As filed with the Securities and Exchange Commission on July 31, 1998
Registration Statement No. 333-__________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
________________________
SPARTECH CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 43-0761773
(State of incorporation)I.R.S. Employer Identification No.
7733 Forsyth Boulevard, Suite 1450, Clayton, Missouri 63105
(Address of Principal Executive Offices)
(Zip Code)
SPARTECH CORPORATION INCENTIVE STOCK OPTION PLAN
SPARTECH CORPORATION 401(K) SAVINGS & INVESTMENT PLAN
(Full title of the plans)
Randy C. Martin
Vice President-Finance and Chief Financial Officer
Spartech Corporation
7733 Forsyth Boulevard, Suite 1450
Clayton, Missouri 63105
(Name and address of agent for service)
(314) 721-4242
(Telephone number, including area code, of agent for service)
With Copies to:
Jeffrey D. Fisher, Esq.
Armstrong, Teasdale, Schlafly & Davis
One Metropolitan Square, Suite 2600
St. Louis, Missouri 63102
(314) 621-5070
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
<S> <C> <C> <C> <C>
Title of each class of Amount to Proposed Proposed Amount
securities to be be maximum maximum of
registered registered offering aggregate registra
price per offering tion
unit<F1> price<F1> fee<F2>
Common stock, par value 1,000,000 $19.66 $19,660,000. $5,799.7
$0.75 per share, issuable shares 00 0
pursuant to Spartech
Corporation Incentive
Stock Option Plan
Common stock, par value 1,000,000 $19.66 $19,660,000. $5,799.7
$0.75 per share, issuable shares 00 0
pursuant to Spartech
Corporation 401(K)
Savings & Investment Plan
<FN>
<F1> Average of the high and low trading prices on the New York Stock Exchange
on July 28, 1998.
<F2> The registration fee is calculated pursuant to Rules 457(c) and 457(h).
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.
</FN>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents previously filed by Spartech Corporation (the
"Registrant") with the Securities and Exchange Commission are hereby
incorporated by reference into this Registration Statement:
(a) The Registrant's 1997 annual report filed pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934;
(b) All other reports filed pursuant to Sections 13(a) or 15(d) of
the Securities Exchange Act of 1934 since the end of the fiscal
year covered by the registrant document referred to in (a) above;
and
(c) The description of the Registrant's Common Stock set forth in the
Registrant's Registration Statement on Form 8-A dated November 28,
1994, filed with the Commission under the Securities Exchange Act of
1934 on December 1, 1994.
All documents filed by the Registrant subsequent to the date of this
Registration Statement pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Securities Exchange Act of 1934, prior to the filing of a post-effective
amendment which indicates that all securities offered hereunder have been sold
or which deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be a part hereof
from the date of filing of such documents.
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 and Section Eighth of
the Registrant's Restated Certificate of Incorporation provide for
indemnification of the Registrant's directors and officers in a variety of
circumstances, which may include liabilities under the Securities Act of 1933.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits. The following Exhibits are filed as a part of this
Registration Statement:
Exhibit Description
3.1 Restated Certificate of Incorporation of Spartech Corporation
3.2 By-Laws of Spartech Corporation, as amended
4.1 Spartech Corporation Incentive Stock Option Plan, as amended
4.2 Spartech Corporation Amended and Restated 401(K) Savings &
Investment Plan
4.3 Summary Plan Description for Spartech Corporation 401(K) Savings
& Investment Plan
5.1 Opinion of Armstrong, Teasdale, Schlafly & Davis regarding
legality of shares being registered
23.1 Consent of Armstrong, Teasdale, Schlafly & Davis (incorporated in
Exhibit 5.1)
23.2 Consent of Arthur Andersen LLP
23.3 Consent of Ernst & Young LLP
24.1 Powers of Attorney (see Signature Page)
In lieu of providing an opinion of counsel concerning compliance with the
requirements of ERISA or an Internal Revenue Service ("IRS") determination
letter that the Spartech Corporation 401(K) Savings & Investment Plan ("Plan")
is qualified under Section 401 of the Internal Revenue Code, the Registrant
hereby undertakes that it will submit or has submitted the Plan and any
amendment thereto to the IRS in a timely manner and has made or will make all
changes required by the IRS in order to qualify the Plan.
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;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in
this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) 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 in 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 Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director, officer or
controlling persons of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
C1 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 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 Clayton, State of Missouri, on July 31, 1998.
SPARTECH CORPORATION
By: s/Bradley B. Buechler
Bradley B. Buechler
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Each person whose signature appears below constitutes and appoints Bradley
B. Buechler and David B. Mueller, or either of them singly, his or her true and
lawful attorneys-in-fact and agents, with full powers of substitution and re-
substitution, for him or her and in his or her name, place or stead, in any and
all capacities, to sign any and all amendments (including post-effective
amendments) to this registration statement, and to file the same with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby granting unto said attorneys-in-fact
and agents, and either of them singly, full power and authority to do and
perform each and every act and things requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said attorneys-in-
fact and agents, or either of them singly, or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Date Signed Signature Title
July 29, 1998 s/W.R. Clerihue Chairman of the Board
W.R. Clerihue
July 29, 1998 s/Bradley B. Buechler President, Chief Executive
Bradley B. Buechler Officer and Director
(Principal Executive Officer)
July 29, 1998 s/David B. Mueller Executive Vice President,
David B. Mueller Chief Operating Officer,
Secretary and Director
July 29, 1998 s/Randy C. Martin Vice President - Finance and
Randy C. Martin Chief Financial Officer
(Principal Financial and
Accounting Officer)
July 29, 1998 s/Ralph B. Andy Director
Ralph B. Andy
July 29, 1998 s/Thomas L. Cassidy Director
Thomas L. Cassidy
July 29, 1998 s/John R. Kennedy Director
John R. Kennedy
July 29, 1998 s/Calvin J. O'Connor Director
Calvin J. O'Connor
July 29, 1998 s/Jackson W. Robinson Director
Jackson W. Robinson
July 29, 1998 s/Alan R. Teague Director
Alan R. Teague
INDEX TO EXHIBITS
Exhibit Description
3.1 Restated Certificate of Incorporation of Spartech Corporation
3.2 By-Laws of Spartech Corporation, as amended
4.1 Spartech Corporation Incentive Stock Option Plan, as amended
4.2 Spartech Corporation Amended and Restated 401(K) Savings &
Investment Plan
4.3 Summary Plan Description for Spartech Corporation 401(K) Savings
& Investment Plan
5.1 Opinion of Armstrong, Teasdale, Schlafly & Davis regarding
legality of shares being registered
23.1 Consent of Armstrong, Teasdale, Schlafly & Davis (incorporated in
Exhibit 5.1)
23.2 Consent of Arthur Andersen LLP
23.3 Consent of Ernst & Young LLP
24.1 Powers of Attorney (see Signature Page)
</TABLE>
RESTATED CERTIFICATE OF INCORPORATION
OF
SPARTECH CORPORATION
This Restated Certificate of Incorporation of Spartech Corporation was duly
adopted by the Board of Directors of the Corporation in accordance with the
provisions of Section 245 of the General Corporation Law of the State of
Delaware. The Corporation was originally incorporated as Permaneer Corporation,
and its original Certificate of Incorporation was filed with the Secretary of
State of Delaware on April 23, 1968. This Restated Certificate of Incorporation
restates and integrates and does not further amend the provisions of the
Corporation's Certificate of Incorporation as theretofore amended or
supplemented, and there is no discrepancy between those provisions and the
provisions of this Restated Certificate of Incorporation.
FIRST: The name of the corporation (which is hereinafter referred to as
the "Corporation") is SPARTECH CORPORATION, the original Certificate of
Incorporation having been filed with the Secretary of State of the State of
Delaware on April 23, 1968.
SECOND: The registered office of the Corporation in the State of Delaware
is located at 1209 Orange Street in the City of Wilmington, County of New
Castle. The name and address of its registered agent at such address is The
Corporation Trust Company.
THIRD: The nature of the business and the objects and purposes to be
transacted, promoted or conducted by the Corporation are:
(1) To fabricate all forms of paneling and building materials from wood
and composition products and manufacture all types of finished products
therefrom, using wood, metal, plastics, glass and other materials therewith, and
engage in, conduct and carry on general wood, composition products and metal
products manufacturing businesses.
(2) To construct, acquire, own, use, dispose of, and operate shops and
plants, mills and works of all kinds, for the purpose of working, fabricating
and otherwise dealing with wood, composition products, metal, plastics, glass
and all other materials now or hereafter known of all kinds, and manufacturing,
making, fabricating, and producing products and by-products of every kind and
nature, and in any and all forms and for any use whatsoever.
(3) To manufacture, buy or otherwise acquire and to sell or otherwise
dispose of, distribute, deal in and with, either as principal, agent, dealer or
broker, goods, wares and merchandise of every kind and description, including
all materials or substances now known or hereafter to be discovered or invented;
to purchase or otherwise acquire and to sell or otherwise dispose of,
distribute, deal in and with, either as principal, agent, dealer or broker, all
kinds of personal property of every sort and description wheresoever situate and
all interest therein which this Corporation may deem necessary or convenient in
connection with any part of its business.
(4) To apply for, obtain, register, purchase, lease or otherwise acquire,
and to hold, use, own and operate under, and to sell, assign and otherwise deal
in and dispose of, any trademarks, trade names, patents and applications for
patents, copyrights, licenses, improvements, processes and secret formulae used
in connection with, or secured under, letters patent of the United States or of
other jurisdictions or countries, and whether or not in any way relating to any
of the business aforesaid, to use, exercise, develop, grant licenses in respect
of or otherwise turn to account any such trademarks, patents, copyrights,
licenses, processes and the like.
(5) To locate, acquire, buy, purchase, lease, own, hold, exploit, sell,
mortgage and encumber improved and unimproved real estate and interests therein,
including lumber, mining, drilling and mineral rights and claims of any kind,
wherever situate, and to construct and erect thereon and to operate and carry on
the business of factories, smelters, works, mines, plants, mills, wells, stores,
hotels, houses and buildings.
(6) To purchase or otherwise acquire and to hold, sell, pledge or
otherwise dispose of all forms of securities, including stocks, bonds,
debentures, notes, certificates of indebtedness, certificates of interest,
mortgages and other similar instruments and rights however issued or created,
and to deal in and with the same and to issue in exchange therefor or in payment
therefor its own stock, bonds or other obligations or securities, and to
exercise in respect thereof any and all rights, powers and privileges of
individual ownership or interest therein, including the right to vote thereon
and to consent or otherwise act with respect thereto; to do any and all acts and
things for the preservation, protection, improvement and enhancement in value
thereof, or designed to accomplish any such purpose, and to aid by loan,
subsidy, guaranty or in any other manner those issuing, creating or responsible
for any of such securities; to acquire or become interested in any such
securities as aforesaid by original subscription, underwriting, participation in
syndicates or otherwise, and to make payments thereon as called for and to
underwrite or subscribe for the same conditionally or otherwise and either with
a view to invest or for resale or for any other lawful purpose.
(7) To borrow money and for monies borrowed or in payment for property
acquired, or for any other objects and purposes of the Corporation or otherwise
in connection with the transaction of any part of its business, to issue bonds,
debentures, notes and other obligations secured or unsecured and to mortgage,
pledge or hypothecate any and all of its properties or assets as security
therefor; to make, accept, endorse, guarantee, execute and issue notes, bills of
exchange and other obligations; to mortgage, pledge or hypothecate any stocks,
bonds, other evidence of indebtedness or securities and any other property held
by it or in which it may be interested, and to loan money with or without
collateral or other security; to guarantee the payment of dividends upon stocks
or the principal of and/or interest upon bonds, notes or other evidences of
indebtedness or obligations or the performance of the contracts or other
undertakings of any corporation, partnership, syndicate or individual; to be a
general or limited partner or enter into, make and perform, contracts of every
kind and for any lawful purpose with any person, firm, corporation or syndicate.
(8) To purchase or otherwise acquire all or any part of the business,
goodwill, rights, property and assets and to assume or otherwise provide for all
or any part of the liabilities of any corporation, association, partnership or
individual, to take over as a going concern and continue any business so
acquired; and to pay for any such business or properties in cash, stock, bonds,
debentures or obligations of this Corporation or otherwise.
(9) To purchase or otherwise acquire, sell or otherwise dispose of,
realize upon or otherwise turn to account, manage, liquidate or reorganize the
properties, asserts, business, undertakings, enterprises or ventures or any part
thereof of corporations, associations, firms, individuals, syndicates and
others; to act as financial, commercial or general agent or representative of
any corporation, association, firm, syndicate or individual, and as such to
develop, improve and extend the property, trade and business interest thereof
and to aid in any lawful enterprise in connection therewith, and in connection
with acting as agent or broker for any principal to give any other aid or
assistance.
(10) To conduct any and all of its business in the State of Delaware and
any other states, the District of Columbia, the territories, colonies and
dependencies of the United States, and in foreign countries and places, and to
have one or more offices outside of the State of Delaware, and to purchase or
otherwise acquire, hold, mortgage, convey, transfer or otherwise dispose of,
both within and without the State of Delaware, real and personal property.
(11) To do all and everything necessary, suitable, convenient or proper for
the accomplishment of any of the purposes or the attainment of any or all of the
objects hereinbefore enumerated or incidental to the powers herein named, or
which shall at any time appear conducive to or expedient for the protection or
benefit of the Corporation, either as holder of or as interested in any property
or otherwise; and to have all of the rights, powers and privileges now or
hereafter conferred by the General Corporation Law of the State of Delaware or
any other law of Delaware.
The foregoing clauses shall be construed both as objects and powers, and it
is hereby expressly provided that the enumeration herein of specific objects and
powers shall not be held to limit or restrict in any manner the general powers
of this Corporation, and all the powers and purposes hereinbefore enumerated
shall be exercised, carried on and enjoyed by this Corporation within and
without the State of Delaware to such extent and in such manner as corporations
organized under the General Corporation Law of the State of Delaware may
properly and legally exercise, carry on and enjoy.
FOURTH: The total number of shares of stock which the Corporation shall
have the authority to issue is Forty-Nine Million (49,000,000), of which stock
Four Million (4,000,000) shares shall be Preferred Stock, $1.00 per share par
value, (hereinafter called "Preferred Stock"), and Forty-Five Million
(45,000,000) shares shall be Common Stock, $.75 per share par value (hereinafter
called "Common Stock").
The designations, preferences, privileges and voting powers of the shares
of Preferred Stock and Common Stock and the qualifications, limitations, and
restrictions thereof, are as follows:
1. Issuance of Preferred Stock in Series. The Board of Directors of the
Corporation is authorized to issue the Preferred Stock of the Corporation from
time to time, in one or more Series, all of which shall rank equally and be
identical except with respect to the voting rights, if any, and the distinctive
serial designation of each Series; the rate or rates of preferential, non-
participating dividends payable in cash annually, semi-annually, or quarterly;
the times of payment of dividends and whether dividends shall be cumulative and
if cumulative the dates from which dividends shall be cumulative; the price or
prices and the time at which the same may be redeemed, which shall be not less
than the par value thereof, plus dividend arrearages, if any; the notice of
redemption required; the amount and terms of any sinking or purchase fund, if
any, for the purpose or redemption thereof, provided such sinking or purchase
fund is payable only out of funds legally available therefor; the terms,
conditions, rights, privileges, and other provisions, if any, respecting the
conversion of any or all Series of Preferred Stock into Common Stock or shares
of another Series of Preferred Stock; and the preferential amount or amounts
which shall be paid to the holders thereof in the event of liquidation,
dissolution, or winding up of the Corporation, whether voluntary or involuntary,
which shall be not less than the par value plus dividend arrearages, if any.
2. Dividends. Subject to the limitations prescribed in this Article
Fourth and any further limitations in accordance herewith, the holders of Common
Stock shall be entitled to receive, when and as declared by the Board of
Directors of the Corporation, out of the assets of the Corporation which are by
law available therefor, dividends payable either in cash, in property, or in
Common Stock. No dividends other than dividends payable in Common Stock shall
be paid on Common Stock, if cash dividends in full on all outstanding Preferred
Stock to which the holders thereof are entitled shall not have been paid or
declared and set apart for payment. Nothing herein contained shall be deemed to
limit, curtail or divest the authority of the Board of Directors to pay
dividends in Common Stock in relation to the Corporation's authorized and
unissued or treasury Common Stock.
3. Voting Rights. At every meeting of shareholders, each holder of
shares of the Corporation, be it Common Stock or Preferred Stock, shall be
entitled to one vote for each share held. The Common Stock and Preferred Stock
shall vote together as one class, except that if and whenever and as often as
dividends on all series of Preferred Stock shall be in arrears in an aggregate
amount equivalent to six (6) quarterly dividends on all shares of all Series of
Preferred Stock at the time outstanding, then and in such event, the holders of
all Series of Preferred Stock then outstanding, voting as a separate class made
up of all such Series, shall be entitled at each meeting of Shareholders
thereafter held for the election of Directors to elect two (2) of the total
number of Directors to be elected at such meeting. Such class voting right
shall continue until such time as all accumulated dividends on all Series of
Preferred Stock at the time outstanding have been paid or declared and set aside
for payment, whereupon such right shall cease until such time, if any, as such
right shall again accrue as hereinabove provided. While the holders of
Preferred Stock, voting as a class, are entitled to elect two (2) Directors,
they shall not be entitled to participate with the holders of the Common Stock
in the election of any other Directors. In the event of any vacancy occurring
in the case of a Director elected by the Preferred Stock voting as a class
(unless at the time when such vacancy shall occur, all accumulated dividends on
Preferred Stock shall have been paid or declared and set aside for payment), a
Special Meeting of the holders of all Series of Preferred Stock shall be called
promptly to fill any such vacancy. Such meeting shall be held within forty days
after such call at a place and upon notice as provided for the holding of
meetings of shareholders, except that no such Special Meeting shall be required
to be called if any such vacancy shall occur less than ninety days before the
date fixed for the Annual Meeting of Shareholders. At any such meeting of
Preferred Stock, a majority of the outstanding Preferred Stock shall be required
to constitute a quorum for the election of the two (2) Directors or to fill any
vacancy. The Directors elected by the class vote of the Preferred Stock shall
serve until the next Annual Meeting of the Shareholders or until their
successors shall be elected, and shall qualify, and shall not be removable from
office other than by class vote of the Preferred Stock, notwithstanding any by-
law otherwise providing for removal of directors; provided, however, that
whenever during the term of office of such Directors, all accumulated dividends
shall have been paid or declared and set aside for payment, the term of office
of such Directors shall forthwith terminate.
Notwithstanding the foregoing, the Board of Directors, in originally fixing
the designations, relative rights, preferences and limitations of any series of
Preferred Stock, may fix by resolution, with respect to the shares of such
series, the powers and rights with respect to voting to the full extent now or
hereafter permitted by law, including providing any series of Preferred Stock
with (i) the right to vote as a separate class on any matters and (ii) more than
one (1) vote per share, in each case as the Board of Directors may determine.
4. Preemptive Rights. No holder of any of the Common Stock or Preferred
Stock of the Corporation shall be entitled as of right to purchase or to
subscribe for any unissued shares of any class, or any additional shares of any
class to be issued by reason of any increase of the authorized capital stock of
the Corporation of any class, or bonds, certificates of indebtedness,
debentures, or other securities convertible into shares of the Corporation or
carrying any right to purchase shares of any class, but any such unissued
shares, or such additional authorized issue of any shares, or of other
securities convertible into shares or carrying any right to purchase shares, may
be issued and disposed of, pursuant to resolutions of the Board of Directors to
such persons, firms, corporations or associations and upon such terms as may be
deemed advisable by the Board of Directors in the exercise of its discretion.
5. Limitations. So long as Preferred Stock of any series shall be
outstanding, the Corporation shall not, without affirmative vote or written
consent of the holders of record of at least a majority of the shares of all
such Series at the time outstanding, whether by an amendment to the Certificate
of Incorporation or by merger or consolidation or in any other manner:
(a) increase the total number of authorized shares of Preferred
Stock, or authorize any class of stock ranking prior to or on a parity with the
Preferred Stock either in the payment of dividends or in the distribution of
assets, or
(b) alter or change the preferences or limitations with respect to
the Preferred Stock in any material respect so as to affect adversely the
holders thereof; provided, however, that any such alteration or change affecting
a particular Series of Preferred Stock which does not adversely affect the
holders of any other Series may be effected by the affirmative vote or written
consent of the holders of record of a majority of the number of shares at the
time outstanding of the particular Series affected by such alteration or change
without the necessity of the class vote or written consent of the holders of
shares of all Series;
provided, however, that nothing herein contained shall require such a class vote
or consent in connection with (i) any increase int he total number of authorized
shares of Common Stock or (ii) the fixing of any of the specific rights,
preferences and limitations of other Series of the Preferred Stock that may be
fixed by the Board of Directors, and provided further, that no class vote or
written consent of the holders of the Preferred stock or any Series thereof
shall be required, if, at or prior to the time the issuance of any such prior
stock is to be made or any such change is to take effect, provision is made for
the redemption of all Preferred Stock at the time outstanding or, if only one or
more Series is entitled to such class vote, provision is made for the redemption
of all shares of such Series at the time outstanding.
6. Liquidation Rights. In the event of any dissolution, liquidation or
winding up of the affairs of the Corporation, after payment or provision for
payment of the debts and other liabilities of the Corporation, the holders of
each Series of Preferred Stock shall be entitled to share ratably with other
holders in the same Series and to receive, out of the net assets of the
Corporation, the preferential amount fixed for their respective series by the
resolutions of the Board of Directors providing for the issuance thereof, plus
an amount equal to all dividend arrearages on each such share up to the date
fixed for distribution and no more, before any distribution shall be made to the
holders of the Common Stock.
Neither the merger or consolidation of the Corporation, nor the sale, lease
or conveyance of all or a part of its assets, shall be deemed to be a
liquidation, dissolution or winding up of the affairs of the Corporation within
the meaning of this Section 6.
FIFTH: The existence of the Corporation is to be perpetual.
SIXTH: The private property of the stockholders of the Corporation shall
not be subject to the payment of corporate debts to any extent whatsoever.
SEVENTH: For the management of the business and for the conduct of the
affairs of the Corporation and in further definition, limitation and regulation
of the powers of the Corporation, and the directors and the stockholders of the
Corporation, it is further provided as follows:
1. The number of directors of the Corporation shall be fixed by, or in
the manner provided in, the by-laws of the Corporation, but in no case shall the
number of directors be less than three. Directors need not be stockholders.
Vacancies in the Board of Directors resulting from any increase in the
authorized number of directors or from the death, resignation, disqualification
of any director or from any other cause may be filled by a majority of directors
then in office, though less than a quorum.
2. A director shall be fully protected in relying in good faith upon the
books of account of the Corporation or statements prepared by any of its
officials as to the value and amount of the assets, liabilities and/or net
profits of the Corporation, or any other facts pertinent to the existence and
amount of surplus or other funds from which dividends might properly be declared
and paid.
3. The Corporation shall be entitled to treat the person in whose name
any share, right, option, warrant, security or other obligation is registered as
the owner thereof, for all purposes, and shall not be bound to recognize any
equitable or other claim to or interest in such share, right, option, warrant,
security or other obligation on the part of any other person, whether or not the
Corporation shall have notice thereof, save as may be expressly provided by the
laws of the State of Delaware.
4. (a) No contract or other transaction between the Corporation and any
other corporation and no other act of the Corporation with relation to any other
corporation shall, in the absence of fraud, in any way be invalidated or
otherwise affected by the fact that any one or more of the directors or officers
of the Corporation are directors or officers or stockholders of, such other
corporation or are pecuniarily or otherwise interested in such other corporation
or in such contract or other transaction or in such act of the Corporation. Any
director of the Corporation individually, or any firm or association of which
any director may be a member, or any corporation of which he may be a director,
officer or stockholder, may be a party to, or may be pecuniarily or otherwise
interested in any contract or transaction of the Corporation, provided that the
fact that he individually or such firm or association or such corporation is
such a party or is so interested shall be disclosed or shall have been known to
the Board of Directors or a majority of such members thereof as shall be present
at any meeting of the Board of Directors at which action upon any such contract
or transaction shall be taken. Any director of the Corporation who is so
interested individually, or is a member of any firm or association or is a
director, officer or stockholder of any corporation which is a party to such
contract or other transaction, or is so pecuniarily or otherwise interested, may
be counted in determining the existence of a quorum at any meeting of the Board
of Directors which shall authorize any such contract or transaction, and may
vote thereat to authorize or ratify any such contract or transaction. Any
director of the Corporation may vote upon any contract or other transaction
between the Corporation and any subsidiary or affiliated corporation without
regard to the fact that he is also a director, officer or stockholder of such
subsidiary or affiliated corporation.
(b) No person shall be liable to the Corporation for any loss or damage
suffered by it on account of any action taken or omitted to be taken by him as a
director of officer of the Corporation if such person (i) exercised or used the
same degree of care and skill as a prudent man would have exercised or used
under the circumstances in the conduct of his own affairs, or (ii) took or
omitted to take, such action in reliance in good faith upon advice of counsel
for the Corporation or upon the books of account or reports made to the
Corporation by any of its officials, or by an independent certified public
accountant or accountants or by an appraiser selected with reasonable care by
the Board of Directors, or by any committee designated by the Board of Directors
or in reliance in good faith upon any other records of the Corporation.
(c) Except as may otherwise be provided by law, any contract, transaction
or act of the Corporation or of the Board of Directors which shall be ratified
by a majority of a quorum of the stockholders entitled to vote at any annual
meeting or at any special meeting called for that purpose shall be as valid and
binding as though ratified by every stockholder of the Corporation; provided,
however, that any failure of the stockholder to approve or ratify such contract,
transaction or act when and if submitted, shall not be deemed in any way to
invalidate the same or to deprive the Corporation, its directors or officers of
their rights to proceed with such contract, transaction or act.
5. In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized:
(a) To make, amend, alter, change, add to or repeal the by-laws of
the Corporation in any manner not inconsistent with the laws of the State of
Delaware, subject to the power of the stockholders to amend, alter, change, add
to or repeal the by-laws made by the Board of Directors.
(b) To fix, determine, and vary from time to time the amount to be
maintained as surplus and the amount or amounts to be set apart as working
capital.
(c) To set apart out of any of the funds of the Corporation legally
available for dividends a reserve or reserves for any proper purposes and/or to
abolish any such reserve or reserves in the manner in which created.
(d) To authorize and cause to be executed mortgages and liens, with
or without limit as to amount, upon the real or personal property of the
Corporation.
(e) From time to time to determine whether and to what extent, at
what time and place, and under what conditions and regulations the accounts and
books of the Corporation, or any of them, shall be open to the inspection of any
stockholder and no stockholder shall have any right to inspect any account or
book or document of the Corporation except as conferred by statute or the by-
laws of the Corporation or as authorized by resolution of the stockholders or
Board of Directors.
(f) To authorize the payment of compensation to the directors for
services to the Corporation or any subsidiary or affiliated corporation
including fees and expenses for attendance at meetings of the Board of
Directors, the Executive Committee and other committees and/or salaries for
serving as such directors or committee members, and to determine the amount of
such compensation.
(g) From time to time to formulate, establish, promote and carry out,
and to amend, alter, change, revise, recall, repeal or abolish, a plan or plans
for the participation by all or any of the employees, including directors and
officers, of the Corporation, or of any corporation, company, association, trust
or organization in which or in the welfare of which the Corporation has any
interest, and those actively engaged in the conduct of the Corporation's
business, in the profits, gains or business of the Corporation or of any branch
or division thereof, as part of the Corporation's legitimate expenses and for
the furnishing to such employees, directors, officers or persons, or any of
them, at the Corporation's expense, of medical services, insurance against
accident, sickness or death, pensions during old age, disability or
unemployment, education, housing, social services, recreation or other similar
aids for their relief or general welfare, in such manner and upon such terms and
conditions as the Board of Directors shall determine.
(h) From time to time to formulate, establish and carry out, and to
amend, alter, change, revise, recall, repeal or abolish, a plan or plans
providing for the purchase of shares of stock of the Corporation by, or for the
granting of options or other rights to purchase shares of stock of the
Corporation to, all or any of the officers and other employees of the
Corporation, upon such terms and conditions and for such consideration as the
Board of Directors may determine in good faith to be fair and reasonable.
(i) By resolution passed by a majority of the whole board, to
designate one or more committees, each committee to consist of two or more
directors of the Corporation, which, to the extent provided in the resolution or
in the by-laws of the Corporation, shall have and may exercise the powers of the
Board of Directors in the management of the business and affairs of the
Corporation, and may authorize the seal of the Corporation to be affixed to all
papers which may require it. Such committee or committees shall have such name
or names as may be stated in the by-laws of the Corporation or as may be
determined from time to time by resolution adopted by the Board of Directors.
(j) When and as authorized by the affirmative vote of the holders of
a majority of the stock issued and outstanding having voting power given at a
stockholders' meeting duly called for that purpose, or when authorized by the
written consent of the holders of a majority of the voting stock issued and
outstanding, to sell, lease or exchange all of the property and assets of the
Corporation, including its good will and its corporate franchises, upon such
terms and conditions and for such consideration, which may be in whole or in
part shares of stock in, and/or other securities of, any other corporation or
corporations, as its Board of Directors shall deem expedient and for the best
interests of the Corporation.
(k) Without the assent or vote of the stockholders, to authorize and
issue obligations of the Corporation, secured or unsecured, to include therein
such provisions as to redeemability, convertibility or otherwise, as the Board
of Directors, in its sole discretion, may determine, and to authorize the
mortgaging or pledging, as security therefor, of any property of the
Corporation, real or personal, including after-acquired property.
6. At any time and from time to time when authorized by resolution of the
Board of Directors and without any action by its stockholders, the Corporation
may issue or sell any shares of its capital stock of any class or series,
whether out of the unissued shares thereof authorized by the Certificate of
Incorporation of the Corporation as originally filed or by any amendment thereof
or out of shares of its capital stock acquired by it after the issue thereof,
and whether or not the shares thereof so issued or sold shall confer upon the
holders thereof the right to exchange or convert such shares for or into other
shares of capital stock of the Corporation of any class or classes or any series
thereof. When similarly authorized, but without any action by its stockholders,
the Corporation may issue or grant rights, warrants or options, in bearer or
registered or such other form as the Board of Directors may determine, for the
purchase of shares of the capital stock of any class or series of the
Corporation within such period of time, or without limit as to time, to such
aggregate number of shares, and at such price per share, as the Board of
Directors may determine. Such rights, warrants or options may be issued or
granted separately or in connection with the issue of any bonds, debentures,
notes, obligations or other evidence of indebtedness or shares of the capital
stock of any class or series of the Corporation and for such consideration and
on such terms and conditions as the Board of Directors in its sole discretion
may determine. In each case the consideration to be received by the Corporation
for any such shares so issued or sold shall be such as shall be fixed from time
to time by resolution of the Board of Directors. Each share of the capital
stock of the Corporation issued or sold pursuant to the foregoing provisions of
this Paragraph 6 and the full consideration for which in each case as so fixed
by the Board of Directors shall have been paid or delivered to the Corporation,
shall be conclusively deemed to be full paid stock and shall not be liable to
any further call or assessments thereon, and the holders thereof shall not be
liable for any further payments in respect thereof. The Corporation may receive
in payment, in whole or in part, for any shares of its capital stock issued or
sold by it, cash, labor done, personal property, or real property or leases
thereof, and in the absence of actual fraud in the transaction, the judgment of
the Board of Directors as to the value of the labor, personal property or real
property or leases thereof so received shall be conclusive.
EIGHTH: Each person who now or hereafter serves as a director of officer
of the Corporation, including his executor, administrator, or other personal
representatives, shall be indemnified by the Corporation against all liabilities
(including reasonable costs, expenses, attorneys' fees, obligations for payment
in settlement and final judgment) incurred by or imposed upon him in the
preparation, conduct or compromise of any actual or threatened action, suit or
proceeding, whether civil, criminal or administrative, including any appeals
therefrom and any collateral proceedings in which he shall be involved by reason
of any action or omission by him in his capacity as a director or officer of the
Corporation or of any other corporation which he serves as a director or officer
at the request of this Corporation, whether or not such person is a director or
officer at the time such liabilities are incurred or any such action, suit, or
proceeding is commenced against him; provided, however, that no indemnification
shall be accorded hereunder:
(1) Where such person shall be finally adjudged in any such action,
suit or proceeding to be liable for negligence or misconduct in the performance
of duty;
(2) Where there has been a final judgment against such person without
an adjudication of the question of liability for negligence or misconduct in the
performance of duty, unless
(a) a majority of the Board of Directors shall determine
that such person was not guilty of negligence or misconduct in the
performance of duty; or
(b) in the absence of a majority of the Board of Directors,
in the written opinion of independent counsel, such person was not guilty
of negligence or misconduct in the performance of duty; or
(3) Where a settlement has been made or proposed unless
(a) a majority of the Board of Directors determines that
the settlement was or will be in the best interest of the Corporation, and
in addition
(b) in the written opinion of independent counsel, the
person involved was not guilty of negligence or misconduct in the
performance of duty.
Where the opinion of independent counsel is required in sub-sections (2)
and (3) above, such counsel shall be selected by or in a manner determined by
the Board of Directors.
Upon request by any such director or officer, from time to time, and prior
to final adjudication or settlement of the matter as to which indemnification is
claimed, the Corporation shall reimburse such person for all liabilities (as
defined above) imposed upon or incurred by him to the date of the request, if
independent legal counsel, selected as set forth above, shall give the
Corporation a written opinion, substantially concurrent with such request, to
the effect that it is not probable that the matter as to which reimbursement is
being sought will result in a determination that such person was guilty of
negligence or misconduct in the performance of duty, and that such liabilities
may properly be borne by the Corporation, such reimbursement to be made on the
condition that the person receiving same will agree, in writing, to repay to the
Corporation any amounts so received unless a written opinion of said independent
counsel shall be rendered substantially concurrent with final adjudication or
settlement of the matter involved, to the effect that such person is entitled to
indemnification under this article.
Except as expressly limited by sub-sections (1), (2) and (3) above, the
foregoing rights of indemnification shall not be in limitation of any other
right to which any director or officer, or his executor, administrator or other
personal representatives may be entitled as a matter of law or which may be
lawfully granted to him, and shall be in addition to, and not in limitation of
any other privilege or power which the Corporation may lawfully exercise to
indemnify or reimburse its directors or officers.
NINTH: Meetings of the stockholders may be held outside the State of
Delaware if the by-laws so provide. The books of the Corporation may be kept
(subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the by-laws of the Corporation.
TENTH: The powers and authorities conferred in this Certificate of
Incorporation or in the by-laws upon the Board of Directors are in furtherance
of, and not in limitation of, those conferred by the laws of the State of
Delaware.
ELEVENTH: The Corporation reserves the right at any time and from time to
time to amend, alter, change or repeal any provision contained in this
Certificate of Incorporation in the manner now or hereafter prescribed by law;
and all rights, preferences and privileges of whatsoever nature conferred upon
stockholders, directors or any other persons whomsoever by and pursuant to this
Certificate of Incorporation in its present form or as hereafter amended are
granted subject to the rights reserved int his Article.
TWELFTH: Members of the Board of Directors may be elected either by
written ballot at a meeting of shareholders, or by written ballot or by voice
vote at a meeting of the Board of Directors. The Board of Directors may from
time to time make, amend, modify or rescind the By-laws of the Corporation,
except to the extent that such authority is limited to the stockholders of the
Corporation by the specific provisions set forth in the By-laws; provided that
any By-law made, amended, modified or rescinded by the Board of Directors may be
amended, modified or rescinded and any By-law may be made by the stockholders of
the Corporation, pursuant to the express provisions set forth in the By-laws.
THIRTEENTH: (A) Except as otherwise expressly provided in Paragraph (B)
of this Article THIRTEENTH:
(1) Any merger or consolidation of the Corporation with or into any
other corporation;
(2) Any sale, lease, exchange or other disposition, whether or not in
partial or complete liquidation of the Corporation, of all or any substantial
part of the assets of the Corporation to or with any other corporation, person
or other entity;
(3) The issuance or transfer by the Corporation or any of its
subsidiaries of any securities of the Corporation, or any securities of any of
its subsidiaries having total assets of $5,000,000 or more, to any other
corporation, person or other entity in exchange for assets or securities or a
combination thereof (except assets or securities or a combination thereof so
acquired in a single transaction or a series of related transactions having an
aggregate fair market value of less than $1,000,000); or
(4) The issuance or transfer by the Corporation or any of its
subsidiaries of any securities of the Corporation, or any securities of any of
its subsidiaries having total assets of $5,000,000 or more, to any other
corporation, person or other entity for cash,
shall require the affirmative vote of the holders of (a) at least 80% of
the outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for such purpose as one
class, and (b) at least a majority of the outstanding shares of capital stock of
the Corporation which are not beneficially owned by such corporation, person or
other entity, if, as of the record date for the determination of stockholders
entitled to notice thereof and to vote thereon, such other corporation, person
or entity is the beneficial owner, directly or indirectly, of 10% or more of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for such purpose as one
class. Such affirmative vote shall be required notwithstanding the fact that no
vote may be required, or that some lesser percentage may be specified, by law or
in any agreement with any national securities exchange.
(B) The provisions of this Article THIRTEENTH shall not apply to any
transaction described in clauses (1), (2), (3) or (4) of Paragraph (A) of this
Article THIRTEENTH with another corporation, person or other entity (1) if the
Board of Directors of the Corporation shall by resolution have approved a
memorandum of understanding with such other corporation, person or other entity
with respect to, and substantially consistent with, such transaction prior to
the time such other corporation, person or other entity became the beneficial
owner, directly or indirectly, of 10% or more of the outstanding shares of
capital stock of the Corporation entitled to vote generally in the election of
directors or (2) if, prior to the consummation of such transaction, the Board of
Directors of the Corporation either (a) adopts by unanimous written consent a
resolution in favor of the transaction, or (b) adopts such resolution at a
meeting, at which at least 80% of the directors then in office are present, by
the affirmative vote of both a majority of the directors present at such meeting
and at least 80% of those directors voting on such resolution.
(C) For purposes of this Article THIRTEENTH and of any other and all
other Articles of this Certificate of Incorporation:
(1) any specific person shall be deemed to be the "beneficial owner"
of shares of stock of a corporation (other than shares of the Corporation's
Common Stock held in its Treasury or by majority-owned subsidiaries of the
Corporation) (a) which such specified person or any of its affiliates or
associates (as such terms are hereinafter defined), including any person who
will become an affiliate or associate of the specified person upon the
consummation of any transaction described in clauses (1), (2), (3) or (4) of
paragraph (A) of this Article THIRTEENTH, beneficially owns, directly or
indirectly, whether of record or not, (b) which such specified person or any of
its affiliates, or associates has the right to acquire pursuant to any
agreement, upon exercise of conversion rights, warrants or options, or
otherwise, or (c) which are beneficially owned, directly or indirectly
(including shares deemed owned through application of clauses (a) and (b)
above), by any other person with which such specified person or any of its
affiliates or associates has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of stock of the Corporation;
(2) a "person" is any individual, corporation, partnership or other
entity;
(3) an "affiliate" of a specified person is any person that directly,
or indirectly through one or more intermediaries, controls, or is controlled by,
or is under common control with, the specified person; and
(4) an "associate" of a specified person is (a) any person of which
such specified person is an officer or partner or is, directly or indirectly,
the beneficial owner of 10% or more of any class of equity securities, (b) any
trust or other estate in which such specified person has a substantial
beneficial interest or as to which such specified person serves as a trustee or
in a similar fiduciary capacity, (c) any relative or spouse of such specified
person, or any relative of such spouse, who has the same home as such specified
person or who is a director or officer of such specified person or any
corporation which controls or is controlled by such specified person, or (d) any
other member or partner in a partnership, limited partnership, syndicate or
other group of which the specified person is a member or partner and which is
acting together for the purpose of acquiring, holding or disposing of securities
of the Corporation.
(D) The Board of Directors of the Corporation shall have the power
and duty to determine for the purposes of this Article THIRTEENTH, on the basis
of information then known to it, (i) whether any corporation, person or other
entity beneficially owns, directly or indirectly, 10% or more of the outstanding
shares of capital stock of the Corporation entitled to vote generally in the
election of directors, or is an "affiliate" or an "associate", as defined above,
of another (including, without limitation, whether any person "controls" any
other person for the purposes of such definitions), (ii) whether any proposed
sale, lease, exchange or other disposition of part of the assets of the
Corporation involves a substantial part of the assets of the Corporation, (iii)
whether assets or securities, or a combination thereof, to be acquired in
exchange for securities of the Corporation, have an aggregate fair market value
of less than $1,000,000 and whether the same are proposed to be acquired in a
single transaction or a series of related transactions, (iv) whether any
subsidiary of the Corporation has total assets in excess of $5,000,000, and (v)
whether the memorandum of understanding referred to above is substantially
consistent with the transaction to which it relates. Any such determination by
the Board shall be conclusive and binding for all purposes of this Article
THIRTEENTH.
FOURTEENTH: Any or all of the directors of the Corporation may be removed
only for cause and only by the affirmative vote, at any stockholders' meeting,
of the holders of at least 80% of the outstanding stock of the Corporation
entitled to vote generally in the election of directors, considered for such
purpose as one class, and, in addition, by the affirmative vote of at least a
majority of the outstanding shares of capital stock of the Corporation which are
not beneficially owned by any corporation, person or other entity which is the
beneficial owner, directly or indirectly, of 10% or more of the outstanding
shares of capital stock of the Corporation entitled to vote generally in the
election of directors, considered for such purpose as one class.
FIFTEENTH: When the Certificate of Incorporation of the Corporation
provides for more or less than one vote for any share, on any matter, every
reference in the Certificate of Incorporation or the Delaware General
Corporation Law to a majority or other proportion or percentage of the shares of
stock entitled to vote shall refer to such majority or other proportion or
percentage of the votes of such stock.
SIXTEENTH: None of the provisions of Articles TWELFTH, THIRTEENTH,
FOURTEENTH or FIFTEENTH or of this Article SIXTEENTH of this Certificate of
Incorporation, may be amended, modified or rescinded except by the affirmative
vote of the holders of at least 80% of the capital stock of the Corporation
entitled to vote generally in the election of directors, considered for such
purpose as one class, and, in addition, by the affirmative vote of the holders
of at least a majority of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors, considered
for such purpose as one class, which are not beneficially owned, directly or
indirectly, by any corporation, person or other entity which is the beneficial
owner, directly or indirectly, of 10% or more of the outstanding shares of such
capital stock, considered for such purpose as one class.
IN WITNESS WHEREOF, this Restated Certificate of Incorporation has been
executed this 30th day of March , 1998.
SPARTECH CORPORATION
By: s/David B. Mueller
David B. Mueller
Attest:
s/David B. Mueller
Secretary
STATE OF MISSOURI )
) SS.
COUNTY OF ST. LOUIS )
On this 30th day of March , 1998 , before me appeared David B. Mueller
, to me personally known, who, being by me duly sworn, did say that he is the
Secretary of Spartech Corporation, a corporation of the
State of Delaware, and that the seal affixed to the foregoing instrument is the
corporate seal of said corporation, and that said instrument was signed and
sealed in behalf of said corporation, by authority of its Board of Directors;
and said he acknowledged said instrument to be the free act and deed of
said corporation.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official
seal in the County and State aforesaid, the day and year first above written.
s/Monica L. Combs
Notary Public
[Notary Seal]
SPARTECH CORPORATION
BY-LAWS
Amended and Restated As of June 11, 1998
Current As of June 19, 1998
___________________________________________________________
ARTICLE I
Offices
Section 1. The registered office shall be in the City of Wilmington,
County of New Castle, State of Delaware.
Section 2. The corporation may also have offices at such other places
both within and without the State of Delaware as the Board of Directors may from
time to time determine or the business of the corporation may require.
ARTICLE II
Meetings of Stockholders
Section 1. All meetings of the stockholders shall be held in St. Louis
County, Missouri at such place as may be fixed from time to time by the Board of
Directors, or at such other place either within or without the State of Delaware
as shall be designated from time to time by the Board of Directors or the
officer calling the meeting and stated in the notice of the meeting.
Section 2. Annual meetings of stockholders shall be held on the second
Wednesday of March if not a legal holiday, and if a legal holiday, then on the
next Business Day following, at 10:00 a.m. or at such other date and time as
shall be designated from time to time by the Board of Directors and stated in
the notice of the meeting, at which they shall elect by a plurality vote a Board
of Directors, and transact such other business as may properly be brought before
the meeting. "Business Day" means any day on which the banks in New York City
are not authorized or required to remain closed and on which the New York Stock
Exchange is not closed.
Section 3. The officer who has charge of the stock ledger of the
corporation shall prepare and make, at least ten days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present.
Section 4. Special meetings of the stockholders, for any purpose or
purposes, unless otherwise prescribed by statute or by the certificate of
incorporation, may be called by the chief executive officer and shall be called
by the chief executive officer or the secretary at the request in writing of a
majority of the Board of Directors, or at the request in writing of stockholders
owning a majority in amount of the entire capital stock of the corporation
issued and outstanding and entitled to vote. Such request shall state the
purpose or purposes of the proposed meeting.
Section 5. Written notice of every meeting of the stockholders stating
the place, date and hour of the meeting and, in the case of a special meeting,
the purpose or purposes for which the meeting is called, shall be given to each
stockholder entitled to vote at such meeting not less than ten nor more than
sixty days before the date of the meeting.
Section 6. Business transacted at any special meeting of stockholders
shall be limited to the purposes stated in the notice.
Section 7. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
certificate of incorporation. If, however, such quorum shall not be present or
represented at any meeting of the stockholders, the stockholders entitled to
vote thereat, present in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented. At such adjourned
meeting, at which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as originally
notified. If the adjournment is for more than thirty days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting.
Section 8. When a quorum is present at any meeting, the vote of the
holders of a majority of the stock having voting power present in person or
represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which by express provisions of the statutes or
of the certificate of incorporation, a different vote is required in which case
such express provision shall govern and control the decision of such question.
Section 9. Each stockholder shall at every meeting of the stockholders
be entitled to one vote in person or by proxy for each share of the capital
stock having voting power held by such stockholder, but no proxy shall be voted
on after three years from its date, unless the proxy provides for a longer
period.
Section 10. Whenever the vote of stockholders at a meeting thereof is
required or permitted to be taken for or in connection with any corporate
action, by any provision of the statutes, the meeting and vote of stockholders
may be dispensed with if all of the stockholders who would have been entitled to
vote upon the action of such meeting were held shall consent in writing to such
corporate action being taken; or if the certificate of incorporation authorizes
the action to be taken with the written consent of the holders of less than all
of the stock who would have been entitled to vote upon the action if a meeting
were held, then on the written consent of the stockholders having not less than
such percentage of the total number of votes as may be authorized in the
certificate of incorporation; provided that in no case shall the written consent
be by the holders of stock having less than the minimum percentage of the total
vote required by statute for the proposed corporate action, and provided that
prompt notice must be given to all stockholders of the taking of corporate
action without a meeting and by less than unanimous written consent.
ARTICLE III
Directors
Number, Qualification, Term of Office
Section 1. The number of directors shall not be less than four nor more
than 15, the exact number of directors to be fixed from time to time only by the
vote of a majority of the entire Board. No decrease in the number of directors
shall shorten the term of any incumbent director.
The directors shall be divided into three classes: Class A, Class B and
Class C. Such classes shall be as nearly equal in number as possible. At each
annual election, the directors chosen to succeed those whose terms then expire
shall be identified as being of the same class as the directors they succeed and
shall be elected for a term expiring at the third succeeding annual meeting or
thereafter when their respective successors in each case are elected and have
qualified. If the number of directors is changed, any increase or decrease in
directors shall be apportioned among the classes so as to maintain all classes
as nearly equal in number as possible and any individual director elected to any
class shall hold office for a term which shall coincide with the term of such
class.
The Board may, by the vote of a majority of the entire Board, prescribe
qualifications of candidates for the office of director of the Corporation, but
no director then in office shall be disqualified from office as a result of the
adoption of such qualifications.
Notwithstanding the foregoing, whenever the holders of any preferred stock
issued by the Corporation shall have the right, voting as a class or otherwise,
to elect directors at the annual meeting of stockholders, the then authorized
number of directors of the Corporation shall be increased by the number of the
additional directors so to be elected, and at such meeting the holder of such
preferred stock shall be entitled, as a class or otherwise, to elect such
additional directors. Any directors so elected shall hold office until the next
annual meeting of stockholders or until their rights to hold such office
terminate pursuant to the provisions of such preferred stock, whichever is
earlier. The provisions of this paragraph shall apply notwithstanding the
maximum number of directors hereinabove set forth.
Removal of Directors
Section 2. Directors of the Corporation may be removed solely in
accordance with the provisions of Article FOURTEENTH of the Certificate of
Incorporation.
Vacancies
Section 3. If the office of any director becomes vacant at any time by
reason of death, resignation, retirement, disqualification, removal from office
or otherwise, or if any new directorship is created by any increase in the
authorized number of directors, a majority of the directors then in office,
although less than a quorum, or the sole remaining director, may choose a
successor or fill the newly created directorship, and the director so chosen
shall hold office, subject to the provisions of these By-laws, until the
expiration of the term of the class to which he has been chosen and until his
successor shall be duly elected and qualified.
Powers
Section 4. The business of the corporation shall be managed by its
Board of Directors which may exercise all such powers of the corporation and do
all such lawful acts and things as are not by statute or by the certificate of
incorporation or by these By-laws directed or required to be exercised or done
by the stockholders.
Meetings of the Board of Directors
Section 5. The Board of Directors of the corporation may hold meetings,
both regular and special, either within or without the State of Delaware.
Section 6. The first meeting of each newly elected Board of Directors
shall be held at such time and place as shall be fixed by the vote of the
stockholders at the annual meeting and no notice of such meeting shall be
necessary to the newly elected directors in order legally to constitute the
meeting, provided a quorum shall be present. In the event of the failure of the
stockholders to fix the time or place of such first meeting of the newly elected
Board of Directors, or in the event such meeting is not held at the time and
place so fixed by the stockholders, the meeting may be held at such time and
place as shall be specified in a notice given as hereinafter provided for
special meetings of the Board of Directors, or as shall be specified in a
written waiver signed by all of the directors.
Section 7. Notice of any meeting of the Board of Directors shall be
given to all directors in the manner hereinafter provided not less than fourteen
(14) Business Days prior to such meeting, provided that, when necessary or
appropriate, notice may be given not less than 72 hours prior to any such
meeting so long as such notice shall be given by facsimile transmission or
telephone. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors need be specified in the
notice of such meeting.
Section 8. Special meetings of the Board may be called by the chief
executive officer on three day's notice to each director, either personally or
by facsimile or by telegram or telephone; special meetings shall be called by
the chief executive officer or secretary in like manner and on like notice on
the written request of any two directors.
Section 9. At all meetings of the Board, a majority of the membership
of the whole Board shall constitute a quorum for the transaction of business and
the act of a majority of the directors present at any meeting at which there is
a quorum shall be the act of the Board of Directors, except as may be otherwise
specifically provided by statute, by the certificate of incorporation, or as
otherwise provided in this Article. If a quorum shall not be present at any
meeting of the Board of Directors, the directors present thereat may adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present.
Section 10. Any transaction requiring a vote by the Board of Directors
must not only satisfy the requirements as set forth in this Article, but also
must satisfy any and all requirements contained in the certificate of
incorporation of the corporation and all statutory requirements.
Board Action Without A Meeting
Section 11. Unless otherwise restricted by the certificate of
incorporation or these By-laws, any action required or permitted to be taken at
any meeting of the Board of Directors or of any committee thereof may be taken
without a meeting, if all members of the Board or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the Board or committees.
Committees of Directors
Section 12. The Board of Directors may, by resolution passed by a
majority of the whole Board, designate one or more committees, each committee to
consist of two or more of the directors of the corporation. The Board may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee. Any
such committee, to the extent provided in the resolution, shall have and may
exercise the powers of the Board of Directors in the management of the business
and affairs of the corporation, and may exercise the powers of the Board of
Directors in the management of the business and affairs of the corporation, and
may authorize the seal of the corporation to be affixed to all papers which may
require it; provided, however, that in the absence or disqualification of any
member of such committee or committees, the member or members thereof present at
any meeting and not disqualified from voting, whether or not he or they
constitute a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of any such absent or disqualified
member. Such committee or committees shall have such name or names as may be
determined from time to time by resolution adopted by the Board of Directors.
Section 13. Each committee shall keep regular minutes of its meetings
and report the same to the Board of Directors when required.
Compensation of Directors
Section 14. The directors may be paid their expenses, if any, of
attendance at each meeting of the Board of Directors and may be paid a fixed sum
for attendance at each meeting of the Board of Directors or a stated salary as
director. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation for attending
committee meetings.
ARTICLE IV
Notice
Section 1. Whenever, under the provisions of the statutes or of the
certificate of incorporation or of these By-laws, notice is required to be given
to any stockholder, it shall not be construed to mean personal notice unless
expressly stated, but such notice may be given in writing, by mail, addressed to
such stockholder at his address as it appears on the records of the corporation,
with postage hereon prepaid, and such notice shall be deemed to be given at the
time when the same shall be deposited in the United States mail.
Notices to directors may be given by telephone or facsimile transmission.
Notice by telephone shall be deemed to be given when the call is either received
personally by the director or received in the director's personal mailbox in a
voice mail system at a number furnished by the director for such purpose.
Notice by facsimile transmission shall be deemed to be given upon confirmation
by the sending machine of a completed transmission to a number furnished by the
director for such purpose; provided that if the receiving location is at a place
other than the director's residence and is either sent on a Saturday, Sunday or
federal holiday or confirmed after 5:00 p.m. local time at the place of receipt
it shall be deemed to be given on the next business day.
Section 2. Whenever any notice is required to be given under the
provisions of the statutes or of the certificate of incorporation or of these By
- -laws, a waiver thereof in writing, signed by the person or persons entitled to
said notice, whether before or after the time stated therein, shall be deemed
equivalent thereto. The attendance of a person at any meeting shall constitute
a waiver of notice of such meeting, except where the person attends such meeting
for the express purpose of objecting to the transaction of any business because
the meeting is not lawfully called or convened and so objects at the beginning
of the meeting.
ARTICLE V
Officers
Section 1. The officers of the corporation shall be elected by the
Board of Directors and shall be a chairman of the board (who shall also be a
director of the corporation), a president, an executive vice president, a vice
president-finance or treasurer, and a secretary. The Board of Directors may
also elect a vice chairman of the board (who shall also be a director of the
corporation), additional vice presidents (who may be designated as executive or
senior vice presidents or given such additional designations as the Board may
determine), assistant secretaries and assistant treasurers. Any number of
offices may be held by the same person, unless the certificate of incorporation
or these By-laws otherwise provide.
Section 2. The Board of Directors shall elect the above officers
annually at its first meeting after the annual meeting of stockholders. If the
election of such officers shall not be held at such meeting, such election shall
be held as soon thereafter as conveniently may be. Vacancies may be filled or
new offices created and filled at any meeting of the Board of Directors.
Section 3. The Board of Directors may appoint or authorize the
appointment of such other officers and agents as it shall deem necessary who
shall hold their offices for such terms and shall exercise such powers and
perform such duties as shall be determined from time to time by the Board of
Directors.
Section 4. The salaries of all officers and agents of the corporation
shall be fixed by the Board of Directors.
Section 5. The officers of the corporation shall hold office until
their successors are chosen and qualify or until their death, resignation or
removal. Any officer elected or appointed by the Board of Directors may be
removed at any time by the affirmative vote of a majority of the Board of
Directors. Any vacancy occurring in any office of the corporation shall be
filled by the Board of Directors.
Section 6. The officers of the corporation shall each have the
following powers and duties generally pertaining to their respective offices, as
well as such powers and duties as from time to time may be conferred by the
Board of Directors:
a. CHAIRMAN OF THE BOARD (AND VICE CHAIRMAN OF THE BOARD). The
chairman of the board shall preside at all meetings of the Board of
Directors. In the absence of the chairman of the board or in the event of
his inability or refusal to act, the vice chairman of the board (if any)
shall exercise the powers and perform the duties of the chairman of the
board.
b. PRESIDENT AND CHIEF EXECUTIVE OFFICER. The president shall be
the chief executive officer of the corporation. He shall preside at all
meetings of the stockholders; shall have general and active management of
the business of the corporation; shall see that all orders and resolutions
of the Board of Directors are carried into effect; and in general shall
have all powers and authority and perform all duties as are usually vested
in the president and chief executive officer of a corporation, as well as
such other powers, authority and duties as may be prescribed by the Board
of Directors from time to time. In the absence of the chairman of the
board and the vice chairman of the board or in the event of their inability
or refusal to act, the president shall exercise the powers and perform the
duties of the chairman of the board. The president may execute bonds,
mortgages and other contracts requiring a seal, under the seal of the
corporation, except where required or permitted by law or these By-laws to
be otherwise signed and executed.
c. EXECUTIVE VICE PRESIDENT. The executive vice president (or if
there shall be more than one, an executive vice president designated by the
Board of Directors), shall be the chief operating officer of the
corporation. He shall preside at all meetings of the stockholders at which
the president is not present, and at all meetings of the Board of Directors
at which neither the chairman nor the vice chairman of the board nor the
president is present; shall have operating management authority over the
corporation; and in general shall have all powers and authority and perform
all duties as are usually vested in the chief operating officer of a
corporation, as well as such other powers, authority and duties as may be
prescribed by the Board of Directors or the president from time to time.
In the absence of the president or his inability or refusal to act, the
executive vice president (or if there shall be more than one, the executive
vice president designated as chief operating officer) shall exercise the
powers and perform the duties of the president. The executive vice
president may execute bonds, mortgages and other contracts requiring a
seal, under the seal of the corporation, except where required or permitted
by law or these By-laws to be otherwise signed and executed.
If there is more than one executive vice president, an executive vice
president who has not been designated as chief operating officer shall have
such powers, authority and duties as may be prescribed by the Board of
Directors or the president from time to time, and in the absence of the
executive vice president designated as chief operating officer or in the
event of his inability or refusal to act, the other executive vice
presidents, if any, in the order determined by the Board of Directors (or
if there be no such determination, then in the order of their election)
shall exercise the powers and perform the duties of the chief operating
officer.
d. OTHER VICE PRESIDENTS. The other vice presidents, if any, shall
each possess powers and perform such duties, in addition to those
prescribed in these By-laws, as the Board of Directors and/or the president
may from time to time determine, and each shall have supervision over such
department or division of the corporation's business as the chairman of the
board or the president may from time to time assign to him. In the absence
of the executive vice presidents or in the event of their inability or
refusal to act, the senior vice presidents, and after them the other vice
presidents, if any, in the order determined by the Board of Directors (or
if there be no such determination, then in the order of their election)
shall exercise the powers and perform the duties of the executive vice
presidents.
e. SECRETARY AND ASSISTANT SECRETARY. The secretary shall attend
all meetings of the Board of Directors and all meetings of the stockholders
and record all the proceedings of the meetings of the corporation and of
the Board of Directors in a book to be kept for that purpose and shall
perform like duties for the standing committees when required. He shall
give, or cause to be given, notice of all meetings of the stockholders and
special meetings of the Board of Directors, and shall perform such other
duties as may be prescribed by the Board of Directors, the chief executive
officer, the chairman of the board, the vice chairman of the board, or the
president, under whose supervision he shall be. He shall have custody of
the corporate seal of the corporation and he, or an assistant secretary,
shall have authority to affix the same to any instrument requiring it and
when so affixed, it may be attested by his signature or by the signature of
such assistant secretary. The Board of Directors may give general
authority to any other officer to affix the seal of the corporation and to
attest the affixing of his signature.
The assistant secretary, or if there be more than one, the assistant
secretaries in the order determined by the Board of Directors (or if there
be no such determination, then in the order of their election), shall, in
the absence of the secretary or in the event of his inability or refusal to
act, perform the duties and exercise the powers of the secretary and shall
perform such other duties and have such other powers as the Board of
Directors may from time to time prescribe.
f. TREASURER OR VICE PRESIDENT-FINANCE AND ASSISTANT TREASURER. The
treasurer or vice president-finance shall have the custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts
and disbursements in books belonging to the corporation and shall deposit
all monies and other valuable effects in the name and to the credit of the
corporation in such depositories as may be designated by the Board of
Directors.
He shall disburse the funds of the corporation as may be ordered by
the Board of Directors, taking proper vouchers for such disbursements, and
shall render to the chief executive officer, chairman of the board, vice
chairman of the board, and president, and the Board of Directors, at its
regular meetings, or when the Board of Directors so requires, an account of
all his transactions in his office and of the financial condition of the
corporation.
If required by the Board of Directors, he shall give the corporation a
bond in such sum and with such surety or sureties as shall be satisfactory
to the Board of Directors for the faithful performance of the duties of his
office and for the restoration to the corporation, in case of his death,
resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or
under his control belonging to the corporation.
The assistant treasurer, or if there shall be more than one, the
assistant treasurers in the order determined by the Board of Directors (or
if there be no such determination, then in the order of their election),
shall, in the absence of the treasurer or in the event of his inability or
refusal to act, perform the duties and exercise the powers of the treasurer
and shall perform such other duties and have such other powers as the Board
of Directors may from time to time prescribe.
ARTICLE VI
Certificates of Stock
Section 1. Every holder of stock in the corporation shall be entitled
to have a certificate certifying the number of shares owned by him in the
corporation, signed by, or in the name of the corporation by, (1) the chairman
or vice chairman of the Board of Directors, the president or a vice president,
and (2) the treasurer or vice president-finance, the secretary, an assistant
treasurer or an assistant secretary.
If the corporation shall be authorized to issue more than one class of
stock or more than one series of any class, the designations, preferences and
relative, participating, optional or other special rights of each class of stock
or series thereof and the qualifications, limitations or restrictions of such
preferences and/or rights shall be set forth in full or summarized on the face
or back of the certificate which the corporation shall issue to represent such
class or series of stock, provided that, except as otherwise provided in Section
202 of the General Corporation Law of Delaware, in lieu of the foregoing
requirements, there may be set forth on the face or back of the certificates
which the corporation shall issue to represent such class or series of stock, a
statement that the corporation will furnish without charge to each stockholder
who so requests the designations, preferences and relative, participating,
optional or other special rights of each class of stock or series thereof and
the qualifications, limitations or restrictions of such preferences and/or
rights.
Section 2. Where a certificate is countersigned (1) by a transfer agent
other than the corporation or its employee, or (2) by a registrar other than the
corporation or its employee, the signatures of the officers of the corporation
may be facsimiles. In case any officer who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be such
officer before such certificate is issued, it may be issued by the corporation
with the same effect as if he were such officer at the date of issue.
Lost Certificates
Section 3. The Board of Directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost, stolen or destroyed. When authorizing such
issue of a new certificate or certificates, the Board of Directors may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate or certificates, or his
legal representatives, to advertise the same in such manner as it shall require
and/or to give the corporation a bond in such sum as it may direct as indemnity
against any claim that may be made against the corporation with respect to the
certificate alleged to have been lost, stolen or destroyed.
Transfers of Stock
Section 4. Upon surrender to the corporation or the transfer agent of
the corporation of a certificate for shares duly endorsed or accompanied by
proper evidence of succession, assignment or authority to transfer, it shall be
the duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its book.
Fixing Record Date
Section 5. In order that the corporation may determine the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or any
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock of for the purpose of any
other lawful action, the Board of Directors may fix, in advance, a record date,
which shall not be more than sixty nor less than ten days before the date of
such meeting, nor more than sixty days prior to any other action. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the Board of Directors may fix a new record date for the adjourned
meeting.
Registered Stockholders
Section 6. The corporation shall be entitled to recognize the exclusive
right of a person registered on its books as the owner of shares to receive
dividends, and to vote as such owner, and to hold liable for calls and
assessments a person registered on its books as the owner of shares, and shall
not be bound to recognize any equitable or other claim to interest in such share
or shares on the part of any other person, whether or not it shall have express
or other notice thereof, except as otherwise provided by the laws of Delaware.
ARTICLE VII
General Provisions
Dividends
Section 1. Dividends upon the capital stock of the corporation, subject
to the provisions of the certificate of incorporation, if any, may be declared
by the Board of Directors at any regular or special meeting, pursuant to law.
Dividends may be paid in cash, in property, or in shares of the capital stock,
subject to the provisions of the certificate of incorporation.
Section 2. Before payment of any dividend, there may be set aside out
of any funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purpose as the directors shall think conductive to the interest of the
corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
Annual Statement
Section 3. The Board of Directors shall present at each annual meeting,
and at any special meeting of the stockholders when called for by vote of the
stockholders, a full and clear statement of the business and condition of the
corporation.
Checks
Section 4. All checks or demands for money and notes of the corporation
shall be signed by such officer or officers or such other person or persons as
the Board of Directors may from time to time designate.
Fiscal Year
Section 5. The fiscal year of the corporation shall be fixed by
resolution of the Board of Directors.
Seal
Section 6. The corporate seal shall have inscribed thereon the name of
the corporation, the year of its organization and the words "Corporate Seal,
Delaware." The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
ARTICLE VIII
Amendments
Sections 1, 2 and 3 of Article III and this Article VIII of the By-laws may
not be amended, modified or rescinded except by the affirmative vote of the
holders of at least 80 percent of the outstanding shares of capital stock of the
corporation entitled to vote generally in the election of directors, considered
for such purpose as one class, and, in addition, the affirmative vote of the
holders of at least a majority of the outstanding shares of capital stock of the
corporation entitled to vote generally in the election of directors, considered
for such purpose as one class, which are not beneficially owned, directly or
indirectly, by any corporation, person or other entity which is the beneficial
owner (as defined in Article THIRTEENTH of the Certificate of Incorporation),
directly or indirectly, of 10 percent or more of the outstanding shares of such
capital stock, considered for such purpose as one class. To the extent not
inconsistent with the foregoing, all other provisions of the By-laws may be
amended, modified and rescinded and new By-laws may be adopted, (i) by the
affirmative vote of the holders of at least a majority of the outstanding shares
of capital stock of the corporation entitled to vote thereon, or (ii) by the
Board of Directors; provided, that any By-law adopted, amended or modified by
the Board of Directors may be amended, modified or rescinded by the vote of the
stockholders prescribed in clause (i) above.
SPARTECH CORPORATION
INCENTIVE STOCK OPTION PLAN
This Incentive Stock Option Plan (the Plans) of Spartech Corporation
("Spartech") for Spartech and its subsidiaries and affiliated corporations
(collectively referred to as the "Company") is intended to provide employment
incentive:
(A) For the purposes of retaining in the employ of the Company persons
with superior training, experience and ability;
(B) For attracting new employees whose services are considered unusually
valuable; and
(C) To encourage a sense of proprietorship in all such persons and to
stimulate in all such persons an active interest in the development and
financial success of the Company.
The Plan is intended to provide for the issuance of options which comply
with all of the requirements of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code").
1. ADMINISTRATION OF PLAN. The Plan shall be administered by a committee of
the Board of Directors of Spartech comprised of two or more members of the Board
who are not employees of the Company, (the "Committee"). No person shall be a
member of the Committee if, during one year prior to service on the Committee,
such person was granted or awarded any equity securities of the Company pursuant
to this or any other plan of the Company, except as permitted by Rule 1 6b-
3(c)(2)(i) under the Securities Exchange Act of 1934.
The Committee shall review and approve the names of all key employees to
whom options are proposed to be granted, the number of shares to be covered by,
and within the applicable limits set forth in the Plan, the price and terms of
any option to be granted hereunder. Subject to the provisions of the Plan, the
Committee shall be authorized to approve the number of options and participants
annually and to interpret the Plan, to prescribe, amend and rescind rules and
regulations, forms, notices and agreements relating to the Plan and to make all
determinations necessary or advisable for the operation of the Plan. All
ultimate powers of approval shall be vested in the Committee as a body and the
Committee shall have absolute discretion, subject to the provisions of the Plan,
with respect to all determinations thereunder.
2. SHARES SUBJECT TO THE PLAN. The aggregate number and class of shares
which may be made the subject of options granted pursuant to the Plan for its
ten (10) years of operation is Two Million (2,000,000) shares of Common Stock of
Spartech (par value $.75 per share), subject to adjustment as provided in
Section 8 below. Such shares may be made available from authorized and unissued
shares of Common Stock of Spartech. In the event that any option granted
hereunder shall terminate prior to its exercise in full, the shares with respect
to which such option shall not have been exercised may thereafter again be made
the subject of new options granted hereunder.
3. ELIGIBILITY FOR OPTIONS.
(A) Employees and executive officers of the Company shall be entitled to
participation in the Plan, if otherwise eligible under the terms hereunder. Any
person granted an option hereunder is hereinafter referred to as a
"Participant".
(B) The adoption by the Committee of a resolution granting an option to
an employee shall complete the necessary corporate action constituting the
grant of such option, and shall be an offer of such shares for sale to such
employee under the terms of the Plan.
(C) For options granted, the aggregate fair market value, determined as
of the date of grant of each option, of shares of Common Stock with respect
to which options are exercisable for the first time by any person during any
calendar year (under all incentive stock option plans of the Company) shall not
exceed $100,000.
A-1
4. EXERCISE PRICE.
(A) The exercise price per share of options granted under the Plan shall not
be less than 100% of the fair market value per share of the shares subject to
such option at the time the option is granted, and such exercise price shall be
determined in good faith by the Committee at the time the option is granted.
(B) However, if any option is granted hereunder to any person who owns
stock possessing more than 10% of the total combined voting power of all
classes of stock of Spartech (or its parent, if any), or of any subsidiary,
then, notwithstanding any other provision of the Plan, such option shall have an
exercise price of at least 110% of the fair market value per share of the shares
subject to such option at the time the option is granted.
For the purposes of the foregoing restriction, a person shall be considered
as owning stock which he may purchase under any outstanding option, as well
as the stock owned directly or indirectly by or for his spouse, brothers and
sisters (whether of the whole or half blood), ancestors and lineal
descendants; and stock owned directly or indirectly by or for a corporation,
partnership, estate or trust shall be considered as being owned proportionately
by or for its shareholders, partners or beneficiaries.
5. EXERCISE PERIOD.
(A) Subject to the provisions of Sections 7 and 8 hereof, the Committee
shall have absolute discretion in determining the rate at which any option
granted hereunder may be exercised and whether any option exercisable in
installments is to be exercisable on a cumulative or noncumulative basis.
However, no option granted hereunder shall be exercisable in whole or in part
later than the day preceding the tenth anniversary date of the grant.
(B) However, no option granted to any person who owns stock of Spartech
possessing more that 10% of the total combined voting power of all classes of
stock of Spartech (or its parent, if any, or a subsidiary) as defined in
Section 4(B) of this Plan shall be exercisable after the expiration of five
years from the date such option is granted.
(C) If the provisions of Section 422 of the Code defining stock options
which meet the requirements for benefits accorded to incentive stock options
under the Code so require (at the time of the granting of any such option), then
notwithstanding the provisions of subparagraphs (A) and (B), no option granted
under the Plan to any person shall be exercisable at a time while there is
outstanding any incentive stock option which was granted, before the granting of
such option, to such person to purchase stock of Spartech or of any corporation
which (at the time of the granting of any such option) is a parent or subsidiary
corporation of Spartech, or of any corporation which is a predecessor of any
such corporations. For purposes of this Plan, an option shall be "outstanding"
until it is exercised in full or expires by reason of lapse of time.
6. MANNER OF EXERCISE OF OPTIONS.
(A) Unless the Committee shall otherwise determine, an option, to the
extent exercisable under this Plan, may be exercised by delivery to the
Treasurer or Controller of Spartech, at its principal office, of a written
notice, signed by the person entitled to exercise such option, specifying the
number of shares purchasable under the option which the Participant then wishes
to purchase, (i) accompanied by a certified check in the amount of the aggregate
option price for such number of shares, or alternatively, (ii) the delivery of
shares of Spartech Common Stock already owned by the Participant having a fair
market value equal to the exercise price, or (iii) by the delivery of a
combination of such shares and certified check.
(B) For purposes of Section 6(A) of this Plan, the "fair market value" of
any shares of Spartech Common Stock tendered by a Participant in exercise or
partial exercise of an option granted under the Plan shall mean the closing bid
price of a share of Spartech Common Stock in the exchange its Common Stock is
traded on the day of exercise of such Option or, if there were no sales on such
day, the lowest bid price for such stock.
(C) In no event shall stock be issued or certificates be delivered until
full payment shall have been received by Spartech, nor shall the Participant
have any right or status as a stockholder prior to such payment.
A-2
7. EFFECT OF TERMINATION OF EMPLOYMENT, DEATH OR NORMAL RETIREMENT.
(A) If a Participant's employment with the Company terminates as a result of
permanent and total disability (as defined in Section 22(e)(3) of the Code), or
if his employment otherwise terminates for any other reason,
including death or retirement, without having fully exercised any option
granted to him, he, his executor or administrator or the legatees or
distributees of his estate, as the case may be, shall have the right, for a
period of one (1 ) year from the date his employment terminates as a result
of such disability, or for a period of three (3) months after such
termination, retirement or from the appointment and qualification of an
executor or administrator, as the case may be, but not, in any case, later
than the day preceding the tenth anniversary of the date of the grant of such
option to exercise such option with respect to all or any part of the number of
shares to which the option relates, to the extent exercisable at the time of his
disability, death, retirement, or termination of employment, and thereafter such
option, to the extent not so exercised during such period, shall be deemed to
have expired regardless of the expiration date otherwise specified therein.
(B) For the purposes of this Plan, the transfer of an employee among
Spartech, its subsidiaries or affiliates, or a leave of absence authorized by
the Company for military service or sickness not exceeding three (3) months, or
a leave of absence in excess of three (3) months for military service or
sickness duly authorized by the Company provided the employee has a right to
reemployment either by statute or by contract, shall not be deemed a termination
of employment.
8. ADJUSTMENT OF NUMBER AND PRICE OF SHARES SUBJECT TO OPTION.
(A) If the outstanding shares of the Common Stock of Spartech are subdivided,
consolidated, increased, decreased, changed into, or exchanged for a different
number or kind of shares or securities of Spartech through
reorganization, merger, recapitalization, reclassification, capital
adjustment or otherwise, or if Spartech shall issue Common Stock as a
dividend or upon a stock split, then the number and kind of shares available for
purposes of this Plan and all shares subject to the unexercised portion of any
options theretofore granted and the option price of such options shall be
appropriately adjusted. However, any such adjustment in outstanding options
shall be made without change in the total exercise price applicable to the
unexercised portion of any outstanding options.
(B) If, in the event of a merger or consolidation, Spartech is not the
surviving corporation, and in the event that the agreement of merger or
consolidation does not provide for the substitution of a new option for an
option granted hereunder or for the assumption of such option by the
surviving corporation, or in the event of the dissolution or liquidation of
Spartech, the holder of any such option theretofore granted and still
outstanding shall have the right immediately prior to the effective date of
such merger, consolidation, dissolution or liquidation to exercise his option in
whole or in part without regard to any installment provision that may have been
made part of the terms and conditions of such option; provided that any
conditions precedent to such exercise set forth in the Incentive Stock Option
Agreement referred to below, other than the passage of time, have occurred. In
no event, however, may an option which becomes exercisable pursuant to this
Section 8 be exercised, in whole or in part, later than the day preceding the
tenth anniversary date of the grant thereof.
(C) Adjustments under this Section shall be made by the Committee, whose
determination as to what adjustments shall be made, and the extent thereof,
shall be final, binding and conclusive. In computing any adjustment under this
Section 8, any fractional share which might otherwise become subject to
an option shall be eliminated.
9. NONTRANSFERABILITY OF OPTIONS; SECURITIES ACT RESTRICTIONS. Options
granted hereunder shall not be transferable except by will or pursuant to the
laws of descent and distribution and may be exercised during a Participant's
lifetime, only by him. Unless the shares to be acquired upon exercise of any
option granted hereunder may, at the time of such acquisition, be lawfully
resold in accordance with a then currently effective registration statement
under the Securities Act of 1933, the Committee may require, as a condition to
the delivery of any shares to be purchased upon exercise of such option:
A-3
(a) That Spartech receive appropriate evidence that the optionee is
acquiring such shares for investment and not with a view to the distribution or
public offering of all or any portion thereof, or any interest therein, and an
agreement to the effect that the optionee shall make no sale or other
disposition of such shares unless and until Spartech (i) shall have received an
opinion of legal counsel satisfactory in form and substance to it, to the effect
that such sale or other disposition may be made without registration under the
then applicable provisions of the Securities Act of 1933 or the regulations of
the Securities and Exchange Commission thereunder, or (ii) such shares shall
thereafter be included in a currently effective registration statement or post-
effective amendment to a registration statement under the Securities Act of
1933; and
(b) That the certificate or certificates issued to evidence such shares
bear an appropriate legend summarizing such restrictions on the further sale or
other disposition thereof.
10. INCENTIVE STOCK OPTION AGREEMENT. Each option granted under the Plan
shall be evidenced by an Incentive Stock Option Agreement which shall set forth
the terms and conditions of such option, including, without limitation, such
terms and conditions, if any, as shall be requisite in the judgment of the
Committee in order to comply with the provisions of the Code defining so-called
"incentive stock options". Each such Agreement shall expressly incorporate by
reference the provisions of this Plan (a copy of which shall be attached
thereto), and shall state that in the event of any inconsistency between the
provisions hereof and the provisions of such Incentive Stock Option Agreement,
the provisions of this Plan shall govern.
11. AMENDMENT OR DISCONTINUANCE OF PLAN. The Committee may alter, amend,
suspend or discontinue the Plan at any time, provided that subject to the
provision of Section 8, no such action of the Committee may, without
appropriate shareholder action, increase the maximum number of shares subject to
the Plan, alter the class of individuals eligible for the grant of options
hereunder or change the manner of determining the exercise price of options
granted under the Plan. In addition, without the consent of the Participant, no
such action shall alter the terms of, or impair the rights of such Participant
under, any option theretofore granted to him pursuant to the Plan, including any
such rights with respect to any shares acquired upon exercise of such option.
12. COMMENCEMENT AND TERMINATION OF PLAN; PERIOD DURING WHICH OPTIONS MAY BE
GRANTED. This Plan, as adopted by the Board of Directors on July 26, 1991 and
subject to approval by the shareholders in accordance with the applicable
provisions of the Corporation Law of the State of Delaware, shall become
effective on October 1, 1991. No options shall be granted pursuant to this Plan
prior to October 1, 1991. No grant of an option shall be made hereunder after
the expiration of ten (10) years from October 1,1991.
13. EFFECT OF AMENDMENTS TO THE PLAN ON PREVIOUSLY GRANTED OPTIONS. Prior to
the termination of any option, the Committee, in its discretion, shall have the
power to amend the Stock Option Agreement relating to any such option in order
to reflect an amendment to the Plan which becomes effective after the date of
grant of any such option. Any such amendment shall be effective only with
respect to the unexercised portion of any such option. Subject to the provisions
of Section 8 of the Plan, nothing contained in this Section 13 shall be
construed to allow the Committee to increase the number of shares purchasable
pursuant to any such option, to reduce the exercise price of any such option or
to extend the exercise period of any such option beyond the day preceding the
tenth anniversary of the date of its grant.
By Order of the Board of Directors
SPARTECH CORPORATION
Dated: July 26, 1991
THIRD AMENDMENT AND RESTATEMENT
OF THE
SPARTECH CORPORATION
401(k) SAVINGS & INVESTMENT PLAN
June 1998
THIRD AMENDMENT AND RESTATEMENT
OF THE
SPARTECH CORPORATION
401(K) SAVINGS & INVESTMENT PLAN
TABLE OF CONTENTS
ARTICLE I. -- DEFINITIONS 2
1.1 Administrator 2
1.2 Affiliated Employer 2
1.3 Anniversary Year 2
1.4 Beneficiary 2
1.5 Benefits 2
1.6 Code 2
1.7 Company 2
1.8 Company Elective Contributions 2
1.9 Company Elective Contributions Account 2
1.10 Company Profit-Sharing Contributions 2
1.11 Company Profit-Sharing Contributions Account 3
1.12 Compensation 3
1.13 Defined Benefit Plan 3
1.14 Defined Contribution Plan 3
1.15 Determination Date 3
1.16 Distribution Account 3
1.17 Effective Date 3
1.18 Elective Contributions 3
1.19 Eligible Employee 3
1.20 Employee 4
1.21 Employee Savings Contributions 4
1.22 Employee Savings Contributions Account 4
1.23 Employee Savings Contributions Agreement 4
1.24 Employment Commencement Date 4
1.25 Entry Date 4
1.26 Excess Aggregate Contributions 4
1.27 Excess Contributions 4
1.28 Excess Employee Savings Contributions 4
1.29 Family Member 4
1.30 Five Percent Owner 5
1.31 Highly Compensated Employee 5
1.32 Highly Compensated Former Employee 6
1.33 Highly Compensated Participant 6
1.34 Highly Compensated Participant Group 6
1.35 Hour of Service 6
1.36 Income 8
1.37 Key Employee 8
1.38 Matching Contributions 8
1.39 Matching Contribution Account 8
1.40 Month of Service 9
1.41 Non-Highly Compensated Employee 9
1.42 Non-Highly Compensated Participant Group 9
1.43 Normal Retirement Date 9
1.44 One Percent Owner 9
1.45 Participant 9
1.46 Plan 9
1.47 Plan Year 9
1.48 Qualified Domestic Relations Order 9
1.49 Regulation 9
1.50 Required Beginning Date 9
1.51 Rollover Contributions 10
1.52 Rollover Contributions Account 10
1.53 Section 414(s) Compensation 10
1.54 Section 415 Compensation 10
1.55 Top Heavy Plan Year 11
1.56 Top Paid Group 11
1.57 Total and Permanent Disability 12
1.58 Trustee 12
1.59 Trust 12
1.60 Valuation Date 12
1.61 Voluntary Contributions 12
1.62 Voluntary Contributions Account 12
1.63 Year of Service 12
ARTICLE II. -- ADMINISTRATION 13
2.1 Administrator Responsibility 13
2.2 Powers and Duties 13
ARTICLE III. -- ELIGIBILITY AND PARTICIPATION 15
3.1 Eligibility 15
3.2 Requalification 15
3.3 Term of Participation 15
3.4 Errors in Inclusion or Exclusion 15
ARTICLE IV. -- CONTRIBUTIONS 17
4.1 Company Contributions 17
4.2 Employee Savings Contributions 17
4.3 Excess Employee Savings Contributions 17
4.4 Procedure for Making Employee Savings
Contributions 18
4.5 No Voluntary Contributions 19
4.6 Timing of Contributions 19
4.7 Crediting of Contributions 19
4.8 20
ARTICLE V. -- ACCOUNTING 21
5.1 Crediting Contributions 21
5.2 Establishing and Maintaining Accounts 21
5.3 Valuation 22
5.4 Allocation of Earnings 22
5.5 Allocation of Contributions 22
5.6 Allocation of Company Contributions 22
5.7 Section 415 Definitions 23
5.8 Defined Contribution Limitation 26
5.9 Combined Defined Contribution Defined
Benefit Limitation 26
5.10 Treatment of Excess Amounts 26
5.11 Participant Account Statements 27
ARTICLE VI. -- INVESTMENTS 28
6.1 Funds 28
6.2 Participant Direction of Contributions 28
6.3 Participant Direction of Accounts 28
6.4 Administrator Direction 29
6.5 Reduction of Accounts 29
6.6 Credits 29
6.7 29
6.8 29
ARTICLE VII. -- RETIREMENT DATE AND BENEFITS 31
7.1 Retirement 31
7.2 Distribution of Retirement Benefits 31
7.3 Value of Retirement Benefits 31
ARTICLE VIII. -- DEATH BENEFITS 32
8.1 Distribution of Death Benefits 32
8.2 Value of Death Benefits 32
8.3 Beneficiary Designation 32
8.4 No Designation of Beneficiary 32
ARTICLE IX. -- DISABILITY BENEFITS 33
9.1 Distribution of Disability Benefits 33
9.2 Value of Disability Benefits 33
ARTICLE X. -- SEVERANCE BENEFITS 34
10.1 Severance 34
10.2 Leaves of Absence 34
10.3 Distributions 34
10.4 Value of Benefits 34
10.5 Restoration of Accounts 35
ARTICLE XI. -- DISTRIBUTION OF BENEFITS 37
11.1 Timing of Distribution 37
11.2 Commencement of Distribution 37
11.3 Medium of Distribution 37
11.4 Mailing Address 37
11.5 Form of Distribution 37
11.6 Death Benefits 37
11.7 Installment Distribution 39
11.8 Distribution Combination 40
11.9 Distribution Accounts 40
11.10 Joint and Survivor Annuity 41
11.11 Pre-Retirement Survivor Annuity 41
11.12 Waiver of Joint and Survivor Annuity 42
11.13 Waiver of Pre-Retirement Survivor Annuity 43
11.14 Payment of Benefit After Waiver of Annuity 43
11.15 Payment to Minors 44
11.16 Lost Beneficiary 44
11.17 Domestic Relations Order 45
11.18 46
11.19 Hardship Distributions 46
11.20 Distribution at Age Fifty-Nine and a Half 48
11.21 Rollover Distributions 48
ARTICLE XII. -- AMENDMENT AND TERMINATION 50
12.1 Reservation of Right to Amend 50
12.2 Reservation of Right to Terminate 50
12.3 Complete Termination 50
12.4 Partial Termination 50
ARTICLE XIII. -- TOP HEAVY RULES 51
13.1 Definitions 51
13.2 Minimum Contributions 52
13.3 Make-Up Contributions 52
13.4 Top Heavy Vesting Schedule 52
13.5 Determination of Top Heavy Status 53
ARTICLE XIV. -- LIMITATIONS ON ELECTIVE CONTRIBUTIONS 54
14.1 Actual Deferred Percentage Test 54
14.2 Actual Deferred Percentage 54
14.3 Considered Participants 55
14.4 Aggregation of Plans 55
14.5 Participation in More Than One Plan 55
14.6 Return of Contributions 55
ARTICLE XV. -- LIMITATIONS ON MATCHING CONTRIBUTIONS 57
15.1 Actual Contributions Percentage Test 57
15.2 Aggregation of Plans 58
15.3 Participation in More Than One Plan 58
15.4 Considered Participants 58
15.5 Return of Contributions 58
15.6 Return of Less Than All Excess Contributions 58
15.7 Considered Contributions 58
15.8 Elective Contributions 59
ARTICLE XVI. -- ALLOCATION OF DUTIES 60
16.1 Trustees Powers and Duties 60
16.2 Allocation of Powers and Duties 60
16.3 Reliance 60
16.4 Multiple Capacities 60
ARTICLE XVII. -- MISCELLANEOUS PROVISIONS 61
17.1 Exclusive Benefit 61
17.2 Construction 61
17.3 Employment Rights 61
17.4 Non-Alienation 61
17.5 Successor to Company 61
17.6 Merger 61
17.7 Terms Binding on Successors 62
17.8 Expenses 62
17.9 Adoption by Other Employers 62
17.10 Gender 62
17.11 Loans 62
17.12 Mistaken Contributions 63
THIRD AMENDMENT AND RESTATEMENT
OF THE
SPARTECH CORPORATION 401(k) SAVINGS & INVESTMENT PLAN
This Plan document executed on June 10, 1998 by the Company,
WITNESSETH:
WHEREAS, the Company established the Plan on May 3, 1985; and
WHEREAS, the Plan was amended and restated on January 15, 1990 effective
January 1, 1987 and on December 24, 1994 effective January 1, 1987; and
WHEREAS, the Plan, as amended and restated on December 24, 1994, was
amended effective January 1, 1995; January 1, 1996; September 27, 1996; and
August 22, 1997; and
WHEREAS, the Company wants to again amend and restate the Plan; and
WHEREAS, the adoption and execution of this amended and restated Plan
document have been approved by the Board of Directors of the Company;
NOW, THEREFORE, the Company amends the Plan by deleting it in its entirety
and restating it, effective January 1, 1997, unless otherwise provided, as
follows:
ARTICLE I. -- DEFINITIONS
As used herein, unless otherwise defined or required by the context, the
following words and phrases used in the Plan shall have the meanings indicated.
Some of the words and phrases used in the Plan are not defined in this Article,
but, for convenience, are defined as they are introduced into text.
1.1 "Administrator".1 Administrator means the Company.
1.2 "Affiliated Employer".2 AffiliatedEmployer means the Company and any
corporation which is a member of a controlled group of corporations (as defined
in Code section 414(b)) which includes the Company; any trade or business
(whether incorporated) which is under common control (as defined in Code section
414(c)) with the Company; any organization (whether incorporated) which is a
member of an affiliated service group (as defined in Code section 414(m)) which
includes the Company; and any other entity required to be aggregated with the
Company pursuant to Regulations under Code section 414(o).
1.3 "Anniversary Year".3 AnniversaryYear means an Employee's annual
period of employment with the Company commencing on his Employment Commencement
Date.
1.4 "Beneficiary".4 Beneficiary is the person designated by a
Participant who is or may become entitled to Benefits under the Plan. A
Beneficiary who becomes entitled to Benefits under the Plan shall remain a
Beneficiary under the Plan until the Trustee has fully distributed his Benefits
to him. A Beneficiary's right to (and the Administrator's and/or the Trustee's
duty to provide to the Beneficiary) information or data concerning the Plan
shall not arise until he first becomes entitled to receive Benefits under the
Plan.
1.5 "Benefits".5 Benefits means the amount standing in the Participant's
Accounts as of any date.
1.6 "Code".6 Code means the Internal Revenue Code of 1986, as amended, or
any successor statute.
1.7 "Company".7 Company means Spartech Corporation, a Delaware
corporation, and any other corporation which adopts the Plan with the approval
of the board of directors of the Company.
1.8 "Company Elective Contributions".8 CompanyElectiveContributions means
the contributions made by the Company pursuant to Subsection 4.1(c).
1.9 "Company Elective Contributions Account".9
CompanyElectiveContributionsAccount means the separate account established for
each Participant to which Company Elective Contributions are credited.
1.10 "Company Profit-Sharing Contributions".10 CompanyProfit-
SharingContributions means those contributions made by the Company pursuant to
Subsection 4.1(d).
1.11 "Company Profit-Sharing Contributions Account".11 CompanyProfit-
SharingContributionsAccount means the separate account established for each
Participant to which Company Profit-Sharing Contributions are credited.
1.12 "Compensation".12 Compensation means, with respect to any
Participant, the total amount paid by the Company during any Plan Year as
remuneration for services rendered by a Participant for the Company.
Compensation shall not include director's fees, amounts contributed by the
Company to retirement, pension, profit-sharing or similar plans and payments by
the Company for group insurance, hospitalization, accident and like benefits.
For purposes of this Section, the determination of Compensation shall be made
with regard to salary reduction contributions made on behalf of a Participant
under Code section125, 402(e), 402(h)(1)(B) and 403(b). Compensation in excess
of $150,000 shall be disregarded. Such amount shall be adjusted at the same
time and in such manner as permitted under Code section401(a)(17)(B).
1.13 "Defined Benefit Plan".13 DefinedBenefitPlan means a retirement
plan which does not provide for individual accounts for Company contributions.
The Administrator shall treat all Defined Benefit Plans ever maintained by the
Affiliated Employer as a single plan.
1.14 "Defined Contribution Plan".14 DefinedContributionPlan means a
retirement plan which does provide for individual accounts for Company
contributions. The Administrator shall treat all Defined Contribution Plans
ever maintained by the Affiliated Employer as a single plan.
1.15 "Determination Date".15 DeterminationDate means, with respect to any
Plan Year, the last day of the preceding Plan Year, or, in the case of the
Plan's initial Plan Year, the last day of such Plan Year.
1.16 "Distribution Account".16 DistributionAccount means the separate
account established for each Participant or Beneficiary receiving Benefits
pursuant to Section 11.5(b).
1.17 "Effective Date".17 EffectiveDate means January 1, 1997.
1.18 "Elective Contributions".18 ElectiveContributions mean Employee
Savings Contributions. For each Plan Year, the Company may elect either to
include all or a portion of the Matching and Company Elective Contributions made
pursuant to Article 4 for such Plan Year, if any as Elective Contributions, or
to include such contributions or portion thereof in the numerator of the
fraction described in Section 15.1. Provided, however, that Matching
Contributions may only be treated as Elective Contributions if such
Contributions are fully vested under Section 10.4.
1.19 "Eligible Employee".19 EligibleEmployee means an Employee who has
attained age twenty-one and who has completed six consecutive Months of Service.
Employees whose employment is governed by the terms of a collective
bargaining agreement between the Employee representatives (within the meaning of
Code section 7701(a)(46)) and the Company under which retirement benefits were
the subject of good faith bargaining between the parties, unless such agreement
expressly provides for such coverage in the Plan, shall not be eligible to
participate in the Plan.
1.20 "Employee".20 Employee means any person in the employment of the
Company or of any other employer required to be aggregated with the Company
under Code section 414(b), (c), (m) or (o). Employee shall include leased
employees within the meaning of Code section 414(n)(2) and 414(o)(2) unless such
leased employees are covered by a plan described in Code section 414(n)(5) and
such leased employees do not constitute more than twenty percent of the
Company's Employees who are not Highly Compensated Employees.
1.21 "Employee Savings Contributions".21 EmployeeSavingsContributions
means the contributions made by a Participant pursuant to Section 4.2.
1.22 "Employee Savings Contributions Account".22
EmployeeSavingsContributionsAccount means the separate account established for
each Participant to which Employee Savings Contributions are credited.
1.23 "Employee Savings Contributions Agreement".23
EmployeeSavingsContributionsAgreement means the agreement made by a Participant
to make Employee Savings Contributions under Section 4.2.
1.24 "Employment Commencement Date".24 EmploymentCommencementDate means
that date upon which an Employee first performs an Hour of Service.
1.25 "Entry Date".25 EntryDate means the first day of each calendar
month of a Plan Year.
1.26 "Excess Aggregate Contributions".26 ExcessAggregateContributions
means, with respect to any Plan Year, the excess of the aggregate amount of
Contributions made on behalf of the Highly Compensated Partici-pant Group for
such Plan Year, over the maximum amount of such Contributions permitted as
provided under Section 15.2.
1.27 "Excess Contributions".27 ExcessContributions means, with respect
to a Plan Year, the excess Elective Contributions made on behalf of the Highly
Compensated Participants for the Plan Year over the maxi-mum amount of such
Contributions permitted under Section 14.1.
1.28 "Excess Employee Savings Contributions".28
ExcessEmployeeSavingsContributions means, with respect to any taxable year of a
Participant, the excess of the aggregate amount of such Participant's Employee
Savings Contri-butions actually made on behalf of such Participant for such
taxable year, over the dollar limitation provided in Code section 401(g) and
the Regulations thereunder.
1.29 "Five Percent Owner".29 FivePercentOwner means an individual who
owns, or who is considered as owning, within the meaning of Code section 318,
more than five percent of the outstanding stock of the Company or stock
possessing more than five percent of the total combined voting power of all
stock of the Company. For purposes of determining ownership under this section,
the aggregation rules of Code section 414(b), (c), (m) or (o) shall not apply.
1.30 "Highly Compensated Employee".30 HighlyCompensatedEmployee means an
individual who is an Employee during the determination year, and who, during the
look-back year:
(a) Is a Five Percent Owner;
(b) Receives Section 415 Compensation from the Company in excess of
$80,000;
(c) If elected by the Company for a Plan Year, is in the Top Paid
Group of Employees;
If the Employee satisfies the definition in clause (b) or (c) in the
determination year but not during the look-back year and does not satisfy clause
(a) in any period, the Employee is a Highly Compensated Employee only if he is
one of the 100 Employees paid the greatest Section 415 Compensation during the
determination year.
For purposes of this Section and Section 1.31, the "determination year"
shall be the Plan Year and the "look-back year" shall be the twelve month period
immediately preceding the determination year.
For purposes of this Section, the determination of Section 415 Compensation
shall be based on Section 415 Compensation which is actually paid and shall be
made without regard to Code section 125 and 402(h)(1)(B). Additionally the
dollar threshold amounts specified in (b) above shall be adjusted at such time
and in such manner as is provided in Regulations. In the case of such an
adjustment, the dollar limits which shall be applied are those for the calendar
year in which the Plan Year or the immediately preceding twelve month period
begins.
The Administrator must make the determination as to who is a Highly
Compensated Employee, including the determinations of the number and identity of
the Top Paid Group, the top 100 paid Employees and the relevant Section 415
Compensation, consistent with Code section 414(q) and the Regulations under
that Code section. The Company may make a calendar year election to determine
the Highly Compensated Employees for the determination year, as prescribed by
Regulations. A calendar year election must apply to all plans and arrangements
of the Company.
In determining who is a Highly Compensated Employee, all Affiliated
Employers shall be taken into account as a single employer and leased employees
within the meaning of Code sections 414(n)(2) and 414(o)(2) shall be considered
Employees unless such leased employees are covered by a plan described in Code
section 414(n)(5) and are not covered in any qualified plan maintained by the
Company.
1.31 "Highly Compensated Former Employee".31
HighlyCompensatedFormerEmployee means a former Employee who had a separation
year prior to the determination year, performs no services for the Company
during the determi-nation year and was a Highly Compensated Employee in the year
of separation from service or in any determination year after attaining age
fifty-five. Notwithstanding the foregoing, an Employee who separated from
service prior to 1987 will be treated as a Highly Compensated Former Employee
only if, during the separation year (or year preceding the separation year) or
any year after the Employee's fifty-fifth birthday, the Employee either received
Section 415 Compensation in excess of $50,000 or was a Five Percent Owner.
Highly Compensated Former Employees shall be treated as Highly Compensated
Employees.
1.32 "Highly Compensated Participant".32 HighlyCompensatedParticipant
means any Highly Compensated Employee who is eligible to participate in the
Plan.
1.33 "Highly Compensated Participant Group".33
HighlyCompensatedParticipantGroup means the group of Participants who are Highly
Compensated Participants.
1.34 "Hour of Service".34 HourofService means each hour for which an
Employee is paid, or entitled to payment, for the performance of duties for the
Company. These hours will be credited to the Employee for the computation
period in which the duties are performed or for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to by the Company. If an
award of back pay shall apply, Hours of Service shall be credited to the period
to which the award applies rather than the period of payment.
If the Company is a member of an affiliated service group under Code
section 414(m), a controlled group of corporations under Code section 414(b), a
group of trades or businesses under common control under Code section 414(c) or
any other entity required to be aggregated with the Company pursuant to Code
section 414(o) and Regulations thereunder, Hours of Service will be credited for
any employment for any period of time for other members of such group. Hours of
Service will also be credited for any individual as required under Code sections
414(n) or 414(o) and the Regulations thereunder considered an Employee of an
Affiliated Employer.
1.35 "Income".35 Income means the income allocable to excess amounts
which shall equal the sum of the allocable gain or loss for the applicable
computation period and the allocable gain or loss for the period between the end
of the applicable computation period and the date of distribution ("gap
period"). The income allo-cable to excess amounts for the applicable
computation period and the gap period is calculated separately and is determined
by multiplying the income for the applicable computation period, or the gap
period, by a fraction. The numerator of the fraction is the excess amount for
the applicable computation period or gap period. The denominator of the
fraction is the total account balance attri-butable to Contributions as of the
end of the appli-cable computation period or the gap period, reduced by the gain
allocable to such total amount for the applicable computation period or the gap
period and increased by the loss allocable to such total amount for the
applicable computation period or the gap period. The provision of this section
shall be applied:
(a) For purposes of Section 4.3, by substituting:
(i) "Excess Employee Savings Contributions" for "excess
amounts";
(ii) "Participant's taxable year" for "applicable computation
period";
(iii) "Employee Savings Contribution" for "Contributions";
and
(iv) "Participant's Employee Savings Contribution Account" for
"account balance".
(b) For purposes of Section 14.7(a) by substituting:
(i) "Excess Contributions" for "excess amount";
(ii) "Plan Year" for "applicable computation period";
(iii) "Employee Savings and, if applicable, Matching
Contributions" for "contributions"; and
(iv) "Participant's Employee Savings and, if applicable, Matching
Contributions Accounts" for account balance".
(c) For purposes of Section 15.6, by substituting:
(i) "Excess Aggregate Contributions" for "excess amounts";
(ii) "Plan Year" for "applicable computation period";
In lieu of the fractional method described above, a safe harbor method may
be used to calculate the allocable Income for the gap period. Under such safe
harbor method, allocable Income for the gap period shall be deemed to equal ten
percent of the Income allocable to excess amounts for the applicable compu-
tation period multiplied by the number of calendar months in the gap period.
For purposes of determining the number of calendar months in the gap period, a
distribution occurring on or before the fifteenth day of the month shall be
treated as having been made on the last day of the preceding month and a
distribution occurring after such fifteenth day shall be treated as having been
made on the first day of the next subsequent month.
Income allocable to any distribution of Excess Contributions on or before
the last day of the taxable year of the Participant shall be calculated from the
first day of the taxable year of the Participant to the date on which the
distribution is made pur-suant to either the fractional method or the safe
harbor method.
Notwithstanding the above, for applicable computation periods which began
in 1987, Income during the gap period shall not be taken into account.
1.36 "Key Employee".36 KeyEmployee means an Employee as defined in Code
section 416(i) and Regulations thereunder. Generally, any Employee or former
Employee (as well as each of his Beneficiaries) is considered a Key Employee if
he, at any time during the Plan Year that contains the Determination Date or any
of the preceding four Plan Years, has been included in one of the following
categories:
(a) An officer of the Company, as that term is defined within the
meaning of Regulations under Code section 416, having annual Section 415
Compensation greater than fifty percent of the amount in effect under Code
section 415(b)(1)(A) for any such Plan Year.
(b) One of the ten Employees having annual Section 415 Compensation
from the Company for a Plan Year greater than the dollar limitation in effect
under Code section 415(c)(1)(A) for the calendar year in which such Plan Year
ends and owning, or considered as owning within the meaning of Code section
318, both more than one-half percent interest and the largest interests in the
Company.
(c) a Five Percent Owner.
(d) a One Percent Owner having annual Section 415 Compen-sation from
the Company of more than $150,000. In determining whether an individual has
Section 415 Compensation of more than $150,000, Section 415 Compensation from
each employer required to be aggregated under Code section 414(b), (c), (m) and
(o) shall be taken into account.
For purposes of this Section, the determination of Section 415 Compensation
shall be based only on Section 415 Compen-sation which is actually paid and
shall be made without regard to Code sections 125, 402(a)(8), 402(h)(1)(B) and,
in the case of Com-pany contributions made pursuant to a salary reduction
agreement, without regard to Code section 403(b).
1.37 "Matching Contributions".37 MatchingContributions mean those
contributions made by the Company pursuant to Section 4.1(b).
1.38 "Matching Contribution Account".38 MatchingContributionAccount means
the separate account established for each Participant to which Matching
Contributions are credited.
1.39 "Month of Service".39 MonthofService means a calendar month during
any part of which an Employee completed an Hour of Service. An Employee shall
receive credit for all Months of Service for employment with wholly owned
Subsidiaries of the Company and for all Months of Service with the following
corporations:
Pawnee Industries, Inc.
Hamlin Industries, Inc.
Preferred Technical Group, Inc.
Plains Plastics, Inc.
Portage Industries Corporation
Each month of Qualified Military Service, provided the Employee returns to the
employment of the Company in accordance with applicable Federal law, shall be
recognized as a Month of Service.
1.40 "Non-Highly Compensated Employee".40 Non-HighlyCompensatedEmployee
means an Employee who is not a Highly Compensated Employee.
1.41 "Non-Highly Compensated Participant Group".41 Non-
HighlyCompensatedParticipantGroup means the group of Participants who are Non-
Highly Compensated Employees.
1.42 "Normal Retirement Date".42 NormalRetirementDate means a
Participant's sixty-fifth birthday.
1.43 "One Percent Owner".43 OnePercentOwner means any person who owns, or
is considered as owning, within the meaning of Code section 318, more than one
percent of the outstanding stock of the Company or stock possessing more than
one percent of the total combined voting power of all stock of the Company. For
purposes of determining ownership under this Section, the aggregation rules of
Code section 414(b), (c), (m) or (o) shall not apply.
1.44 "Participant".44 Participant means any Employee who participates in
the Plan as provided in Section 3.1 and who has not, for any reason, become
ineligible to participate further in the Plan.
1.45 "Plan".45 Plan means this Spartech Corporation 401(K) Savings &
Investment Plan, including all amendments thereto.
1.46 "Plan Year".46 PlanYear means the annual period ending on December 31.
1.47 "Qualified Domestic Relations Order".47
QualifiedDomesticRelationsOrder means a judgement, decree or order as defined in
Code section 414(p).
1.48 "Qualified Military Service" means Service in the Uniformed Services
as defined in Code section 14(u)(5).
1.49 "Regulation".49 Regulation means Federal income tax regulations as
promulgated by the Secretary of Treasury or his delegate, as amended from time
to time.
1.50 "Required Beginning Date".50 RequiredBeginningDate means April 1
immediately following the close of the calendar year in which the Participant
attains age seventy and one-half or in which the Participant retires, or, in the
case of a deceased Participant, would have attained age seventy and one-half had
he survived. For a Five Percent Owner, "Required Beginning Date" means the
April following the close of the calendar year in which the Participant attains
age seventy and a half, or, in the case of a deceased Participant, would have
attained age seventy and a half had he survived.
1.51 "Rollover Contributions".51 RolloverContributions means:
(a) Amounts directly transferred to the Trustee from the trust under
a Plan qualified under Code section 401(a).
(b) Amounts transferred to the Trustee by an Employee who has
received such amounts as a distribution from a trust under a plan qualified
under Code section 401(a) provided that such amounts may be transferred to the
Trustee without Federal income tax consequences to the Employee pursuant to Code
section 402(a)(5).
(c) Amounts directly transferred to the Trustee which are described
in Code section 408(d)(a)(3)(ii).
1.52 "Rollover Contributions Account".52 RolloverContributionsAccount
means the separate account established for each Participant or Employee who or
on whose behalf Rollover Contributions are made.
1.53 "Section 414(s) Compensation".53 Section414(s)Compensation means,
with respect to any Employee, his Employee Savings Contributions plus Section
415 Compensation paid during a Plan Year. The amount of Section 414(s)
Compensation with respect to any Employee shall include Section 414(s)
Compensation paid during the portion of the Plan Year in which the Employee is
eligible to participate in the Plan. The determination of Section 414(s)
Compensation shall be made with regard to employees savings contributions made
on behalf of an Employee to a plan maintained under Code section 125. Section
414(s) Compensation in excess of $150,000 shall be disregarded. Such amount
shall be adjusted at the same time and in the same manner as permitted under
Code section 415(d).
1.54 "Section 415 Compensation".54 Section415Compensation means a
Participant's earned income (as described in Code section 401(c)(2) and
Regulations thereunder), wages, salary, fees for professional services and other
amounts paid during the Plan Year for personal services actually rendered in the
course of employment with the Company (including, but not limited to,
commissions paid salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums, tips and bonuses).
The term "Section 415 Compensation" does not mean:
(a) (i) Company contributions on behalf of an Employee to a
plan of deferred compensation to the extent that, before
application of the Code section 415 limitations to such
plan, the contributions are not included in the gross income
of the Employee for his taxable year in which contributed;
(ii) Company contributions on behalf of an Employee to a
simplified employee pension plan described in Code section
408(k) to the extent such contributions are deductible by
the Employee; and
(iii) Any distribution from a plan of deferred compensation,
regardless of whether such amounts are includible in the
gross income of the Employee when distributed, except any
amounts received by an Employee pursuant to an unfunded, non
-qualified plan to the extent such amounts are includible in
the gross income of the Employee.
(iv) Contributions made by the Employer to a plan of deferred
compensation to the extent that all or a portion of such
contributions are recharacterized as voluntary employee
contributions.
(b) Amounts realized from the exercise of a non-qualified stock
option, or when restricted stock or property held by an Employee becomes either
freely transferable or is no longer subject to a substantial risk of forfeiture.
(c) Amounts realized from the sale, exchange or other disposition of
stock acquired under a qualified stock option.
(d) Other amounts which receive special tax benefits, such as
premiums for group term life insurance (but only to the extent that the premiums
are not includible in the gross income of the Employee), or contributions made
by a Company (whether or not under a salary reduction agreement) toward the
purchase of an annuity contract described in Code section 403(b) (regardless of
whether the contributions are excludible from the gross income of the Employee).
Section 415 Compensation shall be limited to $150,000, unless adjusted in the
same manner as permitted under Code section 615(d).
1.55 "Top Heavy Plan Year".55 TopHeavyPlanYear means a Plan Year commencing
after December 31, 1983 during which the Plan was top heavy pursuant to Section
13.4.
1.56 "Top Paid Group".56 TopPaidGroup means the top twenty percent of
Employees who performed services for the Company during the applicable year,
ranked according to the amount of Section 415 Compensation received from the
Company during such year. All Affiliated Employers shall be taken into account
as a single employer and leased employees, within the meaning of Code sections
414(n)(2) and 414(o)(2), shall be considered Employees unless such leased
employees are covered by a plan described in Code section 414(n)(5) and are not
covered in any qualified plan maintained by the Company. For purposes of
determining the number of active Employees in any year, the following Employees
shall be excluded; however, such Employees shall be considered for the purpose
of identifying the particular Employees in the Top Paid Group:
(a) Employees with less than six months of service;
(b) Employees who normally work less than seventeen and a half hours
a week;
(c) Employees who normally work less than six months during a year.
(d) Employees who have not attained age twenty-one.
(e) Employees who are non-resident aliens and who receive no earned
income, within the meaning of Code section 911(d)(6), from the Company
constituting United States source income within the meaning of Code section
861(a)(3).
In addition, if ninety percent or more of the Employees of the Company are
covered under agreements the Secretary of Labor finds to be collective
bargaining agreements between Employee representatives and the Company, and the
Plan covers only Employees who are not covered under such agreements, the
Employees covered by such agreements shall be excluded from both the total
number of active Employees as well as from the identification of particular
Employees in the Top Paid Group.
1.57 "Total and Permanent Disability".57 TotalandPermanentDisability
means a physical or mental condition of a Participant resulting from bodily
injury, disease, or mental disorder which renders him incapable of continuing
his usual and customary employment with the Company. The disability of a
Participant shall be determined by a licensed physician chosen by the
Administrator. The determination shall be applied uniformly to all
Participants.
1.58 "Trustee".58 Trustee means the person or entity named as Trustee
under the Trust.
1.59 "Trust".59 Trust means the Spartech Corporation 401(k) Savings &
Investment Trust.
1.60 "Valuation Date".60 ValuationDate means the last day of each Plan Year
or other date as agreed to by the Company and the Trustee.
1.61 "Voluntary Contributions" mean non-deductible Voluntary Contributions
made by a Participant pursuant to the Pawnee Industries, Inc. 401(k) Thrift
Plan.
1.62 "Voluntary Contributions Account" means the separate account
established for Participants who make Voluntary Contributions.
1.63 "Year of Service".63 YearofService means the Employee's number of
Months of Service as herein set forth divided by twelve.
ARTICLE II. -- ADMINISTRATION
2.1 The Administrator shall have the sole responsibility for the
administration of the Plan. The Administrator shall have full power and
authority to administer the Plan and to interpret its provisions. Its
decisions, interpretations and administra-tion made in good faith may be relied
upon by Employees, the Trustee and all other parties in interest as proper under
the Plan. A misstatement or other mistake of fact shall be corrected when it
becomes known, and such adjustment shall be made as the Administrator considers
equitable and practical.
2.2 The Administrator shall have the following powers and duties in
addition to those specified elsewhere in this Plan document:
(a) To adopt such uniform and nondiscriminatory regulations and
procedures as it shall deem necessary or appropriate to the administration of
the Plan.
(b) To delegate one or more of its duties to another party or
parties, provided that the nature of the duties allocated shall be specifically
stated.
(c) To require Plan Participants to furnish all pertinent
information. The Administrator may rely on information furnished by a
Participant.
(d) To determine eligibility for participation and Benefits and to
certify such information to the Trustee.
(e) To make determinations as to the right of any person to Benefits.
If the Administrator denies a claim for Benefits under the Plan, the claiming
Participant or Beneficiary shall receive a written notice setting forth the
specific reasons for the denial. The Administrator shall afford the claiming
Participant or Beneficiary a reasonable opportunity for a full and fair review
of the decision resulting in denial.
(f) To prepare and distribute, in such manner as the Administrator
deems appropriate, reports and information explaining the Plan and the status of
a Participant under the Plan.
(g) To establish procedures to determine whether orders constitute
Qualified Domestic Relations Orders and to administer distributions under such
orders.
(h) To determine facts required in the administration of the Plan
from information furnished by the Company. Such information shall be certified
by the Company and may be relied upon conclusively by the Administrator without
inquiry.
(i) Shall designate an individual to be the agent of the
Administrator for service of legal process.
(j) May employ advisors and counsel, who may be advisors or counsel
for the Company, and may arrange for such clerical, accounting and other
services as it may require to carry out the provisions of the Plan. Fees for
services to the Plan shall be paid by the Trustee unless the Company shall elect
to pay the same directly. Fees for services to the Plan shall be billed
separately from any fees for services to the Company.
(k) Shall maintain, or cause to be maintained, all books of account,
records and other data as it may deem necessary or advisable for the proper
administration of the Plan.
ARTICLE III. -- ELIGIBILITY AND PARTICIPATIONIII.
3.1.1 Each Employee who is a Participant on the Effective Date shall
remain a Participant. As of and following the Effective Date, each Employee
shall become a Participant as of the first Entry Date coinciding with or next
following his qualification as an Eligible Employee.
Any person who is absent from active employment of the Company on the date
he would otherwise become a Participant shall automatically become a Participant
as of the first day of the month coincident with or next following the date of
his return to active employment, subject to the provisions of this Article 3.
3.2.2 An Employee who previously participated in the Plan and
terminated employment with the Company or any Eligible Employee who is absent
from active employment with the Company on the date he would otherwise become a
Participant, need not requalify under Section 3.1 to again become a Participant
but shall participate again immediately upon the date of his reemployment.
However, if such Employee terminates his employment for any reason before again
completing twelve consecutive months of employment commencing on the date of his
reemployment, he shall be deemed retroactively not to have become a Participant
and all of his Matching, Company Profit-Sharing and/or Company Elective
Contributions Accounts shall be forfeited as of the last day of the Plan Year in
which his termination of employment occurs. For purposes of this Section, "date
of his reemployment" means the date on which the Employee completes his first
Hour of Service following his termination under Section 10.1.
3.3.3 An Employee who becomes a Participant shall continue to
participate in the Plan through the Valuation Date immediately following his
death, retirement, becoming Totally and Permanently Disabled or termination
under Section 10.1.
3.4.4 If, in any Plan Year, an Employee who should be included as a
Participant is erroneously omitted and discovery of such omission is not made
until after Matching, Company Profit-Sharing and/or Company Elective
Contributions have been made on his behalf for such Year, the Company shall make
subsequent Matching, Company Profit-Sharing and/or Company Elective Matching
Contri-butions with respect to the omitted Employee in the amount the Company
would have contributed with respect to him had he not been omitted. Such
Contributions shall be made regardless of whether they are deductible in whole
or in part in any taxable year under applicable provisions of the Code.
If, in any Plan Year, any person who should not have been included as a
Participant is erroneously included and discovery of such incorrect inclusion is
not made until after Matching, Company Profit-Sharing and/or Company Elective
Contributions for the year have been made, the Company shall not be entitled to
recover such Contributions made with respect to the ineligible person regardless
of whether a deduction is allowable with respect to such Contributions. In such
event, the Matching, Company Profit-Sharing and/or Company Elective Contri-
butions, and Income attributable to such Contributions, contri-buted with
respect to the ineligible person shall constitute a forfeiture for the Plan Year
in which the discovery is made and such Participant's Employee Savings
Contributions, and Income attributable to such Contributions, shall be returned
to the Participant.
ARTICLE IV. -- CONTRIBUTIONS
4.1.1 For each Plan Year, the Company will contribute to the Trustee
for purposes of the Plan the following amounts:
(a) The amount of Employee Savings Contributions elected by
Participants pursuant to Section 4.2
(b) Matching Contributions in the amount of fifty percent of Employee
Savings Contributions made by a Participant. No Matching Contributions shall be
made with respect to a Participant's Employee Savings Contributions which exceed
six percent of the Participant's Compensation. Matching Contributions, and
Income attributed to such Contributions, which are categorized as Excess
Contributions and Excess Employee Savings Contributions shall be forfeited as of
the last day of the Plan Year for which such Contributions are made.
(c) Company Elective Contributions in an amount determined by the
board of directors of the Company.
(d) Company Profit-Sharing Contributions in an amount determined by
the board of directors of the Company.
In no event shall the Contributions pursuant to this Section 4.1 on account of
any fiscal year of the Company exceed the maximum amount deductible from its
income for such year under Code section 404 or any successor statute; provided,
however, the Company shall make Contributions in excess of the limitations of
this Section if such Contributions are necessary to comply with the top heavy
minimum contribution rules of Section 13.2.
4.2.2 Each Participant may elect to have Employee Savings Contributions
contributed to the Trustee by the Company in accordance with Section 4.4.
Subject to rules promulgated by the Administrator, such Contributions shall not
exceed fifteen percent of a Participant's Compensation. A Participant who
terminates an election to make Employee Savings Contributions shall not again be
eligible to make such contributions until the Valuation Date immediately
following termination of the election.
4.3.3 If a Participant's Employee Savings Contributions under this
Plan, together with any elective deferrals (as defined in Regulation 1.402(g)-
1(b)) under another qualified cash or deferred arrangement (as defined in Code
section 401(k)), a simpli-fied employee pension (as defined in Code section
408(k)), an employees' savings arrange-ment (within the meaning of Code section
3121(a)(5)(D)), a deferred compensation plan under Code section 457, or a trust
described in Code section 501(c)(18) cumulatively exceed the limitation imposed
by Code section 402(g) (as adjusted annually in accordance with the method
provided in Code section 415(d) pursuant to Regulations) for such Participant's
taxable year, the Participant may, not later than March 1 following the close of
his taxable year, notify the Administrator in writing of such excess and request
that his Employee Savings Contributions under this Plan be reduced by an amount
specified by the Participant. In such event, the Administrator may direct the
Trustee to distribute such excess amount (and any Income allocable to such
excess amount) to the Participant not later than the first April 15th following
the close of the Participant's taxable year. Distributions in accordance with
this paragraph may be made for any taxable year of the Participant which begins
after December 31, 1986. Any distribution of less than the entire amount of
Employee Savings Contributions and Income shall be treated as a pro rata distri-
bution of Excess Employee Savings Contributions and Income under the Plan for
the taxable year. Any distribution on or before the last day of the
Participant's taxable year must satisfy each of the following conditions:
(a) the Participant shall designate the distribution as Excess
Employee Savings Contributions;
(b) the distribution must be made after the date on which the Plan
received the Employee Savings Contribution; and
(c) the Plan must designate the distribution as a distribution of
Excess Employee Savings Contributions.
4.4.4 Employee Savings Contributions shall be made as follows:
(a) A Participant may commence making Employee Savings Contributions
to the Plan at any time following his becoming an Eligible Employee. The
Participant shall make such an election by entering into a written Employee
Savings Contributions Agree-ment with the Company and filing such agreement with
the Administrator. Such election shall initially be effective as soon as
practicable follow-ing the acceptance of the Employee Savings Contributions
Agreement by the Adminis-trator, shall not have retroactive effect and shall
remain in force until revoked; provided, however, the termination of the
Participant's employ-ment, or the cessation of participation for any reason,
shall be deemed to revoke any Employee Savings Contribution Agreement then in
effect, effective immediately following the close of the pay period within which
such termination or cessation occurs.
(b) In accordance with Administrator rules, a Participant may modify
a prior election at any time during the Plan Year and concurrently make a new
election by filing a written notice with the Administrator at least thirty days
(or upon such shorter notice period as may be acceptable to the Administrator)
prior to the date for which such modification is to be effective.
(c) A Participant may elect to prospectively revoke his Employee
savings agreement in its entirety at any time during the Plan Year by providing
the Administrator with thirty days written notice of such revocation (or upon
such shorter notice period as may be acceptable to the Administrator). Such
revo-cation shall become effective as of the beginning of the first pay period
coincident with or next following the expiration of the notice period.
(d) If the Administrative Committee determines that the Employee
Savings Contributions made by Highly Compensated Employees may violate Code
section 401(k), then on such occasion, the Company may change or suspend the
amounts by which a Participant's Compensation is deferred pursuant to his
Employee Savings Contributions Agreement.
(e) If the Company changes or suspends its Employee Savings
Contributions Agreements in (d) above, then the affected Participants shall
continue to participate in the Plan. When the situation which resulted in the
change or suspension of the Employee Savings Contributions Agreements described
in (d) above ceases to exist, the Employer shall reinstate the Employee Savings
Contribu-tions Agreements to the fullest extent possible for all affected
Participants in a nondiscriminatory manner.
All elections must be in writing on a form acceptable to the Admin-istrator
and shall be effective in accordance with Adminis-trative rules.
4.5.5 A Participant may not make voluntary, after-tax Contributions to
the Plan.
4.6.6 The Company may make Contributions from time to time during its
fiscal year. However, all Company and Matching Contributions must be paid to
the Trustee on or before the last day for filing the Company's Federal income
tax return, including extensions, for the fiscal year on account of which the
Contributions are made. If the Company pays a Contribution to the Trustee after
the last day of the fiscal year on account of which the Contribution is made,
the Company shall designate in writing to the Administrator that the payment is
on account of the preceding fiscal year. However, Employee Savings
Contributions accumulated through payroll deductions shall be paid to the
Trustee at the earliest date such contribu-tions can be reasonably segregated
from the Company's general assets, but in any event, within ninety days from the
date such amounts would have otherwise been payable to the Participant in cash.
The provisions of Department of Labor Regulations 2510.3-102 are incorporated
herein by reference. Furthermore, any additional Company Elective Contributions
shall be paid to the Trustee no later than the last day of the twelve month
period immediately following the close of the Plan Year.
4.7.7 All Company Profit-Sharing, Company Elective, Matching, Employee
Savings and Rollover Contributions shall be added to and become part of the
funds of the Plan. As of the last day of each Plan Year, such Contributions on
account of that Plan Year shall be credited to Participant's Accounts in accord
with Section 5.5. If the Company's fiscal year is the same as the Plan Year,
Contributions made by the Company on account of any fiscal year shall be deemed
to be on account of the same Plan Year. If the Company's fiscal year is
different from the Plan Year, Contributions made by the Company on account of
any fiscal year shall be deemed to be on account of the Plan Year in which the
fiscal year ends.
4.8 An Employee may contribute Make Up Employee Contributions upon return
to employment of the Company following Qualified Military Service. Such
Contributions must be made no later than the last day of a period equal to three
times the period of the Employee's Qualified Military Service or the last day of
a five year period, whichever first occurs after the Employee's reemployment
with the Company. The Company will contribute Make Up Company Contributions on
behalf of an Employee who returns to employment of the Company following
Qualified Military Service within sixty days of such return to employment.
"Make Up Employee Contributions" means Employee Savings Contributions an
Employee could have made during a period of Qualified Military Service and "Make
Up Company Contributions" means the Company Elective and Matching Contributions
and forfeitures that would have been allocated to the accounts of an Employee
during a period of Qualified Military Service. Such Contributions shall be
based upon the Employee's average compensation for the twelve month period
immediately preceding the commencement of his Qualified Military Service. Make
Up Employee and Company Contributions shall be made without regard to the
limitations of Sections 4.3, 5.8, 14.1 and 15.1 for the Plan Year in which they
are paid. At the time of payment, Make Up Employee Contributions shall be
credited to Employee Savings Contributions Accounts and Make Up Company
Contributions shall be credited to Company Elective and Profit Sharing
Contributions Accounts. No earnings shall be credited to Make Up Employee and
Company Contributions for any period before such Contributions are paid.
ARTICLE V. -- ACCOUNTING
5.1.1 Contributions shall be credited as follows:
(a) Company Profit-Sharing Contributions to Company Profit-Sharing
Contributions Accounts;
(b) Matching Contributions to Matching Contributions Accounts;
(c) Employee Savings Contributions to Employee Savings Contributions
Accounts;
(d) Company Elective Contributions to Company Elective Contributions
Accounts;
(e) Rollover Contributions to Rollover Contributions Accounts;
(f) Voluntary Contributions to Voluntary Contributions Accounts.
5.2.2 The Administrator shall establish and maintain separate Company
Profit-Sharing and Company Elective Accounts for each Participant. The Adminis-
trator shall also establish and maintain, where relevant, an Employee Savings
Contributions Account for each Participant making Employee Savings
Contributions, a Matching Contributions Account for each Participant entitled to
Matching Contributions, a Voluntary Contributions Account for each Participant
who has made Voluntary Contributions, a Rollover Contri-butions Account for each
Employee making Rollover Contri-butions, a separate Distribution Account
pursuant to Section 11.9 for each Beneficiary entitled to Benefits pursuant to
Section 11.5(b) and a Section 415 Suspense Account described in Subsection
5.7(f). Company Profit-Sharing, Company Elective, and forfeitures credited to
each Company Profit-Sharing and Company Elective, and where relevant, Employee
Savings Contributions credited to each Employee Savings Contributions Account,
Matching Contributions credited to each Matching Contributions Account,
Voluntary Contributions credited to each Voluntary Contributions Account and
Rollover Contributions credited to each Rollover Contributions Account, as
adjusted for investment experience, charges under Section 5.4 and other
appropriate credits or charges, shall represent the propor-tionate interest in
the assets of the Plan of each Participant and Employee. The balance credited
to each Distribution Account, as adjusted for investment experience, charges
under Sections 5.4 and 11.9 and other appropriate credits or charges, shall
repre-sent the proportionate interest in the assets of the Plan of each
Beneficiary entitled to Benefits. The maintenance of an Account or Accounts for
a Participant or Employee, or a Distribution Account for a Beneficiary, shall
not give him a right or claim to, or an interest in, any specific asset or
assets of the assets of the Plan, but only the right to receive Benefits in the
amount and form and at the time provided in the Plan.
5.3.3 Within sixty days after the end of each calendar quarter, the
Trustee shall furnish the Administrator a written schedule of the total assets
of the Plan on such Valuation Date, showing the valuation at fair market value
placed on each asset. For pur-poses of this Section, assets of the Plan shall
not be deemed to include the Section 415 Suspense Account described in
Subsection 5.7(f) and the segregated accounts described in Sections 10.5, 11.9,
and 17.11. The Trustee's deter-mination of the value of the assets of the Plan,
except for patent errors, may be relied upon conclusively by the Administrator,
the Company, Employees, Participants and Beneficiaries without further inquiry.
Upon request by the Administrator, the Trustee shall furnish a statement of
purchases, sales, gains, losses, income, expenses, taxes, contributions from the
Company and distributions to Participants and Beneficiaries since the last
accounting.
Notwithstanding anything to the contrary, the Administrator shall, in its
sole discretion, have the authority to direct the Trustee to value Plan assets
within sixty days of any date. Any such special valuation of assets may be used
in lieu of the valuation provided in the first sentence of this Section for
purposes of distributions provided for in Article 11. In making allocations to
a Participant's Account or Accounts, the Adminis-trator shall follow the steps
set forth in Sections 5.4 and 5.5, as appropriate, taking into account
distributions from such Accounts and the amount of such distributions.
5.4.4 As of each Valuation Date, Accounts of each Participant and
Beneficiary and segregated accounts, if any, shall be credited with the income,
gain and loss attributable to such Accounts for the period from the preceding
Valuation Date to the current Valuation Date based upon the investment
experience of the particular investment Fund or Funds for such period and
Accounts of each Participant shall be reduced by amounts which are paid out,
used or set aside because of retirement, death, disability or termination under
Section 10.1.
5.5.5 Subject to Sections 5.7, 5.8 and 5.9, allocate Employee Savings,
Matching, and Rollover Contributions as follows:
(a) Allocate Employee Savings Contributions directly to the Employee
Savings Contributions Account of the Participant who made the Contributions.
(b) Allocated Matching Contributions to a Participant's Matching
Contribution Account in the amount of fifty percent of Employee Savings
Contributions made by the Participant. No Matching Contributions for a Plan
Year shall be made with respect to a Partici-pant's Employee Savings
Contributions which exceed six percent of the Participant's Compensation.
(c) Allocate any Rollover Contributions directly to the Rollover
Contributions Account of the Participant who made the Contributions.
5.6.6 Subject to Sections 5.7, 5.8 and 5.9, allocate Company Elective
and Profit-Sharing Contributions and forfeitures as follows:
(a) Allocate the Company Elective Contributions to the Plan on
account of the Plan Year to the Company Elective Contribu-tions Accounts of
Participants under one or any combination of the following methods in order to
satisfy the requirements of Code section 401(k)(3)(A)(ii):
(i) Apportion to the Company Elective Contri-butions Account of
some or all Participants who are Non-Highly Compensated
Employees in a manner as determined by the Administrator.
(ii) Apportion to the Company Elective Contri-butions Account of
each Participant who made Employee Savings Contributions
during the Plan Year in the ratio that Employee Savings
Contributions made by such Parti-cipant bear to the Employee
Savings Contributions made by all Participants during the
Plan Year.
(iii) Apportion to the Company Elective Contri-butions
Account of each Participant in the ratio that the
Compensation of such Participant for the Plan Year bears to
the Compensation of all Participants for the Plan Year.
The Board of Directors of the Company shall determine which of the above methods
or combinations thereof to use and, if combinations of methods are used, the
amount to allocate under each method.
(b) Subject to Sections 5.7, 5.8, 5.9, 10.6 and 13.2, allocate
Company Profit-Sharing Contributions to the Company Profit-Sharing Contributions
Account of each Participant in the ratio that the Compensation of each
Participant bears to the Compensation of all Participants.
(c) Subject to Sections 5.7, 5.8, and 5.9, to the extent not used to
restore accounts under Section 10.5 and 11.16 and to reduce Matching
Contributions under Section 4.1, allocate forfeitures to the Company
Contributions Accounts of Participants on the same basis as in (b) above.
No allocation shall be made pursuant to this Section to Company Elective
and/or Profit-Sharing Contributions Accounts of Participants who are not
employed on the last day of the Plan Year.
5.7.7 For purposes of applying the provisions of Sections 5.8, 5.9 and
5.10:
(a) "Annual Additions" mean the following amounts credited to a
Participant's Account or Accounts for a Plan Year under all Defined Contribution
Plans maintained by the Company:
(i) Company Contributions.
(ii) Participant contributions.
(iii) Forfeitures.
(iv) Amounts allocated after March 31, 1984 to an individual
medical account, as defined in Code section 415(l)(2),
which is part of a Defined Benefit Plan maintained by the
Company.
(v) Amounts paid or accrued after December 31, 1985 by the
Company which are attributable to post retirement medical
benefits allocable to the separate account of a Key Employee
under a welfare benefit fund, as defined in Code section
419(e), which is maintained by the Company.
The following items shall not be treated as Annual Additions:
(vi) For purposes of the percentage limitation under Section
5.8(b), contributions for medical benefits (within the
meaning of Code section 419A(f)(2)) after separation from
service which are otherwise treated as Annual Additions and
any amount otherwise treated as an Annual Addition under
Code section 415(l)(1).
(vii) Rollover Contributions.
(viii) Repayment of loans made to a Participant from the
assets of the Plan.
(ix) Repayment of distributions received by a Participant
pursuant to Code section 411(a)(7)(B).
(x) Employee contributions to a simplified employee pension
excludible from gross income under Code section 408(k)(6).
(xi) Contributions required to be repaid or recharacterized as
Excess Employee Savings Contri-butions pursuant to Section
4.3, Excess Aggregate Contributions pursuant to Section
15.6, and Excess Employee Savings Contributions pursuant to
Section 14.7.
(b) "Defined Benefit Fraction" means the Projected Annual Benefit of
a Participant under the Defined Benefit Plan divided by the lesser of:
(i) One hundred and twenty five percent of the dollar limit in
effect under Code section 415(b)(1)(A) for the Plan Year;
or
(ii) One hundred and forty percent of the Partici-pant's average
Section 415 Compensation for his highest three consecutive
Years of Service.
If the Participant was a participant in a Defined Benefit Plan main-tained by
the Company which was in existence on July 1, 1982, the denominator of the
fraction will not be less than one hundred and twenty five percent of the annual
benefits under such plan which the Participant had accrued as of the end of the
plan year for such plan ending after January 1, 1983.
(c) "Defined Contribution Fraction" means the sum of Annual Additions
to the Participant's Accounts as of the close of the Plan Year divided by the
sum of the lesser of the following amounts determined for the Plan Year and for
each Plan Year in which the Participant is employed by the Company:
(i) One hundred and twenty five percent of the dollar limitation
in effect under Code section 415(c)(1)(A) for the Plan
Year; or
(ii) Thirty-five percent of the Participant's Section 415
Compensation for the Plan Year.
(d) "Excess Amounts" mean, for any Participant for a Plan Year, the
excess, if any, of:
(i) The Annual Additions which would be credited to a
Participant's Account or Accounts, without regard to the
limitations of Sections 5.8 and 5.9, over
(ii) The maximum Annual Additions which may be credited to a
Participant's Account or Accounts under Sections 5.8
and 5.9.
(e) "Projected Annual Benefit" means the annual retirement benefit
(adjusted to any actuarially equivalent straight life annuity if the plan
expresses such benefit in a form other than a straight life annuity or a
qualified joint and survivor annuity) of the Participant under the terms of the
Defined Benefit Plan on the assumption he continues employment until his normal
retirement age as stated in the Defined Benefit Plan, his compensation continues
at the same rate in effect in the Plan Year under consideration until the date
of his normal retirement age and all other relevant factors used to determine
benefits under the Defined Benefit Plan remain constant as of the current Plan
Year and all future Plan Years.
(f) "Section 415 Suspense Account" means the unallocated account
established for the purpose of holding Excess Amounts.
5.8.8 Allocation of Annual Additions to the Account or Accounts of any
Participant for a Plan Year under this Plan and all other Defined Contribution
Plans maintained by the Company shall be limited to the lesser of:
(a) Thirty thousand dollars, or
(b) Twenty-five percent of the Participant's Section 415 Compensation
for the Plan Year.
Participant and Company Contributions and forfeitures in excess of this limit
shall be utilized as provided in Subsection 5.10.
5.9.9 If the Participant presently participates or has ever
participated under a Defined Benefit Plan maintained by the Company, the sum of
the Defined Benefit Fraction and the Defined Contribution Fraction for a
Participant for a Plan Year shall not exceed 1.0.
5.10.10 If the provisions of Sections 5.8 and 5.9 apply to limit benefits
otherwise payable under a Defined Benefit Plan and/or Annual Additions to be
allocated to a Participant's account or accounts under a Defined Contribution
Plan, the Participant's benefits under the Defined Benefit Plan and/or Annual
Additions under the Defined Contribution Plan shall be reduced, to the extent
necessary, as follows:
(a) First, Participant contributions recognized in the computation of
Annual Additions, if any, shall be returned to the Participant under this Plan
and all other plans permitting such returns.
(b) Second, if the other plan(s) do not contain any provisions
permitting a reduction in benefits or contributions thereunder, the necessary
reduction shall be made under this Plan. If the other plan(s) permit reduction
but are silent as to the amount of the reduction permitted thereunder, and if
the terms of such other plan(s) permit such action, the reduction shall be
apportioned between this Plan and the other plan(s) in such a way that the plan
having the larger Defined Benefit or Defined Contribution Fraction, as
appropriate, shall first absorb the reduction until the plan fractions of all
plans are equal, and then the reductions shall be ratable between plans. If the
terms of such other plan(s) do not permit such action, the reduction shall be
apportioned entirely to any one plan or between or among all plans for which a
reduction is appropriate as the Participant may direct by written instructions
filed with the Administrator and the plan administrator(s) of such other
plan(s).
(c) Third, Excess Amounts remaining after adjustments under
Subsections (a) and (b), above, shall be credited to the Section 415 Suspense
Account. Amounts credited to the Section 415 Suspense Account shall be credited
to accounts of Partici-pants for the Plan Year immediately following the Plan
Year in which such amounts are credited to the Section 415 Suspense Account in
the same manner as provided for the allocation of Company Contributions under
Section 5.5. Amounts shall be allocated from the Section 415 Suspense Account
before allocation of Company Contributions for such Plan Year. The Section 415
Suspense Account shall not share in any earnings or losses of the assets of the
Plan. Excess Amounts, other than Participant Contributions, may not be
distributed to Participants or Beneficiaries.
5.11.11 The Administrator shall furnish each Participant an annual
statement of his Account or Accounts as soon as practical following the end of
the Plan Year.
ARTICLE VI. -- INVESTMENTS
6.1.1 Each Participant and Beneficiary shall be entitled to direct the
manner in which assets credited to his respective Accounts shall be invested and
reinvested, at the times and in the manner provided by this Article.
6.2.2 The Trustee shall create and maintain the following separate
Funds:
(a) A Fund which shall have as its principal objective a diversified
portfolio of equity securities (the "Equity Fund").
(b) A Fund which shall have as its principal objective the
preservation of principal and the production of income (the "Fixed Fund").
(c) A guaranteed investment contract or a Fund which is primarily
invested in guaranteed investment contracts.
(d) A Fund which is invested exclusively in common stock of the
Company.
(e) Any other Fund or Funds the Administrator selects to establish.
6.3.3 Each Participant or Beneficiary shall direct the investment of
all contributions made by him and on his behalf in any one, or a combination, of
the Funds described above.
An investment direction shall specify the particular Fund or Funds in which
amounts credited to the respective Accounts of a Participant shall be invested.
A Participant or Beneficiary may, in accordance with Administrator rules, direct
investment of a portion of his Account balances in one Fund and the remaining
portion in another Fund or Funds.
Such investment directions by a Participant or Beneficiary shall cover the
full amount credited to his Accounts. In the event a Participant or Beneficiary
fails to direct the manner in which assets credited to his Accounts shall be
invested, the Trustee shall invest all assets with respect to which no Partici-
pant or Beneficiary investment direction is effective in the guaranteed
investment contract Fund.
Investment directions may be made with respect to a Participant's or
Beneficiary's existing Accounts as of a Valuation Date by delivering written
notice to the Plan Administrator at least thirty days prior to such day.
An investment direction once given shall be deemed to be a continuing
direction until explicitly changed by the Participant or Beneficiary by a
subsequent written direction delivered to the Administrator in accordance with
this Section. An investment direction for future Contributions may differ from
the direction for prior Contributions.
6.4.4 In addition to directing the manner of the initial investment of
Contributions made to his respective Accounts, a Participant or Beneficiary from
time to time may direct rein-vestment of assets credited to his respective
Accounts as of each Valuation Date upon written notice delivered to the
Administrator at least thirty days before the end of such Valuation Date.
An investment direction change in terms of whole dollar amounts or
percentages of the amounts credited to the account of the Participant or
Beneficiary but may not be in excess of the amount credited to such account as
of such Valuation Date.
As soon as practical after each Valuation Date, the Trustee shall transfer
amounts between the respective Funds equal to the net change in investments as
directed by the Participants or Beneficiaries as of such Date.
6.5.5 Accounts shall be reduced by amounts paid out, used or set aside
because of retirement, death, disability or termination under Section 10.1.
6.6.6 As of each Valuation Date, the Administrator shall credit to the
Accounts of each Participant or Beneficiary with the income, gain and losses
attributable to such Accounts for the period from the last Valuation Date to the
current Valuation Date based upon the investment experience of the Funds for
such period.
6.7 Each Participant and Beneficiary may direct the Trustee how to
vote the shares of the Company's common stock held by the Trustee and credited
to his Accounts on the record date established for each meeting or solicitation
of consents of the shareholders of the Company. For this purpose, the
Administrator shall furnish each such Participant and Beneficiary within a
reasonable period of time prior to each such meeting for the proxy materials
provided to shareholders for the meeting or consent solicitation, together with
a form to be returned to the Trustee on which may be set forth the Participant's
or Beneficiary's confidential instructions as to the manner of voting such
shares of stock. Upon receipt of such instructions, the Trustee shall vote such
shares, in person or by proxy, in accordance therewith. If within a reasonable
period of time prior to any meeting or conclusion of any consent solicitation of
the shareholders of the Company, as specified by the Administrator, no
instructions have been received by the Trustee from a Participant or
Beneficiary, the Trustee shall vote the shares of the Company's common stock
allocated to his Account, in person or by proxy, in the same manner as the
Trustee votes the majority of the shares of the Company's common stock for which
instructions are received. Unallocated shares of the Company's common stock, if
any, held by the Trustee, shall also be voted by the Trustee, in person or by
proxy, in the same manner as the Trustee votes the majority of the shares of the
Company's common stock for which instructions are received.
6.8 Each Participant or Beneficiary may direct the Trustee to tender for
purchase or acquisition the shares of the Company's common stock held by the
Trustee and allocated to his Accounts in the event an offer to purchase,
exchange or otherwise acquire such shares is made to all shareholders of the
Company's common stock. For this purpose, the Administrator shall furnish to
each Participant and Beneficiary within a reasonable period of time the
materials provided to shareholders with respect to the offer together with a
form to be returned to the Trustee on which the Participant and Beneficiary may
set forth confidential instructions with respect to the offer. If within a
reasonable period of time, as specified by the Administrator, no instructions
have been received by the Trustee from a Participant or Beneficiary relating to
the offer, the Trustee shall not tender any shares of the Company's common stock
allocated to such Participant's or Beneficiary's Accounts. The Trustee shall
also not tender those shares of the Company's common stock it holds, if any,
which are not allocated to an Account.
ARTICLE VII. -- RETIREMENT DATE AND BENEFITS
7.1.1 A Participant may retire at anytime after the occur-rence of his
Normal Retirement Date. Payment of a Participant's Benefits shall commence
pursuant to Article 11 no later than his Required Beginning Date even though he
is still employed by the Company on such date. In this event, the Employee
shall remain a Participant in the Plan until he is no longer classified as an
Employee.
7.2.2 If the value of a Participant's Accounts is $5,000 or less on the
Valuation Date immediately following the date the Participant retires, the
Administrator shall cause the Trustee to distribute retirement Benefits to him
in accordance with Article 11 as of such Valuation Date. If the value of a
Participant's Accounts is more than $5,000 on the Valuation Date immediately
following the date the Participant retires, the Administrator shall cause the
Trustee to distribute retirement Benefits in accordance with Article 11 as of
such Valuation Date only if the Participant consents in writing to such
distribution. If the Participant does not so consent, the Administrator shall
cause the Trustee to distribute such Benefits following the earliest to occur of
the Valuation Date immediately following the date the Participant dies or
consents in writing to distribution. Provided, however, that distribution must
commence on or before the Participant's Required Beginning Date.
7.3.3 Retirement Benefits shall be full value of the Parti-cipant's
Accounts on the Valuation Date immediately preceding the distribution date under
7.1 of such Benefits. A Participant shall be fully vested in his Benefits on
his Normal Retirement Date.
ARTICLE VIII. -- DEATH BENEFITS
8.1.1 If the value of a Participant's Accounts is $5,000 or less on the
Valuation Date immediately following his death, the Administrator shall cause
the Trustee to distribute death Benefits to his Beneficiary in accordance with
Article 11 as of such Valuation Date. If the value of a Participant's Accounts
is more than $5,000 on the Valuation Date immediately following his death, the
Administrator shall cause the Trustee to distribute death Benefits to his
Beneficiary in accordance with Article 11 as of such Valuation Date only if the
Beneficiary consents in writing to such distribution. If the Beneficiary does
not so consent, the Administrator shall cause the Trustee to distribute such
Benefits following the earliest to occur of the Valuation Date immediately
following the date the Beneficiary dies or consents in writing to distribution.
Provided, however, that distribution must commence on or before what would have
been the Participant's Required Beginning Date had he survived to such date.
8.2.2 Death Benefits shall equal the full value of the Participant's
Accounts on the Valuation Date immediately preceding the distribution date under
Section 8.1 of such Benefits.
8.3.3 Each Participant shall designate a Beneficiary or Beneficiaries
on a form prescribed by and filed with the Administrator. Each designation may
be changed by the Participant by signing and filing with the Administrator a new
Beneficiary designation, subject to the provisions of this Article 8. In the
event a Participant has not waived the qualified pre-retirement survivor annuity
in accordance with Section 11.13, fifty percent of his Benefits, determined as
of the Valuation Date immediately preceding distribution, shall be distributed
to the Participant's spouse as provided in Section 11.11, as a qualified pre-
retirement survivor annuity, and the balance shall be distributed as provided in
this Article 8. The provisions of the immediately preceding sentence of this
Section shall only apply if the Participant has been married to his spouse for
at least 365 days prior to his death.
8.4.4 In the event a written designation cannot be located or all the
designated Beneficiaries predecease or die simultaneously with the deceased
Participant, and the provisions of Section 8.3 do not control, the Administrator
shall direct the Trustee to distribute all of the Participant's Benefits to his
spouse. If there is no spouse, the spouse has predeceased the Participant, or
the spouse cannot be located, the Administrator shall direct the Trustee to
distribute Benefits to the estate of the deceased Participant.
ARTICLE IX. -- DISABILITY BENEFITS
9.1.1 If the value of a Participant's Accounts is $5,000 or less on the
Valuation Date immediately following the date the Participant's Total and
Permanent Disability occurs, the Administrator shall cause the Trustee to
distribute disability Benefits to him in accordance with Article 11 as of such
Valuation Date. If the value of a Participant's Accounts is more than $5,000 on
the Valuation Date immediately following the date the Participant's Total and
Permanent Disability occurs, the Administrator shall cause the Trustee to
distribute disability Benefits in accordance with Article 11 as of such
Valuation Date only if the Participant consents in writing to such distribution.
If the Participant does not so consent, the Administrator shall cause the
Trustee to distribute such Benefits following the earliest to occur of the
Valuation Date immediately following the date the Participant dies or consents
in writing to distribution. Provided, however, that distribution must commence
on or before the Participant's Required Beginning Date.
9.2.2 Disability Benefits shall equal the full value of the
Participant's Accounts on the Valuation Date immediately preceding the
distribution date under Section 9.1 of such Benefits.
ARTICLE X. -- SEVERANCE BENEFITS
10.1.1 A Participant has severed when he terminates employment for a
reason other than retirement, death or Total and Permanent Disability. The
interests and rights of a severed Participant shall be limited as described in
this Article 10.
10.2.2 If the Company grants a Participant a leave of absence, he shall
not be deemed to have terminated his employment under Section 10.1 during his
leave. However, if the Participant fails to return to the service of the
Company on or prior to the expiration date of his leave, he shall be deemed to
have terminated his employment under Section 10.1 on such expiration date. The
Company shall grant leaves of absence only on a uniform basis to all
Participants under similar circumstances.
10.3.3 If the value of the vested portion, determined under Section
10.4, of a severed Participant's Accounts is $5,000 or less on the Valuation
Date immediately following the date the Participant severs under Section 10.1,
the Administrator shall cause the Trustee to distribute severance Benefits to
him in accordance with Article 11 as of such Valuation Date. If the value of
the vested portion, deter-mined under Section 10.4, of a severed Partici-pant's
Accounts is more than $5,000 on the Valuation Date immediately following the
date the Participant severs under Section 10.1, the Administrator shall cause
the Trustee to distribute severance Benefits to him in accordance with Article
11 as of such Valuation Date, only if the severed Participant consents in
writing to such distri-bution. If such Participant does not so consent, the
Adminis-trator shall cause the Trustee to distribute severance Benefits to him
in accordance with Article 11 following the earliest of the Valuation Date
immediately following the day the Participant dies or consents in writing to
distribution. Provided, however, that distribution must commence on or before
the Participant's Required Beginning Date.
10.4.4 Severance Benefits shall consist of (a) the full value, on the
Valuation Date immediately preceding the date of distribution under Section
10.3, including any Employee Savings made by the Participant since such
Valuation Date, of the Participant's Employee Savings, Company Elective,
Voluntary and Rollover Contribution Accounts and (b) the following percentage of
the value, on the Valuation Date immediately preceding the date of distribution
under Section 10.3, of the Participant's Company Profit-Sharing and Matching
Contribution Accounts:
Years of Service Vested Percentage
Less than 1 0%
More than 1 but less than 2 20%
More than 2 but less than 3 40%
More than 3 but less than 4 60%
More than 4 but less than 5 80%
More than 5 100%
Notwithstanding the above vesting schedule, the vested percen-tage of a
Participant's Benefits shall not be less than the vested percentage of such
Benefits attained as of the later of the Effective Date or the date this
amendment and restatement of the Plan is adopted. In the event the Plan is
amended to change or modify any vesting schedule, a Participant with at least
three Years of Service as of the expiration date of the election period
described in this Section 10.4 may elect to have his vesting percentage in his
Benefits computed under the Plan without regard to such amendment. If a
Participant fails to make an election, then such Participant shall be subject to
the new vesting schedule. The Participant's election period shall commence as
of the adoption date of the amendment and shall end sixty days after the latest
of:
(a) The adoption date of the amendment,
(b) The Effective Date, or
(c) The day the Participant receives written notice of the amendment
from the Company or Administrator.
The remaining portion of the Participant's Company Profit-Sharing and
Matching Contribution Accounts shall be a forfeiture as of the earlier of the
last day of the Plan Year in which the Participant's Accounts are distributed or
in which the Partici-pant incurs five successive One Year Breaks in Service. A
Participant's Company Profit-Sharing and Matching Contribution Accounts shall be
deemed paid to the Participant even though the Participant's vested percentage
in such Account, under this Section, is zero percent.
Notwithstanding anything in this Section 10.4 to the contrary, a
Participant shall be fully vested in amounts credited to his Matching
Contributions and Company Contributions Accounts which are attributable to funds
received from the Preferred Technical Group, Inc. 401(k) Savings Plan.
10.5.5 The Company shall cause the Company Profit-Sharing and Matching
Contribution Accounts of a Participant, who severed under Section 10.1, and
received a distribution of his vested Benefits and forfeited the nonvested
portion of his Company Profit-Sharing and Matching Contribution Accounts under
Section 10.4, to be restored in an amount equal to the portion of such Accounts
which were forfeited under Section 10.4 because of his severance upon the
occurrence of the following conditions:
(a) The Participant is re-employed by the Company prior to incurring
five successive One Year Breaks in Service; and
(b) The Participant repays the Trustee the amount distributed to him
on account of his severance, unadjusted for gains and losses, no later than five
years following the date of his reemployment by the Company.
Such restoration shall be made as of the last day of the Plan Year in which
the above conditions occur. A Participant, who has a zero percent vested
interest at the time of his severance, is deemed to receive a distribution of
his vested Benefits at such time and is deemed to have repaid such Benefits upon
his re-employment. Until such restoration is made, the Trustee shall invest the
amount repaid by the Participant in a Federally insured interest bearing savings
account(s) or time deposit(s) (or a combination of both) or in other fixed
income investments. Until the last day of the Plan Year in which the
Participant makes the payment, his segregated account shall remain a part of
Plan assets, but it alone shall share in any income it earns and it also shall
bear any expense or loss it incurs. The Administrator shall direct the Trustee
to repay to the Participant as soon as practicable the full amount of his
segregated account if the Administrator determines that one or more of the
conditions of this Section have not been satisfied.
To restore the Account, the Administrator, to the extent necessary, will
allocate to the Account:
(a) First, the amount, if any, of forfeitures for the Plan Year which
would otherwise be allocated under Subsection 5.6(c);
(b) Second, the Company Elective or Profit-Sharing Contribution for
the Plan Year, to the extent it is made under a discretionary formula.
To the extent amounts described above are insufficient to enable the
Administrator to make the required restoration, the Company shall contribute,
without regard to any requirement or restriction of Section 4.1, the additional
amount necessary to enable the Administrator to make the required restoration.
If, for a particular Plan Year, the Administrator must restore the Accounts of
more than one reemployed Participant, the Administrator shall make the
restorations to each such Account in the same proportion that a Participant's
restored amount for a Plan Year bears to the restored amount for the Plan Year
of all such reemployed Participants. The limitation on allocations of Sections
5.8 and 5.9 shall not apply to allocations under this Section.
ARTICLE XI. -- DISTRIBUTION OF BENEFITS
11.1.1 Benefits shall be distributed in accordance with this Article 11
following the Valuation Date as of which Benefits are distributable.
11.2.2 The distribution of Benefits shall occur or commence within sixty
days after the Valuation Date as of which Benefits are distributable. However,
if the amount of Benefits cannot be ascertained by the end of such sixty day
period, the distribution of Benefits shall occur or commence within sixty days
following the ascertainment of the amount of Benefits due.
11.3.3 Distribution of Benefits shall be in cash.
11.4.4 Each Participant and Beneficiary shall submit to the
Administrator, on a form provided by it, his current mailing address. It shall
be the duty of each Participant and Benefi-ciary to promptly notify the
Administrator of any change of address. In the absence of such notice, the
Administrator shall be entitled for all purposes to rely on the last known
address of the Participant or Beneficiary.
11.5.5 The Administrator shall direct the Trustee to distri-bute
Benefits, in accordance with the written election of the Participant, in one of
the following ways:
(a) A single payment, or
(b) Approximately equal annual or monthly installments over a period
of time.
(c) An annuity, to be purchased from a commercial insurance company
with the Participant's Benefits, to be paid over the Participant's life or the
joint lives of the Participant and his designated Beneficiary.
Notwithstanding this Section, if the value of a Participant's vested
Benefits as of the Valuation Date as of which Benefits are distributable are not
greater than $3,500, the Administrator shall, without consent of the Participant
or the Participant's spouse, direct the Trustee to pay the Participant's
Benefits in a single payment.
The Administrator may, in its sole discretion, direct the Trustee to
purchase and distribute a nontransferable annuity to the Participant or his
Beneficiary in lieu of making a distribution of Benefits which are payable as an
annuity in accordance with Sections 11.10 or 11.11.
11.6.6 Distributions to a Participant and his Beneficiaries shall only
be made in accordance with the incidental death benefit requirements of Code
section 401(a)(9) and Regulations thereunder, including the minimum distribution
incidental benefit requirements of proposed Regulations.
Distributions, if not made in a single sum, may be made over a period not
exceeding one of the following periods, or combination thereof:
(a) A period certain not extending beyond the Life Expectancy of the
Participant.
(b) A period certain not extending beyond the joint and last survivor
Life Expectancy of the Participant and Beneficiary.
(c) The life of the Participant.
(d) The life of the Participant and Beneficiary.
Installment distributions under Subsection 11.5(b) shall be subject to the
following minimum distributions rules:
(e) If a Participant's Benefits are to be distributed over a period
not extending beyond the Life Expectancy of the Participant or the joint life
and last survivor Life Expectancy of the Participant and the Participant's
Beneficiary or a period not extending beyond the Life Expectancy of the
Beneficiary, the amount required to be distributed for each calendar year,
beginning with distributions for the first Distribution Calendar Year, must at
least equal the quotient obtained by dividing the Participant's Benefits by the
Applicable Life Expectancy.
(f) For calendar years beginning after December 31, 1988, the amount
to be distributed each year, beginning with distributions for the first
Distribution Calendar Year, shall not be less than the quotient obtained by
dividing the Participant's Benefits by the lesser of the Applicable Life
Expectancy or, if the Participant's spouse is not the Beneficiary, the
applicable divisor determined from the table set forth in Q&A-4 of Section
1.401(a)(9)-2 of proposed Regulations. Distributions after the death of the
Participant shall be distributed using the Applicable Life Expectancy in
Subsection 11.6(a), above, without regard to Section 1.401(a)(9)-2 of proposed
Regulations.
(g) The minimum distribution required for the Participant's first
Distribution Calendar Year must be made on or before the Participant's Required
Beginning Date. The minimum distribution for the Distribution Calendar Year in
which the Participant's Required Beginning Date occurs, must be made on or
before December 31 of that Distribution Calendar Year.
(h) For calendar years beginning before January 1, 1989, if the
Participant's spouse is not the Beneficiary, the method of distribution selected
must assure that at least fifty percent of the present value of the amount
available for distribution is paid within the Life Expectancy of the
Participant.
11.7.7 Notwithstanding any provision of the Plan to the contrary,
distributions made upon the death of a Participant shall be made in accordance
with the following requirements and shall otherwise comply with Code section
401(a)(9) and Regulations thereunder. If it is determined pursuant to
Regulations that the distribution of a Participant's interest has begun and the
Participant dies before his entire interest has been distributed to him, the
remaining portion of such interest shall be distributed at least as rapidly as
under the method of distribution in effect as of his date of death. If a
Participant dies before he has begun to receive any distributions of his
interest under the Plan or before distributions are deemed to begin under
Regulations, and distributions are not to be made in the form of a qualified pre
- -retirement survivor annuity, then his death Benefits shall be distributed to
his Beneficiary or Beneficiaries by December 31 of the calendar year in which
the fifth anniversary of his date of death occurs.
However, the five year distribution requirement of the preceding paragraph
shall not apply to any portion of the deceased Participant's interest which is
payable to or for the benefit of a designated Beneficiary. In such event such
portion may, at the election of the Participant or the Participant's designated
Beneficiary, be distributed over a period not extending beyond the life
expectancy of such designated Beneficiary provided such distribution begins not
later than December 31 of the calendar year immediately following the calendar
year in which the Participant died. However, in the event the Participant's
spouse (determined at the date of the Participant's death) is his Beneficiary,
the requirement that distribution commence within one year of a Participant's
death shall not apply. In lieu thereof, distributions must commence on or
before the later of: (a) December 31 of the calendar year immediately following
the calendar year in which the Participant dies; or (b) December 31 of the
calendar year in which the Participant would have attained age seventy and one-
half. If the surviving spouse dies before distribution to such spouse begins,
then the five year distribution requirement of this Section shall apply as if
the spouse was a Participant.
For purposes of this Section, the election by a designated Beneficiary to
be exempted from the five year distribution requirement must be made no later
than December 31 of the calendar year following the calendar year of the
Participant's death. Except, however, with respect to a designated Beneficiary
who is the Participant's surviving spouse, the election must be made by the
earlier of: (a) December 31 of the calendar year immediately following the
calendar year in which the Participant would have attained age seventy and a
half; or (b) December 31 of the calendar year in which falls the fifth
anniversary of the date of the Participant's death. An election by a designated
Beneficiary must be in writing and shall be irrevocable as of the last day of
the election period stated herein. In the absence of an election by the
Participant or a designated Beneficiary, the five year distribution requirement
shall apply.
For purposes of this Section, a distribution of a Participant's interest is
considered to begin on his Required Beginning Date, or the date distribution is
required to begin to his surviving spouse pursuant to this Section.
For purposes of applying the provisions of Section 11.6 and this Section
11.7, the following terms have the meanings indicated:
(a) "Applicable Life Expectancy" means the Life Expectancy (or joint
and last survivor Life Expectancy) calculated using the attained age of the
Participant or Beneficiary as of the Participant's or Beneficiary's birthday in
the applicable calendar year reduced by one for each calendar year which has
elapsed since the date Life Expectancy was first calculated. If the Life
Expectancy is being recalculated, the applicable Life Expectancy shall be the
Life Expectancy as so recalculated. The applicable calendar year shall be the
first Distribution Calendar Year and if the Life Expectancy is being
recalculated, such succeeding calendar year.
(b) "Distribution Calendar Year" means a calendar year for which a
minimum distribution is required. For distribution beginning before the
Participant's death, the first distribution calendar year is the calendar year
immediately preceding the calendar year which contains the Participant's
Required Beginning Date. For distributions beginning after the Participant's
death, the first Distribution Calendar Year is the calendar year in which
distributions are required to begin pursuant to Sections 11.6 and 11.7.
(c) "Life Expectancy" means the Life Expectancy and joint and last
survivor Life Expectancy computed by use of the expected return multiples in
Tables V and VI of Regulation Section 1.72-9. Unless otherwise elected by the
Participant, or his spouse in the case of distributions commencing after the
death of a Participant, by the time distributions are required to begin, Life
Expectancies shall be recalculated annually. Such election shall be irrevocable
as to the Participant or his spouse and shall apply to all subsequent years.
The Life Expectancy of a nonspouse Beneficiary may not be recalculated.
11.8.8 The Administrator shall permit a Participant or Beneficiary to
elect any combination of the two forms of payment specified by Subsections
11.5(a) and (b). A Participant and/or Beneficiary shall also elect the form and
timing of payment of his Benefits subject to the distribution requirements of
Sections 11.6 and 11.7. Upon the Participant's or Beneficiary's request, the
Administrator shall furnish such person an appropriate form for making the
election. A Participant or Beneficiary shall make an election under this
Section by filing the election form with the Administrator at anytime before the
Trustee otherwise would commence payment of a Participant's Benefits in
accordance with the requirements of Section 11.2.
11.9.9 The retirement, disability, death or severance Benefits to be
paid to a Participant or Beneficiary pursuant to Section 11.5(b) shall be
credited to a Distribution Account prior to the commencement of distribution of
the Account pursuant to Section 11.2. If the distribution is made from the
Account in such a manner that, as of the last day of the Plan Year following the
Plan Year in which the Participant retired, died, became disabled or severed his
employment, a net credit balance remains in the Distribution Account, such
Distribution Account shall be adjusted as provided in Section 5.4. The amounts
paid from a Distribution Account shall, concurrently with such payment, be
debited against such Account. To facilitate installment payments, the
Administrator may direct the Trustee to segregate all or any part of the
Participant's Benefits in a separate account. The Administrator may direct the
Trustee to (a) invest such segregated account in Federally insured interest
bearing savings account(s) or time deposit(s) (or a combination of both), or in
other fixed income investments or (b) purchase a nontransferable annuity
contract for a term certain (with no life contingencies) providing for such
payment. A segregated account shall remain a part of the assets of the Plan,
but it alone shall share in any income, earnings or any expense or loss it
incurs.
11.10.10 Unless waived in accordance with Section 11.12, the Benefits of a
Participant on the date payment of his Benefits commences shall be paid in the
form of a qualified joint and survivor annuity. A qualified joint and survivor
annuity for a married Participant is an annuity purchasable with the
Participant's Benefits which is payable for the Participant's life if the
Participant is married on the date payment of Benefits commence, with the
survivor annuity for the life of the Participant's surviving spouse equal to
fifty percent of the amount of the annuity payable for the joint lives of the
Participant and his spouse. A married Participant may elect to receive a
smaller annuity benefit with continuation payments to his surviving spouse at a
rate of seventy-five percent or 100 percent of the rate payable to the
Participant during his lifetime, which alternative joint and survivor annuity
shall be equal in value to the qualified joint and fifty percent survivor
annuity. A qualified joint and survivor annuity for a Participant who is not
married is an annuity purchasable with the Participant's Benefits which is
payable for the Participant's life. Notwithstanding this Section 11.10, if the
value of a Participant's Vested Benefits as of the Valuation Date prior to the
date payment of such Participant's Benefits commences under Section 11.2 is not
greater than $3,500, the Administrator, in its sole discretion, without
Participant or spousal consent, may direct the Trustee to pay the Participant's
Benefits in a single payment. This Section 11.10 shall only apply to a
Participant who has completed at least one Hour of Service after August 22,
1984.
11.11.11 If a married Participant dies prior to the commencement of the
payment of his Benefits, the Administrator shall direct the Trustee to
distribute a portion of the Participant's Benefits to the Participant's
surviving spouse in the form of a qualified pre-retirement survivor annuity,
unless the Participant has a valid waiver election described in Section 11.13 in
effect or unless a Participant and his spouse are not married throughout the one
year period ending on the date of his death. The Participant's spouse may
direct that payment of the qualified pre-retirement survivor annuity commence
within a reasonable period after the Participant's death. If the spouse does
not so direct, payment of such benefit will commence at the time the Participant
would have attained the later of his Normal Retirement Age or age sixty-two.
However, the spouse may select a later commencement date subject to the rules of
Sections 11.6 and 11.7.
A qualified pre-retirement survivor annuity is an annuity which is
purchasable with fifty percent of a Participant's Benefits (determined as of the
Valuation Date immediately prior to the date distribution of Benefits commences)
and which is payable for the life of the Participant's surviving spouse. The
Administrator, in its sole discretion, may direct the Trustee to pay the
Participant's Benefits in a lump sum in lieu of a qualified pre-retirement
survivor annuity if the value of the Participant's Benefits has never exceeded
$3,500. This Section shall only apply to a Participant who dies after August
22, 1984 and who has either completed one Hour of Service with the Company after
August 22, 1984 or separated from service with the Company with at least ten
Years of Service and completed at least one Hour of Service in a Plan Year
beginning after December 31, 1975.
11.12.12 The Administrator shall provide the Participant no less than
thirty and no more than ninety days before the Participant's annuity starting
date, consistent with regulations prescribed by the Secretary of Treasury, a
written explanation of the terms and conditions of the qualified joint and
survivor annuity, the Participant's right to make, and the effect of, an
election to waive the joint and survivor form of benefit, the rights of the
Participant's spouse regarding the waiver election and the Participant's right
to make, and the effect of, a revocation of a waiver election. A Participant's
annuity starting date is the first day of the first period for which an amount
is payable as annuity, or, in the case of a benefit not payable as an annuity,
the first day on which all events have occurred which entitle the Participant to
such benefit.
A married Participant's waiver election is not valid unless:
(a) The Participant makes the waiver election within the ninety day
period ending on the date the first payment pursuant to the annuity described in
Section 11.10 is scheduled to be made; and
(b) The Participant's spouse, to whom the survivor annuity is payable
under the qualified joint and survivor annuity, has consented in writing to the
waiver election, the spouse's consent acknowledges the effect of the election
and a notary public or a representative of the Administrator witnesses the
spouse's consent; and
(c) Such election shall designate a Beneficiary, or a form of
Benefits, that may not be changed without spousal consent, unless the consent of
the spouse expressly permits designations by the Participant without the
requirement of further consent by the spouse.
The election made by the Participant and consented to by his spouse may be
revoked by the Participant in writing without the consent of the spouse at
anytime during the election period. The number of revocations shall not be
limited. Any new election must comply with the requirements of this paragraph.
A former spouse's waiver will not be binding on a new spouse.
The Administrator may accept as valid a waiver election which does not
satisfy the spousal consent requirement described in clause (b) if the
Administrator establishes the Participant does not have a spouse, the
Administrator is not able to locate the Participant's spouse or other
circumstances exist under which the Secretary of the Treasury will excuse the
consent requirement. If the spouse is legally incompetent to give consent, the
spouse's legal guardian, even if such guardian is the Participant, may give
consent.
11.13.13 The Administrator shall provide each Participant, within the
period beginning on the first day of the Plan Year in which the Participant
attains age thirty-two and ending on the last day of the Plan Year in which the
Participant attains age thirty-four, in a manner consistent with Regulations, a
written explanation of the terms and conditions of the qualified pre-retirement
survivor annuity comparable to the explanation of the qualified joint and
survivor annuity required under Section 11.12. If the Employee does not become
a Participant, or is not subject to this Section prior to the time the
Administrator must provide the written explanation of the qualified pre-
retirement survivor annuity, the Administrator shall provide the written
explanation, within a reasonable period, consistent with Regulations, following
the time the Employee becomes a Participant or first is subject to this Section,
but not later than the close of the second Plan Year following the Plan Year in
which the Participant enters the Plan or first becomes a Participant or first is
subject to this Section. In the case of a Participant who separates from
service with the Company prior to attaining age thirty-five, such notice must be
provided within a period beginning one year before separation of service and
ending one year after such separation. An earlier waiver, with spousal consent,
may be made provided a written explanation of the qualified pre-retirement
survivor annuity is given to the Participant and such waiver becomes invalid at
the beginning of the Plan Year in which the Participant turns thirty-five.
A Participant's waiver election of the qualified pre-retirement survivor
annuity is not valid unless:
(a) The Participant makes the waiver election no earlier than the
first day of the Plan Year in which he attains age thirty-five; and
(b) The Participant's spouse, to whom the qualified pre-retirement
annuity is payable, satisfies the spousal consent requirements described in
Section 11.12.
Any election to waive the qualified pre-retirement survivor annuity before the
Participant's death must be made by the Participant in writing during the
election period and shall require the spouse's irrevocable consent in the same
manner provided for in Section 11.12. Further, the spouse's consent must
acknowledge the specific nonspouse Beneficiary of the alternative form of death
benefit to be paid in lieu of the qualified pre-retirement survivor annuity.
Notwithstanding the forgoing, the nonspouse Beneficiary of the alternative form
of the death benefit need not be acknowledged, provided the consent of the
spouse acknowledges that the spouse has the right to limit the consent only to a
specific Beneficiary or a specific form of benefit and that the spouse
voluntarily elects to relinquish one or both of such rights.
11.14.14 If the Participant has in effect a valid waiver election
regarding the qualified joint and survivor annuity or the qualified pre-
retirement survivor annuity, the Administrator shall direct the Trustee to
distribute the Participant's Benefits to the Participant or his Beneficiary in
the form he has selected in accordance with Section 11.5, subject to the
restrictions of Sections 11.6 and 11.7. Furthermore, the Administrator shall
permit the Participant's surviving spouse to elect any combination of the two
forms of payment described in Subsections 11.5(a) and (b) in lieu of the
qualified pre-retirement survivor annuity. For purposes of applying this
Article 11, the Administrator shall treat a former spouse as the Participant's
spouse to the extent provided under a Qualified Domestic Relations Order.
11.15.15 Any amount payable to or for the benefit of a minor, an
incompetent person or other person incapable of receipting therefore shall be
deemed paid when paid to the conservator of such person's estate or to the party
providing or reasonably appearing to provide for the care of such person, and
such payment shall fully discharge the Trustee, the Administrator and the
Company with respect thereto.
11.16.16 The Plan does not require either the Trustee or the Administrator
to search for, or ascertain the whereabouts of, any Participant or Beneficiary.
The Administrator, by certified or registered mail addressed to his last known
address of record with the Administrator, shall notify any Participant or
Beneficiary that he is entitled to a distribution under the Plan. Such notice
shall quote the provisions of this Section. If the Participant or Beneficiary
fails to claim his Benefits or make his whereabouts known to the Administrator
within two years of the date of mailing the notice, or before termination of
this Plan, whichever should first occur, the Administrator shall treat the
Participant's or Beneficiary's unclaimed Benefits as forfeited and shall
reallocate the unclaimed payable Benefits in the same manner as if such Benefits
are forfeitures under Subsection 5.6(c).
If the Participant or Beneficiary who has incurred a forfeiture of his
Benefits under the provisions of the first paragraph of this Section makes a
claim at anytime for his forfeited Benefits, the Administrator shall restore the
Participant's or Beneficiary's forfeited Benefits to the same dollar amount as
the dollar amount of the Benefits forfeited, unadjusted for any gains or losses
occurring subsequent to the date of forfeiture. The Administrator shall make
the restoration during the Plan Year in which the Participant or Beneficiary
makes the claim as follows:
(a) First, the amount, if any, of forfeitures for the Plan Year of
restoration which would otherwise be allocated under Subsections 5.6(c);
(b) Second, the Company Profit-Sharing Contributions for the Plan
Year of restoration to the extent it is made under a discretionary formula.
To the extent amounts described above are insufficient to enable the
Administrator to make the required restoration, the Company shall contribute,
without regard to any requirement or restriction of Section 4.1, the additional
amount necessary to enable the Administrator to make the required restoration.
If, for a particular Plan Year, the Administrator must restore the Accounts of
more than one former Participant, the Administrator shall make the restorations
to such Accounts in the same proportion that a Participant's restored amount for
a Plan Year bears to the restored amount for the Plan Year of such former
Participants. The limitation on allocations of Sections 5.8 and 5.9 shall not
apply to allocations under this Section 11.16.
The Administrator shall direct the Trustee to distribute the Participant's
or Beneficiary's restored Benefits to him not later than sixty days after the
close of the Plan Year in which the Administrator restores Benefits.
11.17.17 The following rules and procedures apply with respect to a
domestic relations order received by the Administrator:
(a) Payments under a Qualified Domestic Relations Order may be made,
as of any Valuation Date, after the Participant's Normal Retirement Date but
prior to his actual severance under Section 10.1 following the date of
distribution designated in such order. The amount to be distributed under such
order shall be based on the value of the Participant's Accounts as of such day.
(b) A Qualified Domestic Relations Order may require a Participant's
former spouse to be treated as a spouse for purposes of Article 8 if the
Participant and such former spouse were married for twelve consecutive months.
(c) An alternate payee under a Qualified Domestic Relations Order may
be a spouse, former spouse, child or other dependent of a Participant.
(d) The Administrator shall promptly notify the Participant and
alternate payees in writing of its receipt of a domestic relations order and the
procedures for determining whether such order is a Qualified Domestic Relations
Order. Within a reasonable period of time after receipt of a domestic relations
order, the Administrator shall determine whether such order is a Qualified
Domestic Relations Order and notify the Participant and each alternate payee of
such determination.
(e) The Administrator, upon receipt of a domestic relations order
with respect to a Participant whose Benefits are distributable pursuant to
Section 11.1 but the distribution of which has not yet commenced or whose
Benefits have not been completely distributed at the time of receipt of such
order, shall, upon receipt of such order, segregate the balance of the Benefits
in question, based upon the value of the Participant's Accounts as of the last
day of the prior Plan Year, and deposit such amount in a separate, interest
bearing bank or savings and loan account pending the Administrator's
determination as to whether such order constitutes a Qualified Domestic
Relations Order. The Administrator shall direct the Trustee to pay the amounts
segregated under this Subsection, plus interest earned on such amounts, as
follows:
(i) If the Administrator determines, within eighteen months
after receipt of the order, that it is a Qualified Domestic
Relations Order, payment shall be made to the alternate
payee or payees specified in such order.
(ii) If the Administrator determines, within eighteen months
after receipt of the order, that it is not a Qualified
Domestic Relations Order, payment shall be made to the
Participant or his Beneficiary.
(iii) If the Administrator has not determined, within
eighteen months after receipt of the order, whether it is a
Qualified Domestic Relations Order, payment shall be made to
those individuals or entities who or which would be entitled
to payment if the order did not exist. If the Administrator
subsequently determines the order is a Qualified Domestic
Relations Order, the Administrator shall only direct the
Trustee to make payments to the alternate payee under the
order upon such determination and the Administrator and
Trustee shall have no responsibility to retroactively modify
payments made prior to such determination under this
Subsection 11.17(e)(iii).
11.18 Pursuant to Administrator rules, a Participant may withdraw all
or a portion of his Voluntary Contributions Account. Only two such withdrawals
may be made in a consecutive twelve month period. Any withdrawal under this
Section 11.18 shall not exceed the value of the Participant's Voluntary
Contributions Account on the Valuation Date immediately preceding such
withdrawal.
11.19.19 Each Participant who has suffered financial hard-ship may, prior
to his termination of employment, request to withdraw a specified portion of his
Employee Savings Contribu-tions (disregarding any earnings on such
contributions), his Rollover Contributions Account and his Matching
Contributions Account (to the extent vested under Section 10.4). "Financial
Hardship", as determined by the Administrator, shall mean the existence of a
Participant's immediate and heavy financial need. Such need shall exist if it
is necessary for:
(a) the payment of medical expenses of the Participant, his spouse or
dependents;
(b) the payment of tuition for post-secondary education of the
Participant, his spouse, children or dependents;
(c) the purchase of the Participant's principal residence;
(d) payments necessary to prevent eviction of the Participant from
his principal residence or foreclosure on his principal residence; and
(e) other expenses which the Commissioner of Internal Revenue Service
indicates will be deemed to be made on account of such need.
The Participant must demonstrate to the Administrator that a withdrawal
under this Section is necessary to satisfy a Financial Hardship. The
Participant may demonstrate such need by certifying to the Administrator that
the Financial Hardship cannot be relieved:
(f) through reimbursement or compensation by insurance or otherwise;
(g) by reasonable liquidation of the Participant's assets, to the
extent such liquidation would not itself cause an immediate and heavy financial
need;
(h) by cessation of Employee Savings Contributions or other
contributions under the Plan or other plans maintained by the Company or any
other employer;
(i) by other distributions or nontaxable loans from plans maintained
by the Company or other employer; or
(j) by borrowing from commercial sources on reasonable commercial
terms. Assets owned by a Participant's spouse or minor children that are
reasonably available to the Participant shall be considered resources of the
Participant.
In lieu of satisfying the five conditions specified in Subsections (f),
(g), (h), (i) and (j), above, a Participant may receive a distribution not in
excess of the amount necessary to satisfy the expense of a Financial Hardship if
the Participant has obtained all other distributions and all nontaxable loans
currently available under this Plan and all other qualified plans maintained by
the Company. In order to receive a distribution under this paragraph, the
Participant shall not be entitled to make Employee Savings Contributions to any
qualified or nonqualified plan of the Company, except for mandatory employee
contributions to a defined benefit plan of the Company and employee
contributions to health or welfare plans of the Company, within twelve months
after the Financial Hardship withdrawal. In addition, the Employee Savings
Contributions made in the calendar year following a withdrawal on account of a
Financial Hardship under this paragraph shall not exceed the limit under Code
section 402(g), reduced by the Employee Savings Contributions which were made in
the calendar year of the Financial Hardship withdrawal.
No withdrawals may be made pursuant to this Section 11.19 until a
Participant has completely withdrawn his Voluntary Contributions Account
pursuant to Section 11.18. Only that portion of a Participant's Matching
Contributions Account attributable to Matching Contributions made more than two
years prior to a withdrawal under this Section 11.19 may be withdrawn under this
Section. Withdrawals under this Section 11.19 shall first be made from the
withdrawing Participant's Employee Savings Contributions until such
contributions are depleted, second from the withdrawing Participant's Rollover
Contributions Account until such Account is depleted and third from the
withdrawing Participant's Matching Contributions Account.
Any withdrawals under this Section shall be effective as of the payroll
period coincident with or next following the Administrator's approval of the
withdrawal. Withdrawals under this Section shall not exceed the value of the
Participant's Employee Savings Rollover Contributions Account and Matching
Contributions Account as of the Valuation Date immediately preceding such
withdrawal.
11.20.20 Notwithstanding any other provision of this Plan to the contrary,
any Participant, who has attained age fifty-nine and one-half, may elect to
withdraw in one lump sum payment, subject to rules promulgated by the
Administrator, the vested portion of all amounts credited to his Accounts
effective as of any Valuation Date. An election to so withdraw must be made on
a form suitable to the Administrator. Only one election may be made by a
Participant under this Section. An amount that a Participant shall elect to
withdraw pursuant to this Section shall be paid to the Participant as soon as
practical after the effective date of the withdrawal. An election by a
Participant under this Section shall not restrict his ability to make Employee
Savings Contributions in accordance with the provisions of Article 4 of the
Plan.
11.21.21 The following rules apply to an "Eligible Rollover Distribution":
(a) This Section applies to distributions made on or after January 1,
1993. Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a Distributee's election under this Section, a Distributee may
elect, at the time and in the manner prescribed by the 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.
(b) For purposes of applying the provisions of this Section:
(i) "Eligible Rollover Distribution" means any distribution of
all or any portion of the balance to the credit of the
Distributee, except that an Eligible Rollover Distribution
does not include any distribution that is one of a series of
substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the
Distributee or the joint lives (or joint life expectancies)
of the Distributee and the Distributee's designated
beneficiary, or for a specified period of ten years or more;
any distribution to the extent such distribution is required
under Code section 401(a)(9); 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).
(ii) "Eligible Retirement Plan" means an individual retirement
account described in Code section 408(a), an individual
retirement annuity described in Code section 403(a), or a
qualified trust described in Code section 401(a), 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.
(iii) "Distributee" means an Employee or former Employee. In
addition, the Employee's or former Employee's surviving
spouse and the Employee's for former Employee's spouse or
former spouse who is the alternate payee under a qualified
domestic relations order as defined in Code section 414(p),
are Distributees with regard to the interest of the spouse
or former spouse.
(iv) "Direct Rollover" means a payment by the Plan to the
Eligible Retirement Plan specified by the Distributee.
ARTICLE XII. -- AMENDMENT AND TERMINATION
12.1.1 The Company reserves the right to amend the Plan. However, no
amendment shall diminish or adversely affect any accrued interest or Benefits of
Participants or their Beneficiaries.
12.2.2 The Company reserves the right to discontinue Contributions to
the Plan, to completely terminate the Plan and to partially terminate the Plan.
In any such event, all assets of the Plan shall be retained by the Trustee until
the Participants or their Beneficiaries are entitled to them under the terms of
the Plan. If the Company discontinues contributions to the Plan, the rights of
Participants to Benefits accrued to the date of discontinuance shall be non-
forfeitable. If the Company partially terminates the Plan, the rights of
affected Participants, in that part of the Plan which is terminated, to Benefits
accrued to the date of termination shall be non-forfeitable.
12.3.3 The Company reserves the right to completely terminate the Plan.
In such event, the assets of the Plan will be distributed as soon a practical to
Participants or their Beneficiaries. If the Company completely terminates the
Plan, the rights of Participants to Benefits accrued to the date of termination
shall be non-forfeitable.
12.4.4 The Company reserves the right to partially terminate the Plan.
In such event, the assets of the terminated portion of the Plan will be
distributed as soon as practical to affected Participants or their
Beneficiaries. If the Company partially terminates the Plan, the rights of
affected Participants, in that part of the Plan which is terminated, to Benefits
accrued to the date of partial termination shall be non-forfeitable.
ARTICLE XIII. -- TOP HEAVY RULES
13.1.1 For purposes of applying the provisions of this Article 13:
(a) "Non-Key Employee" means an Employee, or former Employee, and his
Beneficiaries who is not a Key Employee.
(b) "Permissive Aggregation Group" means the Required Aggregation
Group plus any other qualified plans maintained by the Company, but only if such
group would satisfy in the aggregate the requirements of Code sections 401(a)(4)
and 410. The Administrator shall determine which plans to take into account in
determining the Permissive Aggregation Group. In the case of a Permissive
Aggregation Group, only a plan that is part of the Required Aggregation Group
will be considered a Top Heavy Plan if the Permissive Aggregation Group is a Top
Heavy Group. No plan in the Permissive Aggregation Group will be considered a
Top Heavy Plan if the Permissive Aggregation Group is not a Top Heavy Group.
(c) "Required Aggregation Group" means:
(i) Each qualified plan of the Company in which at least one Key
Employee participates in the Plan Year containing the
Determination Date or any of the four preceding Plan Years;
and
(ii) Any other qualified plan of the Company which enables a plan
described in (i), above, to meet the requirements of Code
sections 401(a)(4) or 410.
In the case of a Required Aggregation Group, each plan in the group will be
considered a top heavy plan if the Required Aggregation Group is a Top Heavy
Group. No Plan in the Required Aggregation Group will be considered a top heavy
plan if the Required Aggregation Group is not a Top Heavy Group. An Aggregation
Group shall include any terminated plan of the Company if it was maintained
within the last five years ending on the Determination Date.
(d) "Present Value of Accrued Benefit" means, in the case of a
Defined Benefit Plan, the Present Value of Accrued Benefits for a Participant
other than a Key Employee, determined using the single accrual method used for
all plans of the Company and Affiliated Employers, or, if no such single method
exists, using a method which results in benefits accruing not more rapidly than
the slowest accrual rate permitted under Code section 411(b)(1)(C).
(e) "Top Heavy Group" means an Aggregation Group in which, as of the
Determination Date, the sum of:
(i) The Present Value of Accrued Benefits of Key Employees under
all Defined Benefit Plans included in the group, and
(ii) The aggregate Accounts of Key Employees under all Defined
Contribution Plans included in the group, exceeds sixty
percent of a similar sum determined for all Participants.
13.2.2 If the Plan is top heavy in any Plan Year, the Plan guarantees a
minimum contribution of three percent of Compensation for each Non-Key Employee
who is a Participant employed by the Company on the last day of the Plan Year.
The Plan satisfies the guaranteed minimum contribution for the Non-Key Employee
if the Non-Key Employee's contribution rate is at least equal to the minimum
contribution. For purposes of this paragraph, a Non-Key Employee Participant
includes any Employee otherwise eligible to participate in the Plan but who is
not a Participant because his Compensation does not exceed a specified level.
13.3.3 If the contribution rate for a Plan Year with respect to a Non-
Key Employee is less than the minimum contribution, the Company will increase
its contribution for such Employee to the extent necessary so his contribution
rate for the Plan Year will equal the guaranteed minimum contribution. The
Administrator shall allocate the additional contribution to the Account of the
Non-Key Employee for whom the Company makes the contribution.
13.4.4 The Plan is top heavy for a Plan Year if the top heavy ratio as
of the Determination Date exceeds sixty percent. The top heavy ratio is a
fraction, the numerator of which is the sum of the present value of the Accounts
of all Key Employees as of the Determination Date, plus the contribution due as
of the Determination Date, and the Denominator of which is a similar sum
determined for all Employees. The Administrator shall calculate the top heavy
ratio without regard to any Non-Key Employee who was formerly a Key Employee.
For Plan Years beginning after December 31, 1984, if a Participant or former
Participant has not performed any services for the Company at anytime during the
five year period ending on the Determination Date, any accrued benefit for such
Participant or former Participant shall not be taken into account for purposes
of determining whether this Plan is a top heavy Plan. The Administrator shall
calculate the top heavy ratio, including the extent to which it must take into
account distributions, rollovers and transfers, in accordance with Code section
416 and Regulations under that Code section.
If the Company maintains other qualified plans (including a simplified
employee pension plan), this Plan is top heavy only if it is part of the
Required Aggregation Group and the Permissive Aggregation Group and the top
heavy ratio exceeds sixty percent. The Administrator will calculate the top
heavy ratio in the same manner as is required by the first paragraph of this
Section by taking into account all plans within the Aggregation Group. The
Administrator shall calculate the present value of accounts and the other
amounts the Administrator must take into account, under Defined Benefit Plans or
simplified employee pension plans included within the group, in accordance with
the terms of those plans, Code section 416 and Regulations under that Code
section. The Administrator shall calculate the top heavy ratio with reference
to the Determination Dates that fall within the same calendar year.
13.5.5 If during any Plan Year the Participant is a participant in both
a Defined Contribution Plan and a Defined Benefit Plan which are part of a Top
Heavy Group, the Administrator shall apply the limitations of Section 5.9 to
such Participant by substituting 100 percent for 125 percent each place it
appears in Subsections 5.7(b) and (c). This Section shall not apply if:
(a) The Plan would satisfy Section 13.2 if the minimum contribution
was one percent greater than the guaranteed minimum contribution the
Administrator otherwise would calculate, and
(b) The top heavy ratio does not exceed ninety percent.
ARTICLE XIV. -- LIMITATIONS ON ELECTIVE CONTRIBUTIONS
14.1.1 The annual allocations derived from Elective Contributions to a
Participant's Accounts shall satisfy one of the following tests:
(a) The Actual Deferral Percentage for the Highly Compensated
Participant Group shall not be more than the Actual Deferral Percentage for the
Non-Highly Compensated Participant Group multiplied by 1.25, or
(b) The excess of the Actual Deferral Percentage for the Highly
Compensated Participant Group over the Actual Deferral Percentage for the Non-
Highly Compensated Participant Group shall not be more than two percentage
points. Additionally, the Actual Deferral Percentage for the Highly Compensated
Participant Group shall not exceed the Actual Deferral Percentage for the Non-
Highly Compensated Participant Group multiplied by two. The provisions of Code
section 401(k)(3) and Regulation 1.401(k)-1(b) are incorporated herein by
reference.
In order to prevent the multiple use of the alternative method described in
(b) above and in Code section 401(m)(9)(A), any Highly Compensated Participant
eligible to make Employee Savings Contributions pursuant to Section 4.2 or to
receive matching contributions under this Plan or under any other plan
maintained by the Company or an Affiliated Employer shall have his actual
contribution percentage ratio reduced pursuant to Regulation 1.401(m)-2, the
provisions of which are incorporated herein by reference.
14.2.2 For the purposes of this Article, Actual Deferral Percentage
means, with respect to the Highly Compensated Participant Group and Non-Highly
Compensated Participant Group for a Plan Year, the average of the ratios,
calculated separately for each Participant in such group, of the amount of
Elective Contributions allocated to each Participant's Accounts for the
immediately preceding Plan Year, to such Participant's Section 414(s)
Compensation for such Plan Year. The Actual Deferral Percentage for each
Participant and the Actual Deferral Percentage for each Group shall be
calculated to the nearest one-hundredth of one percent. Elective Contributions
allocated to each Non-Highly Compensated Partici-pant's Accounts shall be
reduced by Excess Employee Savings Contributions returned to the Participant
pursuant to Section 4.3 to the extent such excess amounts are made under this
Plan or any other plan maintained by the Company.
For the Plan Year ending December 31, 1997, the Average Deferral Percentage
shall be determined on the basis of Elective Contributions and Section 414(s)
Compensation for such Year. The Administrator may elect, in accordance with
regulations, to use Elective Contributions and Section 414(s) Compensation for
the Plan Year to which the limitation of Section 14.1 applies to determine the
applicable Actual Deferral Percentage for such Year.
14.3.3 For the purposes of this Article, a Highly Compensated
Participant and a Non-Highly Compensated Participant shall include any Employee
eligible to make an Employee Savings Contri-bution pursuant to Section 4.2,
whether or not such deferral election was made or suspended pursuant to Section
4.4.
14.4.4 For the purposes of this Section and Code sections 401(a)(4),
410(b) and 401(k), if two or more plans which include cash or deferred
arrangements are considered one plan for the purposes of Code sections 401(a)(4)
or 410(b) (other than Code section 410(b)(2)(A)(ii)), the cash or deferred
arrangements included in such plans shall be treated as one arrangement. In
addition, two or more cash or deferred arrangements may be considered as a
single arrangement for purposes of determining whether such arrangements satisfy
Code sections 401(a)(4), 410(b) and 401(k). In such a case, the cash or
deferred arrangements included in such plans and the plans including such
arrangements shall be treated as one arrangement and as one plan for purposes of
this Section and Code sections 401(a)(4), 410(b) and 401(k). Plans may be
aggregated under this Section only if they have the same plan year.
14.5.5 For the purposes of this Section, if a Highly Compen-sated
Participant is a Participant under two or more cash or deferred arrangements
(other than a cash or deferred arrangement which is part of an employee stock
ownership plan as defined in Code section 4975(e)(7)) of the Company or an
Affiliated Employer, all such cash or deferred arrangements shall be treated as
one cash or deferred arrangement for the purpose of determining the Actual
Deferral Percentage with respect to such Highly Compensated Participant. This
paragraph shall be applied by treating all cash or deferred arrangements ending
with or within the same calendar year as a single arrangement.
14.6.6 In the event the initial allocations of Elective Contributions do
not satisfy one of the tests set forth in Section 14.1, the Administrator shall
adjust Excess Contributions pursuant to the options set forth below:
(a) On or before the fifteenth day of the third month following the
end of each Plan Year, the Highly Compensated Participant having the largest
amount of Employee Savings Contributions contributed for such Year shall have
his portion of Employee Savings and, if applicable, Matching Contributions
distributed to him or until one of the tests set forth in Section 14.1 is
satisfied, or until his Actual Deferral Percentage equals the Actual Deferral
Percentage of the Highly Compensated Participant having the second highest
Actual Deferral Percentage. This process shall continue until one of the tests
set forth in Section 14.1 is satisfied. For each Highly Compensated
Participant, the amount of Excess Contributions is equal to the Elective
Contributions on behalf of such Highly Compensated Participant (determined prior
to the application of this paragraph) minus the amount determined by multiplying
the Highly Compensated Participant's Actual Deferral Percentage (determined
after application of this paragraph) by his Section 414(s) Compensation.
However, in determining the amount of Excess Contributions to be distributed
and/or recharacterized with respect to an affected Highly Compensated
Participant as determined herein, such amount shall be reduced by any Excess
Employee Savings Contributions previously distributed to such affected Highly
Compensated Participant for his taxable year ending with or within such Plan
Year.
(b) With respect to the distribution of Excess Contributions pursuant
to (a) above, such distribution:
(i) May be postponed but not later than the close of the
succeeding Plan Year;
(ii) Shall be made first from unmatched Employees Savings
Contributions and, thereafter, simultaneously from Employees
Savings Contributions which are matched and, if applicable,
Matching Contributions which relate to such Contributions.
Provided, however, that Matching Contributions, to the
extent they are not vested under Section 10.5, shall be
forfeited instead of returned to the Participant;
(iii) Shall be made from Company Elective Contributions only
to the extent that Excess Contributions exceed the balance
in the Participant's Employee Savings Contributions Account
attributable to Employee Savings Contributions and, if
applicable, in the Participant's Matching Contributions
Account attributable to Matching Contributions;
(iv) Shall be adjusted for Income; and
(v) Shall be designated by the Company as a distribution of
Excess Contributions and Income.
(c) Any distribution and/or recharacterization of less than the
entire amount of Excess Contributions shall be treated as a pro rata
distribution and/or recharacterization of Excess Contributions and Income.
ARTICLE XV. -- LIMITATIONS ON MATCHING CONTRIBUTIONS
15.1.1 The "Actual Contribution Percentage" for the Highly Compensated
Participant Group shall not exceed the greater of:
(a) One hundred and twenty five percent of such percentage for the
Non-Highly Compensated Participant Group; or
(b) The lesser of 200 percent of such percentage for the Non Highly
Compensated Participant Group, or such percentage for the Non Highly Compensated
Participant Group plus two percentage points. To prevent the multiple use of
the alternative method described in this paragraph and Code section
401(m)(9)(A), any Highly Compensated Participant, eligible to make elective
deferrals pursuant to any cash or deferred arrangement maintained by the Company
or an Affiliated Employer and/or to make employee contributions or to receive
matching contributions under any other plan maintained by the Company or an
Affiliated Employer, shall have his Actual Contribution Percentage reduced
pursuant to Regulation 1.401(m)-1(b) and 1.401(m)-2. The provisions of Code
section 401(m) and Regulations 1.401(m)-1(b) and 1.401(m)-2 are incorporated
herein by reference.
For purposes of applying the provisions of this Article 15:
"Actual Contribution Percentage" for a Plan Year means, with respect
to the Highly Compensated Participant Group and Non-Highly Compensated
Participant Group, the average of the ratios, calculated separately for each
Participant in each group, of:
(i) The sum of Matching Company Elective Contributions, if any,
made pursuant to Article 4 on behalf of each such
Participant for the immediately preceding Plan Year, to
(ii) The Participant's Section 414(s) Compensa-tion for such Plan
Year.
For each Plan Year, the Company may elect either to include Matching and/or
Company Elective Contributions made pursuant to Article 4 for such Plan Year in
the numerator of the fraction described in this Section or as Elective
Contributions.
For the Plan Year ending December 31, 1997, the Average Contribution
Percentage shall be determined on the basis of Matching and Company Elective
Contributions and Section 414(s) Compensation for such Year. The Administrator
may elect, in accordance with regulations, to use Matching and Elective
Contributions and Section 414(s) Compensation for the Plan Year for which the
limitation of Section 15.1 applies to determine the applicable Actual
Contribution Percentage for such Year.
15.2.2 For purposes of this Article 15, if two or more plans of the
Company (other than an employee stock ownership plan as defined in Code section
4975(e)(7)) to which Employee contributions are made, are treated as one plan
for purposes of Code sections 401(a)(4) or 410(b) (other than the average
benefits test under Code section 410(b)(2)(A)(ii)), such plans shall be treated
as one plan for purposes of this Article. In addition, two or more plans of the
Company to which Employee contributions are made may be considered as a single
plan for purposes of this Article. In such a case, the aggregated plans must
satisfy Code section 401(a)(4) and 410(b) as though such aggregated plans were
a single plan. Notwithstanding the above, for Plan Years beginning after
December 31, 1988, contributions to an employee stock ownership plan as defined
in Code section 4975(e)(7) shall not be aggregated with the Plan.
15.3.3 If a Highly Compensated Participant participates in two or more
plans, other than an employee stock ownership plan as defined in Code section
4975(e)(7), which are maintained by the Company or an Affiliated Employer to
which Excess Aggregate Contributions are made, all such contributions on behalf
of such Highly Compensated Participant shall be aggregated for purposes of this
Article.
15.4.4 For purposes of this Article, a Highly Compensated Participant
and Non Highly Compensated Participant shall include any Employee eligible to
make and on whose behalf the Company may make Excess Aggregate Contributions,
regardless of whether in fact such contributions are made on behalf of such
Participant.
15.5.5 In the event that the Actual Contribution Percentage for the
Highly Compensated Participant Group exceeds the Actual Contri-bution Percentage
for the Non-Highly Compensated Participant Group pursuant to Section 15.1, the
Administrator, on or before the fifteenth day of the third month following the
end of the Plan Year, but in no event later than the close of the following Plan
Year, shall direct the Trustee to distribute to the Highly Compensated
Participant having the largest amount of Matching and Elective Contributions
contributed for such Year, and Income allocable to such Contributions, until
either one of the tests specified in Section 15.1 is satisfied, or until his
Actual Contribution Percentage equals the highest Actual Contribution Percentage
of the Highly Compensated Participant having the second highest Actual
Contribution Percentage. Provided, however, that Matching Contributions, to the
extent they are not vested under Section 10.5, shall be forfeited instead of
returned to the Participant. This process shall continue until one of the tests
set forth in Section 15.1 is satisfied.
15.6.6 Any distribution pursuant to Section 15.5 of less than the entire
amount of Excess Aggregate Contributions and Income attributable thereto shall
be treated as a pro rata distribution of Excess Aggregate Contributions and
Income.
15.7.7 For each Highly Compensated Participant, the amount of Excess
Aggregate Contributions is equal to the total of such Contributions made by and
on behalf of the Highly Compensated Participant, determined prior to the
application of this paragraph, less the amount determined by multiplying the
Highly Compensated Participant's Actual Contribution Percentage, determined
after application of this paragraph, by his Section 414(s) Compensation for the
Plan Year. The Actual Contribution Percentage must be rounded to the nearest
one-hundredth of one percent. In no case shall the amount of Excess Aggregate
Contributions with respect to any Highly Compensated Participant exceed the
amount of such Contributions made on behalf of such Highly Compensated
Participant for such Plan Year.
15.8.8 Notwithstanding the above, within twelve months after the end of
the Plan Year, the Company may, on account of the Plan Year, make a qualified
non-elective contribution, as defined in Code section 401(m)(4)(C) on behalf of
Non-Highly Compensated Partici-pants in an amount sufficient to satisfy one of
the tests set forth in Section 15.1. Such contribution shall be allocated to the
Elective Contribution Account of some or all Non-Highly Compensated Participants
in a manner to be determined by the Administrator. A separate accounting must
be maintained with respect to such contributions.
ARTICLE XVI. -- ALLOCATION OF DUTIES
16.1.1 The Trustee shall have the powers and duties given to it pursuant
to the Plan, including the power to invest the funds of the Plan.
16.2.2 The Company, the Administrator and the Trustee each shall have
only the powers and duties specifically given to it pursuant to the Plan.
Neither the Company, the Administrator nor the Trustee shall be responsible for
powers or duties allocated to the other pursuant to the Plan or for duties
delegated to another party or parties in accordance with the Plan. The
Administrator and the Trustee shall each be a named fiduciary for purposes of
the Plan.
16.3.3 The Company, the Administrator and the Trustee each may rely upon
any direction or action of or information from the other as proper pursuant to
the Plan without inquiry.
16.4.4 Notwithstanding the forgoing, any individual or party may serve
in one or more capacities with regard to the Plan in addition to being a
Participant in the Plan.
ARTICLE XVII. -- MISCELLANEOUS PROVISIONS
17.1.1 The Plan is are created for the exclusive benefit of Employees of
the Company and their Beneficiaries. No assets of the Plan shall ever revert to
or be used or enjoyed by the Company, nor shall such assets ever be used other
than for the exclusive benefit of Participants or their Beneficiaries.
17.2.2 Construction of the Plan shall be governed by the law of the
state in which the Company's principal office is located. However, the Company
intends the Plan to be a qualified profit-sharing plan under Code section
401(a) and any ambiguities in construction shall be interpreted to effectuate
such intent.
17.3.3 Nothing in the Plan or any amendment thereto shall give a
Participant, Beneficiary, Employee or other person a right unless it is
specifically provided or is accorded by the Company or the Administrator
pursuant to the Plan. Nothing in the Plan or any amendment thereto shall be
construed as giving a Participant or Beneficiary the right to be retained in the
employ of the Company and all persons shall remain subject to discharge at any
time to the same extent as if the Plan had not been adopted.
17.4.4 The interests of Participants and their Beneficiaries are not
subject to claims, indebtedness, attachment, execution, garnishment or other
legal or equitable process and such interests may not be voluntarily or
involuntarily sold, transferred or assigned except that Benefits may be
distributed pursuant to a Qualified Domestic Relations Order.
17.5.5 A successor to the business of the Company, by whatever form or
manner arising, may continue the Plan by executing an appropriate written
instrument to this effect. If the Plan is continued, the following rules shall
apply:
(a) The successor company shall succeed to the rights and obligations
of the Company under the Plan.
(b) Employees who accept a position with the successor company shall
continue as Participants. If an Employee is offered a position with the
successor company at compensation not less than that he was receiving from the
Company and does not accept the position, he shall be deemed to have terminated
his employment within Section 10.1. Any other Employee who does not accept a
position with the successor company shall be deemed to have retired,
irrespective of his age.
(c) Every reference to the Company shall be treated as reference to
the successor company.
17.6.6 The Plan shall not be merged or consolidated with, or its assets
or liabilities transferred to, any other plan, unless the benefit to which each
Participant would be entitled if the Plan terminated immediately following such
merger, consolidation or transfer is equal to or greater than the benefit to
which each Participant would have been entitled if the Plan had terminated
immediately prior to such merger, consolidation or transfer.
17.7.7 The terms of the Plan shall be binding upon the heirs, personal
representatives, administrators, successors and assigns of all parties in
interest, except for a successor to the Company electing not to continue the
Plan under Section 17.5.
17.8.8 The cost of administering the Plan may be paid by the Company.
If the Company does not pay the cost of administering the Plan, it shall be paid
from assets of the Plan. Taxes relating to assets of the Plan will be paid by
the Trustee and charged against the assets to which they are applicable.
17.9.9 Any employer may adopt the Plan for the benefit of its employees
with the consent of the board of directors of the Company. The adoption of the
Plan by an employer shall subject it to the provisions of the Plan and shall
constitute an automatic delegation to the Company of full authority to amend,
alter or modify the Plan. Any such amendment, alteration or modification made
by the Company shall be binding upon and effective with respect to each
employer. The delegation of authority, however, shall not be deemed to
constitute a delegation of authority to terminate the Plan as respects such
employer or to terminate the participation of such employer in the Plan. Any
participating employer, through action of its board of directors, shall cease to
participate in the Plan and shall have the proportionate interest of the funds
of the Plan for its Participants set aside and held as a separate fund to be
used and applied according to the provisions of the Plan.
17.10.10 Terms in the masculine shall be deemed to include the feminine,
and terms in the singular shall be deemed to include the plural, and vice versa,
wherever the context to admits or requires.
17.11.11 The Administrator, in accordance with a uniform policy, may
direct the Trustee to loan money to a Participant. In this event, the following
rules shall apply:
(a) Loans shall be made available to all Participants and
Beneficiaries on a reasonably equivalent basis.
(b) Loans shall not be made available to Highly Compensated Employees
in an amount greater than the amount made available to other Employees.
(c) Loans must be adequately secured and bear a reasonable rate of
interest.
(d) No loan shall exceed the value of the vested percentage,
determined pursuant to Section 10.5, at the time the loan is made.
(e) In the event of default, foreclosure on the note and attachment
of security will not occur until a distributable event occurs pursuant to the
Plan.
(f) No loans will be made to any Employee who is a Five Percent Owner
of an electing small business corporation.
A separate fund, entitled "Loan Repayment Fund," shall be established for
each Participant who borrows pursuant to this Section. Loan principal
repayments and interest payments shall be credited to the Loan Repayment Account
and shall be segregated from the general Plan assets. Any credit balance in the
Loan Repayment Fund shall be invested in general Plan assets.
17.12.12 In the event the Company makes an excessive Company Contribution
under a mistake of fact, as that term is used in Section 403(c)(2)(A) of Title I
of the Employee Retirement Income Security Act of 1974, the Company may demand
repayment of such amount at any time within one year following the time of
payment and the Trustee shall return such amount to the Company within sixty
days after such demand.
IN WITNESS WHEREOF, the Company has caused this Plan document to be
executed by its duly authorized officer or representative.
SPARTECH CORPORATION
By:/s/Bradley B. Buechler
Bradley B. Buechler
Title:President
FIRST AMENDMENT
TO THE
AMENDMENT AND RESTATEMENT
OF THE
SPARTECH CORPORATION 401(k) SAVINGS & INVESTMENT TRUST
This Amendment, executed on June 10, 1998, by Spartech Corporation
("Company"), a Missouri corporation, and National City Bank (the "Trustee").
WITNESSETH:
WHEREAS, the Company simultaneously established the Spartech Corporation
401(k) Savings & Investment Plan ("Plan") and the Spartech Corporation 401(k)
Savings & Investment Trust ("Trust") effective May 3, 1995; and
WHEREAS, the Plan and Trust were amended and restated in the form of two
separate documents on December 24, 1994; and
WHEREAS, the Company wants to now amend the amended and restated Trust; and
WHEREAS, the adoption of this amendment has been approved by the Board of
Directors of the Company;
NOW THEREFORE, the Company amends the Trust as follows:
1. Effective July 1, 1998, the Trustee under the Trust shall be National
City Bank.
2. Delete the first paragraph of ITEM FOUR and insert the following new
first paragraph in lieu thereof:
Within thirty days after the last day of each calendar quarter, the
Trustee should furnish the Administrator a written schedule of the total
assets of the Trust showing the valuation at fair market value placed on
each asset.
3. Add the following new Subsection (u) immediately before the last
paragraph of ITEM FIVE:
(u) To invest up to 100 percent of Trust assets in common stock of
the Company.
4. Delete ITEM TEN and insert the following new ITEM TEN in lieu thereof:
ITEM TEN
Each Participant may direct the Trustee how to vote the shares of the
Company common stock held by the Trustee and credited to his Accounts on
the record date established for each meeting or solicitation of consents of
the shareholders of the Company. For this purpose, the Administrator shall
furnish each such Participant within a reasonable period of time prior to
each such meeting the proxy materials provided to shareholders for the
meeting or consent solicitation, together with a form to be returned to the
Trustee on which may be set forth the Participant's confidential
instructions as to the manner of voting such shares of stock. Upon receipt
of such instructions, the Trustee shall note such shares, in person or by
proxy, in accordance therewith. If within a reasonable period of time
prior to any meeting or conclusion of any consent solicitation of the
shareholders of the Company, as specified by the Administrator, no
instructions have been received by the Trustee from a Participant, the
Trustee shall vote the shares of the Employer's common stock allocated to
this Account, in person or by proxy, in the same manner as the Trustee
votes the majority of the shares of the Company's common stock for which
instructions are received. Unallocated shares of the Company's common
stock, if any, held by the Trustee, shall also be voted by the Trustee, in
person or by proxy, in the same manner as the Trustee votes the majority of
the shares of the Company's common stock for which instructions are
received.
Each Participant may also direct the Trustee to tender for purchase or
acquisition the shares of the Company's common stock held by the Trustee
and allocated to his Accounts in the event an offer to purchase, exchange
or otherwise acquire such shares is made to all shareholders of the
Company's common stock. For this purpose, the Administrator shall furnish
to each Participant within a reasonable period of time the materials
provided to shareholders with respect to the offer together with a form to
be returned to the Trustee on which the Participant may set forth
confidential instructions with respect to the offer. If within a
reasonable period of time, as specified by the Administrator, no
instructions have been received by the Trustee from a Participant relating
to the offer, the Trustee shall not tender any shares of the Company's
common stock allocated to such Participant's Accounts. The Trustee shall
also not tender those shares of the Company's common stock it holds, if
any, which are not allocated to an Account.
IN WITNESS WHEREOF, the Company and the Trustee have executed this First
Amendment to the Spartech Corporation 401(k) Savings & Investment Trust as of
the date first above written.
SPARTECH CORPORATION
By:/s/ Bradley B. Buechler
Bradley B. Buechler
President
NATIONAL CITY BANK
By:/s/Steve McCreary
Steve McCreary
Title:Senior Vice President
SPARTECH CORPORATION
401(k) Savings and Investment Plan
Summary Plan Description
August 1998
TABLE OF CONTENTS
General Information
Introduction
Plan Type
1. What is a 401(k) Savings and Investment Plan?
Plan Participation
2. Are all employees eligible to participate in the Plan?
3. What are the requirements to be eligible to participate in the Plan?
4. When will I become a participant in the Plan?
Plan Contributions
5. What types of contributions may be made to the Plan?
6. Who is responsible for accounting to me for contributions made to the Plan?
7. What rules govern my Participant Contributions?
8. What rules govern Employer Profit Sharing Contributions?
9. What are the requirements to receive an Employer Profit Sharing
Contribution?
10. How will my share of Employer Profit Sharing Contributions be determined?
11. What rules govern Additional Employer Contributions?
12. What are the requirements to receive an Additional Employer Contribution?
13. How will my share of Additional Employer Contributions be determined?
14. Am I entitled to receive all Employer Contributions allocated to my Account
at time of distribution?
Distributions of Benefits
15. When am I entitled to receive a distribution?
16. When will a benefit distribution occur?
17. May I assign or pledge my interest in the Plan?
18. Who is entitled to receive my Account if I die before distributions
commence?
19. What forms of distribution are available from the Plan?
Investment of Plan Assets
20. How are Employer and Employee contributions invested?
Withdrawals and Loans
21. May I withdraw my voluntary, after tax contributions I made under the
Pawnee Industries, Inc. 401(k) Thrift Plan?
22. Are any of my Participant Contributions available to me
prior to retiring, terminating service, becoming disabled, or dying?
23. Are loans available to participants under this Plan?
Additional Information
24. May changes be made to the Plan?
25. Are there other limitations on my rights under the Plan?
26. Are my benefits guaranteed by the Pension Benefit Guaranty Corporation
(PBGC)?
27. As a participant in the Plan, do I have any rights?
28. How do you make a claim for benefits under the Plan?
GENERAL INFORMATION
Name of Plan: SPARTECH CORPORATION
401(k) SAVINGS AND INVESTMENT PLAN
(the "Plan").
Employer and
Plan Administrator: Spartech Corporation
Name and Address 7733 Forsyth Boulevard
Suite 1450
Clayton, MO 63105
Telephone: (314) 721-4242
(314) 721-1543 (fax)
Employer's Federal Tax
Identification Number: 43-0761773
Plan Number: 002
Plan Year: Begins: January 1
Ends: December 31
Original Effective Date: May 3, 1985
Trustee:
Name and Address: National City Bank
20 Stanwix Street
16th Floor
Pittsburgh, Pennsylvania 15222
Telephone: (412) 644-8317
Agent for Service
of Legal Process: Spartech Corporation
7733 Forsyth Boulevard
Suite 1450
Clayton, MO 63105
Telephone: (314) 721-4242
(314) 721-1543 (fax)
INTRODUCTION
This booklet is intended as a general summary of the provisions of the Spartech
Corporation 401(k) Savings and Investment Plan, a retirement plan which has been
adopted by your Employer. The Plan is designed to provide you with the
opportunity to save for your retirement on a pre-tax basis and to share in your
Employer's contributions to the Plan.
This summary highlights the most important provisions of Plan. It has been
written in a question and answer format in order to simplify the presentation of
the material. In the event of any conflict between this summary and the Plan,
the provisions of the Plan will control. A copy of the Plan is available for
inspection at your Employer's office.
PLAN TYPE
1. What is a 401(k) Savings and Investment Plan?
A 401(k) Savings and Investment Plan is a deferred compensation plan
designed to provide retirement income and other benefits. Your Employer
will make contributions to a Trust in the amount of the Basic and Voluntary
Contributions made by participants (see Question 7). In addition, your
Employer may make Employer Matching or Profit Sharing contributions under a
formula or method defined in the Plan (see Question 5). An Account will be
established in the Trust to identify your share of the assets.
PLAN PARTICIPATION
2. Are all employees eligible to participate in the Plan?
All employees of the Employer, after satisfying the requirements described
in paragraph 3, are eligible to participate in the Plan unless excluded as
a member of any collective bargaining unit.
3. What are the requirements to be eligible to participate in the Plan?
If you are an eligible employee, you will be eligible to participate in the
Plan after you have met these requirements:
(a) attained age 21;
(b) completed six consecutive months of service.
You receive credit for your months of service with the Employer; any
subsidiary of the Employer; and the following companies which have been
acquired by the Employer: Pawnee Industries, Inc; Portage Industries
Corporation; Hamelin Industries, Inc; Preferred Technical Group, Inc; and
Plains Plastics, Inc.
4. When will I become a participant in the Plan?
If you are in an eligible class of employees (see Question 2), you
will become a participant in the Plan on the first day of the month
during the Plan Year which occurs after you complete the eligibility
requirements (see Question 3). If you were not in an eligible class
of employees when first employed, but subsequently become a member of
the eligible class, you will participate immediately if you have
already completed the eligibility requirements. In either event, you
must complete the Plan's Enrollment Application to elect to (or
decline to) defer amounts from current compensation (see Question 7),
to designate the investment of Plan contributions (see Question 20),
and to designate your beneficiary (see Question 18).
After you become a participant in the Plan, you generally continue to
participate as long as you are employed. You would, however, become
ineligible to participate if your employment classification changed so that
you were no longer a member of an eligible class of employees. In this
event, you would resume participation immediately upon your subsequent
return to an eligible class of employees.
PLAN CONTRIBUTIONS
5. What types of contributions may be made to the Plan?
PARTICIPANT CONTRIBUTIONS - consist of your Basic Contributions and your
Voluntary Contributions.
Basic Participant Contributions - You may contribute 1%, 2%, 3%,
4%, 5% or 6% of your monthly compensation. Contributions are made at
your election by means of regular payroll deductions and will be
deducted on a pre-tax basis.
Voluntary Participant Contributions - If you have chosen 6% as
your Basic Participant Contribution rate, you may elect to contribute
an additional 1%, 2%, 3%, 4%, 5%, 6%, 7%, 8%, or 9% of your monthly
pay on a pre-tax basis. Contributions are made at your election by
means of regular payroll deductions and will be deducted on a pre-tax
basis.
EMPLOYER CONTRIBUTIONS - are in addition to any Participant Contributions
you choose to make. They consist of Regular Employer Contributions, Profit
Sharing Employer Contributions, and Additional Employer Contributions.
Regular Employer Contributions - Your Employer will contribute on
your behalf 50% of the amount of your Basic Participant Contributions.
No Regular Employer Contributions will be made for any Voluntary
Participant Contributions. Regular Employer Contributions will be
credited to you on a pre-tax basis.
Profit Sharing Employer Contributions - Your Employer may, but is
not required to, make Profit Sharing Contributions to the Plan in such
amounts as determined by the Employer.
To date, no Profit Sharing Employer Contributions have been made.
Additional Employer Contributions - As of the end of each Plan
Year, your Employer may make an additional contribution to the Plan.
This contribution is separate from the Regular Employer Contributions.
Any Additional Employer Contributions will be allocated at your
Employer's discretion to either:
- All Plan Participants as of the last day of the Plan
Year, or
- To some or all Plan Participants, who are not Highly-
Compensated Employees, as of the last day of the Plan Year.
The amount of the contribution, as well as the group of
participants who will receive it, will be determined by the Board of
Directors of your Employer.
To date, no Additional Employer Contributions have been made.
Military Service - If you are on active duty with the United
States Armed Forces or the Public Health Service and return to
employment with the Employer within the time provided by law, you are
permitted to make Participant Contributions for your period of
service. In this event, you receive Regular Employer Contributions
based upon the Basic Contributions you make for the period of military
or Public Health service. After you return to employment, the make-up
contributions must be made no later than the period of time equal to
the shorter of three times your period of military or Public Health
service or five years. The amount of the make-up contributions you
may make is based upon your compensation at the time you commence
military or Public Health service.
6. Who is responsible for accounting to me for contributions made to the Plan?
The Plan Administrator, is required to account for each participant's
interest in the Plan. The Plan Administrator will provide you with a
quarterly Statement of your Account showing your interest in the Plan and
disclosing the different types of contributions which have been made to the
Plan.
7. What rules govern my Participant Contributions?
You may elect to make Basic Participant Contributions and Voluntary
Participant Contributions as outlined in Question 5. However, the maximum
amount of pre-tax contributions you may make under this Plan and any other
401(k) plan during 1998 is $10,000. (This dollar amount will be adjusted
to reflect cost of living increases in accordance with Federal
regulations.)
Your Participant Contributions will begin with the first payroll period
which begins after you enter the Plan (see Question 4) and which is at
least 10 days after the Plan Administrator receives your enrollment form.
The enrollment form will remain in effect until amended or revoked. You may
elect to change the amount of your existing deferral election for future
payroll periods effective with the first payroll period beginning on or
after the first day of each quarter of the Plan Year (January 1, April 1,
July 1, and October 1), if the Plan Administrator has received an amended
Enrollment form at least 10 days prior to such date. Your Employer will
reduce your wages or salary by the amount of the Basic and Voluntary
Participant Contributions you have chosen to make, and will contribute that
amount to your Account under the Plan.
Limits on Contributions - Department of Treasury regulations require that
during each Plan Year all Participant Contributions and all Employer
Contributions meet a mathematical test in order for the plan to maintain
its tax status. This test compares the average contribution rate for the
Highly Compensated Employees (with this amount indexed for inflation) to
the average contribution rate for all non-Highly Compensated Employees
eligible to participate in the Plan. A Highly Compensated Employee is
generally an employee who has compensation from the Employer in excess of
$80,000. The $80,000 amount is indexed to inflation and may annually
increase.
If at the end of the year, the average contributions of the Highly-
Compensated Employees exceed the average contributions of the non-Highly
Compensated Employees by too large of a factor (the exact amount is based
on Treasury regulations and the average contribution of non-Highly
Compensated Employees), Participant Contributions will be returned to
Highly-Compensated Employees so the mathematical test may be met. You will
be notified if you are a Highly-Compensated Employee who will be receiving
a refund of a portion of your contribution.
If you have made salary reduction contributions to one or more other 401(k)
plans and your total contributions for a year exceed the annual dollar
limit on 401(k) contributions, and you wish to correct your over-
contribution by having all or part of your salary reduction contributions
to this Plan returned to you, you must notify the Plan Administrator no
later than March 1 of the following year. The Plan Administrator will
distribute the excess amount plus earnings to you by April 15.
Employee contributions will be accounted for separately from Employer
contributions. Any earnings on such contributions are not taxed until
distributed to you or your beneficiary.
8. What rules govern Employer Profit Sharing Contributions?
Your Employer may, but is not required to, make Profit Sharing
Contributions from net profits to the Plan during each Plan Year. The
amount of these contributions will be determined by your Employer each
year.
Your Employer has not elected to make any Employer Profit Sharing
Contributions to date.
Employer Contributions, including Employer Matching Contributions, are
subject to maximum limitations which are set forth in the Plan.
9. What are the requirements to receive a Profit Sharing Employer
Contribution?
In each Plan Year in which your Employer makes a Profit Sharing Employer
Contribution, you will be entitled to a share of such contribution if you
are employed on the last day of that Plan Year. You will not be entitled
to a share in the Profit Sharing Employer Contribution if you ceased to be
an employee for any reason during the Plan Year.
10. How will my share of Profit Sharing Employer Contributions be determined?
If you are eligible, your Account will be allocated a share of the Profit
Sharing Employer Contribution in proportion to the ratio of your
compensation to the total compensation of all eligible participants for the
Plan Year. For example, if your compensation was $10,000 and the total
compensation of all eligible participants for that Plan Year was $100,000,
your share of a $15,000 Employer Profit Sharing Contribution would be
$1,500 ($10,000/$100,000 x $15,000). Compensation for this purpose means
all earnings (up to $150,000) including Participant Contributions for the
Plan Year. The $150,000 amount increases with inflation.
11. What rules govern Additional Employer Contributions?
In any Plan Year in which the Plan fails to meet the special
nondiscrimination rules of the Internal Revenue Code for 401(k) plans, the
Employer may choose to make a special Additional Employer Contribution in
order to avoid the reduction or return of Participant contributions to
certain Highly Compensated Employees, as described in Question 7.
In addition, if the Plan is a "top heavy" plan under the Internal Revenue
Code, certain participants (called non-Key Employees) are entitled to a
minimum contribution of the lesser of 3% of compensation or the largest
percentage of Employer contributions allocated to a Key Employee, even if
they fail to complete 1,000 Hours of Service in a Plan Year. You must,
however, be employed on the last day of that Plan Year to be entitled to
such a minimum contribution. The Plan Administrator will inform you if the
Plan is "top-heavy." If, however, you are entitled only to the minimum
contribution as a non-Key Employee, your Account will be allocated the
minimum amount due based solely on your compensation.
12. What are the requirements to receive an Additional Employer Contribution?
Additional Employer Contributions will be allocated to either:
- All Plan Participants as of the last day of the Plan Year or
- Some or all Plan Participants, who are not Highly-Compensated
Employees, as of the last day of the Plan Year
The amount of the contribution, as well as the group of participants who
will receive it, will be determined by the Board of Directors of your
Employer.
13. How will my share of Additional Employer Contributions be determined?
The amount allocated to you will either be in proportion to the ratio of
the amount of Basic Participant Contributions you have made to the Plan for
the Plan Year to the total Basic Participant Contribution made during the
Plan Year by all eligible Plan Participants or in the ratio of your
compensation to the total compensation of all eligible participants.
Additional Employer Contributions may also be allocated to accounts of Non-
Highly Compensated Employees in any manner to enable the Plan to satisfy
the non-discrimination tests described in Questions 11. The method of
allocation will be determined by the Board of Directors of your Employer.
14. Am I entitled to receive all Employer Contributions allocated to my Account
at the time of distribution?
You are entitled to receive only that portion of your Employer Contribution
Account in which you are vested. An amount that is vested means you have a
legal right - a nonforfeitable interest - to that percentage of your
Account at the time of distribution.
You will always be fully vested in the value of your Participant and
Additional Employer Contributions (including earnings).
You will become fully vested in the value of any Regular Employer and
Profit Sharing Contributions (including earnings) that have been allocated
to you:
- On your Normal Retirement Age
- Upon becoming totally disabled
- Upon your completion of 5 Years of Service with your
Employer
- If you die before your employment is ended
- If this Plan is terminated
Before you become fully vested, your vested interest will be a percentage
of the value of the Regular Employer and Profit Sharing Contributions
(including earnings) that have been allocated to you. Your vested interest
will be based on your Years of Service. The following schedule is used to
determine your vested interest:
Years of Service Vested Interest
Less than 1 year 0%
At least 1 year but less than 2 years 20%
At least 2 years but less than 3 years 40%
At least 3 years but less than 4 years 60%
At least 4 years but less than 5 years 80%
5 years or more 100%
Your number of Years of Service equals your Months of Service divided by
twelve. You are credited with a Month of Service for each calendar month
in which you have an hour of service with the Employer, a subsidiary of the
Employer or any of the following companies which have been acquired by the
Employer: Pawnee Industries, Inc.; Portage Industries Corporation; Hamelin
Industries, Inc.; Preferred Technical Group, Inc.; and Plains Plastic, Inc.
You are also credited with a month of service for each calendar month you
serve on active duty in the United States Armed Forces or Public Health
Service, provided you return to the employment of Employer within the
period required by law.
DISTRIBUTION OF BENEFIT
15. When am I entitled to receive a distribution?
You, or your beneficiary, are entitled to receive a distribution of your
interest in the Plan when any one of the following events occurs:
1) termination of employment for any reason, including
retirement;
2) death;
3) disability;
4) termination of the Plan (if no successor Plan is
adopted); or
5) the Employer's sale of the business in which you are
employed, to an unrelated company;
6) attainment of age 59 1/2.
You will be eligible for disability benefits if you suffer a mental or
physical condition which renders you incapable of continuing your usual and
customary duties with the Employer. Whether you are disabled will be
determined by a physician selected by the Administrator.
You may also withdraw your Participant Contributions to meet certain
immediate and heavy financial needs, or upon attaining age 59 1/2.
Immediate and heavy financial needs include uninsured medical expenses,
college tuition or the purchase of a principal residence (see Section 22).
16. When will a benefit distribution occur?
In the event a distribution is required because of your retirement after
Normal Retirement Age, death, disability or other severance of employment,
benefit distributions will begin no later than 60 days after the date on
which such event occurs.
Your Normal Retirement Date is the first day of the month after you reach
age 65. If you continue to be employed after your Normal Retirement Date,
you will continue to be eligible to make Participant Contributions and to
share in the allocation of Employer Contributions. Distribution of your
Account will be deferred until you actually retire.
If your vested interest in the Plan is less than $5,000, your Employer may
require you to take your distribution as a lump sum at the time.
If your vested interest in the Plan is $5,000 or more at the time you
terminate employment, you may elect to defer commencement of the
distribution of your benefits to a later date you designate. This date may
not be later than April 1 following the close of the taxable year in which
you attain age 70 1/2. After your employment terminates, you should submit
a completed termination form to the Plan Administrator to receive your
benefits.
17. May I assign or pledge my interest in the Plan?
No. However, your interest in the Plan may be subject to claims under a
"qualified domestic relations order" issued by a court granting another
person a right to receive all or part of your Plan Account in connection
with your support, alimony, or property division obligations to your
spouse, former spouse, children or other dependents.
18. Who is entitled to receive my Account if I die before distributions
commence?
If you are married at the time of your death, your Account will be
distributed to your surviving spouse, unless your spouse has previously
consented in writing before a Plan representative or notary public to
payment of the death benefit to another beneficiary you have named. If you
are unmarried at the time of your death, the death benefit will be
distributed to your named beneficiary.
If you do not have a spouse or a named beneficiary living at the time of
your death, the death benefit will be distributed to the personal
representative of your estate.
19. What forms of distribution are available from the Plan?
If you are a married participant when distributions are to commence, your
benefit will be distributed in the form of a joint and survivor annuity,
unless you elect otherwise and your spouse consents to such election in
writing before a Plan representative or a notary public.
Your written consent to a form of distribution other than the annuity
option is required when the value of your Account exceeds $5,000. You, and
your spouse if you are married, may elect any of the following forms of
payment:
LUMP SUM
You may elect to receive your money in a lump sum cash payment.
MONTHLY INCOME
You may elect to have your money used to purchase any one of the
monthly annuities described below.
Joint and Survivor Annuity - This form of annuity will
provide monthly payments to you for as long as you live with a
death benefit payable to your surviving spouse upon your death.
Your surviving spouse is the spouse to whom you are married at
the time this annuity is purchased. The death benefit provides
for the continuation of a percentage of your monthly payment to
your surviving spouse. You elect the percentage to be continued,
it can be 50%, 75% or 100%. These monthly payments to your
surviving spouse will start as of the first day of the month
following your death and stop upon your surviving spouse's death.
No death benefits are payable should your spouse die prior to
you.
Longer Life Annuity - This form of annuity will provide
monthly payments to you as long as you live with a death benefit
payable to your beneficiary upon your death. The death benefit
provides for the continuation of a percentage (100% or less) of
your monthly payment to your beneficiary. You must choose the
beneficiary and the percentage to be continued at the time this
annuity is purchased and these choices cannot be changed at a
later time. The monthly payments to your beneficiary will start
as of the first day of the month following your death and will
stop upon your beneficiary's death. No death benefit is payable
should your beneficiary die prior to you.
Life Annuity - This form of annuity will provide
monthly payments to you for as long as you live with payments
stopping upon your death. There is no death benefit payable
under this form of annuity.
Full Cash Refund Annuity - This form of annuity will
provide monthly payments to you for as you live with a death
benefit payable to your beneficiary upon your death. The death
benefit provides for the payment of a lump sum dollar amount
equal to the difference between the amount used to purchase the
annuity and the total amount received as monthly annuity
payments.
No death benefit will be paid unless the total amount
received as annuity payments is equal to or greater than the
amount used to purchase the annuity. You must choose your
beneficiary at the time this annuity is purchased. This form of
annuity allows you to change your beneficiary at any time.
Life Annuity with Guaranteed Number of Monthly Payments
- This form of annuity will provide monthly payments to you for
as long as you live with the guarantee that a specified minimum
number of monthly payments will be made. You have the choice of
60, 120 or 180 guaranteed monthly payments. Should you die
before the guaranteed number of payments have been made, the
payments will continue to your beneficiary until the total of the
guaranteed payments chosen by you have been made to you and your
beneficiary. You must choose your beneficiary and the number of
payments you wish to have guaranteed at the time this annuity is
purchased. This form of annuity allows you to change your
beneficiary at any time, but you cannot change the number of
guaranteed payments
Annuity Certain - This form of annuity provides for
monthly payments to you for a specified period of time. Unlike
the other forms available, it is not paid for your lifetime. You
may choose to receive monthly payments for a period of 60, 120 or
180 months. Payments will stop at the end of the period chosen
by you, even if you are still living. Should you die before the
end of the payment period, pay-ments will continue to your
beneficiary for the remainder of the period. You must choose
your beneficiary and the period of payment at the time this
annuity is purchased. This form of annuity allows you to change
your beneficiary at any time, but you cannot change the payment
period.
In determining if you wish to receive an annuity, you
may obtain an estimate of the amount of monthly benefit. To
obtain an estimate, you should make a written request to the Plan
Administrator a few months before you retire. The Plan
Administrator will respond to your request within 30 days. The
Plan Administrator need comply with only one such request.
INVESTMENT OF PLAN ASSETS
20. How are Employer and Employee contributions invested?
Contributions can be invested in various mutual funds offered by the
Trustee. You are provided detailed information regarding the funds.
Contributions may also be invested in common stock of the Employer. You
select the manner in which your Participant Contributions are invested.
Employer Contributions made on your behalf are invested in the same manner
as your Participant Contributions. You may also have money transferred
from one fund to another.
You may direct the Trustee as to the voting of shares of Employer common
stock allocated to your accounts. If there is a tender offer for all of
the Employer's common stock, you may also direct the Trustee to offer
Employer stock allocated to your accounts for sale in connection with the
offer.
If you do not direct the Trustee regarding the voting or tendering of
shares allocated to your accounts, such shares are voted or tendered in the
same manner as the shares allocated the accounts of other participants, for
which the Trustee receives direction, are voted or tendered. For example,
if the Trustee receives direction from Plan participants to vote seventy-
five percent of their shares for and twenty-five percent of their shares
against a particular issue, and you do not provide instructions regarding
shares allocated to your account, the Trustee will vote seventy-five
percent of the shares allocated to your account for and twenty-five percent
of the shares allocated to your accounts against the issue. The Trustee
will, to the extent possible, purchase shares for the Plan on the open
market.
WITHDRAWALS AND LOANS
21. May I withdraw my voluntary, after tax contributions I made under the
Pawnee Industries, Inc. 401(k) Thrift Plan?
You may withdraw voluntary, after tax contributions made under the Pawnee
Industries, Inc. 401(k) Thrift Plan. You may only make two withdrawals in
a twelve month period.
22. Are any of my Participant Contributions or Regular Contributions available
to me prior to retiring, terminating service, becoming disabled, or dying?
You may withdraw your Participant Contributions and Regular Contributions
plus earnings (attributable to contributions made at least two years before
the withdrawal) only if you have an immediate and heavy financial need. The
Internal Revenue Service defines the following as immediate and heavy
financial needs:
1) the cost of purchasing a principal residence
2) medical and dental expenses incurred for you or any of
your dependents
3) the cost of tuition for post-secondary education for
you or your dependents
4) expenses associated with preventing your eviction from
your principal residence or foreclosure on the mortgage of your
principal residence
5) funeral expenses you incur on account of the death of a
member of your immediate family
You must certify to the Plan Administrator that this financial hardship
cannot be satisfied by other resources which may be reasonably available to
you, your spouse or minor children. You may also only make a hardship
withdrawal after you have withdrawn all after tax, voluntary contributions
made under the Pawnee Industries, Inc. 401(k) Plan (see question 21) and
have taken all loans available to you under the Plan.
In addition, you may request that the Plan Administrator permit a
withdrawal of your vested accounts after you have attained age 59 1/2 even
if your employment has not been terminated. Such withdrawals must be
consented to in writing by your spouse if you are married. If you elect a
hardship withdrawal, you may not make additional contributions for at least
12 months.
23. Are loans available to participants under this Plan?
You may request a loan from the Plan. Should you wish to receive a loan,
you must complete and file with the Plan Administrator a loan request
application. In requesting a loan, you should be aware that:
- The loan request application must indicate the amount
and term of the loan. Please note however, that the term of the
loan cannot be less than one year or more than five years unless
the loan is to be used for the purchase of a primary residence,
in which case the term of the loan may be up to 20 years.
- You must have the consent of the Plan Administrator to
receive a loan.
- The maximum loan amounts are:
1. You can borrow up to half of your vested
Account balance.
2. If your Account balance is over $100,000, you
can borrow up to $50,000.
- No loan will be granted for less than $1,000.
- You will be required to sign a promissory
note for the loan in a form acceptable to the Plan
Administrator.
- You may not have more than one loan
outstanding at any time. A request for a loan, prior to the
complete repayment of a previous loan, will not be granted.
In addition, a loan may not be renewed.
- The interest rate to be charged for each loan
will be the Bank of America's prime rate plus 1%.
- All loan repayments will be made by means of
regular payroll deductions. However, if your employment is
interrupted due to your disability or a period of temporary
leave without pay, loan repayments may be made in monthly
cash payments.
- If your employment ends, or if you fail to
make a loan repayment when due, the entire unpaid amount of
the loan plus accrued and unpaid interest will immediately
be due and payable in a lump sum payment. The Plan
Administrator will provide you with a written notice of the
lump sum payment requirement at least 30 days prior to the
due date. Should you fail to make the lump sum payment on
the due date, the amount of any distribution which would
have otherwise been available to you shall be reduced by the
amount of the unpaid principal and accrued but unpaid
interest. Under no circumstances may a loan be prepaid by
means of a lump sum payment without the written consent of
the Plan Administrator.
ADDITIONAL INFORMATION
24. May changes be made to the Plan?
Your Employer intends to continue the Plan indefinitely. However, your
Employer specifically reserves the right to amend or even to terminate the
Plan if it becomes necessary or desirable to do so. In the event the Plan
is changed, your vested benefit accrued to the effective date of such
change may not be reduced. Upon termination of the Plan, you will become
fully vested in your Account and your benefits will be distributed to you
from the Trust in one of the forms previously discussed.
25. Are there other limitations on my rights under the Plan?
The Plan does not give any person the right to be retained as an employee
of the Employer. It creates only those rights specifically provided in the
Plan.
26. Are my benefits guaranteed by the Pension Benefit Guaranty Corporation
(PBGC)?
This Plan is a defined contribution plan, and as such, benefits under the
Plan are not insured by the Pension Benefit Guaranty Corporation. The
retirement benefit you receive will depend on the investment performance of
your Account.
27. As a participant in the Plan, do I have any rights?
As a participant in the Plan, you are entitled to certain rights and
protections under the Employee Retirement Income Security Act of 1974
(ERISA). ERISA provides that all Plan participants shall be entitled to:
1. Examine without charge, at the Plan Administrator's
office, all Plan documents, including insurance contracts and
copies or all documents, filed by the Plan with the U.S.
Department of Labor, such as detailed annual reports and plan
descriptions.
2. Obtain copies of all Plan documents, and other Plan
information upon written request to the Plan Administrator. The
Administrator may make a reasonable charge for the copies.
3. Receive a summary of the Plan's annual financial
report. The Plan Administrator is required under ERISA to
furnish each participant with a copy of this summary annual
report.
4. Obtain a statement telling you whether you have a right
to receive a benefit at the Normal Retirement Age and if so, what
your benefits would be at such date if you stopped working under
the Plan now. If you do not have a right to a benefit, the
statement will tell you how many more years you have to work to
get such a right. This statement must be requested in writing
and is not required to be given more than once a year. The Plan
must provide the statement free of charge.
In addition to creating rights for Plan participants, ERISA imposes duties
upon the individuals who are responsible for the operation of the Plan.
These individuals called "fiduciaries" of the Plan, have a duty to act
prudently in your interest and that of the other Plan participants and
beneficiaries. No one, including your Employer, may terminate you or
otherwise discriminate against you in any way to prevent you from obtaining
a benefit or exercising your rights under ERISA. If your claim for a
benefit is denied, in whole or in part, you must receive a written
explanation of the reason for the denial. You have the right to have the
Plan Administrator review and reconsider your claim.
Under ERISA, there are steps you can take to enforce the above rights. The
following examples will show you action that you may take.
- First, if you request materials from the Plan and do not receive
them within 30 days, you may file suit in a Federal court. In such a
case, the court may require the Plan Administrator to provide the
materials and pay up to $100 a day until you receive the materials,
unless the materials were not sent because of reasons beyond control
of the Plan Administrator.
- Second, if you have a claim for benefits which is denied or
ignored, in whole or in part, you may file suit in a state or Federal
court.
- Third, if it should happen that Plan fiduciaries misuse the
Plan's money, or if you are discriminated against for asserting your
rights, you may seek assistance from the U.S. Department of Labor or
you may file suit in a Federal court. The court will decide who would
pay court and legal fees. If you are successful, the court may order
the person you have sued to pay these costs and fees. If you lose,
the court may order you to pay these costs and fees, for example, if
it finds your claim is frivolous.
If you have any questions about your Plan, you should contact the Plan
Administrator. If you have any questions about your rights under ERISA,
you should contact the nearest Area Office of the U.S. Labor Management
Services Administration, Department of Labor.
28. How do you make a claim for benefits under the Plan?
Apply for benefits to the Administrator. You need to complete all
necessary forms and supply needed information, such as the address where
you will receive your distribution.
Your claim is reviewed and a decision made within ninety days. In some
cases the decision may be delayed for an additional ninety days. If so,
you will be notified in writing.
If you make a claim and all or part of it is refused, you are notified in
writing. You are told (1) why your claim was refused, (2) the specific
provisions of the Plan governing the decision, (3) what additional
information is needed, if any, and (4) what steps you should take to have
your claim reviewed.
If your claim is refused, you have sixty days after you receive written
notice of refusal to make a written appeal to your Administrator. You or
your representative may also review Plan documents and submit issues and
comments in writing.
A decision is made on your appeal within sixty days. In some cases the
decision may be delayed for an additional sixty days. If so, you are
notified in writing.
[ARMSTRONG, TEASDALE, SCHLAFLY, & DAVIS LETTERHEAD]
July 29, 1998
Spartech Coporation
7733 Forsyth, Suite 1450
Clayton, MO 63105
Re: Registration Statement on Form S-8 for up to 2,000,000 Shares of Common
Stock
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 (the "Registration
Statement") proposed to be filed by Spartech Corporation, a Delaware corporation
(the "Company"), with the Securities and Exchange Commission on or about
July 21, 1998, in connection with the registration under the Securities Act of
1933, as amended, of up to an aggregate of 2,000,000 shares of the Company's
Common Stock $0.75 par value per share (the "Common Stock"), of which (i) up to
1,000,000 shares are being offered by the Company pursuant to the Spartech
Corporation Incentive Stock Option Plan (the "Option Plan"), and (ii) up to
1,000,000 shares are being offered pursuant to the Spartech Corporation 401(k)
Savings & Investment Plan (the "401(k) Plan" or together with the Option Plan,
the "Plans").
As your counsel, we have examined the Company's Restated Certificate of
Incorporation and By-Laws, each as amended to the date hereof, and the records
of corporate proceedings and other actions taken by the Company in connection
with the adoption of the Plans and the authorization, issuance and sale of the
Common Stock pursuant to the Plans. Based upon the foregoing and in reliance
thereon, we are of the opinion that, subject to compliance with applicable state
securities laws and the effectiveness of the Registration Statement,
1. The up to 1,000,000 shares of Common Stock to be issued by the Company
pursuant to the Option Plan, when issued pursuant to the due and valid exercise
of options duly granted under the Option Plan, will be legally issued, fully
paid and nonassessable; and
2. The up to 1,000,000 shares of Common Stock to be acquired by
participants in the 401(k) Plan, when and to the extent issued by the Company
pursuant to the terms of the 401(k) Plan, will be legally issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, and we further consent to the use of our name under the
caption "Legal Matters" in any Prospectus provided to participants in the Plans.
Very truly yours,
/s/ARMSTRONG, TEASDALE, SCHLAFLY & DAVIS
ARMSTRONG, TEASDALE, SCHLAFLY & DAVIS
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
dated December 5, 1997, incorporated by reference in this registration statement
and to all references to our firm included in or made a part of this
registration statement.
/s/ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
St. Louis, Missouri
July 30, 1998
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference in the Registration Statement (Form S-8) pertaining
to Spartech Corporation's Incentive Stock Option Plan and 401(k) Savings &
Investment Plan for the registration of 2,000,000 shares of its common stock and
to the incorporation by reference therein of our report dated April 17, 1998,
with respect to the consolidated financial statements of Polycom Huntsman, Inc.
included in the Current Report on Form 8-K/A, as filed with the Securities and
Exchange Commission on June 15, 1998.
/s/Ernst & Young LLP
Ernst & Young LLP
Pittsburgh, Pennsylvania
July 29, 1998
