<PAGE> 1
As filed with the Securities and Exchange Commission on October 15, 1999.
Registration No. 333-_______
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
MACDERMID, INCORPORATED
(Exact name of issuer as specified in its charter)
CONNECTICUT 06-0435750
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
245 FREIGHT STREET, WATERBURY, CT 06702
----------------------------------------
(Address of principal executive offices)
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MACDERMID, INCORPORATED PROFIT SHARING AND EMPLOYEE STOCK OWNERSHIP PLAN
MACDERMID EQUIPMENT 401(K) PLAN
(Full Title of Plan)
----------
Copy to:
DANIEL H. LEEVER MICHAEL E. MOONEY, ESQ.
CHAIRMAN AND CHIEF EXECUTIVE OFFICER NUTTER, MCCLENNEN & FISH, LLP
MACDERMID, INCORPORATED ONE INTERNATIONAL PLACE
245 FREIGHT STREET BOSTON, MASSACHUSETTS 02110-2699
WATERBURY, CT 06702 (617) 439-2000
(203) 575-5700
(Name, address and telephone
number of agent for service)
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==================================================================================================
Title of each class Amount Proposed Proposed
of securities to being maximum offering maximum aggregate Amount of
be registered registered(1) price per share offering price registration fee
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 1,500,000 Shares $33.13(2) $49,695,000(2) $13,815.21(2)
without par value
==================================================================================================
</TABLE>
(1) This Registration Statement covers 1,200,000 shares of Common Stock that
may be purchased for participants' accounts in accordance with the
MacDermid, Incorporated Profit Sharing and Employee Stock Ownership Plan
(the "MacDermid, Incorporated Plan") and 300,000 shares of Common Stock
that may be purchased for participants' accounts in accordance with the
MacDermid Equipment 401(k) Plan (the "MacDermid Equipment Plan")
(collectively, the "Plans"). Pursuant to Rule 416(b) under the Securities
Act of 1933, as amended (the "Securities Act"), this Registration Statement
also covers an indeterminate number of additional shares of Common Stock
which may be purchased in accordance with said Plans as a result of a stock
dividend, stock split or other recapitalization. In addition, pursuant to
Rule 416(c) under the Securities Act, this Registration Statement also
covers an indeterminate amount of interests to be offered or sold pursuant
to the Plans.
(2) Calculated based on the average of the high and low prices per share of the
Common Stock as reported on the New York Stock Exchange on October 13,
1999.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
MacDermid, Incorporated (the "Company") and the Plans hereby
incorporate by reference in this Registration Statement the following documents
and information heretofore filed with the Securities and Exchange Commission
(the "Commission"):
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended March 31, 1999 and the MacDermid, Incorporated Plan's Annual Report on
Form 11-K and the MacDermid Equipment Plan's Annual Report on Form 11-K for the
Plans' fiscal year ended March 31, 1999; and
(b) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A (File No. 001-13889).
All documents subsequently filed by the Company and the Plans pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), prior to the filing of any post-effective
amendment which indicates that all securities offered hereunder have been sold
or which deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be a part hereof
from the date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Registration Statement to the
extent that any other subsequently-filed document which also is incorporated or
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Connecticut Business Corporation Act, Sections 33-770 to 33-778,
inclusive, and Article 9 of the Company's By-laws, contain provisions
authorizing indemnification by the Company of directors, officers and employees
of the registrant against certain liabilities and expenses which they may incur
as directors, officers and employees of the registrant or of certain other
corporations. Section 33-773 also provides that such indemnification may include
payment by the Company of expenses incurred in defending a proceeding in advance
of the final disposition of such proceeding, upon certain
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representations being made by such indemnified person as to his or her good
faith belief that he or she has met the relevant standard of conduct and upon
agreement by the person indemnified to repay such payment if he or she shall be
adjudicated not entitled to be indemnified under Sections 33-772, 33-774 or
33-775.
Section 33-777 provides that the Company may purchase and maintain
insurance on behalf of an individual who is a director, officer, employee or
agent of the corporation, or who, while a director, officer, employee or agent
of the corporation, serves at the Company's request as a director, officer,
employee or agent of another entity against liability asserted against or
incurred by such person in such capacity, whether or not the corporation would
have power to indemnify or advance expenses to him or her against the same
liability under Section 33-770 to 33-778 inclusive. The Company maintains an
officer's and director's liability insurance policy.
ITEM 7. EXEMPTION FROM REGISTRATION.
Not applicable.
ITEM 8. EXHIBITS.
See the exhibit index immediately preceding the exhibits attached
hereto. The Registrant will submit or has submitted the Plans and all 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 Plans (or keep the
Plans qualified) under Section 401 of the Internal Revenue Code.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this registration statement to
include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
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.
(4) That, for purposes of determining any liability under
the Securities Act of 1933, each filing of the Registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and each filing
of the Plans' annual reports pursuant to Section 15(d) of the Exchange Act) that
is incorporated by reference in the registration statement shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
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(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions of the Connecticut Business
Corporation Act and the Registrant's By-laws, or otherwise, the Registrant has
been advised that, in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy, as expressed in the Act, and will be governed by the final adjudication
of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Waterbury, Connecticut, on the 15th day of October, 1999.
MACDERMID, INCORPORATED
By: /s/ Daniel H. Leever
------------------------------------
Daniel H. Leever
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed below by the following persons on
behalf of the registrant in the capacities and on the dates indicated.
SIGNATURES TITLE DATE
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/s/ Daniel H. Leever CHAIRMAN OF THE BOARD AND October 15, 1999
- --------------------------- CHIEF EXECUTIVE OFFICER
DANIEL H. LEEVER
/s/ R. Nelson Griebel PRESIDENT, CHIEF OPERATING October 15, 1999
- --------------------------- OFFICER AND DIRECTOR
R. NELSON GRIEBEL
/s/ Gregory M. Bolingbroke CONTROLLER AND PRINCIPAL October 15, 1999
- --------------------------- ACCOUNTING OFFICER
GREGORY M. BOLINGBROKE
/s/ Harold Leever CHAIRMAN EMERITUS October 15, 1999
- --------------------------- AND DIRECTOR
HAROLD LEEVER
/s/ Thomas W. Smith DIRECTOR October 15, 1999
- ---------------------------
THOMAS W. SMITH
/s/ James C. Smith DIRECTOR October 15, 1999
- ---------------------------
JAMES C. SMITH
/s/ Donald G. Ogilvie DIRECTOR October 15, 1999
- ---------------------------
DONALD G. OGILVIE
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Pursuant to the requirements of the Securities Act of 1933, the administrator of
the MacDermid, Incorporated Profit Sharing and Employee Stock Ownership Plan and
the MacDermid Equipment 401(k) Plan has duly caused this registration statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in
Waterbury, Connecticut, on the 15th day of October, 1999.
MACDERMID, INCORPORATED
By: /s/ Marion L. Hubbard
---------------------------------
Name: Marion L. Hubbard
Title: Plan Administrator
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EXHIBIT INDEX
Exhibit No. Title
- ----------- -----
4.1 MacDermid, Incorporated Profit Sharing
and Employee Stock Ownership Plan
4.2 MacDermid Equipment 401(K) Plan
5 Opinion of Nutter, McClennen & Fish, LLP
23.1 Consent of Nutter (Contained in Exhibit 5),
McClennen & Fish, LLP
23.2 Consent of KPMG LLP
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ARTICLE I
PREAMBLE
The MacDermid, Incorporated Profit Sharing and Employee Stock Ownership
Plan (the "Plan") is a result of the merger, effective April 1, 1996, of the
MacDermid, Incorporated Employees' Profit Sharing Plan (the "Profit Sharing
Plan") and the MacDermid, Incorporated Employee Stock Ownership Plan (the
"Employee Stock Ownership Plan" or "ESOP"). Effective January 1, 1999, the
MacDermid Imaging Technology, Inc. 401(k) and Profit Sharing Plan (the
"MacDermid Imaging Plan") was merged into the Plan in connection with the merger
of MacDermid Imaging Technology, Inc. ("MacDermid Imaging") into MacDermid,
Incorporated.
The Profit Sharing Plan was established to encourage employees to take a
mutual interest in improving efficiency, cost control, quality of service
rendered, and thereby the Company's profits; to attract and hold its employees;
and to enhance the financial growth, independence and security of the Company's
employees and their families and beneficiaries at the time of retirement or
disability, other termination of employment, or of death, by enabling eligible
employees to share in a portion of the profits of the Company.
The Profit Sharing Plan was intended to effectuate a moral objective of the
Company to share profits with employees and also to encourage employee thrift,
so as to further enhance their financial security.
The Employee Stock Ownership Plan was established to further assist
employees in planning financially for retirement, disability or termination of
employment and to afford employees an opportunity to acquire a proprietary
interest in the Company. The Employee Stock Ownership Plan was originally
adopted as of April 1, 1980.
The Profit Sharing Plan was originally adopted on December 15, 1952,
effective as of January 1, 1952, and was approved by the United States Treasury
Department on February 4, 1953. It was subsequently amended thereafter on
several occasions. Such MacDermid Incorporated Employees' Profit Sharing Plan
(the "Original Plan") was then separated into two plans. One was the plan
continued under the name MacDermid Incorporated Ferndale Employees' Profit
Sharing Plan, for those employees who were in the collective bargaining unit at
the Company's facility located in Ferndale, Michigan, represented by Cylinder
Gas, Chemical, Petroleum, Auto Service and Accessory Drivers, Maintenance,
Mechanics, Helpers and Inside Employees Local Union No. 283, an affiliate of the
International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of
America. The other was the predecessor plan (the "Prior Plan") of the plan
contained herein (the "Profit Sharing Plan") continued substantially under the
name of the Original Plan for all the other employees of MacDermid, Incorporated
and its domestic subsidiaries who were eligible under the Original Plan. All
employees who were eligible under the Original Plan thus remained eligible under
one or the other of the two plans. Both plans had been amended and restated
effective April 1, 1976. The Prior Plan was subsequently amended and was further
amended and restated, effective April 1, 1982. Effective April 1, 1984, both
plans were again merged in the Prior Plan. Effective generally April 1, 1985,
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the Prior Plan was further amended and restated among other things to comply
with the Tax Equity and Fiscal Responsibility Act of 1982, the Tax Reform Act of
1984 and the Retirement Equity Act of 1984. The Prior Plan was subsequently
amended. The Profit Sharing Plan was amended and restated generally effective
April 1, 1989 to comply with the Tax Reform Act of 1986 and subsequent tax
legislation and to make such other amendments as determined by MacDermid,
Incorporated.
The Profit Sharing Plan, as contained herein, and the related trust are
intended to qualify as a discretionary contribution plan under section
401(a)(27) and section 501(a) of the Code, respectively, and the cash or
deferred arrangement under the Plan is intended to qualify under section 401(k)
of the Code. The Employee Stock Ownership Plan, as contained herein, is intended
to qualify under section 401(a) and to meet the requirements for an employee
stock ownership plan under section 4975(e)(7) of the Code.
The MacDermid Imaging Plan was established effective January 1, 1996 for
the benefit of eligible employees of MacDermid Imaging, then a wholly-owned
subsidiary of MacDermid, Incorporated. The MacDermid Imaging Plan was intended
at all times since its establishment to qualify as a discretionary contribution
plan and trust under sections 401(a) and 501(a) of the Code, and the
cash-or-deferred-arrangement under the MacDermid Imaging Plan was intended to
qualify under section 401(k) of the Code.
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ARTICLE II
DEFINITIONS AND CONSTRUCTION
Whenever used in this instrument:
2.1 "Acquisition Loan" means an obligation incurred by the Trustee, the
proceeds of which are used to purchase qualifying employer securities, as
defined in section 4975(e)(8) of the Code. An Acquisition Loan may be made or
guaranteed by a disqualified person, as defined in section 4975(e)(2) of the
Code.
2.2 "Administrator" means the person or persons appointed pursuant to
Article X to administer the Plan in accordance with said Article.
2.3 "Affiliated Company" means (a) any corporation (other than the
Company) which is a member of a controlled group of corporations (as defined in
section 414(b) of the Code) with the Company; (b) any trade or business (other
than the Company), whether or not incorporated, which is under common control
(as defined in section 414(c) of the Code) with the Company; (c) any trade or
business (other than the Company) which is a member of an affiliated service
group (as defined in section 414(m) of the Code) of which the Company is also a
member; or (d) any entity (other than the Company) required to be aggregated
with the Company pursuant to regulations issued under section 414(o) of the
Code; PROVIDED, that the term "Affiliated Company" shall not include any
corporation, unincorporated trade or business or other entity prior to the date
on which such corporation, trade or business or entity satisfies the affiliation
or control test of (a), (b), (c) or (d) above. In identifying "Affiliated
Companies" for purposes of Section 4.7(a), the definitions in sections 414(b)
and (c) of the Code will be modified as provided in section 415(h) of the Code.
2.4 "Approved Leave" means a leave of absence authorized by the Company
under the Company's standard personnel practices; provided, that all persons
under similar circumstances must be treated alike in the granting of such
Approved Leaves; and provided further, that the Participant returns within the
period specified in the Approved Leave.
2.5 "Board of Directors" means the Board of Directors of MacDermid,
Incorporated.
2.6 "Break in Service" means one or more consecutive One Year Breaks in
Service. The term "One Year Break in Service" means, with respect to any person,
a Plan Year during which the person does not complete 500 or more Hours of
Service, except as otherwise provided herein. An Approved Leave shall not
constitute a Break in Service, but shall not be considered as Credited Service
under the Plan, except as otherwise specifically provided herein.
2.7 "Cash Distributions" means the amount which a Participant elects to
receive as a cash distribution for any Plan Year in accordance with the
provisions of Section 4.6.
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2.8 "Code" means the Internal Revenue Code of 1986, as from time to time
amended.
2.9 "Company" means MacDermid, Incorporated, a corporation organized and
existing under the laws of the State of Connecticut, and any Affiliated Company
which adopts the Plan with the consent of MacDermid, Incorporated.
2.10 "Compensation" means
(a) For purposes of Section 4.7(a) and Section 8.4(a), the Participant's
wages, salaries, fees for professional services and other amounts
received (without regard to whether or not an amount is paid in cash)
for personal services actually rendered in the course of employment
with the Company to the extent that the amounts are includable in
gross income, including but not limited to commissions paid to
salesmen, compensation for services on the basis of a percentage of
profits, commissions on insurance premiums, tips, bonuses, fringe
benefits, reimbursements and expense allowances, but not including any
items excludable from the definition of compensation under Treasury
Regulations, section 1.415-2(d)(2) and (3).
(b) For purposes of Section 2.30, Sections 4.7(b) and (c) and Section 8.1,
the amounts specified in paragraph (a) above, but including any amount
which is not includable in the gross income of an Employee by reason
of sections 125, 402(e)(3), 402(g)(3), 402(h) or 403(b) of the Code.
(c) For all other purposes under the Plan, so much of the aggregate
compensation (inclusive of overtime allowances, commissions, bonuses
and other extra compensation, if any, but exclusive of the
contributions made by the Company to the Plan and any other employee
benefit plan maintained by the Company) paid to a person while a
Participant for his services to the Company during the particular Plan
Year (but including also any commissions or bonuses paid during such
Plan Year after termination of employment) or which would have been so
paid if not deferred by the Participant's election under Section 4.3
hereof. If, because of the destruction of records or for some other
reason, it shall not be reasonably possible to determine exactly the
amount of compensation of a Participant for any Plan Year, the
approximate amount thereof shall be determined in such manner as the
Administrator shall determine.
Consistent with section 401(a)(17) of the Code, the Compensation of each
Participant for any Plan Year shall be limited for all purposes of the Plan to
$150,000, as adjusted from time to time by the Secretary of the Treasury.
2.11 "Continuous Employment" means the aggregate regular and customary
employment by the Company for a period of one or more complete Plan Years,
including periods of Approved Leave, and shall include all complete Plan Years
of employment whether continuous or interrupted. If an Employee is absent solely
because of sickness or disability, he
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shall be deemed an eligible Employee continuously employed during such period as
the Company continues him on its payroll, but he shall not be deemed an eligible
Employee or continuously employed during such absence after such period unless
absent on Approved Leave. On and after April 1, 1969 continuous employment by
the Company shall for purposes of the Plan include all continuous employment, as
defined above, by Brookside AIL Corporation (formerly American Industrial
Linings, Inc.). Effective January 1, 1999 continuous employment by the Company
shall for purposes of the Plan include all continuous employment, as defined
above, by MacDermid Imaging prior to January 1, 1999.
2.12 "Credited Service" means, with respect to any person, the number of
Plan Years during each of which such person has completed at least 1,000 Hours
of Service; provided, however, that:
(a) Notwithstanding anything in this Section 2.12 to the contrary, for any
Participant, the Participant's last period of Continuous Employment
with the Company prior to April 1, 1976 shall be counted as Credited
Service. The partial year beginning a Participant's such last period
of Continuous Employment shall be deemed to be one full year of
Credited Service if such partial year began on or before October 31.
(b) In the case of any person who does not have any nonforfeitable right
to a benefit derived from Company contributions, years of Credited
Service prior to any Break in Service shall not be taken into account
if the number of consecutive One Year Breaks in Service is five or
more. The aggregate number of years of Credited Service prior to such
Break in Service shall be deemed not to include any years of Credited
Service not required to be taken into account under this Section by
reason of any prior Break in Service.
(c) Solely for purposes of determining Credited Service under the Employee
Stock Ownership Plan, for Plan Years beginning prior to April 1, 1989,
an Employee shall be credited with a year of Credited Service if the
Employee was performing services on the last day of such Plan Year. If
the Employee was not performing services on the last day of any such
Year, he will be deemed to have incurred a One Year Break in Service
for such Plan Year.
2.13 "Early Retirement Age" means age 55.
2.14 "Effective Date" means April 1, 1996.
2.15 "Elective Contribution" means the contribution made on behalf of a
Participant under Section 4.3 consisting of the Elective Contribution to Profit
Sharing Plan and/or Elective Contribution to ESOP. "Elective Contribution to
Profit Sharing Plan" and "Elective Profit Sharing Contribution" mean the
Elective Contribution made to the Profit Sharing Plan on behalf of a Participant
under Section 4.3(a); and "Elective Contribution to ESOP" and "Elective ESOP
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Contribution" mean the Elective Contribution to the ESOP made on behalf of a
Participant under Section 4.3(b).
2.16 "Elective Contribution Account" means either an Elective Profit
Sharing Contribution Account or Elective ESOP Contribution Account maintained
for a Participant to record his Elective Contributions and adjustments thereto.
"Elective Profit Sharing Contribution Account" and "Elective ESOP Contribution
Accounts" mean the accounts maintained for a Participant to record his Elective
Contributions to Profit Sharing Plan and Elective Contributions to ESOP,
respectively, and adjustments thereto.
2.17 "Employee" means any person between whom and the Company or an
Affiliated Company there exists the common law relationship of employee and
employer and who is receiving remuneration for personal services rendered to the
Company or an Affiliated Company, as the case may be, including any person
absent on Approved Leave and any person who is also an officer or director of
the Company or an Affiliated Company, but excluding (a) any officer or director
not otherwise employed by the Company or an Affiliated Company, (b) any person
who merely receives from the Company, an Affiliated Company or the Trust a
retirement allowance or benefit, retainer or fee under contract but who is not
otherwise an employee, (c) any employee who, by virtue of a general bargaining
obligation, agreement or good faith impasse between the Company or an Affiliated
Company and a labor organization which the Company or the Affiliated Company is
legally obligated to recognize as such employee's exclusive bargaining
representative, is precluded from participation in the Plan and (d) any person
who is a nonresident alien and who receives no earned income from the Company or
an Affiliated Company which constitutes income from sources within the United
States (within the meaning of section 861(a)(3) of the Code). Any person who is
a "leased employee," within the meaning of section 414(n) of the Code, and any
person required to be considered an employee pursuant to regulations under
section 414(o) of the Code, shall be considered an employee to the extent
required under such section; provided, that no such person shall be eligible to
become a Participant until he is actually employed by the Company.
2.18 "Employee ESOP Contribution" means the amount contributed by a
Participant under the Employee Stock Ownership Plan for each Plan Year pursuant
to Section 4.4.
2.19 "Employee ESOP Contribution Account" means the account maintained for
a Participant to record his Employee ESOP Contributions and adjustments thereto.
2.20 "Employee Profit Sharing Contribution" means the amount contributed by
a Participant under the Plan pursuant to Section 4.2.
2.21 "Employee Profit Sharing Contribution Account" means the account
maintained for a Participant to record his Employee Profit Sharing Contributions
and adjustments thereto.
2.22 "Employee Stock Ownership Plan" or "ESOP" means the Employee Stock
Ownership Plan contained in the Plan.
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2.23 "Employer Contribution" means the amount contributed by the Company
under the Profit Sharing Plan for each Plan Year pursuant to Section 4.1.
2.24 "Employer Contribution Account" means the account maintained for a
Participant to record his share of the contributions of the Company under
Section 4.1 and adjustments thereto.
2.25 "Employer ESOP Contribution" means the amount contributed by the
Company under the Employee Stock Ownership Plan for each Plan Year in accordance
with Section 4.5.
2.26 "Employer ESOP Contribution Account" means the account maintained for
a Participant to record his share of the Employer ESOP Contributions made by the
Company and adjustments thereto.
2.27 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
2.28 "Fiduciary" means the Company, the Administrator and the Trustee, but
only with respect to the specific responsibilities of each with respect to the
administration of the Plan and Trust Fund, as provided in Article X.
2.29 "Forfeiture" means the portion of a Participant's Employer
Contribution Account and Employer ESOP Contribution Account which is forfeited
because of termination of employment before full vesting.
2.30 "Highly Compensated Employee" means
(a) For Plan Years beginning on or before January 1, 1996, an Employee
who, during the Plan Year in question or the preceding Plan Year,
(i) was at any time a five-percent owner (as defined in section
416(i)(1) of the Code) of the Company,
(ii) received Compensation in excess of $75,000,
(iii) received Compensation in excess of $50,000 and was in the
top-paid group of employees (as defined in section 414(q) of the
Code, based upon the exclusion of all employees excludable under
section 414(q)(8)) for the Year, or
(iv) was at any time an officer of the Company and received
Compensation greater than 150 percent of the amount in effect
under section 415(b)(1)(A) of the Code for such Year.
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<PAGE> 8
The $75,000 and $50,000 amounts in (ii) and (iii) above shall
automatically be adjusted if and to the extent the corresponding
amounts in section 414(q) of the Code are adjusted by the Secretary of
the Treasury. No more than 50 Employees (or, if less, the greater of
three Employees or 10 percent of all Employees) shall be treated as
officers for purposes of clause (iv) above. An individual who was not
described in (i), (ii), (iii), or (iv) above during the preceding Plan
Year shall be a Highly Compensated Employee during the current Plan
Year only if he is described in (i) above or is among the 100
Employees with the greatest Compensation for the current Plan Year.
If an Employee is described in (i) above or is among the ten
Employees with the greatest Compensation during the Plan Year, the
Employee and any family members, as defined in section 414(q)(6) of
the Code, who are also Employees shall be treated as a single
Employee.
(b) For Plan Years beginning on or after January 1, 1997, an Employee who
(i) was a 5-percent owner, as defined in section 416(i)(1) of the
Code, of the Company at any time during the Plan Year or the preceding
Plan Year, or (ii) for the preceding Plan Year received Compensation
from the Company in excess of $80,000 (adjusted as provided in Section
415(d) of the Code), and, if the Company elects the operation of the
remainder of this clause (ii), was in the top twenty percent of all
Employees of the Company on the basis of Compensation for such
preceding Plan Year.
2.31 "Hours of Service" means for any Employee during any period of time:
(a) Each hour for which the Employee is directly or indirectly paid, or
entitled to payment, for the performance of duties for the Company or
an Affiliated Company, each such hour to be credited to the Employee
for the computation period in which such duties were performed.
(b) (i) Each hour for which the Employee is directly or indirectly paid,
or entitled to payment, on account of any of the following
periods during which no duties are performed; PROVIDED, HOWEVER,
that no more than 501 Hours of Service shall be credited under
this paragraph (b) to any person on account of any single
continuous period during which he performs no duties; and FURTHER
PROVIDED, that Hours of Service shall not be credited under this
paragraph (b) for a payment which solely reimburses the Employee
for medically related expenses incurred by the Employee, or which
is made or due under a plan maintained solely for the purpose of
complying with applicable worker's compensation, unemployment
compensation or disability insurance laws:
(A) Periods of time during which the Employee has been
excused from work by the Company or an Affiliated
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<PAGE> 9
Company by reason of vacation, holiday, illness, incapacity
(including disability), layoff or jury duty; PROVIDED, that
in the event that such person fails to return to work upon
the expiration of the period for which he has been so
excused, his employment shall be deemed to terminate upon
such expiration;
(B) Periods of Approved Leave authorized in writing by
the Company; PROVIDED, that in the event the Employee fails
to return to the active employ of the Company or the
Affiliated Company upon the expiration of the period of such
Approved Leave his employment shall be deemed to terminate
upon such expiration;
(ii) (A) In the case of a payment made or due which is
calculated on the basis of units of time, the number of
Hours of Service to be credited shall be the number of
regularly scheduled working hours included in the units of
time on the basis of which the payment is calculated. Such
hours shall be credited to the computation period in which
the period during which no duties are performed occurs,
beginning with the first unit of time to which the payment
relates.
(B) In the case of a payment made or due which is not
calculated on the basis of units of time, the number of
Hours of Service to be credited shall be equal to the amount
of the payment divided by the person's most recent hourly
rate of compensation before the period during which no
duties are performed. For purposes of this subparagraph
(b)(ii)(B), a person's most recent hourly rate of
compensation shall be (1) if his compensation is determined
on the basis of an hourly rate, his most recent hourly rate
of compensation, (2) if his compensation is determined on
the basis of a fixed rate for specified periods of time
(other than hours), his most recent rate of compensation for
such specified period of time divided by the number of hours
regularly scheduled for the performance of duties during
such period of time, and (3) if his compensation is not
determined on the basis of a fixed rate for specified
periods of time, the lowest hourly rate of compensation paid
to employees in the same job classification as his, or if no
employees in the same job classification have an hourly
rate, the minimum wage as established from time to time
under section 6(a)(1) of the Fair Labor Standards Act of
1938, as amended. Any hours to be credited under this
subparagraph (b)(ii)(B) shall be credited to the computation
period in which the period during which no duties are
performed occurs, or if the period during which no duties
are performed extends beyond one computation
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<PAGE> 10
period, shall be allocated between not more than the first
two computation periods on any reasonable basis which is
consistently applied with respect to all employees within
the same job classification, reasonably defined.
(iii) Notwithstanding any of the foregoing provisions of this
paragraph (b), a person is not required to be credited hereunder
on account of a period during which no duties are performed with
a number of Hours of Service which is greater than the number of
hours regularly scheduled for the performance of duties during
such period.
(iv) For purposes of this paragraph (b), in the case of a person
without a regular work schedule, such person shall be deemed to
have a 40 hour work week.
(c) To the extent not already credited under paragraph (a) or (b) of this
Section, each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Company or the
Affiliated Company, each such hour being credited to the computation
period to which such award or agreement pertains; PROVIDED, that
crediting of Hours of Service under this paragraph (c) with respect to
periods described in paragraph (b) shall be subject to the limitations
set forth in such paragraph (b).
(d) To the extent not already described under paragraph (a), (b), or (c)
of this Section, each hour as is determined by the Company to be
credited for periods covered by leaves of absence authorized by it or
an Affiliated Company; PROVIDED, HOWEVER, that all such determinations
shall be uniform and applicable to all persons similarly situated.
(e) Solely for purposes of determining whether a Break in Service has
occurred, with respect to a person who furnishes to the Administrator
such information as shall be reasonably required to establish that he
is absent from work for maternity or paternity reasons, the number of
Hours of Service which would normally have been credited to him during
such absence but for such absence (or, if the number of such Hours of
Service cannot be determined, eight Hours of Service for each day of
such absence); PROVIDED, HOWEVER, that no more than 501 Hours of
Service shall be credited with respect to any such maternity or
paternity absence.
For purposes of this paragraph (e), an absence from work for
maternity or paternity reasons means an absence (i) by reason of the
pregnancy of the Employee, (ii) by reason of the birth of a child of
the Employee, (iii) by reason of the placement of a child with the
Employee in connection with the adoption of such child by such
Employee, or (iv) for purposes of caring for such child for a period
beginning immediately following such birth or placement.
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<PAGE> 11
Hours of Service credited in accordance with this paragraph (e)
shall be credited for the computation period in which the absence
begins, if necessary to prevent the Employee from incurring a Break in
Service in such period, or if not, in the computation period following
the period in which the absence begins if necessary to prevent such a
Break in Service in that period.
(f) To the extent not already credited under paragraph (a), (b), (c), (d),
or (e) of this Section, each period of qualified military service in
the uniformed services (as defined for purposes of section 414(u)(5)
of the Code and the Uniformed Services Employment and Reemployment
Rights Act of 1994 ("USERRA")) served by an Employee shall be
considered, upon reemployment of the Employee by the Company under
USERRA, for purposes of the Plan to be service with the Company.
2.32 "Income" means the net gain or loss of the Trust Fund or of a separate
investment fund within the Trust Fund, as the case may be, from investments, as
reflected by interest payments, dividends, realized and unrealized gains and
losses on investments and expenses paid from the Trust Fund. In determining the
Income of the Trust Fund or any separate fund for any period, assets shall be
valued on the basis of their fair market value.
2.33 "Investment Committee" means a committee appointed by the Board of
Directors pursuant to Section 10.1.
2.34 "Investment Manager" means an investment adviser registered under the
Investment Advisers Act of 1940, a bank as defined in that Act, or an insurance
company qualified to manage, acquire or dispose of assets of the Plan under the
laws of more than one State, which is appointed pursuant to Section 10.1 to
manage, acquire or dispose of assets of the Plan.
2.35 "MacDermid Imaging" means MacDermid Imaging Technology, Inc.
2.36 "MacDermid Imaging Plan" means the MacDermid Imaging Technology, Inc.
401(k) and Profit Sharing Plan established by MacDermid Imaging effective
January 1, 1996.
2.37 "Normal Retirement Age" means age 60.
2.38 "Participant" means an Employee of the Company who has become a
Participant in the Plan in the manner set forth in Article III.
2.39 "Plan" means the MacDermid, Incorporated Profit Sharing and Employee
Stock Ownership Plan contained herein, as from time to time amended.
2.40 "Plan Year" or "Limitation Year" means the fiscal year of the Company,
which is the 12-month period commencing on each April 1 and ending the next
succeeding March 31.
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<PAGE> 12
2.41 "Prior ESOP" means the MacDermid, Incorporated Employee Stock
Ownership Plan as in effect from time to time prior to the Effective Date.
2.42 "Prior Plan" means the MacDermid, Incorporated Employees' Profit
Sharing Plan as in effect from time to time prior to the Effective
2.43 "Profit Sharing Plan" means the profit sharing plan contained in the
Plan.
2.44 "Required Matching Amount" means, with respect to any Participant for
any period (except as hereinafter provided), an amount equal to 50 percent of
the Elective Contributions to ESOP made by the Participant under Section 4.3(b)
for such period not in excess of 7 percent of his Compensation for the Plan
Year; PROVIDED, HOWEVER, that for the period commencing on the Effective Date
and ending on December 31, 1998, inclusive, "Required Matching Account" means,
with respect to any Participant during such period, an amount equal to 50
percent of the Employee ESOP Contributions made by the Participant under Section
4.4 for such period not in excess of 7 percent of his Compensation for the
affected Plan Year. The "Required Annual Matching Amount" means the aggregate
Required Matching Amounts with respect to all Participants for a Plan Year.
2.45 "Transferred National Starch Employee" means any individual who became
an Employee of MacDermid, Incorporated pursuant to Section 6.1 of the Purchase
and Sale Agreement dated September 29, 1997 by and among National Starch and
Chemical Company and MacDermid, Incorporated.
2.46 "Trustee" means, collectively, the trustee or trustees acting under
the Trust Agreement.
2.47 "Trust Agreement" means the agreement between the Company and the
Trustee establishing the trust.
2.48 "Trust Fund" means the principal and Income of the trust under the
Trust Agreement.
2.49 "Valuation Date" means June 30, September 30, December 31 and March 31
of each Plan Year and such other dates as the Administrator may determine.
The masculine gender, where appearing in the Plan, shall be deemed to
include the feminine gender, and the singular shall include the plural, unless
the context indicates otherwise. The words "hereof", "herein", "hereunder" and
other similar compounds of the word "here" shall mean and refer to the entire
Plan, and not to any particular provision or Section.
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<PAGE> 13
ARTICLE III
PARTICIPATION AND SERVICE
3.1 PARTICIPATION. Each individual who was a participant in the Prior Plan
or the Prior ESOP on March 31, 1996 shall become a Participant in the Plan as of
the Effective Date; PROVIDED, that he is an Employee of the Company on such
date; and PROVIDED FURTHER that each Transferred National Starch Employee shall
become a Participant in the Plan as of the date such individual becomes an
Employee of the Company but in no event prior to September 29, 1997. Each
individual who was a participant in the MacDermid Imaging Plan on January 1,
1999 shall become a Participant in the Plan as of such date; PROVIDED, that he
is an Employee of the Company on such date. Any other Employee of the Company
shall become a Participant in the Plan in accordance with the following:
(a) For purposes of making Elective Contributions under the Profit
Sharing Plan, an Employee shall become a Participant as of the
later of (i) the first day of the calendar month next following
the date his employment with the Company begins and (ii) the date
on which he files with the Administrator a salary reduction
agreement in accordance with Section 4.3 to have Elective
Contributions made to the Plan on his behalf; PROVIDED, that for
Plan Years beginning before April 1, 1998, for purposes of making
Elective Contributions under the Profit Sharing Plan, an Employee
shall become a Participant as of the first day of the calendar
quarter following the later of (i) date on which he completes
three months of service with the Company and (ii) the date on
which he files with the Administrator a salary reduction
agreement in accordance with Section 4.3 to have Elective
Contributions made to the Plan on his behalf. No such Participant
shall be entitled to an allocation of Employer Contributions or
Forfeitures, or be permitted to make Employee Profit Sharing
Contributions under the Profit Sharing Plan, until the
requirements of paragraph (b)(i) have been satisfied, PROVIDED,
that for Plan Years beginning before April 1, 1998 no such
Participant shall be entitled to an allocation of Employer
Contributions or Forfeitures, or be permitted to make Employee
Profit Sharing Contributions under the Profit Sharing Plan, until
the requirements of paragraph (b)(ii) have been satisfied;
(b) (i) Effective April 1, 1998, for purposes of eligibility to
receive a portion of an Employer Contribution in accordance
with Sections 4.1 and 5.2, an Employee shall become a
Participant in the Profit Sharing Plan (A) as of March 1 of
the first Plan Year during which he is an Employee,
PROVIDED, that his employment by the Company commences on or
prior to October 1 of such Plan Year and he is at least 21
years of age as of such March 1 date; or (B) as of March 1
of the second Plan Year during which he is an Employee,
PROVIDED,
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<PAGE> 14
that his employment with the Company commences after October
1 of the first Plan Year during which he is an Employee and
he is at least 21 years of age as of such March 1 date. In
the event that an Employee is ineligible to become a
Participant under the preceding sentence solely because he
is less than 21 years old, then he shall become a
Participant in the Profit Sharing Plan as of March 1 next
following the date he attains 21 years of age;
(ii) For Plan Years beginning before April 1, 1998 an Employee
shall become a Participant in the Profit Sharing Plan
commencing on April 1 nearest the date on which he (i)
reaches the age of 21 years and (ii) completes a 12-month
period of employment during which he had 1,000 Hours of
Service. The 12-month period shall be the earliest of either
the 12-month period commencing on the date of completion of
his first Hour of Service on any Plan Year commencing
thereafter;
(c) An Employee shall become a Participant in the Employee Stock
Ownership Plan as of the later of (i) the first day of the
calendar month next following the date his employment with the
Company begins and (ii) the date on which he files with the
Administrator a salary reduction agreement in accordance with
Section 4.3 authorizing Elective ESOP Contributions and/or an
agreement to make Employee ESOP Contributions in accordance with
Section 4.4; PROVIDED, that for Plan Years beginning before April
1, 1998, an Employee shall become a Participant in the Employee
Stock Ownership Plan as of the first day of the calendar quarter
coinciding with or next following the later of (i) the date on
which he completes three months of service with the Company and
(ii) the date on which he files with the Administrator an
agreement to make Employee ESOP Contributions in accordance with
Section 4.4;
provided, in each case, that he is an Employee of the Company on such date.
3.2 TERMINATION OF PARTICIPATION. A Participant shall cease to be a
Participant in the Plan on the first to occur of the following events:
(a) His retirement at or after reaching Early Retirement Age or
Normal Retirement Age in accordance with Section 6.1;
(b) His retirement as the result of disability in accordance with
Section 6.2;
(c) His death;
(d) His termination of employment with the Company for reasons other
than retirement, disability or death; and
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<PAGE> 15
(e) The termination of the Plan.
3.3 REJOINING AFTER TERMINATION OF PARTICIPATION. Each Participant whose
participation in the Plan terminates as a result of his retirement, disability
or termination of employment for reasons other than retirement, disability or
death shall again become a Participant as of the first day of his reemployment
as an Employee of the Company.
3.4 INACTIVE STATUS. In the event that any Participant shall in any Plan
Year accumulate 500 or more but less than 1,000 Hours of Employment or be on
Approved Leave and have accumulated less than 1,000 Hours of Employment, his
Employer Contribution Account and Employer ESOP Contribution Account shall be
placed on inactive status. In such case, such Plan Year shall not be considered
as a period of Credited Service for the purpose of determining the Participant's
vested interest in accordance with Section 6.4, and the Participant shall not
share in the Employer Contribution (except as otherwise provided in Section 5.2)
or in Forfeiture allocations for any such Year, but he shall continue to receive
Income allocations with respect to his Accounts in accordance with Section 5.5.
Such Participant shall cease to have any right to make contributions pursuant to
Sections 4.2, 4.3 and 4.4. In the event such Participant accumulates 1,000 Hours
of Service in a subsequent Plan Year, his Employer Contribution Account and
Employer ESOP Contribution Account shall be restored to active status with full
rights and privileges under the Plan restored.
3.5 PRIOR PLAN PROVISIONS TO APPLY TO CERTAIN PERSONS. The provisions of
the Plan as contained herein shall apply only to Employees who terminate
employment or participation in the Plan on or after the Effective Date;
PROVIDED, HOWEVER, that the rights and benefits, if any, of each Employee
participating in the MacDermid Imaging Plan who terminates employment or
participation in the MacDermid Imaging Plan on or between the Effective Date and
December 31, 1998 shall be determined in accordance with the provisions of the
MacDermid Imaging Plan in effect on the date such Employee terminates his
employment or participation. The rights and benefits, if any, of each other
Employee shall be determined in accordance with the provisions of the Prior Plan
and the Prior ESOP, or to the extent applicable, the MacDermid Imaging Plan, in
effect on the date such Employee terminates his employment or participation.
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ARTICLE IV
CONTRIBUTIONS
4.1 EMPLOYER CONTRIBUTIONS. The Company shall pay over to the Trust Fund
for each Plan Year as an Employer Contribution under the Profit Sharing Plan the
amount, if any, determined by the Board of Directors in its sole discretion.
The Employer Contribution for each Plan Year shall be paid over to the
Trustee by the Company not later than the time prescribed by law for filing its
Federal income tax return, including any extensions thereof, with respect to the
Company's fiscal year ending with, or within which ends, such Plan Year.
The Employer Contribution shall be prorated between MacDermid, Incorporated
and the Affiliated Companies participating in the Plan on the basis of the
Compensation attributable to Participants who are Employees of each during the
Plan Year and who are eligible to receive a portion of such Contribution in
accordance with Section 5.2.
4.2 EMPLOYEE PROFIT SHARING CONTRIBUTIONS. Each Participant may elect to
make Employee Profit Sharing Contributions on an "after-tax" basis under the
Profit Sharing Plan; PROVIDED, HOWEVER, that such Contributions may not exceed
10 percent of the Participant's Compensation for the Plan Year, less any
Employee ESOP Contributions made by the Participant to the Plan pursuant to
Section 4.4 or any voluntary contributions made by the Employee under any other
qualified plan of the Company or an Affiliated Company; PROVIDED, HOWEVER, that
effective January 1, 1999, the maximum percentage that may be elected under this
Section 4.2 shall be reduced to five percent; and PROVIDED further, that in no
event may a Participant elect to contribute any percentage to the Profit Sharing
Plan under this Section 4.2 which when combined with all Elective Contributions
and Employee ESOP Contributions made with respect to the same Limitation Year,
exceeds twenty percent of the Participant's Compensation. Employee Profit
Sharing Contributions may be made by means of payroll deduction in an amount
equal to the percentage of Compensation designated by the Participant. A
Participant may also make Employee Profit Sharing Contributions by means of
direct payments to the Company which is his employer. A Participant may
terminate such Contributions at any time, and may elect to increase or decrease
the amount of Employee Profit Sharing Contributions at such time and subject to
such notice and timing requirements as the Administrator shall determine.
The aggregate amount of all Employee Profit Sharing Contributions deducted
by or paid to the Company in any month shall be promptly paid over to the Trust
Fund by the Company as soon as such amounts can reasonably be segregated from
the assets of the Company, in accordance with applicable Department of Labor
regulations.
Employee Profit Sharing Contributions shall be fully vested and
nonforfeitable at all times. The Administrator shall prescribe rules as to the
time and manner of making Employee
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<PAGE> 17
Profit Sharing Contributions, including any minimum payroll deduction which may
be elected per payroll period and the effective date of any such election, and
shall provide appropriate forms to be used in making Employee Profit Sharing
Contributions and elections in connection therewith. Elections by Participants
pursuant to this Section 4.2 shall be made in writing in accordance with such
rules as may be prescribed by the Administrator.
4.3 ELECTIVE CONTRIBUTIONS.
(a) ELECTIVE CONTRIBUTIONS TO PROFIT SHARING PLAN. A Participant may
elect in writing by a salary reduction agreement with the Company
to have the Company contribute to the Profit Sharing Plan on his
behalf any percentage, up to a maximum of nine percent, of his
Compensation payable thereafter while he is a Participant in the
Plan; PROVIDED, HOWEVER, that effective January 1, 1999, the
maximum percentage of Compensation that may be contributed to the
Profit Sharing Plan pursuant to this Section 4.3(a) shall be
eight percent.
A Participant may from time to time change such percentage by
entering into a new salary reduction agreement or may at any time
voluntarily suspend any Elective Contributions on his behalf by
revoking any salary reduction agreement then in effect for him;
PROVIDED, HOWEVER, that a Participant who suspends his Elective
Contributions may resume such contributions in accordance with
Plan procedures; and PROVIDED further, that any election of a
percentage greater than eight percent in effect as at December
31, 1998 shall be deemed to be changed to eight percent by the
Participant effective January 1, 1999.
(b) ELECTIVE CONTRIBUTIONS TO ESOP. Effective January 1, 1999, a
Participant may elect in writing by a salary reduction agreement
with the Company to have the Company contribute to the Employee
Stock Ownership Plan on his behalf any percentage, up to a
maximum of seven percent, of his Compensation payable thereafter
while he is a Participant in the Plan.
A Participant may from time to time change such percentage by
entering into a new salary reduction agreement or may at any time
voluntarily suspend any Elective Contributions on his behalf by
revoking any salary reduction agreement then in effect for him;
PROVIDED, HOWEVER, that a Participant who suspends his Elective
Contributions may resume such contributions in accordance with
Plan procedures.
(c) SALARY REDUCTION AGREEMENTS, ETC. A salary reduction agreement
entered into by a Participant in accordance with this Section 4.3
shall be applied to reduce his Compensation otherwise payable by
the Company for each full pay period after the effective date of
such salary reduction agreement until revoked or changed. Any
such salary reduction agreement:
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<PAGE> 18
(i) shall be effective as of the first day of the calendar month
next following its execution or as of such other date
subsequent to its execution as may be approved by the
Administrator, and
(ii) shall remain in effect unless and until (A) revoked by the
Participant by written notice to the Administrator, such
revocation being effective as of the first full pay period
next following receipt by the Administrator of such notice
or as of such other date subsequent to the receipt of such
notice as may be approved by the Administrator, or (B)
superseded by a subsequent salary reduction agreement
entered into in accordance with the provisions of this
Section.
Elective Contributions shall be paid over to the Trust Fund by
the Company as soon as such amounts can reasonably be segregated
from the assets of the Company, in accordance with applicable
Department of Labor regulations.
Elective Contributions shall be fully vested and nonforfeitable
at all times. The Administrator shall prescribe such rules as he
deems necessary or appropriate as to the form and manner in which
elections and salary reduction agreements pursuant to this
Section 4.3 are to be made. Elections and agreements shall be
made in writing in accordance with such rules as may be
prescribed by the Administrator.
4.4 EMPLOYEE ESOP CONTRIBUTIONS. Each such Participant may contribute to
the Employee Stock Ownership Plan on an "after-tax basis" for each Plan Year any
whole percentage of his Compensation from one percent to 11 percent inclusive
less any Employee Profit Sharing Contributions made by the Participant to the
Plan pursuant to Section 4.2 or any voluntary contributions made by the
Participant under any other qualified Plan of the Company or an Affiliated
Company; PROVIDED, HOWEVER, that effective January 1, 1999, the maximum
percentage that may be elected under this Section 4.4 shall be reduced to five
percent; and PROVIDED further, that in no event may a Participant elect to
contribute any percentage to the ESOP under this Section 4.4 which, when
combined with all Elective Contributions and Employee Profit Sharing
Contributions made with respect to the same Limitation Year, exceeds twenty
percent of the Participant's Compensation. Such contribution shall be made
pursuant to an election in writing, made in such form and manner as the
Administrator may prescribe and delivered to the Administrator on or before the
date on which the Participant begins participation in the Plan. Contributions
may be made through payroll deductions, lump sum deposits or by such other
methods as may be approved by the Administrator. A Participant may revoke or
change a contribution election as of the first day of any calendar month by
providing notice to the Administrator at least 20 days before such revocation or
change is to become effective; PROVIDED, that a Participant may revoke or change
an authorization to make contributions through payroll deduction at any time;
and PROVIDED further, that any percentage elected by a Participant under this
Section 4.4 which, as of January 1, 1999, exceeds twenty percent when combined
with the percentage of Compensation elected by the Participant pursuant to
Section 4.3, shall be deemed to be reduced by the Participant, effective
December 31, 1998 by the number of whole
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<PAGE> 19
percentage points necessary to cause the Participant's aggregate contributions
under Sections 4.3 and 4.4 to be not more than twenty percent of the
Participant's Compensation. Employee ESOP Contributions shall be paid to the
Trustee within ten business days after the end of each month.
Notwithstanding the foregoing, no Participant election shall be effective
unless and until a registration statement relating to participation interests in
the Plan has been filed with the Securities and Exchange Commission and has
become effective within the meaning of the Securities Act of 1933, as amended,
and each Participant has received a final prospectus.
4.5 EMPLOYER ESOP CONTRIBUTIONS. The Company shall contribute to the
Employee Stock Ownership Plan for each Plan Year, in cash or Company Stock, or a
combination of both, an amount which, when added to the allocable Forfeitures
for such Plan Year, equals the Required Annual Matching Amount. No Employer ESOP
Contribution shall be required for any Plan Year with respect to which the
amount of Forfeitures equals or exceeds the Required Annual Matching Amount. For
purposes of this Section 4.5, Company Stock shall be valued at the closing price
for the trading day of the date of contribution. Notwithstanding the foregoing,
in the event that at any time shares of Company Stock are not listed on a
National Securities Exchange registered under section 6 of the Securities
Exchange Act of 1934, as amended, or quoted on a system sponsored by the
National Securities Association under section 15A(b) of such Act, valuation of
Company Stock for all purposes under the Plan shall be made by an independent
appraiser, within the meaning of section 401(a)(28) of the Code. Forfeitures for
any Plan Year in excess of the Required Annual Matching Amount for such Plan
Year shall be held in the Trust Fund in a separate account for allocation for
the following Plan Year.
4.6 CASH DISTRIBUTIONS. Each Participant entitled to a share of an
Employer Contribution for any Plan Year made under Section 4.1 may elect, in
lieu of having his entire share of such Contribution paid to the Trust Fund and
applied for his benefit, to receive a Cash Distribution from the Company which
is his employer, in an amount equal to 33 1/3 percent of his vested share (to
the extent such share does not exceed five percent of his Compensation) of his
portion of the Employer Contribution for the Plan Year. Such election must be
made by submitting to the Administrator, not later than March 1 of the Plan Year
for which the Contribution is to be made, a completed form as prescribed by the
Administrator. An election to receive a Cash Distribution for any Plan Year is
irrevocable. A new election must be filed for each Plan Year in order to receive
a Cash Distribution with respect to each such Plan Year.
That portion of the Employer Contribution allocated to a Participant which
may be distributed in cash pursuant to this Section shall be fully vested and
nonforfeitable at all times. In the event of the death of the Participant before
payment of any elected Cash Distribution, such payment shall be made in
accordance with Section 6.3.
4.7 LIMITATIONS ON ALLOCATIONS TO PARTICIPANTS.
(a) LIMITATIONS ON ANNUAL ADDITIONS UNDER CODE SECTION 415.
Notwithstanding any other provision of the Plan, the total annual
additions (within the meaning of Code section 415(c)(2)) made to a
Participant's Accounts hereunder for any Limitation
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Year, when added to the annual additions to his accounts for such Year
under all other defined contribution Plans maintained by the Company
and the Affiliated Companies, shall not exceed the amount permitted
under section 415 of the Code. For Plan Years beginning before January
1, 2000, in the case of a Participant who also participates in a
defined benefit plan maintained by the Company or an Affiliated
Company, the annual addition for a limitation year will, if necessary,
be further limited so that the sum of the Participant's "defined
contribution fraction" (as determined under Code section 415(e) and
Treasury Regulations thereunder) and his "defined benefit plan
fraction" (as so determined) for such Limitation Year does not exceed
1.0. To the extent necessary to satisfy the limitations of section 415
of the Code for any Participant, the annual addition which would
otherwise be made with respect to the Participant under the Plan shall
be reduced only after the Participant's benefit is reduced under any
defined benefit plan.
Notwithstanding the foregoing, with respect to the Employee Stock
Ownership Plan, if no more than one-third of the Employer ESOP
Contributions for any Plan Year are allocated to the Accounts of
Participants who are Highly Compensated Employees, any Employer ESOP
Contributions applied to the payment of interest on an Acquisition
Loan and Forfeitures of shares of Company Stock acquired with the
proceeds of such a Loan shall not be included in determining annual
additions.
In the event that the amounts otherwise allocable hereunder to
the Accounts of any Participant for any Plan Year would be in excess
of the limitations provided in this Section 4.7(a), such excess shall
be disposed of in the following order:
(i) First, any voluntary Employee Profit Sharing Contributions
to the Plan, to the extent that their return would reduce
such excess, shall be forthwith returned to the Participant.
(ii) Second, any voluntary Employee ESOP Contributions that are
not matched by Employer ESOP Contributions, to the extent
that their return would reduce such excess, shall be
forthwith returned to the Participant.
(iii) Third, to the extent such excess is attributable to
Employer Contributions under the Plan for the Plan Year,
such excess shall be reallocated among other eligible
Participants in accordance with Section 5.2.
(iv) Fourth, to the extent such excess is attributable to any
Employee ESOP Contributions for the Plan Year that would
have been matched by Employer ESOP Contributions, such
excess shall be forthwith returned to the Participants.
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(v) Fifth, to the extent such excess is attributable to
Forfeitures under the Plan, such excess shall be reallocated
among other eligible Participants in accordance with Section
5.7.
(vi) Sixth, such excess shall otherwise be held in a suspense
account and used to reduce the Employer Contribution or the
Employer ESOP Contribution for the following Plan Year and
each succeeding Plan Year if necessary; PROVIDED, HOWEVER,
that no such suspense account shall participate in the
allocation of the investment earnings, gains or losses under
the Plan.
(b) NONDISCRIMINATION PROVISIONS UNDER CODE SECTION 401(k)(3).
(i) Notwithstanding any other provision of the Plan, the Plan shall
at all times meet the applicable requirements of Code section
401(k)(3) and Treasury Regulations thereunder, which are
incorporated herein by reference.
(ii) CORRECTION OF EXCESS CONTRIBUTIONS. If the Elective Contributions
made on behalf of Plan Participants, when added to that portion
of the Employer Contribution which may be distributed in cash
under Section 4.6, would cause the Plan to fail the
nondiscrimination tests under Code section 401(k)(3), then any
excess contributions and any allocable income or loss shall be
distributed to the affected Participants no later than 12 months
after the close of the Plan Year in which the excess contribution
was made. Any excess contributions to be distributed shall be
reduced by excess deferrals previously distributed under Section
4.7(d).
If a distribution becomes necessary, it will be first
applied to the Participant who is the Highly Compensated Employee
having the highest actual deferral amount, determined under Code
section 401(k)(3) and applicable regulations, until the
requirements of section 401(k)(3) are met or until such
Participant's actual deferral amount is reduced to the same
amount as that of the Participant who is the Highly Compensated
Employee having the next highest actual deferral amount. If
further limitations are required, the process shall be repeated
until the requirements of section 401(k)(3) are met.
The Administrator shall maintain such records as are
necessary to demonstrate compliance with the requirements of Code
section 401(k)(3).
(c) NONDISCRIMINATION PROVISIONS UNDER CODE SECTION 401(m)(2).
(i) Notwithstanding any other provision of the Plan, the Plan shall
at all times meet the applicable requirements under Code section
401(m)(2) and
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Treasury Regulations thereunder, which are incorporated herein by
reference.
(ii) CORRECTION OF EXCESS AGGREGATE CONTRIBUTIONS. If the Employee
Profit Sharing Contributions made on behalf of Plan Participants
would cause the Plan to fail the nondiscrimination tests under
Code section 401(m)(2), then any excess aggregate contributions
and any allocable income shall be returned to the affected
Participants no later than 12 months after the close of the Plan
Year in which the excess aggregate contribution was made.
If a distribution become necessary, it will be first applied
to the Participant who is the Highly Compensated Employee with
the highest actual contribution amount, determined under Code
section 401(m)(2) and applicable regulations, until the
requirements of Code section 401(m)(2) are met or until such
Participant's actual contribution amount is reduced to the same
percentage level as that of the Participant who is the Highly
Compensated Employee having the next highest actual contribution
amount. If further limitations are required, this process shall
be repeated until the requirements of Code section 401(m)(2) are
met. A Participant's excess aggregate contributions will be
designated by the Company as a distribution of excess aggregate
contributions.
The Administrator shall maintain such records as are
necessary to demonstrate compliance with the requirements of Code
section 401(m)(2).
(d) LIMITATION OF CODE SECTION 402(g).
(i) Elective Contributions made on behalf of a Participant, when
added to that portion of the Employer Contribution which may be
distributed in cash under Section 4.6 and to the Participant's
elective deferrals (within the meaning of section 402(g)(3) of
the Code) under all plans, contracts or arrangements maintained
by the Company or an Affiliated Company shall not exceed the
limitation of section 402(g) of the Code (as from time to time
adjusted by the Secretary of the Treasury).
(ii) CORRECTION OF EXCESS DEFERRALS. Notwithstanding any other
provision of the Plan, if prior to March 1 following the close of
a Participant's taxable year, the Participant notifies the Plan
that he requests a return of that portion of his prior Plan
Year's Elective Contributions which exceeds the limit of Code
section 402(g) (and any income allocable to such amount) the Plan
may (but is not required to) return such excess amount with
income allocable thereto not later than the April 15 following
the end of the Participant's taxable year. The Participant's
request will be limited solely to Elective Contributions deemed
made in the immediately prior taxable year. No distribution of an
excess deferral shall be made during
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the taxable year of a Participant in which the excess deferral
was made unless the correcting distribution is made after the
date on which the Plan received the excess deferral and both the
Participant and the Plan designate the distribution as a
distribution of an excess deferral. The Administrator shall
establish such rules as it deems necessary to carry out the
effect of this provision.
4.8 LIMIT ON CONTRIBUTIONS OF COMPANY. The sum of the contributions by the
Company shall in no event be greater than the amount which is deductible under
section 404 of the Code. All Company contributions are hereby conditioned on
their deductibility under section 404 of the Code.
4.9 LIMITED RETURN OF CONTRIBUTIONS. Notwithstanding any other provision
of the Plan, any contribution which was made by the Company under a mistake of
fact or which was conditioned on the deductibility of the contribution under
section 404 of the Code, but the deduction of which is disallowed or treated as
disallowed, shall upon request of the Company be returned to it within one year
following the payment of such contribution or the disallowance of such deduction
(to the extent disallowed), whichever is applicable.
4.10 CERTAIN TRANSFERS. A Participant otherwise entitled to receive a
distribution from the Employee Stock Ownership Plan during his employment with
the Company may roll over or direct the transfer of all or any portion of such
distribution to the Profit Sharing Plan. Such amount shall be held by the
Trustee in a separate account and invested at the direction of the Participant
as provided in Section 5.9. Amounts representing the balance to the credit of
each participant in the MacDermid Imaging Plan who becomes a Participant as of
January 1, 1999 shall be transferred to the Plan and each such amount shall be
held in one or more separate individual accounts created by the Plan
Administrator in accordance with Article V of the Plan for the benefit of the
affected Participant. Optional forms of benefit, if any, with respect to such
amounts shall continue to be available under the Plan to the extent required by
section 411(d)(6) of the Code.
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ARTICLE V
ALLOCATIONS TO PARTICIPANTS' ACCOUNTS
5.1 INDIVIDUAL ACCOUNTS. The Administrator shall create and maintain, or
cause to be created and maintained, adequate records to disclose the interest in
the Trust Fund of each Participant, former Participant and beneficiary. Such
records shall be in the form of individual accounts and shall reflect the amount
invested in each of the separate investment funds available from time to time
under the Profit Sharing Plan, or in Company Stock or other investments under
the Employee Stock Ownership Plan, and credits and charges shall be made to such
accounts in the manner herein described. A Participant shall have six separate
accounts, an Employer Contribution Account, an Employee Profit Sharing
Contribution Account, an Elective Profit Sharing Contribution Account, an
Elective ESOP Contribution Account, an Employee ESOP Contribution Account and an
Employer ESOP Contribution Account, and such other accounts as the Administrator
may deem appropriate. The maintenance of individual accounts is for accounting
purposes, and a segregation of the assets of the Trust Fund shall not be
required.
5.2 COMPUTATION AND ALLOCATION OF EMPLOYER CONTRIBUTIONS. As of March 31
of each year, there shall be allocated to the Employer Contribution Account of
each person who was a Participant on the last day of the Plan Year, including a
Participant who terminated employment on such date, or who ceased employment for
reasons of retirement, disability or death during the Plan Year an undivided
proportionate interest in the Employer Contribution, if any, made by the Company
for such Plan Year. The amount allocated to each such Participant shall be an
amount which bears the same ratio to the total Employer Contribution as the
Participant's Compensation for such Year bears to the total Compensation for all
such Participants for such Year.
5.3 ALLOCATION OF EMPLOYEE PROFIT SHARING AND EMPLOYEE ESOP CONTRIBUTIONS.
Each Participant's Employee Profit Sharing Contributions, if any, made pursuant
to Section 4.2 and Employee ESOP Contributions, if any, made pursuant to Section
4.4 shall be allocated to such Participant's Employee Profit Sharing
Contribution Account and Employee ESOP Contribution Account, respectively, for
each biweekly or monthly payroll date.
5.4 ALLOCATION OF ELECTIVE CONTRIBUTIONS. A Participant's Elective Profit
Sharing Contributions, if any, made pursuant to Section 4.3(a) and Elective ESOP
Contributions, if any, made pursuant to Section 4.3(b) shall be allocated to his
Elective Profit Sharing Contribution Account and Elective ESOP Contribution
Account, respectively, for each biweekly or monthly payroll date.
5.5 ALLOCATION OF EMPLOYER ESOP CONTRIBUTIONS AND FORFEITURES. Subject to
the provisions of Section 5.13, for each biweekly or monthly payroll date the
portion of the Employer ESOP Contribution for the Plan Year that is attributable
to Elective ESOP Contributions made pursuant to Section 4.3(b) credited for the
period ending on such payroll date shall be allocated among the Employer ESOP
Contribution Accounts of Participants. Employer ESOP Contributions for any
period shall be allocated to each Participant's Employer ESOP
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Account in an amount equal to the Required Matching Amount with respect to such
Participant. Contributions made by the Company in shares of Company Stock shall
be allocated at their fair market value, determined as provided in Section 4.5.
Fractional shares shall be allocated to the Accounts of Participants, but no
allocations shall be made in fractions of less than one-thousandth of a share.
5.6 ALLOCATION OF INCOME AND DIVIDENDS.
(a) With respect to amounts invested in the separate investment funds
available under the Profit Sharing Plan, the Income of each separate
investment fund of the Trust Fund during each Plan Year shall be
allocated as received among the Participants (including, for purposes
of this Section 5.6, a former Participant) in each separate investment
fund.
There shall be allocated to each Participant an undivided
proportionate interest in such Income, the amount of which shall bear
the same ratio to the total of such Income as the ratio which the
market value of such Participant's interest in the separate investment
fund bears to the aggregate market value of all Participants'
interests in such separate investment fund.
(b) With respect to amounts held in Participant's Accounts under the
Employee Stock Ownership Plan and Company Stock allocated to
Participant's Accounts under the Profit Sharing Plan, except as
otherwise provided in Section 7.4, cash dividends on all shares of
Company Stock allocated to Participants' Accounts and on all shares
purchased with such cash dividends shall be allocated as received
among such Participant Accounts in proportion to the number of shares
of Company Stock allocated to each such Account. Shares of Company
Stock received by the Trustee as a stock dividend or stock split
attributable to shares of Company Stock allocated to Participants'
Accounts shall be allocated among all such Accounts as received in
proportion to the number of shares of Company Stock allocated to each
such Account. Shares of Company Stock received by the Trustee as a
stock dividend or stock split attributable to unallocated Company
Stock held in the Trust Fund shall be held by the Trustee until such
unallocated shares are allocated to Participants' Employer ESOP
Accounts. Such shares received as a stock dividend or stock split
shall be allocated among Participants' Employer ESOP Accounts in the
same proportion and at the same time that the unallocated shares are
so allocated.
(c) All other Income of the Trust Fund during each calendar quarter shall
be allocated as received among the Participant Accounts to which
investments with respect to such Income are allocated as of the close
of such quarter, excluding for this purpose any Company Stock
allocated to such Accounts.
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5.7 FORFEITURES. If upon termination of employment a Participant's vested
interest in his Employer Contribution Account or Employer ESOP Contribution
Account is less than 100 percent, then as of the Valuation Date next following
or coinciding with his termination such Account shall be made to reflect two
separate portions, one representing his vested percentage and the other his
forfeiture percentage. The forfeiture percentage, if any, of each separate
investment fund (other than the Individual Company Matched Stock Fund) shall be
held in such fund or partially or totally transferred from time to time to any
other separate investment fund as the Investment Committee shall in its sole
discretion determine until it is applied in accordance with the provisions of
this Section 5.7. As of the last day of the Plan Year in which the terminated
Participant incurs a One-Year Break in Service, or, if earlier, on the last day
of the Plan Year in which distribution to such Participant of his benefits is
made as provided in Section 6.8, the terminated Participant's previous Employer
Contribution Account or Employer ESOP Contribution Account, as the case may be,
shall be closed and his forfeiture percentage shall be applied to reduce the
Employer Contribution or Employer ESOP Contribution for the next Plan Year;
provided, that if the benefit of any Participant is to be restored in accordance
with Section 6.11, Forfeitures for the current Plan Year shall first be applied
for such purpose. If the terminated Participant returns to the employ of the
Company or an Affiliated Company before he has incurred five consecutive
One-Year Breaks in Service, then, subject to Sections 6.9 and 6.11, the amount
of the forfeiture percentage maintained in his previous Employer Contribution
Account in each of the separate investment funds shall upon reparticipation be
credited to such funds in his new Employer Contribution Account, and the amount
of the forfeiture percentage in his previous Employer ESOP Contribution Account
shall be credited to his new Employer ESOP Contribution Account, together with
the amount of a distribution repaid by the Participant, if any, pursuant to
Section 6.11.
5.8 ACCOUNT VALUE. The value of the interest of any Participant in the
Trust Fund at any time prior to his retirement date or termination date shall be
the market value, as determined by the Trustee, of his interest at the next
preceding Valuation Date, plus Employee Profit Sharing Contributions, Elective
Contributions, Employee ESOP Contributions and rollover or transferred amounts,
if any, and less withdrawals or other distributions, if any, made subsequent
thereto, and on and after the date of his retirement, disability, death or other
termination of employment shall be the value of his Employee Profit Sharing
Contribution Account, Elective Profit Sharing Contribution Account, Elective
ESOP Contribution Account and Employee ESOP Contribution Account, and any
rollover or transfer account, and the vested portion of his Employer
Contribution Account and Employer ESOP Contribution Account as of the Valuation
Date coinciding with the date of distribution. Notwithstanding anything herein
to the contrary, the value of any portion of a distribution of any benefit of a
Participant that is invested in Company Stock shall be determined as of the date
of distribution.
5.9 INVESTMENT OPTIONS UNDER PROFIT SHARING PLAN. Subject to the
limitations hereinafter set forth and to such further rules as may be prescribed
by the Administrator, including any rules as to the minimum amount of any
Employer Contributions, Employee Profit Sharing Contributions or Elective Profit
Sharing Contributions which may be so invested, a Participant may give
instructions or changes of instructions to the Administrator to invest (a)
Employer Contributions allocated to his Employer Contribution Account in an
amount equal
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to not more than five percent of his Compensation, (b) Employee Profit Sharing
Contributions and Elective Profit Sharing Contributions made to the Plan on his
behalf, and (c) amounts rolled over or transferred to the Plan in one or more of
the following separate investment funds within the Trust Fund as the Participant
shall designate. An election pursuant to this Section 5.9 shall become
effective, and shall be reflected, as soon as is administratively feasible. An
election, once made, may be changed by a Participant not more often than twice
in any Plan Year, unless the Administrator permits such changes to be made more
frequently, but in no event more often than four times in any Plan Year. An
election filed pursuant to this Section 5.9 shall remain in effect until changed
by the Participant by the filing of a subsequent election in accordance with the
foregoing provisions of this Section 5.9.
The separate investment funds maintained within the Trust Fund shall
consist of such investment funds as are specified on Schedule A attached hereto
and made a part hereof. Notwithstanding anything herein to the contrary, the
Investment Committee may from time to time in its sole discretion change such
other separate investment funds by amending such Schedule A.
In the event that a Participant fails to provide investment instructions to
the Administrator in accordance with this section 5.9, amounts held in his
Accounts under the Profit Sharing Plan shall be invested in the Commingled
Company Stock Fund.
5.10 TRANSFERS AMONG INVESTMENT FUNDS. Subject to the limitations
hereinafter set forth and to such further rules as may be prescribed by the
Administrator, including any rules as to the minimum amount of transfers, a
Participant (including, for purposes of this Section 5.10, a former Participant)
may give instructions or changes of instructions to the Administrator to
transfer all or any portion of the amounts then held in his Employer
Contribution Account, Employee Profit Sharing Contribution Account or Elective
Profit Sharing Contribution Account and any rollover or transfer account from
one separate investment fund to another separate investment fund. Such
instructions shall become effective, and shall be reflected, as soon as is
administratively feasible. An election, once made, may be changed by a
Participant not more often than twice in any Plan Year, unless the Administrator
permits such changes to be made more frequently.
No additional amounts may be invested in or transferred to the Individual
Company Matched Stock Fund after the Effective Date. Amounts invested in such
Fund as of the Effective Date may not be transferred on or between the Effective
Date and the June 14, 1998 to another investment fund within the Trust Fund
except as provided in this Section. A Participant who is fully vested in his
Employer Contribution Account may transfer in any Plan Year 20 percent of the
shares allocated to him in the Individual Company Matched Stock Fund to the
Commingled Company Stock Fund; PROVIDED, HOWEVER, that effective June 15, 1998,
a Participant may transfer in any Plan Year all or a portion of the shares
allocated to him in the Individual Company Matched Stock Fund to the Commingled
Company Stock Fund, without regard to whether said Participant is fully vested
in his Employer Contribution Account. Any election to transfer funds shall
comply in form and manner, including requirements as to notice and timing, with
such rules as the Administrator may prescribe.
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In addition, a Participant who has attained age 55 or retired may
thereafter elect to transfer amounts from the Individual Company Matched Stock
Fund to any other investment fund as of the last day of any calendar quarter
following the receipt by the Administrator of his election to do so; PROVIDED,
HOWEVER, that in any such case (a) such election shall apply only to amounts
which have been held on behalf of such Participant in the Individual Company
Matched Stock Fund for at least two years as of the fifteenth day immediately
preceding the date as of which such election is to be effective, (b) if such
election is to be effective prior to the June 30 next following a Participant's
retirement from the employ of the Company, it shall not apply to any
contributions allocated to the Individual Company Matched Stock Fund with
respect to the Plan Year ending on the March 31 next following the date as of
which such election is to be effective, (c) the Administrator may defer to a
later date any transfer provided for herein to the extent that he determines in
good faith that there are insufficient assets of the appropriate character
available in the Trust Fund to effect such transfer as of the date originally
requested, in which case such transfer shall be made as soon thereafter as
sufficient assets of such character become available for such purpose, and (d)
the Administrator may establish such other uniform rules with respect to such
elections and transfers as he deems necessary and appropriate; PROVIDED further,
that effective June 15, 1998, a Participant may transfer in any Plan Year all or
a portion of the shares allocated to him in the Individual Company Matched Stock
Fund to any other investment fund as of the last day of any calendar quarter
following the receipt by the Administrator of his election to do so, without
regard to whether said Participant has attained age 55 or retired.
5.11 PURCHASE, VOTING AND OTHER RIGHTS ON COMPANY STOCK. In the event that
any rights, warrants or options are issued on the shares or other securities of
the Company held by the Trustee, the Trustee shall exercise them to the extent
that cash is then available to do so. Shares acquired in this manner shall be
treated as shares bought for the net price paid by the Trustee. Any rights,
warrants or options on shares of the Company which cannot be exercised for any
reason may be sold by the Trustee and the proceeds shall be treated as current
cash dividends received on the shares to which they are attributable and
allocated in the manner described in Section 5.6. All shares or other securities
of the Company held by the Trustee shall be voted by the Trustee (a) at the
timely direction of the Participant to whom such shares are allocated or his
beneficiary; PROVIDED, that fractional shares shall be combined to the extent
possible to reflect the direction of the respective Participants or
beneficiaries; or (b) in the case of unallocated shares and shares allocated to
Participants' Accounts for which the Trustee does not receive timely directions,
in the proportion specified in the directions received by the Trustee for all
other shares of the Company, consistent with the requirements of ERISA. Shares
held by the Trustee shall be tendered or not tendered, as the case may be, in
any transaction soliciting such tender in accordance with this Section as if the
decision to tender were a vote by the Participant with respect to shares in
which the Participant has a fully vested and nonforfeitable interest.
Participants shall be named fiduciaries, within the meaning of section 402(a)(2)
of ERISA, for purposes of voting or making such other decisions with respect to
shares or other securities of the Company held by the Plan. A former participant
shall retain his rights as a Participant under this Section until distribution
of his benefits under the Plan has been completed.
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5.12 CERTAIN PROTECTIONS WITH RESPECT TO ESOP STOCK. In the event that at
any time within 15 months after distribution from the Plan shares of Company
Stock are not listed on a national securities exchange registered under section
6 of the Securities Exchange Act of 1934, as amended, or quoted on a system
sponsored by the National Securities Association under section 15A(b) of such
Act, the Administrator shall, on or before the tenth day after the date on which
such shares cease to be so listed or quoted, notify each Participant or
beneficiary holding shares of Company Stock distributed within the applicable
period and attributable to the Participant's Accounts under the Employee Stock
Ownership Plan that the shares held by such Participant or beneficiary are, to
the extent that no federal or state law will be violated by the Company honoring
the same, subject to a put option to the Company upon the terms and conditions
specified in Treasury Regulations under section 4975 of the Code. Such terms and
conditions shall be incorporated in such notice, including the right of the
Participant or beneficiary to exercise the put option for the remainder of the
15-month period.
Except as otherwise permitted or required under this Section 5.12 or
applicable regulations, no shares of Company Stock acquired with the proceeds of
an Acquisition Loan shall be subject to a put, call or other option, or a
buy-sell or similar arrangement, either while held in the Trust Fund under the
Plan or when distributed from the Plan, regardless of whether the Employee Stock
Ownership Plan continues to qualify as an employee stock ownership plan or
whether the Acquisition Loan is repaid.
5.13 ALLOCATION OF COMPANY STOCK PURCHASED WITH ACQUISITION LOAN.
Notwithstanding the foregoing provisions of this Article V, in the event that
the Trustee shall at any time purchase qualifying employer securities, as
defined under section 4975(e)(8) of the Code, with the proceeds of an
Acquisition Loan, such Stock shall not be allocated to the Accounts of
Participants when received by the Trustee, but shall be segregated and held
unallocated in a separate suspense account subject to the provisions of this
Section 5.13.
Securities held in the suspense account shall be released from such
account, and allocated to the Employer ESOP Contribution Accounts of
Participants in accordance with the provisions of Section 5.5, in installments
as of the close of each calendar quarter over the original duration of the
Acquisition Loan. Except as may be otherwise required by applicable law,
including without limitation Treasury Regulations, section 54.4975-7(b)(8), the
amount of securities to be released from the suspense account as of the close of
any calendar quarter shall be that number of the total securities in the
suspense account immediately before such release multiplied by a fraction the
numerator of which is the amount of principal and interest paid on the Loan for
such calendar quarter and the denominator of which is the sum of the numerator
plus the principal and interest to be paid for all future years under the Loan,
without taking into account any possible extensions or renewal periods. For
purposes of determining such amounts if the interest rate is variable, the
interest to be paid in future years shall be computed by using the interest rate
applicable as of the close of the calendar quarter.
5.14 INTEREST OF PARTICIPANTS IN TRUST FUND. Nothing contained herein shall
be deemed to give any Participant an interest in any specific assets of the
Trust Fund or in any contribution
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made by the Company to the Plan, or any other interest under the Plan, other
than his right to receive benefits in accordance with the provisions of Articles
VI and VII.
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ARTICLE VI
BENEFITS
6.1 RETIREMENT. An Employee may retire as of the first day of any month on
or after the attainment of his Early Retirement Age or Normal Retirement Age. In
the event of a Participant's retirement, he shall be entitled to a benefit in
the amount of the value of his interest in the Trust Fund, determined in
accordance with Section 5.8. A Participant shall be fully vested in amounts held
in his Employer Contribution Account and Employer ESOP Contribution Account as
of the date on which he attains Early Retirement Age.
6.2 DISABILITY. If, because of a medically determinable physical or mental
impairment likely to result in death or to be of continued duration of at least
one year, a Participant cannot engage in any substantial gainful employment and
terminates employment with the Company and the Affiliated Companies, he will be
entitled to a benefit in the amount of the value of his interest in the Trust
Fund, determined in accordance with Section 5.8. In the event of such a
disability, the Participant shall be fully vested in amounts held in his
Employer Contribution Account and Employer ESOP Contribution Account. Whether or
not a Participant is disabled will be determined by the Administrator in its
sole discretion on the basis of medical evidence satisfactory to the
Administrator.
6.3 BENEFITS ON DEATH. In the event of the death of a Participant or
former Participant, his designated beneficiary or beneficiaries will have a
fully vested and nonforfeitable interest in, and will be entitled to receive a
benefit equal to, the amount or remaining amount of his interest in the Trust
Fund, as determined in accordance with Section 5.8.
Each Participant may at any time and from time to time designate, in the
manner described in this Section, one or more persons to be the beneficiary or
beneficiaries to receive all benefits payable under the Plan upon or after his
death. Each beneficiary designation shall be on a form furnished by the
Administrator, signed by such Participant and delivered to the Administrator and
upon receipt by the Administrator shall be deemed to be a revocation of all
prior beneficiary designations, if any, made by the Participant. At any time and
from time to time each Participant may revoke a prior beneficiary designation
made by him by a written instrument signed by the Participant and delivered to
the Administrator. No beneficiary designation or revocation of a designation
shall become effective prior to its receipt by the Administrator.
Notwithstanding the foregoing, if a Participant was married at the time of his
death, he shall be deemed to have named his surviving spouse as his beneficiary
unless (a) such spouse has consented in writing to the designation of another
beneficiary or beneficiaries and that consent acknowledges the effect of such
designation and the specific beneficiary or beneficiaries or, with respect to
subsequent designations, the consent of the spouse explicitly permits such
designations without any requirement of further consent by such spouse, and the
consent is witnessed by a notary public, or (b) it has been established to the
satisfaction of the Administrator (or a Plan representative designated by him)
that the Participant has no spouse, or that the spouse's consent could not be
obtained because the spouse could not be located, or
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because of such other circumstances as may be prescribed in applicable Treasury
Regulations. Any consent by a spouse or determination by the Administrator with
respect to a spouse shall be effective only with respect to such spouse. Any
consent that permits beneficiary designations by the Participant without any
requirement of further consent must acknowledge the spouse's right to limit
consent to a specific beneficiary and the spouse's voluntary election to
relinquish such right. Any consent by a spouse under this Section shall be
irrevocable.
If a Participant has not designated any beneficiary, or no designated
beneficiary survives the Participant, the benefit payable upon his death will be
paid to his estate.
6.4 VESTING. If a Participant terminates employment for any reason other
than retirement, disability or death, the Participant shall be entitled to a
benefit equal to the full amount of his Employee Profit Sharing Contribution
Account, Elective Profit Sharing Contribution Account, Elective ESOP
Contribution Account, Employee ESOP Account and any rollover or transfer
account, plus, in the case of a Participant who has completed five years of
Credited Service, the full amount of his Employer Contribution Account and
Employer ESOP Contribution Account, determined in accordance with Section 5.8,
together with any allocable share of the Employer Contribution for the Plan Year
of his termination of employment as provided in Section 5.2. Subject to Section
8.2, a Participant who has completed less than five years of Credited Service
will not be vested in any portion of his Employer Contribution Account or
Employer ESOP Account and his interest in each such Account shall be subject to
forfeiture in accordance with the provisions of Section 5.7.
6.5 CHANGES IN VESTING SCHEDULE. If the Plan is amended at any time and
such amendment directly or indirectly affects the computation of the
nonforfeitable interest of a Participant in his Employer Contribution Account or
Employer ESOP Contribution Account, such amendment shall apply to any
Participant who has completed three years of Credited Service as of the end of
the period described below only to the extent that the Participant's
nonforfeitable interest in each such Account is equal to or greater than such
interest determined without regard to the amendment. The period referred to in
the preceding sentence will begin on the date the amendment of the vesting
schedule is adopted and will end on the date which is 60 days after the later of
(a) the date on which the amendment is adopted and (b) the date on which the
amendment becomes effective.
6.6 MANNER OF PAYMENT OF BENEFITS. Subject to such rules as the
Administrator shall prescribe, a Participant or former Participant may elect to
receive his benefits hereunder in any of the following forms:
(a) in a lump sum in cash or in kind (payable currently or on a deferred
basis);
(b) in equal periodic installments payable not less frequently than
annually over a fixed period not exceeding 15 years (or, if less, the
life expectancy of the Participant or the joint life and last survivor
expectancy of the Participant and his beneficiary);
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(c) in any combination of the methods provided in (a) and (b);
PROVIDED, that in the event of the death of the Participant or former
Participant after benefits have commenced, any remaining benefits will be paid
to his beneficiary in an immediate lump sum. In the event of the death of a
Participant or former Participant prior to the commencement of benefits, his
beneficiary may elect the form of benefit payments in accordance with this
Section 6.6.
In the case of distributions to be made in installments, the amount of an
installment for a particular calendar year shall be determined by dividing (i)
the value of the Participant's Accounts as of the Valuation Date immediately
preceding the beginning of such year (adjusted for any allocations of
contributions and any distributions which are made after the Valuation Date but
before such year) by (ii) the greater of (A) the number of remaining
installments under the period elected by the Participant as of the beginning of
such year, and (B) the number of years in the applicable remaining life
expectancy for such year determined pursuant to proposed Treasury Regulations,
section 1.401(a)(9)-1, or (if the Participant's beneficiary is not his spouse)
the applicable divisor for such year determined under section 1.401(a)(9)-2 of
the proposed Treasury Regulations. For purposes of determining the amount of any
installment distribution, the life expectancies of a Participant and his spouse
will be recalculated annually, if elected by the Participant, pursuant to
section 401(a)(9) of the Code.
An election pursuant to this Section must be made prior to the commencement
of benefits and shall become irrevocable upon the commencement of such benefits.
In the absence of any election by the Participant, former Participant or
beneficiary his benefits hereunder shall be payable in an immediate lump sum.
6.7 ELECTION TO TAKE BENEFITS IN STOCK. All benefits payable from the
Company Stock Fund shall be paid in cash or shares of Company Stock, as elected
by the Participant or former Participant; PROVIDED, that he submits a written
notice of such election to the Administrator at least 30 days prior to the date
his benefit is to commence (or such shorter period as may be provided by rules
or regulations issued by the Secretary of the Treasury). Notwithstanding the
foregoing, fractional shares of Company Stock shall be paid in cash. In the
event a Participant or former Participant fails to make an election under this
Section, his benefit will be distributed in cash.
All benefit payments, as well as any subsequent transfer of Company Stock
paid out from the Plan shall be effected in accordance with all applicable
requirements of federal and other securities laws as from time to time in
effect. In order to assure compliance with such securities laws and for other
purposes deemed necessary and proper, the Trustee or the Company may in its
discretion require as conditions to the payment of benefits under the Plan
either (a) that a registration statement under the Securities Act of 1933, as
amended, with respect to the shares of Company Stock to be distributed has
become, and continues to be, effective and that a requisite prospectus is
available which meets, and conforms to, the requirements of such Act and the
rules and regulations thereunder, or (b) that the recipient of the benefit
payment shall have (i) represented, warranted and agreed, by documents
satisfactory to the Company or the Trustee in
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form and substance, executed and delivered at and as of the time of payment,
that he is acquiring such shares for his own account and not with a view to or
in connection with any distribution, (ii) agreed to restrictions on transfer, in
form and substance satisfactory to the Company or the Trustee, and (iii) agreed
to an endorsement which makes appropriate reference to such representations,
warranties, agreements and restrictions on the certificates representing such
shares.
6.8 TIME OF PAYMENT OF BENEFITS. Distribution of benefits, or the
commencement thereof, shall be made as soon as administratively feasible after
the event giving rise to the distribution and, in any event, within 60 days
after the close of the Plan Year in which such event occurs. Notwithstanding the
foregoing, such Participant or former Participant may elect, subject to such
rules as the Administrator may prescribe, to have his benefits commence as of
such later date after his termination of employment and before his attainment of
Normal Retirement Age as the Participant shall request.
6.9 SEPARATE ACCOUNT. Notwithstanding any other provision of the Plan, if
a Participant or former Participant receives a distribution from his Employer
Contribution Account or Employer ESOP Contribution Account at a time when he has
a nonforfeitable interest in less than 100 percent of such Account, then upon
the distribution a separate account shall be established for him. Such separate
account shall be credited with the balance remaining in the Participant's
Employer Contribution Account or Employer ESOP Contribution Account, as the case
may be, after the distribution and shall be used to determine his nonforfeitable
interest, if any, in such balance thereafter. On any particular date, the
Participant or former Participant shall be entitled to a nonforfeitable portion
of the balance of his separate account, payable as otherwise herein provided,
equal to an amount determined by the following formula:
X = P (AB + D) - D
where P is the applicable vesting percentage determined under Section 6.4 (or
Section 8.2, if applicable) as of such date, AB is the balance in the separate
account as of such date; and D is the amount which was last distributed from the
separate account or from the Participant's Account when the separate account was
established. The establishment of a separate account for a Participant whose
employment with the Company has terminated shall not prevent a Forfeiture of any
portion of his Employer Contribution Account or Employer ESOP Contribution
Account from occurring and a reallocation thereof, in accordance with Section
5.7; provided, that if any portion of such separate account is forfeited, the
remaining balance, if any, in such separate account will thereafter be fully
vested and nonforfeitable. Except as otherwise provided in this Section 6.9, a
separate account shall be treated as though it were the Account from which it
was derived for all purposes under the Plan.
6.10 CASH-OUTS OF CERTAIN BENEFITS. Notwithstanding any other provision of
the Plan, with respect to a Participant whose employment terminates for any
reason and who is entitled to a nonforfeitable benefit under the Plan, if the
present value of such nonforfeitable benefit does not, and did not at the time
of any prior distribution, exceed $3,500, the Participant's benefit shall be
distributed in cash or in kind in a lump sum as soon as administratively
feasible after such
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termination; PROVIDED, however, that effective April 1, 1998, if the present
value of such nonforfeitable benefit does not, and did not at the time of any
prior distribution, exceed $5,000, the Participant's benefit shall be
distributed in cash or in kind, in a lump sum as soon as administratively
feasible after such termination.
6.11 RESTORATION OF BENEFITS. If a Participant who terminated employment
with the Company and the Affiliated Companies for any reason other than
retirement, disability or death and received a distribution of benefits
hereunder returns to the employ of the Company before incurring five consecutive
One-Year Breaks in Service and again becomes a Participant, such Participant may
repay to the Plan the full amount of such distribution derived from Employer
Contributions and Employer ESOP Contributions. In the event of such repayment
the full present value of the Participant's benefit derived from such
contributions (nonforfeitable and forfeitable, if any) as of the date of such
distribution shall be restored to his accounts.
Any restoration of a Participant's Employer Contribution Account or
Employer ESOP Contribution Account shall be made first from then current
Forfeitures and second from additional contributions of the Company for such
purpose.
6.12 DIRECT ROLLOVER. With respect to distributions made on or after
January 1, 1993, a Participant may elect to have all or any portion of a
distribution paid in the form of a direct rollover to an individual retirement
account or annuity described in section 408(a) or (b) of the Code, an annuity
plan qualified under section 403(a) of the Code, or a plan and trust qualified
under section 401(a) of the Code, if such plan accepts direct rollover
distributions. Notwithstanding the foregoing, this Section shall not apply to
any distribution that is (a) one of a series of substantially equal installments
over the life expectancy of the Participant or the joint life expectancies of
the Participant and his beneficiary, or over a fixed period of ten years or
more, (b) a required minimum distribution under section 401(a)(9) of the Code,
(c) a distribution (or portion of a distribution) of amounts not otherwise
includable in income, (d) a distribution in an amount less than $200, or (e) a
distribution that is otherwise not an eligible rollover distribution, within the
meaning of section 402(f)(2)(A) of the Code and applicable Treasury Regulations
thereunder. Any election pursuant to this Section 6.12 shall be made in such
form and manner as the Administrator may prescribe and shall specify the
retirement plan to which the distribution is to be made. Any such election may
be revoked by the Participant at any time prior to the time distribution is
made. If no election is made by the Participant under this Section, the
distribution shall be paid to the Participant. If any distribution is payable to
the spouse or former spouse of a Participant, this Section shall apply as if
such spouse or former spouse were the Participant, except that any such
distribution may be directly rolled over only to an individual retirement
account or annuity.
The Administrator shall provide Participants with notice with respect to
the direct rollover of eligible rollover distributions no less than 30 days and
no more than 90 days prior to the Participant's annuity starting date, as
defined for purposes of section 411(a)(11) of the Code; PROVIDED, HOWEVER, that
the Participant may affirmatively elect, in accordance with such procedures as
the Administrator may prescribe, to have benefits commence sooner than 30 days
after such notice.
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6.13 IMMEDIATE DISTRIBUTIONS. Subject to Section 6.10, no distribution to a
Participant will be compelled of amounts held in his Accounts before his
attainment of age 62, unless the written consent of the Participant and, if the
distribution is subject to sections 401(a)(11) and 417 of the Code, the
Participant's spouse, has been obtained. Such consent shall be made in writing
within the 90-day period ending on the Participant's annuity starting date, as
defined for purposes of section 401(a)(11) of the Code. Within the period
beginning 90 days before the Participant's annuity starting date (as so defined)
and ending 30 days before such date, the Administrator will provide the
Participant with written notice containing a general description of the material
features and an explanation of the relative values of the optional forms of
benefit available under the Plan and informing the Participant of his right to
defer receipt of the distribution until age 62; PROVIDED, that, if the
distribution is not subject to sections 401(a)(11) and 417 of the Code, the
Participant may affirmatively elect to have benefits commence less than 30 days
after such notice. Notwithstanding the preceding sentence, the Plan may provide
the written notice referred to in said sentence after the Participant's annuity
starting date (subject to applicable Treasury regulations, if any); provided,
that the applicable election period under Section 417(a)(6) of the Code shall
not end before the 30th day after the date on which such written notice is
provided. A Participant may elect (with spousal consent, if applicable) to waive
the requirement that the above-referenced written notice be provided at least 30
days before the Participant's annuity starting date (or to waive the 30-day
requirement under the preceding sentence); PROVIDED, that the benefit
distribution commences more than 7 days after such written notice is furnished.
Notwithstanding the foregoing, all or any portion of a Participant's Accounts
may be distributed without the consent of the Participant or the Participant's
spouse to the extent that a distribution is required to satisfy section
401(a)(9) or section 415 of the Code.
6.14 REQUIRED DISTRIBUTIONS. Notwithstanding any other provision of the
Plan, distribution of benefits under Article VI shall satisfy the requirements
of this Section 6.14. The benefits of a Participant will be distributed (a) to
the Participant in full not later than the required beginning date, or (b)
beginning not later than the required beginning date, to the Participant over a
period not extending beyond the life expectancy of the Participant, or to the
Participant and his designated beneficiary over a period not extending beyond
the life expectancy of the Participant and the designated beneficiary. For
purposes of this Section 6.14, a Participant's "required beginning date" shall
be the date determined under Section 6.15(b) with respect to the Participant,
and the term "designated beneficiary" shall have the meaning given such term
under section 401(a)(9) of the Code and Treasury Regulations thereunder.
In the event that distribution of benefits to a Participant has commenced
and the Participant dies prior to the distribution of his entire benefit, but
after the required beginning date, the remaining portion of the benefit will be
distributed at least as rapidly as under the method of distribution used as of
the date of the Participant's death. In the event a Participant dies before
distribution of benefits has commenced or after actual commencement but before
the required beginning date, the remaining benefit will be distributed within
five years unless the benefit is payable to a designated beneficiary, in which
case such benefit will be distributed, beginning not later than one year after
the death of the Participant (or such other time as may be prescribed by
regulations), over a period not exceeding the life expectancy of such
beneficiary; provided, that if the designated beneficiary is the Participant's
spouse, distributions will not be
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required to commence hereunder earlier than the date on which the Participant
would have attained age 70 1/2 and, in the event the Participant's spouse dies
prior to the commencement of distributions, the provisions of this Section shall
apply as if such spouse were the Participant. Any distribution required under
the incidental death benefit requirements of section 401(a)(9)(G) of the Code
will be treated as a distribution required under section 401(a)(9) of the Code
and this Section. The provisions of this Section will be interpreted and applied
in accordance with applicable Treasury Regulations under section 401(a)(9) of
the Code, including proposed Treasury Regulations, sections 1.401(a)(9)-1 and
1.401(a)(9)-2.
6.15 LATEST COMMENCEMENT DATE OF BENEFITS. In no case will the payment of
benefits to any Participant commence later than the earliest of:
(a) unless the Participant otherwise elects in writing, the sixtieth day
after the latest of the following:
(i) the close of the Plan Year in which occurs the date on which
the Participant attains age 62;
(ii) the close of the Plan Year in which occurs the tenth
anniversary of the year in which the Participant commenced
participation in the Plan; or
(iii) the close of the Plan Year in which the Participant ceases
to be an Employee; and
(b) except with respect to a Participant who is a 5 percent owner (as
defined in section 416(i)(1)(B)(i) of the Code) of the Company or any
Affiliated Company for the Plan Year ending in the calendar year in
which the Participant attains age 70 1/2, the April 1 next following
the end of the calendar year in which the Participant retires;
PROVIDED, that the Participant may elect an earlier commencement date
for benefit distribution, but not earlier than the April 1 next
following the end of the calendar year in which the Participant
attains age 62, by filing a written, irrevocable election with the
Administrator in a form acceptable to the Administrator at least 30
days prior the proposed benefit commencement date; PROVIDED further,
that with respect to any Participant who attained age 70 1/2 before
April 1, 1997 (and who was not a 5 percent owner (as defined in
section 416(i)(1)(B)(i) of the Code) of the Company or any Affiliated
Company for any of the Plan Years ending after the Participant
attained age 70 1/2) but did not cease covered employment under the
Plan (including Continuous Service under the Prior Plan, Prior ESOP
and/or the MacDermid Imaging Plan) before April 1, 1997 and to whom
benefit payments from the Plan (including the Prior Plan, the Prior
ESOP or the MacDermid Imaging Plan) commenced in accordance with the
requirements of section 401(a)(9) of the Code, each such Participant
may elect, at any time prior to the date the Participant retires, to
stop such payments from the Plan (subject to the terms of any
applicable qualified domestic relations order
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within the meaning of section 414(p) of the Code) and, if such an
election is made, the Participant's benefit shall be distributed in
accordance with the other provisions of this Section and/or such other
provisions of the Plan as may be applicable; PROVIDED further, that
for the Plan Years commencing before April 1, 1997, the commencement
date under this Section 6.15(b) shall be the April 1 next following
the close of the calendar year in which the Participant attains age 70
1/2; and
(c) with respect to a Participant who is a 5 percent owner (as defined in
section 416(i)(1)(B)(i) of the Code) of the Company or any Affiliated
Company at any time during the Plan Year ending in the calendar year
in which the Participant attains age 70 1/2, the April 1 next
following the close of the calendar year in which the Participant
attains age 70 1/2.
6.16 NONALIENATION OF BENEFITS.
(a) No benefit payable to any person under the Plan shall be subject to
anticipation or assignment by such person or to attachment by or the
interference or control of any creditor, or be taken or reached by any
legal or equitable process in satisfaction of any debt or liability
prior to actual receipt; PROVIDED, HOWEVER, that this provision shall
be inapplicable to the extent otherwise provided in a qualified
domestic relations order within the meaning of section 414(p) of the
Code.
(b) effective August 5, 1997, the non-alienation rule of Section (a) above
shall not apply to any offset, as defined by the Administrator, of a
Participant's benefit(s) under the Plan against an amount that the
Participant is ordered or required to pay to the Plan if:
(i) the order or requirement to pay arises (1) under a judgment
of conviction for a crime involving the Plan; (2) under a
civil judgment (including a consent order or decree) entered
by a court in an action brought in connection with a
violation (or alleged violation) of Part 4 of Subtitle B of
Title I of the ERISA; or (3) pursuant to a settlement
agreement between the Secretary of the United States
Department of Labor and the Participant, or a settlement
agreement between the Pension Benefit Guaranty Corporation
and the Participant, in connection with a violation (or
alleged violation) of Part 4 of Subtitle B of Title I of
ERISA by a fiduciary (as defined in Section 3(21) of ERISA)
or any other person; and
(ii) the judgment, order, decree, or settlement agreement
expressly provides for the offset of all or part of the
amount ordered or required to be paid to the Plan against
the Participant's benefit(s) provided under the Plan; and
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(iii) in a case in which the survivor annuity requirements of
Section 205 of ERISA or Section 401(a)(11) of the Code apply
with respect to distributions from the Plan to the
Participant, if the Employee has a spouse at the time at
which the offset is to be made;
(1) either:
(A) such spouse has consented in writing to such
offset and such consent is witnessed by a notary
public or Plan representative designated by the
Administrator (or it is established to the
satisfaction of such Plan representative that such
consent may not be obtained by reason of
circumstances described in Section 205(c)(2)(5) of
ERISA or Section 417(a)(2)(B) of the Code, or
(B) an election to waive the right of the spouse to a
qualified joint and survivor annuity or a
qualified preretirement survivor annuity is in
effect in accordance with the requirements of
Section 205(c) of ERISA or Section 417(a) of the
Code; or
(2) such spouse is ordered or required in such judgment,
order, decree, or settlement to pay an amount to the
Plan in connection with a violation of Part 4 of
Subtitle B of Title I of ERISA; or
(3) in such judgment, order, decree, or settlement, such
spouse retains the right to receive the survivor
annuity under a qualified joint and survivor annuity
provided pursuant to Section 205(a)(1) of ERISA or
Section 401(a)(11)(A)(i) of the Code, and under a
qualified preretirement survivor annuity provided
pursuant to Section 205(a)(2) of ERISA or Section
401(a)(11)(A)(ii) of the Code, determined in accordance
with Section 206(d)(5) of ERISA and Section
401(a)(13)(D) of the Code.
6.17 DISTRIBUTIONS REQUIRED BY A QUALIFIED DOMESTIC RELATIONS ORDER. To the
extent required by a qualified domestic relations order, within the meaning of
Code section 414(p), the Administrator shall make distributions of a
Participant's benefit to alternate payees named in such order in a manner
consistent with the distribution options otherwise available under the Plan,
regardless of whether the Participant is otherwise entitled to a distribution at
such time under the Plan.
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6.18 NO VESTED RIGHTS. A Participant who terminates employment with the
Company and the Affiliated Companies for reasons other than retirement,
disability or death and who has no vested benefit under the Plan shall be deemed
to receive a distribution of zero benefits hereunder and shall promptly forfeit
all rights to all benefits under the Plan.
6.19 INCAPACITY OF PAYEE. Subject to applicable regulations of the
Secretary of the Treasury or the Secretary of Labor, if any person to whom a
benefit is payable under the Plan is, in the opinion of the Administrator,
incapable for any reason of handling his affairs at the time payment thereof is
due, such payment (unless prior demand therefor is made to the Administrator or
the Trustee by a duly qualified guardian or other legally qualified
representative of such person) may be made to such person or persons comprised
in the class consisting of the spouse, parents, brothers, sisters or issue of
the person to whom the benefit is payable as the Administrator may determine,
and each payment made pursuant to such determination shall constitute a full
discharge of all liability under the Plan with respect thereto.
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ARTICLE VII
WITHDRAWALS
7.1 HARDSHIP WITHDRAWALS.
(a) AMOUNT OF WITHDRAWAL. A Participant who has suffered a financial
hardship, as determined by the Administrator in accordance with the
provisions of this Section, may elect to withdraw from the Trust Fund
an amount not to exceed the value of his Employee Profit Sharing
Contribution Account, Elective Contribution Accounts (exclusive of
earnings after December 31, 1988), Employee ESOP Contribution Account
and any rollover or transfer account, plus his vested interest in his
Employer Contribution Account (exclusive of earnings after December
31, 1988 on that portion of the Employer Contribution Account which
could have been distributed in cash pursuant to Section 4.5) and
Employer ESOP Contribution Account, determined as of the date upon
which written notice of such election is received by the
Administrator. The withdrawal may not exceed the amount required to
meet the financial hardship of the Participant.
Such a withdrawal shall be made by giving 30 days prior written
notice to the Administrator on a form provided by him and shall be
effective as soon as is administratively feasible. Such notice when
made shall be irrevocable.
Withdrawals will be charged first to the Participant's Employee
Profit Sharing Contribution Account, next to his Employee ESOP
Contribution Account, next to his Employer Contribution Account, next
to his Employer ESOP Contribution Account and the balance, if any,
will be charged to his Elective Contribution Accounts; PROVIDED, that
any changes to his Elective Contribution Accounts shall be made first
to the account having the larger balance.
(b) IMMEDIATE AND HEAVY FINANCIAL NEED. For purposes of this Section 7.1,
financial hardship shall consist of:
(i) expenses for medical care described in Code section 213(d), or
necessary to obtain such care, incurred by the Participant, his
spouse or any of his dependents (as defined in Code section 152);
(ii) the purchase (excluding mortgage payments) of a principal
residence of the Participant;
(iii) the payment of tuition, fees or room and board for the next
12-month period of post-secondary education for the Participant,
his spouse, children or dependents; or
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(iv) the need to prevent the eviction of the Participant from his
principal residence or foreclosure on the mortgage of his
principal residence.
The Administrator shall determine whether there is an immediate
and heavy financial need on the basis of such written evidence
furnished by the Participant as the Administrator may require. The
Participant shall also provide evidence that he has obtained all other
distributions (other than hardship distributions) and all nontaxable
loans currently available under the Plan and all other plans
maintained by the Company and the Affiliated Companies.
(c) EFFECT OF HARDSHIP DISTRIBUTION. If a Participant receives a hardship
distribution from his Elective Profit Sharing Contribution Account or
Elective ESOP Contribution Account or from that portion of his
Employer Contribution Account which may be distributed in cash, then
any Elective Profit Sharing Contribution election, Elective ESOP
Contribution election, Employee Profit Sharing Contribution election,
Employee ESOP Contribution election, or any other cash-or-deferred or
employee contribution election in effect with respect to the
Participant under the Plan (or any other qualified plan maintained by
the Company or an Affiliated Company) shall be suspended for the
12-month period beginning with the date the Participant receives the
distribution, and the amount of Elective Contributions made for the
benefit of the Participant, together with any elective deferrals made
on behalf of the Participant under any other plan maintained by the
Company or an Affiliated Company for the calendar year immediately
following the calendar year of the hardship distribution must not
exceed the applicable limit under Code section 402(g) for such next
calendar year, less the amount of such contributions made on behalf of
the Participant for the calendar year of the hardship distribution.
7.2 WITHDRAWALS FROM EMPLOYEE PROFIT SHARING CONTRIBUTION ACCOUNT. A
Participant may elect at any time, subject to such rules as the Administrator
may prescribe, to withdraw all or any portion of the amounts held in his
Employee Profit Sharing Contribution Account and attributable to Employee Profit
Sharing Contributions; PROVIDED, that a Participant who has attained aged 59 1/2
and who participated in the MacDermid Imaging Plan as of December 31, 1998 may
withdraw all or a portion of the amounts held in the Plan credited to such
participant as of December 31, 1998 but not in excess of his nonforfeitable
interest in MacDermid Imaging Plan as of such date. A withdrawal pursuant to
this Section shall be made by giving 30 days prior written notice to the
Administrator on a form provided by him and shall be effective as soon as is
administratively feasible. Such notice when made shall be irrevocable. A
Participant shall be entitled to make a withdrawal not more than once during
each calendar quarter.
7.3 WITHDRAWALS FROM ESOP ACCOUNTS. A Participant may, not more often than
once in any calendar quarter, withdraw from the Plan (a) all or any portion of
his Employee ESOP Contributions to the extent such contributions were not
eligible for a 50 percent matching Employer ESOP Contribution under Section 4.5,
and (b) solely with respect to benefits accrued as of March 31, 1995, if the
Participant had been a Participant in the Plan for five years or more
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as of such date, all or any portion of the Employer ESOP Contribution previously
made to the Plan on his behalf to which he has a fully vested and nonforfeitable
right under Section 6.4 or Section 8.2. Any such withdrawal shall be made by
written notice submitted to the Administrator and must be for an amount not less
than $250. Distribution of such withdrawals shall be made as soon as is
administratively feasible.
A Participant may, not more often than once in any calendar quarter,
withdraw from the Plan all or any portion of his Employee ESOP Contributions, if
any, which were eligible for a 50 percent matching contribution under Section
4.5. Any such withdrawal shall be made by written notice submitted to the
Administrator. Distribution of such Employee ESOP Contributions shall be made as
soon as is administratively feasible. Upon such withdrawal, the Participant
shall forfeit the portion of the amount standing to the credit of his Employer
ESOP Contribution Account which has not become nonforfeitable in accordance with
Section 6.4 or Section 8.2 and which is attributable to the Employee ESOP
Contributions which have been withdrawn; provided, that such Participant does
not have a nonforfeitable right to at least 50 percent of his Employer ESOP
Contribution Account attributable to Employer ESOP Contributions made with
respect to Employee ESOP Contributions made prior to January 1, 1999 in
accordance with Section 4.5.
7.4 DISTRIBUTION OF DIVIDENDS PAYABLE ON ESOP STOCK. A Participant may at
any time request distribution of all cash dividends thereafter declared and paid
on Company Stock allocated to his ESOP Accounts; provided, that the amount of
such dividends distributable for any calendar quarter must be at least $250. Any
such request shall be made by written notice submitted to the Administrator.
Notwithstanding the foregoing, any cash dividends paid with respect to
shares of Company Stock allocated to Participants' Accounts under the Employee
Stock Ownership Plan may, as the Administrator shall direct, be paid by the
Company directly to Participants or paid to the Trustee and distributed by the
Trustee within 90 days of the close of the Plan Year in which paid to the
Trustee. With respect to Company Stock acquired by the Plan with the proceeds of
an Acquisition Loan and held in a suspense account in accordance with Section
5.13, dividends paid on such Stock may, as the Administrator in its sole
discretion shall direct, be used to make payments on such Acquisition Loan.
7.5 ELECTION TO DIVERSIFY UNDER ESOP. A Participant who has (a) completed
at least ten years of participation in the Plan and (b) attained age 55 may
elect within 90 days after the close of each Plan Year within the election
period described below (i) to receive distribution of or (ii) to direct the Plan
to transfer or roll over from the ESOP to the Profit Sharing Plan an amount
equal to the value of (A) 25 percent or (B) in the last Plan Year of such
election period, 50 percent of the shares of Company Stock acquired by the Plan
and allocated to his Accounts under the Employee Stock Ownership Plan after
December 31, 1986; PROVIDED, HOWEVER, that, without limiting the foregoing
diversification right, effective January 1, 1999, a Participant who has
completed at least ten years of participation in the Plan and attained age 55,
may elect thereafter to direct the Plan to transfer or roll over from the ESOP
to any other investment vehicle generally available under the terms of the Plan
at the time of such transfer or roll over, an
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amount equal to the value of some or all of the shares of Company Stock acquired
by the Plan and allocated to his Accounts under the Employee Stock Ownership
Plan. Such distribution or transfer shall be made as soon as is administratively
feasible, but in any event within 180 days after the close of the Plan Year with
respect to which the Participant's election is made. The amount which may be
distributed or transferred under this Section 7.5 shall be determined by
multiplying the number of shares of Company Stock allocated to the Participant's
Accounts under the Employee Stock Ownership Plan (including amounts subject to a
prior election under this Section) by the percentage transferred or rolled over,
reduced by the amount of any prior distribution or transfer made under this
Section.
The election period referred to above shall consist of the six Plan
Year-period beginning with the first Plan Year in which the Participant
satisfies the requirements of both (a) and (b) above. Any election under this
Section shall be made in writing, in such form and manner as the Administrator
may prescribe.
Notwithstanding the foregoing, a Participant may not elect to receive a
distribution or to direct a transfer of amounts under this Section if the value
of the shares of Company Stock acquired by the Plan after December 31, 1986 and
allocated to his Accounts under the Employee Stock Ownership Plan, determined as
of the Valuation Date immediately preceding the period in which the
Participant's election would otherwise be made, does not exceed $500.
7.6 LOANS TO PARTICIPANTS. Subject to the conditions of this Section 7.6,
loans shall be made from the Trust to Participants upon the written request of
the Participant.
(a) The Administrator shall prescribe such rules and procedures as it
deems necessary or appropriate to carry out the purposes of this
Section. All such rules and procedures shall be considered part of the
Plan for purposes of Department of Labor Regulations, section
2550.408b-1(d).
(b) The following limitations shall apply in determining the amount of any
loan under the Plan:
(i) The amount of the loan, together with any other outstanding
indebtedness of the Participant under the Plan or any other
qualified retirement plans of the Company, shall not exceed
$50,000 reduced by the excess of (A) the highest outstanding loan
balance of the Participant from such plans during the one-year
period ending on the day prior to the date on which the loan is
made, over (B) the Participant's outstanding loan balance from
such plans immediately prior to the loan.
(ii) The amount of the loan shall not exceed 50 percent of the
Participant's nonforfeitable interest in his Accounts, determined
as of the Valuation Date immediately preceding the date of the
loan.
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(c) Each loan shall be evidenced by a note signed by the Participant and
shall be secured by 50 percent of his nonforfeitable interest in his
Accounts. The loan shall bear interest at an annual percentage
interest rate to be determined by the Administrator. In determining
the interest rate, the Administrator shall take into consideration
interest rates currently being charged by persons in the business of
lending with respect to loans made in similar circumstances. The
Administrator shall make such determination through consultation with
one or more lending institutions, as the Administrator deems
appropriate.
(d) Each loan made to a Participant who is receiving regular payments of
Compensation from the Company shall be repayable by payroll deduction.
Loans made to Participants where payroll deduction is not practicable
shall be repayable in such manner as the Administrator may from time
to time determine. Loan payments shall be made not less frequently
than quarterly, over a specified term as determined by the
Administrator, in substantially level payments. Such term shall not
exceed five years unless the loan is being applied toward the purchase
of a principal residence for the Participant.
(e) If, at the time distribution of benefits is to be made or commence to
a Participant or his beneficiary, there remains any unpaid balance of
a loan under the Plan, such unpaid balance shall, to the extent
consistent with Department of Labor Regulations, become immediately
due and payable in full. Such unpaid balance, together with any
accrued but unpaid interest on the loan, shall be deducted from the
Participant's Accounts subject to the default provisions below, before
any distribution of benefits is made.
(f) In the event of a default in making any payment of principal or
interest when due under the note evidencing any loan under this
Section, if such default continues for more than 14 days after written
notice of the default by the Trustee, the unpaid principal balance of
the note shall immediately become due and payable in full. Such unpaid
principal, together with any accrued but unpaid interest, shall
thereupon be deducted from the Participant's Accounts, subject to the
further provisions of this Section. The amount so deducted shall be
treated as distributed to the Participant and applied by him as
payment of the unpaid interest and principal (in that order) under the
note evidencing such loan. In no event shall the Administrator apply
the Participant's Accounts to satisfy his repayment obligation,
whether or not he is in default, unless the amount so applied could
otherwise be distributed in accordance with the Plan.
(g) The note evidencing a loan to a Participant shall be an asset of the
Trust which is allocated to the Accounts of the Participant and shall
for purposes of the Plan be deemed to have a value at any given time
equal to the unpaid principal balance of the note plus the amount of
any accrued but unpaid interest.
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(h) A Participant may designate the Account or Accounts from which his
loan is to be made. In the absence of such a designation, the loan
shall be made proportionately from the Participant's Accounts under
the Plan.
(i) Loans shall be made available under this Section to all Participants
on a reasonably equivalent basis, except that the Administrator may
make reasonable distinctions based on creditworthiness and financial
need.
(j) For purposes of this Section, a former Participant or beneficiary who
is a party in interest with respect to the Plan, within the meaning of
section 3(14) of ERISA, shall be treated as a Participant.
(k) To the extent, if any, that the Participant's benefit is subject to
sections 401(a)(11) and 417 of the Code, the written consent of the
Participant's spouse to the loan must be obtained in accordance with
Section 6.13.
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ARTICLE VIII
TOP-HEAVY PROVISIONS
8.1 TOP-HEAVY MINIMUM CONTRIBUTIONS. Notwithstanding any other provision
of the Plan, for any Plan Year which is a top-heavy plan year, each Participant
who is a Participant on the last day of such Plan Year and who is not a key
employee shall be entitled to receive a minimum contribution under the Plan
equal to the lesser of (a) three percent of his total Compensation from the
Company for such Plan Year or (b) if the Company or Affiliated Company does not
maintain a defined benefit plan required to be aggregated with the Plan, the
largest percentage of Compensation contributed (exclusive of Employee Profit
Sharing Contributions) on behalf of a key employee for such Plan Year.
Notwithstanding the foregoing, no minimum contribution will be required with
respect to a Participant who is also covered by another top-heavy plan of the
Company or an Affiliated Company under which he receives the top-heavy minimum
contribution or the top-heavy defined benefit minimum.
8.2 TOP-HEAVY VESTING. Notwithstanding any other provision of the Plan,
for each Employee who is a Participant at any time during a top-heavy plan year
the nonforfeitable percentage of the Participant's Employer Contribution Account
and Employer ESOP Contribution Account shall be determined in accordance with
the following schedule:
<TABLE>
<CAPTION>
If the period of his
Credited Service is: The percentage shall be:
-------------------- ------------------------
<S> <C>
Less than 2 years 0%
2 years but less than 3 years 20%
3 " " " " 4 " 40%
4 " " " " 5 " 60%
5 or more years 100%
</TABLE>
8.3 ADJUSTMENT TO LIMITATION ON BENEFITS. For Plan Years beginning before
January 1, 2000, for purposes of the Code section 415 limits, the definitions of
"defined contribution plan fraction" and "defined benefit plan fraction"
contained therein shall be modified, for any Plan Year which is a top-heavy plan
year, by applying the special rule set forth in Code section 416(h) of the Code
unless (a) the Plan and each plan with which the Plan is required to be
aggregated for top-heavy purposes satisfies the requirements of Code section
416(h)(2)(A), and (b) such Plan year would not be a top-heavy plan year if "90
percent" were substituted for "60 percent" in the definition of a top-heavy plan
year.
8.4 DEFINITIONS. For purposes of these top-heavy provisions, the following
terms have the following meanings:
(a) "key employee" means a key employee described in Code section
416(i)(l); and
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(b) "top-heavy plan year" means a Plan Year if the sum of the account
balances of all key employees under the Plan and each other defined
contribution plan (as of the applicable determination date of each
such plan) which is aggregated with the Plan, plus the sum of the
present values of the total accrued benefits of all key employees
under each defined benefit plan (as of the applicable determination
date of each such plan) which is aggregated with the Plan exceeds 60
percent of the sum of such amounts for all Employees and former
Employees (other than former key employees, but including
beneficiaries of former Employees) under the Plan and all such plans.
For purposes of these determinations:
(i) The foregoing determination will be made in accordance with
the provisions of Code section 416 and the regulations
thereunder, which are specifically incorporated herein by
reference.
(ii) The term "determination date" means, with respect to the
initial plan year of a plan, the last day of such plan year
and, with respect to any other plan year of a plan, the last
day of the preceding plan year of such plan. The term
"applicable determination date" means, with respect to the
Plan, the determination date for the Plan Year of reference
and, with respect to any other plan, the determination date
for any plan year of such plan which falls within the same
calendar year as the applicable determination date of the
Plan.
(iii) Accrued benefits or account balances under a plan will be
determined as of the most recent valuation date of the plan
in the 12-month period ending on the applicable
determination date of the plan; PROVIDED, HOWEVER, that in
the case of a defined benefit plan such valuation date must
be the same date as is employed for minimum funding
purposes, and in the case of a defined contribution plan the
value so determined will be adjusted for contributions made
after the valuation date to the extent required by
applicable regulations.
(iv) If any individual has not received any compensation from the
Company or an Affiliated Company maintaining a plan (other
than benefits under the plan) at any time during the
five-year period ending on the applicable determination date
with respect to such plan, any accrued benefit for such
individual (and the account of such individual) under such
plan shall not be taken into account.
(v) Each plan of the Company or an Affiliated Company (whether
or not terminated) in which a key employee participates, and
any other plan of the Company or an Affiliated Company which
enables a plan referred to in the preceding clause to
satisfy the
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requirements of Code sections 401(a)(4) and 410, shall be
aggregated with the Plan. Any plan of the Company or an
Affiliated Company not required to be aggregated with the
Plan may nevertheless, at the discretion of the
Administrator, be aggregated with the Plan if the benefits
and coverage of all aggregated plans would continue to
satisfy the requirements of sections 401(a)(4) and 410 of
the Code.
(vi) The determination of the present value of accrued benefits
under a defined benefit plan shall be made on the basis of
the funding assumptions employed by such plan.
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ARTICLE IX
TRUSTEE
9.1 APPOINTMENT. A Trustee for the Plan shall be appointed by MacDermid,
Incorporated and named in a Trust Agreement executed by MacDermid, Incorporated,
and, upon acceptance thereof, the Trustee shall perform the duties and exercise
the authority of the Trustee as set forth in the Plan and Trust Agreement. All
cash, certificates for shares of Company Stock assets of the Plan shall, until
disposed of pursuant to the provisions of the Plan, be held in the possession of
the Trustee. Such Company Stock may be registered in the name of the Trustee or
in the name of its nominee and in certificate denominations which the Trustee
shall determine.
9.2 REMOVAL AND REPLACEMENT. MacDermid, Incorporated shall reserve the
right to remove the Trustee at any time and to appoint a successor Trustee.
9.3 CHANGES IN TRUST ARRANGEMENTS. The Company may from time to time enter
into such further agreements with the Trustee or other parties and make such
amendments to trust agreements as it may deem necessary or desirable to carry
out the Plan, and it may take such other steps and execute such other
instruments as may be deemed necessary or desirable to put the Plan into effect
or to carry it out.
9.4 GROUP OR COMMON TRUST FUNDS. The provisions of any group or common
trust fund in which any trust under the Plan participates shall be deemed part
of the Plan with respect to the Plan assets invested therein, but only as long
as such group or common trust fund remains qualified under section 401(a), and
exempt from taxation under section 501(a), of the Code.
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ARTICLE X
ADMINISTRATION OF PLAN
10.1 ALLOCATION OF FIDUCIARY RESPONSIBILITY. The Fiduciaries under the Plan
shall have only those specific powers, duties, responsibilities and obligations
as are specifically given them under the Plan or the Trust Agreement. The
Company shall have the sole responsibility for making the contributions provided
for under Sections 4.1 and 4.5. The Board of Directors shall have the sole
authority (a) to appoint and remove or replace the Trustee, the Administrator,
and the Investment Committee, (b) to amend or terminate, in whole or in part,
the Plan or the Trust Agreement, (c) to direct the Trustee as to the investment
of all or part of the Trust Fund in a specific manner, including under the
management of an Investment Manager pursuant to such contractual arrangements as
it shall specify, (d) to delegate to an Investment Committee appointed by it the
authority to so direct investments, and to establish and discontinue such
separate investment funds under Section 5.9 as the Committee shall in its sole
discretion from time to time determine. The Administrator shall have the sole
responsibility for the administration of the Plan, which responsibility is
specifically described in the Plan and the Trust Agreement. The Trustee shall
have the sole responsibility for the administration of the Trust Fund and the
management of the assets held under the Trust Agreement, except as otherwise
directed by the Board of Directors or the Investment Committee and except for
assets managed by an Investment Manager, all as specifically provided in the
Plan and the Trust Agreement. The Investment Committee shall have such authority
and responsibility to direct investments and appoint Investment Managers as may
be delegated to it by the Board of Directors. An Investment Manager shall have
sole responsibility for the management of Trust Fund assets turned over to it.
Any directions given, information furnished, or action taken by a
Fiduciary, with respect to the Plan or Trust Fund shall be in accordance with
the provisions of the Plan and the Trust Agreement, as the case may be,
authorizing or providing for such direction, information or action. To the
extent permitted by law, each Fiduciary may rely upon the direction, information
or action of any other Fiduciary as being proper under the Plan and the Trust
Agreement and is not required to inquire into the propriety of any such
direction, information or action. It is intended that each Fiduciary shall be
responsible for the proper exercise of its powers, duties, responsibilities and
obligations under the Plan and the Trust Agreement and that no Fiduciary shall
be responsible for any act or failure to act of another Fiduciary. No Fiduciary
guarantees the Trust Fund in any manner against investment loss or depreciation
in asset value.
10.2 APPOINTMENT OF ADMINISTRATOR. The Plan shall be administered by the
Administrator who shall be appointed by and serve at the pleasure of the Board
of Directors. All usual and reasonable expenses of the Administrator may be paid
in whole or in part by the Company, and any expenses not paid by the Company
shall be paid by the Trustee out of the principal or Income of the Trust Fund.
If the Administrator is an Employee he shall not receive compensation with
respect to his services as Administrator. The Administrator may also appoint one
or more assistant administrators and other persons, who shall serve at his
pleasure, to assist
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him in the administration of the Plan and may allocate and delegate his
fiduciary responsibilities under the Plan by written instrument in accordance
with section 405 of ERISA.
10.3 POWER AND DUTIES. In addition to such powers and duties as may be
specified elsewhere in this instrument, the Administrator shall have the
discretionary authority to
(a) make and enforce such rules as he deems necessary or proper for the
administration of the Plan;
(b) determine all matters relating to the eligibility of persons to become
Participants in the Plan and determine whether or not any eligible
Employee has become a Participant in the Plan;
(c) determine whether and when the employment of any Participant has been
terminated and, if material to a determination of the benefits of such
Participant, the cause of such termination;
(d) decide all questions and disputes which may arise from time to time
with respect to the rights under the Plan of Employees, Participants
and all other persons who may be entitled to benefits under the Plan;
(e) compute, or cause to be computed, the amount of benefits which will be
payable to any Participant or other person, to determine the person or
persons to whom such benefits will be paid and to authorize the
payment of such benefits;
(f) from time to time in writing furnish to the Trustee all such
information, data and directions as may be required by the Trustee or
the terms of this instrument for the performance by the Trustee of its
duties hereunder;
(g) determine such matters as may from time to time be submitted to him by
the Trustee which the Trustee states to be necessary for it properly
to discharge its duties, powers and obligations under this instrument;
(h) keep, or cause to be kept, such books and records as may be necessary
or appropriate for the orderly administration of the Plan, all such
books and records to be open to inspection at any time by the Company;
(i) execute and file, or cause to be executed and filed, such reports or
other documents, and make, or cause to be made, such disclosures, as
the Plan or any one acting for the Plan may be required to execute and
file or make by any applicable law or statute now or hereafter
enacted, unless otherwise provided by such law or statute;
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(j) interpret and construe any and all of the provisions of this
instrument and any and all documents and materials developed,
maintained or used in connection with the administration of the Plan;
and
(k) perform all such other duties and acts as may be required to be
performed by the Administrator by the terms of this instrument and the
operation of the Plan.
10.4 EFFECT OF INTERPRETATION OR DETERMINATION. Any interpretation of the
Plan or other determination with respect to the Plan by the Administrator shall
be final and conclusive on all persons in the absence of clear and convincing
evidence that the Administrator acted arbitrarily and capriciously.
10.5 NONDISCRIMINATORY EXERCISE OF AUTHORITY. Whenever, in the
administration of the Plan, any discretionary action by the Administrator is
required, he shall exercise his authority in a nondiscriminatory manner so that
all persons similarly situated will receive substantially the same treatment.
10.6 NAMED FIDUCIARY. The Administrator will be a "named fiduciary" for
purposes of section 402(a)(1) of ERISA with authority to control and manage the
operation and administration of the Plan, except that he will have no authority
over the investment of the assets of the Trust Fund.
10.7 INDEMNIFICATION. The Company agrees to indemnify the Administrator and
save him harmless against any and all liability occasioned by or arising out of
any action taken, suffered or omitted in good faith by him.
10.8 EXAMINATION OF RECORDS. The Administrator will make available to each
Participant such of its records as pertain to him, for examination at reasonable
times during normal business hours.
10.9 CLAIMS AND REVIEW PROCEDURES.
(a) CLAIMS PROCEDURE. If any person believes he is being denied any rights
or benefits under the Plan, such person may file a claim in writing
with the Administrator. If any such claim is wholly or partially
denied, the Administrator will notify such person of its decision in
writing. Such notification will contain (i) specific reasons for the
denial, (ii) specific reference to pertinent Plan provisions, (iii) a
description of any additional material or information necessary for
such person to perfect such claim and an explanation of why such
material or information is necessary and (iv) information as to the
steps to be taken if the person wishes to submit a request for review.
Such notification will be given within 90 days after the claim is
received by the Administrator (or within 180 days, if special
circumstances require an extension of time for processing the claim,
and if written notice of such extension and circumstances is given to
such person within the initial 90-day period). If such notification is
not given within such period, the claim will be considered
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denied as of the last day of such period and such person may request a
review of his claim.
(b) REVIEW PROCEDURE. Within 60 days after the date on which a person
receives a written notice of a denied claim (or, if applicable, within
60 days after the date on which such denial is considered to have
occurred) such person (or his duly authorized representative) may (i)
file a written request with the Administrator for a review of his
denied claim and of pertinent documents and (ii) submit written issues
and comments to the Administrator. The Administrator will notify such
person of its decision in writing. Such notification will be written
in a manner calculated to be understood by such person and will
contain specific reasons for the decision as well as specific
references to pertinent Plan provisions. The decision on review will
be made within 60 days after the request for review is received by the
Administrator (or within 120 days, if special circumstances require an
extension of time for processing the request, such as an election by
the Administrator to hold a hearing, and if written notice of such
extension and circumstances is given, to such person within the
initial 60-day period). If the decision on review is not made within
such period, the claim will be considered denied.
10.10 MEMBERSHIP OF INVESTMENT COMMITTEE. The Investment Committee shall be
comprised of the number of persons determined by the Board of Directors and
appointed in writing by MacDermid, Incorporated. Any member of the Committee may
at any time be removed from office by MacDermid, Incorporated by notice in
writing delivered or mailed by registered mail, postage prepaid, to such member
and to each other member of the Committee. Such removal shall be effective on
the date specified therein or, if no date is specified, on the fifth day next
following the date of such notice. Whenever a member of the Committee who is an
Employee of the Company shall cease to be such Employee, he shall automatically
cease to be a member of the Committee. Any member of the Committee may resign by
instrument in writing delivered or mailed by registered mail, postage prepaid,
to the Corporation. Such resignation shall be effective on the date specified
therein or, if no date is specified, on the fifth day next following the date of
such instrument. Each vacancy in the Committee, however arising, shall be filled
by MacDermid, Incorporated by the appointment in writing of a successor;
provided, that if, after the expiration of a period of 30 days following receipt
by the Corporation from the remaining members of the Committee of a written
request to fill any such vacancy, MacDermid, Incorporated shall have failed to
do so, the remaining members of the Committee shall have the power to fill the
same by instrument in writing delivered or mailed by registered mail, postage
prepaid, to the Corporation and to the Trustee. During the existence of a
vacancy on the Committee the remaining members thereof shall have and may
exercise all the powers and authority of the Committee.
10.11 ACTION BY INVESTMENT COMMITTEE. The Committee shall act by a majority
(but not less than two) of its members; PROVIDED, that no member of the
Committee shall vote or decide upon any matter relating to himself as a
Participant, but all such matters shall be voted or decided by the other members
of the Committee and in case they do not agree may be determined by the
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Trustee, and the vote, decision or determination of such other members or the
Trustee, as the case may be, shall be final, binding and conclusive upon the
interested member of the Committee. A formal meeting of the Committee need not
be called or held for the purpose of making any decision, but decisions may be
made and evidenced by a written document signed by a majority of the Committee.
A Committee member who, within a reasonable time after he has knowledge of any
action or failure to act by the majority, registers his dissent in writing with
the other members of the Committee and the Corporation shall not be responsible
for such action or failure to act.
10.12 INVESTMENT INSTRUCTIONS. The Committee shall have the authority to
select the separate investment funds within the Trust Fund and, to the extent
investments are not directed by Participants in accordance with Section 5.7, to
instruct the Trustee regarding the investment and reinvestment of the Trust Fund
and may delegate such authority to the Administrator. All such instructions to
the Trustee shall be in writing and, if such instructions are given by the
Committee, shall be signed by a majority of the Committee members. Except to the
extent otherwise provided by applicable law, in acting pursuant to written
instructions of the Committee or the Administrator, the Trustee shall not be
liable for any loss resulting from following such written instructions.
10.13 NONDISCRIMINATION AND STANDARD OF CARE. In exercising the powers and
duties vested in them under this instrument, neither the Administrator nor the
Committee shall discriminate among Participants, each of whom shall be given the
same consideration under like circumstances, and all such powers and duties
shall be discharged with the care, skill, prudence and diligence under the
circumstances that a prudent person acting in a like capacity and familiar with
such matters would use in the conduct of an enterprise of a like character and
with like aims, and in accordance with the terms of the documents and
instruments governing the Plan.
10.14 PAYMENT OF EXPENSES. All costs and expenses incurred in the
administration of the Plan, including fees and expenses of the Trustee, shall be
paid by the Company or, to the extent not paid by the Company, by the Plan.
Brokerage commissions, transfer taxes, and other charges and expenses in
connection with the purchase and sale of Company Stock by the Trustee shall be
paid by the Company or, to the extent not paid by the Company, by the Plan.
Taxes, if any, upon, or in respect of, any assets held by the Trustee or income
therefrom, which are payable by the Trustee, shall be charged against the
applicable Accounts of Participants as the Trustee and the Administrator shall
determine.
10.15 COMPENSATION AND INDEMNIFICATION. Neither the Administrator nor the
Committee shall be entitled to compensation for their services, but the Company
agrees to reimburse the Administrator and the Committee for any and all
necessary expenses incurred by them. The Company agrees to indemnify and save
harmless each of the Administrator and the members of the Committee against any
and all liability occasioned by or arising out of any action taken, suffered or
omitted in good faith by him. Any reasonable expenses incurred in administering
the Plan may be paid by the Company, or to the extent not paid by the Company,
from the Trust Fund.
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ARTICLE XI
AMENDMENT AND TERMINATION
11.1 AMENDMENT. MacDermid, Incorporated shall have the right, at any time
and from time to time, to modify or amend this instrument or any of its
provisions by action of the Board of Directors, each such modification or
amendment to be by instrument in writing, executed by MacDermid, Incorporated;
PROVIDED, that no such modification or amendment shall be such, or shall be so
construed, as to:
(a) cause or permit any assets of the Trust Fund to be diverted to
purposes other than the exclusive benefit of Participants and their
beneficiaries (as provided in Section 12.2);
(b) reduce without his consent the benefits then accrued of any
Participant in the Plan; or
(c) change, without the prior written consent of the Trustee or
Administrator, as the case may be, any of the powers, rights, duties
or obligations of the Trustee or Administrator, as the case may be,
unless such modification or amendment is necessary or appropriate in order to
qualify the trust hereunder as an exempt trust under the provisions of section
401(a) and 501 of the Code, or to retain for the trust such qualified status.
11.2 TERMINATION. Although MacDermid, Incorporated expects to continue the
Plan indefinitely, it expressly reserves the right to terminate it any time by
instrument in writing, such termination to be effective on the date specified in
such instrument. From and after the termination date so specified, no further
contributions shall be made by the Company and the Trustee shall forthwith
proceed with the liquidation of the Trust Fund and each person who is a
Participant in the Plan or entitled to benefits under the Plan on said date
shall be entitled to a nonforfeitable benefit, payable in a single lump sum
payment, equal in amount to that proportion of the value (after such liquidation
and the payment of the expenses of liquidation and termination) of the Trust
Fund which the net credit balance in the accounts maintained on behalf of such
Participant on said termination date bears to the total of all net credit
balances in the accounts of all Participants on said termination date. In the
event that a partial termination of the Plan shall be deemed to have occurred,
each Participant affected shall be entitled to a nonforfeitable benefit equal in
amount to the net credit balance in the accounts maintained on behalf of such
Participant as of the date such partial termination is deemed to have occurred.
Although a suspension of Company contributions may occur without being deemed a
termination of the Plan, the permanent discontinuance by the Company of further
contributions under the Plan shall be deemed to be a termination by the Company
of the Plan as hereinbefore provided. If the Company or an Affiliated Company
maintains a defined contribution plan (other than an employee stock ownership
plan as defined in section 4975(e)(7) of the Code), a Participant's
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benefit will not be distributed without the Participant's consent. In the event
a successor plan, as defined for purposes of section 401(k) of the Code, is
established or maintained, distribution shall be made in accordance with the
requirements of such Code section. Upon the completion of distributions
hereunder, the Trust Fund will terminate and no Participant or other person
shall have any claims thereunder, except as required by applicable law.
11.3 TERMINATION IN EVENT OF CERTAIN CHANGES IN OWNERSHIP OF THE COMPANY.
In the event that at any time the Company shall have a "Principal Stockholder,"
as hereinafter defined, then notwithstanding anything to the contrary contained
herein, unless a majority of the "Continuing Directors", as hereinafter defined,
shall have, on or before the date of termination hereinafter specified, voted to
continue the Plan, the Plan shall terminate as of the twenty-first day next
following the date on which the Board of Directors becomes aware that it has a
Principal Stockholder. Thereupon, the Accounts of all Participants shall become
fully vested and nonforfeitable and all amounts then held in the Participants'
Accounts shall be immediately distributed to such Participants in the manner
provided in Section 11.2, subject to a prior favorable determination by the
Internal Revenue Service with respect to the Plan termination, which shall be
promptly applied for.
For purposes of this Section 11.3, (a) the term "Principal Stockholder"
shall mean any corporation, person, or other entity ("person") owning
beneficially, directly or indirectly, shares of the capital stock of the Company
entitled to cast 25 percent or more of the votes at the time entitled to be cast
generally in the election of Directors by all of the outstanding shares of all
classes of capital stock of the Company (other than any such shares held by any
qualified employee benefit plan maintained by the Company), considered for
purposes of this Section 11.3 as one class; (b) in determining such ownership, a
person shall be deemed to be the beneficial owner of any shares of capital stock
of the Company which are beneficially owned, directly or indirectly, by any
other person (i) with which it or its "affiliate" or "associate," as hereinafter
defined, has any agreement, arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of capital stock of the Company or (ii)
which is its "affiliate" or "associate"; (c) the term "Continuing Director"
shall mean a person who was a member of the Board of Directors of the Company
elected by the public stockholders prior to the time that the Company had a
Principal Stockholder, or a person recommended to succeed a Continuing Director
by a majority of Continuing Directors; (d) a person shall be deemed to be an
"affiliate" of, or affiliated with, a specified person if such person directly,
or indirectly through one or more intermediaries, controls, or is controlled by,
or is under common control with, the person specified; and (e) the term
"associate" used to indicate a relationship with any person shall mean (i) any
corporation or organization (other than the Company or any subsidiary of the
Company) of which such person is an officer or partner or is, directly or
indirectly, the beneficial owner of 10 percent or more of any class of equity
security, (ii) any trust or other estate in which such person has a substantial
beneficial interest or as to which such person serves as trustee or in a similar
fiduciary capacity, and (iii) any relative or spouse of such person, or any
relative of such spouse, who has the same home as such person.
11.4 NOTICES WITH RESPECT TO TERMINATION. No payment of benefits or
distribution of assets shall be made by the Trustee hereunder until receipt by
it of written confirmation from the
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<PAGE> 58
Company that it has given all notices and prepared and filed all reports which
may be required by law.
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<PAGE> 59
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 PARTICIPANT AND EMPLOYEE RIGHTS. This instrument and the Plan embodied
herein and established hereby shall not be deemed to give any Participant or any
Employee the right to be retained in the employ of the Company or an Affiliated
Company, or confer on or create in any Participant or any Employee any rights of
any name or nature, legal or equitable, except such as are expressly set forth
herein. Neither anything contained in this instrument nor any action taken by
the Company hereunder shall in any way prevent the Company or an Affiliated
Company from terminating at any time the employment of any Employee or
Participant, present or future, nor subject it to any liability under this
instrument for any such termination.
12.2 EXCLUSIVE BENEFIT. This instrument and the Plan embodied herein and
established hereby are for the exclusive benefit of the Employees of the
Company. No part of the assets of the Trust Fund shall be held for purposes
other than the exclusive benefit of Participants and their beneficiaries and the
payment of expenses of administering the Plan and Trust Fund. Except as provided
in Section 4.9, no funds paid to the Trustee under the Plan and no funds or
property at any time held by the Trustee hereunder shall revert or inure to the
possession, ownership or control of the Company.
12.3 RELEASE BY PARTICIPANTS. Except to the extent that it relieves the
Company, the Administrator or the Trustee from responsibility or liability for
any responsibility, obligation or duty owing to the Plan or any Participant, any
payment to any Participant or to any person entitled to a benefit under the
Plan, made in accordance with the provisions of this instrument, shall to the
extent thereof be in full satisfaction of all claims against any or all of the
Trustee, the Administrator and the Company, any of whom may require such
Participant or person, as a condition precedent to such payment, to execute a
receipt and release therefor in such form as shall be determined by the Trustee,
the Administrator or the Company, as the case may be.
12.4 MERGER. In the event of any merger or consolidation of the Plan with
any other plan, or in the event of any transfer of assets and liabilities from
the Plan to any other plan, the assets of the Plan applicable to any Participant
shall be transferred to such other plan only if the benefit to which such
Participant is entitled immediately after the merger, consolidation or transfer
(determined as if the plan had then terminated) is equal to or greater than the
benefit which he would have been entitled to receive if the Plan had terminated
immediately prior to such merger, consolidation or transfer.
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12.5 GOVERNING LAW. This instrument shall be construed, and the rights and
liabilities of all persons hereunder shall be determined, in accordance with the
laws of the State of Connecticut, to the extent not preempted by ERISA.
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SCHEDULE A
A-1
<PAGE> 62
MACDERMID, INCORPORATED
PROFIT SHARING AND EMPLOYEE STOCK OWNERSHIP PLAN
(As amended and restated generally
effective April 1, 1996)
<PAGE> 63
MACDERMID, INCORPORATED PROFIT SHARING AND
EMPLOYEE STOCK OWNERSHIP PLAN
TABLE OF CONTENTS
<TABLE>
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ARTICLE I PREAMBLE...............................................................................................1
ARTICLE II DEFINITIONS AND CONSTRUCTION..........................................................................3
2.1 "Acquisition Loan"..............................................................................3
2.2 "Administrator".................................................................................3
2.3 "Affiliated Company"............................................................................3
2.4 "Approved Leave"................................................................................3
2.5 "Board of Directors"............................................................................3
2.6 "Break in Service"..............................................................................3
2.7 "Cash Distributions"............................................................................4
2.8 "Code"..........................................................................................4
2.9 "Company".......................................................................................4
2.10 "Compensation"..................................................................................4
2.11 "Continuous Employment".........................................................................5
2.12 "Credited Service"..............................................................................5
2.13 "Early Retirement Age"..........................................................................5
2.14 "Effective Date"................................................................................6
2.15 "Elective Contribution".........................................................................6
2.16 "Elective Contribution Account".................................................................6
2.17 "Employee"......................................................................................6
2.18 "Employee ESOP Contribution"....................................................................6
2.19 "Employee ESOP Contribution Account"............................................................6
2.20 "Employee Profit Sharing Contribution"..........................................................6
2.21 "Employee Profit Sharing Contribution Account"..................................................7
2.22 "Employee Stock Ownership Plan" or "ESOP".......................................................7
2.23 "Employer Contribution".........................................................................7
2.24 "Employer Contribution Account".................................................................7
2.25 "Employer ESOP Contribution"....................................................................7
2.26 "Employer ESOP Contribution Account"............................................................7
2.27 "ERISA".........................................................................................7
2.28 "Fiduciary".....................................................................................7
2.29 "Forfeiture"....................................................................................7
2.30 "Highly Compensated Employee"...................................................................7
2.31 "Hours of Service"..............................................................................8
2.32 "Income".......................................................................................11
2.33 "Investment Committee".........................................................................11
2.34 "Investment Manager"...........................................................................11
2.35 "MacDermid Imaging"............................................................................12
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2.36 "MacDermid Imaging Plan".......................................................................12
2.37 "Normal Retirement Age"........................................................................12
2.38 "Participant"..................................................................................12
2.39 "Plan".........................................................................................12
2.40 "Plan Year" or "Limitation Year"...............................................................12
2.41 "Prior ESOP"...................................................................................12
2.42 "Prior Plan"...................................................................................12
2.43 "Profit Sharing Plan"..........................................................................12
2.44 "Required Matching Amount".....................................................................12
2.45 "Transferred National Starch Employee".........................................................12
2.46 "Trustee"......................................................................................12
2.47 "Trust Agreement"..............................................................................13
2.48 "Trust Fund"...................................................................................13
2.49 "Valuation Date"...............................................................................13
ARTICLE III PARTICIPATION AND SERVICE...........................................................................14
3.1 Participation..................................................................................14
3.2 Termination of Participation...................................................................15
3.3 Rejoining After Termination of Participation...................................................16
3.4 Inactive Status................................................................................16
3.5 Prior Plan Provisions to Apply to Certain Persons..............................................16
ARTICLE IV CONTRIBUTIONS........................................................................................17
4.1 Employer Contributions.........................................................................17
4.2 Employee Profit Sharing Contributions..........................................................17
4.3 Elective Contributions.........................................................................18
(a) Elective Contributions to Profit Sharing Plan..................................................18
(b) Elective Contributions to ESOP.................................................................18
(c) Salary Reduction Agreements, Etc...............................................................18
4.4 Employee ESOP Contributions....................................................................19
4.5 Employer ESOP Contributions....................................................................20
4.6 Cash Distributions.............................................................................20
4.7 Limitations on Allocations to Participants.....................................................21
(a) Limitations on Annual Additions Under Code Section 415.........................................21
(b) Nondiscrimination Provisions Under Code Section 401(k)(3)......................................22
(c) Nondiscrimination Provisions Under Code Section 401(m)(2)......................................23
(d) Limitation of Code Section 402(g)..............................................................24
4.8 Limit on Contributions of Company..............................................................24
4.9 Limited Return of Contributions................................................................24
4.10 Certain Transfers..............................................................................24
ARTICLE V ALLOCATIONS TO PARTICIPANTS' ACCOUNTS.................................................................26
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5.1 Individual Accounts............................................................................26
5.2 Computation and Allocation of Employer Contributions...........................................26
5.3 Allocation of Employee Profit Sharing and Employee ESOP Contributions..........................26
5.4 Allocation of Elective Contributions...........................................................26
5.5 Allocation of Employer ESOP Contributions and Forfeitures......................................26
5.6 Allocation of Income and Dividends.............................................................27
5.7 Forfeitures....................................................................................28
5.8 Account Value..................................................................................28
5.9 Investment Options Under Profit Sharing Plan...................................................29
5.10 Transfers Among Investment Funds...............................................................29
5.11 Purchase, Voting and Other Rights on Company Stock.............................................30
5.12 Certain Protections with Respect to ESOP Stock.................................................31
5.13 Allocation of Company Stock Purchased with Acquisition Loan....................................31
5.14 Interest of Participants in Trust Fund.........................................................32
ARTICLE VI BENEFITS.............................................................................................33
6.1 Retirement.....................................................................................33
6.2 Disability.....................................................................................33
6.3 Benefits on Death..............................................................................33
6.4 Vesting........................................................................................34
6.5 Changes in Vesting Schedule....................................................................34
6.6 Manner of Payment of Benefits..................................................................34
6.7 Election to Take Benefits in Stock.............................................................35
6.8 Time of Payment of Benefits....................................................................36
6.9 Separate Account...............................................................................36
6.10 Cash-Outs of Certain Benefits..................................................................37
6.11 Restoration of Benefits........................................................................37
6.12 Direct Rollover................................................................................37
6.13 Immediate Distributions........................................................................38
6.14 Required Distributions.........................................................................38
6.15 Latest Commencement Date of Benefits...........................................................39
6.16 Nonalienation of Benefits......................................................................40
6.17 Distributions Required by a Qualified Domestic Relations Order.................................42
6.18 No Vested Rights...............................................................................42
6.19 Incapacity of Payee............................................................................42
ARTICLE VII WITHDRAWALS.........................................................................................43
7.1 Hardship Withdrawals...........................................................................43
(a) Amount of Withdrawal...........................................................................43
(b) Immediate and Heavy Financial Need.............................................................43
(c) Effect of Hardship Distribution................................................................44
7.2 Withdrawals From Employee Profit Sharing Contribution Account..................................44
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7.3 Withdrawals from ESOP Accounts.................................................................45
7.4 Distribution of Dividends Payable on ESOP Stock................................................45
7.5 Election to Diversify under ESOP...............................................................45
7.6 Loans To Participants..........................................................................46
ARTICLE VIII TOP-HEAVY PROVISIONS...............................................................................49
8.1 Top-Heavy Minimum Contributions................................................................49
8.2 Top-Heavy Vesting..............................................................................49
8.3 Adjustment to Limitation on Benefits...........................................................49
8.4 Definitions....................................................................................49
(a) "key employee".................................................................................49
(b) "top-heavy plan year"..........................................................................50
ARTICLE IX TRUSTEE..............................................................................................52
9.1 Appointment....................................................................................52
9.2 Removal and Replacement........................................................................52
9.3 Changes in Trust Arrangements..................................................................52
9.4 Group or Common Trust Funds....................................................................52
ARTICLE X ADMINISTRATION OF PLAN................................................................................53
10.1 Allocation of Fiduciary Responsibility.........................................................53
10.2 Appointment of Administrator...................................................................53
10.3 Power and Duties...............................................................................54
10.4 Effect of Interpretation or Determination......................................................55
10.5 Nondiscriminatory Exercise of Authority........................................................55
10.6 Named Fiduciary................................................................................55
10.7 Indemnification................................................................................55
10.8 Examination of Records.........................................................................55
10.9 Claims and Review Procedures...................................................................55
(a) Claims Procedure...............................................................................55
(b) Review procedure...............................................................................56
10.10 Membership of Investment Committee.............................................................56
10.11 Action by Investment Committee.................................................................57
10.12 Investment Instructions........................................................................57
10.13 Nondiscrimination and Standard of Care.........................................................57
10.14 Payment of Expenses............................................................................57
10.15 Compensation and Indemnification...............................................................58
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ARTICLE XI AMENDMENT AND TERMINATION............................................................................59
11.1 Amendment......................................................................................59
11.2 Termination....................................................................................59
11.3 Termination in Event of Certain Changes in Ownership of the Company............................60
11.4 Notices with Respect to Termination............................................................61
ARTICLE XII MISCELLANEOUS PROVISIONS............................................................................62
12.1 Participant and Employee Rights................................................................62
12.2 Exclusive Benefit..............................................................................62
12.3 Release by Participants........................................................................62
12.4 Merger.........................................................................................62
12.5 Governing Law..................................................................................63
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(v)
<PAGE> 1
NUTTER, McCLENNEN & FISH
VOLUME SUBMITTER DISCRETIONARY CONTRIBUTION PLAN
<PAGE> 2
NUTTER, MCCLENNEN & FISH
VOLUME SUBMITTER DISCRETIONARY CONTRIBUTION PLAN
TABLE OF CONTENTS
Page
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ARTICLE I PREAMBLE 1
ARTICLE II DEFINITIONS 2
2.1 Account
2.2 Administrator 2
2.3 Adoption Agreement 2
2.4 Affiliated Company 2
2.5 Annuity Starting Date 3
2.6 Break in Service 3
2.7 Code 3
2.8 Company 3
2.9 Company Contribution 4
2.10 Company Contribution Account 4
2.11 Compensation 4
2.12 Credited Service 6
2.13 Earned Income 6
2.14 Effective Date 6
2.15 Elective Contribution 6
2.16 Elective Contribution Account 7
2.17 Eligible Employee 7
2.18 Employee 7
2.19 Employee Contribution 7
2.20 Employee Contribution Account 7
2.21 Entry Date 8
2.22 ERISA 8
2.23 Highly Compensated Employee 8
2.24 Hour of Service 9
2.25 Matching Contribution 13
2.26 Matching Contribution Account 14
2.27 Normal Retirement Age 14
2.28 Participant 14
2.29 Plan 14
2.30 Plan Year 14
2.31 Prior Plan 14
2.32 Rollover Account 14
2.33 Self-Employed Individual 15
2.34 Sponsor 15
2.35 Trust 15
2.36 Trustee 15
2.37 Valuation Date 15
2.38 Year of Service 15
ARTICLE III PARTICIPATION 17
3.1 Participation 17
3.2 Termination of Participation 17
3.3 Rejoining After Termination 17
of Participation 17
3.4 Prior Plan Provisions to Apply
(i)
<PAGE> 3
to Certain Persons 17
ARTICLE IV CONTRIBUTIONS 19
4.1 Company Contributions 19
4.2 Employee Contributions 19
4.3 Elective Contributions 19
4.4 Matching Contributions 20
4.5 Time of Contributions 20
4.6 Limitations on Annual Additions
under Section 415 of the Code 21
4.7 Nondiscrimination Provisions Under
Section 401(k)(3) of the Code 22
4.8 Nondiscrimination Provisions Under
Section 401(m)(2) of the Code 26
4.9 Limitation of Section 402(g) of
the Code 30
4.10 Limit on Contributions of the
Company 31
4.11 Limited Return of Contributions 31
4.12 Rollovers 31
ARTICLE V ALLOCATIONS TO PARTICIPANTS' ACCOUNTS 33
5.1 Individual Accounts 33
5.2 Allocation of Contributions 33
5.3 Allocation of Forfeitures 34
5.4 Adjustments to Accounts 34
5.5 Investment of Accounts 34
5.6 Appointment of Investment Manager 35
ARTICLE VI RETIREMENT 36
6.1 Retirement 36
6.2 Disability Retirement 36
ARTICLE VII BENEFITS 37
7.1 Benefits on Retirement 37
7.2 Benefits on Death 37
7.3 Termination of Employment 38
7.4 Changes in Vesting
Schedule 38
7.5 Manner of Payment of Benefits 39
7.6 Time of Payment of Benefits 39
7.7 Annuity Distributions 40
7.8 Spousal Consent 45
7.9 Separate Account 46
7.10 Installment Payment Fund 47
7.11 Cash-Outs of Certain Benefits 47
7.12 Repayment of Distribution 48
(ii)
<PAGE> 4
7.13 Direct Rollover 49
7.14 Immediate Distributions 50
7.15 Required Distributions 51
7.16 Latest Commencement Date
of Benefits 54
7.17 Nonalienation of Benefits 55
7.18 Distributions Required by a
Qualified Domestic Relations
Order 55
7.19 Certain Distribution Options
Protected 56
7.20 Incapacity of Payee 56
7.21 No Vested Rights 57
ARTICLE VIII WITHDRAWALS AND LOANS 58
8.1 Hardship Withdrawals 58
8.2 Withdrawals After Age 59 1/2 60
8.3 Other Withdrawals 61
8.4 Loans To Participants 61
ARTICLE IX TOP-HEAVY PROVISIONS 67
9.1 Top-Heavy Minimum Contributions 67
9.2 Top-Heavy Vesting 67
9.3 Adjustment to Limitation
on Benefits 68
9.4 Definitions 68
ARTICLE X TRUSTEE 72
10.1 Appointment 72
10.2 Removal and Replacement 72
10.3 Changes in Trust Arrangements 72
ARTICLE XI ADMINISTRATION OF PLAN 73
11.1 Appointment of Administrator 73
11.2 Powers and Duties 74
11.3 Effect of Interpretation or
Determination 76
11.4 Nondiscriminatory Exercise of
Authority 76
11.5 Named Fiduciary 76
11.6 Expenses and Indemnification 77
11.7 Examination of Records 77
11.8 Claims and Review Procedures 77
ARTICLE XII AMENDMENT AND TERMINATION 80
12.1 Amendment 80
12.2 Termination 81
12.3 Notices with Respect to
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Termination 82
ARTICLE XIII MISCELLANEOUS PROVISIONS 83
13.1 Participant and Employee Rights 83
13.2 Exclusive Benefit 83
13.3 Release by Participants 84
13.4 Failure of Initial Qualification 84
13.5 Merger 84
13.6 Governing Law 85
(iv)
<PAGE> 6
ARTICLE I
The Plan and Trust are intended to qualify as a discretionary contribution
plan and trust under sections 401(a) and 501(a) of the Code. If provided under
Article IV of the Adoption Agreement, the cash or deferred arrangement under the
Plan is intended to qualify under section 401(k) of the Code.
ARTICLE II
DEFINITIONS
Wherever used in the Plan, the following terms have the following meanings:
2.1 "Account" or "Accounts" means the account or accounts established for
the benefit of a Participant under Section 5.1.
2.2 "Administrator" means the person or persons appointed pursuant to
Article XI to administer the Plan.
2.3 "Adoption Agreement" means the agreement in accordance with which the
Company adopts the Plan. The Adoption Agreement constitutes part of the Plan.
2.4 "Affiliated Company" means (a) any corporation which is a member of a
controlled group of corporations (as defined in section 414(b) of the Code) with
the Company; (b) any trade or business, whether or not incorporated, which is
under common control (as defined in section 414(c) of the Code) with the
Company; (c) any trade or business which is a member of an affiliated service
group (as defined in section 414(m) of the Code) of which the Company is also a
member; or (d) any organization required to be aggregated with the Company
pursuant to regulations issued under section 414(o) of the Code; PROVIDED, that
the term "Affiliated Company" shall not include any corporation, unincorporated
trade or business or other organization prior to the date on which such
corporation, trade or business or organization satisfies the affiliation or
control test of (a), (b), (c) or (d) above. In identifying an "Affiliated
Company" for purposes of Section 4.6, the definitions in sections 414(b) and (c)
of the Code will be modified as provided in section 415(h) of the Code.
2.5 "Annuity Starting Date" means the first day as of which benefits are
payable as an annuity or, if benefits are not payable as an annuity, the first
day on which all events have occurred which entitle the Participant to such
benefit.
2.6 "Break in Service" means one or more consecutive One Year Breaks in
Service. The term "One Year Break in Service" means, with respect to any
Employee, a Plan Year during which the Employee does not complete more than 500
Hours of Service.
2.7 "Code" means the Internal Revenue Code of 1986, as amended from time to
time.
2.8 "Company" means the Sponsor and any Affiliated Company which adopts the
Plan with the consent of the Sponsor.
2.9 "Company Contribution" means the amount contributed by the Company for
each Plan Year in accordance with the provisions of Section 4.1.
2.10 "Company Contribution Account" means the account maintained for a
Participant to which his or her share of Company Contributions is allocated,
<PAGE> 7
together with income, expenses, gains or losses attributable to such
Contributions.
2.11 "Compensation" means, with respect to any Participant for a Plan Year,
(a) For purposes of Sections 4.6 and 9.1, the Participant's wages,
salaries, fees for professional services and other amounts received
(without regard to whether or not an amount is paid in cash) for
personal services actually rendered in the course of employment with
the Company to the extent that the amounts are includable in gross
income, including but not limited to commissions paid to salesmen,
compensation for services on the basis of a percentage of profits,
commissions on insurance premiums, tips, bonuses, fringe benefits,
reimbursements and expense allowances, but not including any items
excludable from the definition of compensation under Treasury
Regulations, sections 1.415-2(d)(2) and (3).
(b) For purposes of Sections 2.23 and 9.4(a), the amounts specified in
paragraph (a) above, but including any amount which is not includable
in the gross income of an Employee by reason of sections 125,
402(a)(8) (prior to January 1, 1993), 402(e)(3) (on or after January
1, 1993), 402(h)(1)(B) or 403(b) of the Code.
(c) For all other purposes under the Plan, the amounts specified by the
Sponsor in the Adoption Agreement.
(d) For a Self-Employed Individual, (i) for purpose of Sections 4.6 and
9.1, his or her Earned Income, and (ii) for all other proposes under
the Plan, his or her Earned Income, but including the amounts
specified in subsection (b).
Compensation shall include only compensation actually paid to a Participant
during the Plan year. Consistent with section 401(a)(17) of the Code, the
Compensation of each Participant for any Plan Year shall be limited to $200,000
and, for Plan Years beginning on or after January 1, 1994, to $150,000, as
adjusted in each case from time to time by the Secretary of the Treasury or his
delegate. In computing such limitation, the rules of Code section 414(q)(6)
shall apply, except that the term "family" shall include only the spouse of the
Participant and any lineal descendants of the Participant who have not attained
age 19 before the end of the Plan Year.
2.12 "Credited Service" means, with respect to any Employee, the number of
Plan Years during which the Employee has completed at least 1,000 Hours of
Service; PROVIDED that, as specified in the Adoption Agreement with respect to
Breaks in Service, certain Plan Years shall not be included as Credited Service.
2.13 "Earned Income" means the net earnings from self-employment in the
trade or business with respect to which the Plan is established, for which
personal services of the individual are a material income producing factor. Net
earnings will be determined without regard to items not included in gross income
and the deductions allocable to such items. Net earnings are reduced by
contributions by the Company to a plan to the extent deductible under section
404 of the Code. For tax years commencing after December 31, 1989, Earned Income
is computed without regard to the deduction allowed the Company under Code
section 164(f).
-2-
<PAGE> 8
2.14 "Effective Date" means the date selected by the Sponsor in the
Adoption Agreement.
2.15 "Elective Contribution" means a contribution made for the benefit of a
Participant pursuant to Section 4.3.
2.16 "Elective Contribution Account" means the account maintained for a
Participant to which Elective Contributions made for the benefit of the
Participant are allocated, together with income, expenses, gains or losses
attributable to such Contributions.
2.17 "Eligible Employee" means an Employee eligible to participate in the
Plan as specified in the Adoption Agreement.
2.18 "Employee" means any person between whom and the Company or an
Affiliated Company there exists the common law relationship of employee and
employer. Such term shall include a Self-Employed Individual. Any person who is
a "leased employee," within the meaning of section 414(n) of the Code, and any
person required to be considered an employee pursuant to regulations under
section 414(o) of the Code, shall be considered an Employee to the extent
required under such section; PROVIDED, that no such person shall be eligible to
become a Participant until he or she is actually employed by the Company.
2.19 "Employee Contribution" means a contribution made by a Participant
pursuant to Section 4.2.
2.20 "Employee Contribution Account" means the account maintained for a
Participant to which Employee Contributions made by the Participant are
allocated, together with income, expenses, gains or losses attributable to such
Contributions.
2.21 "Entry Date" means the dates specified in the Adoption Agreement.
2.22 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
2.23 "Highly Compensated Employee" means an Employee who, during the Plan
Year or the preceding Plan Year,
(a) was at any time a 5-percent owner, as defined in section 416(i)(1) of
the Code, of the Company,
(b) received Compensation in excess of $75,000,
(c) received Compensation in excess of $50,000 and was in the top-paid
group of employees, as defined in section 414(q)(4) of the Code, based
upon the exclusion of all employees excludable under section
414(q)(8), for the Year, or
(d) was at any time an officer of the Company and received Compensation
greater than 50 percent of the amount in effect under section
415(b)(1)(A) of the Code for such Year.
The $75,000 and $50,000 amounts in (b) and (c) above shall automatically be
adjusted if and to the extent the corresponding amounts in section 414(q) of the
Code are adjusted by the Secretary of the Treasury. No more than 50 Employees
-3-
<PAGE> 9
(or, if less, the greater of three Employees or 10 percent of all Employees)
shall be treated as officers for purposes of clause (d) above. An individual who
was not described in (a), (b), (c), or (d) above during the preceding Plan Year
shall be a Highly Compensated Employee during the current Plan Year only if he
or she is described in (a) above or is among the 100 Employees with the greatest
Compensation for the current Plan Year.
If an Employee is described in (a) above or is among the ten Employees with
the greatest Compensation during the Plan Year or the preceding Plan Year, the
Employee and any family members, as defined in section 414(q)(6) of the Code,
who are also Employees shall be treated as a single Employee.
2.24 "Hour of Service" means for any Employee:
(a) Each hour for which the Employee is directly or indirectly paid, or
entitled to payment, for the performance of duties for the Company or
an Affiliated Company, each such hour to be credited to the Employee
for the computation period in which such duties are performed;
(b) Each hour for which the Employee is directly or indirectly paid, or
entitled to payment, by the Company or an Affiliated Company on
account of any of the following periods during which no duties are
performed; PROVIDED, HOWEVER, that no more than 501 Hours of Service
shall be credited under this subparagraph (b) to any Employee on
account of any single continuous period during which he or she
performs no duties; and FURTHER PROVIDED, that Hours of Service shall
not be credited under this paragraph (b) for a payment which solely
reimburses the Employee for medically related expenses incurred by the
Employee, or which is made or due under a plan maintained solely for
the purpose of complying with applicable worker's compensation,
unemployment compensation or disability insurance laws:
(i) Periods of time during which the Employee has been excused from
work by the Company or an Affiliated Company by reason of
vacation, holiday, illness, incapacity (including disability),
layoff, jury duty or military duty; PROVIDED, that in the event
that the Employee fails to return to work upon the expiration of
the period for which he or she has been so excused, his or her
employment shall be deemed to terminate;
(ii) Periods of approved leave authorized by the Company or an
Affiliated Company; PROVIDED, that in the event the Employee
fails to return to the active employ of the Company or the
Affiliated Company upon the expiration of the period of such
leave his or her employment shall be deemed to terminate;
(c) To the extent not already credited under paragraph (a) or (b) of this
Section, each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Company or an
Affiliated Company, each such hour being credited to the computation
period to which such award or agreement pertains; PROVIDED, that
crediting of Hours of Service under this paragraph (c) with respect to
periods described in paragraph (b) shall be subject to the limitations
set forth in such paragraph (b);
(d) To the extent not already described under subparagraph (a), (b), or
(c) of this Section,
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(i) Each noncompensated hour while an Employee is in the armed forces
of the United States; PROVIDED, that the Employee returns to the
employ of the Company or an Affiliated Company at a time when he
or she has reemployment rights under federal law;
(ii) Each noncompensated hour as determined by the Company to be
credited for periods covered by leaves of absence authorized by
it or an Affiliated Company;
(e) Solely for purposes of determining whether a Break in Service has
occurred, the number of hours which would otherwise have been credited
to an Employee during a period of absence from work for maternity or
paternity reasons (or, if the number of such hours cannot be
determined, eight Hours of Service for each day of such absence);
PROVIDED, HOWEVER, that no more than 501 Hours of Service shall be
credited with respect to any such maternity or paternity absence.
For purposes of this paragraph (e), an absence from work for maternity
or paternity reasons means an absence (i) by reason of the pregnancy
of the Employee, (ii) by reason of the birth of a child of the
Employee, (iii) by reason of the placement of a child with the
Employee in connection with the adoption of such child by such
Employee, or (iv) for purposes of caring for such child for a period
beginning immediately following such birth or placement. An Employee
shall furnish such information as the Administrator shall reasonably
request to establish that he or she is absent from work for maternity
or paternity reasons.
Hours of Service credited in accordance with this paragraph (e) shall
be credited for the computation period in which the absence begins, if
necessary to prevent the Employee from incurring a Break in Service in
such period, or if not, in the computation period following the period
in which the absence begins if necessary to prevent a Break in Service
in that period.
The provisions relating to the special rules for the determination of Hours
of Service for reasons other than the performance of duties and to the crediting
of Hours of Service to computation periods in sections 2530.200b-2(b) and (c),
respectively, of the Department of Labor Regulations are incorporated by
reference herein.
2.25 "Matching Contribution" means the amount contributed by the Company
for a Plan Year pursuant to Section 4.4.
2.26 "Matching Contribution Account" means the account maintained for a
Participant to which Matching Contributions made for the benefit of the
Participant are allocated, together with income, expenses, gains or losses
attributable to such Contributions.
2.27 "Normal Retirement Age" means the age specified by the Sponsor in the
Adoption Agreement.
2.28 "Participant" means an Employee of the Company who has become a
participant in the Plan in accordance with Article III.
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2.29 "Plan" means the plan as contained herein and as named in the Adoption
Agreement.
2.30 "Plan Year" or "Limitation Year" means the 12-month period specified
by the Sponsor in the Adoption Agreement.
2.31 "Prior Plan" means, if the Plan is an amendment and restatement of a
qualified plan of the Company, such plan as in effect from time to time prior to
the Effective Date.
2.32 "Rollover Account" means the account maintained for a Participant to
which a rollover contribution made pursuant to Section 4.12 is credited,
together with income, expenses, gains and losses attributable to such
contribution.
2.33 "Self-Employed Individual" means an individual who has Earned Income
for the taxable year from the trade or business with respect to which the Plan
is established, or who would have had Earned Income but for the fact that the
trade or business had no net profits for such year.
2.34 "Sponsor" means the organization named as such in the Adoption
Agreement.
2.35 "Trust" means the trust established as part of the Plan.
2.36 "Trustee" means, collectively, the trustee or trustees acting under
the Trust.
2.37 "Valuation Date" means the last day of each Plan Year and such other
days as may be specified by the Administrator.
2.38 "Year of Service" means, with respect to any Employee, a period of 12
consecutive months during which the Employee has completed at least 1,000 Hours
of Service. Computation of any such 12 month period shall be made with reference
to the date on which the Employee's employment or reemployment commenced.
Singular pronouns shall include the plural, unless the context indicates
otherwise.
ARTICLE III
PARTICIPATION
3.1 PARTICIPATION. Each Eligible Employee of the Company shall become a
Participant in the Plan as of the Entry Date coinciding with or next following
the day on which he or she meets the eligibility requirements specified in the
Adoption Agreement. If the Plan is a restatement, each individual who was a
participant in the Prior Plan immediately prior to the Effective Date shall
become a Participant in the Plan as of the Effective Date; PROVIDED, that he or
she is an Eligible Employee of the Company on such Date.
3.2 TERMINATION OF PARTICIPATION. A Participant's participation in the Plan
shall terminate on the first to occur of (a) his or her retirement, death or
termination of employment as an Eligible Employee, and (b) the termination of
the Plan.
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3.3 REJOINING AFTER TERMINATION OF PARTICIPATION. Each Participant whose
participation in the Plan terminates shall again become a Participant as of the
first day of his or her reemployment as an Eligible Employee of the Company.
3.4. PRIOR PLAN PROVISIONS TO APPLY TO CERTAIN PERSONS. The provisions of
the Plan shall apply only to individuals who are Employees of the Company or an
Affiliated Company on or after the Effective Date. The rights and benefits, if
any, of each other Employee shall be determined in accordance with the
provisions of the Prior Plan in effect on the date such Employee terminated his
or her employment with the Company or an Affiliated Company.
ARTICLE IV
CONTRIBUTIONS
4.1 COMPANY CONTRIBUTIONS. The Company shall contribute for each Plan Year
the amount, if any, determined by the Sponsor in its sole discretion.
4.2 EMPLOYEE CONTRIBUTIONS. If provided in the Adoption Agreement, a
Participant may elect to make after-tax Employee Contributions to the Plan. Such
Contributions shall be in an amount equal to any whole percentage of the
Participant's Compensation, within the limits specified in the Adoption
Agreement. Employee Contributions may be made by means of payroll deduction, or
by direct payments to the Company. A Participant may cease making Employee
Contributions at any time, but may elect to increase or decrease the amount of
such Contributions only at such times as the Administrator may determine. Any
election pursuant to this Section 4.2 shall be made in such form and manner as
the Administrator may prescribe.
4.3 ELECTIVE CONTRIBUTIONS. If provided in the Adoption Agreement, a
Participant may elect, by entering into a salary reduction agreement with the
Company, to have the Company contribute to the Plan on his or her behalf any
whole percentage, within the limits specified in the Adoption Agreement, of his
or her Compensation payable thereafter. A Participant may from time to time (a)
change such percentage with respect to Compensation not yet payable by entering
into a new salary reduction agreement, or (b) cease making Elective
Contributions by revoking any salary reduction agreement then in effect. Any
salary reduction agreement and the revocation of any such agreement shall be
made in such form and manner, and subject to such prior notice, as the
Administrator may prescribe and shall be effective as of the date subsequent to
its execution specified in the Adoption Agreement. A salary reduction agreement
shall remain in effect until changed or revoked by the Participant.
4.4 MATCHING CONTRIBUTIONS. If provided in the Adoption Agreement, in the
event that a Participant elects to make Employee or Elective Contributions, the
Company shall contribute for the benefit of the Participant the amount specified
in the Adoption Agreement.
4.5 TIME OF CONTRIBUTIONS. Company Contributions and Matching Contributions
for each Plan Year shall be paid over to the Trustee not later than the time
prescribed by law for filing the Company's federal income tax return, including
extensions, with respect to the fiscal year ending with, or within which ends,
such Plan Year. Employee Contributions and Elective Contributions shall be paid
over to the Trustee as soon as such contributions can reasonably be segregated
from the general assets of the Company, but in no event later than 90 days after
such amounts are received by the Company or would otherwise have been payable as
Compensation to the Participant.
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4.6. LIMITATIONS ON ANNUAL ADDITIONS UNDER SECTION 415 OF THE CODE.
Notwithstanding any other provision of the Plan, the annual additions, within
the meaning of Code section 415(c)(2), made to a Participant's Accounts for any
Limitation Year, when added to the annual additions to his or her accounts for
such Year under all other defined contribution plans maintained by the Company
and the Affiliated Companies, shall not exceed the lesser of (a) $30,000 (or, if
greater, one-fourth of the limitation in effect under section 415(b)(1)(A) of
the Code), or (b) 25 percent of the Participant's Compensation for the
Limitation Year. In the case of a Participant who also participates in a defined
benefit plan maintained by the Company or an Affiliated Company, the annual
addition for a Limitation Year will, if necessary, be further limited so that
the sum of the Participant's "defined contribution fraction," as determined
under section 415(e) of the Code and Treasury Regulations thereunder, and his or
her "defined benefit plan fraction," as so determined, for such Limitation Year
does not exceed 1.0. The annual addition which would otherwise be made on behalf
of a Participant under the Plan shall be reduced in the order, with respect to
any other qualified plans maintained by the Company or an Affiliated Company,
specified in the Adoption Agreement.
In the event that the amounts otherwise allocable to the Accounts of any
Participant for any Plan Year would be in excess of the limitations provided in
this Section 4.6, such excess shall be disposed of in the following order:
(a) Any Employee Contributions made for the Limitation Year, to the extent
that their return would reduce such excess, shall be returned to the
Participant;
(b) Such excess amounts shall be used to reduce contributions by the
Company for the following Limitation Year for the Participant, if he
or she is covered by the Plan at the end of such Year; and
(c) Such excess amounts shall otherwise be held in a suspense account and
used to reduce contributions by the Company for the following
Limitation Year and each succeeding Limitation Year, if necessary;
PROVIDED, that no such suspense account shall participate in the
allocation of the income, gains or losses under the Plan.
4.7 NONDISCRIMINATION PROVISIONS UNDER SECTION 401(k)(3) OF THE CODE.
Elective Contributions under the Plan shall at all times meet the applicable
requirements of section 401(k)(3) of the Code. This Section 4.7 shall be
interpreted and applied in accordance with such Code section and Treasury
Regulations thereunder, including section 1.401(k)-1, which are incorporated
herein by reference.
(a) ACTUAL DEFERRAL PERCENTAGES. For each Plan Year, the Administrator
shall determine for each Employee eligible to make Elective
Contributions the ratio of his or her Elective Contributions for the
Plan Year to his or her Compensation for such Year. To the extent
permitted under Treasury Regulations, the Administrator may take into
account only that portion of the Plan Year during which the Employee
was a Participant. The actual deferral ratios for all Highly
Compensated Employees eligible to make Elective Contributions, and the
actual deferral ratios for all non-Highly Compensated Employees
eligible to make such Contributions, shall be averaged to determine
the actual deferral percentages for each group of Employees for the
Plan Year. The actual deferral percentage for the group of Highly
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<PAGE> 14
Compensated Employees for any Plan Year shall not exceed the greater
of:
(i) 125 percent of the actual deferral percentage for the group of
non-Highly Compensated Employees, and
(ii) Twice, but not more than two percentage points in excess of, the
actual deferral percentage for the group of non-Highly
Compensated Employees.
(b) QUALIFIED NONELECTIVE CONTRIBUTIONS. As determined by the Sponsor in
its sole discretion, qualified nonelective contributions, within the
meaning of Treasury Regulations, section 1.401(k)-1(g)(13), may be
made to the Trust for a Plan Year. Qualified nonelective contributions
for a Plan Year shall be allocated, as the Sponsor shall determine,
among the Elective Contribution Accounts of either (i) all
Participants who are eligible to make Elective Contributions for the
Plan Year, or (ii) all such Participants who are not Highly
Compensated Employees. Except as otherwise expressly provided, any
qualified nonelective contribution shall be treated as an Elective
Contribution for all purposes under the Plan.
(c) CORRECTION OF EXCESS CONTRIBUTIONS. If the Elective Contributions made
on behalf of Participants would cause the Plan to exceed the limits
under section 401(k)(3) of the Code, the Administrator may limit the
amount of Elective Contributions to be made with respect to any Highly
Compensated Employee. If such limits have not been met for any Plan
Year after all contributions for such Year have been made, then any
excess contributions and any allocable income, gain or loss shall be
distributed to the affected Participants no later than 12 months after
the close of the Plan Year in which the excess contribution was made.
If a distribution becomes necessary, it will be first applied to
the Participant who is the Highly Compensated Employee having the
highest actual deferral percentage, until the limits of section
401(k)(3) are met or until such Participant's actual deferral
percentage is reduced to the same percentage level as that of the
Participant who is the Highly Compensated Employee having the next
highest actual deferral percentage. If further limitations are
required, the process shall be repeated until the limits of section
401(k)(3) are met. The amount of excess contributions for any Highly
Compensated Employee shall be determined as the amount of his or her
Elective Contributions for the Plan Year, less the product of (i) his
or her reduced actual deferral ratio and (ii) his or her Compensation.
A distribution under this Section shall be designated by the
Administrator as a distribution of excess contributions. Any excess
contributions to be distributed shall be reduced by excess deferrals
previously distributed under Section 4.9. Excess contributions shall
be allocated to Participants who are subject to the family aggregation
rules of section 414(q)(6) of the Code in the manner prescribed by
applicable Treasury Regulations.
The Administrator shall maintain such records as are necessary to
demonstrate compliance with the requirements of section 401(k)(3) of
the Code.
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4.8 NONDISCRIMINATION PROVISIONS UNDER SECTION 401(M)(2) OF THE CODE. The
Plan shall at all times meet the applicable requirements of section 401(m)(2) of
the Code. This section 4.8 shall be interpreted and applied in accordance with
such Code section and Treasury Regulations thereunder, including sections
1.401(m)-1 and 1.401(m)-2, which are incorporated herein by reference.
(a) ACTUAL CONTRIBUTION PERCENTAGES. For each Plan Year, the Administrator
shall determine for each Employee eligible for Employee Contributions
or Matching Contributions, the ratio of the Employee and Matching
Contributions made on his or her behalf for the Plan Year to his or
her Compensation for such Year. To the extent permitted under Treasury
Regulations, the Administrator may take into account only that portion
of the Plan Year during which the Employee was a Participant. The
actual contribution ratios for all Highly Compensated Employees
eligible for Employee or Matching Contributions, and the actual
contribution ratios for all non-Highly Compensated Employees eligible
for such Contributions, shall be averaged to determine the actual
contribution percentages for each group of Employees for the Plan
Year. The actual contribution percentage for the group of Highly
Compensated Employees shall not exceed the greater of:
(i) 125 percent of the actual contribution percentage for the group
of non-Highly Compensated Employees, and
(ii) Twice, but not more than two percentage points in excess of, the
actual contribution percentage for the group of non-Highly
Compensated Employees.
(b) CORRECTION OF EXCESS AGGREGATE CONTRIBUTIONS. If the Employee or
Matching Contributions made on behalf of Participants would cause the
Plan to exceed the limits under section 401(m)(2) of the Code, the
Administrator may limit the amount of such Contributions to be made
with respect to any Highly Compensated Employee. If such limits have
not been met for a Plan Year after all contributions for the Plan Year
have been made, then any excess aggregate contributions and any
allocable income, gain or loss shall be returned to the affected
Participants no later than 12 months after the close of the Plan Year
in which the excess aggregate contribution was made.
If a distribution becomes necessary, it will be first applied to
the Participant who is the Highly Compensated Employee with the
highest actual contribution ratio, until the limits of Code section
401(m)(2) are met or until such Participant's actual contribution
ratio is reduced to the same percentage level as that of the
Participant who is the Highly Compensated Employee having the next
highest actual contribution ratio. If further limitations are
required, this process shall be repeated until the tests of section
401(m)(2) are met. The amount of excess aggregate contributions for
any Highly Compensated Employee shall be determined as the amount of
Employee and Matching Contributions made with respect to the Employee,
less the product of (i) his or her reduced actual contribution ratio
and (ii) his or her Compensation.
Distributions of excess aggregate contributions shall be made
first from unmatched Employee Contributions and only then from matched
Employee Contributions and Matching Contributions. A Participant's
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excess aggregate contributions will be designated by the Administrator
as a distribution of excess aggregate contributions. Excess aggregate
contributions shall be allocated to Participants who are subject to
the family aggregation rules of section 414(q)(6) of the Code in the
manner prescribed by applicable Treasury Regulations.
The Administrator shall maintain such records as are necessary to
demonstrate compliance with the tests of section 401(m)(2) of the
Code.
(c) MULTIPLE USE TEST. In the event that (i) the limitations of Sections
4.7 and 4.8 are both exceeded and (ii) the sum of the actual deferral
percentage and the actual contribution percentage for the group of
Highly Compensated Employees exceeds the aggregate limit under
Treasury Regulations, section 1.401(m)-2(b)(3), the Administrator
shall reduce the actual contribution ratios of Highly Compensated
Employees in accordance with the requirements of such regulations.
4.9 LIMITATION OF SECTION 402(G) OF THE CODE.
(a) GENERAL LIMITATION. Elective Contributions made on behalf of a
Participant, when added to the Participant's elective deferrals,
within the meaning of section 402(g)(3) of the Code, under all plans,
contracts or arrangements maintained by the Company or an Affiliated
Company shall not exceed the limitation of section 402(g) of the Code,
as from time to time adjusted by the Secretary of the Treasury.
(b) CORRECTION OF EXCESS DEFERRALS. If following the close of a
Participant's taxable year, the Participant notifies the Administrator
that all or a portion of his or her Elective Contributions for the
prior calendar year exceeds the limit of section 402(g) of the Code,
the Administrator may distribute such excess amount to the
Participant, together with any income, gain, or loss allocable
thereto, no later than the April 15 following the calendar year with
respect to which the excess deferral was made. No distribution of an
excess deferral shall be made during the taxable year of a Participant
in which the excess deferral was made unless the correcting
distribution is made after the date on which the Plan received the
excess deferral and both the Participant and the Plan designate the
distribution as a distribution of an excess deferral. The amount of
any excess deferral that may be distributed to a Participant will be
reduced by the amount of any Elective Contributions previously
distributed to the Participant as excess contributions under Section
4.7.
4.10 LIMIT ON CONTRIBUTIONS OF THE COMPANY. Contributions made by the
Company shall in no event be greater than the amount which is deductible under
section 404 of the Code. All contributions by the Company are hereby conditioned
on their deductibility under section 404 of the Code.
4.11 LIMITED RETURN OF CONTRIBUTIONS. Notwithstanding any other provision
of the Plan, any contribution which was made by the Company under a mistake of
fact or which was conditioned on the deductibility of such contribution under
section 404 of the Code, but the deduction of which is disallowed or treated as
disallowed, shall upon request of the Company be returned to it within one year
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following the payment of such contribution or the disallowance of such deduction
(to the extent disallowed), whichever is applicable.
4.12 ROLLOVERS. If permitted under the Adoption Agreement, an Employee may
make a contribution to the Plan of any amount which qualifies for rollover under
sections 402(c) (or, prior to January 1, 1993, 402(a)(5)), 403(a) or 408(d)(3)
of the Code. A rollover shall be permitted only if the optional forms of
benefit, within the meaning of section 411(d)(6) of the Code, with respect to
such amounts are otherwise provided for under the Plan.
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ARTICLE V
ALLOCATIONS TO PARTICIPANTS' ACCOUNTS
5.1 INDIVIDUAL ACCOUNTS. The Administrator shall establish and maintain, or
cause to be established and maintained, Accounts for the benefit of each
Participant to reflect his or her interest in the Trust. Separate Accounts shall
be established for Company, Employee, Elective and Matching Contributions and
rollovers, respectively, to the extent such contributions are provided for in
the Adoption Agreement. Such other accounts may be established as the
Administrator deems necessary or appropriate to carry out the purposes of the
Plan.
5.2 ALLOCATION OF CONTRIBUTIONS. Company Contributions and Matching
Contributions for a Plan Year shall be allocated to the Accounts of Participants
entitled to share in such Contributions, as provided in the Adoption Agreement,
as of each Valuation Date. Company Contributions shall be allocated in the
proportion that each Participant's Compensation bears to the total Compensation
of all Participants entitled to share in such Contributions. In the event the
Company makes any contributions in kind, the assets contributed shall be
allocated at their fair market value. Elective Contributions and Employee
Contributions shall be allocated to the Accounts of Participants as of the last
day of the pay period, as specified in the Adoption Agreement, to which such
Contributions relate.
5.3 ALLOCATION OF FORFEITURES. Amounts forfeited under Section 7.9 shall be
applied and allocated to Participants as provided in the Adoption Agreement.
5.4 ADJUSTMENTS TO ACCOUNTS. As of each Valuation Date, the fair market
value of the assets attributable to amounts held in each Participant Account
shall be determined and the balance of each such Account adjusted to reflect
gain, loss, income and expenses attributable to such assets. The balances of
such Accounts shall be adjusted to reflect any contributions, distributions and
transfers made since the preceding Valuation Date.
5.5 INVESTMENT OF ACCOUNTS. Except as otherwise provided in the Adoption
Agreement, all amounts held in the Trust shall be invested by the Trustee in its
sole discretion.
To the extent provided in the Adoption Agreement, each Participant shall
direct the investment of his or her Accounts among the investment options
available under the Plan. Investment directions shall be made, or changed, in
such form and manner, and with such frequency, as the Administrator may
prescribe, and shall become effective as of such dates as the Administrator
shall determine, consistent with the requirements of the investment vehicles.
Amounts may be transferred among investment options under the Plan in such form
and manner, and with such frequency, as the Administrator may prescribe.
If an investment manager has been appointed in accordance with Section 5.6,
the investment manager shall invest in its sole discretion such portion of the
Trust as the Sponsor shall determine.
5.6 APPOINTMENT OF INVESTMENT MANAGER. The Sponsor may appoint one or more
investment managers to manage the investment of all or any portion, as
determined by the Sponsor, of the Trust assets. The investment manager shall
acknowledge in writing that it is a fiduciary with respect to the Plan. An
investment manager must be (a) registered as an investment adviser under the
Investment Advisers Act of 1940, (b) a bank as defined in that Act, or (c) an
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insurance company qualified under the laws of more than one state to manage,
acquire or dispose of any assets of the Plan.
ARTICLE VI
RETIREMENT
6.1 RETIREMENT. An Employee may retire as of the first day of any month on
or after the attainment of Normal Retirement Age. In the event of a
Participant's retirement, he or she shall be entitled to a benefit in accordance
with Section 7.1. A Participant shall have a nonforfeitable interest in amounts
held in his or her Accounts as of the date on which he or she attains Normal
Retirement Age.
6.2 DISABILITY RETIREMENT. If provided in the Adoption Agreement, if
because of a medically determinable physical or mental impairment likely to
result in death or to be of a continuous duration of not less than 12 months, a
Participant cannot engage in any substantial gainful employment and terminates
employment with the Company and the Affiliated Companies, he or she will be
entitled to a benefit in accordance with Section 7.1. In the event of such a
disability, the Participant shall have a nonforfeitable interest in amounts held
in his or her Accounts. Whether or not a Participant is disabled will be
determined by the Administrator on the basis of medical evidence satisfactory to
the Administrator.
ARTICLE VII
BENEFITS
7.1 BENEFITS ON RETIREMENT. Each Participant who retires in accordance with
Section 6.1 or 6.2 shall be entitled to a benefit, payable as provided in
Section 7.5, equal to the balance of his or her Accounts, determined as of the
Valuation Date coinciding with or immediately preceding the date distribution is
to be made or commence.
7.2 BENEFITS ON DEATH. In the event of the death of a Participant, his or
her beneficiary will have a nonforfeitable interest in, and will be entitled to
receive a benefit equal to, the balance of his or her Accounts, determined as of
the Valuation Date coinciding with or immediately preceding the date
distribution is to be made or commence.
A Participant may at any time designate one or more persons to be the
beneficiary or beneficiaries to receive all benefits payable under the Plan in
the event of his or her death. A Participant may also revoke a prior beneficiary
designation. A beneficiary designation or revocation of a designation shall be
made in such form and manner as the Administrator may prescribe. No such
designation or revocation shall become effective prior to its receipt by the
Administrator. Notwithstanding the foregoing, if a Participant was married at
the time of his or her death, he or she shall be deemed to have named his or her
surviving spouse as beneficiary unless the spousal consent requirements of
Section 7.8 have been met. If a Participant has not designated any beneficiary,
or no
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designated beneficiary survives the Participant, the benefit payable upon his or
her death will be paid to his or her estate.
7.3 TERMINATION OF EMPLOYMENT. If a Participant terminates employment for
any reason other than retirement or death, the Participant shall be entitled to
a benefit equal to the full balance of his or her Employee Contribution and
Elective Contribution Accounts and his or her Rollover Account, plus a portion
of his or her Company Contribution and Matching Contribution Accounts,
determined in accordance with the schedule provided in the Adoption Agreement.
The Participant's benefit shall be computed as of the Valuation Date coinciding
with or immediately preceding the date on which distribution is to be made or
commence.
7.4 CHANGES IN VESTING SCHEDULE. If the Plan is amended at any time and
such amendment directly or indirectly affects the computation of the
nonforfeitable interest of a Participant in his or her Accounts, such amendment
shall apply to any Participant who has completed three years of Credited Service
as of the end of the period described below only to the extent that the
Participant's nonforfeitable interest in his or her Accounts is equal to or
greater than such interest determined without regard to the amendment. The
period referred to in the preceding sentence will begin on the date the
amendment of the vesting schedule is adopted and will end on the date which is
60 days after the later of (a) the date on which such amendment is adopted and
(b) the date on which such amendment becomes effective.
7.5 MANNER OF PAYMENT OF BENEFITS. Subject to such rules as the
Administrator may prescribe, a Participant may elect to receive his or her
benefits in any of the forms specified in the Adoption Agreement. An election
pursuant to this Section must be made prior to the commencement of benefits and
shall become irrevocable upon the commencement of such benefits. In the absence
of any election by the Participant, his or her benefits shall be payable in an
immediate lump sum. However, if the normal form of benefit under the Plan, as
specified in the Adoption Agreement, is an annuity, benefits shall be paid as
provided in Section 7.7.
7.6 TIME OF PAYMENT OF BENEFITS. Distribution of benefits, or the
commencement thereof, shall be made, as specified in the Adoption Agreement, as
soon as reasonably practicable after the event giving rise to the distribution;
PROVIDED, HOWEVER, that in the case of termination of employment for a reason
other than retirement or death, distribution of a Participant's benefit shall be
made or commence as of the later of the Participant's termination of employment
or his or her Normal Retirement Date. Notwithstanding the foregoing, if provided
in the Adoption Agreement, a Participant may elect, subject to such rules as the
Administrator may prescribe, to have benefits commence after his or her
termination of employment and before his or her Normal Retirement Date or to
defer the commencement of benefits, in either case as specified in the Adoption
Agreement.
7.7. ANNUITY DISTRIBUTIONS. Notwithstanding any other provision of the
Plan, if annuity distributions are provided for under the Adoption Agreement and
a Participant elects distribution of his or her benefits in the form of an
annuity, or if annuity distributions are the normal form of benefit under the
Plan, as specified in the Adoption Agreement, the Participant's benefits will be
paid as provided in this Section 7.7.
(a) ANNUITY FORM. If a Participant is not married on his or her Annuity
Starting Date, then the Participant's benefits will be payable as a
single life annuity. If a Participant is married on his or her
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Annuity Starting Date and has not made an effective election of an
optional form of benefit under this Section, then benefits will be
payable in the form of a 50 percent joint and survivor annuity, under
which a reduced benefit will be payable to the Participant during his
or her lifetime, and upon his or her death one half of such reduced
benefit will be paid to the Participant's spouse during the spouse's
lifetime, if the spouse survives the Participant. The joint and
survivor form of benefit will be the actuarial equivalent of the
single life annuity otherwise payable to the Participant.
A Participant may elect not to receive his or her benefits in the
form described above and to have such benefits paid in one of the
optional forms permitted under the Adoption Agreement. Any such
election shall be made in such form and manner as the Administrator
may prescribe and during the election period described below. No
election by a married Participant will be effective unless the
Participant's spouse consents to the election in accordance with
Section 7.8.
(i) The election period will consist of the 90 day period preceding
the Participant's Annuity Starting Date and ending on such Date.
(ii) The Administrator shall provide each Participant with a written
explanation of the form of benefit described in (a) above
applicable to the Participant. This explanation will be written
in nontechnical terms and will contain (1) the terms and
conditions of the form of benefit; (2) the Participant's right,
if any, to make, and the effect of, an election to waive such
form of benefit; (3) in the case of a married Participant, the
rights of the Participant's spouse under Section 7.8 to consent
to a waiver of the form of benefit; and (4) The right to make,
and the effect of, a revocation of an election to waive payment
in such form of benefit.
The Administrator will also furnish Participants with a
general description of the eligibility conditions and other
material features of the optional forms of benefit, including
sufficient information as to the relative value of such optional
forms of payment. The Administrator will provide the foregoing
explanation and other information within the period beginning 90
days prior to the Participant's Annuity Starting Date and ending
30 days prior to such Date.
(iii) A Participant may revoke an election under this Section without
the requirement of spousal consent by filing a written revocation
with the Administrator any time during the election period
described above. A revocation will not prevent the Participant
from making a subsequent election under this Section during the
election period described above, subject, however, to Section
7.8.
(b) PRERETIREMENT DEATH BENEFIT. If a married Participant dies before his
or her Annuity Starting Date, then 50 percent of his or her vested
Account balance will be used to provide an annuity for the life of the
Participant's surviving spouse; PROVIDED, that in place of such
annuity, the spouse may elect in writing to receive distributions
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<PAGE> 22
under the Plan as if he or she had been designated by the Participant
as his or her beneficiary with respect to 50 percent of the
Participant's Accounts.
A Participant may waive the preretirement death benefit during
the period commencing on the first day of the Plan Year in which the
Participant attains age 35 and ending on the date of the Participant's
death; PROVIDED, that in the case of a Participant who terminates
employment, the election period with respect to benefits accrued prior
to the date of such termination will in no event commence later than
the date of his or her termination of employment. A Participant may
elect to waive the application of this subsection prior to the Plan
Year in which he or she attains age 35, except that any such waiver
will cease to be effective as of the first day of the Plan Year in
which the Participant attains age 35. A waiver of the preretirement
death benefit must satisfy the consent requirements of Section 7.8.
The Administrator will provide the Participant with a written
explanation of the preretirement death benefit comparable to that
required under (a)(ii) above. The explanation shall be furnished
within whichever of the following periods ends last: (i) the period
beginning with the first day of the Plan Year in which the Participant
reaches age 32 and ending with the end of the Plan Year preceding the
Plan Year in which he or she reaches age 35, (ii) a reasonable period
ending after the Employee becomes a Participant, (iii) a reasonable
period ending after this Section first becomes applicable to the
Participant, (iv) in the case of a Participant who separates from
service before age 35, a reasonable period of time ending after such
separation from service. The two year period beginning one year prior
to the date of the event described in clause (ii), (iii) or (iv),
whichever is applicable, and ending one year after such date shall be
considered reasonable; PROVIDED, that in the case of a Participant who
separates from service under (iv) above and subsequently recommences
employment with the Employer, the applicable period for such
Participant shall be redetermined in accordance with this Section.
7.8. SPOUSAL CONSENT. No election by a married Participant to waive the
joint and survivor annuity form of benefit or the preretirement death benefit
pursuant to Section 7.7 will be effective, and no distribution subject to
sections 401(a)(11) and 417 of the Code may be made or commence to a married
Participant prior to his or her Normal Retirement Date, unless:
(a) The spouse of the Participant consents in writing to such election,
and the spouse's consent acknowledges the effect of such election and
the specific form of benefit or nonspouse beneficiary, if any,
including any class of beneficiaries and any contingent beneficiaries
(or, with respect to subsequent designations, the consent of the
spouse expressly permits such designations without any requirement of
further consent by such spouse), and such consent is witnessed by a
Plan representative or a notary public; or
(b) It is established to the satisfaction of the Administrator that the
required consent may not be obtained because there is no spouse,
because the spouse cannot be located, or because of such other
circumstances as the Secretary of the Treasury may prescribe by
regulations.
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Any consent by the spouse or establishment that the consent of a spouse may
not be obtained under (a) or (b) above shall be effective only with respect to
such spouse. Any consent that permits beneficiary designations or the election
of optional forms of benefit by the Participant without any requirement of
further consent must acknowledge the spouse's right to limit consent to a
specific beneficiary or optional form of benefit and the spouse's voluntary
election to relinquish those rights. Any election and spousal consent under this
Section must be made in such form and manner as the Administrator may prescribe.
7.9 SEPARATE ACCOUNT. If a Participant receives a distribution from an
Account at a time when he or she has a nonforfeitable interest in less than 100
percent of the Account, then upon such distribution the balance remaining in the
Account shall be transferred to a separate account. On any particular date prior
to the occurrence of five consecutive One Year Breaks in Service, the
Participant shall be entitled to a nonforfeitable portion of the balance of his
or her separate account, payable as otherwise provided under the Plan, equal to
an amount determined by the following formula:
X = P(AB + (R x D)) - (R x D),
where P is the vested percentage as of such date; AB is the balance in the
separate account as of such date; D is the amount which was distributed; and R
is the ratio of the balance of the separate account on such date to the balance
of the separate account after the distribution. If the Participant or former
Participant incurs five consecutive One Year Breaks in Service, the portion of
his or her separate account which is not nonforfeitable under the foregoing
formula shall be forfeited. Except as otherwise provided in this Section 7.9,
any separate account shall be treated as though it were the Account from which
it was derived for all purposes under the Plan.
7.10 INSTALLMENT PAYMENT FUND. If a benefit is payable in installments,
assets equal in amount to the present value of all such installments shall be
segregated and held by the Trustee in an installment payment fund for the
benefit of the person or persons to whom the benefit is payable. The Trustee
shall maintain a separate account in such fund for each such person and each
installment shall be charged to such account upon payment.
7.11 CASH-OUTS OF CERTAIN BENEFITS. Notwithstanding any other provision of
the Plan, with respect to a Participant whose employment with the Company or an
Affiliated Company terminates for any reason and who is entitled to a
nonforfeitable benefit under the Plan, if the present value of such
nonforfeitable benefit does not, and did not at the time of any prior
distribution, exceed $3,500, the Participant's benefit shall be distributed in
cash or other assets of the Trust in a lump sum as soon as reasonably
practicable after the termination of his or her employment and, in any case,
within 60 days after the close of the Plan Year in which such termination
occurs.
7.12 REPAYMENT OF DISTRIBUTION. If a Participant terminates employment with
the Company and the Affiliated Companies at a time when he or she has a
nonforfeitable interest in less than 100 percent of his or her Accounts and
receives a distribution of benefits under the Plan, and he or she subsequently
returns to the employ of the Company before incurring five consecutive One Year
Breaks in Service and again becomes a Participant, such Participant may repay to
the Plan the full amount of such distribution; PROVIDED, that such repayment is
made before the earlier of (a) the close of the period in which the Participant
incurs five consecutive One Year Breaks in Service commencing with the
distribution, and (b) the fifth anniversary of the Participant's reemployment
with
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<PAGE> 24
the Company. In the event of such repayment the full present value of the
Participant's benefit (nonforfeitable and forfeitable, if any) as of the date of
such distribution shall be restored to his or her Accounts.
7.13 DIRECT ROLLOVER. With respect to distributions made on or after
January 1, 1993, a Participant may elect to have all or any portion of a
distribution paid in the form of a direct rollover to an individual retirement
account or annuity described in section 408(a) or (b) of the Code, an annuity
plan described in section 403(a) of the Code, or a plan and trust qualified
under section 401(a) of the Code, if such plan accepts direct rollover
distributions. Notwithstanding the foregoing, this Section shall not apply to
any distribution that is (a) one of a series of substantially equal installments
over the life or life expectancy of the Participant or the lives or joint life
expectancies of the Participant and his or her beneficiary, or over a fixed
period of ten years or more, (b) a required minimum distribution under section
401(a)(9) of the Code, (c) a distribution (or portion of a distribution) of
amounts not otherwise includable in income, (d) a distribution in an amount less
than $200, or (e) a distribution that is otherwise not an eligible rollover
distribution, within the meaning of section 402(f)(2)(A) of the Code and
applicable Treasury Regulations thereunder. Any election pursuant to this
Section 7.13 shall be made in such form and manner as the Administrator may
prescribe and shall specify the retirement plan to which the distribution is to
be made. Any such election may be revoked by the Participant at any time prior
to the time distribution is made. If no election is made by the Participant
under this Section, the distribution shall be paid to the Participant. If any
distribution is payable to the spouse or former spouse of a Participant, this
Section shall apply as if such spouse or former spouse were the Participant,
except that any such distribution may be directly rolled over only to an
individual retirement account or annuity.
The Administrator shall provide Participants with notice with respect to
the direct rollover of eligible rollover distributions no less than 30 days and
no more than 90 days prior to the Participant's Annuity Starting Date; PROVIDED,
HOWEVER, that if the distribution is not subject to sections 401(a)(11) and 417
of the Code, the Participant may affirmatively elect, in accordance with such
procedures as the Administrator may prescribe, to have benefits commence sooner
than 30 days after such notice.
7.14 IMMEDIATE DISTRIBUTIONS. Notwithstanding any other provision of the
Plan, no distribution will be made to a Participant of amounts held in his or
her Accounts before his or her Normal Retirement Date, unless the written
consent of the Participant, and, if the distribution is subject to sections
401(a)(11) and 417 of the Code, the Participant's spouse, has been obtained.
Such consent shall be made in writing within the 90-day period ending on the
Participant's Annuity Starting Date. Within the period beginning 90 days before
the Participant's Annuity Starting Date and ending 30 days before such Date, the
Administrator will provide the Participant with written notice containing a
general description of the material features and an explanation of the relative
values of the optional forms of benefit available under the Plan and informing
the Participant of his or her right to defer receipt of the distribution until
his or her Normal Retirement Date; PROVIDED, that if the distribution is not
subject to sections 401(a)(11) and 417 of the Code, the Participant may elect to
have benefits commence less than 30 days after such notice. Notwithstanding the
foregoing, all or any portion of a Participant's Accounts may be distributed
without the consent of the Participant or the Participant's spouse to the extent
that a distribution is required to satisfy section 401(a)(9) or section 415 of
the Code.
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<PAGE> 25
7.15 REQUIRED DISTRIBUTIONS. Notwithstanding any other provision of the
Plan, distribution of benefits under Article VII shall satisfy the requirements
of this Section 7.15. The benefits of a Participant will be distributed (a) to
the Participant in full not later than the required beginning date, or (b)
beginning not later than the required beginning date, to the Participant over a
period not extending beyond the life expectancy of the Participant, or to the
Participant and his or her designated beneficiary over a period not extending
beyond the life expectancies of the Participant and the designated beneficiary.
For purposes of this Section, a Participant's "required beginning date" shall be
the date determined under Section 7.16(b) with respect to the Participant, and
the term "designated beneficiary" shall have the meaning given such term under
section 401(a)(9) of the Code and Treasury Regulations thereunder.
In the event that distribution of benefits to a Participant has commenced
and the Participant dies prior to the distribution of his or her entire benefit,
but after the required beginning date, the remaining portion of the benefit will
be distributed at least as rapidly as under the method of distribution used as
of the date of the Participant's death. In the event a Participant dies before
distribution of benefits has commenced or after actual commencement but before
the required beginning date, the remaining benefit will be distributed within
five years unless the benefit is payable to a designated beneficiary, in which
case such benefit will be distributed, beginning not later than one year after
the death of the Participant (or such other time as may be prescribed by
regulations), over a period not exceeding the life expectancy of such
beneficiary; PROVIDED, that if the designated beneficiary is the Participant's
spouse, distributions will not be required to commence hereunder earlier than
the date on which the Participant would have attained age 70 1/2, and, in the
event the Participant's spouse dies prior to the commencement of distributions,
the provisions of this Section shall apply as if such spouse were the
Participant. Any distribution required under the incidental death benefit
requirements of section 401(a)(9)(G) of the Code will be treated as a
distribution required under section 401(a)(9) of the Code and this Section.
In the case of distributions to be made in installments, if provided in the
Adoption Agreement, the amount of an installment for a particular calendar year
shall be determined by dividing (i) the value of the Participant's Accounts as
of the Valuation Date immediately preceding the beginning of such year (adjusted
for any allocations of contributions and any distributions which are made after
the Valuation Date but before such year) by (ii) the greatest of (A) the number
of remaining installments under the period elected by the Participant as of the
beginning of such year, (B) the number of years in the applicable remaining life
expectancy for such year determined pursuant to proposed Treasury Regulations,
section 1.401(a)(9)-1, or (iii) (if the Participant's beneficiary is not his or
her spouse) the applicable divisor for such year determined under section
1.401(a)(9)-2 of the proposed Treasury Regulations. If provided in the Adoption
Agreement, for purposes of determining the amount of any installment
distribution, the life expectancies of the Participant and his or her spouse
will be recalculated annually pursuant to section 401(a)(9) of the Code.
The provisions of this Section will be interpreted and applied in
accordance with applicable Treasury Regulations under section 401(a)(9) of the
Code, including proposed Treasury Regulations, sections 1.401(a)(9)-1 and
1.401(a)(9)-2.
7.16 LATEST COMMENCEMENT DATE OF BENEFITS. In no case will the payment of
benefits to any Participant commence later than the earlier of:
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(a) Unless the Participant otherwise elects in writing, the 60th day after
the latest of the following:
(i) The close of the Plan Year in which the Participant attains
Normal Retirement Age;
(ii) The close of the Plan Year in which occurs the tenth anniversary
of the year in which the Participant commenced participation in
the Plan; or
(iii) The close of the Plan Year in which the Participant ceases to be
an Employee; and
(b) The April 1 next following the close of the calendar year in which the
Participant attains age 70 1/2 or, in the case of any Participant who
attains age 70 1/2 before January 1, 1988 and is not a 5-percent owner
(as defined in section 416(i)(1)(B)(i) of the Code) of the Company or
an Affiliated Company at any time during the five Plan Year period
ending in the calendar year in which the Participant attains age 70
1/2 or any subsequent Plan Year, the close of the calendar year in
which he or she retires, if later; PROVIDED, that in the case of any
Participant who attains age 70 1/2 after December 31, 1987 and before
January 1, 1989, payment of benefits shall commence not later than
April 1, 1990.
7.17 NONALIENATION OF BENEFITS. No benefit payable to any person under the
Plan shall be subject to anticipation or assignment by such person or to
attachment by or the interference or control of any creditor, or be taken or
reached by any legal or equitable process in satisfaction of any debt or
liability prior to actual receipt; PROVIDED, HOWEVER, that this provision shall
be inapplicable to the extent otherwise provided in a qualified domestic
relations order, within the meaning of section 414(p) of the Code.
7.18 DISTRIBUTIONS REQUIRED BY A QUALIFIED DOMESTIC RELATIONS ORDER. To the
extent required by a qualified domestic relations order, within the meaning of
section 414(p) of the Code, the Administrator shall make distribution of a
Participant's benefits to alternate payees named in such order in a manner
consistent with the distribution options otherwise available under the Plan,
regardless of whether the Participant is otherwise entitled to a distribution at
such time under the Plan.
7.19 CERTAIN DISTRIBUTION OPTIONS PROTECTED. Notwithstanding any other
provision of the Plan, if the Plan is a restatement and any distribution option
available under the Prior Plan is an optional form of benefit within the meaning
of section 411(d)(6) of the Code, such option shall continue to be available to
the extent required by such Code section.
7.20 INCAPACITY OF PAYEE. Subject to the requirements of ERISA, if any
person to whom a benefit is payable under the Plan is, in the opinion of the
Administrator, incapable for any reason of handling his or her affairs at the
time payment thereof is due, such payment (unless prior demand therefor is made
to the Administrator or the Trustee by a duly qualified guardian or other
legally qualified representative of such person) may be made to the Employee or
persons comprised in the class consisting of the spouse, parent, brothers,
sisters or issue of the person to whom the benefit is payable, as the
Administrator may determine, and each payment made pursuant to such
determination shall constitute a full discharge of all liability under the Plan
with respect thereto.
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<PAGE> 27
7.21 NO VESTED RIGHTS. A Participant who terminates employment with the
Company and the Affiliated Companies for reasons other than retirement or death
and who has no vested benefit under the Plan shall be deemed to receive a
distribution of zero benefits hereunder and shall promptly forfeit all rights to
all benefits under the Plan.
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<PAGE> 28
ARTICLE VIII
WITHDRAWALS AND LOANS
8.1 HARDSHIP WITHDRAWALS.
(a) IN GENERAL. If provided in the Adoption Agreement, a Participant who
has suffered a financial hardship, as determined by the Administrator
in accordance with the provisions of this Section, may withdraw the
amount necessary to meet the hardship, but not in excess of the value
of his or her nonforfeitable interest in his or her Accounts,
exclusive of earnings after December 31, 1988, on Elective
Contributions. Such a withdrawal shall be made in such form and
manner, and with such prior notice, as the Administrator may
prescribe.
Withdrawals will be charged first to the Participant's Rollover
Account, next to his or her Employee Contribution Account, next to his
or her Company Contribution and Matching Contribution Accounts, and
the balance, if any, will be charged to his or her Elective
Contribution Account.
(b) IMMEDIATE AND HEAVY FINANCIAL NEED. For purposes of this Section 8.1,
financial hardship shall consist of:
(i) Expenses for medical care described in section 213(d) of the Code
or necessary to obtain such care incurred by the Participant, his
or her spouse or any of his or her dependents (as defined in
section 152 of the Code);
(ii) The purchase (excluding mortgage payments) of a principal
residence of the Participant;
(iii) The payment of tuition or related fees for the next 12 months of
post-secondary education for the Participant, his or her spouse,
children or dependents; or
(iv) The need to prevent the eviction of the Participant from his or
her principal residence or foreclosure on the mortgage of his or
her principal residence.
The Administrator shall determine whether there is an immediate and
heavy financial need, and the amount of such need, on the basis of
such written evidence from the Participant as the Administrator may
require. The Participant shall also provide evidence that he or she
has obtained all other distributions (other than hardship
distributions) and all nontaxable loans currently available under the
Plan and all other plans maintained by the Company and the Affiliated
Companies.
(c) EFFECT OF HARDSHIP DISTRIBUTION. If a Participant receives a
hardship distribution from his or her Elective Contribution
Account, then any salary reduction agreement, Employee
Contribution election, or any other elective or employee
contribution election in effect with respect to the Participant
under the Plan or any other qualified plan maintained by the
Company or an Affiliated Company shall be suspended for the
12-month period beginning with the date the Participant receives
the distribution. The amount of Elective Contributions made
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for the benefit of the Participant, together with any elective
deferrals made on behalf of the Participant under any other plan
maintained by the Company or an Affiliated Company for the calendar
year immediately following the calendar year of the hardship
distribution must not exceed the applicable limit under section 402(g)
of the Code for such next calendar year, less the amount of such
contributions made on behalf of the Participant for the calendar year
of the hardship distribution.
8.2 WITHDRAWALS AFTER AGE 59 1/2. If provided in the Adoption Agreement, a
Participant who has attained age 59 1/2 may withdraw all or a portion of the
amounts held in one or more of his or her Accounts not in excess of his or her
nonforfeitable interest in such Account. Such withdrawal shall be made in such
form and manner, and with such prior notice, as the Administrator may prescribe.
8.3 OTHER WITHDRAWALS. A Participant may withdraw at any time all or a
portion of the amounts held in his or her Employee Contribution Account. If
provided in the Adoption Agreement, a Participant may withdraw all or a portion
of the amounts held in his or her Rollover Account and his or her Company
Contribution and Matching Contribution Accounts not in excess of his or her
nonforfeitable interest in each such Account; PROVIDED, that (a) he or she has
been a Participant for five years or more, or (b) the withdrawal is limited to
amounts attributable to contributions which have been allocated to the
Participant's Account for at least two years. A withdrawal under this Section
8.3 shall be made in such form and manner, and with such prior notice, as the
Administrator may prescribe.
8.4 LOANS TO PARTICIPANTS. If provided in the Adoption Agreement, and
subject to the conditions of this Section 8.4, loans shall be made from the
Trust to Participants upon the written request of the Participant.
(a) The Administrator shall prescribe such rules and procedures as it
deems necessary or appropriate to carry out the purposes of this
Section. All such rules and procedures shall be considered part of the
Plan for purposes of Department of Labor Regulations, section
2550.408b-1(d).
(b) The following limitations shall apply in determining the amount of any
loan under the Plan:
(i) The amount of the loan, together with any other outstanding
indebtedness of the Participant under the Plan or any other
qualified retirement plans of the Company and the Affiliated
Companies, shall not exceed $50,000 reduced by the excess of (A)
the highest outstanding loan balance of the Participant from such
plans during the one-year period ending on the day prior to the
date on which the loan is made, over (B) the Participant's
outstanding loan balance from such plans immediately prior to the
loan.
(ii) The amount of the loan shall not exceed 50 percent of the
Participant's nonforfeitable interest in his or her Accounts,
determined as of the Valuation Date immediately preceding the
date of the loan.
(c) Each loan shall be evidenced by a note signed by the Participant and
shall be secured by 50 percent of his or her nonforfeitable interest
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in his or her Accounts. The loan shall bear interest at an annual
percentage interest rate to be determined by the Administrator. In
determining the interest rate, the Administrator shall take into
consideration interest rates currently being charged by persons in the
business of lending with respect to loans made in similar
circumstances. The Administrator shall make such determination through
consultation with one or more lending institutions, as the
Administrator deems appropriate.
(d) Each loan made to a Participant who is receiving regular payments of
Compensation from the Employer shall be repayable by payroll
deduction. Loans made to Participants where payroll deduction is not
practicable shall be repayable in such manner as the Administrator may
from time to time determine. Loan payments shall be made not less
frequently than quarterly, over a specified term as determined by the
Administrator, in substantially level payments. Such term shall not
exceed five years unless the loan is being applied toward the purchase
of a principal residence for the Participant.
(e) If, at the time distribution of benefits is to be made or commence to
a Participant or his beneficiary, there remains any unpaid balance of
a loan under the Plan, such unpaid balance shall, to the extent
consistent with Department of Labor Regulations, become immediately
due and payable in full. Such unpaid balance, together with any
accrued but unpaid interest on the loan, shall be deducted from the
Participant's Accounts subject to the default provisions below, before
any distribution of benefits is made.
(f) In the event of a default in making any payment of principal or
interest when due under the note evidencing any loan under this
Section, if such default continues for more than 14 days after written
notice of the default by the Trustee, the unpaid principal balance of
the note shall immediately become due and payable in full. Such unpaid
principal, together with any accrued but unpaid interest, shall
thereupon be deducted from the Participant's Accounts, subject to the
further provisions of this Section. The amount so deducted shall be
treated as distributed to the Participant and applied by him or her as
a payment of the unpaid interest and principal (in that order) under
the note evidencing such loan. In no event shall the Administrator
apply the Participant's Accounts to satisfy his or her repayment
obligation, whether or not he or she is in default, unless the amount
so applied could otherwise be distributed in accordance with the Plan.
(g) The note evidencing a loan to a Participant shall be an asset of the
Trust which is allocated to the Accounts of the Participant and shall
for purposes of the Plan be deemed to have a value at any given time
equal to the unpaid principal balance of the note plus the amount of
any accrued but unpaid interest.
(h) A Participant may designate the Account or Accounts from which his or
her loan is to be made. In the absence of such a designation, the loan
shall be made proportionately from the Participant's Accounts under
the Plan.
(i) if the Participant's benefit is subject to sections 401(a)(11) and 417
of the Code, the written consent of the Participant's spouse to the
loan must be obtained in accordance with Section 7.8.
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(j) Loans shall be made available under this Section to all Participants
on a reasonably equivalent basis, except that the Administrator may
make reasonable distinctions based on creditworthiness and financial
need.
(k) For purposes of this Section, a former Participant or beneficiary who
is a party in interest with respect to the Plan, within the meaning of
section 3(14) of ERISA, shall be treated as a Participant.
ARTICLE IX
TOP-HEAVY PROVISIONS
9.1 TOP-HEAVY MINIMUM CONTRIBUTIONS. Notwithstanding any other provision of
the Plan, for any Plan Year which is a top-heavy plan year, each Participant who
is a Participant on the last day of such Plan Year and who is not a key employee
shall be entitled to receive a minimum contribution under the Plan equal to the
lesser of (a) 3 percent of his or her Compensation for such Plan Year, or (b) if
the Company or the Affiliated Company does not maintain a defined benefit plan
required to be aggregated with the Plan, the largest percentage of Compensation
contributed (exclusive of Employee Contributions) on behalf of a key employee
for such Plan Year. If the Company or the Affiliated Company maintains a defined
benefit plan required to be aggregated with the Plan, such minimum contribution
shall be equal to 5 percent of the Participant's Compensation for the Plan Year.
Notwithstanding the foregoing, no minimum contribution will be required with
respect to a Participant who is also covered by another top-heavy plan of the
Company or an Affiliated Company under which he or she receives the top-heavy
minimum contribution or the top-heavy defined benefit minimum.
9.2 TOP-HEAVY VESTING. Notwithstanding any other provision of the Plan, for
each Employee who is a Participant at any time during a top-heavy plan year the
nonforfeitable percentage of the Participant's Company Contribution and Matching
Contribution Accounts shall be determined in accordance with the following
schedule:
If the period of his or her
Credited Service is: The percentage shall be:
--------------------------- ------------------------
Less than 2 years 0%
2 years but less than 3 years 20%
3 " " " " 4 " 40%
4 " " " " 5 " 60%
5 " " " " 6 " 80%
6 or more years 100%
9.3 ADJUSTMENT TO LIMITATION ON BENEFITS. For purposes of the limits of
section 415 of the Code, the definitions of "defined contribution plan fraction"
and "defined benefit plan fraction" shall be modified, for any Plan Year which
is a top-heavy plan year, by applying the special rule in section 416(h) of the
Code unless (a) the Plan and each plan with which the Plan is required to be
aggregated for top-heavy purposes satisfies the requirements of section
416(h)(2)(A) of the Code and section 1.416-1, M-14 of the Treasury Regulations,
and (b) such Plan Year would not be a top-heavy plan year if "90 percent" were
substituted for "60 percent" in the definition of a top-heavy plan year.
9.4 DEFINITIONS. For purposes of these top-heavy provisions, the following
terms have the following meanings:
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<PAGE> 32
(a) "key employee" means a key employee described in Code section
416(i)(l) of the Code; and
(b) "top-heavy plan year" means a Plan Year if the sum of the account
balances of all key employees under the Plan and each other defined
contribution plan (as of the applicable determination date of each
such plan) which is aggregated with the Plan, plus the sum of the
present values of the total accrued benefits of all key employees
under each defined benefit plan (as of the applicable determination
date of each such plan) which is aggregated with the Plan exceeds 60
percent of the sum of such amounts for all Employees and former
Employees (other than former key employees, but including
beneficiaries of former Employees) under the Plan and all such plans.
For purposes of these determinations:
(i) The foregoing determination will be made in accordance with the
provisions of section 416 of the Code and Treasury Regulations
thereunder, which are specifically incorporated herein by
reference.
(ii) The term "determination date" means, with respect to the initial
plan year of a plan, the last day of such plan year and, with
respect to any other plan year of a plan, the last day of the
preceding plan year of such plan. The term "applicable
determination date" means, with respect to the Plan, the
determination date for the Plan Year of reference and, with
respect to any other plan, the determination date for any plan
year of such plan which falls within the same calendar year as
the applicable determination date of the Plan.
(iii) Accrued benefits or account balances under a plan will be
determined as of the most recent valuation date of the plan in
the 12-month period ending on the applicable determination date
of the plan; PROVIDED, HOWEVER, that in the case of a defined
benefit plan such valuation date must be the same date as is
employed for minimum funding purposes, and in the case of a
defined contribution plan the value so determined will be
adjusted for contributions made after the valuation date to the
extent required by applicable regulations.
(iv) If any individual has not received any compensation from the
Company or an Affiliated Company maintaining a plan (other than
benefits under the plan) at any time during the five-year period
ending on the applicable determination date with respect to such
plan, any accrued benefit for such individual (and the account of
such individual) under such plan shall not be taken into account.
(v) Each plan of the Company or an Affiliated Company (whether or not
terminated) in which a key employee participates, and any other
plan of the Company or an Affiliated Company which enables a plan
referred to in the preceding clause to satisfy the requirements
of sections 401(a)(4) and 410 of the Code, shall be aggregated
with the Plan. Any plan of the Company or an Affiliated Company
not required to be aggregated with the Plan may nevertheless, at
the discretion of the Administrator, be aggregated with the Plan
if the benefits and coverage of all
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aggregated plans would continue to satisfy the requirements of
sections 401(a)(4) and 410 of the Code.
(vi) The determination of the present value of accrued benefits under
a defined benefit plan shall be made on the basis of the funding
assumptions employed by such plan.
ARTICLE X
TRUSTEE
10.1 APPOINTMENT. A Trustee for the Plan shall be named in a trust
instrument executed by the Sponsor, and, upon acceptance thereof, the Trustee
shall perform the duties and exercise the authority of the Trustee as set forth
in the Plan and trust instrument. All assets of the Plan shall, until disposed
of pursuant to the provisions of the Plan, be held in the Trust in the
possession of the Trustee.
10.2 REMOVAL AND REPLACEMENT. The Sponsor shall reserve the right to remove
the Trustee at any time and to appoint a successor Trustee.
10.3 CHANGES IN TRUST ARRANGEMENTS. The Sponsor may from time to time enter
into such further agreements with the Trustee or other parties, make such
amendments to trust instruments or take such other action as it may deem
necessary or desirable to carry out the Plan.
ARTICLE XI
ADMINISTRATION OF PLAN
11.1 APPOINTMENT OF ADMINISTRATOR. The Plan shall be administered by the
Administrator who shall be appointed by and serve at the pleasure of the
Sponsor. The Administrator may also appoint one or more assistant administrators
and other persons, who shall serve at its pleasure, to assist it in the
administration of the Plan and may allocate and delegate its fiduciary
responsibilities under the Plan by written instrument in accordance with section
405 of ERISA.
If a committee is appointed as Administrator, the committee shall act by a
majority of its members; PROVIDED, that no member of the committee shall vote on
or decide any matter relating to himself or herself as a Participant. All such
matters shall be voted on or decided by the other members of the committee and,
in the event that they do not agree, by the Board of Directors of the Sponsor,
and the vote, decision or determination of such other members or of the Sponsor,
as the case may be, shall be final and conclusive upon the interested member of
the committee. A formal meeting of the committee need not be called or held for
the purpose of making any decision, but decisions may be made and evidenced by a
written document signed by a majority of the committee.
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<PAGE> 34
11.2 POWERS AND DUTIES. In addition to such powers and duties as may be
specified elsewhere in this instrument, the Administrator shall have the
discretionary authority to:
(a) Make and enforce such rules as it deems necessary or proper for the
administration of the Plan;
(b) Determine all matters relating to the eligibility of persons to become
Participants in the Plan and determine whether or not any Eligible
Employee has become a Participant in the Plan;
(c) Determine whether and when the employment of any Participant has been
terminated and, if material to a determination of the benefits of such
Participant, the cause of such termination;
(d) Decide all questions and disputes which may arise from time to time
with respect to the rights under the Plan of Employees, Participants
and all other persons who may be entitled to benefits under the Plan;
(e) Compute, or cause to be computed, the amount of benefits which will be
payable to any Participant or other person, to determine the person or
persons to whom such benefits will be paid and to authorize the
payment of such benefits;
(f) Furnish to the Trustee from time to time in writing all such
information, data and directions as may be required by the Trustee or
the terms of this instrument for the performance by the Trustee of its
duties hereunder;
(g) Determine such matters as may from time to time be submitted to it by
the Trustee which the Trustee states to be necessary for it properly
to discharge its duties, powers and obligations under this instrument;
(h) Keep, or cause to be kept, such books and records as may be necessary
or appropriate for the orderly administration of the Plan, all such
books and records to be open to inspection at any time by the Sponsor;
(i) Execute and file, or cause to be executed and filed, such reports or
other documents, and make, or cause to be made, such disclosures, as
the Plan or any one acting for the Plan may be required to execute and
file or make by any applicable law or statute now or hereafter
enacted, unless otherwise provided by such law or statute;
(j) Interpret and construe any and all of the provisions of this
instrument; and
(k) Perform all such other duties and acts as may be required to be
performed by the Administrator by the terms of this instrument and the
operation of the Plan.
11.3 EFFECT OF INTERPRETATION OR DETERMINATION. Any interpretation of the
Plan or other determination with respect to the Plan by the Administrator shall
be final and conclusive on all persons in the absence of clear and convincing
evidence that the Administrator acted arbitrarily and capriciously.
11.4 NONDISCRIMINATORY EXERCISE OF AUTHORITY. Whenever, in the
administration of the Plan, any discretionary action by the Administrator is
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<PAGE> 35
required, it shall exercise its authority in a nondiscriminatory manner so that
all persons similarly situated will receive substantially the same treatment.
11.5 NAMED FIDUCIARY. The Administrator will be a "named fiduciary" for
purposes of section 402(a)(1) of ERISA with authority to control and manage the
operation and administration of the Plan, except that it will have no authority
over the investment of the assets of the Trust.
11.6 EXPENSES AND INDEMNIFICATION. All usual and reasonable expenses of the
Administrator shall be paid in whole or in part by the Company, and any expenses
not paid by the Company shall be paid out of the principal or income of the
Trust, consistent with applicable law. If the Administrator is an Employee he or
she shall not receive compensation with respect to services performed as
Administrator. The Company agrees to indemnify the Administrator and save him or
her harmless against any and all liability occasioned by or arising out of any
action taken, suffered or omitted in good faith by such Administrator.
11.7 EXAMINATION OF RECORDS. The Administrator will make available to each
Participant such of its records as pertain to him or her, for examination at
reasonable times during normal business hours.
11.8 CLAIMS AND REVIEW PROCEDURES.
(a) CLAIMS. If any person believes he or she is being denied any rights or
benefits under the Plan, such person may file a claim in writing with
the Administrator. If any such claim is wholly or partially denied,
the Administrator will notify such person of its decision in writing.
Such notification will contain (i) specific reasons for the denial,
(ii) specific reference to pertinent Plan provisions, (iii) a
description of any additional material or information necessary for
such person to perfect such claim and an explanation of why such
material or information is necessary and (iv) information as to the
steps to be taken if the person wishes to submit a request for review.
Such notification will be given within 90 days after the claim is
received by the Administrator (or within 180 days, if special
circumstances require an extension of time for processing the claim,
and if written notice of such extension and circumstances is given to
such person within the initial 90-day period). If such notification is
not given within such period, the claim will be considered denied as
of the last day of such period and such person may request a review of
his or her claim.
(b) REVIEW PROCEDURE. Within 60 days after the date on which a person
receives a written notice of a denied claim (or, if applicable, within
60 days after the date on which such denial is considered to have
occurred) such person (or his or her duly authorized representative)
may (i) file a written request with the Administrator for a review of
the denied claim and of pertinent documents and (ii) submit written
issues and comments to the Administrator. The Administrator will
notify such person of its decision in writing. Such notification will
be written in a manner calculated to be understood by such person and
will contain specific reasons for the decision as well as specific
references to pertinent Plan provisions. The decision on review will
be made within 60 days after the request for review is received by the
Administrator (or within 120 days, if special circumstances require an
extension of time for processing the request, such as an election by
the Administrator to hold a hearing, and if written notice of such
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<PAGE> 36
extension and circumstances is given to such person within the initial
60-day period). If the decision on review is not made within such
period, the claim will be considered denied.
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<PAGE> 37
ARTICLE XII
AMENDMENT AND TERMINATION
12.1 AMENDMENT. The Sponsor shall have the right, at any time and from time
to time, to modify or amend the Plan or any of its provisions, each such
modification or amendment to be by instrument in writing; PROVIDED, that no such
modification or amendment shall be such, or shall be so construed, as to:
(a) Cause or permit any assets of the Trust to be diverted to purposes
other than the exclusive benefit of Participants and their
beneficiaries, as provided in Section 13.2;
(b) Reduce the benefits then accrued, or the nonforfeitable interest in
such benefits, of any Participant in the Plan; or
(c) Change, without the prior written consent of the Trustee or
Administrator, any of the powers, rights, duties or obligations of the
Trustee or Administrator, as the case may be,
unless such modification or amendment is necessary or appropriate in order to
qualify the Plan or Trust under section 401(a) or 501(a) of the Code, or to
retain such qualified status, or to insure compliance of the Plan with ERISA.
12.2 TERMINATION. Although the Sponsor expects to continue the Plan
indefinitely, it expressly reserves the right to terminate it at any time by an
instrument in writing, the termination to be effective on the date specified in
such instrument. From and after the termination date, no further contributions
shall be made by the Company and the Trustee shall proceed with the liquidation
of the Trust. In the event of a termination or partial termination of the Plan,
or the complete discontinuance of contributions by the Company, each affected
Participant or other person entitled to benefits under the Plan shall be
entitled to a nonforfeitable benefit, payable as otherwise provided in the Plan,
equal in amount to the value of the Participant's Accounts determined as of the
Valuation Date coinciding with or immediately preceding the date distribution is
to be made or commence. If the Company or an Affiliated Company maintains a
defined contribution plan (other than an employee stock ownership plan as
defined in section 4975(e)(7) of the Code), a Participant's benefits will not be
distributed without the Participant's consent. In the event a successor plan, as
defined for purposes of section 401(k) of the Code, is established or
maintained, distribution shall be made in accordance with the requirements of
such Code section. Upon the completion of distributions, the Trust will
terminate and no Participant or other person shall have any claims under the
Plan or Trust, except as required by applicable law.
12.3 NOTICES WITH RESPECT TO TERMINATION. No payment of benefits or
distribution of assets shall be made by the Trustee hereunder until receipt by
it of written confirmation from the Sponsor that it has given all notices and
prepared and filed all reports which may be required by law.
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<PAGE> 38
ARTICLE XIII
MISCELLANEOUS PROVISIONS
13.1 PARTICIPANT AND EMPLOYEE RIGHTS. The Plan shall not be deemed to give
any Participant or Employee the right to be retained in the employ of the
Company or an Affiliated Company, or confer on any Participant or Employee any
rights, legal or equitable, except such as are expressly set forth in the Plan.
No provision of the Plan nor any action taken by the Company under the Plan
shall in any way prevent the Company or an Affiliated Company from terminating
the employment of any Employee or Participant at any time, nor subject it to any
liability under this instrument for any such termination.
13.2 EXCLUSIVE BENEFIT. The Plan and Trust are for the exclusive benefit of
the Employees of the Company and the Affiliated Companies. No part of the assets
of the Trust shall be held for purposes other than the exclusive benefit of
Participants and their beneficiaries and the payment of expenses of
administering the Plan and Trust. Except as provided in Sections 4.11 and 13.4,
no funds paid to the Trust under the Plan and no funds or property at any time
held by the Trustee shall revert or inure to the possession, ownership or
control of the Company.
13.3 RELEASE BY PARTICIPANTS. Except to the extent that it relieves the
Company, the Administrator or the Trustee from responsibility or liability for
any responsibility, obligation or duty owing to the Plan or any Participant, any
payment to any Participant or to any person entitled to a benefit under the
Plan, made in accordance with the provisions of this instrument, shall to the
extent thereof be in full satisfaction of all claims against any or all of the
Trustee, the Administrator and the Company, any of whom may require such
Participant or person, as a condition precedent to such payment, to execute a
receipt and release therefor in such form as shall be determined by the Trustee,
the Administrator or the Company, as the case may be.
13.4 FAILURE OF INITIAL QUALIFICATION. If the Plan is a new plan and it is
determined by the Internal Revenue Service that the Plan does not initially
qualify under section 401(a) of the Code, all assets then held in the Trust
shall be returned to the Company within one year of the date the application is
denied; PROVIDED, that the application is made by the time prescribed by law for
filing the Company's income tax return for the fiscal year in which the Plan is
adopted. Upon such distribution the Plan will be considered to be rescinded and
to be of no force or effect.
13.5 MERGER. In the event of any merger or consolidation of the Plan with
any other plan, or in the event of any transfer of assets and liabilities from
the Plan to any other plan, the assets of the Plan applicable to any Participant
shall be transferred to such other plan only if the benefit to which such
Participant is entitled immediately after the merger, consolidation or transfer
(determined as if the plan had then terminated) is equal to or greater than the
benefit which he or she would have been entitled to receive if the Plan had
terminated immediately prior to such merger, consolidation or transfer.
13.6 GOVERNING LAW. This instrument shall be construed, and the rights and
liabilities of all persons hereunder shall be determined, in accordance with the
laws of the Commonwealth of Massachusetts, to the extent not preempted by ERISA.
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<PAGE> 39
NUTTER, McCLENNEN & FISH
VOLUME SUBMITTER DISCRETIONARY CONTRIBUTION PLAN
ADOPTION AGREEMENT
<PAGE> 40
ARTICLE I
ADOPTION
The Sponsor hereby adopts a discretionary contribution plan in the form of the
Nutter, McClennen & Fish Volume Submitter Discretionary Contribution Plan. The
name of the Plan is
The MacDermid Equipment 401K Plan
- -------------------------------------------------------------------------
The Plan
Select one:
[x] is initially established as of the Effective Date.
[ ] is an amendment and restatement of _______________ which was
initially established on _____________________.
This Adoption Agreement constitutes part of the Plan. Capitalized terms have the
same meanings as in the Plan document.
ARTICLE II
DEFINITIONS
2.11 "Compensation" under Section 2.11(c) means (select one):
Select one:
[ ] the amounts specified in Section 2.11(a).
[ ] the amounts specified in Section 2.11(b).
[ ] wages within the meaning of section 3401(a) of the Code and
all other payments of compensation paid to the Participant
while a Participant by the Company (in the course of the
Company's trade or business) for which the Company is
required to furnish the Participant a written statement
under sections 6041(d), 6051(a)(3), and 6052 of the Code.
Compensation under this paragraph shall be determined
without regard to any rules under section 3401(a) of the
Code that limit the remuneration included in wages based on
the nature or location of the employment or the services
performed.
[ ] wages within the meaning of section 3401(a) of the Code, for
purposes of income tax withholding at the source, paid to
the Participant while a Participant, but determined without
regard to any rules that limit the remuneration included in
wages based on the nature or location of the employment or
the services performed.
[x] other SEE ATTACHMENT.
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<PAGE> 41
2.12 "Credited Service" under Section 2.12 shall NOT include the following:
[ ] there are no Breaks in Service under the Plan.
[x] In the case of any Employee who does not have a nonforfeitable
right to a benefit derived from contributions by the Company,
years of Credited Service prior to any Break in Service shall not
be taken into account if the number of consecutive One Year
Breaks in Service is five or more. The aggregate number of years
of Credited Service prior to such Break in Service shall be
deemed not to include any years of Credited Service not required
to be taken into account under this Section by reason of any
prior Break in Service.
[ ] In the case of any Employee who incurs five consecutive One Year
Breaks in Service, Credited Service following such Break in
Service shall not be taken into account for purposes of
determining the Employee's nonforfeitable right to a benefit
derived from contributions by the Company which accrued before
such Break in Service.
[ ] In the case of any Employee who incurs a Break in Service, years
of Credited Service prior to such Break shall not be taken into
account until he or she has completed a year of Credited Service
after such Break in Service.
2.14 "Effective Date" under Section 2.14 means
January 1, 1999 .
-----------------------------------------------------------------
2.17 "Eligible Employee" under Section 2.17 means
[ x ] all Employees of the Company.
[ ] __________________________________________________________.
2.21 "Entry Date" under Section 2.21 means the following dates (which, with
respect to any Participant, cannot be later than six months after the
requirements for eligibility are satisfied)
The first of any month
-------------------------------------------------------------------
2.27 "Normal Retirement Age" under Section 2.27 means
Age 65 .
--------------------------------------------------------------------
2.30 "Plan Year" and "Limitation Year" under Section 2.30 mean
The 12 month period ending March 31st. .
--------------------------------------------------------------------
-3-
<PAGE> 42
ARTICLE III
PARTICIPATION
3.1 Each Eligible Employee of the Company shall become eligible to participate
in the Plan upon satisfying ALL of the following indicated requirements:
[ ] the completion of an Hour of Service.
[x] the completion of a period of employment of 30 days (without regard
to Hours of Service).
[ ] the completion of one Year of Service with respect to Elective
Contributions.
[ ] the completion of ____________ Years of Service.
[x] the attainment of age 18 _________.
ARTICLE IV
CONTRIBUTIONS
4.2 Employee Contributions under Section 4.2
[ ] are permitted.
[x] are not permitted.
If permitted, Employee Contributions may be made in an amount equal to a whole
percentage of the Participant's Compensation from ___ to ___ percent.
4.3 Elective Contributions under Section 4.3
[x] are permitted.
[ ] are not permitted.
If permitted, Elective Contributions may be made in an amount equal to a whole
percentage of the Participant's Compensation from 1 to 15 percent.
A salary reduction agreement shall be effective as of the 1st day of the month
_______ following its execution by the Participant.
4.4 Matching Contributions under Section 4.4
[x] will be made by the Company.
[ ] will not be made by the Company.
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<PAGE> 43
If permitted, Matching Contributions will be made, with respect to each eligible
Participant, in an amount equal to 50% OF THE FIRST 6% OF ELECTIVE CONTRIBUTIONS
INVESTED IN MACDERMID INCORPORATED COMPANY STOCK.
4.6 If the Company maintains, or has maintained, any other qualified plan or
plans, contributions and benefits will be limited in accordance with the
requirements of Section 4.6
[x] first under this Plan.
[ ] by the following means _____________________________________________
_______________________________________________________________________________.
4.12 Rollovers under Section 4.12
[x] are permitted.
[ ] are not permitted.
ARTICLE V
ALLOCATION TO PARTICIPANTS' ACCOUNTS
5.2 A Participant will be entitled to share in the Company Contribution for a
Plan Year if he or she
Select all that apply:
[ ] has been a Participant at any time during the Plan Year.
[x] is a Participant on the last day of the Plan Year.
[x] has completed 1000 Hours of Service during the Plan Year.
[x] retires or dies during the Plan Year (without regard to Hours
of Service).
5.3 Forfeitures for a Plan Year shall be
[x] applied to reduce contributions by the Company for the Plan Year if
related to Company matching contributions under Section 4.4.
[x] allocated to Participants who are Participants on the last day of the
Plan Year in the proportion that each Participant's Compensation bears
to the total Compensation of all such Participants if related to
Company Contributions under Section 4.1.
5.5 The Trust shall be invested under Section 5.5 as follows:
[x] Each Participant shall direct the investment of the following
percentages of amounts in his or her Accounts:
100% of Elective Contributions .
---------------------------------------------------------------------
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<PAGE> 44
[ ] The Trustee shall direct the investment of the following portion
of the Trust:
_____________________________________________________________________.
[ ] An investment manager shall direct the investment of the following
portion of the Trust: ______________________________________________.
ARTICLE VI
RETIREMENT
6.2 Retirement in the event of disability
[x] is permitted under the Plan.
[ ] is not permitted under the Plan.
ARTICLE VII
BENEFITS
7.3 Each Participant's nonforfeitable percentage of amounts held in his or her
Company Contribution and Matching Contribution Accounts upon termination of
employment prior to Normal Retirement Age under Section 7.3 shall be
[x] 100 percent after five years of Credited Service.
[ ] a percentage determined in accordance with the following schedule:
If the period of his or The applicable
her Credited Service is: percentage shall be:
------------------------------------------------------
Less than 3 years 0%
3 but less than 4 years 20%
4 but less than 5 years 40%
5 but less than 6 years 60%
6 but less than 7 years 80%
7 years or more 100%
[ ] other _________________________________________.
7.5 Distribution of benefits under Section 7.5 may be made in the following
forms:
[ ] an immediate lump sum payment.
[ ] substantially equal installments payable not less frequently
than annually over a period not to exceed the life expectancy
of the Participant or the joint life expectancies of the
Participant and his or her beneficiary.
[ ] an annuity.
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<PAGE> 45
[x] any combination of the above.
[ ] Annuity distributions under Section 7.7 will be the normal
form of benefit under the Plan.
7.6 In the event of termination of employment for reasons other than retirement
or death, a Participant
[x] may elect to receive benefits prior to his or her Normal
Retirement Date.
[ ] may not elect to receive benefits prior to his or her Normal
Retirement Date.
[x] may elect to defer the commencement of benefits.
[ ] may not elect to defer the commencement of benefits.
7.6 Distribution of benefits shall be made or commence under Section 7.6 as of
any __________ day of any
[x] month.
[ ] calendar quarter.
[ ] year.
7.7 Life expectancies of the Participant and the Participant's spouse
[ ] shall be recalculated annually.
[x] shall not be recalculated.
ARTICLE VIII
WITHDRAWALS AND LOANS
8.1 Hardship withdrawals under Section 8.1
[x] are permitted.
[ ] are not permitted.
8.2 Withdrawals after age 59 1/2 under Section 8.2
[x] are permitted.
[ ] are not permitted.
8.3 Other withdrawals from Participants' Company and Matching Contribution
Accounts under Section 8.3
[ ] are permitted.
[x] are not permitted.
8.4 Loans to Participants under Section 8.4
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<PAGE> 46
[x] are permitted.
[ ] are not permitted.
ARTICLE IX
TOP-HEAVY PROVISIONS
9.1 If the Company maintains a defined benefit plan required to be aggregated
with the Plan, the top-heavy minimum will be provided
[x] under Section 9.1 of the Plan.
[ ] by the following means ________________________________________
_________________________________________________________________.
IN WITNESS WHEREOF, the Sponsor has caused this Adoption Agreement to be
executed
this day of , 199.
By __________________________________________
________ Its__________________________________________
Accepted by the Trustee:
______________
By ___________
-8-
<PAGE> 47
MACDERMID EQUIPMENT 401(K) PLAN
Attachment to Plan and Trust
WHEREAS, the Plan and Trust have not been amended to reflect certain
changes in the employee benefit plan qualification requirements of Section
401(a) of the Internal Revenue Code of 1986 (the "Code") enacted since the Plan
and Trust were established, including changes to the qualification requirements
made by the Uruguay Round Agreements Act, the Small Business Job Protection Act
of 1996, and the Taxpayer Relief Act of 1997; and
WHEREAS, the remedial amendment period with respect to the foregoing
qualification changes has been extended generally until the last day of the
first plan year beginning on or after January 1, 2000, see generally Revenue
Procedure 99-23, I.R.B. 1999-16, 5 (April 5, 1999); and
WHEREAS, notwithstanding the extension of the remedial amendment period
for these qualification changes, the Employer desires that the Plan and Trust be
administered in accordance with applicable law in effect during the remedial
amendment period;
NOW, THEREFORE, the Employer directs that the Plan and Trust be deemed
to have been amended, solely for purposes of plan administration, as follows:
1. "Compensation" shall (i) be determined without regard to the final
sentence of Section 2.11, and (ii) include any elective deferral (as defined in
section 402(g)(3) of the Code) and any amount that is contributed or deferred by
the Company at the election of the Employee and which is not includable in the
gross income of the Employee by reason of section 125 of the Code.
2. The definition of "Highly Compensated Employee" set forth in Section
2.23 shall be replaced with the following definition:
"`Highly Compensated Employee' means an Employee who (a) was a
5-percent owner, as defined in section 416(i)(1) of the Code, of the
Company, at any time during the Plan Year or the preceding Plan Year,
or (b) for the preceding Plan Year received Compensation from the
Company in excess of $80,000 (adjusted as provided in Section 415(d) of
the Code), and, if the Company elects the operation of the remainder of
this clause (b), was in the top twenty percent of all Employees of the
Company on the basis of Compensation for such preceding Plan Year."
3. Section 2.24 of the Plan is amended by inserting immediately after
paragraph (e) of said Section 2.24 the following new paragraph.
"(f) To the extent not already credited under paragraph (a), (b), (c),
(d) or (e) of this Section, each period of qualified military service in the
uniformed services (as defined for
<PAGE> 48
purposes of section 414(u)(5) of the Code and the Uniformed Services Employment
and Reemployment Rights Act of 1994 ("USERRA")) served by an Employee shall be
considered, upon reemployment of the Employee by the Company under USERRA, for
purposes of the Plan to be service with the Company for purposes determining
such Employee's eligibility, if any, to receive Matching Contributions and such
Employee's nonforfeitable interest therein."
4. Section 4.7 of the Plan is amended as follows:
(i) delete the first and second sentences of Section 4.7(a) in
their entirety and insert in lieu thereof the following:
"For each Plan Year, the Administrator shall
determine for each Employee eligible to make
Elective Contributions the ratio of his or her
Elective Contributions for the immediately preceding
Plan Year to his or her Compensation for such
preceding Plan Year. To the extent permitted under
Treasury Regulations, the Committee may take into
account only that portion of such preceding Plan
Year during which the Employee was a Participant."
(ii) delete the third sentence of Section 4.7(c) in its entirety
and insert in lieu thereof the following:
"If a distribution becomes necessary, it will be
applied first to the Participant who is the Highly
Compensated Employee having the highest actual
deferral amount, until the limits of section
401(k)(3) are met or until such Participant's actual
deferral amount is reduced to the same amount as
that of the Participant who is the Highly
Compensated Employee having the next highest actual
deferral amount."
(iii) delete the eighth sentence of Section 4.7(c) in its
entirety.
5. Section 4.8 of the Plan is amended as follows:
(i) delete the first sentence of Section 4.8(a) in its entirety
and insert in lieu thereof the following:
"For each Plan Year, the Administrator shall
determine for each Employee eligible for Matching
Contributions, the ratio of the Matching
Contributions made on his or her behalf for the
immediately preceding Plan Year to his or her
Compensation for such preceding Year."
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<PAGE> 49
(ii) delete the third sentence of Section 4.8(b) in its entirety
and insert in lieu thereof the following:
"If a distribution becomes necessary, it will be
first applied to the Participant who is the Highly
Compensated Employee with the highest actual
contribution amount, until the limits of Code
section 401(m)(2) are met or until such
Participant's actual contribution amount is reduced
to the same contribution amount as that of the
Participant who is the Highly Compensated Employee
having the next highest actual contribution amount."
(iii) delete the seventh sentence of Section 4.8(b) in its
entirety.
6. Section 7.11 of the Plan is amended by deleting from the first
sentence thereof the reference to "$3,500" and inserting in lieu thereof
"$5,000".
7. Section 7.16 of the Plan is amended by deleting the provisions of
subsection 7.16(b) in their entirety and by inserting in lieu thereof the
following:
"The April 1 next following the end of the later of (i) the
calendar year in which the Participant attains age 70 1/2, and
(ii) except with respect to a Participant who is a 5 percent
owner (as defined in section 416(i)(1)(B)(i) of the Code) of the
Company for the Plan Year ending in the calendar year in which
the Participant attains age 70 1/2, the calendar year in which
the Participant retires."
8. Section 7.17 of the Plan is amended by designating the first (and
only) paragraph thereof as "(a)" and by inserting after such subsection (a) the
following new subsection:
"(b) The non-alienation rule of Section 1(a) above shall not apply to
any offset, as defined by the Administrator, of a Participant's
benefit(s) under the Plan against an amount that the Participant
is ordered or required to pay to the Plan if:
(i) the order or requirement to pay arises (1) under a judgment
of conviction for a crime involving the Plan; (2) under a
civil judgment (including a consent order or decree) entered
by a court in an action brought in connection with a
violation (or alleged violation) of Part 4 of Subtitle B of
Title I of the ERISA; or (3) pursuant to a settlement
agreement between the Secretary of the United States
Department of Labor and the Participant, or a settlement
agreement between the Pension Benefit Guaranty Corporation
and the Participant, in connection with a violation (or
alleged violation) of Part 4 of Subtitle B of Title I of
ERISA by a
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<PAGE> 50
fiduciary (as defined in Section 3(21) of ERISA) or any
other person; and
(ii) the judgment, order, decree, or settlement agreement
expressly provides for the offset of all or part of the
amount ordered or required to be paid to the Plan against
the Participant's benefit(s) provided under the Plan; and
(iii) in a case in which the survivor annuity requirements of
Section 205 of ERISA or Section 401(a)(11) of the Code apply
with respect to distributions from the Plan to the
Participant, if the Employee has a spouse at the time at
which the offset is to be made;
(1) either:
(A) such spouse has consented in writing to such offset
and such consent is witnessed by a notary public or
Plan representative designated by the Administrator
(or it is established to the satisfaction of such
Plan representative that such consent may not be
obtained by reason of circumstances described in
Section 205(c)(2)(5) of ERISA or Section
417(a)(2)(B) of the Code, or
(B) an election to waive the right of the spouse to a
qualified joint and survivor annuity or a qualified
preretirement survivor annuity is in effect in
accordance with the requirements of Section 205(c)
of ERISA or Section 417(a) of the Code; or
(2) such spouse is ordered or required in such judgment,
order, decree, or settlement to pay an amount to the
Plan in connection with a violation of Part 4 of
Subtitle B of Title I of ERISA; or
(3) in such judgment, order, decree, or settlement, such
spouse retains the right to receive the survivor
annuity under a qualified joint and survivor annuity
provided pursuant to Section 205(a)(1) of ERISA or
Section 401(a)(11)(A)(i) of the Code, and under a
qualified preretirement survivor annuity provided
pursuant to Section 205(a)(2) of ERISA or Section
401(a)(11)(A)(ii) of the Code, determined in
accordance with Section 206(d)(5) of ERISA and
Section 401(a)(13)(D) of the Code."
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<PAGE> 51
MacDermid Equipment, Inc.
Dated: ________________ By: _______________________________
Title:
Accepted by the Trustee:
By:_____________________
Title:
Dated: __________________
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<PAGE> 52
MACDERMID EQUIPMENT
401(k) PLAN
Attachment to Adoption Agreement
SECTION 2.11 "Compensation" under Section 2.11(c) means (a) for purposes of
Section 4.3, the amounts specified in Section 2.11(b); and (b) for
purposes of Section 5.2, with respect to any Participant, such
Participant's wages for the Plan Year within the meaning of Code
Section 3401(a) (for the purposes of income tax withholding at the
source), excluding (even if includable in gross income) overtime,
commissions, bonuses, reimbursements or other expense allowances,
fringe benefits (cash or noncash), deferred compensation, and
welfare benefits.
MACDERMID EQUIPMENT, INC.
Dated: __________________________ By: _________________________________
Title:
Accepted by the Trustee:
By: _____________________________
Title:
<PAGE> 1
EXHIBIT 5
NUTTER, McCLENNEN & FISH, LLP
ATTORNEYS AT LAW
ONE INTERNATIONAL PLACE
BOSTON, MASSACHUSETTS 02110-2699
TELEPHONE: 617-439-2000 FACSIMILE: 617-973-9748
CAPE COD OFFICE DIRECT DIAL NUMBER
HYANNIS, MASSACHUSETTS
October 15, 1999
MacDermid, Incorporated
245 Freight Street
Waterbury, CT 06702
Gentlemen/Ladies:
Reference is made to the Registration Statement on Form S-8 (the
"Registration Statement") which MacDermid, Incorporated (the "Company") is
filing concurrently herewith with the Securities and Exchange Commission under
the Securities Act of 1933, as amended (the "Securities Act"), with respect to
1,500,000 shares of common stock, without par value (the "Common Stock"),
issuable pursuant to the MacDermid, Incorporated Profit Sharing and Employee
Stock Ownership Plan and MacDermid Equipment 401(K) Plan (collectively, the
"Plans"), and an indeterminate number of shares of such Common Stock which may
be issued or become issuable under the Plans by reason of stock dividends,
stock splits or other recapitalizations executed hereafter, and an
indeterminate amount of interests to be offered or sold pursuant to the Plans.
We are familiar with the Company's articles of organization and
By-laws, both as amended to date (collectively, the "Organizational Documents"),
and have examined the Plans and such other documents as we deemed necessary for
this opinion. Based upon the foregoing, we are of the opinion that:
1. When issued and paid for in compliance with the terms of the
Plans, the Organizational Documents and applicable state law, the 1,500,000
shares of Common Stock referred to above will be duly and validly issued, fully
paid and non-assessable; and
2. The additional shares of Common Stock which may become
issuable under the Plans by reason of stock dividends, stock splits or other
recapitalizations hereafter executed, if and when issued in compliance with the
terms of the Plans, the Organizational Documents and applicable state law, will
be duly and validly issued, fully paid and non-assessable.
<PAGE> 2
We understand that this opinion letter is to be used in connection with
the Registration Statement and hereby consent to the filing of this opinion
letter with and as a part of the Registration Statement and of any amendments
thereto. It is understood that this opinion letter is to be used in connection
with the offer and sale of the aforesaid shares only while the Registration
Statement, as it may be amended from time to time as contemplated by Section
10(a)(3) of the Securities Act, is effective under the Securities Act.
Very truly yours,
/s/ Nutter, McClennen & Fish, LLP
---------------------------------------
NUTTER, McCLENNEN & FISH, LLP
MEM/DMR
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<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 of our report dated May 14, 1999, which appears in
MacDermid, Incorporated's Annual Report on Form 10-K for the year ended March
31, 1999. We also consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated August 20, 1999 appearing on page 2
of the Annual Report of the MacDermid, Incorporated Profit Sharing and Employee
Stock Ownership Plan on Form 11-K for the year ended 3/31/99 and of our report
dated August 20, 1999 appearing on page 2 of the Annual Report of the MacDermid
Equipment 401(k) Plan on Form 11-K for the year ended 3/31/99.
/s/ KPMG LLP
Boston, Massachusetts
October 15, 1999
