<PAGE> 1
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
KAYDON CORPORATION
(Exact name of registrant as specified in its charter)
________________
DELAWARE 13-3186040
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
Arbor Shoreline Office Park
19345 U.S. 19 North
Clearwater, Florida 34624
(Address of principal executive offices, zip code)
SEABEE CORPORATION
PENSION AND RETIREMENT SAVINGS PLAN
(Full title of the plan)
JOHN F. BROCCI ANTHONY J. KOLENIC, JR.
SECRETARY WARNER NORCROSS & JUDD LLP
KAYDON CORPORATION 400 TERRACE PLAZA
ARBOR SHORELINE OFFICE PARK P.O. BOX 900
19345 U.S. 19 NORTH MUSKEGON, MICHIGAN 49443-0900
CLEARWATER, FLORIDA 34624
(Name and address of agent for service)
(813) 531-1101
(Telephone number, including area code, of agent for service)
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
TITLE OF PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES TO BE AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
REGISTERED REGISTERED PER SHARE<F3> OFFERING PRICE<F3> REGISTRATION FEE<F3>
<S> <C> <C> <C> <C> <C>
Common Stock, 200,000<F1> $40.32<F2> $8,064,000<F2> $2,443.64<F3>
$.10 par value
<PAGE> 2
<FN>
<F1> Plus such indeterminate number of additional shares as may be
required to be issued in the event of an adjustment as a result
of an increase in the number of issued shares of Common Stock
resulting from a subdivision of such shares, the payment of a
stock dividend, or certain other capital adjustments.
<F2> Estimated solely for the purpose of calculating the registration
fee.
<F3> Calculated pursuant to Rule 457(h)(1). On November 4, 1996, the
mean between the high and low prices of the Company's Common
Stock on the New York Stock Exchange was $40.32.
</FN>
</TABLE>
In addition, pursuant to Rule 416(c) under the Securities Act of
1933, this registration statement also covers an indeterminate amount
of interests to be offered or sold pursuant to the employee benefit
plan described herein.
===========================================================================
<PAGE> 3
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange
Commission are incorporated in this registration statement by
reference:
(a) The Registrant's latest annual report filed pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of
1934 (the "Exchange Act").
(b) All other reports filed pursuant to Section 13(a) or 15(d)
of the Exchange Act since the end of the fiscal year
covered by the annual report referred to in (a) above.
(c) The description of the Registrant's Common Stock, $.10 par
value, which is contained in the Registrant's Registration
Statement filed under the Exchange Act, including any
amendment or report filed for the purpose of updating such
description.
All documents subsequently filed by the Registrant (also referred
to as the "Corporation") pursuant to Sections 13(a), 13(c), 14,
and 15(d) of the Exchange Act, prior to the filing of a post-
effective amendment which indicates that all securities offered
hereby have been sold or which deregisters all securities
remaining unsold, shall be deemed to be incorporated by reference
in this registration statement and to be a part of this
registration statement from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law provides that
a Delaware corporation has the power to indemnify its directors,
officers, employees, and agents against liability under certain
circumstances. Pursuant to its Certificate of Incorporation, as
amended, and Bylaws, the Registrant may indemnify a director, officer,
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employee, or agent described in Section 145 of the Delaware General
Corporation Law for liabilities reasonably incurred resulting from
any pending, threatened, or completed action or proceeding arising
out of such person's position with the Registrant.
The Registrant's stockholders approved an amendment to the
Registrant's Certificate of Incorporation which may have the
effect of reducing or eliminating the liability of the
Registrant's officers and directors, and which increased the
Registrant's obligations with respect to indemnification. The
Registrant maintains an insurance policy on behalf of its
directors and officers against certain liabilities that may arise
under the Securities Act of 1933 (the "Securities Act").
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, or persons
controlling the Registrant pursuant to the foregoing provision,
the Registrant has been informed that in the opinion of the
Commission, such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The following exhibits have been filed as part of this
registration statement:
EXHIBIT
NUMBER DESCRIPTION
------- -----------
4.1 Certificate of Incorporation of Kaydon Corporation,
as amended. Previously filed as an exhibit to the
Corporation's Registration Statement on Form S-1
(Registration No. 2-89399) filed on February 16,
1984; as amended by Amendment No. 1 to the
Registration Statement on Form S-1 (Registration
No. 2-89399) filed on March 27, 1984; as further
amended by the Corporation's 10-K Annual Report
for the fiscal year ended December 31, 1987;
and as further amended by the Corporation's Form
10-Q Quarterly Report for the quarter ended March
28, 1992. Incorporated herein by reference.
4.2 Bylaws. Previously filed as an exhibit to the
Corporation's Registration Statement on Form S-1
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(Registration No. 2-89399) filed on February 16,
1984; as amended by Amendment No. 1 to the
Registration Statement on Form S-1 (Registration
No. 2-89399) filed on March 27, 1984; as further
amended by the Corporation's Form 10-K Annual
Report for the fiscal year ended December 31,
1985; and as further amended by the Corporation
Form 10-K Annual Report for the fiscal year
ended December 31, 1989. Incorporated herein by
reference.
4.3 Seabee Corporation Pension and Retirement Savings
Plan.
5.1 Opinion Regarding Legality of Securities Offered.
5.2 Undertaking to Submit Plan to the Internal Revenue
Service.
23.1 Consent of Warner Norcross & Judd LLP. See Exhibit
5.1.
23.2 Consent of Arthur Andersen LLP (Independent Auditors
of Kaydon Corporation).
23.3 Consent of Carney, Alexander, Marold & Co.
(Independent Auditors of the Seabee Corporation
Pension and Retirement Savings Plan, formerly
entitled the Seabee Corporation Employee Stock
Ownership Plan).
24 Powers of Attorney.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this Registration
Statement;
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933 (the "1933 Act");
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereto) which, individually or in the aggregate,
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<PAGE> 6
represent a fundamental change in the information set
forth in the Registration Statement;
(iii) To include any material information with
respect to the plan of distribution not previously
disclosed in the Registration Statement or any material
change to such information in the Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic
reports filed by the Registrant pursuant to Section 13 or 15(d) of
the Exchange Act that are incorporated by reference in this
Registration Statement.
(2) That, for the purpose of determining any liability
under the 1933 Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial BONA FIDE
offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered that
remain unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining liability under the 1933 Act, each filing
of the Registrant's annual report pursuant to Section 13(a) or
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.
(h) Insofar as indemnification for liabilities arising under
the 1933 Act may be permitted to directors, officers, and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the 1933
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
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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 1933 Act and will be
governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Clearwater, State of Florida, on
the 7th day of November, 1996.
KAYDON CORPORATION
By /S/ LAWRENCE J. CAWLEY
Lawrence J. Cawley
Chairman and Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated:
DATE NAME AND TITLE
---- --------------
November 7, 1996 /S/ GERALD J. BREEN
Gerald J. Breen
Director
November 7, 1996 /S/ BRIAN P. CAMPBELL
Brian P. Campbell
Director
November 7, 1996 /S/ LAWRENCE J. CAWLEY
Lawrence J. Cawley
Chairman of the Board, Chief Financial
Officer (Principal financial and
accounting officer) and Director
November 7, 1996 */S/ STEPHEN K. CLOUGH
Stephen K. Clough
President, Chief Executive Officer
(Principal executive officer) and
Director
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<PAGE> 9
DATE NAME AND TITLE
November 7, 1996 /S/ JOHN H.F. HASKELL, JR.
John H.F. Haskell, Jr.
Director
*By /S/ LAWRENCE J. CAWLEY
Lawrence J. Cawley
Attorney-in-Fact
Pursuant to the requirements of the Securities Act of 1933, the trustees
(or other persons who administer the employee benefit plan) have duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Clearwater, State of
Florida, on the 7th day of November, 1996.
SEABEE CORPORATION PENSION AND
RETIREMENT SAVINGS PLAN
/S/ LAWRENCE J. CAWLEY
Lawrence J. Cawley
Chairman and Member of the Seabee Corporation
Pension and Retirement Savings Plan
Administrative Committee
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
4.1 Certificate of Incorporation of Kaydon Corporation, as
amended. Previously filed as an exhibit to the
Corporation's Registration Statement on Form S-1
(Registration No. 2-89399) filed on February 16, 1984; as
amended by Amendment No. 1 to the Registration Statement on
Form S-1 (Registration No. 2-89399) filed on March 27, 1984;
as further amended by the Corporation's 10-K Annual Report for
the fiscal year ended December 31, 1987; and as further amended
by the Corporation's Form 10-Q Quarterly Report for the quarter
ended March 28, 1992. Incorporated herein by reference.
4.2 Bylaws. Previously filed as an exhibit to the Corporation's
Registration Statement on Form S-1 (Registration No. 2-89399)
filed on February 16, 1984; as amended by Amendment No. 1 to
the Registration Statement on Form S-1 (Registration No. 2-89399)
filed on March 27, 1984; as further amended by the Corporation's
Form 10-K Annual Report for the fiscal year ended December 31,
1985; and as further amended by the Corporation Form 10-K
Annual Report for the fiscal year ended December 31, 1989.
Incorporated herein by reference.
4.3 Seabee Corporation Pension and Retirement Savings Plan.
5.1 Opinion Regarding Legality of Securities Offered.
5.2 Undertaking to Submit Plan to the Internal Revenue Service.
23.1 Consent of Warner Norcross & Judd LLP. See Exhibit 5.1.
23.2 Consent of Arthur Andersen LLP (Independent Auditors of Kaydon
Corporation).
23.3 Consent of Carney, Alexander, Marold & Co. (Independent Auditors
of the Seabee Corporation Pension and Retirement Savings Plan,
formerly entitled the Seabee Corporation Employee Stock Ownership
Plan).
24 Powers of Attorney.
<PAGE> 1
EXHIBIT 4.3
SEABEE CORPORATION
PENSION AND RETIREMENT SAVINGS PLAN
(As Amended and Restated December 14, 1995 Effective January 1, 1996)
<PAGE> 2
TABLE OF CONTENTS
ARTICLE PAGE
I Establishment . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.1 Effective Date . . . . . . . . . . . . . . . . . . . . . . . . .1
1.2 Qualification Intent . . . . . . . . . . . . . . . . . . . . . .1
1.3 Incorporation of Trust . . . . . . . . . . . . . . . . . . . . .1
1.4 No Prior Application . . . . . . . . . . . . . . . . . . . . . .2
1.5 Qualifying Employer Securities and Special Rule. . . . . . . . .2
II Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
2.1 Account Balance. . . . . . . . . . . . . . . . . . . . . . . . .3
2.2 Active Participant . . . . . . . . . . . . . . . . . . . . . . .3
2.3 Affiliated Employer. . . . . . . . . . . . . . . . . . . . . . .3
2.4 Allocation Date. . . . . . . . . . . . . . . . . . . . . . . . .3
2.5 Break in Service . . . . . . . . . . . . . . . . . . . . . . . .4
2.6 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . .5
2.7 Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
2.8 Highly Compensated Employees . . . . . . . . . . . . . . . . . .8
2.9 Hour of Service. . . . . . . . . . . . . . . . . . . . . . . . 10
2.10 Limitation Year. . . . . . . . . . . . . . . . . . . . . . . . 12
2.11 Matching Contribution. . . . . . . . . . . . . . . . . . . . . 12
2.12 Normal Retirement Age. . . . . . . . . . . . . . . . . . . . . 13
2.13 Plan Year. . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.14 Qualified Order. . . . . . . . . . . . . . . . . . . . . . . . 13
2.15 Qualifying Spouse. . . . . . . . . . . . . . . . . . . . . . . 14
2.16 Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.17 Top Heavy. . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.18 Year of Service. . . . . . . . . . . . . . . . . . . . . . . . 16
III Eligibility and Participation . . . . . . . . . . . . . . . . . . . 18
3.1 Eligibility Requirements . . . . . . . . . . . . . . . . . . . 18
3.2 Participation. . . . . . . . . . . . . . . . . . . . . . . . . 18
3.3 Re-Participation . . . . . . . . . . . . . . . . . . . . . . . 18
3.4 Transferred Employees. . . . . . . . . . . . . . . . . . . . . 19
IV Employer Contributions. . . . . . . . . . . . . . . . . . . . . . . 23
4.1 Employer Contributions . . . . . . . . . . . . . . . . . . . . 23
4.2 Maximum Deductible Amount. . . . . . . . . . . . . . . . . . . 25
4.3 Maximum Annual Additions . . . . . . . . . . . . . . . . . . . 26
4.4 Excess Addition. . . . . . . . . . . . . . . . . . . . . . . . 28
4.5 Erroneous Contribution . . . . . . . . . . . . . . . . . . . . 29
4.6 Investment of Contributions in Stock . . . . . . . . . . . . . 29
V Participant Contributions . . . . . . . . . . . . . . . . . . . . . 30
5.1 Participant Contributions. . . . . . . . . . . . . . . . . . . 30
5.2 Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.3 Matching and Voluntary Contribution Limits . . . . . . . . . . 32
5.4 Actual Contribution Percentage . . . . . . . . . . . . . . . . 32
5.5 Excess . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
5.6 Salary Deferred Contribution Limit . . . . . . . . . . . . . . 36
<PAGE> 3
5.7 Actual Deferral Percentage . . . . . . . . . . . . . . . . . . 37
5.8 Excess Contributions . . . . . . . . . . . . . . . . . . . . . 38
5.9 Elective Deferral Limit. . . . . . . . . . . . . . . . . . . . 40
5.10 Excess Deferrals . . . . . . . . . . . . . . . . . . . . . . . 41
5.11 Multiple Use . . . . . . . . . . . . . . . . . . . . . . . . . 42
VI Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
6.1 Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
6.2 Allocation of Employer Contributions . . . . . . . . . . . . . 46
6.3 Allocation of Forfeitures. . . . . . . . . . . . . . . . . . . 48
6.4 Allocation of Expenses, Earnings, Losses and Adjustments
in Value . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
6.5 Vesting. . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.6 Vested Accounts. . . . . . . . . . . . . . . . . . . . . . . . 51
6.7 Investment of Employer and Participant Contributions . . . . . 52
6.8 ERISA Section 404(c) . . . . . . . . . . . . . . . . . . . . . 53
VII Distribution. . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.1 Distributive Event . . . . . . . . . . . . . . . . . . . . . . 56
7.2 General Method of Payment. . . . . . . . . . . . . . . . . . . 58
7.3 Special Method of Payment. . . . . . . . . . . . . . . . . . . 58
7.4 Information Provided . . . . . . . . . . . . . . . . . . . . . 59
7.5 Application for Distribution . . . . . . . . . . . . . . . . . 59
7.6 Timing of Payment. . . . . . . . . . . . . . . . . . . . . . . 60
7.7 Duration of Payment. . . . . . . . . . . . . . . . . . . . . . 63
7.8 Amount of Payment. . . . . . . . . . . . . . . . . . . . . . . 64
7.9 Special Participant Account Distribution Rules . . . . . . . . 65
7.10 Additional Distribution Provisions . . . . . . . . . . . . . . 66
7.11 Designation of Beneficiary . . . . . . . . . . . . . . . . . . 69
7.12 Claims Procedure . . . . . . . . . . . . . . . . . . . . . . . 71
7.13 Facility of Payment. . . . . . . . . . . . . . . . . . . . . . 72
7.14 Qualified Order. . . . . . . . . . . . . . . . . . . . . . . . 72
7.15 Direct Rollover Rules. . . . . . . . . . . . . . . . . . . . . 73
VIII Insurance or Annuities. . . . . . . . . . . . . . . . . . . . . . . 75
8.1 Types of Policies and Contracts. . . . . . . . . . . . . . . . 75
8.2 Premiums - Dividends . . . . . . . . . . . . . . . . . . . . . 75
IX Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . 76
9.1 Fiduciary Responsibilities . . . . . . . . . . . . . . . . . . 76
9.2 Employer . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
9.3 Employer Action. . . . . . . . . . . . . . . . . . . . . . . . 76
9.4 Investment Manager Appointment . . . . . . . . . . . . . . . . 76
9.5 Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . 77
9.6 Fiduciary Standards. . . . . . . . . . . . . . . . . . . . . . 78
9.7 Inter-Relationship of Fiduciaries. . . . . . . . . . . . . . . 79
9.8 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . 79
9.9 Payment of Expenses. . . . . . . . . . . . . . . . . . . . . . 79
9.10 Limitation of Liability and Legal Action . . . . . . . . . . . 79
<PAGE> 4
X Amendment and Termination of Plan . . . . . . . . . . . . . . . . . 81
10.1 Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . . 81
10.2 Vesting Schedule Amendment . . . . . . . . . . . . . . . . . . 81
10.3 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . 82
10.4 Partial Termination. . . . . . . . . . . . . . . . . . . . . . 82
10.5 Full Vesting . . . . . . . . . . . . . . . . . . . . . . . . . 82
10.6 Merger or Consolidation of Plan. . . . . . . . . . . . . . . . 83
XI Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
11.1 Nonassignability . . . . . . . . . . . . . . . . . . . . . . . 84
11.2 Employment Rights Not Enlarged . . . . . . . . . . . . . . . . 84
11.3 Participants' Rights Limited . . . . . . . . . . . . . . . . . 84
11.4 Interpretation and Construction. . . . . . . . . . . . . . . . 84
11.5 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 85
11.6 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 85
Signature Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Appendix A - Section 1.1 - Special Effective Dates
Appendix B - Section 2.6 - Explanation of Definition of Compensation
Appendix C - Section 2.17(d)(ii) - Top Heavy Actuarial Assumptions
Appendix D - Section 6.7(a)(i) - List of Investment funds Available Under
the Plan
Appendix E - Section 6.8 - Information Provided to Comply With Section
404(c) of ERISA
Appendix F - Section 6.8 - Policies and Procedures Re: Compliance With
Section 404(c) of ERISA
Appendix G - Section 9.1 - Parties Responsible for Certain Plan Functions
<PAGE> 5
SEABEE CORPORATION
PENSION AND RETIREMENT SAVINGS PLAN
On this 14th of December, 1995, Kaydon Acquisition Corp. V and Seabee
Corporation and the Participating Employers identified in the Appendix of
Participating Employers (the Employer) adopt and amend and restate the
Seabee Corporation Employee Stock Ownership Plan to become the Seabee
Corporation Pension and Retirement Savings Plan (the Plan).
ARTICLE I
ESTABLISHMENT
1.1 EFFECTIVE DATE. This amendment and restatement is generally
effective on the Plan's original effective date, January 1, 1996. Certain
provisions are effective as specified in Appendix A. The plan was
originally effective January 1, 1980. The Plan is adopted by Kaydon
Acquisition VII, Inc., d/b/a Victor Fluid Power Company, effective February
16, 1996.
1.2 QUALIFICATION INTENT. The Plan is intended to qualify as a
401(k) profit sharing plan under Sections 401(a), 401(k) and 501(a) of the
Internal Revenue Code of 1986, as amended (the Code), and as an employee
pension benefit plan under the Employee Retirement Income Security Act of
1974, as amended (ERISA). Prior to amendment and restatement, the Plan was
intended to qualify as an employee stock ownership plan as defined in
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<PAGE> 6
Section 4975(e)(7) of the Code, and as a stock bonus plan under Section
401(a) of the Code.
1.3 INCORPORATION OF TRUST. The Employer has adopted two Trusts
which are incorporated in this Plan by reference. The Trusts comprise part
of a single plan.
1.4 NO PRIOR APPLICATION. The Plan and each amendment to the Plan do
not apply to any participant who is not an Active Participant on or after
the effective date of the Plan or the respective amendment, as the case may
be, except that:
(a) EXPLICIT APPLICATION. The Plan, an amendment, or portions of the
Plan or an amendment applies to the extent explicitly designated as
applicable to other participants; and
(b) ARTICLE VII. The provisions of Article VII through XI and the
Appendices, as amended from time to time, apply to all participants.
(c) VICTOR FLUID POWER CO. For eligibility and vesting purposes,
Years of Service calculated under the rules of this Plan based on service
with Victor Fluid Power prior to February 16, 1996.
1.5 QUALIFYING EMPLOYER SECURITIES AND SPECIAL RULE. The Plan is
intended to allow up to 100% of the Plan assets to be invested in
qualifying employer securities within the meaning of Section 407 of ERISA.
The maximum number of shares which may be allocated to Participants under
this Plan is determined by the Form S-8 Registration Statement for the
Plan, as amended from time to time.
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<PAGE> 7
ARTICLE II
DEFINITIONS
2.1 ACCOUNT BALANCE. The Account Balance is the sum of:
(a) SINGLE PARTICIPANT INVESTMENT. The value of a participant's
Single Participant Investment from time to time; and
(b) OTHER. The value of a participant's accounts other than a Single
Participant Investment from time to time, including all allocations as of
the coincident or immediately preceding Allocation Date and the appropriate
portion of the earnings, losses and adjustments in value from that
Allocation Date to the date of any distribution.
2.2 ACTIVE PARTICIPANT. An Active Participant is an Employee who has
met the Eligibility Requirements of Section 3.1 who begins to participate
in the Plan under Section 3.2. An Employee who becomes an Active
Participant remains an Active Participant until the Employee is no longer
employed as an Employee and remains a participant until death or the
participant's entire vested Account Balance is distributed.
2.3 AFFILIATED EMPLOYER. An Affiliated Employer is an employer
included within a controlled group of corporations, a group of trades or
businesses under common control, or an affiliated service group (as defined
in Code Sections 414(b), (c), (m), or (o)) with the Employer.
2.4 ALLOCATION DATE. Each business day is an Allocation Date for
Participant Contributions, earnings, losses and other adjustments in value
(except that earnings on the CIGNA Cash Transaction Account are allocated
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as of December 31 of each year). The Allocation Date for Employer
Contributions and forfeitures is December 31. The Committee may designate
one or more interim Allocation Dates.
2.5 BREAK IN SERVICE. A Break in Service is a Plan Year (or, for
purposes of Section 3.3, an eligibility computation period) in which an
individual has not completed more than five hundred (500) Hours of Service.
(a) DATE OF BREAK. A Break in Service occurs on the first day of the
applicable Plan Year.
(b) M/PATERNITY LEAVE. To determine whether an individual has
incurred a Break in Service, the individual is credited with up to five
hundred one (501) Hours of Service during a M/Paternity Leave.
(i) DEFINED. M/Paternity Leave is an absence from employment
due to the individual's pregnancy, the birth of the individual's
child, the individual's adoption of a child or the individual's care
of a new born or recently adopted child. The individual must certify
that the absence is due to M/Paternity Leave, specify the exact period
of the absence, and provide either medical certification of the birth
or legal certification of the adoption.
(ii) CREDITING. An individual shall, during the M/Paternity
Leave, be credited with the individual's regularly scheduled work
hours. If the individual is not regularly scheduled, the individual
shall be credited with eight (8) Hours of Service for each normally
scheduled work day during the Leave. The Hours shall be credited to
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the Plan Year in which the absence occurs, or to the next Plan Year,
as necessary, to prevent a Break in Service.
(c) LEAVE OF ABSENCE. Solely for purposes of preventing a Break in
Service, a Participant on an approved Leave of Absence is credited with
eight (8) Hours of Service for each business day of the Leave. A Leave of
Absence is a leave granted by the Employer in accordance with rules
uniformly applied to all Participants for reasons of health or public
service or for reasons determined by the Employer to be in its best
interests. A Participant who does not return to the employ of the Employer
within thirty (30) days following the end of the Leave is deemed to have
terminated employment as of the date the leave began, unless the failure to
return is the result of death, Disability or Retirement.
2.6 COMPENSATION. Except as otherwise provided, Compensation is
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 Employer
(or Affiliated Employer) to the extent that the amounts are includible in
gross income (including, but not limited to, overtime and shift premiums,
commissions paid salesman, compensation for services on the basis of a
percentage of profits and bonuses (except as excluded below)) (reduced
simplified general Section 415 Compensation as provided in Reg. Sections
1.415-2(d)(10) and 1.414(s)-1(c)(3)) and salary continuation payments, plus
any salary reduction contribution made by the Employer and excluded from
gross income as a cafeteria plan contribution under Code Section 125, a
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401(k) profit sharing or simplified employee pension (SEP) plan
contribution, or a Code Section 403(b) tax deferred annuity contribution,
any compensation deferred under an eligible Code Section 457(b) deferred
compensation plan and any Code Section 414(h)(2) pick-up contributions. A
listing of the types of remuneration NOT included in this definition of
Compensation is provided in Appendix B.
(a) CODE SECTION 415 LIMIT. For purposes of the Code Section 415
Limit and the Maximum Annual Contribution limit of Article IV, Compensation
is determined without the additions described above.
(b) EMPLOYER RELATED. Compensation includes only those items
relating to the participant's employment with the Employer (or Affiliated
Employer).
(c) EXCLUSION. For purposes of determining and allocating Employer
Contributions under Article VI (other than Minimum Top Heavy Contributions)
and ACP and ADP testing, Compensation excludes compensation earned before
becoming and after ceasing to be an Active Participant.
(d) DOLLAR LIMIT. In addition to other applicable limitations set
forth in the Plan, and notwithstanding any other provision of the Plan to
the contrary, the annual Compensation of each employee taken into account
under the Plan may not exceed the OBRA '93 Annual Compensation Limit.
(i) DEFINED. The OBRA '93 Annual Compensation Limit is
$150,000, as adjusted by the Commissioner for increases in the cost of
living in accordance with Section 401(a)(17)(B) of the Internal
Revenue Code.
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(A) COST OF LIVING. The cost-of-living adjustment in
effect for a calendar year applies to any period, not exceeding
12 months, over which Compensation is determined (Determination
Period) beginning in that calendar year.
(B) SHORT PERIOD. If a Determination Period consists of
fewer than 12 months, the OBRA '93 Annual Compensation Limit is
multiplied by a fraction the numerator of which is the number of
months in the Determination Period and the denominator of which
is 12.
(ii) OVERRIDE. Any reference in this Plan to the limitation
under Section 401(a)(17) of the Code means the OBRA '93 Annual
Compensation Limit set forth in this provision.
(iii) PRIOR PERIOD. If Compensation for any prior Determination
Period is taken into account in determining benefits accruing in the
current Plan Year, the Compensation for that prior Determination
Period is subject to the OBRA '93 Annual Compensation Limit in effect
for that prior Determination Period. For this purpose, for
Determination Periods beginning before the first day of the first Plan
Year beginning on or after January 1, 1994, the OBRA '93 Annual
Compensation Limit is $150,000.
(e) FAMILY AGGREGATION. The Compensation of a Five Percent (5%)
owner and the ten most highly compensated Highly Compensated Employees for
the year includes the Compensation of the individual's spouse and lineal
descendants who have not attained age 19 before the close of the year. In
that case, the family member is not considered a separate employee. If the
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Dollar Limit is exceeded as a result of the Family Aggregation rule, the
limitation is prorated among the affected individuals in proportion to each
individual's Compensation as determined prior to the application of the
rule.
2.7 EMPLOYEE. An Employee is any person employed by the Employer who
receives compensation for personal services rendered to the Employer which
is subject to withholding for federal income tax purposes, except
nonresident aliens who do not receive any earned income (as defined in Code
Section 911(d)(2)) from the Employer which constitutes United States source
income (as defined in Code Section 861(a)(3)) and persons included in a
collective bargaining unit which has not adopted the Plan.
(a) LEASED EMPLOYEE. Employee includes a Leased Employee. A Leased
Employee is an individual other than an employee who has performed services
historically performed by employees for the Employer (or Related Person
under Code Section 414(n)(6)) on a full-time basis for at least one (1)
year.
(b) LEASED EXCLUSION. A Leased Employee is excluded if:
(i) OTHER PLAN. The leasing organization certifies that the
Leased Employee is covered by a money purchase pension plan which
provides for: immediate participation (except as otherwise provided
in Code Section 414(n)); non-integrated contributions of at least ten
percent (10%) of Compensation and full and immediate vesting; and
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(ii) WORK FORCE. Leased Employees do not constitute more than
twenty percent (20%) of the aggregate number of Non-Highly Compensated
Employees who:
(A) FULL-TIME. Have performed services for the Employer
and any Related Person on a substantially full-time basis for a
period of at least 1 year; or
(B) OTHER LEASED. Are leased employees of the Employer
(determined without regard to this paragraph).
2.8 HIGHLY COMPENSATED EMPLOYEES. A Highly Compensated Employee is:
(a) GENERAL RULE. An Employee who has an Hour of Service for the
performance of duties during the Plan Year who, with respect to the
Employer (or Affiliated Employer), during the Plan Year or the Look-Back
Year:
(i) FIVE PERCENT OWNER. Is at any time a more than five
percent (5%) owner of stock or voting power;
(ii) $75,000. Receives Compensation in excess of $75,000, as
adjusted by the Secretary of the Treasury;
(iii) TOP PAID GROUP. Receives Compensation in excess of
$50,000, as adjusted by the Secretary of the Treasury, and is in the
group consisting of the top 20 percent of the employees of the
Employer (and Affiliated Employers) when ranked on the basis of
Compensation received during the year (calculated by including Leased
Employees required to be treated as Employees but excluding employees
who: have not completed six months of service by the end of the year;
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<PAGE> 14
normally work less than 17 1/2 hours per week or during less than six
months during any year; or have not attained age 21 by the end of the
year); or
(iv) OFFICER. Is at any time an officer who receives
Compensation greater than 50 percent of the amount in effect under
Code Section 415(b)(1)(A) for the year.
(A) MAXIMUM. The number of officers shall not exceed the
greater of three or ten percent of the total employees performing
services for the Employer (or Affiliated Employer) during the
Plan Year or the Look-Back Year, without exclusion, with a
maximum of 50. If this limitation operates, the officers are
those receiving the greatest compensation during the Plan Year or
the Look-Back Year.
(B) MINIMUM. If no officer satisfies the compensation
rule for the Plan Year or the Look-Back Year, the highest paid
officer for the Plan Year or the Look-Back Year is a Highly
Compensated Employee.
(C) SEPARATE. These rules apply separately to the Plan
Year and the Look-Back Year.
For each Plan Year, an Employee who was not a Highly Compensated
Employee under (ii), (iii), or (iv), above, for the Look-Back Year is
not a Highly Compensated Employee unless the Employee is also one of
the 100 highest paid employees of the Employer (and Affiliated
Employers) for the Plan Year, including Leased Employees required to
be treated as employees. The applicable dollar amount for a year is
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the dollar amount, as adjusted by the Secretary of the Treasury, for
the calendar year in which the Plan Year or the Look-Back Year begins.
(b) FORMER EMPLOYEE RULE. A former Employee who:
(i) SEPARATED. Performs no services for the Employer (or
Affiliated Employer) during the Plan Year or is treated as having
separated under Code Section 414(q); and
(ii) HIGHLY COMPENSATED. Was a Highly Compensated Employee
when the employee separated from service or at any time after
attaining age 55.
Former employees are not included in the Top-Paid Group, the group of
the top 100 employees, or the group of includable officers for purposes of
determining the Employees who are Highly Compensated and are not used to
determine the number of employees in the Top Paid Group.
(c) FAMILY MEMBER RULE. Any individual who is a member of the family
of a Five Percent (5%) Owner or of one of the ten most Highly Compensated
Employees for the Plan Year or the Look-Back Year is not considered a
separate employee. Any Compensation paid to the individual (and any
applicable contribution or benefit on behalf of the individual) is treated
as paid to (or on behalf of) the Five Percent (5%) Owner or Highly
Compensated Employee. Family means the employee's spouse and lineal
ascendants or descendants and the spouses of the lineal ascendants or
descendants on any day within the year.
(d) DETERMINATION AND LOOK-BACK YEARS. The Determination Year is the
Plan Year.
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(i) LOOK-BACK YEAR. The Look-Back Year is the calendar year
ending with or within the applicable Plan Year or, in the case of a
Plan Year of less than twelve months, the calendar year ending with or
within the twelve month period ending with the end of the Plan Year.
(ii) SPECIAL RULE FOR PLAN YEAR. The calculation for the Plan
Year is based only on the period, if any, by which the applicable Plan
Year extends beyond the Look-Back Year. In that case:
(A) NO LAG PERIOD. If there is no lag period, a separate
Plan Year calculation is not required.
(B) ADJUSTMENT. The $75,000.00 and Top Paid Group dollar
amounts must be adjusted for each lag period by multiplying the
dollar amount by a fraction, of which the numerator is the number
of calendar months included in the lag period and the denominator
is twelve.
(C) NO SERVICES. An employee who performs services during
the Plan Year is not a Former Employee merely because the
employee does not perform services during the lag period.
2.9 HOUR OF SERVICE. An Hour of Service is an hour for which an
employee is paid or entitled to be paid by the Employer (or Affiliated
Employer, except for hours before the affected Employers become
affiliated): for the performance of duties for the Employer (or Affiliated
Employer) during the applicable period; for a period of time during which
no duties are performed (whether or not employment has terminated) due to
vacation, holiday, illness, incapacity (including disability), layoff, jury
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duty, Military Service or leave of absence related to the Employer (or
Affiliated Employer); or for back pay, irrespective of mitigation of
damages, based on a settlement or award involving the Employer (or
Affiliated Employer).
(a) EXCLUDED HOURS. Hours of Service are not credited for periods
for which payments are received under applicable worker's compensation,
unemployment compensation or disability laws or for payments which
reimburse an Employee for medical or medically related expenses.
(b) MAXIMUM CREDIT. For periods during which no duties are performed
or back pay is awarded, an employee is not credited with greater than five
hundred one (501) Hours of Service during any single, continuous period
during which no services are performed for the Employer (or Affiliated
Employer). An employee is not credited with Hours of Service under this
subsection in excess of regularly scheduled hours for the performance of
duties during the period. Credit is not given twice for any Hour of
Service. This rule does not limit the crediting of Hours of Service for
paid non-duty vacation, holiday, bereavement, jury duty, or short-term
military service time.
(c) UNIT OF TIME PAYMENT. If non-duty or back-pay payments are
determined by units of time, an employee is credited with the number of
regularly scheduled working hours included in the units of time upon which
the payment is calculated. If the employee does not have a regularly
scheduled workweek, hours are calculated on a reasonable basis which
reflects the average hours worked by the Employee.
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(d) OTHER METHOD OF PAYMENT. If non-duty or back-pay payments are
not determined on the basis of time, an employee is credited with Hours of
Service determined by dividing the amount of the payment by the employee's
most recent rate of hourly compensation. If an employee is not paid on an
hourly basis, the hourly rate is determined by dividing the most recent
compensation for the period of payment by the number of hours regularly
scheduled for the period, or if not regularly scheduled, by the average
number of hours worked during the period. If an employee's compensation is
not determined on the basis of a fixed rate for specified periods, the
employee's hourly rate is the lowest hourly rate paid to employees in the
same job classification. If no employees in the same job classification
have an hourly rate, the rate is the minimum wage under Section 7(a)(1) of
the Fair Labor Standards Act of 1938, as amended.
(e) CREDITING. Hours of Service for which duties are performed are
credited to the Plan Year in which the duties are performed. Hours of
Service for which no duties are performed or for back pay are credited to
the Plan Year to which the payment relates. Hours, other than back pay,
not calculated on units of time, shall not extend beyond the first two (2)
Plan Years.
(f) MILITARY SERVICE. An Active Participant who is on an unpaid
military leave of absence and is on active duty in the Armed Forces of the
United States shall receive credit for Hours of Service equal to the Active
Participant's regularly scheduled work hours for each month of leave. The
Active Participant must apply for and be able to resume employment with the
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Employer (or Affiliated Employer) within the time for protection of
reemployment rights.
(g) SPECIAL RULE FOR PRIOR SERVICE. An employee is also credited
with an Hour of Service with respect to each hour of employment with any
predecessor business entity of an Employer or with a business entity the
business or assets of which were acquired by an Employer prior to the date
the Employer adopted the Plan.
(h) SPECIAL RULE FOR DUTY HOURS. If an Employer does not maintain
hourly records with respect to any employee, the employee is credited with
forty-five (45) Hours of Service for each week in which the employee is
entitled to be credited with a duty Hour of Service.
2.10 LIMITATION YEAR. The Limitation Year is the Plan Year.
2.11 MATCHING CONTRIBUTION. A Matching Contribution is any Employer
Contribution made to the Plan on behalf of an Active Participant on account
of an Elective Contribution made by the Active Participant for the Plan
Year or any forfeiture allocated on the basis of Matching or Elective
Contributions, excluding any contribution or allocation used to meet the
top heavy minimum contribution or benefit requirement of Code Section 416
and any Matching Contribution to the extent considered for purposes of Code
Section 401(k) testing.
2.12 NORMAL RETIREMENT AGE. Normal Retirement Age is 65.
2.13 PLAN YEAR. The Plan Year is an annual accounting period ending
each December 31.
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2.14 QUALIFIED ORDER. A Qualified Order is an order issued by a
competent State Court with jurisdiction under its domestic relations law
which meets the following conditions.
(a) REQUIREMENTS. The order must:
(i) RECIPIENT. Identify the recipient who must be the then or
former spouse, child or dependent of the participant;
(ii) SUBJECT. Provide for payment in connection with alimony,
child support or a division of marital property; and
(iii) CONTENTS. Contain the name and address of the participant
and the recipient, the amount or percentage of the payment and the
duration of the payment.
(b) RESTRICTIONS. The order must not require:
(i) INCREASE. The Plan to pay more to the participant and all
recipients than the participant's Vested Account Balance;
(ii) METHOD, DURATION. A method or duration of payment not
permitted under the Plan;
(iii) PAYMENT. Payment to begin before the earliest of: a
Distributive Event or the later of the date the participant attains
age 50 or could begin receiving benefits upon separation from service;
(iv) CANCEL. Cancellation of the prior right of another
recipient; or
(v) BENEFICIARY. A greater right to designate a beneficiary
for a recipient's benefit amount than the participant's right, or
application of the Joint and Spousal Survivor benefit or the Spousal
Survivor Annuity to the spouse of the recipient.
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2.15 QUALIFYING SPOUSE. A Qualifying Spouse is an individual to whom
the participant has been legally married for at least one (1) year before
the earlier of the first day of the first period for which benefits are
paid or the date of the participant's death and to whom the participant
remains married at that time.
(a) SPECIAL RULES. A Qualifying Spouse includes: to the extent of
the interest provided under a Qualified Order, an individual who is a
former spouse who was married to the participant for at least one year who
is required to be treated as a Qualifying Spouse under the Order and, for
provisions relating to the Joint and Spousal Survivor form, an individual
whom a participant legally married within one (1) year before the first day
of the first period for which benefits were paid and to whom the
participant has been legally married for at least one (1) year before the
date of the participant's death and to whom the participant remains married
at that time.
(b) QDRO SPOUSE. A Qualifying Spouse does not include a spouse or
former spouse to the extent benefits are payable to or with respect to a
prior spouse who is treated as a Qualifying Spouse under a Qualified Order.
2.16 STOCK. Stock is common stock of Kaydon Corporation.
2.17 TOP HEAVY. The Plan is Top Heavy for any Plan Year in which the
present value of Accrued Benefits for Key Employees is more than sixty
percent (60%) of the present value of Accrued Benefits for all Participants
excluding former Key Employees. The Plan is Super Top Heavy for any Plan
Year in which the present value of Accrued Benefits for Key Employees is
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more than ninety percent (90%) of the present value of Accrued Benefits for
all Participants excluding former Key Employees.
(a) REQUIRED AGGREGATION. A Required Group includes each plan of the
Employer (or Affiliated Employer) in which a Key Employee participates or
participated at any time during the five year period ending on the
Determination Date (whether or not terminated) or which enables any such
plan to meet the nondiscrimination and participation requirements of Code
Sections 401(a)(4) or 410. If the Group is Top Heavy, all plans in the
Group are Top Heavy. If the Group is not Top Heavy, all plans in the Group
are not Top Heavy.
(b) PERMISSIVE AGGREGATION. A Permissive Group may include any other
plan of the Employer (or Affiliated Employer) or to which the Employer
contributes which, when considered with any Required Group, satisfies the
nondiscrimination and participation requirements of Code Sections 401(a)(4)
and 410 and provides comparable contributions or benefits. If the
Permissive Group is Top Heavy, only the plans in the Required Group are Top
Heavy. If the Permissive Group is not Top Heavy, all plans in the
Permissive Group are not Top Heavy.
(c) KEY EMPLOYEES. A Key Employee is a Participant who, under Code
Section 416(i), is with respect to the Employer:
(i) OFFICER. A corporate officer whose Compensation is more
than one-half the limitation under Code Section 415(b)(1)(A);
(ii) TEN LARGEST OWNERS. One (1) of ten (10) employees owning
the largest interests, excluding those whose pay is not more than the
limitation under Code Section 415(c)(1)(A), who have Compensation less
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than the tenth largest owner, and who owns less than a one-half
percent (.5%) interest;
(iii) FIVE PERCENT OWNER. A Five Percent (5%) Owner; or
(iv) ONE PERCENT OWNER, $150,000. A more than one percent (1%)
owner of stock or voting power with Compensation of more than
$150,000.00.
(d) DETERMINATION. Top Heavy status and Account Balances are
determined under Code Section 416(g) on the last day of the preceding Plan
Year, or, for the initial Plan Year, the last day of that Plan Year
(Determination Date).
(i) PERSONS INCLUDED. Key Employees include individuals who
had that status during the Plan Year or any of the four (4) preceding
Plan Years or who are their beneficiaries. For purposes of this
section, Participants include individuals who were Employees during
the Plan Year or any of the four (4) preceding Plan Years, without
regard to whether the individual actually receives compensation for
the personal services rendered to the Employer.
(ii) ACTUARIAL ASSUMPTIONS. The actuarial assumptions for this
determination, if any, are set forth in Appendix C.
(iii) ACCRUED BENEFITS. The Accrued Benefit under the Plan and
any other defined contribution plan is the Participant's Account
Balance. The Accrued Benefit under a defined benefit plan is the
Participant's annualized normal retirement benefit under the basic
form determined under that plan's accrual method. For Participants
other than Key Employees, if there is no specified uniform accrual
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method, the Accrued Benefit is determined as if the benefit accrued
not more rapidly than the slowest accrual rate permitted under Code
Section 411(b)(1)(C). Accrued Benefits include distributions made
during the Plan Year and the four (4) preceding Plan Years, other than
benefits already included, and contributions due and unpaid in the
first year of the Plan or to a money purchase, target benefit or
defined benefit pension plan.
(iv) OWNERSHIP. Ownership is determined under Code Section 318
modified by Code Section 416(i)(1)(B)(iii) without regard to the
aggregation rules under Code Sections 414(b), (c), (m) and (o).
(v) OTHER PLANS. For other plans of an Employer, values shall
be determined on the Determination Date ending on or within the same
calendar year.
2.18 YEAR OF SERVICE. A Year of Service is:
(a) GENERAL RULE. A Period in which at least one thousand (1,000)
Hours of Service are completed. The Period is:
(i) ELIGIBILITY. For eligibility purposes, the 12 consecutive
month period beginning on the date on which an Employee first performs
an Hour of Service for the Employer on or after the Effective Date,
and Plan Years beginning on or after that date; and
(ii) VESTING AND BREAK IN SERVICE. For vesting and Break in
Service purposes, each Plan Year beginning on or after the Effective
Date.
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(b) PRE-AMENDMENT AND RESTATEMENT. All Years of Service credited
under the Plan before amendment and restatement in accordance with the
prior plan document.
(c) VICTOR FLUID POWER CO. For eligibility and vesting purposes,
Years of Service calculated under the rules of this Plan based on service
with Victor Power Co. prior to February 16, 1996.
Years of Service credited prior to a Break in Service are disregarded for
all purposes under the Plan upon a return to employment until the Employee
again completes one-thousand (1,000) Hours of Service for the performance
of duties during the twelve (12) month period following the date on which
the Employee completes an Hour of Service after the Break in Service or
during any calendar year beginning on or following that date. Years of
Service credited prior to a distribution of a participant's entire vested
Account Balance after termination of employment are disregarded (with
respect to previous allocations) upon a return to employment unless the
individual repays the distribution in accordance with the limits of Article
VI.
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ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.1 ELIGIBILITY REQUIREMENTS. An Employee is eligible to become an
Active Participant when the Employee:
(a) AGE. Attains age 18; and
(b) SERVICE. Completes one thousand (1000) or more Hours of Service
during the one year period beginning with the individual's first Hour of
Service or a Plan Year beginning during that period or thereafter. The
Service requirement is satisfied upon completion of the 1,000th Hour of
Service where that occurs prior to the end of the one year or the Plan Year
measuring period.
3.2 PARTICIPATION. Every Active Participant in the Plan on the
Effective Date remains an Active Participant. Each Employee who satisfies
the Eligibility Requirements on the Effective Date is an Active Participant
on the Effective Date. Each other Employee is an Active Participant on the
first January 1, April 1, July 1, or October 1 coincident with or after the
Employee satisfies the Eligibility Requirements. In addition to the
general Participation rules, each Employee who had satisfied the
Eligibility Requirements as of February 16, 1996 based on service with
Victor Fluid Power Co. is an Active Participant in this Plan on February
16, 1996.
3.3 RE-PARTICIPATION. An Employee who is reemployed by the Employer
following a Break in Service becomes an Active Participant:
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(a) FORMER VESTED ACTIVE PARTICIPANT. On the first day on which the
Employee again completes an Hour of Service for the performance of duties
as an Employee if the Employee had a vested interest in the Employer
Regular Profit Sharing Account at the beginning of a Break in Service.
(b) FORMER NONVESTED ACTIVE PARTICIPANT. On the first day on which
the Employee again completes an Hour of Service for the performance of
duties as an Employee if the Employee's consecutive Breaks in Service do
not exceed the greater of five (5) or the pre-Break Years of Service if the
Employee was previously an Active Participant in the Plan but did not have
a vested interest in an Employer Account at the beginning of a Break in
Service. In all other cases, the individual is treated as a new Employee
for purposes of participation.
3.4 TRANSFERRED EMPLOYEES. Plan benefits of employees who transfer
employment among Employers, among classifications within the Employers, or
among the Employer and an Affiliated Employer which has not adopted the
Plan are coordinated as follows.
(a) IN GENERAL. A Transfer is a change in job responsibilities in
which the employee is employed by an Employer or an Affiliated Employer
both before and after the change, the employee is an eligible Active
Participant in this Plan either before or after the change, and the
employee first performs an Hour of Service in the new job (the End of
Transfer) before the fifth anniversary of the date on which the employee
last performed an Hour of Service in the old responsibilities (the
Beginning of the Transfer).
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(i) DIRECTION. The coordination depends upon whether the
employee is Transferring into or out of this Plan and upon whether the
other plan involved in the Transfer is a defined benefit plan or a
defined contribution plan.
(ii) VESTING AND PARTICIPATION. In all transfers, the
employee's employment year service and Years of Service for vesting
and participation purposes with the Employer and An Affiliated
Employer are credited for vesting and participation purposes under
this Plan and all plans to which, or from which, the employee
transfers. An employee is entitled to a benefit from a plan only if
the employee's aggregate service for vesting purposes entitles the
employee to a benefit under that plan's vesting schedule.
(b) TRANSFERS OUT. An employee who Transfers from employment covered
by this Plan to employment with the Employer or an Affiliated Employer not
covered by this Plan receives an amount under this Plan based on accruals
under this Plan for the portion of the plan year of Transfer prior to the
Beginning of the Transfer to the extent the employee is eligible under the
terms of this Plan. The employee's Accounts in this Plan will continue to
share in investment gains or losses under the terms of this Plan, and will
continue to be subject to participant investment direction under this Plan
from and after the Beginning of the Transfer.
(i) TRANSFER TO A DEFINED BENEFIT PLAN. If the employee
participates in a defined benefit plan maintained by the Employer or
an Affiliated Employer, to the extent provided in that plan, the
employee will receive a benefit from the defined benefit plan to which
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the employee Transferred based only upon the employee's service and
compensation with the Employer or Affiliated Employer (except as
limited by that plan) subsequent to the End of the Transfer.
(ii) TRANSFER TO A DEFINED CONTRIBUTION PLAN. If the employee
participates in a defined contribution plan maintained by the Employer
or an Affiliated Employer, the employee will receive an amount under
the defined contribution plan to which the employee Transferred based
on accruals under that plan for the portion of the plan year of
Transfer and later plan years subsequent to the End of the Transfer to
the extent the employee is eligible under the terms of that plan. In
addition, to the extent the employee is fully vested, the plans so
provide, the employee requests, the plans' qualified status is
unaffected and no plan amendments or plan operational changes are
necessary to carry out the transfer, the employee's account balance in
this Plan will be transferred in a trustee to trustee transfer to the
other defined contribution plan as soon as administratively
practicable after the End of the Transfer.
(c) TRANSFERS IN. An employee who Transfers from employment with the
Employer or an Affiliated Employer not covered by this Plan to employment
covered by this Plan receives an amount under this Plan based on accruals
under this Plan for the portion of the plan year of Transfer and later plan
years subsequent to the End of the Transfer to the extent the employee is
eligible under the terms of this Plan.
(i) TRANSFER FROM A DEFINED BENEFIT PLAN. If the employee
participated in a defined benefit plan maintained by the Employer or
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an Affiliated Employer, the employee will receive no additional
service for benefit accrual purposes under that defined benefit plan
from and after the Beginning of the Transfer. The employee's Average
Monthly Compensation under that plan is fixed as of the Beginning of
the Transfer and the employee's benefit at or after ultimate
termination of employment with the Employer and Affiliated Employer is
determined under that plan's benefit formula or benefit multiplier in
effect at the Beginning of the Transfer.
(ii) TRANSFER FROM A DEFINED CONTRIBUTION PLAN. If the
employee participated in another defined contribution plan maintained
by the Employer or an Affiliated Employer, the employee will receive
an amount under the defined contribution plan from which the employee
Transferred based on accruals under that plan for the portion of the
plan year of Transfer prior to the Beginning of the Transfer to the
extent the employee is eligible under the terms of that plan. The
employee's account in that plan will continue to share in investment
gains or losses under the terms of that plan as long as the account
remains part of that plan. In addition, to the extent the employee is
fully vested, the plans so provide, employee requests, the plans'
qualified status is unaffected and no plan amendments or plan
operational changes are necessary to carry out the transfer, the
employee's account balance in that plan will be transferred in a
trustee to trustee transfer to this Plan as soon as administratively
practicable after the End of the Transfer.
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(d) SPECIAL RULE. All Transfers are subject to the following special
rules.
(i) NON-RESIDENT ALIENS. These Transfer rules do not apply to
transfers in which the employee was or becomes a non-resident alien or
in which a plan not subject to ERISA is involved.
(ii) DETERMINATION OF SERVICE. Unless otherwise provided,
Years of Service are determined under the plan under which the service
was earned.
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ARTICLE IV
EMPLOYER CONTRIBUTIONS
4.1 EMPLOYER CONTRIBUTIONS. For each Plan Year, the Employer:
(a) SALARY DEFERRED. Must contribute the sum of Active Participant
Salary Deferred Contributions.
(b) REGULAR PROFIT SHARING. May contribute a Regular Profit Sharing
Contribution. The amount of the contribution, if any, is determined by the
Committee or the Board of Directors of Seabee Corporation in its
discretion, subject to the maximum limitations of this Plan. A Regular
Profit Sharing Contribution is allocated under Article VI and is subject to
the applicable Vesting Schedule.
(c) QUALIFYING. May contribute a Qualifying Contribution which is:
(i) NON-DISCRIMINATORY. Part or all of an Employer
Contribution which is non-discriminatory under Code Section 401(a)(4)
determined with and without the Qualifying Contribution;
(ii) NOT USED. Not taken into account in determining whether
any other contributions or benefits are non-discriminatory under Code
Sections 401(a)(4); or under Code Sections 401(k)(3) or 401(m) except
to the extent designated by the Employer for that purpose under this
Plan;
(iii) ALLOCATED. Allocated to the Active Participant as of a
date within the Plan Year; and
(iv) INCREASE. Not effective to increase the difference
between the Actual Contribution Percentages (ACP) or Actual Deferral
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Percentages (ADP) for the Highly Compensated and Non-Highly
Compensated groups.
The amount of the contribution, if any, is determined by the Board of
Directors of Seabee Corporation in its discretion, subject to the maximum
limitations of this Plan.
(d) MATCHING. Will contribute a Matching Contribution which is the
sum of $0.25 for each dollar of each eligible Participant's Salary Deferred
Contributions, not to exceed a match of $800 per eligible Participant.
The tentative contribution is reduced by the amount of forfeitures to
be reallocated to Employer Accounts on the Allocation Date as a Matching
Contribution. The Matching Contribution is allocated under Article VI and
is subject to the applicable Vesting Schedule.
(e) TOP HEAVY MINIMUM. Must, if applicable, contribute the Minimum
Top Heavy Contribution. The Minimum Top Heavy Contribution for each Plan
Year in which the Plan is Top Heavy is:
(i) SINGLE PLAN. If the Employer does not maintain another
qualified retirement plan, or for Active Participants in just this
Plan, the lesser of three percent (3%) of the Compensation of each
Non-Key Employee Active Participant employed by the Employer (or
Affiliated Employer) on the last day of the Plan Year or the highest
percentage of Compensation allocated to a Key Employee multiplied by
the Compensation of those Participants (the Regular Minimum). For
this purpose, Salary Deferred and Matching Contributions allocated to
Key Employees are treated as an Employer Contribution allocated to a
Key Employee. The Amount is determined without regard to the
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integration of contributions with Social Security or an Active
Participant's failure to make a Mandatory Contribution.
(ii) ANOTHER DEFINED CONTRIBUTION PLAN. If the Employer
maintains another qualified defined contribution plan in which an
Active Participant also participates, the Regular Minimum contribution
of the Plan which comes first in the following priority order: a
target benefit plan, a money purchase pension plan, a leveraged
employee stock ownership plan, a stock bonus plan, or a tax credit
employee stock ownership plan.
(iii) ANOTHER DEFINED BENEFIT PLAN. If the Employer maintains a
defined benefit plan in which an Active Participant also participates,
a contribution to the defined benefit plan which will fund the Minimum
Benefit under the defined benefit plan, offset by the benefits
provided under this and any other defined contribution plan of the
Employer. If the Employer maintains a defined benefit plan, the Plan
is not Super Top Heavy and the Employer elects to utilize the greater
multiplier for dollar limitations in the denominator of the defined
benefit and defined contribution fractions, the Minimum Benefit
Multiplier is three percent (3%) rather than two percent (2%).
The Minimum Contribution may be satisfied by Regular Profit Sharing or
Qualifying Contributions.
(f) FORFEITURE RESTORATION. Shall contribute for a reemployed Active
Participant the amount of the forfeited Nonvested Account required to be
restored under Article VI, unadjusted for earnings, losses or adjustments
in value, less the allocable portion of forfeitures under Article VI.
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The Employer Contribution for a Leased Employee Participant is reduced
by any contributions made by the leasing organization for the Employee to,
and the actuarial equivalent of benefits earned by the Employee under, a
qualified retirement plan maintained by the leasing organization which are
attributable to services performed for the Employer (or Affiliated
Employer).
4.2 MAXIMUM DEDUCTIBLE AMOUNT. All contributions to this Plan are
conditioned on the deductibility of the contribution under Code Section
404. Employer Contributions must be determined and made within the time
required to qualify the contributions for a deduction under Code Section
404. An Employer Contribution which exceeds the amount which is deductible
by the Employer is subject to a non-deductible contribution excise tax in
the year contributed and subsequent years until deducted or returned to the
Employer within the period provided in Code Section 4972(c). A
nondeductible contribution shall, if requested by the Employer, be returned
to the Employer within one (1) year of disallowance of the deduction.
4.3 MAXIMUM ANNUAL ADDITIONS. The maximum Annual Additions to a
Participant's Accounts under the Plan shall not exceed the Maximum Amount
established by this section and Code Section 415, which is incorporated
here by reference.
(a) MAXIMUM AMOUNT. The Maximum Amount is the lesser of:
(i) PERCENTAGE. Twenty-five percent (25%) of the Active
Participant's Compensation for the year; or
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(ii) DOLLAR LIMIT. $30,000 (or, if greater, one quarter of the
dollar limitation in effect under Code Section 415(b)(1)(A)). For the
First Short Plan Year, the Dollar Limit is 11/12 of $30,000 or
$27,500, and for the Second Short Plan Year, the Dollar Limit is 1/12
of $30,000 or $2,500.
(b) ANNUAL ADDITIONS. Annual Additions are the sum of the following
amounts for the applicable Plan Year:
(i) EMPLOYER CONTRIBUTIONS. Employer Contributions allocated
to the Participant's Accounts (including amounts which constitute
excess deferrals, excess contributions, or excess aggregate
contributions whether or not recharacterized or distributed under
Article V);
(ii) FORFEITURES. Forfeitures allocated to the Participant's
Accounts;
(iii) VOLUNTARY CONTRIBUTIONS. For Limitation Years beginning
on or after January 1, 1987, a participant's voluntary contributions
for the year and, for Limitation Years beginning prior to that date,
the lesser of a participant's voluntary contributions in excess of
six percent (6%) of the participant's Compensation for the year or
one-half (1/2) of the contributions; and
(iv) MEDICAL ACCOUNTS. Certain amounts allocated after March
31, 1984 to a participant's individual medical account within Code
Section 415(l) under the Employer's pension or annuity plan or after
December 31, 1985 to a Key Employee Participant's post-retirement
medical account under the Employer's welfare benefit plan, although
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the Percentage limit in Subsection (a)(i) shall not apply to this
amount.
(c) DEFINED CONTRIBUTION AGGREGATION. If a participant is also a
participant in any other qualified defined contribution plan maintained by
the Employer, the Annual Additions to the participant's accounts shall not
exceed the limitations above and shall be reduced in the plans in the
following order of priority: a tax credit employee stock ownership plan; a
stock bonus plan; a profit sharing plan; this plan; a money purchase
pension plan; a target benefit plan; or a defined benefit pension plan.
(d) DEFINED BENEFIT PLAN. If a participant is also a participant in
any qualified defined benefit plan maintained by the Employer, the Annual
Additions to the participant's accounts shall be reduced in the order of
priority for Defined Contribution Aggregation so that the sum of the
Defined Benefit Fraction and the Defined Contribution Fraction does not
exceed 1.0 for any year.
(i) DEFINED BENEFIT FRACTION. The numerator of the Defined
Benefit Fraction is the sum of the projected annual benefit of the
participant under all defined benefit plans maintained by the Employer
(or Affiliated Employer), whether or not terminated, determined as of
the close of the Limitation Year. The denominator is the lesser of
the following, adjusted under Code Section 415.
(A) 1.25. 1.25 multiplied by the defined benefit dollar
limitation or, if greater for a participant who entered the Plan
before January 1, 1983, the participant's accrued benefit at the
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end of the last Limitation Year ending before December 31, 1983;
or
(B) 1.4. 1.4 multiplied by the highest average
compensation, including any adjustments, under Code Section
415(b).
(ii) DEFINED CONTRIBUTION FRACTION. The numerator of the
Defined Contribution Fraction is the sum of annual additions to the
participant's account under all defined contribution plans maintained
by the Employer (or Affiliated Employer), whether or not terminated,
as of the end of the Plan Year. The denominator is the lesser of the
following, adjusted under Code Section 415.
(A) 1.25. 1.25 multiplied by $30,000.00 (as adjusted by
the Secretary of the Treasury); or
(B) 35%. 35% of the participant's Compensation determined
for each Limitation Year.
(e) TOP HEAVY ADJUSTMENT. If the Plan is Top Heavy and the Employer
has not elected to provide the Additional Minimum Contribution or if the
Plan is Super Top Heavy:
(i) MULTIPLIER REDUCTION. The multiplier of the defined
benefit dollar limitation, the defined benefit denominator adjustment
and the defined contribution dollar amount is reduced to 1.0; and
(ii) TRANSITION FRACTION. The pre-TEFRA transition fraction
numerator amount is reduced to $41,500.00.
(f) AFFILIATED EMPLOYER. For purposes of applying the limitations
contained in this section, plans maintained by the Employer include all
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plans maintained by an Affiliated Employer as modified by Code Section
415(h).
4.4 EXCESS ADDITION. If, despite the restrictions contained in this
Article and Code Section 415, an excess Annual Addition occurs, to the
extent the excess cannot be cured by the distribution of Elective Deferrals
or other Participant Contributions, the excess:
(a) REDUCED CONTRIBUTION. If the excess is due to a reasonable error
in estimating compensation, allocation of forfeitures or other facts and
circumstances as determined by the Commissioner justifying the excess,
shall be retained by the Trustee in an Unallocated Suspense Account. The
excess reduces the Employer's contribution for the next succeeding Plan
Year and is allocated to the applicable Participant's Account on the next
Allocation Date before any additional contributions may be made to the
Plan. If the participant's participation is terminated before the next
Allocation Date, the excess is allocated and reallocated among the Active
Participants on that date.
(b) UNALLOCATED SUSPENSE ACCOUNT. Held in an Unallocated Suspense
Account shall not share in the earnings, losses and adjustments in value of
the Fund.
To the extent the excess can be cured by the distribution of Salary
Deferred Contributions or other Participant Contributions, such
Contributions and the gains on these amounts shall be distributed, to the
extent that the distribution reduces the excess amounts in the
participant's Account. Amounts distributed in that manner are disregarded
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for purposes of Code Section 402(g), the Actual Deferral Percentage test
and the Actual Contribution Percentage test.
4.5 ERRONEOUS CONTRIBUTION. An erroneous contribution resulting from
a mistake of fact shall, if requested by the Employer, be returned to the
Employer within one (1) year of payment. Contributions made prior to an
initial determination of nonqualified status shall, if requested by the
Employer, be returned to the Employer within one year of the denial of
qualified status, if the request for initial determination of qualified
status was made in a timely manner. In all other circumstances, the corpus
or income of the Trust may not be diverted to or used for other than the
exclusive benefit of the participants or their beneficiaries.
4.6 INVESTMENT OF CONTRIBUTIONS IN STOCK. Effective upon compliance
with applicable federal and state securities laws, to the extent
Participants have elected to invest contributions in Stock, the Trustee
shall purchase the number of whole shares of Stock which may be purchased
with each contribution. Purchases shall be made as soon as practicable.
If any balance of a contribution which Participants have elected to be
invested in Stock or cash dividends remains after the Trustee has purchased
the number of shares of Stock which may be purchased, the remaining amount
shall be maintained in the Trust, aggregated with the next contribution to
be invested in Stock or cash dividends on Stock paid to the Plan and
applied to purchase the number of shares of Stock which may then be
purchased.
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ARTICLE V
PARTICIPANT CONTRIBUTIONS
5.1 PARTICIPANT CONTRIBUTIONS. For each Plan Year, an Active
Participant may make:
(a) SALARY DEFERRED. Salary Deferred Contributions of Compensation
which the Active Participant may elect to defer or receive in cash which:
(i) NOT AVAILABLE. Are not made out of Compensation which is
currently available to the Active Participant at the date of the
election, the date of adoption of the Plan and the Effective Date;
(ii) TIMING. Are reflected in an election made within thirty
(30) days after the close of the Plan Year;
(iii) IMPERMISSIBLE USE. Are not taken into account in
determining whether any other contributions under any plan satisfy
Code Section 401(a) other than Code Section 410(b)(2)(A)(ii),
including but not limited to Code Section 416; and
(iv) LIMITS. Do not exceed the Elective Contribution Limit,
the Elective Deferral Limit, the Multiple Use Limit, or 15% of
Compensation.
(b) TRANSFER OR ROLLOVER. Contributions which consist of amounts
transferred:
(i) TRANSFER. Directly from the Trustee, Custodian, or
Insurer of a plan or related trust qualified under Code Section 401(a)
if this Plan is not obligated to provide Code Section 411(d)(6)
protected benefits not already provided by this Plan as a result of
the transfer.
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(ii) ROLLOVER. In a rollover qualified under Code Sections
402(a) or 408(d). An Active Participant may not contribute amounts
from an inherited Individual Retirement Account or Annuity. The Plan
will accept a rollover only if the individual agrees that the amount
rolled-over becomes subject to the distribution restrictions of this
Plan.
A participant may not make a deductible employee contribution for any
taxable year.
5.2 METHOD. Participant Contributions may be made by payroll
deduction or by any methods and at any intervals under rules established by
the Employer. All Participant Contributions must be made to the Trust
through the Employer. The Trustee is not required to receive contributions
directly from Participants.
(a) ELECTIONS. Elections to make, discontinue or resume Participant
Contributions must be in writing and signed by the Participant.
(i) TIMING. An Election is effective not later than the first
day of the first payroll period beginning after the Election is filed
with the Committee, the Trustee, or the Plan Administrator, unless a
later date is specified by the Participant or additional time is
required for administrative processing.
(ii) DISCONTINUANCE. A discontinuance remains in effect until
at least the first day of the first payroll period beginning after the
end of the calendar quarter in which an Election to again make
contributions is made.
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(iii) AUTOMATIC. A Participant's Election is automatically
suspended for twelve (12) months after receipt of a hardship
distribution from a plan of the Employer (or Affiliated Employer) if
the hardship distribution is based on a deemed financial need or if
the hardship distribution is made from this Plan, and until the first
day of the calendar quarter coincident with or next following thirty
(30) days from an Age 59 1/2 distribution.
(b) TIME LIMIT. Participant Contributions must be transmitted to the
Trustee on the earliest date the contributions can reasonably be segregated
from the Employer's general assets, but not later than ninety (90) days
from the date the amounts are received by the Employer or would otherwise
have been payable to the Active Participant.
(c) SPECIAL RULE. Any Participant Contribution Election otherwise
permitted by this Article may, at the Participant's election, also be made
pursuant to an irrevocable election made by the Participant six months or
more in advance of the effective date of the election.
5.3 MATCHING AND VOLUNTARY CONTRIBUTION LIMITS. Matching and
voluntary Contributions (excluding Qualifying Contributions used to meet
the Code Section 401(k) tests and including, to the extent designated by
the Employer, other Qualifying or Salary Deferred Contributions) to this
Plan, and any plan aggregated with this Plan for purposes of Code Sections
401(a)(4) and 410(b), must:
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(a) MATCHING AND VOLUNTARY CONTRIBUTION LIMIT. Satisfy the Actual
Contribution Percentage test. The Actual Contribution Percentage for all
eligible Highly Compensated Employees may not be greater than either:
(i) ONE AND TWENTY-FIVE HUNDREDTHS. One and twenty-five
hundredths times (1.25x) the Actual Contribution Percentage for all
eligible Active Participants other than Highly Compensated Employees;
or
(ii) TWO PERCENT AND TWO TIMES. The lesser of two percent (2%)
above or two times (2x) the Actual Contribution Percentage for all
eligible Active Participants other than Highly Compensated Employees;
and
(b) MULTIPLE USE. Satisfy the additional Multiple Use limitations of
Code Section 401(m).
5.4 ACTUAL CONTRIBUTION PERCENTAGE. The Actual Contribution
Percentage (ACP) for Active Participants other than Highly Compensated
Employees or Highly Compensated Employees is the average of the percentages
of Compensation represented by the sum of the non-forfeited matching,
voluntary and, to the extent designated by the Employer, other Qualifying
or Salary Deferred Contributions deferred under the Plan for each Active
Participant eligible for any part of the Plan Year (or ineligible because
of suspension) included within the respective classification.
(a) AGGREGATION. The average is calculated by treating all of the
matching and voluntary Contributions to any plan made on behalf of a Highly
Compensated Active Participant as made to one plan.
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(b) TAKEN INTO ACCOUNT - VOLUNTARY. A voluntary contribution is
taken into account for the Plan Year in which the amount is contributed to
the plan or paid to a plan agent for transmittal to the plan within a
reasonable time.
(c) TAKEN INTO ACCOUNT - MATCHING. A matching contribution is taken
into account for a Plan Year only if the contribution is allocated as of a
date within the Plan Year and is actually paid within twelve months after
the Plan Year.
(d) TAKEN INTO ACCOUNT - SALARY DEFERRED. Salary Deferred
contributions are taken into account only if the contributions:
(i) NON-DISCRIMINATORY. Satisfy the requirements of Code
Section 401(k)(3), determined with and without any Salary Deferred
contributions treated as matching contributions;
(ii) NOT USED. Are not taken into account in determining
whether any other contributions or benefits are non-discriminatory
under Code Sections 401(a)(4) or 401(k)(3);
(iii) ALLOCATED AND PAID. Are actually paid within twelve
months after the Plan Year and the allocation of the contribution is
not contingent on continued participation or performance of services
after allocation; and
(iv) RECEIPT. Relate to compensation that would have been
received in the Plan Year or within two and one-half months after the
Plan Year but for the deferral.
(e) TAKEN INTO ACCOUNT - QUALIFYING. Qualifying Contributions are
taken into account only if the contributions:
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(i) NONFORFEITABLE. Are nonforfeitable when made; and
(ii) DISTRIBUTION RESTRICTIONS. Are subject to the
distribution restrictions of Section 7.1.
(f) AGGREGATION OF FAMILY MEMBERS. The combined Actual Contribution
Percentage for a family group treated as one Highly Compensated Employee
under the Family Aggregation rule is determined by combining the voluntary
and matching Contributions, Compensation, and amounts treated as matching
contributions of all the eligible family members.
If it is necessary, for purposes of correcting Excess Aggregate
Contributions of family members, to calculate an Actual Contribution
Percentage for the group of eligible family members who are not Highly
Compensated without regard to family aggregation, that Actual Contribution
Percentage is determined by combining the voluntary and matching
Contributions, Compensation, and amounts treated as matching contributions
of these employees. The voluntary and matching Contributions,
Compensation, and amounts treated as matching contributions of all family
members are disregarded for purposes of determining the Actual Contribution
Percentage for the group of Highly Compensated Employees and the group of
Non-Highly Compensated Employees, except to the extent required by this
section.
5.5 EXCESS. If a Highly Compensated Employee's matching and
voluntary Contributions (and, to the extent designated by the Employer,
other Qualifying or Salary Deferred Contributions) exceed the Matching and
Voluntary Contribution Limit for any Plan Year, after the close of the Plan
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Year and within twelve months after the close of the Plan Year or date of
plan termination, the Excess Aggregate Contributions for the Plan Year and
Allocable Income must be designated by the Employer and distributed without
notice or consent; or, if forfeitable, forfeited.
(a) ALLOCABLE INCOME. The income allocable to excess aggregate
contributions is equal to the sum of the allocable gain or loss for the
Plan Year and the allocable gain or loss from the end of the Plan Year to
the date of distribution (or forfeiture). Income includes all earnings and
appreciation whether realized or not.
(i) PLAN YEAR. For the Plan Year, the income allocable to
voluntary, matching and designated Qualifying Contributions is
multiplied by a fraction the numerator of which is the Excess
Aggregate Contributions made on behalf of the Participant for the Plan
Year and the denominator of which is the total Account Balance of the
Participant attributable to voluntary, matching and designated
Qualifying Contributions as of the beginning of the Plan Year plus the
voluntary, matching and designated Qualifying Contributions
attributable to the Participant for the Plan Year.
(ii) POST-PLAN YEAR. For the period between the end of the
Plan Year and the date of a correction, the same method may be used or
the allocable income or loss for the period may be deemed to be equal
to 10 percent of the income or loss allocable to Excess Aggregate
Contributions for the Plan Year (as calculated above) multiplied by
the number of calendar months since the end of the Plan Year. For
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that purpose, a distribution occurring after the fifteenth day of a
month will be treated as made on the first day of the next month.
(iii) PARTIAL CORRECTION. Any distribution of less than the
entire amount of excess aggregate contributions (and income) is
treated as a pro rata distribution of excess aggregate contributions
and income.
(b) TIME LIMITS. Amounts not distributed or forfeited within two and
one-half (2 1/2) months after the close of the preceding Plan Year are
subject to a ten percent (10%) excise tax and within twelve months will
cause the disqualification of the Plan.
(c) METHOD. Distribution (or forfeiture, to the extent available)
occurs by first distributing unmatched voluntary Contributions (and
allocable income) and then distributing (or forfeiting, if available)
voluntary and matching Contributions (and allocable income) on a pro rata
basis.
(d) NOTICES TO PARTICIPANTS. The Plan Committee must advise affected
participants at the time of distribution of the year in which the
distribution is includible in income and that the receipt of amounts
includible in income in a prior year will require the participant to file
an amended income tax return if a return has already been filed for the
year.
(e) ORDERING. A Highly Compensated Active Participant's matching and
voluntary Contributions which exceed the Matching and voluntary
Contribution Limit are determined by reducing contributions made on behalf
of Highly Compensated Employees in order of the Actual Contribution
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Percentages as necessary, beginning with the highest percentage, until the
Limit is satisfied or the Participant's Percentage equals the next lowest
Percentage and by repeating the process until the Limit is satisfied. Each
distribution or forfeiture of the Excess Aggregate Contributions must be
made to Highly Compensated Employees on the basis of the respective
portions of the excess aggregate contributions attributable to each as
determined by this process. If a Highly Compensated Employee's Actual
Contribution Percentage is determined by combining the Contributions and
Compensation of all the eligible family members, the excess aggregate
contributions for the family unit are allocated among the family members in
proportion to the voluntary and matching Contributions of each family
member that have been combined.
(f) FORFEITURE LIMITATION. Forfeitures of Excess Aggregate
Contributions may not be allocated to Participants whose contributions are
reduced under this section.
(g) COORDINATION. Excess Aggregate Contributions shall be determined
after:
(i) EXCESS DEFERRALS. The Excess Deferrals; and
(ii) EXCESS CONTRIBUTIONS. The Excess Contributions.
5.6 SALARY DEFERRED CONTRIBUTION LIMIT. Salary Deferred
Contributions (excluding Salary Deferred and Qualifying Contributions used
to meet the Code Section 401(m) tests and including, to the extent
designated by the Employer, other Qualifying Contributions) to this Plan,
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and any plan aggregated with this Plan for purposes of Code Sections
401(a)(4) and 410(b), must satisfy:
(a) ELECTIVE CONTRIBUTION LIMIT. The Actual Deferral Percentage
test. The Actual Deferral Percentage for all eligible Highly Compensated
Employees may not be greater than either:
(i) ONE AND TWENTY-FIVE HUNDREDTHS. One and twenty-five
hundredths times (1.25x) the actual deferral percentage for all
eligible Active Participants other than Highly Compensated Employees;
or
(ii) TWO PERCENT AND TWO TIMES. The lesser of two percent (2%)
above or two times (2x) the actual deferral percentage for all
eligible Active Participants other than Highly Compensated Employees;
and
(b) MULTIPLE USE. The additional Multiple Use limitations of Code
Section 401(m).
Effective January 1, 1993, the collectively bargained portions of the
Plan must be separately tested. In applying the Salary Deferred
Contribution Limit, the restructuring rules of the regulations under Code
Section 401(a)(4) may be used for Plan Years beginning before January 1,
1992.
5.7 ACTUAL DEFERRAL PERCENTAGE. The Actual Deferral Percentage for
Active Participants other than Highly Compensated Employees or Highly
Compensated Employees is the average of the percentages of Active
Participant's Compensation deferred by each Active Participant eligible for
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any part of the Plan Year (or ineligible because of a suspension) included
within the respective classification as an Salary Deferred Contribution
(and, to the extent designated by the Employer, Qualifying Contributions).
(a) AGGREGATION. The average is calculated by treating all cash or
deferred arrangements in which an Active Participant is eligible to
participate as one arrangement. If a Highly Compensated Employee
participants in two or more cash or deferred arrangements with different
plan years, the average is calculated by treating all arrangements ending
with or within the same calendar year as one arrangement.
(b) DISTRIBUTED AMOUNTS. Distributed Excess Deferrals (excluding
amounts deferred by nonhighly compensated employees to plans of the
Employer) and Qualifying Contributions designated by the Employer are
included in the calculation.
(c) TAKEN INTO ACCOUNT. A Salary Deferred or Qualifying Contribution
is taken into account for a Plan Year only if:
(i) ALLOCATED AND PAID. The contribution is actually paid
within twelve months after the Plan Year and the allocation of the
contribution is not contingent on continued participation or
performance of services after allocation;
(ii) RECEIPT. The contribution relates to compensation that
would have been received in the Plan Year or within two and one-half
months after the Plan Year but for the deferral; and
(iii) QUALIFYING. In the case of a Qualifying Contribution, the
Contribution is nonforfeitable when made and subject to the
distribution restrictions of Section 7.1.
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(d) AGGREGATION OF FAMILY MEMBERS. The combined Actual Deferral
Percentage for family group treated as one Highly Compensated Employee
under the family aggregation rule is determined by combining the Salary
Deferred Contributions, Compensation, and amounts treated as Salary
Deferred Contributions of all the eligible family members.
If it is necessary, for purposes of correcting Excess Contributions of
family members, to calculate an Actual Deferral Percentage for the eligible
family members who are not Highly Compensated Employees without regard to
family aggregation, that Actual Deferral Percentage is determined by
combining the Salary Deferred Contributions, Compensation, and amounts
treated as Salary Deferred Contributions of these employees. The Salary
Deferred Contributions, Compensation, and amounts treated as Salary
Deferred Contributions of all family members are disregarded for purpose of
determining the Actual Deferral Percentage for the group of Non Highly
Compensated Employees, except to the extent required by this section.
5.8 EXCESS CONTRIBUTIONS. If a Highly Compensated Active
Participant's Salary Deferred Contributions (and, to the extent designated
by the Employer, Qualifying Contributions) exceed the Salary Deferred
Contribution Limit for any Plan Year, after the close of the Plan Year and
within twelve months after the close of the Plan Year or date of plan
termination, the excess Salary Deferred Contributions for the Plan Year and
Allocable Income must be designated by the Employer and distributed without
notice or consent.
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(a) ALLOCABLE INCOME. The income allocable to Excess Contributions
is equal to the sum of the allocable gain or loss for the Plan Year and the
allocable gain or loss from the end of the Plan Year to the date of
distribution (or forfeiture). Income includes all earnings and
appreciation whether realized or not.
(i) PLAN YEAR. For the Plan Year, the income allocable to
Salary Deferred and designated Qualifying Contributions is multiplied
by a fraction the numerator of which is the Excess Contributions made
on behalf of the Participant for the Plan Year and the denominator of
which is the total Account Balance of the Participant attributable to
Salary Deferred and designated Qualifying Contributions as of the
beginning of the Plan Year plus the Salary Deferred and designated
Qualifying Contributions attributable to the Participant for the Plan
Year.
(ii) POST-PLAN YEAR. For the period between the end of the
Plan Year and the date of a correction, the same method may be used or
the allocable income or loss for the period may be deemed to be equal
to 10 percent of the income or loss allocable to Excess Contributions
for the Plan Year (as calculated above) multiplied by the number of
calendar months since the end of the Plan Year. For that purpose, a
distribution occurring after the fifteenth day of a month will be
treated as made on the first day of the next month.
(iii) PARTIAL CORRECTION. Any distribution of less than the
entire amount of Excess Contributions (and income) is treated as a pro
rata distribution of Excess Contributions and income.
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(b) TIME LIMITS. Amounts not distributed or recharacterized within
two and one-half (2 1/2) months after the close of the preceding Plan Year
are subject to a ten percent (10%) excise tax and within twelve months may
cause the disqualification of the Plan.
(c) NOTICES TO ACTIVE PARTICIPANTS. The Plan Committee must advise
affected Participants at the time of distribution of the year in which the
distribution is includible in income and that the receipt of amounts
includible in income in a prior year will require the Participant to file
an amended income tax return if a return has already been filed for the
year.
(d) ORDERING. A Highly Compensated Employee's Salary Deferred
Contributions which exceed the Salary Deferred Contribution Limit are
determined by reducing contributions made on behalf of Highly Compensated
Employees in order of the Actual Deferral Percentages as necessary,
beginning with the highest percentage, until the Limit is satisfied or the
Participant's Percentage equals the next lowest Percentage and by repeating
the process until the Limit is satisfied. Each distribution or
recharacterization of the Excess Contributions is made to Highly
Compensated Employees on the basis of the respective portions of the Excess
Contributions attributable to each as determined by this process. If a
Highly Compensated Employee's Actual Deferral Percentage is determined by
combining the Contributions and Compensation of all the eligible family
members, the Excess Contributions for the family unit are allocated among
the family members in proportion to the Salary Deferred Contributions of
each family member that have been combined.
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(e) CO-ORDINATION. Excess Contributions are reduced by any Excess
Deferrals previously distributed with respect to the affected participant
for the taxable year ending with or within the Plan Year.
5.9 ELECTIVE DEFERRAL LIMIT. Elective Deferrals under this Plan and
all other plans, contracts, or arrangements of the Employer (and any
Affiliated Employer) may not exceed the limitation in effect under Code
Section 402(g)(1) for the taxable year beginning in the calendar year.
Elective Deferrals which exceed the limit are included in the individual's
gross income.
(a) GENERAL RULE. The limitation is $7,000.00, as adjusted by the
Secretary of the Treasury.
(b) INCREASE. The limitation is increased (but not to an amount in
excess of $9,500) by the amount of any employer contributions to purchase a
403(b) annuity contract under a salary reduction agreement.
(c) DECREASE. The limitation is decreased in the taxable year
following the taxable year the participant receives a hardship distribution
which is based on a deemed financial need by the amount of the Elective
Deferral in the taxable year of the hardship distribution.
(d) ELECTIVE DEFERRALS. Elective Deferrals are, for any taxable
year, the sum of employer 401(k) contributions within Code Section
402(a)(8), other employer SEP contributions within Code Section
402(h)(1)(B), employer contributions to a 403(b) annuity contract under a
salary reduction agreement and deductible employee contributions to a plan
described in Code Section 501(c)(18).
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5.10 EXCESS DEFERRALS. The Excess Deferrals included in the gross
income of a participant may be distributed without notice or consent, with
the Allocable Income, not later than the April 15 following the close of
the taxable year.
(a) ALLOCABLE INCOME. The income allocable to Excess Deferrals is
equal to the sum of the allocable gain or loss for the taxable year and the
allocable gain or loss from the end of the taxable year to the date of
distribution (or forfeiture). Income includes all earnings and
appreciation whether realized or not.
(i) TAXABLE YEAR. For the taxable year, the income allocable
to Salary Deferred Contributions is multiplied by a fraction the
numerator of which is the Excess Deferrals made on behalf of the
Participant for the taxable year and the denominator of which is the
total Account Balance of the Participant attributable to Salary
Deferred Contributions as of the beginning of the taxable year plus
the Salary Deferred Contributions attributable to the Participant for
the taxable year.
(ii) POST-TAXABLE YEAR. For the period between the end of the
taxable year and the date of a correction, the same method may be used
or the allocable income or loss for the period may be deemed to be
equal to 10 percent of the income or loss allocable to Excess
Deferrals for the taxable year (as calculated above) multiplied by the
number of calendar months since the end of the taxable year. For that
purpose, a distribution occurring after the fifteenth day of a month
will be treated as made on the first day of the next month.
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(iii) PARTIAL CORRECTION. Any distribution of less than the
entire amount of Excess Deferrals (and income) is treated as a pro
rata distribution of Excess Deferrals and income.
(b) LIMITATION. Distribution may occur only to the extent the
individual has allocated the Excess Deferral to this Plan by certifying it
to the Plan Committee in writing not later than the March 1 following the
close of the taxable year and to the extent the Plan designates the
distribution as a distribution of Excess Deferrals.
(c) COORDINATION. Excess Deferrals that may be distributed are
reduced by any Excess Contributions previously distributed or
recharacterized with respect to the affected participant for the Plan Year
beginning with or within the taxable year. In the event of a reduction,
however, the amount treated as a distribution of Excess Contributions is
reduced by the amount of the reduction. Certification is deemed to have
occurred to the extent the individual has Excess Deferrals for the taxable
year calculated by taking into account only this Plan and other plans of
the Employer (of Affiliated Employer).
(d) PRO RATA. If only a portion of any Excess Deferral and allocable
gains and losses is distributed, the Excess Deferral and the gains and
losses are treated as distributed ratably.
5.11 MULTIPLE USE. Multiple Use occurs if: one or more Highly
Compensated Employees of the Employer (or Affiliated Employer) are eligible
in a Plan Year with respect to Salary Deferred and Voluntary or matching
Contributions to a plan or plans maintained by the Employer (or Affiliated
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Employer); the sum of the Actual Deferral Percentage and the Actual
Contribution Percentage (determined after any corrective distribution of
Excess Deferrals, Excess Contributions, or Excess Aggregate Contributions
otherwise required) of the entire group of eligible Highly Compensated
Employees exceeds the Aggregate Limit; the Actual Deferral Percentage of
the entire group of eligible Highly Compensated Employees fails the 1.25x
test; and the Actual Contribution Percentage of the entire group of
eligible Highly Compensated Employees also fails the 1.25x test. The
Aggregate Limit is the greater of the amount determined under (a) and (b):
(a) AGGREGATE LIMIT. The sum of:
(i) 125 PERCENT. 125 percent (125%) of the greater of:
(A) ADP. The ADP of the group of Non-Highly Compensated
Employees eligible to make Salary Deferred Contributions for the
Plan Year; or
(B) ACP. The ACP of the group of Non-Highly Compensated
Employees eligible with respect to matching or voluntary
Contributions for the Plan Year beginning with or within the Plan
Year of the arrangement subject to Code Section 401(k); plus
(ii) TWO PERCENT AND TWO TIMES. The lesser of:
(A) TWO PERCENT PLUS. Two percent (2%) plus the lesser of
(A) or (B), above; or
(B) TWO TIMES. Two times (2x) the lesser of (A) or (B),
above.
(b) ALTERNATIVE AGGREGATE LIMIT. The sum of:
(i) 125 PERCENT. 125 percent (125%) of the lesser of:
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(A) ADP. The ADP of the group of Non-Highly Compensated
Employees eligible to make Salary Deferred Contributions for the
Plan Year; or
(B) ACP. The ACP of the group of Non-Highly Compensated
Employees eligible with respect to matching or voluntary
Contributions for the Plan Year beginning with or within the Plan
Year of the arrangement subject to section 401(k); plus
(ii) TWO PERCENT AND TWO TIMES. The lesser of:
(A) TWO PERCENT PLUS. Two percent (2%) plus the greater
of (A) or (B), above; or
(B) TWO TIMES. Two times (2x) the greater of (A) or (B),
above.
(c) CORRECTION OF MULTIPLE USE. If a Multiple Use occurs, the
Multiple Use must be corrected by reducing the Actual Deferral Percentage
or Actual Contribution Percentage of Highly Compensated Employees. The
required reduction is treated as an Excess Contribution or an Excess
Aggregate Contribution. The amount of the reduction is first applied to
the Excess Aggregate Contributions and is allocated to those Highly
Compensated Employees who had allocated both Salary Deferred and voluntary
or matching Contributions for the year.
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ARTICLE VI
ACCOUNTS
6.1 ACCOUNTS. The Committee shall establish for each participant a
separate Employer Account for each type of Employer Contribution and a
separate Participant Account for each type of Participant Contribution.
(a) IDENTIFICATION. The specific accounts created are, as necessary:
(i) EMPLOYER REGULAR PROFIT SHARING ACCOUNT. The Accounts to
which any Employer Regular Profit Sharing Contributions are credited;
(ii) EMPLOYER MATCHING CONTRIBUTIONS ACCOUNT. The Accounts to
which any Employer Matching Contributions and amounts rolled-over to
this Plan are credited;
(iii) SALARY DEFERRED CONTRIBUTIONS ACCOUNT. The Accounts to
which Active Participant Salary Deferred Contributions to this Plan
are credited;
(iv) EMPLOYER QUALIFYING CONTRIBUTIONS ACCOUNT. The Accounts
to which any Employer Qualifying Contributions are credited; and
(v) ESOP ACCOUNT. The Account to which the proceeds of the
sale of stock of Seabee Corporation and each participant's Other
Investments Account under the Plan prior to amendment and restatement
are credited upon amendment and restatement of the Plan.
Each Account consists of a number of sub-Accounts. One sub-Account
includes the portion of the Account which is invested in Stock of Kaydon
Corporation. The other sub-Accounts include the portions of the Accounts
which are otherwise invested pursuant to each option provided under the
Plan.
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(b) CREDITING. On each Allocation Date:
(i) EMPLOYER ACCOUNTS. Each Employer Account is credited with
the designated Employer Contributions, forfeitures and a share of the
expenses, earnings, losses and adjustments in value of the applicable
portion or portions of the Trust; and
(ii) PARTICIPANT ACCOUNTS. Each Participant Account is
credited with the Active Participant's Contributions to that Account
and a share of the expenses, earnings, losses and adjustments in value
of the applicable portion or portions of the Trust.
6.2 ALLOCATION OF EMPLOYER CONTRIBUTIONS. Employer Regular Profit
Sharing Contributions for the Plan Year are allocated to the Employer
Regular Profit Sharing Accounts of Active Participants who complete one
thousand (1,000) Hours of Service during the Plan Year and are Employees on
the last day of that Plan Year, or who retire, die, or become Disabled
during the Plan Year, in the proportion which each Active Participant's
Allocation Limit Compensation for the Plan Year bears to the aggregate of
Active Participants' Allocation Limit Compensation for the Plan Year,
subject to the Testing Adjustment.
(a) SALARY DEFERRED. Salary Deferred Contributions are allocated to
the account of the electing Active Participant.
(b) QUALIFYING. Employer Qualifying Contributions are allocated as
directed by the Employer. That direction may include allocation in the
same manner as Employer Regular Profit Sharing Contributions, in any other
non-discriminatory manner, or a combination, and may be limited to
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Non-Highly Compensated Employees or one or more classifications of Non-
Highly Compensated Employees. The method of allocation must be specified
by the Employer within thirty (30) days of the end of the Plan Year to
avoid discrimination under Code Sections 401(k) and 401(m).
(c) MATCHING. Matching Contributions are allocated to the Matching
Account of each Active Participant eligible for an allocation of Employer
Regular Profit Sharing Contributions for the Plan Year based on each
eligible Active Participant's Salary Deferred Contributions for the year
which are eligible for a Matching Contribution as provided under Article
IV. The amount allocated is $0.25 for each dollar of the Participant's
Salary Deferral Contributions, to a maximum match of $800.
(i) PROVISIONAL ALLOCATION. Each allocation of Matching
Contributions to a Highly Compensated Participant is provisional until
the Actual Contribution Percentage, the Actual Deferral Percentage,
the Multiple Use and the Elective Deferral Limitations for the
applicable year have been satisfied.
(ii) EFFECT. Matching Contributions provisionally allocated
based on Salary Deferred Contributions which are forfeited,
recharacterized, or distributed to the Participant are forfeited and
must be removed from the allocation and reallocated to other
Participants, if appropriate, for the Plan Year, or held in an Excess
Contribution Account under Article IV.
(d) SPECIAL CONTRIBUTIONS. Forfeiture Restoration Contributions are
allocated to the account of the affected Active Participant. Minimum Top
Heavy Contributions are allocated to the account of the affected Non-Key
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Employee Active Participants who are employed by the Employer (or
Affiliated Employer) on the last day of the Plan Year.
(e) STOCK CONTRIBUTIONS. Employer Contributions may be made in Stock
or in cash, or in any combination of Stock and cash (as determined by each
Employer) except that Elective Contributions may be made in Stock only to
the extent Participants have elected to have those contributions invested
in Stock. Stock contributed by an Employer is valued at the average of its
closing prices as reported on any national securities exchange or as quoted
on any system sponsored by a national securities association for the twenty
(20) consecutive trading days immediately prior to the date on which the
Stock is contributed to the Plan.
(f) LEASED EMPLOYEE OFFSET. Contributions are not allocated to a
Leased Employee to the extent the Leased Employee accrues contributions or
benefits under a plan maintained by the leasing organization which are
attributable to services performed for the Employer (or Affiliated
Employer).
(g) TESTING ADJUSTMENT. All allocations for Highly Compensated
Employees are subject to limitation based on, and may be reduced as
necessary to comply with, the participation, coverage and
non-discrimination tests applicable to the Plan under Code Sections
401(a)(26), 410(b) and 401(a)(4). All allocations to Highly Compensated
Employees are provisional until the earlier of the date the Employer
certifies the allocations as non-provisional and the due date of the
Employer's tax return for the year including the Allocation Date.
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The method of allocation cannot be changed more frequently than once
every six months, other than to comport with changes in the Code, ERISA, or
the applicable rules or regulations.
6.3 ALLOCATION OF FORFEITURES. Forfeitures from the Non-Vested
Accounts of participants who have incurred five (5) consecutive Breaks in
Service, received a distribution of their entire Vested Account Balance, or
died after terminating employment during the Plan Year are first allocated
to reduce any Forfeiture Restoration Contribution. Any remaining
forfeitures of Regular Profit Sharing Contributions are allocated in the
same manner as Employer Regular Profit Sharing Contributions and of
Matching Contributions are allocated in the same manner as Matching
Contributions. Forfeitures allocated as Contributions reduce the
contribution of the Employer for the year.
6.4 ALLOCATION OF EXPENSES, EARNINGS, LOSSES AND ADJUSTMENTS IN
VALUE. The assets of the Trust will be valued at fair market value as of
each Allocation Date. Participants share in the earnings, losses and
adjustments in value of the fund and in the expenses not paid by the
Employer in the following manner:
(a) COMMON FUND. If invested in a qualified common or pooled fund,
each participant has a proportionate undivided interest in the assets of
the fund and, except as otherwise provided, has allocated to the account
the expenses, earnings, losses and adjustments in value of the fund under
the rules of the fund.
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(b) MULTIPLE PARTICIPANT INVESTMENTS. If an amount from an account
of a participant is invested in assets other than a Common Fund and the
investment is commingled in another investment with amounts from the
accounts of other participants, each participant has a proportionate
interest in the asset and, except as otherwise provided, has allocated to
the participant's account expenses, earnings, losses and adjustments in
value of the asset in the ratio that the stated value in the asset bears to
the total stated value of all participants in the assets. The stated value
of a participant's account is the value of the participant's interest as of
the beginning of each Allocation Period less any distribution, forfeiture,
or other debit to the account plus any Participant Contributions during the
period.
(c) SINGLE ACTIVE PARTICIPANT INVESTMENTS. If an amount from the
account of a participant is invested in assets other than the Common Fund
and the account is not commingled in another investment with the amounts
from accounts of other participants, each participant is entitled to the
entire interest in the asset and, except as otherwise provided, the
expenses, earnings, losses and adjustments in value of the asset are
allocated to the participant's account.
(d) EXPENSES. In general, expenses paid by the Trustee and charged
against the Trust Fund are allocated to participants' Accounts as earnings,
losses and other adjustments in value. Fees for recordkeeping services are
allocated as a flat fee per participant and are spread across all of each
participants' Accounts. Any investment management fee applicable to Stock
is allocated only to Accounts invested in Stock in the ratio of the Stock
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holdings. Distribution fees are allocated to the Account being distributed
prior to distribution.
6.5 VESTING. The Account Balance in each Account other than the
Employer Regular Profit Sharing, the Employer Matching Contributions and
the ESOP Accounts, if any, is fully vested and nonforfeitable at all times.
The Account Balance in each Employer Regular Profit Sharing, Employer
Matching Contributions and ESOP Account is fully vested and nonforfeitable
upon the Participant's attainment of Normal Retirement Age, Death, or
Disability while an employee of the Employer (or Affiliated Employer) and
under one or a combination of the following Vesting Schedules:
(a) NON-TOP HEAVY. The Non-Top Heavy Schedule applies if the Plan
never becomes Top Heavy or for Plan Years after it has ceased to be Top
Heavy (subject to the restrictions on Vesting Schedule amendments in
Article X). This schedule also applies to a participant who does not
complete an Hour of Service in a Plan Year in which the Plan is Top Heavy.
The Non-Top Heavy schedule is:
<TABLE>
<CAPTION>
YEARS OF SERVICE FOR VESTING PURPOSES PERCENTAGE
TO DATE EMPLOYMENT TERMINATED VESTED
<S> <C> <C>
Less than 3 years 0%
3 years but less than 4 years 20%
4 years but less than 5 years 40%
5 years but less than 6 years 60%
6 years but less than 7 years 80%
7 years or more 100%
</TABLE>
(b) TOP HEAVY. Unless the Non-Top Heavy Schedule is more favorable,
the Top Heavy Schedule applies for Plan Years in which the Plan is Top
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Heavy and for amounts allocated in Plan Years before the Plan became Top
Heavy. The Top Heavy Schedule is:
<TABLE>
<CAPTION>
YEARS OF SERVICE FOR VESTING PURPOSES PERCENTAGE
TO DATE EMPLOYMENT TERMINATED VESTED
<S> <C> <C>
Less than 2 years 0%
2 years but less than 3 years 20%
3 years but less than 4 years 40%
4 years but less than 5 years 60%
5 years but less than 6 years 80%
6 years or more 100%
</TABLE>
(c) EFFECT OF RE-PARTICIPATION. Years of Service prior to a Break in
Service are Years of Service for purposes of determining the vested
interest in the Employer Accounts of an Employee who is reemployed by the
Employer following a Break in Service and for all purposes under the Plan
on the first day on which the Employee becomes an Active Participant unless
the Employee re-participates as a new Employee.
(d) CHANGE. A change in the applicable Vesting Schedule is a vesting
amendment under Article X.
6.6 VESTED ACCOUNTS. The vested portion of the Accounts of a
participant is a Vested Account and the nonvested portion is a Nonvested
Account. Vested and Nonvested Accounts are solely for accounting purposes,
and do not require segregation of the assets of the Trust. Distribution of
benefits may be made to a participant or a beneficiary only from the Vested
Accounts.
(a) RE-PARTICIPATION. Separate Vested Accounts are maintained for
participants whose prior service is disregarded following reemployment.
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(b) PARTIAL DISTRIBUTION. In the event of a distribution of less
than the entire Vested Account Balance of a participant whose Employer
Account is not fully vested and nonforfeitable at the time of the
distribution, a Separate Account is established at the time of
distribution. The vested portion of the participant's Separate Account
equals P(AB + (R x D)) - (R x D) where P is the vested percentage, AB is
the Account Balance from time to time, D is the amount of the distribution
and R is the ratio of the Account Balance from time to time to the Separate
Account Balance after distribution.
(c) FORFEITURE. All Nonvested Accounts are forfeited as of the first
day of the Plan Year following the later of the end of the Plan Year during
which a participant incurs five (5) consecutive Breaks in Service, receives
a distribution of the entire Vested Account Balance, or dies after
terminating employment. A participant who is not vested in any portion of
an Employer Account is deemed to receive a distribution of the
participant's entire vested Account Balance in that Account on the date the
participant terminates employment with the Employer.
(d) EMPLOYER ACCOUNT RESTORED. If a terminated participant is
reemployed by the Employer before incurring five (5) consecutive Breaks in
Service, the forfeited Nonvested Account must be restored to the Employer
Account if:
(i) NO DISTRIBUTION. No distribution was received from the
Vested Account; or
(ii) REPAYMENT. The entire distribution received from the
Vested Account is repaid not later than the date the participant
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incurs five (5) consecutive Breaks in Service. A participant who is
deemed to have received a distribution of the entire Vested Account
Balance is deemed to have repaid that amount on the first day on which
the Employee again completes an Hour of Service for the performance of
duties.
The participant must be reinstated in all optional forms of benefits
and subsidies relating to the benefits applicable to the restored amount
prior to the distribution.
6.7 INVESTMENT OF EMPLOYER AND PARTICIPANT CONTRIBUTIONS. Except as
otherwise provided, each participant's Account shall be invested in
accordance with the options provided for, and properly elected by,
participants from time to time.
(a) OPTIONS. The options available are:
(i) INVESTMENT FUNDS. The Investment Funds available from
time to time identified in an Appendix D to this Plan.
(ii) STOCK. Stock of Kaydon Corporation.
(b) PROCEDURE. A participant may designate the investment of the
participant's Accounts in the available options in increments of 1% subject
to a minimum allocation to any option of 10%. A participant may change the
designated investment options as frequently as allowed by the
administrative processing abilities of the Contract Administrator and the
Trustee, but no less frequently than once within each three month period.
All investment directions must be communicated to the Contract
Administrator in writing on the appropriate form or in accordance with an
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alternative administrative procedure approved in advance by the Committee
and the Contract Administrator. Any such alternative procedure which is
not in writing must provide the participant with an opportunity to obtain
written confirmation of the instructions.
(c) EFFECTIVE DATE. Except as provided, the Contract Administrator
or Trustee must effect any appropriate direction within a reasonable period
of time and as soon as practicable after the direction is properly
communicated (or, in the case of a sale of Stock, after the end of the
stated month), unless circumstances beyond the control of the Contract
Administrator or Trustee preclude reasonable completion of the direction.
(d) NO DIRECTION. Amounts which a participant may direct but which
are not effectively directed by the participant or which the participant
may not direct will be invested in accordance with the default investment
rules. Such amounts will not be invested in Stock.
(e) MULTIPLE. If a number of purchases or sales are to be made at
any one time, the net purchase or sales price of all shares of Stock
purchased or sold at that time will be averaged to determine the amount to
be allocated to each participant.
(f) LIMITATION The following limitations override any contrary rule
in this Plan.
(i) KAYDON STOCK. No participant may invest any Plan assets
in stock of Kaydon Corporation until an appropriate registration
statement on Form S-8 is filed with the Securities and Exchange
Commission.
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(ii) PRIOR FUNDS. No participant may direct the investment of
any Plan assets which were allocated to the participant's account on
or before December 31, 1995, until the Committee, by written
resolution, permits such direction.
6.8 ERISA SECTION 404(C). Except with respect to the portion of the
Plan required to be invested in Kaydon Stock, the Plan is intended to
comply with ERISA Section 404(c). The Committee or other party designated
by Plan policy, rule, or contract shall provide each participant eligible
to direct investments the information identified in Appendix E or provided
under DOL Reg. 2550.404c-1 for that purpose.
(a) CONFIDENTIALITY. Information relating to the purchase, holding
and sale of stock and to the exercise of voting, tender and similar rights
with respect to Stock shall be subject to procedures established to provide
for and safeguard the confidentiality of that information (except to the
extent necessary to comply with Federal laws or state laws not pre-empted
by ERISA. The Committee is responsible for ensuring that the procedures
are sufficient to safeguard the confidentiality of the information, the
procedures are being followed and that an independent fiduciary is
appointed to carry out activities relating to any situations which the
Committee determines involve a potential for undue employer influence on
participants with regard to the direct or indirect exercise of shareholder
rights.
(b) STOCK RIGHTS. With respect to Stock:
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(i) INFORMATION. Information provided to shareholders of such
securities shall be provided to participants or beneficiaries with Accounts
holding Stock; and
(ii) VOTING. Voting, tender and similar rights with respect to
such securities shall be passed through to participants and beneficiaries
with Accounts holding Stock.
If a participant or beneficiary does not direct the Trustee to vote
the Stock in a particular manner, the Trustee may not vote the Stock.
(c) EXPENSES. The Plan may charge participants' accounts for the
reasonable expenses of carrying out the participant's instructions pursuant
to a procedure established under the Plan to periodically inform
participants of the actual expenses incurred with respect to their
respective individual Accounts.
(d) SECTION 16B RULE. Any available participant election may, at the
participant's election, also be made pursuant to:
(i) SIX MONTH ADVANCE. An irrevocable election made by the
participant six months or more in advance of the effective date of the
election; or
(ii) QUARTERLY DATE. An election made by the participant on a
Quarterly Date at least six months after the date of the previous
intraplan transfer election relating to the Stock Fund. The Quarterly
Date begins on the third business day following the release of Kaydon
Corporation's quarterly financial data and ends on the twelfth
business day following that date.
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(e) GENERAL. Participant instructions will not be implemented if the
instructions:
(i) PLAN. Are not in accordance with the documents and
instruments governing the Plan insofar as such documents and
instruments are consistent with the provisions of Title I of ERISA;
(ii) UNITED STATES. Would cause a fiduciary to maintain the
indicia of ownership of any assets of the plan outside the
jurisdiction of the district courts of the United States other than as
permitted by section 404(b) of ERISA;
(iii) QUALIFICATION. Would jeopardize the Plan's tax qualified
status under the Internal Revenue Code;
(iv) PROHIBITED TRANSACTION. Would result in a prohibited
transaction described in ERISA section 406 or section 4975 of the
Internal Revenue Code;
(v) LOSS. Could result in a loss in excess of that
participant's account balance; or
(vi) INCOME. Would generate income that would be taxable to
the Plan.
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ARTICLE VII
DISTRIBUTION
7.1 DISTRIBUTIVE EVENT. A participant's Account is distributable
upon the occurrence of a Distributive Event. A Distributive Event is:
(a) NORMAL RETIREMENT. A participant's attainment of Normal
Retirement Age and termination of employment with the Employer;
(b) DEATH. A participant's Death;
(c) DISABILITY. A participant's Total and Permanent Disability which
is:
(i) GENERAL RULE. The Participant's inability to engage in
any substantial gainful activity for a period of at least six (6)
months by reason of a medically determinable physical or mental
impairment which has existed for six (6) continuous months, can be
expected to result in death or to be of long, indefinite duration and
causes the individual to cease active work with the Employer.
Disability must be evidenced by receipt of non-contingent award for
permanent and total disability under the Social Security Act, as
amended; and
(ii) ESOP ACCOUNT. As to the Participant's ESOP Account
balance on December 31, 1995 (adjusted by all earnings, losses and
adjustment in value after that date), the mental or physical inability
of the Participant to perform the Participant's normal job, as
evidenced by the certificate of a medical examiner certifying such
inability and certifying that the condition is likely to be permanent.
The Committee may have a Participant examined by a qualified physician
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of its own choosing. In the event of a conflict of opinion between
the Participant's physician and the Committee's physician, the
decision of the Committee's physician shall be conclusive and binding
on all parties.
(d) EMPLOYMENT TERMINATION. A participant's termination of
employment with the Employer (and all Affiliated Employers);
(e) PLAN TERMINATION. For other than a Qualifying Account or a
Salary Deferred Contributions Account, the termination of the Plan;
(f) SALARY DEFERRED AND QUALIFYING. From a Salary Deferred
Contributions Account or a Qualifying Account:
(i) PLAN TERMINATION. The termination of the Plan without
establishment or maintenance of another defined contribution plan
(other than a plan defined in Code Section 4975(e)(7)), to the extent
the participant receives a lump sum distribution within Code Section
401(k)(10) by reason of the termination; or
(ii) DISPOSITION. To the extent the participant receives a
lump sum distribution within Code Section 401(k)(10) by reason of the
disposition, and if the Employer continues to maintain this Plan after
the disposition, the disposition by the Employer to an unrelated
employer of:
(A) ASSETS. Substantially all of the assets used by the
Employer in a trade or business with respect to an employee who
continues employment with the acquiring corporation; and
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(B) STOCK. The Employer's interest in a subsidiary with
respect to an employee who continues employment with the
subsidiary.
(g) MINIMUM REQUIRED. A participant's attainment of age 70 1/2.
(h) ALTERNATE PAYEE. For an Alternate Payee under a Qualified
Domestic Relations Order, the request of the Alternate Payee at the time
set forth in or allowed under the Order even if that time is prior to the
date the participant attains the earliest retirement age as defined in
Section 414(p)(4) of the Code, to the extent authorized under Section
414(p)(10) of the Code.
The pre-amendment and restatement provision for diversification under
Section 401(a)(28) of the Code and for distribution in lieu of
diversification do not apply after September 15, 1995 due to the sale of
the stock of Seabee Corporation held in the Plan and the cessation of
operation of the Plan as an employee stock ownership plan subject to
Section 401(a)(28).
7.2 GENERAL METHOD OF PAYMENT. Payments from a participant's
Accounts at or after a Distributive Event may be made by a single payment
within one (1) taxable year of the recipient. If a participant's Vested
Account Balance (including any Participant Account) is, and at the time of
any prior distribution was, less than $3,500.00, the Committee must
distribute the balance in an immediate, lump sum payment (in cash and not
in Stock) (a Cash Out) as soon as administratively practicable following a
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Distributive Event, subject to any required participant notification and
election under the Direct Rollover rules.
7.3 SPECIAL METHOD OF PAYMENT. The following special rules apply to
payments from a participant's Accounts.
(a) TERMINATION. On recognition by the Employer of termination of
the Plan, Salary Deferred Contributions and Qualifying Accounts must be
transferred to any other defined contribution plan maintained by the
Employer or a member of a controlled group including the Employer (other
than a Code Section 4975(e)(7) employee stock ownership plan).
(b) STOCK. Except as otherwise provided, all distributions shall be
in whole shares of Stock if and to the extent the distribution is from an
Account invested in whole or in part in Stock. All other distributions
shall be in cash except that, upon any necessary registration of the Plan
under the securities laws, the ESOP Account may also be distributed in
Kaydon Stock, at the election of the Participant. Any fractional share of
Stock otherwise distributable shall also be distributed in cash.
(i) ELECTION AGAINST STOCK. Any participant or other payee
may elect on the appropriate form to receive in cash all or part of
the portion of a distribution which would otherwise be made in Stock.
(ii) PROCEDURE. The Trustee shall, to the extent necessary,
purchase or sell the number of shares of Stock to be distributed, and
the participant or other payee shall receive in cash or Stock, as the
case may be, the net amount (after adjustments for any expenses
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directly related to the purchase, such as brokerage fees or
commissions) of that purchase or sale.
(A) MULTIPLE. If a number of purchases or sales are to be
made by the Trustee at any one time, the net purchase or sales
price of all shares of Stock purchased or sold at that time shall
be averaged to determine the amount to be distributed to each
participant or other payee.
(B) VALUATION. Fractional shares of Stock shall be valued
on the basis of the closing price of the Stock as reported on any
national securities exchange or as quoted on any system sponsored
by a national securities association on the trading day on which
the stock is sold.
7.4 INFORMATION PROVIDED. The Committee must provide to each
participant, with the Application for Distribution:
(a) WITHHOLDING. Where applicable, a form permitting rejection of
federal income tax withholding from the distribution; and
(b) FAVORABLE TAX TREATMENT. A form providing notification of the
requirements for and the effects of lump sum five (5) and ten (10) year
averaging, a Direct Rollover and a qualifying rollover under the Code.
7.5 APPLICATION FOR DISTRIBUTION. To begin distribution after a
Distributive Event, the participant or other payee must file a written,
valid Application for Distribution after receiving the information
described in this Article executed within 90 days before the first day of
the first period for which benefits are paid.
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(a) NO APPLICATION. An Application is not required if the
distribution: is a Cash Out; is required to satisfy Code Sections
401(a)(9), 411(b), or 415; or is made after the date the participant has
(or would have, if not dead) attained the later of Normal Retirement Age or
age 62.
(b) GENERAL REQUIREMENTS. To be a valid Application, the participant
or other payee must consent to or request the distribution and designate
the desired type of benefit, the form of payment, the beginning date for
payment, whether federal income tax will be withheld (where not mandatory),
and whether the participant is married.
(c) LATER ACCRUAL. The provisions of this Section apply separately
to additional accruals after a benefit start date that occurs before the
participant attains Normal Retirement Age.
(d) ELECTIONS. Any election otherwise permitted by this Article may,
at the participant's election, also be made pursuant to an irrevocable
election made by the participant six months or more in advance of the
effective date of the election.
7.6 TIMING OF PAYMENT. Payment from a participant's Accounts may be
made on the first day of a month following a Distributive Event and, except
where unnecessary, filing of an appropriate Application.
(a) REQUIRED BEGINNING DATE - PARTICIPANT. Payments to a participant
of the appropriate Minimum Amount must begin not later than April 1
following the calendar year in which the participant attains age 70 1/2
unless the participant:
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(i) ELECTION. Made an election under Section 242(b) of the
Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA Election);
(ii) SPECIAL RULE. Attained age 70 1/2 in 1988, was not a Five
Percent Owner at any time during the Plan Year ending with or within
the calendar year in which the participant attained age 66 1/2 or any
later Plan Year, and had not retired by January 1, 1989. In that case
the participant is treated as having retired on January 1, 1989; or
(iii) AGE 70 1/2. Attained age 70 1/2 before January 1, 1988 and
has not yet retired. In that case:
(A) NON-FIVE PERCENT (5%) OWNER. If the participant was
not a Five Percent Owner at any time during the Plan Year ending
with or within the calendar year in which the participant
attained age 66 1/2 or any later Plan Year, payments must begin
not later than April 1 following the later of the calendar year
in which the participant retires or attains age 70 1/2.
(B) FIVE PERCENT (5%) OWNER. If the participant was a
Five Percent Owner during any Plan Year beginning after December
31, 1979, payments must begin not later than April 1 following
the earlier of the calendar year in which the participant retires
or with or within which ends the Plan Year in which the
participant becomes a Five Percent Owner.
(b) REQUIRED BEGINNING DATE - BENEFICIARY. Payments to a beneficiary
or other recipient must begin by the earliest applicable date in this
subsection.
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(i) NO PAYMENTS. If a participant dies before the
participant's Required Beginning Date (and if irrevocable annuity
distributions have not begun with respect to Restricted Transfer
amounts):
(A) LUMP SUM. Payment must be made by December 31 of the
fifth calendar year after the calendar year of the death of the
participant (or the participant's spouse, if the spouse was the
Designated Beneficiary at the participant's death and dies before
the spouse's required beginning date); or
(B) LIFE OR LIFE EXPECTANCY. If elected by a Designated
Beneficiary (determined as of the date of death), payments must
begin by December 31 of the year after the year of the
participant's (or spouse's) death in a method which will result
in the Account Balance being payable during the Beneficiary's
life or life expectancy or, if elected by the participant's
spouse, payments must begin in the same manner by the December 31
after the later of the end of the calendar year in which the
participant died and the date on which the participant would have
attained age 70 1/2.
(ii) PAYMENTS. If the participant dies on or after the
participant's Required Beginning Date (or irrevocable annuity
distributions have begun with respect to Restricted Transfer Amounts),
the Account Balance must be payable at least as rapidly as under the
method of payment elected by the participant. Any Designated
Beneficiary whose life or life expectancy was used to determine the
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period for that method of payment must be the beneficiary of the
remaining portion.
(c) CONTINUING PAYMENT DATES. The Minimum Distribution for all
distribution calendar years other than the distribution due by the Required
Beginning Date, including the Minimum Distribution for the distribution
calendar year in which the Required Beginning Date occurs, must be made on
or before December 31 of that distribution calendar year.
(d) GENERAL LIMITATION. Payments to all participants must begin,
unless postponed, not later than sixty (60) days after the end of the
latest Plan Year in which the participant: attains the earlier of age 65
or Normal Retirement Age; reaches the tenth anniversary of participation;
or terminates employment. Payments to the surviving spouse of a deceased
participant must be available within a reasonable time after the
participant's death. Unless special circumstances require an extension of
time, the reasonable time may not exceed 90 days after the participant's
death.
(e) OVERRIDE. Payments for each distribution calendar year must be
made in accordance with the regulations under Code Section 401(a)(9), which
override any distribution options in the Plan or elections inconsistent
with Code Section 401(a)(9). Notwithstanding any other provision of the
Plan, the Plan must begin distribution in a manner that satisfies: Code
Section 401(a)(9) even though the participant (or spouse, where applicable)
fails to consent to the distribution if the plan has made reasonable
efforts to obtain consent and if the distribution otherwise meets the
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applicable requirements of Code Section 417; Code Section 411(b) and Code
Section 415.
(f) EXCISE TAX. Payments before a participant attains age 59 1/2 are
subject to an excise tax under the Code unless the payments are made:
(i) DEATH OR DISABILITY. On account of death or disability
within the meaning of Code Section 72(m)(7);
(ii) ANNUITY. As part of a series of substantially equal
periodic payments, not less frequently than annually, made for the
life or life expectancy of the participant or the joint lives or joint
life expectancies of the participant and the Designated Beneficiary;
or
(iii) SEPARATION. To a participant after separation from
service after attainment of age 55.
7.7 DURATION OF PAYMENT. A participant or a Designated Beneficiary
may not elect a method of payment which extends beyond the later of the
life or life expectancy of the participant or the lives or joint life
expectancy of the participant and the participant's Designated Beneficiary
(the Maximum Period). For this purpose, the life expectancy of the
Designated Beneficiary (excluding beneficiaries contingent on the death of
a prior beneficiary, but including the spouse, as recomputed) with the
shortest life expectancy must be used.
(a) RECALCULATION. The life expectancies of the participant and
spouse shall be recalculated annually unless the participant or spouse
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irrevocably elects against recalculation prior to the applicable Required
Beginning Date.
(b) NO LIFE EXPECTANCY. The Plan must distribute the participant's
entire remaining interest prior to the last day of the calendar year in
which the last applicable life expectancy is reduced to zero.
7.8 AMOUNT OF PAYMENT. The amount each payment must satisfy these
Minimum Distribution requirements. The time and method of payment of
benefits selected by a participant must be adjusted as necessary to comply
with Section 401(a)(9) and the Minimum Distribution rules.
(a) NON-ANNUITY PAYMENTS. For other than annuity distributions of
Restricted Transfer amounts, the Plan must distribute for each distribution
calendar year, beginning with the first calendar year for which
distributions are required, an amount at least equal to the participant's
Account Balance divided by the lesser of the Applicable Life Expectancy or,
if the participant's spouse is not the Designated Beneficiary, the
applicable divisor.
(i) ACCOUNT BALANCE. The Account Balance used in determining
the Minimum Distribution for a distribution calendar year is the
Account Balance as of the last valuation date in the calendar year
immediately preceding the distribution calendar year (Valuation
Calendar Year) as adjusted. The Account Balance is increased by any
contributions or forfeitures allocated as of dates in the Valuation
Calendar Year after the valuation date and decreased by distributions
made in the Valuation Calendar Year after the valuation date and
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transfers made in prior years. The Plan may not, however, distribute
amounts which are not vested.
(ii) APPLICABLE LIFE EXPECTANCY. The Applicable Life
Expectancy is the life (or joint life) expectancy of the participant
and the participant's spouse or Designated Beneficiary (first
determined as of the participant's (or spouse's) Required Beginning
Date or as of any date within ninety days before annuity payments
begin), reduced by one for each calendar year which has elapsed since
the date on which the life (or joint life) expectancy was calculated,
subject to recalculation.
(b) ANNUITY PAYMENTS. For annuity distributions of Restricted
Transfer amounts, the Plan must distribute an annuity contract from an
insurance company providing payments which satisfy Code Section 401(a)(9)
and the regulations issued thereunder. Annuity distributions of Restricted
Transfer amounts must be payable as:
(i) ANNUITY FOR ACTIVE PARTICIPANT. A life annuity for the
life of the participant;
(ii) ANNUITY, NONSPOUSE BENEFICIARY. A joint and survivor
annuity for the joint lives of the participant and a beneficiary other
than the spouse under which the periodic annuity payment payable to
the survivor must not at any time on and after the Required Beginning
Date exceed the applicable percentage of the annuity payment for the
participant.
(iii) PERIOD CERTAIN. A period certain annuity in which the
annuity payments payable to the participant satisfy the preceding;
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(iv) ANNUITY, SPOUSE BENEFICIARY. A joint and survivor annuity
for the joint lives of the participant and spouse which otherwise
satisfies Code Section 401(a)(9); or
(v) TEFRA ELECTION. Provided in a TEFRA 242(b) Election to
the extent the method of distribution satisfies the incidental benefit
rules in effect on July 27, 1987.
The applicable divisor and the applicable percentages are determined under
Regulation Section 1.401(a)(9)-2.
7.9 SPECIAL PARTICIPANT ACCOUNT DISTRIBUTION RULES. A participant's
Account established by a transfer directly from the trustee, custodian or
insurer of a plan or related trust qualified under Code Section 401(a)
(Transferor Plan):
(a) RESTRICTED - SURVIVING SPOUSE REQUIREMENTS. Is subject to the
Additional Distribution Provisions of this Article if the Transferor Plan
was subject to the surviving spouse annuity requirements of Code Sections
401(a)(11) and 417 at the time of the transfer (Restricted Account);
(b) RESTRICTED - CODE SECTION 401(K). Is subject to the distribution
restrictions of Code Sections 401(k)(2) and (10) to the extent the amount
transferred consists of elective contributions (or amounts treated as
elective contributions) under a plan with a Code Section 401(k)
arrangement; and
(c) DISTRIBUTION TIMING. Which is transferred after the Required
Beginning Date under both the Transferor Plan and this Plan must begin to
be distributed in the calendar year following the calendar year in which
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the amount was transferred if the Designated Beneficiary under this Plan
has a life expectancy that is longer than the life expectancy of the
designated beneficiary under the Transferor Plan. This distribution must
be made over a period not exceeding the applicable life expectancies used
by the Transferor Plan to determine the participant's minimum distribution
with respect to the amount transferred.
7.10 ADDITIONAL DISTRIBUTION PROVISIONS. These additional
distribution provisions apply to a Restricted Transfer Account.
(a) METHOD OF PAYMENT. Payment from a participant's Restricted
Account may also be made by:
(i) JOINT AND SPOUSAL SURVIVOR. The purchase of an immediate,
nontransferable annuity from an insurance company, with an amount
payable for the participant's life and, if the participant is survived
by a Qualifying Spouse to whom the participant is married at the date
of death or who is treated as a Qualifying Spouse under a Qualified
Order, at least fifty percent (50%) of the amount continued for that
spouse's life;
(ii) SPOUSAL SURVIVOR. In the case of the death of the
participant, the purchase for the Qualifying Spouse of a fully
subsidized nontransferable annuity from an insurance company with a
benefit having a value which is actuarially equivalent to fifty
percent (50%) of the participant's Vested Restricted Transfer Account
Balance as of the date of the participant's death; and
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(iii) ANNUITY. The purchase of a nontransferable annuity from
an insurance company for the life of the participant.
The normal form of payment to a married participant with a Qualifying
Spouse is the Joint and Spousal Survivor form and to other participants is
the Annuity form. The normal form of payment after the death of a
participant with a Qualifying Spouse is the Spousal Survivor Annuity.
(b) INFORMATION PROVIDED. The Committee must also provide to each
participant who has a Restricted Account:
(i) JOINT AND SPOUSAL SURVIVOR NOTICE. With respect to the
Joint and Spousal Survivor form, no less than 30 days and no more than
90 days before the first day of the first period for which benefits
are paid, a written explanation of: the Joint and Spousal Survivor
Annuity; the participant's right to make, and the effect of, an
election not to receive payments in that form; the requirement that
the Qualifying Spouse consent; the participant's right to revoke an
election and the effect of revocation; the material features and the
relative values of the optional forms of benefit available under the
Plan; and the right to defer receipt of the distribution; and
(ii) SPOUSAL SURVIVOR ANNUITY NOTICE. With respect to the
Spousal Survivor Annuity, a written explanation of: the Spousal
Survivor Annuity; the participant's right to make, and effect of, an
election to waive the benefit; the requirement that the Qualifying
Spouse consent; and the participant's right to revoke an election and
the effect of revocation. The explanation shall provide within the
last to end of:
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(A) THREE YEAR PERIOD. The three (3) year period
beginning with the first day of the Plan Year in which the
participant attains age 32; or
(B) TWO YEAR PERIOD. The two year period beginning one
year before: the individual becomes an Active Participant, a
benefit subsidy (as defined in Section 417 of the Code) ceases,
the survivor benefit requirements first apply to the participant,
or the separation from service of a participant who has not
attained age 35.
The explanation must be provided to a participant who separates from
service before age 32 within one year after termination of employment; and
(c) APPLICATION FOR DISTRIBUTION. In addition to the other
applicable requirements for a valid Application, to be a valid Application
with respect to a Restricted Account:
(i) ELECTION AGAINST JOINT AND SPOUSAL SURVIVOR. If the
participant elects during the applicable period or receives after the
date the participant has attained the later of Normal Retirement Age
or age 62, with respect to the Restricted Account, a form of payment
other than the Joint and Spousal Survivor (or the Annuity form if the
participant is not married to a Qualifying Spouse), the participant
must specify the particular optional form of benefit and, if
applicable, the Application must be executed by the participant's
Qualifying Spouse and witnessed by a Plan representative or a notary
public.
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(A) SPOUSAL CONSENT. Spousal Consent must specify the
particular optional form of benefit; except as provided in a
Qualified Order, is necessary within ninety (90) days before the
first day of the first period for which benefits are paid; and is
irrevocable.
(B) NO SPOUSE. Spousal consent is not required if it is
established to the satisfaction of a Plan Representative that
there is no Qualifying Spouse or that the Qualifying Spouse
cannot be located; if the spouse is legally incompetent and the
spouse's legal guardian gives consent; or if the participant is
legally separated or has been abandoned as determined by court
order (unless a Qualified Order provides otherwise).
(ii) MODIFICATION. A participant's election may be modified or
revoked after the spouse's death or divorce, except as provided in a
Qualified Order, and at any time during the ninety (90) days
immediately before the first day of the first period for which
benefits are paid to return to the Joint and Spousal Survivor form or,
with appropriate Spousal consent, to another optional form of benefit.
(d) SPECIAL SPOUSAL SURVIVOR ANNUITY RULES. A participant, with the
consent of any Qualifying Spouse, may elect to waive the Spousal Survivor
Annuity with respect to the Restricted Account during the period beginning
on the expiration of the time for provision of the Spousal Survivor Annuity
Notice and ending at the participant's death. A Qualifying Spouse may
elect to waive the Spousal Survivor Annuity with respect to the Restricted
Account after the death of the participant.
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(i) NO SPOUSE. Spousal consent is not required if it is
established to the satisfaction of a Plan Representative that there is
no Qualifying Spouse or that the Qualifying Spouse cannot be located;
if the spouse is legally incompetent and the spouse's legal guardian
gives consent; or if the participant is legally separated or been
abandoned as determined by court order (unless a Qualified Order
provides otherwise).
(ii) NOT NECESSARY. Spousal consent is not necessary for a
distribution of the Spousal Survivor Annuity after the date the
participant attains (or would have attained if not dead) the later of
Normal Retirement Age or age 62.
(iii) IRREVOCABLE. Spousal consent is irrevocable.
7.11 DESIGNATION OF BENEFICIARY. A participant or a Designated
Beneficiary may designate the beneficiary or contingent beneficiary to
receive amounts payable under the Plan (other than the Spousal Survivor
Annuity) in the event of the participant's or Designated Beneficiary's
death. The Designated Beneficiary may not change a designation by the
participant.
(a) MARRIED ACTIVE PARTICIPANT. Except as provided in a Qualified
Order, a married participant's beneficiary is the participant's legal
spouse unless the spouse consents otherwise.
(i) SPOUSAL CONSENT REQUIRED. Except as provided in a
Qualified Order, spousal consent is necessary for a beneficiary
designation of another and a change of beneficiary designation.
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(ii) SPOUSAL CONSENT NOT REQUIRED. Spousal Consent is not
required to the extent a prior Qualified Order provides for payment of
any portion of a Participant's Account Balance to an alternate payee
under the Qualified Order or if it is established to the satisfaction
of a Plan Representative that there is no spouse or that the spouse
cannot be located; if the spouse is legally incompetent and the
spouse's legal guardian gives consent; or if the participant is
legally separated or has been abandoned as determined by court order
(unless a Qualified Order provides otherwise).
(iii) IRREVOCABLE. Spousal consent is irrevocable.
(b) METHOD. The designation, revocation, or alteration must be made
in writing on forms provided by the Committee. Any designation by a
participant and any spousal consent must state the specific nonspouse
beneficiary (including any class of beneficiaries or any contingent
beneficiaries) who will receive the benefit. If the Designated Beneficiary
is a trust, the spouse need only consent to the designation of the trust
and need not consent to the designation of trust beneficiaries or any
changes of trust beneficiaries. A designation may be altered or revoked at
any time before the participant's entire Account Balance has been
distributed, with appropriate spousal consent if another beneficiary is
designated.
(c) DESIGNATED BENEFICIARY. A beneficiary other than an individual
or eligible trust will be recognized as a beneficiary but may not be a
Designated Beneficiary for purposes of this Article and Code Section
401(a)(9). All identifiable beneficiaries of an eligible trust are treated
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as Designated Beneficiaries for those purposes with respect to the trust's
interest in the Plan. An eligible trust is a trust which, as of the later
of the date on which the trust is named as beneficiary or the participant's
Required Beginning Date (and for all subsequent periods during which the
trust is a beneficiary) is valid and irrevocable and which is provided to
the Plan.
(d) FAILURE TO DESIGNATE. In the absence of an effective
designation, any benefit payable upon death is paid in the following
priority order: (1) the participant's surviving spouse, (2) the
participant's issue, per stirpes, or (3) to those who would receive the
personal property of the participant under Michigan law of intestate
succession.
7.12 CLAIMS PROCEDURE. A participant or beneficiary and the Committee
must observe the following procedures for claims to benefits:
(a) INITIAL CLAIM. A participant, beneficiary or legal
representative must file an Application for Distribution with the
Committee. The Committee must grant or deny the request within ninety (90)
days after receipt unless special circumstances require an extension of
time. The extension must not exceed an additional ninety (90) days. The
Committee must notify the applicant in writing of the extension and the
reasons for the extension.
(b) DENIAL OF CLAIM. If a claim is denied, the Committee must
provide to the applicant a written notice containing the reason for the
denial, reference to Plan provisions upon which the denial is based, a
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description of additional information necessary to permit granting the
claim and an explanation of the Plan's claim review procedure. If notice
of a denial of claim or an extension of time has not been received by the
applicant within ninety (90) days, the claim is deemed denied.
(c) EMPLOYER REVIEW. Within sixty (60) days after a denial is
received, the applicant may request a full and fair review upon written
application to the Committee. The applicant may review pertinent documents
and submit issues and comments in writing to the Committee. The Committee
must make a decision on review and notify the applicant of the decision
within sixty (60) days of receipt of the application unless special
circumstances require an extension of time. The extension may not exceed
an additional sixty (60) days. The Committee must notify the applicant in
writing of the extension and the reasons for the extension. The decision
upon review must meet the requirements for denial of a claim.
7.13 FACILITY OF PAYMENT. A payment made under this section fully
discharges the Employer, the Committee and the Trustee from all future
liability with respect to the payment.
(a) INCAPACITY. If a person entitled to payment is legally,
physically or mentally incapable of receiving or acknowledging payment, the
Committee may direct payment: directly to the person; to the person's
legal representative; to the spouse, child or relative by blood or marriage
of the person; to the person with whom the person resides; or by expending
the payment directly for the benefit of the person. A payment made other
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than to the person is intended to be used for the person's exclusive
benefit.
(b) LEGAL REPRESENTATIVE. The Committee shall not be required to
commence probate proceedings or to secure the appointment of a legal
representative.
(c) DETERMINATIONS. The Committee may act upon affidavits in making
any determination. The Committee, in relying upon affidavits or having
made a reasonable effort to locate any person entitled to payment, is
authorized to direct payment to a successor beneficiary or another person.
A person omitted from payment has no rights on account of payments so made.
(d) ANTI-ESCHEAT. If the Committee cannot locate a person entitled
to payment, the amount is a forfeiture. The forfeiture is reinstated if a
claim is made within the applicable limitations period by a person entitled
to payment.
7.14 QUALIFIED ORDER. Distribution to the recipient under a Qualified
Order must be made in accordance with Code Section 401(a)(9) and this
Article applied by substituting the recipient for the participant, except
that the distribution to the recipient need not satisfy the minimum
distribution incidental benefit rule.
(a) DESIGNATION OF BENEFICIARY. A recipient may designate a
beneficiary under the Plan but may not elect any form of payment which
requires distribution over the joint lives or life expectancy of the
recipient and the designated beneficiary.
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(b) LIMITATION. Where, because of a Qualified Order, more than one
individual is treated as a Qualifying Spouse or Designated Beneficiary with
respect to a participant, the total amount payable as a Spousal Survivor
Annuity, as the survivor portion of the Joint and Spousal Survivor benefit
or otherwise may not exceed the amount payable if there were only one
Qualifying Spouse or Designated Beneficiary. Where a Qualified Order
allocates a portion of the participant's accrued benefit to or with respect
to a former spouse or alternate payee, the Joint and Spousal Survivor
benefit, the Spousal Survivor Annuity and any other amounts payable to a
Qualifying Spouse or Designated Beneficiary are based on the vested accrued
benefit less the amount payable to or with respect to the former spouse or
alternate payee.
7.15 DIRECT ROLLOVER RULES. Notwithstanding any provision of the Plan
to the contrary that would otherwise limit a Distributee's election under
this Article, a Distributee may elect, at the time and in the manner
prescribed by the Plan Administrator, to have any portion of an Eligible
Rollover Distribution paid directly to an Eligible Retirement Plan
specified by the Distributee in a Direct Rollover.
(a) ELIGIBLE ROLLOVER DISTRIBUTION. An Eligible Rollover
Distribution is a distribution of all or any portion of the balance to the
credit of the Distributee, except that an Eligible Rollover Distribution
does not include: any distribution that is one of a series of
substantially equal periodic payments (not less frequently than annually)
made for the life (or life expectancy) of the Distributee or the joint
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lives (or joint life expectancies) of the Distributee and the Distributee's
designated beneficiary, or for a specified period of ten years or more; any
distribution to the extent such distribution is required under section
401(a)(9) of the Code; and the portion of any distribution that is not
includible in gross income (determined without regard to the exclusion for
net unrealized appreciation with respect to employer securities).
(b) ELIGIBLE RETIREMENT PLAN. An Eligible Retirement Plan is an
individual retirement account described in section 408(a) of the Code, an
individual retirement annuity described in section 408(b) of the Code, an
annuity plan described in section 403(a) of the Code, or a qualified trust
described in section 401(a) of the Code, that accepts the Distributee's
eligible rollover distribution. However, in the case of an Eligible
Rollover Distribution to the surviving spouse, an Eligible Retirement Plan
is an individual retirement account or individual retirement annuity.
(c) DISTRIBUTEE. A Distributee includes an employee or former
employee. In addition, the employee's or former employee's surviving
spouse or former spouse who is the alternate payee under a qualified
domestic relations order, as defined in section 414(p) of the Code, are
Distributees with regard to the interest of the spouse or former spouse.
(d) DIRECT ROLLOVER. A Direct Rollover is a payment by the Plan to
the Eligible Retirement Plan specified by the Distributee.
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ARTICLE VIII
INSURANCE OR ANNUITIES
8.1 TYPES OF POLICIES AND CONTRACTS. The Committee may direct the
purchase of an annuity contract or permanent or term life insurance policy
(Policy) which satisfies the requirements of this Article.
(a) ADDITIONAL RIGHTS. A Policy must be convertible to cash or
periodic income. A Policy may provide for disability waiver of premium or
for conversion to a larger policy.
(b) OWNERSHIP. A Policy must be owned by the Trustee.
8.2 PREMIUMS - DIVIDENDS. Premiums on each Policy must be paid on
the premium due dates. Dividends may be applied to: reduce premiums;
increase the value of the Policy subject to the limits in this Article; or
increase the allocation to the participant's account.
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ARTICLE IX
ADMINISTRATION
9.1 FIDUCIARY RESPONSIBILITIES. The responsibilities of the Employer
and the Committee are set forth in the Plan. The responsibilities of the
Trustee and Investment Manager are set forth in the Trust. This division
of responsibility is an allocation of fiduciary responsibility under
Section 405(c)(1) of ERISA.
9.2 EMPLOYER. The Employer has sole responsibility for:
(a) CONTRIBUTIONS. Determining and making Employer
Contributions;
(b) FIDUCIARY APPOINTMENT. Appointing and removing the
Trustee, the Contract Administrator, the Investment Manager and the
Committee;
(c) AMENDMENT, TERMINATION. Amending or terminating the Plan
and the Trust; and
(d) EXPENSES. Paying the expenses of administering the Plan
and the Trust which may not be paid with Plan assets or which
otherwise are not paid by the Trustee out of Plan assets.
9.3 EMPLOYER ACTION. Action by the Employer must be taken by
resolution of its Board of Directors or by a written instrument executed by
two or more officers.
9.4 INVESTMENT MANAGER APPOINTMENT. Any Investment Manager must be
an investment advisor registered under the Investment Advisors Act of 1940
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or an insurance company qualified to perform investment management services
under the laws of the State of Iowa. An Investment Manager must file its
written acceptance with the Employer acknowledging status as a named
fiduciary. Upon acceptance, the Employer must notify the Trustee of the
appointment.
9.5 COMMITTEE. The Committee has responsibility for general
administration of the Plan.
(a) APPOINTMENT. The Committee may consist of one or more persons.
In the absence of a Committee, the Employer has the responsibilities of the
Committee designated by the Plan. Any members of the Committee who are
employees must not receive compensation for their services to the
Committee.
(b) AUTHORITY. The Committee has the duty and power to:
(i) CONSTRUCTION. Exercise discretionary authority to
construe and interpret the Plan and decide all questions of eligibility for
participation and benefits;
(ii) PROCEDURES. Prescribe procedures and forms for
applications for benefits, benefit elections, loans, if provided, and
designation of beneficiaries;
(iii) DISCLOSE. Disclose to participants, as required by
law, a summary of the Plan, a summary of annual reports to the government,
benefit accruals, entitlement to the benefits and notices of application
for determination;
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(iv) REPORTING. Make governmental reports required by law
including annual and periodic reports to the United States Internal Revenue
Service and the Department of Labor;
(v) INFORMATION. Receive from and transmit to the
Employer, the Trustee, the Investment Manager and the participants such
information as shall be necessary for the proper administration of the
Plan;
(vi) FINANCIAL REPORTS. Receive and retain reports of the
financial condition of the Trust Fund from the Trustee and the Investment
Manager;
(vii) BENEFIT AUTHORIZATION. Determine entitlement to, and
the amount of, benefits and loans and authorize benefit payments and loans,
if provided;
(viii) AGENTS. Appoint or employ individuals to assist in
the administration of the Plan and other agents it deems advisable,
including legal counsel;
(ix) RULES. Promulgate rules and decisions to be uniformly
and consistently applied under similar circumstances;
(x) BONDING. Assure that all fiduciaries are bonded as
required by ERISA; and
(xi) RECOVER. Recover Plan benefits improperly paid,
through offset and reduction of subsequent benefit payments or otherwise.
(c) PROCEDURE. The Committee must elect one of its members as
chairperson and may designate a secretary. The Committee must keep a record
of all meetings and forward all necessary communications to the Trustee.
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Any delegation of duties by the Committee must state the scope of the
delegation with reasonable specificity. The Committee acts by a majority
of its members, either by vote at a meeting or by signature to a writing.
Action by the Committee must be evidenced by a written and duly executed
instrument.
9.6 FIDUCIARY STANDARDS. Each fiduciary must act solely in the
interest of participants and beneficiaries:
(a) PRUDENTLY. With the care, skill and diligence of a prudent
person;
(b) EXCLUSIVE PURPOSE. For the exclusive purpose of providing
benefits and paying expenses of administration; and
(c) PROHIBITED TRANSACTION. To avoid engaging in a prohibited
transaction under the Code or ERISA unless an exemption is obtained.
9.7 INTER-RELATIONSHIP OF FIDUCIARIES. Each fiduciary warrants that
any of its actions are in accordance with the Plan and Trust. Each
fiduciary may rely upon the action of another fiduciary and is not required
to inquire into the propriety of any action. Each fiduciary is responsible
for the proper exercise of its responsibilities.
9.8 INDEMNIFICATION. Except to the extent required by ERISA, as
amended, no member of the Committee or any sub-committee shall be liable
for any act, omission, determination, construction or communication made by
the member, the Committee or any other member. The Employer hereby agrees
to indemnify and save harmless each person now or hereafter acting as a
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member of the Committee from all loss or damage that may or might result
from acts as a member, except to the extent that any liability is imposed
as a result of the member's gross negligence or willful misconduct. The
Employer may purchase insurance to indemnify a member for that liability.
9.9 PAYMENT OF EXPENSES. The Employer may elect to pay all or a
portion of the administrative expenses of the Plan. If the Employer does
not elect to pay all of the administrative expenses of the Plan which may
be paid out of Plan assets, the Trustee shall pay those expenses or the
remaining portion of those expenses (to the extent not precluded by ERISA)
and charge the payment against the Plan assets.
9.10 LIMITATION OF LIABILITY AND LEGAL ACTION. Except as otherwise
provided in ERISA, as amended, as a condition of participation in the Plan,
each participant agrees that the Employer, the Committee, the Contract
Administrator and the Trustee shall not in any way be subject to suit,
litigation, or any legal liability in connection with the Plan and Trust or
their operation, except for its or their own negligence or willful
misconduct. Except as otherwise provided in ERISA, as amended, each
participant hereby releases the Employer, its officers and agents, the
Committee, the Contract Administrator and the Trustee from any and all such
liability or obligation.
(a) PARTIES. Except as otherwise provided in ERISA, as amended, in
any action or proceeding involving all or any portion of the Plan, the
Trust, or its administration, the Employer, the Committee and the Trustee
shall be the only necessary parties. No person in the employ of (or
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formerly employed by) the Employer or any beneficiary or other person
having or claiming to have an interest in the Trust Fund or under the Plan,
shall be entitled to any notice of process; nor shall such persons be
entitled to participate in any such action or proceedings.
(b) BINDING RESULT. Any final judgment entered in any such action or
proceeding which is not appealed or appealable shall be binding and
conclusive on the parties and all persons having or claiming to have an
interest in the Trust Fund or under the Plan.
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ARTICLE X
AMENDMENT AND TERMINATION OF PLAN
10.1 AMENDMENT. The Board of Directors of Seabee Corporation or any
two officers of Seabee Corporation may amend the Plan. An amendment must
not:
(a) DECREASE BENEFITS. Retroactively decrease a participant's
account balance or eliminate an optional form of distribution unless
required or permitted by law;
(b) DIVERSION. Divert or use the Trust other than for the exclusive
benefit of participants and their beneficiaries; or
(c) COMPANY INTEREST. Give the Employer any interest in the Trust
until all liabilities are satisfied.
(d) PROTECTED BENEFITS. Reduce or eliminate Code Section 411(d)(6)
protected benefits, to the extent accrued, unless required or permitted by
law.
10.2 VESTING SCHEDULE AMENDMENT. A participant's current vested
status may not be decreased by amendment at any time. A participant with
at least three (3) years of service (five (5) years of service if the
participant does not have one or more Hours of Service in any Plan Year
beginning after December 31, 1988) whose vested interest would be decreased
by an amendment may irrevocably elect to remain under the former vesting
rule.
(a) ELECTION PERIOD. The period for election begins no later than
the date the amendment is adopted and ends sixty (60) days after the latest
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of the date that: the amendment is adopted; the amendment is effective; or
the participant is notified of the amendment.
(b) FAILURE. A participant who does not make an election is subject
to the amended vesting schedule for allocations made after the later of the
date the amendment is adopted or effective.
10.3 TERMINATION. The Board of Directors of Seabee Corporation or any
two officers of Seabee Corporation may terminate the Plan. If a favorable
determination cannot be received from the Internal Revenue Service upon
initial qualification or an amendment to the Plan, Seabee Corporation may
terminate the Plan as of the applicable effective date. The Plan
automatically terminates upon:
(a) LIQUIDATION, BANKRUPTCY. The liquidation or discontinuance of
the business of the Employer; the adjudication of the Employer as a
bankrupt; or a general assignment by the Employer to or for the benefit of
its creditors.
(b) MERGER, CONSOLIDATION. Unless continued, the merger or
consolidation of the Employer into another entity which is the survivor,
the consolidation or other reorganization of the Employer, or the sale of
substantially all of the Employer's assets.
10.4 PARTIAL TERMINATION. If the Plan terminates with respect to less
than all participants, the proportionate interest of the affected
participants shall be determined. The Committee must declare an interim
Allocation Date on the date of partial termination.
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10.5 FULL VESTING. The Account Balance of each affected Active
Participant becomes fully vested and nonforfeitable upon termination (or
partial termination) of the Plan or upon a complete discontinuance of
contributions within Code Section 411(d)(3). For this purpose, the Account
Balance is the Account Balance which is funded as of the date of
termination (or partial termination).
10.6 MERGER OR CONSOLIDATION OF PLAN. A merger, consolidation, or
transfer of Plan assets or liabilities may occur if:
(a) AUTHORIZATION. The other plan is qualified and authorizes the
merger, consolidation or transfer;
(b) EQUAL BENEFIT. Each participant's benefit will be at least equal
to the participant's benefit if the Plan was terminated immediately before
the merger, consolidation or transfer; and
(c) PROTECTED BENEFITS. Code Section 411(d)(6) protected benefits,
to the extent accrued, are not reduced or eliminated unless required or
permitted by law.
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ARTICLE XI
MISCELLANEOUS
11.1 NONASSIGNABILITY. Except for a Qualified Order, benefits are not
subject to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, charge, garnishment, execution, or levy (Assignment), before
actual receipt. Any Assignment which violates this section is void. The
right to receive a benefit is not an asset for insolvency or bankruptcy.
11.2 EMPLOYMENT RIGHTS NOT ENLARGED. The Plan does not create any
employment rights or restrict the Employer's right to discharge an
employee.
11.3 PARTICIPANTS' RIGHTS LIMITED. The Plan does not give any
participant: any interest in the Employer's assets, business or affairs;
the right to question any Employer action or policy; or the right to
examine Employer books and records. The rights of all participants are
limited to the right to receive payment of benefits when due.
11.4 INTERPRETATION AND CONSTRUCTION. The use of the singular
includes the plural where applicable, and vice versa. The headings in the
Plan do not limit or extend the provisions of the Plan. Capitalized terms,
except where capitalized solely for grammar, have the meanings as provided
in the Plan.
(a) QUALIFICATION. Provisions must be interpreted and construed to
maintain the qualification of the Plan.
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(b) SEVERABILITY. If a provision is unenforceable in a legal
proceeding, the provision is severed only for that proceeding.
11.5 COUNTERPARTS. The Plan may be executed in any number of
counterparts, each of which is considered an original.
11.6 GOVERNING LAW. The Plan is governed by the applicable laws of
the United States of America (including the Code, ERISA, securities law,
labor law, age discrimination law, and civil rights law) and, to the extent
not preempted, by the laws of Iowa.
KAYDON ACQUISITION CORP. V AND
SEABEE CORPORATION
By _____________________________________
Lawrence J. Cawley
Their President
And ____________________________________
John F. Brocci
Their Secretary
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APPENDIX OF PARTICIPATING EMPLOYERS
Kaydon Acquisition VII, Inc. d/b/a Victor Fluid Power Company
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EXHIBIT 5.1
WARNER NORCROSS & JUDD LLP
ATTORNEYS AT LAW
900 OLD KENT BUILDING
111 LYON STREET, N.W.
GRAND RAPIDS, MICHIGAN 49503-2489
TELEPHONE (616) 752-2000
FAX (616) 752-2500
November 11, 1996
Kaydon Corporation
Arbor Shoreline Office Park
19345 U.S. 19 North
Clearwater, Florida 34624
Re: KAYDON CORPORATION
REGISTRATION STATEMENT ON FORM S-8
SEABEE CORPORATION PENSION AND RETIREMENT SAVINGS PLAN
Dear Sir or Madam:
We represent Kaydon Corporation, a Delaware corporation (the
"Company"), with respect to the above-captioned registration statement on
Form S-8 (the "Registration Statement") filed pursuant to the Securities
Act of 1933 (the "Act") to register 200,000 shares of Common Stock, $.10
par value ("Common Stock").
As counsel for the Company, we are familiar with its Certificate
of Incorporation, as amended, and Bylaws, and have reviewed the various
proceedings taken by the Company to authorize the issuance of the Common
Stock to be sold pursuant to the Registration Statement. We have also
reviewed and assisted in preparing the Registration Statement. On the
basis of the foregoing, we are of the opinion that:
1. The Company is a corporation duly incorporated and validly
existing under the laws of the State of Delaware.
2. The Company has an authorized capitalization of ninety-eight
million (98,000,000) shares of Common Stock, $.10 par value, and two
million (2,000,000) shares of Preferred Stock, $.10 par value.
3. The Common Stock will be, when duly registered under the Act and
issued and delivered as described in the Registration Statement, legally
issued, fully paid, and nonassessable.
<PAGE> 2
Kaydon Corporation
November 11, 1996
Page 2
______________________
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement on Form S-8 covering the Common Stock to be issued
pursuant to the Seabee Corporation Pension and Retirement Savings Plan.
Very truly yours,
WARNER NORCROSS & JUDD LLP
By /S/ ANTHONY J. KOLENIC, JR.
Anthony J. Kolenic, Jr.
A Partner
<PAGE> 1
EXHIBIT 5.2
UNDERTAKING TO SUBMIT PLAN TO THE INTERNAL REVENUE SERVICE
The above-signed Registrant has submitted the Seabee Corporation
Pension and Retirement Savings Plan (the "Plan") and any amendment thereto
to the Internal Revenue Service ("IRS") and will make any changes required
by the IRS in order to qualify the Plan.
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our report
dated January 18, 1996 included in Kaydon Corporation's Form 10-K for the
year ended December 31, 1995, and to all references to our Firm included in
this registration statement.
/S/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Grand Rapids, Michigan
November 8, 1996
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our report
dated September 20, 1996, included in Form 11-K for the Seabee Corporation
Pension and Retirement Savings Plan.
/S/ CARNEY, ALEXANDER, MAROLD & CO.
CARNEY, ALEXANDER, MAROLD & CO.
Waterloo, Iowa
November 8, 1996
<PAGE> 1
EXHIBIT 24
POWER OF ATTORNEY
The undersigned in his capacity as a director and/or officer, as
the case may be, of Kaydon Corporation, does hereby appoint Lawrence J.
Cawley and Stephen K. Clough his true and lawful attorneys to execute in
his name, place, and stead, in his capacity as a director and/or officer,
as the case may be, of Kaydon Corporation, a Form S-8 Registration
Statement of Kaydon Corporation with respect to the issuance of up to
200,000 shares of its Common Stock, $.10 par value, to be offered in
connection with the Seabee Corporation Pension and Retirement Savings Plan,
any and all amendments to said Registration Statement and post-effective
amendments thereto, and to file the same with the Securities and Exchange
Commission. Each attorney shall have full power and authority to do and to
perform in the name and on behalf of the undersigned, in any and all
capacities, every act whatsoever requisite or necessary to be done in the
premises as fully and to all intents and purposes as the undersigned might
or could do in person, hereby ratifying and approving the acts of said
attorneys.
KAYDON CORPORATION
November 7, 1996 By /S/ GERALD J. BREEN
Gerald J. Breen
Director
<PAGE> 2
POWER OF ATTORNEY
The undersigned in his capacity as a director and/or officer, as
the case may be, of Kaydon Corporation, does hereby appoint Lawrence J.
Cawley and Stephen K. Clough his true and lawful attorneys to execute in
his name, place, and stead, in his capacity as a director and/or officer,
as the case may be, of Kaydon Corporation, a Form S-8 Registration
Statement of Kaydon Corporation with respect to the issuance of up to
200,000 shares of its Common Stock, $.10 par value, to be offered in
connection with the Seabee Corporation Pension and Retirement Savings Plan,
any and all amendments to said Registration Statement and post-effective
amendments thereto, and to file the same with the Securities and Exchange
Commission. Each attorney shall have full power and authority to do and to
perform in the name and on behalf of the undersigned, in any and all
capacities, every act whatsoever requisite or necessary to be done in the
premises as fully and to all intents and purposes as the undersigned might
or could do in person, hereby ratifying and approving the acts of said
attorneys.
KAYDON CORPORATION
November 7, 1996 By /S/ BRIAN P. CAMPBELL
Brian P. Campbell
Director
<PAGE> 3
POWER OF ATTORNEY
The undersigned in his capacity as a director and/or officer, as
the case may be, of Kaydon Corporation, and in his capacity as Chairman and
a member of the Seabee Corporation Pension and Retirement Savings Plan
Administrative Committee, does hereby appoint Stephen K. Clough his true
and lawful attorney to execute in his name, place, and stead, in his
capacity as a director and/or officer, as the case may be, of Kaydon
Corporation, and in his capacity as Chairman and a member of the Seabee
Corporation Pension and Retirement Savings Plan Administrative Committee, a
Form S-8 Registration Statement of Kaydon Corporation with respect to the
issuance of up to 200,000 shares of its Common Stock, $.10 par value, to be
offered in connection with the Seabee Corporation Pension and Retirement
Savings Plan, any and all amendments to said Registration Statement and
post-effective amendments thereto, and to file the same with the Securities
and Exchange Commission. The attorney shall have full power and authority
to do and to perform in the name and on behalf of the undersigned, in any
and all capacities, every act whatsoever requisite or necessary to be done
in the premises as fully and to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and approving the acts of
said attorney.
KAYDON CORPORATION
November 7, 1996 By /S/ LAWRENCE J. CAWLEY
Lawrence J. Cawley
Chairman of the Board, Chief
Financial Officer, Director and
Chairman and a Member of the
Seabee Corporation Pension and
Retirement Savings Plan
Administrative Committee
<PAGE> 4
POWER OF ATTORNEY
The undersigned in his capacity as a director and/or officer, as
the case may be, of Kaydon Corporation, and in his capacity as a member of
the Seabee Corporation Pension and Retirement Savings Plan Administrative
Committee, does hereby appoint Lawrence J. Cawley his true and lawful
attorney to execute in his name, place, and stead, in his capacity as a
director and/or officer, as the case may be, of Kaydon Corporation, and in
his capacity as a member of the Seabee Corporation Pension and Retirement
Savings Plan Administrative Committee, a Form S-8 Registration Statement of
Kaydon Corporation with respect to the issuance of up to 200,000 shares of
its Common Stock, $.10 par value, to be offered in connection with the
Seabee Corporation Pension and Retirement Savings Plan, any and all
amendments to said Registration Statement and post-effective amendments
thereto, and to file the same with the Securities and Exchange Commission.
The attorney shall have full power and authority to do and to perform in
the name and on behalf of the undersigned, in any and all capacities, every
act whatsoever requisite or necessary to be done in the premises as fully
and to all intents and purposes as the undersigned might or could do in
person, hereby ratifying and approving the acts of said attorney.
KAYDON CORPORATION
November 5, 1996 By /S/ STEPHEN K. CLOUGH
Stephen K. Clough
President, Chief Executive
Officer, Director and Member of
the Seabee Corporation Pension
and Retirement Savings Plan
Administrative Committee
<PAGE> 5
POWER OF ATTORNEY
The undersigned in his capacity as a director and/or officer, as
the case may be, of Kaydon Corporation, does hereby appoint Lawrence J.
Cawley and Stephen K. Clough his true and lawful attorneys to execute in
his name, place, and stead, in his capacity as a director and/or officer,
as the case may be, of Kaydon Corporation, a Form S-8 Registration
Statement of Kaydon Corporation with respect to the issuance of up to
200,000 shares of its Common Stock, $.10 par value, to be offered in
connection with the Seabee Corporation Pension and Retirement Savings Plan,
any and all amendments to said Registration Statement and post-effective
amendments thereto, and to file the same with the Securities and Exchange
Commission. Each attorney shall have full power and authority to do and to
perform in the name and on behalf of the undersigned, in any and all
capacities, every act whatsoever requisite or necessary to be done in the
premises as fully and to all intents and purposes as the undersigned might
or could do in person, hereby ratifying and approving the acts of said
attorneys.
KAYDON CORPORATION
November 7, 1996 By /S/ JOHN H.F. HASKELL, JR.
John H.F. Haskell, Jr.
Director
