As filed with the Securities And Exchange Commission on February 22, 2000
Registration Statement No. 333-______
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
________________________________
SPARTECH CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Delaware 43-0761773
(State or Other Jurisdiction (IRS Employer Identification No.)
of Incorporation or Organization)
120 South Central Avenue, Suite 1700, Clayton, Missouri 63105
(Address of Principal Executive Offices (Zip Code)
________________________________
SPARTECH POLYCOM, INC.
401(K) PROFIT SHARING PLAN
(Full Title of the Plan)
________________________________
Jeffrey D. Fisher
Vice President and General Counsel
Spartech Corporation
120 South Central Avenue, Suite 1700
St. Louis, Missouri 63105
(Name and Address of Agent for Service)
(314) 721-4242
(Telephone Number, Including Area Code, of Agent for Service)
________________________________
CALCULATION OF REGISTRATION FEE
Proposed Proposed Amount Of
Title Of Each Class Of Amount To Maximum Maximum Registration
Securities To Be Be Offering Aggregate Fee
Registered Registered Price Offering Price
Per Unit
Common stock, $.75 par 500,000 $25.75(1) $12,875,000.00 $3,399.00 (2)
value shares
(1) Average of the high and low trading prices of the common stock reported in
the consolidated reporting system as of February 15, 2000, a date within five
business days prior to the date of filing of the registration statement.
(2) 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.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 3. Incorporation of Documents by Reference.
The following documents previously filed by the registrant with the
Securities and Exchange Commission are hereby incorporated by reference into
this registration statement:
(a) The registrant's 1999 annual report on Form 10-K filed with the
Securities and Exchange Commission on January 13, 2000 pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934;
(b) All other reports filed by the registrant or the Plan pursuant to
Section 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 Amendment
No. 1 to the registrant's registration statement on Form 8-A dated
November 28, 1994, filed with the Securities and Exchange Commission on
May 17, 1999 under the Securities Exchange Act of 1934.
All documents subsequently filed by the registrant 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
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference in the registration statement and to
be part thereof from the date of filing of such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
The validity, authorization and issuance of the shares of common stock
offered by this prospectus has been passed upon for Spartech by Jeffrey D.
Fisher, Esq., an attorney licensed in the State of Missouri. Mr. Fisher has
been employed by Spartech as its Vice President and General Counsel since July,
1999.
Item 6. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of Delaware provides
generally and in pertinent part that a Delaware corporation may indemnify its
directors and officers against expenses, judgments, fines and settlements
actually and reasonably incurred by them in connection with any civil suit or
action, except actions by or in the right of the corporation, or any
administrative or investigative proceeding if, in connection with the matters in
issue, they acted in good faith and in a manner they reasonably believed to be
in, or not opposed to, the best interest of the corporation, and in connection
with any criminal suit or proceeding, if in connection with the matters in
issue, they had no reasonable cause to believe their conduct was unlawful.
Section 145 further permits a Delaware corporation to grant its directors and
officers additional rights of indemnification through charter or bylaw
provisions and otherwise and to purchase indemnity insurance on behalf of its
directors and officers.
Section Eighth of the registrant's Restated Certificate of Incorporation
provides for indemnification of the registrant's directors and officers in a
variety of circumstances against a variety of liabilities, which may include
liabilities under the Securities Act of 1933, as amended.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
A list of exhibits is set forth in the Exhibit Index appearing on page II-5
of this registration statement and is incorporated herein by reference.
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 with or
furnished to the Commission by the registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purposes 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 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 person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Clayton, State of Missouri, on February 14, 2000.
Spartech Corporation
By: s/Bradley B. Buechler
Bradley B. Buechler
Chairman of the Board, President and
Chief Executive Officer
Each person whose signature appears below hereby constitutes and appoints
Bradley B. Buechler and David B. Mueller, and each of them, the true and lawful
attorneys-in-fact and agents of the undersigned, with full power of substitution
and resubstitution, for and in the name, place and stead of the undersigned, 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, and hereby grants to such attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done, fully to all intents
and purposes as the undersigned might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agents, or any of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
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.
Signature Title Date Signed
s/BRADLEY B. BUECHLER Chairman of the Board, President, February 14,
Bradley B. Buechler Chief Executive Officer and Director 2000
(Principal Executive Officer)
s/DAVID B. MUELLER Executive Vice President, Chief
David B. Mueller Operating Officer, February 14,
Secretary and Director 2000
s/RANDY C. MARTIN Vice President-Finance and Chief
Randy C. Martin Financial Officer February 14,
(Principal Financial and Accounting 2000
Officer)
s/RALPH B. ANDY Director February 15,
Ralph B. Andy 2000
s/THOMAS L. CASSIDY Director February 14,
Thomas L. Cassidy 2000
s/W.R. CLERIHUE Director February 16,
W.R. Clerihue 2000
s/JOHN R. KENNEDY Director February 14,
John R. Kennedy 2000
s/CALVIN J. O'CONNOR Director February 15,
Calvin J. O'Connor 2000
s/JACKSON W. ROBINSON Director February 15,
Jackson W. Robinson 2000
s/ALAN R. TEAGUE Director February 15,
Alan R. Teague 2000
EXHIBIT INDEX
Exhibit Number Description
3.1 Restated Certificate of Incorporation of Spartech
Corporation, incorporated by reference to Exhibit 3 to the
registrant's quarterly report on Form 10-Q for the quarter ended May
2, 1998, filed with the Securities and Exchange Commission on June
1, 1998.
3.2 Amended and Restated By-Laws of Spartech Corporation,
incorporated by reference to Exhibit 3(B) to the registrant's annual
report on Form 10-K for the fiscal year ended October 31, 1998,
filed with the Securities and Exchange Commission on January 7,
1999.
4.1 Spartech Polycom, Inc. 401(k) Profit Sharing Plan and Trust
Agreement, as amended and restated effective January 1, 2000
4.2 Summary Plan Description for Spartech Polycom, Inc. 401(k)
Profit Sharing Plan, as amended and restated effective January 1,
2000
5.1 Legal opinion regarding shares being registered
23.1 Consent of independent public accountants (Arthur Andersen LLP)
23.4 Consent of counsel (included in Exhibit 5.1)
24.1 Power of attorney (included on Page II-3)
SPARTECH POLYCOM , INC. 401(k)
PROFIT SHARING PLAN AND TRUST AGREEMENT
TABLE OF CONTENTS
1. Effective Date. . . . . . . . . . . . . . . . . . . . . . 2
2. Designation of Trust. . . . . . . . . . . . . . . . . . . 3
3. Definitions . . . . . . . . . . . . . . . . . . . . . . . 4
4. Eligibility and Participation . . . . . . . . . . . . . . 16
5. Contributions . . . . . . . . . . . . . . . . . . . . . . 17
6. Allocations . . . . . . . . . . . . . . . . . . . . . . . 25
7. Limitation on Annual Additions. . . . . . . . . . . . . . 27
8. Vested Interest . . . . . . . . . . . . . . . . . . . . . 31
9. Withdrawals and Loans. . . . . . . . . . . . . . . . . . 34
10. Retirement Benefits . . . . . . . . . . . . . . . . . . . 39
11. Death Benefit . . . . . . . . . . . . . . . . . . . . . . 41
12. Payment of Benefits . . . . . . . . . . . . . . . . . . . 42
13. Administration of Plan. . . . . . . . . . . . . . . . . . 47
14. Trust Provisions. . . . . . . . . . . . . . . . . . . . . 52
15. Amendment and Termination . . . . . . . . . . . . . . . . 59
16. Miscellaneous Provisions. . . . . . . . . . . . . . . . . 62
SPARTECH POLYCOM , INC. 401(k)
PROFIT SHARING PLAN AND TRUST AGREEMENT
MADE this ______ day of, February, 2000, but effective as of January 1,
2000, by and among SPARTECH POLYCOM, INC. hereinafter referred to as the
"Company", and NATIONAL CITY BANK, hereinafter referred to as the "Trustee";
WHEREAS, SPARTECH POLYCOM, INC. is the successor plan sponsor of the
POLYCOM HUNTSMAN, INC. PROFIT SHARING PLAN , now known as the SPARTECH POLYCOM,
INC. 401(k)PROFIT SHARING PLAN, hereinafter referred to as the "Plan";
WHEREAS, the Company and the Trustee desire to amend the Plan and restate
it in its entirety; 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 and the Trustee, intending to be legally bound
hereby, amends and restates the Plan, effective January 1, 2000 as follows:
SECTION ONE
EFFECTIVE DATE
1.01 Effective Date: The provisions of the Plan were originally effective
as of April 1, 1983. This amended and restated Plan shall be effective as of
January 1, 2000.
SECTION TWO
DESIGNATION OF TRUST
2.01 Profit Sharing Trust: The Trust established hereunder shall be known
as the SPARTECH POLYCOM , INC. 401(k) PROFIT SHARING TRUST (hereinafter called
the "Trust") and shall be for the exclusive benefit of the Employees. The terms
of the Trust are intended to comply with the Internal Revenue Code of 1986, as
amended, and Treasury regulations issued in connection therewith, in order that
the Trust may qualify as a tax-exempt profit sharing trust.
SECTION THREE
DEFINITIONS
When used herein the following words shall have the following meanings
unless the context clearly indicates otherwise:
3.01 "Accrual Computation Period" shall mean the Plan Year.
3.02 "Accrued Benefit" shall mean the balance of all of a Participant's
accounts held under the Plan.
3.03 "Active Participant" shall mean a Participant who is employed by the
Company on the last day of the Plan Year.
3.04 "Anniversary Date" shall mean March 31st of each year and effective
December 31, 1996 it shall mean December 31st of each year.
3.05 "Break in Service" shall mean any One-Year Break in Service or series
of consecutive One-Year Breaks in Service.
3.06 "Company" shall mean SPARTECH POLYCOM , INC.
3.07 "Compensation" shall mean the total of a Participant's wages as
defined in I.R.C. section 3401(a) for purposes of federal income tax withholding
at the source but determined without regard to any rules that limit the
remuneration included in wages based on the nature or location of the employment
or the services performed (such as the exception for agricultural labor in
I.R.C. section 3401(a)(2)). Compensation shall be determined over the Plan
Year. Compensation shall include Company Contributions, Contributions made
pursuant to a salary reduction agreement, and amounts which are not includable
in the gross income of the Employee under sections 125, 402(e)(3), 402(h) or
403(b) of the I.R.C. Compensation used to determine Plan benefits will not
exceed $160,000, as adjusted under section 401(a)(17) of the I.R.C. A cost of
living adjustment in effect for a calendar year applies to any period not
exceeding 12 months over which Compensation is determined beginning in such
Plan Year. If the period for determining Compensation used in calculating an
Employee's allocation for a determination period is a short Plan Year (i.e.,
shorter than 12 months), the annual Compensation limit is an amount equal to the
otherwise applicable annual Compensation limit multiplied by the fraction, the
numerator of which is the number of months in the short Plan Year, and the
denominator of which is 12.
Solely for the purposes of Section Seven, the definition of
Compensation shall be determined according to section 7.04.
For years beginning after December 31, 1988 and before January 1,
1994, the annual Compensation of each Participant taken into account for
determining all benefits provided under the Plan for any determination period
shall not exceed $200,000. This limitation shall be adjusted by the Secretary at
the same time and in the same manner as under I.R.C. section 415(d), except that
the dollar increase in effect on January 1 of any calendar year is effective for
years beginning in such calendar year and the first adjustment to the $200,000
limitation is effected on January 1, 1990.
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, for Plan Years
beginning on or after January 1, 1994, the annual Compensation of each Employee
taken into account under the Plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living in accordance
with section 401(a)(17)(B) of the Code. The cost-of-living adjustment in effect
for a calendar year applies to any period, not exceeding 12 months, over which
Compensation is determined (determination period) beginning in such calendar
year. If a determination period consists of fewer than 12 months, the OBRA '93
annual compensation limit will be multiplied by a fraction, the numerator of
which is the number of months in the determination period, and the denominator
of which is 12.
For Plan Years beginning on or after January 1, 1994, any reference in
this Plan to the limitation under section 401(a)(17) of the Code shall mean the
OBRA '93 annual compensation limit set forth in this provision.
If Compensation for any prior determination period is taken into
account in determining an Employee's benefits accruing in the current Plan Year,
the Compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
first Plan Year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
3.08 "Determination Date" shall be the Anniversary Date of the preceding
Plan Year except for the first Plan Year in which case the Determination Date
shall be the Anniversary Date of such Plan Year.
3.09 "Direct Rollover" shall mean a payment by the Plan to the Eligible
Retirement Plan specified by the Distributee.
3.10 "Disqualified Person" shall mean a person who is:
(a) a Fiduciary, counsel or Employee of the Plan;
(b) a person providing services to the Plan;
(c) an employer, any of whose employees are covered by the Plan;
(d) an employee organization, any of whose members are covered by the
Plan;
(e) an owner, direct or indirect, of fifty percent (50%) or more of
the combined voting power, the total values of shares, the capital or profits
interest, or the beneficial interest of a person described in (c) or (d) above;
(f) a spouse, ancestor, lineal descendant or spouse of a lineal
descendant of any person described in (a), (b), (c) or (e) above;
(g) a corporation, partnership, trust or estate of which fifty
percent (50%) or more of the combined voting power, the total value of shares,
the capital or profits interest, or the beneficial interest, is owned directly
or indirectly, or held by any person described in (a) through (e) above;
(h) an officer, director, (or an individual having powers or
responsibilities similar to those of officers or directors), an owner of ten
percent (10%) or more of the shares or interest in capital or profits, or a
person earning ten percent (10%) or more of the total yearly wages of, a person
described in (b), (c), (d), (e) or (g) above;
(i) a ten percent (10%) or more (in capital or profits) partner or
joint venturer of a person described in (c), (d), (e) or (g) above.
3.11 "Distributee" means an Employee or former Employee. In addition, the
Employee's or former Employee's surviving spouse, and the Employee's or former
Employee's spouse or former spouse who is the alternate payee under a Qualified
Domestic Relations Order are Distributees with regard to the interest of the
spouse or former spouse.
3.12 "Eligible Retirement Plan" means an individual retirement account
described in I.R.C. section 408(a), an individual retirement annuity described
in I.R.C. section 408(b), an annuity plan described in I.R.C. section 403(a), or
a qualified trust described in I.R.C. 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.
3.13 "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:
(a) any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life (or life
expectancy) of the Distributee or the joint lives (or joint life expectancies)
of the Distributee and the Distributee's designated beneficiary, or for a
specified period of ten years or more;
(b) any distribution to the extent such distribution is required
under I.R.C. section 401(a)(9); and
(c) the portion of any distribution that is not includable in gross
income (determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
3.14 "Employee" shall mean only those persons employed by the Company or
by any other employer required to be aggregated with the Company under sections
414(b), (c), (m) or (o) of the I.R.C., but who is not covered by a collective
bargaining agreement where retirement benefits are the subject of good-faith
bargaining between employee representatives and the Company. The term Employee
shall also include any Leased Employee (as defined in section 3.26) deemed to be
an employee of any employer described above as provided in sections 414(n) or
(o) of the I.R.C.
3.15 "Employment Commencement Date" shall mean the first date on which an
Employee completes an Hour of Service.
3.16 "Entry Date" shall mean January 1, April 1, July 1 and October 1 of
each year.
3.17 "Fiduciary" shall mean any person or entity who exercises any
discretionary management of the Plan or exercises any authority or control
respecting management or disposition of its assets, renders investment advice
for a fee or other compensation, direct or indirect, with respect to any moneys
or other property of the Plan, or has authority or responsibility in the
administration of the Plan.
3.18 "Highly Compensated Employee" shall include both highly compensated
active employees and highly compensated former employees.
Effective for years beginning after December 31, 1996, the term Highly
Compensated Employee means any Employee who: (1) was a 5% percent owner (as
defined in section 416(i)(1) of the I.R.C.) at any time during the determination
year or the look-back year; or (2) for the look-back year had compensation from
the Company in excess of $80,000 as adjusted at the same time and in the same
manner pursuant to I.R.C. section 415(d), except that the base period is the
calendar quarter ending September 30, 1996.
For this purpose, "compensation" has the meaning given that term by
I.R.C. section 415(c)(3), and includes amounts deferred pursuant to I.R.C.
section 402(e)(3) (with respect to cash or deferred arrangements as defined in
section 401(k)(2)), section 402(h) (with respect to simplified employee pension
plans) or section 403(b), or contributed to any welfare benefit plans maintained
by the Company through a reduction in the Employee's compensation which,
pursuant to I.R.C. section 125, are not included in the gross income of the
Employee for the taxable year in which such amounts are contributed.
For this purpose, the determination year shall be the Plan Year for
which the determination of who is highly compensated is being made. The look-
back year shall be the twelve-month period immediately preceding the
determination year.
The determination of who is a Highly Compensated former employee is
based on the rules applicable to determining Highly Compensated employee status
as in effect for that determination year, in accordance with temporary Treasury
Regulations section 1.414(q)- 1T, A-4 and IRS Notice 97-45.
3.19 "Hours of Service" shall mean:
(a) each hour for which an Employee is directly or indirectly paid,
or entitled to payment, by the Company for the performance of duties during the
applicable computation period; such hours shall be credited to the Employee in
the computation period during which the duties were performed;
(b) each hour for which back pay, irrespective of mitigation of
damages, has been awarded or agreed to by the Company; such hours shall be
credited in the computation period or periods to which the award or agreement
pertains rather than the computation period in which the payment, award or
agreement is made;
(c) each hour for which an Employee is directly or indirectly paid,
or entitled to payment, by the Company for reasons (such as vacation, sickness
or disability) other than the performance of duties;
(d) in the case of an Employee who is on unpaid leave of absence
approved by the Company for reasons of sickness, temporary disability, temporary
layoff, education or military service, each hour during such leave which would
have been credited to such Employee under (a), (b) or (c), above, had his
customary employment continued; provided, however, that the Employee returns to
employment with the Company within ninety (90) days after the end of such leave
of absence; and
(e) hours which would normally have been credited to an Employee but
for an absence due to the (i) pregnancy of such Employee, (ii) birth of a child
of such Employee, (iii) placement of a child with the Employee in connection
with the adoption of such child, or (iv) caring for a child described in (ii) or
(iii) immediately following such birth or placement. Such hours shall not
exceed 501 hours and shall be treated as Hours of Service only in the Plan Year
in which the absence begins if such hours would prevent the Employee from
incurring a Break in Service or in the immediately following Plan Year.
The above provisions shall be construed so as to resolve any
ambiguities in favor of crediting Employees with Hours of Service. In addition,
Hours of Service shall be computed and credited in accordance with Department of
Labor Regulation section 2530.200b-2.
3.20 "I.R.C." shall mean the Internal Revenue Code of 1986, as amended.
3.21 "Key Employee" shall mean any Employee, former Employee or
beneficiary who at any time during the Plan Year or any of the four (4)
preceding Plan Years, is, or was, (i) an officer of the Company having annual
Compensation for such Plan Year which is greater than 50% of the amount in
effect under section 415(b)(1)(A) of the I.R.C. for the calendar year in which
such Plan Year ends, (ii) one (1) of the ten (10) Employees owning the largest
interests in the Company (if the interest is larger than one-half percent
(1/2%)) and having annual Compensation from the Company in excess of the
limitation in effect under section 415(c)(1)(A) of the I.R.C. for the year,
(iii) a five percent (5%) owner of the Company or (iv) a one percent (1%) owner
of the Company with annual Compensation in excess of One Hundred Fifty Thousand
Dollars ($150,000). For purposes of this subsection, ownership shall include
constructive ownership as defined by section 318 of the I.R.C. (with the
substitution of 5% for 50% in section 318(a)(2) of the I.R.C.).
For purposes of (i) above, no more than fifty (50) Employees (or, if
lesser, the greater of 3 or 10 percent of the Employees) shall be treated as
officers. For purposes of (ii) above, if two (2) Employees have the same
interest in the Company, the Employee having greater annual Compensation from
the Company shall be treated as having a larger interest. For purposes of
determining the number of officers taken into account under (i) above, Employees
described in section 414(q)(8) of the I.R.C. shall be excluded.
Annual Compensation means Compensation as defined in section 3.08, but
including amounts contributed by the Company pursuant to a salary reduction
agreement which are excludable from the Employee's gross income under section
125, section 402(e)(3), section 402(h) or section 403(b) of the I.R.C.
3.22 "Late Retirement Date" shall mean the first day of the month
coincident with or the next following the date on which a Participant actually
retires following his Normal Retirement Date.
3.23 "Leased Employee" shall mean any person (other than an Employee of the
Company) who pursuant to an agreement between the Company and any other person
("leasing organization") has performed services for the Company (or for the
Company and related persons determined in accordance with section 414(n)(6) of
the I.R.C.) on a substantially full-time basis for a period of at least one
year, and such services are performed under primary direction or control of the
Company. Contributions or benefits provided a Leased Employee by the leasing
organization which are attributable to services performed for the Company shall
be treated as provided by the Company.
A Leased Employee shall not be considered an Employee of the Company
if: (i) such employee is covered by a money purchase pension plan providing:
(a) a non-integrated employer contribution rate of at least ten percent (10%) of
compensation, as defined in section 415(c)(3) of the I.R.C., but including
amounts contributed pursuant to a salary reduction agreement which are
excludable from the employee's gross income under section 125, section
402(e)(3), section 402(h) or section 403(b) of the I.R.C., (b) immediate
participation, and (c) full and immediate vesting; and (ii) Leased Employees do
not constitute more than twenty percent (20%) of the Company's non-highly
compensated workforce.
3.24 "Limitation Year" shall mean the Plan Year.
3.25 "Month of Service" shall mean 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 Polycom Huntsman, Inc. and
PH Chemicals, Inc.
3.26 "Net Income" shall mean the current and accumulated earnings of the
Company, as determined by the Company's accountant upon the basis of the
Company's books of account, in accordance with generally accepted accounting
principles, but without any deduction being taken for any of the following: (a)
depreciation; (b) extraordinary losses; (c) casualty losses in excess of
recovery; (d) contributions to this or any other qualified retirement plan; or
(e) federal, state, county or city income taxes.
3.27 "Non-Key Employee" shall mean an Employee who is not a Key Employee.
3.28 "Normal Retirement Date" shall mean the later of a Participant's sixty
- -fifth (65th) birthday or the fifth (5th) anniversary of the Entry Date on which
the Participant commenced participation in the Plan. In no event, however, may
such Normal Retirement Date occur later than any mandatory retirement age
consistently enforced by the Company.
3.29 "One-Year Break in Service" shall mean a period of severance of at
least 12-consecutive months. A period of severance is a continuous period of
time during which the Employee is not employed by the Company. Such period
begins on the date the Employee retires, dies, quits or is discharged, or if
earlier, the 12 month anniversary of the date on which the Employee was
otherwise first absent from service.
In the case of an individual who is absent from work for maternity or
paternity reasons, the 12-consecutive month period beginning on the first
anniversary of the first date of such absence shall not constitute a One Year
Break in Service. For purposes of this paragraph, an absence from work for
maternity or paternity reasons means an absence (1) by reason of the pregnancy
of the individual, (2) by reason of the birth of a child of the individual, (3)
by reason of the placement of a child with the individual in connection with the
adoption of such child by such individual, or (4) for purposes of caring for
such child for a period beginning immediately following such birth or placement.
3.30 "Participant" shall mean any Employee or former Employee of the
Company who is participating in the Plan in accordance with Section Four or who
is receiving benefits pursuant to Section Twelve.
3.31 "Permissive Aggregation Group" shall mean one or more plans that may
be aggregated with the Plan if such group of plans continues to meet the
requirements of sections 401(a)(4) and 410 of the I.R.C.
3.32 "Plan" shall mean this Plan as it shall be amended from time to time.
The Plan shall be known as the SPARTECH POLYCOM , INC. 401(k) PROFIT SHARING
PLAN.
3.33 "Plan Administrator" shall mean the person or persons or entity named
or appointed as such pursuant to Section Thirteen.
3.34 "Plan Year" shall mean the twelve (12) consecutive month period ending
on the Anniversary Date except that because of the change in Plan Year there
will be a short Plan Year during the period from April 1, 1996 through December
31, 1996.
3.35 "Qualified Domestic Relations Order" shall mean a court order as
defined in I.R.C. section 414(p).
3.36 "Required Aggregation Group" shall mean the group of plans of the
Company, including plans that have been terminated, in which a Key Employee is
(in the Plan Year containing the Determination Date or any of the four (4)
preceding Plan Years) a Participant and each other plan of the Company which
enables this Plan to meet the requirements of sections 401(a)(4) and 410 of the
I.R.C.
3.37 "Rollover" shall mean (a) amounts directly transferred to the Trustee
from the trust under a plan qualified under section 401(a) of the I.R.C.; (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 section 401(a) of
the I.R.C. provided that such amounts may be transferred to the Trustee without
Federal income tax consequences to the Employee pursuant to section 402(a)(5) of
the I.R.C.; and (c) amounts directly transferred to the Trustee which are
described in section 408(d)(a)(3)(ii)of the I.R.C.
3.38 "Top-Heavy Plan" shall mean this Plan for a Plan Year if, as of the
Determination Date (or in the case of a Plan Year in which occurs the Effective
Date of this Plan, the last day of such Plan Year), one of the following
conditions exists:
(a) If the Top-Heavy Ratio for this Plan exceeds 60 percent (60%) and
this Plan is not part of any Required Aggregation Group or Permissive
Aggregation Group of plans.
(b) If this Plan is a part of a Required Aggregation Group of plans
but not part of a Permissive Aggregation Group and the Top-Heavy Ratio for the
group of plans exceeds 60 percent (60%).
(c) If this Plan is a part of a Required Aggregation Group and part
of a Permissive Aggregation Group of plans and the Top-Heavy Ratio for the
Permissive Aggregation Group exceeds 60 percent (60%).
3.39 "Top-Heavy Ratio" shall mean the following:
(a) If the Company maintains one or more defined contribution plans
(including any simplified employee pension plan) and the Company has not
maintained any defined benefit plan which during the five (5) year period ending
on the Determination Date(s) has or has had Accrued Benefits, the Top-Heavy
Ratio for this Plan alone or for the Required or Permissive Aggregation Group as
appropriate is a fraction, the numerator of which is the sum of the account
balances of all Key Employees as of the Determination Date(s) (including any
part of any account balance distributed in the five (5) year period ending on
the Determination Date(s)), and the denominator of which is the sum of all
account balances (including any part of any account balance distributed in the
five (5) year period ending on the Determination Date(s)), both computed in
accordance with section 416 of the I.R.C. and the regulations thereunder. Both
the numerator and denominator of the Top-Heavy Ratio are increased to reflect
any contribution not actually made as of the Determination Date, but which is
required to be taken into account on that date under section 416 of the I.R.C.
and the regulations thereunder.
(b) If the Company maintains one or more defined contribution plans
(including any simplified employee pension plan) and the Company maintains or
has maintained one or more defined benefit plans which during the five (5) year
period ending on the Determination Date(s) has or has had any Accrued Benefits,
the Top-Heavy Ratio for any Required or Permissive Aggregation Group as
appropriate is a fraction, the numerator of which is the sum of account balances
under the aggregated defined contribution plan or plans for all Key Employees,
determined in accordance with (a) above, and the present value of Accrued
Benefits under the aggregated defined benefit plan or plans for all Key
Employees as of the Determination Date(s), and the denominator of which is the
sum of the account balances under the aggregated defined contribution plan or
plans for all Participants, determined in accordance with (a) above, and the
present value of Accrued Benefits under the defined benefit plan or plans for
all Participants as of the Determination Date(s), all determined in accordance
with section 416 of the I.R.C. and the regulations thereunder. The Accrued
Benefits under a defined benefit plan in both the numerator and denominator of
the Top-Heavy Ratio are increased for any distribution of an Accrued Benefit
made in the five (5) year period ending on the Determination Date.
(c) For purposes of (a) and (b) above the value of account balances
and the present value of Accrued Benefits will be determined as of the most
recent Determination Date except as provided in section 416 of the I.R.C. and
the regulations thereunder for the first and second plan years of a defined
benefit plan. The account balances and Accrued Benefits of a Participant (1)
who is not a Key Employee but who was a Key Employee in a prior year, or (2) who
has not been credited with at least one hour of service with any employer
maintaining the plan at any time during the five (5) year period ending on the
Determination Date will be disregarded. The calculation of the Top-Heavy Ratio,
and the extent to which distributions, rollovers, and transfers are taken into
account will be made in accordance with section 416 of the I.R.C. and the
regulations thereunder. When aggregating plans, the value of account balances
and Accrued Benefits will be calculated with reference to the Determination
Dates that fall within the same calendar year.
The Accrued Benefit of a Participant other than a Key Employee shall
be determined under (i) the method, if any, that uniformly applies for accrual
purposes under all defined benefit plans maintained by the Company, or (ii) if
there is no such method, as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under the fractional rule of section 411(b)(1)(C)
of the I.R.C.
3.40 "Total Disability" shall mean the total and permanent mental or
physical incapacity of a Participant to perform the usual duties of his
employment with the Company and for the purposes of this Plan shall exist only
when certified by an impartial physician or physicians selected by the Plan
Administrator.
3.41 "Trustee" shall mean the person or entity holding the assets of the
Trust pursuant to the terms of the Plan.
3.42 "Valuation Date" shall mean each business day of the Plan Year on
which the New York Stock Exchange is open to trading.
3.43 "Vested Interest" shall mean a Participant's nonforfeitable and
unconditional right to all or a portion of his Accrued Benefit.
3.44 "Vesting Computation Period" shall mean the Plan Year.
3.45 "Year of Service" shall mean the Employee's number of Months of
Service as herein set forth divided by twelve (12) .
SECTION FOUR
ELIGIBILITY AND PARTICIPATION
4.01 Eligibility Requirements: Each Employee who has completed six (6)
consecutive Months of Service and who has attained the age of twenty-one (21)
years shall be eligible to participate in the Plan.
4.02 Date of Participation: Each Employee who has satisfied the
eligibility requirements of section 4.01 shall be admitted to participation in
the Plan on the Entry Date immediately following his satisfying the requirements
of said section 4.01.
4.03 Current Employees: Notwithstanding any other provision of this
Section Four, each Employee as of the effective date of this Plan who has
satisfied the eligibility requirements of section 4.01 shall commence
participation on such date.
4.04 Former Participants: If a Participant's employment has been
terminated, he shall resume participation in the Plan immediately upon rehire.
4.05 Waiver of Participation: A Participant may elect to waive either
complete participation in the Plan or participation in the Company Contribution
portion of the Plan (i.e. remain eligible to make Elective Contributions and for
Matching Contributions) for any Plan Year by notifying the Plan Administrator in
writing of such election no later than fifteen (15) days before the first day of
the Plan Year for which such election is to be effective. Such waiver shall be
effective for each successive Plan Year unless the Employee or Participant
notifies the Plan Administrator in writing of his election to resume
participation in the Plan no later than fifteen (15) days before the first day
of the Plan Year in which he is to resume participation. Such Participant shall
resume participation on the first day of such Plan Year.
SECTION FIVE
CONTRIBUTIONS
5.01 Company Contributions: For each Plan Year each Company may make a
Company Contribution to the Trust out of Net Income in an amount which shall be
determined by the Board of Directors of the Company in its sole and absolute
discretion. The Company Contribution for any Plan Year shall be paid to the
Trustee within the time prescribed by law for the filing of the Company's
Federal Income Tax Return, including extension of time, for such Plan Year.
5.02 Conditions of Company Contributions: All Company Contributions shall
be expressly conditioned upon the continued qualification of this Plan, and the
qualification of any amendments to this Plan, under I.R.C. section 401 and upon
the deductibility of such Company Contributions under I.R.C. section 404.
Company Contributions which shall fail to meet either of such conditions shall
be subject to the provisions of section 16.03.
5.03 Elective Deferrals and Matching Contributions:
(a) The Plan Administrator shall permit each Eligible Participant to
elect to defer (in lieu of receiving cash compensation) a whole percentage
amount of up to ten percent (10%) of his Compensation and to have such amount
deposited in the Participant Elective Deferral Account.
The Plan Administrator shall implement the deferral elections in
accordance with the following:
(i) A Participant must make his initial salary deferral election
by entering into a written salary reduction agreement election within
a reasonable time not to exceed thirty(30)days after becoming a
Participant in the Plan. If the Participant fails to make an initial
salary deferral election within such time, then such Participant may
thereafter make an election in accordance with the rules governing
modifications.
(ii) A Participant may modify a prior salary deferral election
quarterly, by providing the Plan Administrator with thirty (30) days
written notice of such modification (or upon such shorter notice
period as may be acceptable to the Administrator) during such election
periods established by the Plan Administrator prior to the first day
of each Plan Year quarter. Any modifications shall not have
retroactive effect and shall remain in full force until revoked.
(iii) A Participant may elect to prospectively revoke his salary
reduction agreement in its entirety at any time during the Plan Year
by providing the Plan Administrator with thirty (30) days written
notice of such revocation (or upon such shorter notice period as may
be acceptable to the Administrator). Such revocation shall become
effective as of the beginning of the first pay period coincident with
or next following the expiration of the notice period. Furthermore,
the termination of the Participant's employment, or the cessation of
Participant in the Plan for any reason shall be deemed to revoke any
salary reduction agreement then in effect, effective immediately
following the close of the pay period within which such termination or
cessation occurs.
The Plan Administrator may, in its sole discretion, decrease the
amount of Elective Deferrals required to be made for the benefit of certain
Participants if the Plan Administrator deems such a decrease to be necessary in
order to satisfy either the ADP test set forth in paragraph (b) of this section
5.03 or the requirements of Section Seven, or both. In the event of any such
decrease, the amount by which each affected Eligible Participant's Compensation
is to be reduced pursuant to his election above shall be increased by an
equivalent amount. If the Plan Administrator requires a decrease in the rate of
Elective Deferrals in order to meet the nondiscrimination standard set forth in
paragraph (b) of this section 5.03, such decrease shall be effected by
decreasing by increments of one percentage point the percentage rate of Elective
Deferrals made for the benefit of all those Eligible Participants who are Highly
Compensated Employees for whose benefit the highest percentage rate of such
contributions (determined immediately before each such decrease, and taking into
account prior decreases) would have been made.
A Participant who has received a Hardship Withdrawal pursuant to
section 9.03 shall not be permitted to make an Elective Deferral for a twelve
(12) month period following the date of receipt of the Hardship Withdrawal, nor
may he make Elective Deferrals for the calendar year immediately following the
calendar year of the Hardship Withdrawal in excess of the $7,000 limit (as
adjusted pursuant to section 415(d) of the I.R.C.) for such next calendar year
less the amount of such Participant's Elective Deferral for the calendar year of
the Hardship Withdrawal.
Subject to the limitations contained in paragraph (b) of this section
5.03, and Section Seven, for each plan year, as decided by the Board of
Directors of the Company, in its sole and absolute discretion, the Company may
contribute on behalf of each Eligible Participant an amount in cash which shall
match all or a portion of the Eligible Participant's Compensation contributed as
an Elective Deferral (which is not subsequently returned to the Participant
pursuant to a corrective distribution described in section 5.03(d)) with respect
to each Plan Year.
(b) The Actual Deferral Percentage (hereinafter "ADP") for
Participants who are Highly Compensated Employees for each Plan Year and the ADP
for Participants who are Non-highly Compensated Employees for the same Plan Year
must satisfy one of the following tests:
(i) The ADP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ADP for Participants
who are Non-highly Compensated Employees for the same Plan Year
multiplied by 1.25; or
(ii) The ADP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ADP for Participants
who are Non-highly Compensated Employees for the same Plan Year
multiplied by 2.0, provided that the ADP for Participants who are
Highly Compensated Employees does not exceed the ADP for Participants
who are Non-highly Compensated Employees by more than two (2)
percentage points.
(c) The following special rules shall apply in interpreting the
tests:
(i) The ADP for any Participant who is a Highly Compensated
Employee for the Plan Year and who is eligible to have Elective
Deferrals (and Matching Contributions if treated as Elective Deferrals
for purposes of the ADP test) allocated to his or her accounts under
two or more arrangements described in section 401(k) of the I.R.C.,
that are maintained by the Company, shall be determined as if such
Elective Deferrals (and, if applicable, such Matching Contributions)
were made under a single arrangement. If a Highly Compensated
Employee participates in two or more cash or deferred arrangements
that have different Plan Years, all cash or deferred arrangements
ending with or within the same calendar year shall be treated as a
single arrangement. Notwithstanding the foregoing, certain plans
shall be treated as separate if mandatorily desegregated under section
401(k) of the I.R.C.
(ii) In the event that this Plan satisfies the requirements
of sections 401(k), 401(a)(4), or 410(b) of the I.R.C. only if
aggregated with one or more other plans, or if one or more other plans
satisfy the requirements of such sections of the I.R.C. only if
aggregated with this Plan, then this section shall be applied by
determining the ADP of Employees as if all such plans were a single
plan. Plans may be aggregated in order to satisfy section 401(k) of
the I.R.C. only if they have the same Plan Year.
(iii) For purposes of determining the ADP of a Participant
who is a five percent (5%) owner or one of the ten most highly-paid
Highly Compensated Employees, the Elective Deferrals (and Matching
Contributions if treated as Elective Deferrals for purposes of the ADP
test) and Compensation of such Participant shall include the Elective
Deferrals (and, if applicable, Matching Contributions) and
Compensation for the Plan Year of Family Members (as defined in
section 414(q)(6) of the I.R.C.). Family Members, with respect to
such Highly Compensated Employees, shall be disregarded as separate
Employees in determining the ADP both for Participants who are Non-
highly Compensated Employees and for Participants who are Highly
Compensated Employees.
(iv) For purposes of determining the ADP test, Elective
Deferrals and Matching Contributions must be made before the last day
of the twelve-month period immediately following the Plan Year to
which contributions relate.
(v) The Company shall maintain records sufficient to
demonstrate satisfaction of the ADP test and the amount of Matching
Contributions used in such test.
(vi) For purposes of determining the ADP test, the Elective
Deferral and Matching Contribution will be taken into account for a
Plan Year only if it relates to Compensation that either (A) would
have been received by the Participant during the Plan Year, but for
the Participant's election to defer such amount under this section
5.03, or (B) is attributable to services performed by the Participant
in the Plan Year and, but for the Participant's election to defer such
amount under this section 5.03, would have been received by the
Participant within two and one-half months after the close of the Plan
Year.
(vii) For purposes of determining the ADP test, the
Elective Deferral and Matching Contribution will be taken into account
for a Plan Year only if it is allocated to the Participant's accounts
on a day within the Plan Year.
(viii) The determination and treatment of the ADP amounts
of any Participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
(d) No Participant shall be permitted to make Elective Deferrals
under this Plan or any other qualified plan maintained by the Company during any
calendar year in excess of $10,500 for 2000(as adjusted pursuant to section
402(g)(5) of the I.R.C.) for such calendar year.
A Participant may assign to this Plan any Excess Elective Deferrals
made during the calendar year by notifying the Plan Administrator on or before
March 1 following the close of the taxable year in which the Elective Deferral
was contributed to the Plan of the amount of the Excess Elective Deferrals to be
assigned to the Plan. A Participant's notice pursuant to this paragraph shall
specify the Participant's Excess Elective Deferral amount for the preceding
calendar year and shall be accompanied by a written statement that if such
amount is not distributed, such Excess Elective Deferral when added to amounts
deferred under other plans or arrangements described in I.R.C. sections 401(k),
408(k), or 403(b), exceeds the limit imposed under I.R.C. section 402(g) for the
preceding year. A Participant is deemed to have notified the Plan Administrator
of any Excess Elective Deferrals that arise by taking into account only those
Elective Deferrals made to this Plan and any other plans of the Company.
Notwithstanding any other provision of this Plan, Excess Elective
Deferrals, plus any income and minus any loss allocable thereto, shall be
distributed no later than April 15 to any Participant to whose account Excess
Elective Deferrals were assigned for the preceding year and who claims Excess
Elective Deferrals for such calendar year.
Excess Elective Deferrals shall be adjusted for any income or loss up
to the date of distribution. The income or loss allocable to Excess Elective
Deferrals is the sum of: (1) income or loss allocable to the Participant's
Elective Deferral Account for the calendar year multiplied by a fraction, the
numerator of which is such Participant's Excess Elective Deferrals for the year
and the denominator of which is the Participant's account balance attributable
to Elective Deferrals without regard to any income or loss occurring during such
calendar year; and (2) ten percent of the amount determined under (1) multiplied
by the number of whole calendar months between the end of the calendar year and
the date of distribution, counting the month of distribution if distribution
occurs after the 15th of such month.
(e) Notwithstanding any other provision of this Plan, Excess
Contributions, plus any income and minus any loss allocable thereto, shall be
distributed no later than the last day of each Plan Year to Participants to
whose accounts such Excess Contributions were allocated for the preceding Plan
Year in the amount necessary to reduce the ADP for Participants who are Highly
Compensated Employees to the highest permitted ADP under the test in (b) above.
If such excess amounts are distributed more than 2 1/2 months after the last
day of the Plan Year in which such excess amounts arose, a ten percent (10%)
excise tax will be imposed on the Company. Such distributions shall be made to
Highly Compensated Employees on the basis of the respective portions of the
Excess Contributions attributable to each of such Employees. Excess
Contributions shall be allocated to Participants who are subject to the family
member aggregation rules of section 414(q)(6) of the I.R.C. in the manner
prescribed by Treasury Regulations.
The amount of Excess Contributions to be distributed under paragraph
(e) of this section with respect to an Eligible Participant for a Plan Year
shall be reduced by any Excess Elective Deferrals previously distributed to the
Eligible Participant for such Eligible Participant's taxable year ending with or
within the Plan Year in accordance with section 402(g)(2) of the I.R.C.
Excess Contributions shall be treated as Annual Additions under the
Plan.
Excess Contributions shall be adjusted for any income or loss up to
the date of distribution. The income or loss allocable to Excess Contributions
is the sum of: (1) income or loss allocable to the Participant's Elective
Deferral Account (and, if applicable, the Qualified Non-elective Contribution
account or the Qualified Matching Contributions account or both) for the Plan
Year multiplied by a fraction, the numerator of which is such Participant's
Excess Contribution for the year and the denominator of which is the
Participant's account balance attributable to Elective Deferrals (and Qualified
Non-elective Contributions or Qualified Matching Contributions, or both, if any
of such contributions are included in the ADP test) without regard to any income
or loss occurring during such Plan Year; and (2) ten percent (10%) of the amount
determined under (1) multiplied by the number of whole calendar months between
the end of the calendar year and the date of distribution, counting the month of
distribution if distribution occurs after the 15th of such month.
Accounting for Excess Contributions: Excess Contributions shall be
distributed from the Participant's Elective Deferral Account and Matching
Contribution Account (if applicable) in proportion to the Participant's Elective
Deferrals and Matching Contributions (to the extent used in the ADP test) for
the Plan Year.
(f) For purposes of this Section, the following definitions shall
apply:
(i) "Elective Deferrals" shall mean any Company
Contributions made to the Plan at the election of the Participant, in
lieu of cash compensation, and shall include contributions made
pursuant to a salary reduction agreement. With respect to any taxable
year, a Participant's Elective Deferral is the sum of all Company
Contributions made on behalf of such Participant pursuant to an
election to defer under any qualified cash or deferral arrangement as
described in I.R.C. section 401(k), any simplified employee pension
cash or deferred arrangement as described in I.R.C. section
402(h)(1)(B), any eligible deferred compensation plan under I.R.C.
section 457, any plan as described under I.R.C. section 501(c)(18),
and any Company Contributions made on the behalf of a Participant for
the purchase of an annuity contract under I.R.C. section 403(b)
pursuant to a salary reduction agreement. Elective Deferrals shall
not include any deferrals properly distributed as excess Annual
Additions.
(ii) "Excess Contributions" shall mean, with respect to any
Plan Year, the excess of:
(a) The aggregate amount of Company Contributions
taken into account in computing the ADP of Highly
Compensated Employees for such Plan Year, over
(b) The maximum amount of such contributions
permitted by the ADP test (determined by reducing
contributions made on behalf of Highly Compensated Employees
in the order of their ADP's, beginning with the highest of
such percentages).
(iii) "Excess Elective Deferrals" shall mean those Elective
Deferrals that are includible in a Participant's gross income under section
402(g) of the I.R.C. to the extent such Participant's Elective Deferrals
for a taxable year are in excess of the $7,000 limit (as adjusted pursuant
to section 415(d) of the I.R.C.). Excess Elective Deferrals shall be
treated as Annual Additions under the Plan, unless such amounts are
distributed no later than the first April 15th following the close of the
Participant's taxable year.
5.04 Receipt of Rollover Contributions: The Plan Administrator may, at its
sole and absolute discretion, receive Rollovers provided that the receipt of
such amounts qualifies as a tax-free "rollover" transaction under the I.R.C.
The Plan Administrator may require such evidence as it deems appropriate to
verify that such transaction constitutes a valid "rollover" transaction under
the I.R.C.
SECTION SIX
ALLOCATIONS
6.01 Allocation of Company Contributions: As of each Anniversary Date the
Company Contribution for the Plan Year from each Company shall be allocated
among the Participants Accounts of all Participants of each Company who are (a)
Active Participants employed by the Company on the Anniversary Date, or (b)
Participants whose employment terminated by reason of retirement on or after his
Normal or Late Retirement Date, Total Disability or death. Such Company
Contribution for each Company shall be allocated to each such Participant's
account in the proportion that the Compensation paid to or accrued for each such
Participant during the Plan Year (even if the Participant participated in the
Plan for only a portion of the Plan Year) in excess of the minimum wage bases
subject to Social Security Tax as in effect on the last day of the calendar year
immediately preceding the Anniversary Date bears to the total Compensation so
paid to or accrued for all such Participants; provided, however, that the
Company Contribution so allocated for any Plan Year shall not exceed 4.168%
multiplied by the total Compensation so paid. Any excess Company Contribution
not so allocated shall be allocated in the proportion that the Compensation paid
to or accrued for each Participant during the Plan Year (even if the Participant
participated in the Plan for only a portion of the Plan Year) bears to the total
Compensation so paid to or accrued for all such Participants.
Notwithstanding any provision of the Plan to the contrary, if the Plan
is a Top-Heavy Plan, the Company Contribution must be allocated among the
Participants' accounts so that each Participant receives an allocation of not
less than three percent (3%) of such Participant's Compensation, except that
such percentage shall not exceed the percentage at which contributions are made
for the Key Employee for whom such percentage is the highest for the year.
In the event a Participant participates or has participated in more
than one qualified plan maintained by the Company, the sum of the defined
benefit excess plan disparity fraction, the offset plan disparity fraction,
defined contribution plan disparity fraction, and the imputed disparity fraction
(as those terms are defined in I.R.C. section 401(l) and the regulations
thereunder) may not exceed one (1) for the Plan Year with respect to any
Employee.
6.02 Separate Accounts: A separate Participant's Account shall be
maintained for each Participant setting forth his Accrued Benefit from Company
Contributions, Elective Deferrals, and Matching Contributions. The Plan
Administrator shall make the allocations among such Participant's Accounts as
set forth in this Section Six.
6.03 Allocations of Elective Deferrals: All Participant's Elective
Deferrals made by a Participant during a Plan Year shall be allocated to the
Elective Deferral Account of such Participant. Such Elective Deferral
Account shall not share in in the allocation of forfeitures provided herein.
6.04 Allocations of Matching Contributions on Elective Deferrals: All
Matching Contributions made by the Company during a Plan Year shall be allocated
to each Participant's Matching Contribution Account in the amount provided in
section 5.03. Such Participant's Matching Contribution Account shall not share
in in the allocation of forfeitures provided herein.
6.05 Allocation of Rollover Contributions: Rollover contributions paid to
the Trust during a Plan Year with respect to a certain Employee shall be
allocated to a separate Rollover Account for such Employee. Such Rollover
Account shall not share in the allocation of forfeitures provided herein.
6.06 Allocation of Gain or Loss: As of each Valuation Date, the Plan
Administrator shall credit to the Participant's Accounts, the income, gain and
losses attributable to such accounts for the period from the last Valuation Date
to the current Valuation Date.
6.07 Allocation of Forfeitures: Amounts forfeited due to Section Ten shall
be allocated by the Trustee as of the Anniversary Date specified therein in the
proportion that the Compensation paid to or accrued for each such Participant
during the Plan Year (even if the Participant participated in the Plan for only
a portion of the Plan Year) bears to the total Compensation so paid to or
accrued for all such Participants.
SECTION SEVEN
LIMITATION ON ANNUAL ADDITIONS
7.01 Limitation on Annual Additions: Notwithstanding any other provision
of this Plan, the aggregate Annual Addition with respect to a Participant's
Account to this Plan and to all other defined contribution plans maintained by
the Company in any Limitation Year may not exceed the lesser of:
(a) Thirty Thousand Dollars ($30,000.00) or, if greater, one-fourth
(1/4) of the dollar limitation in effect under section 415(b)(1)(A) of the
I.R.C.; or
(b) Twenty-five percent (25%) of the Participant's Compensation in
the Limitation Year.
If a short Limitation Year is created because of an amendment changing
the Limitation Year to a different twelve (12) consecutive-month period, then
the dollar limitation on Annual Additions for the short Limitation Year is
determined by multiplying (1) the amount determined above for the calendar year
in which the short Limitation Year ends by (2) a fraction, the numerator of
which is the number of months (including any fractional parts of a month) in the
short Limitation Year, and the denominator of which is twelve (12).
7.02 Annual Addition: For the purposes of section 7.01, the term "Annual
Addition" means the sum of:
(a) Company Contributions made directly or indirectly;
(b) Forfeitures;
(c) Amounts allocated to an individual medical account (as defined in
I.R.C. section 415(l)(2)) that is part of a defined benefit plan maintained by
the Company; and
(d) Amounts derived from contributions paid or accrued after December
31, 1985, in taxable years ending after such date, that are attributable to post
- -retirement medical benefits allocated to the separate account of a Key Employee
(as defined in section 419A(d)(3) of the I.R.C.) under a welfare benefit fund
(as defined in section 419(e) of the I.R.C.) maintained by the Company.
For purposes of this section 7.02, any excess amount applied to reduce
Company Contributions in the Limitation Year as provided in section 7.06(c) will
be considered Annual Additions for such Limitation Year.
7.03 Time Annual Additions Deemed Credited: An Annual Addition with
respect to a Participant's accounts shall be deemed credited to such
Participant's accounts with respect to a Limitation Year if it is allocated to
such Participant's accounts under the terms of this Plan as of any date within
such Limitation Year.
7.04 Compensation: Solely for the purposes of this section Seven, the
term "Compensation" shall mean the total of a Participant's wages, salaries,
fees for professional services and other amounts received for personal services
actually rendered in the course of employment with the Company to the extent
that the amounts are includable in gross income (including, but not limited to,
commissions paid to salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums, tips, bonuses, fringe
benefits, reimbursements, and expense allowances). Compensation does not
include: Company Contributions to a qualified retirement plan, a nonqualified
deferred compensation plan or a simplified employee pension plan, income
received from the disposition of stock pursuant to the exercise of a qualified
stock option; income realized upon the exercise of a nonqualified stock option
or upon the lapse of substantial forfeiture provisions or nontransferability
provisions on previously restricted property (as defined under I.R.C. section
83); premiums paid by the Company for group life insurance to the extent not
includable in the Participant's gross income; and Company Contributions (whether
or not under a salary reduction agreement) towards the purchase of a tax-
sheltered annuity contract (as described in I.R.C. section 403(b)).
7.05 Cost of Living Adjustments: The dollar limitation set forth in
section 7.01(a) shall be deemed to be adjusted annually, without the necessity
of formal amendment of this Plan, for increases in the cost of living in
accordance with regulations prescribed by the Secretary of the Treasury .
7.06 Allocation of Excess Amounts: In the event that the Annual Addition
for any Participant exceeds the limitations specified herein, such Annual
Addition shall be reduced by proportionately reducing Company Contributions.
Such reduction shall be treated as follows:
(a) The amount of such reduction consisting of Company Contributions
and forfeitures shall be allocated and reallocated to other Participant's
accounts as set forth in Section Six and in this subsection;
(b) To the extent that the reduction described in (b), above, cannot
be allocated to other Participant's accounts due to the limitations of this
Section Seven, such reductions shall be allocated as forfeitures to a suspense
account. The amount in the suspense accounts shall not share in the allocations
of gain and loss provided in section 6.07 and shall be allocated as forfeitures
pursuant to section 6.08 on succeeding Anniversary Dates until the suspense
account is exhausted. Until such time, no Company Contributions may be made
when their allocation would be precluded by the limitations of this Section
Seven.
7.07 Overall Limitation in Case of Two or More Plans: In addition to any
other limitations set forth in this Plan, for any Participant the sum of the
following two fractions for any Limitation Year may not exceed the figure one
(1.0):
(a) A fraction, the numerator of which is the projected annual
benefit of the Participant for such Limitation Year under any and all defined
benefit plans maintained by the Company and the denominator of which is the
lesser of (i) the product of 1.25 (1.0 if the Plan is a Top-Heavy Plan)
multiplied by the dollar limitation set forth in section 415(b)(1)(A) of the
I.R.C. in effect for such year or (ii) the product of 1.4 multiplied by the
amount which may be taken into account under section 415(b)(1)(B) of the I.R.C.
in effect for such year; and
(b) A fraction, the numerator of which is the sum of the Annual
Additions to the Participant's accounts in any defined contribution plans
maintained by the Company for the Limitation Year and for all prior Limitation
Years and the denominator of which is the sum of the lesser of the following
amounts determined for such Limitation Year and for each prior Year of Service
(i) the product of 1.25 (1.0 if the Plan is a Top-Heavy Plan) multiplied by the
dollar limitation set forth in section 415(c)(1)(A) of the I.R.C. in effect for
such year, or (ii) the product of 1.4 multiplied by the amount which may be
taken into account under the section 415(c)(1)(B) of the I.R.C. in effect for
such year. The Plan Administrator shall have the right to elect to determine
the denominator in accordance with section 415(e)(6) of the I.R.C.
The above factors shall not be reduced from 1.25 to 1.0 if the sum of
the benefits available to the Key Employees from all defined contribution and
defined benefit plans maintained by the Company does not exceed 90% of the total
of all Participants' benefits and the minimum allocation provided to Non-Key
Employees in section 6.01 is modified by substituting "four percent (4%)" for
"three percent (3%)".
SECTION EIGHT
VESTED INTEREST
8.01 Company and Matching Contributions: A Participant shall have a Vested
Interest in the percentage of his Accrued Benefit attributable to Company
Contributions and Matching Contributions listed below opposite the number of
Years of Service credited to him according to this Section Eight:
Years of Service Vested Percentage
0 but less than 3 0%
3 but less than 4 20%
4 but less than 5 40%
5 but less than 6 60%
6 but less than 7 80%
7 or more 100%
Notwithstanding the above, a Participant shall have a Vested Interest in one
hundred percent (100%) of his Accrued Benefit upon his death, upon the finding
of his Total Disability or upon and after his Normal or Late Retirement Date,
regardless of whether he actually retires on his Normal or Late Retirement Date.
In any year in which the Plan is a Top-Heavy Plan, the following
vesting schedule shall apply:
Years of Service Vested Percentage
0 but less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 or more 100%
8.02 Determination of Years of Service: For purposes of determining a
Participant's Vested Interest in his Accrued Benefit derived from Company
Contributions and Matching Contributions under section 8.01 above, all Years of
Service shall be taken into account except for the following:
(a) In the case of an Employee who has suffered a One-Year Break in
Service, Years of Service before such Break in Service shall not be taken into
account until the Employee has completed a Year of Service after his return; and
(b) In the case of a Participant who does not have any Vested
Interest in his Accrued Benefit derived from Company Contributions under section
8.01, Years of Service before a One-Year Break in Service shall not be taken
into account if the number of consecutive One-Year Breaks in Service equals or
exceeds the greater of the aggregate number of such Years of Service prior to
such Break in Service or five (5). Such aggregate number of Years of Service
before such Break in Service shall be deemed not to include any Years of Service
not required to be taken into account under this subsection by reason of any
prior Break in Service.
8.03 Vested Interest before Break in Service: In the case of any
Participant who has five (5) consecutive One-Year Breaks in Service, Years of
Service after such five (5) year period shall not be taken into account for
purposes of section 8.01 to determine his Vested Interest in his Accrued Benefit
derived from Company Contributions which accrued before such Break in Service.
Both pre-Break and post-Break Years of Service will be taken into account for
purposes of section 8.01 to determine the Participant's Vested Interest in his
Accrued Benefit derived from Company Contributions which accrue after such Break
in Service.
In such case, the Accrued Benefit derived from Company Contributions
shall be divided into separate accounts for pre-Break and post-Break Accrued
Benefits derived from Company Contributions for purposes of determining a
Participant's Vested Interest in such Accrued Benefit. Both accounts will share
in the allocation of gains and losses of the Trust under section 6.07.
8.04 Vesting upon Return without Break in Service: In the case of a
Participant who has separated from service with a Vested Percentage of less than
one hundred percent (100%) as determined according to section 8.01 and who has
received a distribution pursuant to Section Twelve, if such Participant returns
to service with the Company before he incurs five consecutive One-Year Breaks in
Service, his Vested Interest in the undistributed amounts held in the segregated
account as specified in section 12.03 shall be determined at any relevant time
after his return by means of the following formula:
X = P (AB + (R x D)) - (R x D)
For purposes of applying this formula: P is his Vested Percentage, as
determined according to section 8.01, at the relevant time; AB is the account
balance of such segregated account at the relevant time; D is the amount of the
distribution; and R is the ratio of the account balance at the relevant time to
the account balance after distribution.
8.05 Rollover Contributions: An Employee or Participant shall at all times
have a Vested Interest in one hundred percent (100%) of his Accrued Benefit
derived from Rollover Contributions.
8.06 Elective Deferrals: A Participant shall at all times have a Vested
Interest in one hundred percent (100%) of his Accrued Benefit derived from
Elective Deferrals.
SECTION NINE
WITHDRAWALS AND LOANS
9.01 Loans to Participants: Notwithstanding the other provisions of this
Plan, but subject to the spousal consent requirement set forth in section 9.02,
the Plan Administrator may authorize the Trustee to loan to any Participant an
amount or amounts not to exceed the lesser of (a) one-half (1/2) of the
Participant's Account related to Elective Deferrals and Vested Matching
Contributions or (b) Fifty Thousand Dollars ($50,000). The minimum amount of a
loan shall be $1,000. No participant shall have more than one loan outstanding
at any one time. For the purpose of the above limitation, all loans from all
plans of the Company and other members of a group of employers described in
sections 414(b), (c), (m) and (o) of the I.R.C. are aggregated.
Loans must be made available to all Participants on a reasonably
equivalent basis. Loans may not be made to Participants who are Highly
Compensated Employees in percentage amounts greater than amounts made available
to other Participants. Any loans made must bear a reasonable rate of interest,
considering all relevant factors, specifically including current bank interest
rates, and must be adequately secured, as determined by the Plan Administrator.
The Accrued Benefit of the borrower may be pledged as security for such loans.
However, no more than fifty percent (50%) of the present value of a
Participant's Vested Accrued Benefit may be considered by the Plan as security
for the outstanding balance of all Plan loans made to the Participant.
Loans will be made in accordance with the terms and conditions of the
Participant Loan Program which has been established by the Company.
Any loan shall by its terms require that repayment of principal and
interest be amortized in level payments, not less frequently than quarterly,
over a period not extending beyond five (5) years from the date of the loan,
unless such loan is used to acquire a dwelling unit which within a reasonable
time is to be used (determined at the time the loan is made) as the principal
residence of the Participant. If during any taxable year a Participant assigns
(or agrees to assign) or pledges (or agrees to pledge) any portion of the
Participant's interest in the Plan, such portion will be treated as having been
received by such individual as a loan from the Plan.
In the event of default, foreclosure on the note and attachment of
security will not occur until a distributable event occurs in the Plan.
If a valid spousal consent has been obtained in accordance with
section 9.02, then, notwithstanding any other provision of this Plan, the
portion of the Participant's vested Accrued Benefit used as a security interest
held by the Plan by reason of a loan outstanding to the Participant shall be
taken into account for purposes of determining the amount of the Accrued Benefit
payable at the time of death or distribution, but only if the reduction is used
as repayment of the loan. If less than 100% of the Participant's vested Accrued
Benefit (determined without regard to the preceding sentence) is payable to the
surviving spouse, then the Accrued Benefit shall be adjusted by first reducing
the vested Accrued Benefit by the amount of the security used as repayment of
the loan, and then determining the benefit payable to the surviving spouse.
All costs and expenses in connection with obtaining the loan and
perfecting the Plan's security interest, including but not limited to taxes,
recording fees, filing fees and attorney's fees, shall be prepaid by the
Participant or shall be deducted from the total proceeds of the loan.
9.02 Spousal Consent: No portion of the Accrued Benefit of any Participant
may be withdrawn as a Hardship Withdrawal pursuant to the terms of section 9.03
or used as security for any loan under section 9.01 unless, at the time of the
Hardship Withdrawal or at the time the security agreement is entered into
(whichever applies), the Participant's spouse, if any, consents to the Hardship
Withdrawal or to the use of the Accrued Benefit as security. This paragraph
shall not apply if the Participant establishes to the satisfaction of the Plan
Administrator that there is no spouse or that the spouse cannot be located.
The Participant's spouse must consent in writing to such Hardship
Withdrawal or security agreement during the ninety (90) day period ending on the
date on which the Hardship Withdrawal is made or on which the loan is to be so
secured. The consent must acknowledge the effect of such Hardship Withdrawal or
loan and must be witnessed by a Plan Representative or Notary Public. Such
consent shall be binding with respect to the consenting spouse or any subsequent
spouse with respect to that loan. A new consent shall be required if the
Accrued Benefit is used for renegotiation, extension, renewal, or other revision
of the loan.
9.03 Hardship Withdrawal: A Participant may apply in writing to the
Committee for a Hardship Withdrawal of part or all of the Participant's Elective
Deferral Account, excluding any earnings thereon after December 31, 1988. The
Committee in its discretion and in accordance with the provisions of this
section 9.03 shall determine what portion or all of such Elective Deferral
Account is necessary to alleviate the hardship. A withdrawal is on account of
hardship only if the withdrawal is both made on account of an immediate and
heavy financial need of the Participant, as determined in accordance with
paragraph (a) below and is necessary to satisfy such financial need as
determined in accordance with paragraphs (b) and (c) below. The determination
of hardship by the Committee shall be final and binding.
(a) The determination by the Committee of whether a Participant has
an immediate and heavy financial need is to be made on the basis of all relevant
facts and circumstances, and must be for one of the reasons specified in (i)-
(vi), below. A financial need shall not fail to qualify as immediate and heavy
merely because such need was reasonably foreseeable or voluntarily incurred by
the Participant. A withdrawal will be deemed to be made on account of an
immediate and heavy financial need of the Participant if the withdrawal is on
account of:
(i) medical expenses incurred by the Participant, the
Participant's spouse, or any dependents of the Participant;
(ii) the purchase (excluding mortgage payments) of a
principal residence of a Participant;
(iii) tuition for the next twelve (12) months of post-
secondary education for the Participant, his or her spouse, children
or dependents of the Participant;
(iv) the need to prevent the eviction of the Participant
from his principal residence or foreclosure on the mortgage of the
Participant's principal residence;
(v) funeral expenses incurred by the Participant on the
account of the death of a member of a Participant's immediate family; or
(vi) other expenses which the Commissioner of the Internal
Revenue Service indicates will be deemed to be made on account of such need.
(b) A withdrawal will not be treated as necessary to satisfy an
immediate and heavy financial need of a Participant to the extent the amount of
the withdrawal is in excess of the amount required to relieve the financial need
or to the extent such need may be satisfied from other sources that are
reasonably available to the Participant. This determination by the Committee is
to be made on the basis of all relevant facts and circumstances. A withdrawal
generally may be treated as necessary to satisfy a financial need if the
Committee reasonably relies on the Participant's representation that the need
cannot be relieved:
(i) through reimbursement or compensation by insurance or
otherwise;
(ii) by reasonable liquidation of the Participant's assets,
to the extent such liquidation would not itself cause an immediate and
heavy financial need;
(iii) by cessation of Elective Deferrals under the Plan;
(iv) by other distributions or nontaxable (at the time of
the loan) loans from plans maintained by the Company or by any other
employer; or
(v) by borrowing from commercial sources on reasonable
commercial terms.
For purposes of this paragraph (b), the Participant's resources shall
be deemed to include those assets of his spouse and minor children that are
reasonably available to the Participant. Property owned by the Participant and
the Participant's spouse, whether as community property, joint tenants, tenants
by the entirety or tenants in common, will be deemed a resource of the
Participant. However, property held for the Participant's child under an
irrevocable trust or under the Uniform Gifts to Minors Act will not be treated
as a resource of the Participant.
(c) A distribution will be deemed to be necessary to satisfy an
immediate and heavy financial need of a Participant if all of the following
requirements are satisfied:
(i) the distribution is not in excess of the amount of the
immediate and heavy financial need of the Participant;
(ii) the Participant has attained all distributions, other
than hardship distributions, and all nontaxable loans currently
available under all plans maintained by the Company; and
(iii) the Participant does not make an Elective Deferral
for a twelve-month period following the date of receipt of the
Hardship Withdrawal, nor does he make Elective Deferrals for the
calendar year immediately following the calendar year of the Hardship
Withdrawal in excess of the $7,000 limit (as adjusted pursuant to
section 415(d) of the I.R.C.) for such next calendar year, less the
amount of such Participant's Elective Deferrals for the taxable year
of the Hardship Withdrawal.
SECTION TEN
RETIREMENT BENEFITS
10.01 Normal Retirement Benefit: A Participant shall be entitled to
retire at his Normal Retirement Date. If a Participant retires on his Normal
Retirement Date, one hundred percent (100%) of his Accrued Benefit derived from
all sources shall be paid to him in the manner and at the time provided in
Section Twelve.
10.02 Late Retirement Benefit: If the Participant's employment continues
beyond the Normal Retirement Date, such Participant shall continue to
participate in the Plan, to share in Company Contributions and to make
Participant's Contributions in the same manner as any Participant who has not
reached his Normal Retirement Date. When such Participant actually retires, one
hundred percent (100%) of his Accrued Benefit shall be paid to him in the manner
and at the time provided in Section Twelve.
10.03 Early Retirement Benefit: A Participant who is credited with twenty
(20) or more Years of Service as determined according to Section Eight shall be
entitled to retire on or after his Early Retirement Date, which shall be the
first day of the month next following his fifty-fifth (55th) birthday. In
addition, a Participant who is credited with fifteen (15) or more Years of
Service as determined according to Section Eight, shall be entitled to retire on
or after his sixtieth (60th) birthday. When any such Participant actually
retires, one hundred percent (100%) of his accrued benefit derived from all
sources shall be paid to him in the manner and at the time provided in Section
Twelve.
10.04 Early Retirement Benefit for Terminated Employees: If a Participant
who has satisfied the service requirements for early retirement set forth in
section 10.03 above retires or is terminated before satisfying the age
requirement set forth in section 10.03 above, such Participant shall be entitled
upon satisfaction of such age requirement to receive the benefit to which he
would have been entitled at his Normal Retirement Date, such benefit to be paid
to him in the manner and at the time provided in Section Twelve.
10.05 Disability Retirement Benefit: If the Plan Administrator shall find
that the employment of a Participant has been terminated due to his Total
Disability, one hundred percent (100%) of his Accrued Benefit shall be paid to
him in the manner and at the time provided in Section Twelve.
10.06 Benefit Upon Termination: In the event that a Participant's
employment is terminated for a reason other than death, Total Disability or
retirement, he shall be paid a benefit equal to the amount of his Accrued
Benefit in which he has a Vested Interest according to Section Eight. Such
benefit shall be paid to such terminated Participant in the manner and at the
time provided in Section Twelve.
10.07 Forfeiture of Unvested Amounts: Upon distribution of a
Participant's Vested Interest in his Accrued Benefit in accordance with Section
Twelve, any portion of a terminated Participant's Accrued Benefit to which he is
not entitled shall be immediately forfeited and allocated according to Section
Six as of the Anniversary Date of the Plan Year in which the distribution
occurs. In the event that a Participant has terminated and has not yet received
a distribution of his Vested Interest in his Accrued Benefit, any portion of the
undistributed Accrued Benefit to which he is not entitled shall be held in a
segregated account until the Anniversary Date which falls in the Plan Year after
the Participant has suffered a One-Year Break in Service or until the death of a
Participant and shall then be forfeited and allocated according to Section Six
as of such Anniversary Date. Such segregated account shall be invested
separately from the other assets of the Trust and shall not share in the
allocation of gain or loss or of forfeitures provided herein.
10.08 Leave of Absence: A leave of absence for reasons of illness,
injury, temporary lay-off, educational purposes or military service shall not be
considered a termination of employment for purposes of section 10.06, provided
that the Participant returns to employment with the company within ninety (90)
days after the end of such leave of absence. All Participants similarly
situated shall be similarly treated by the Company in granting leaves of
absence. The Participant's accounts of a Participant who is on such leave of
absence shall continue to share in the allocations and adjustments set forth in
Section Six.
SECTION ELEVEN
DEATH BENEFIT
11.01 Death Benefit: In the event of the death of a Participant, a
death benefit equal to one hundred percent (100%) of his Accrued Benefit derived
from all sources shall be paid in lump sum to the surviving spouse or his
designated beneficiary in accordance with Section Twelve.
11.02 Beneficiary Designation: Each Participant may from time to time
file with the Plan Administrator a designation of one or more primary or
secondary beneficiaries to whom the death benefit shall be paid. In all cases
the most recent of such designations shall control. If the Participant is
married, the beneficiary designation must be consented to by the spouse of such
Participant, such consent to be in writing and witnessed by a Plan
Representative or a Notary Public.
11.03 Lack of Beneficiary Designation: Upon notification of the death
of a Participant, the Plan Administrator shall direct the Trustee to pay the
death benefit to the beneficiary or beneficiaries currently designated by the
Participant. If no such designation has been made, if all beneficiaries so
designated have predeceased the Participant, or if the Plan Administrator is
unable to locate the designated beneficiary, then the Plan Administrator shall
direct the Trustee to pay the death benefit to the Participant's spouse, or, if
such spouse does not survive the Participant, to the Participant's then living
issue, per stirpes, or, if there is no such issue, to the Participant's estate.
SECTION TWELVE
PAYMENT OF BENEFITS
12.01 Valuation of Accrued Benefit: Upon receiving notice of a
Participant's retirement, Total Disability, death or other termination of
employment, the Plan Administrator shall direct the Trustee to determine the
fair market value of the Participant's Accrued Benefit as soon as
administratively feasible following the date of his retirement, Total
Disability, death or other termination. That portion of such Accrued Benefit to
which such Participant or his beneficiaries are entitled according to the
provisions of this Plan shall be paid as set forth in this Section Twelve.
12.02 Method of Payment:
(a) Subject to the restrictions set forth in this Section Twelve, the
amount to which a Participant or his beneficiaries shall become entitled
hereunder shall be paid in accordance with one or more of the following methods:
(i) a single lump-sum payment;
(ii) a Cash-out;
(iii)a direct rollover; or
(vi) a combination of the foregoing.
(b) Notwithstanding the preceding, if a Participant terminates service,
and the value of the Participant's vested Accrued Benefit derived from Company
Contributions does not exceed $3,500 in Plan Years beginning before August 6,
1997 or $5,000 in Plan Years beginning after August 5, 1997, the entire amount
of such vested Accrued Benefit shall be distributed without the consent of the
Participant and the Participant's spouse in the form of a Cash-Out within the
time specified in section 12.04, and the nonvested portion will be treated as an
immediate forfeiture. For purposes of this section, if the value of an
Participant's vested Accrued Benefit is zero, the Participant shall be deemed to
have received a distribution of such vested Accrued Benefit. A Participant's
vested Accrued Benefit shall not include accumulated deductible employee
contributions within the meaning of I.R.C. section 72(o)(5)(B) for Plan Years
beginning prior to January 1, 1989.
(c) If the value of a Participant's vested Accrued Benefit exceeds (or at
the time of any prior distribution exceeded) $3,500 in Plan Years beginning
before August 6, 1997 or $5,000 in Plan Years beginning after August 5, 1997,
and the vested Accrued Benefit is immediately distributable, the Participant and
the Participant's spouse (or where either the Participant or the spouse has
died, the beneficiary) must consent to any distribution of such vested Accrued
Benefit. The consent of the Participant and the Participant's spouse shall be
obtained in writing.
12.03 Time of Payment:
(a) Unless the Participant and the Participant's spouse elect to the
contrary, payment of benefits under this Plan shall commence within sixty (60)
days after the end of the Plan Year in which the Participant dies, becomes
Totally Disabled or retires; provided, however, that the payment of benefits
under this Plan to the Participant will begin not later than the sixtieth (60th)
day after the close of the Plan Year in which the latest of the following events
occurs:
(i) the date on which the Participant attains the age of
sixty-five (65) years;
(ii) the tenth (10th) anniversary of the date on which the
Participant commenced participation in this Plan; or
(iii) the date on which the Participant terminates his
service with the Company.
Notwithstanding the foregoing, the failure of a Participant and
spouse to consent to a distribution while a benefit is immediately
distributable, within the meaning of section 12.02 of the Plan, shall be deemed
to be an election to defer commencement of payment of any benefit sufficient to
satisfy this section.
(b) Elective Deferrals and Matching Contributions, and income
allocable to each are not distributable to a Participant or his or her
beneficiary or beneficiaries, in accordance with such Participant's or
beneficiary's or beneficiaries' election, earlier than upon separation from
service, death, or Total Disability.
Such amounts may also be distributed upon:
(i) Termination of the Plan without the establishment of
another defined contribution plan;
(ii) The disposition by the Company to an unrelated
corporation of substantially all of the assets (within the meaning of
section 409(d)(2) of the I.R.C.) used in a trade or business of such
corporation if such corporation continues to maintain this Plan after
the disposition, but only with respect to Employees who continue
employment with the corporation acquiring such assets;
(iii) The disposition by the Company to an unrelated entity
of the Company's interest in a subsidiary (within the meaning of
section 409(d)(3) of the I.R.C.) if such corporation continues to
maintain this Plan, but only with respect to Employees who continue
employment with such subsidiary;
(iv) The attainment of age 59 1/2; or
(v) The hardship of the Participant as described in section
9.03.
All distributions that may be made pursuant to one or more of the
foregoing distributable events are subject to the spousal and Participant
consent requirements (if applicable) contained in sections 401(a)(11) and 417 of
the I.R.C.
12.04 Required Distributions:
(a) The required beginning date of a Participant is the later of (i)
the first day of April of the calendar year following the calendar year in which
the Participant attains age 70-1/2, or (ii) the calendar year in which the
Participant retires if the Participant is not a 5-percent owner of the Company
For calendar beginning on for before 1999, the required beginning date
of a Participant is the first day of April of the calendar year following the
calendar year in which the Participant attains age 70-1/2.
(b) If the distribution of the Participant's interest has begun in
accordance with (a) above, and the Participant dies before his entire interest
has been distributed to him, then the remaining portion of the Participant's
interest must be distributed at least as rapidly as under the method of
distribution being used prior to the Participant's death.
(c) If the Participant dies before the distribution of the
Participant's interest has begun in accordance with (a)) above, then the entire
interest of the Participant must be distributed by December 31 of the calendar
year containing the fifth anniversary of the Participant's death, except to the
extent that an election is made to receive the distribution in accordance with
(d) or (e) below.
(d) If any portion of the Participant's interest is payable to (or
for the benefit of) a designated beneficiary, then such portion will be
distributed (in accordance with regulations provided by the Secretary of the
Treasury) over the life or over a period certain not extending beyond the life
expectancy of such designated beneficiary commencing on or before December 31 of
the calendar year immediately following the calendar year in which the
Participant died.
(e) If the designated beneficiary referred to in (d) above is the
surviving spouse of the Participant, then the date on which the distributions
are required to begin in accordance with (d) above shall not be earlier than the
later of (i) December 31 of the calendar year immediately following the calendar
year in which the Participant died, and (ii) December 31 of the calendar year in
which the Participant would have attained the age of seventy and one-half (70
1/2).
(f) If the surviving spouse dies after the death of the Participant,
but before payments to such surviving spouse begin, then the provisions of this
section 12.05, with the exception of paragraphs (a) and (e), shall be applied as
if the surviving spouse were the Participant.
(g) For purposes of this section 12.05, any amount paid to a child
shall be treated as if it had been paid to the surviving spouse if such amount
will become payable to the surviving spouse upon such child reaching majority
(or other designated event permitted under regulations prescribed by the
Secretary of the Treasury).
(h) All distributions required under this section 12.05 shall be
determined and made in accordance with the Proposed Regulations under I.R.C.
section 401(a)(9), including the minimum distribution incidental benefit
requirement of section 1.401(a)(9)-2 of the Proposed Regulations.
12.05 Direct Rollover of Eligible Rollover Distribution: This section
12.06 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 Twelve, a Distributee may
elect, at the time and in the manner prescribed by the Plan Administrator, to
have any portion of an Eligible Rollover Distribution paid directly to an
Eligible Retirement Plan specified by the Distributee in a Direct Rollover.
12.06 Consultation with Participant: If circumstances permit and if
the Plan Administrator deems it advisable, the Plan Administrator may consult
with a Participant prior to his retirement or termination, or with a beneficiary
entitled to payment of a benefit, regarding the time of payment best suited to
his needs and circumstances. The Plan Administrator shall determine the time of
payment at its sole discretion without being bound in any manner by the request
of such Participant or beneficiary.
12.07 Transfer of Accounts: Notwithstanding anything to the contrary
herein, whenever the employment of a Participant shall terminate, the Plan
Administrator may, at its sole discretion, direct the transfer of all (but not
less than all) of the amount of the Participant's Accrued Benefit to any
qualified trust or other account capable of accepting such amounts. The Plan
Administrator may require of the trustee of the recipient trust
SECTION THIRTEEN
ADMINISTRATION OF PLAN
13.01 Plan Administrator: The Company shall serve as the Plan
Administrator.
13.02 Named Fiduciary: The Plan Administrator as determined by section
13.01 shall be the "named fiduciary" of this Plan and the agent for service of
legal process.
13.03 Funding Policy: The Plan Administrator shall determine and carry
out the funding policy of the Plan which shall be consistent with the objectives
and needs of the Plan and the requirements of law. Such determination shall
include a decision of whether the Plan has a short-term need of liquidity or a
long-term need of investment growth. Such determination shall be reviewed from
time to time by the Plan Administrator.
13.04 General Powers and Duties: The Plan Administrator shall
administer the Plan in accordance with its terms and shall have all the powers
necessary to carry out the terms of the Plan. All interpretations of the Plan
and questions concerning its application and administration shall be determined
by the Plan Administrator. Such determinations shall be binding on all persons
except as otherwise provided by law. The Plan Administrator shall give all
instructions and directions to the Trustee as shall be necessary to conduct the
administration of the Plan.
13.05 Agents and Expenses: The Plan Administrator may employ agents to
assist it in its duties and may rely upon the written certificates of any agent,
counsel, accountant, investment manager, actuary or physician. The Plan
Administrator shall be entitled to reimbursement by the Company for all other
proper charges and expenses incurred in carrying out its duties under this Plan,
including compensation of agents.
13.06 Investment Manager: The Company may appoint a qualified
investment manager to manage all or part of the assets of the Plan. In such
event, the Trustee will not be liable for any act or omission of such investment
manager except as provided by law.
13.07 Delegation to Trustee: The Company or Plan Administrator may,
with the written consent of the Trustee, delegate in writing to the Trustee all
or any part of the responsibilities of the Plan Administrator under this Plan.
Upon such delegation, the Company or Plan Administrator shall notify all
Participants of the nature and extent of such delegation. Actions of the
Trustee in the exercise of such delegated responsibilities shall have the same
force and effect as if such action had been taken by the Plan Administrator.
The Company may at any time revoke such delegation by delivery of a written
instrument to that effect.
13.08 Company Investment Direction: The Company shall direct the
Trustee in writing as to the investment alternatives available for investments
of the Trust (the "Investment Alternatives"). As provided in section 13.10
below, Participants shall direct the investment of their Participant's Account
into and among the Investment Alternatives. The Investment Alternatives may
include (i) registered investment companies (i.e. mutual funds) for which the
Trustee, its parent, affiliates or successors (collectively "Affiliates") may
serve as an investment advisor, manager, administrator, custodian or transfer
agent; (ii) registered investment companies from which the Trustee or its
Affiliates may receive distribution (12b-1) fees, shareholder servicing fees or
other fees; and (iii) any collective trust fund exempt from taxation under Rev.
Ruling 81-100 for which the Trustee or an Affiliate acts as trustee. If a
Participant fails to direct the Trustee as to the investment of all or some
portion of that Participant's Account, then that portion, or all, of the
Participant's Account shall be invested as provided in the Company's standing
direction delivered in writing to the Trustee covering the investment of such
portions of each Participant's Account. The Trustee shall not exercise any
investment discretion or have any investment responsibility, other than to do as
it is directed, with regards to the Trust or any Participant's Account, except
to the extent that the Trustee acts as a Trustee of a common trust fund chosen
by the Company as one of the Investment Alternatives. The Trustee shall not
render any investment advice to the Company or to any Participant. The Trustee
shall not be responsible for the propriety of any investment direction it
receives from the Company or any Participant.
Neither the Trustee, nor the Company, nor any fiduciary of the
Plan shall be liable to the Participant or any of his or her beneficiaries for
any loss resulting from action taken at the direction of the Participant or
Beneficiary. No Participant or Beneficiary shall be considered a fiduciary of
the Plan or Trust merely by making an investment direction hereunder.
13.09 Participant Investment Direction: Each Participant shall have
the right and the responsibility to direct the investment of his or her
Participant's Account as follows: (i) at the time the Participant first becomes
eligible for the Plan, he or she shall direct the investment of his or her
Participant's Account in one or more of the Investment Alternatives; (ii) each
Participant may change his or her investment direction with respect to future
contributions to his or her Participant's Account; and (iii) each Participant
may transfer all or part of his or her Participant's Account from one Investment
Alternative to another, all in accordance with procedures established from time
to time by the Plan Administrator. The Company shall be responsible when
transmitting Employee and Company contributions to properly identify the amount
to be credited to each Participant's Account.
13.10 Proxy Voting: Each Participant may direct the Trustee how to
vote the shares of the Company common stock held by the Trustee and credited to
his Participant's Accounts on the record date established for each meeting or
solicitation of consents of the shareholders of the Company. For this purpose,
the Plan 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 Plan Administrator, no instructions have been
received by the Trustee from a Participant, the Trustee shall vote the shares of
the Company'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 Plan 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 Plan 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
13.11 Uniformity of Discretion: Wherever under the provisions of this Plan
the Plan Administrator is granted discretionary powers which shall affect the
rights and benefits of Participants, such discretion shall be exercised
uniformly so that all Participants similarly situated shall be similarly
treated.
13.12 Records and Reports: The Plan Administrator shall keep records of
all proceedings and actions, shall maintain all such books of account, records,
and other data as shall be necessary for the proper administration of the Plan
and shall meet the disclosure and reporting requirements of all applicable law.
13.13 Liability: The Plan Administrator shall be liable for the acts of
commission or omission of another Fiduciary when: (a) the Plan Administrator
knowingly participates in or knowingly attempts to conceal the act or omission
of another Fiduciary and the Plan Administrator knows the act of omission is a
breach of fiduciary responsibility by the other Fiduciary; or (b) the Plan
Administrator has knowledge of a breach by the other Fiduciary and shall not
make reasonable efforts to remedy the breach; or (c) the breach by the Plan
Administrator of its own fiduciary responsibility permits the other Fiduciary
to commit a breach.
13.14 Indemnification: The Company shall indemnify the Plan Administrator
against any and all claims, losses, damages, expenses and liabilities arising
from their duties and responsibilities pursuant to the provisions of this Plan,
unless the same is determined to be due to gross negligence or willful
misconduct.
13.15 Bonding: Every Fiduciary of the Plan and every person who handles
funds or other property of the Plan shall be bonded for each Plan Year in an
amount which is not less than the greater of ten percent (10%) of the assets of
the Trust or One Thousand Dollars ($1,000.00) but which in no event shall exceed
Five Hundred Thousand Dollars ($500,000.00).
13.16 Claims Procedure: The Plan Administrator shall give written notice
to a Participant or his beneficiary of the amount of benefits payable according
to the provisions of this Plan within ninety (90) days after such Participant's
retirement, Total Disability, death or termination of employment. Within thirty
(30) days after receipt of such notice, such Participant or beneficiary may file
with the Plan Administrator a claim disputing such notice of benefits payable;
if no such claim if received within the time specified or if such Participant or
beneficiary informs the Plan Administrator that he intends to file no such
disputing claim, the Plan Administrator may commence payment of benefits in
accordance with Section Twelve hereof. If such claim is received within the
time specified, written notice of the disposition of a claim shall be furnished
the claimant within thirty (30) days after such claim is filed. In the event
the claim is denied, the reasons for the denial shall be specifically set forth,
pertinent provisions of the Plan shall be cited and, where appropriate, an
explanation as to how the claimant can perfect the claim will be provided.
13.17 Claims Review: Any Participant or beneficiary who has been denied a
benefit, or feels aggrieved by any other action of the Plan Administrator or the
Trustee, shall be entitled, upon request to the Plan Administrator and if he has
not already done so, to receive a written notice of such action, together with a
full and clear statement of the reasons for the action. If the claimant wishes
further consideration of his position, he may file with the Plan Administrator a
written request for a hearing, together with a written statement of the
claimant's position, which shall be filed with the Plan Administrator no later
than sixty (60) days after receipt of the written notification provided for
above or in section 13.16. The Plan Administrator shall then schedule and
conduct a full and fair hearing of the issue within the next thirty (30) days.
The decision following such hearing shall be made within thirty (30) days, shall
be communicated in writing to the claimant, and shall be the final disposition
of the matter.
SECTION FOURTEEN
TRUST PROVISIONS
14.01 Fiduciary Responsibility: Property paid to the Trustee shall be
held in the Trust established herein and dealt with in accordance with the
provisions of this Plan. The Trustee shall discharge his duties with respect to
this Plan solely in the interest of the Participants and their beneficiaries and
for the exclusive purpose of providing benefits to Participants and their
beneficiaries. Such duties shall be discharged with the care, skill, prudence
and diligence under the circumstances then prevailing that a prudent man acting
in a like capacity and familiar with such matters would use in the conduct of an
enterprise of like character and with like aims, paying particular attention to
diversifying the investments of this Plan so as to minimize the risk of large
losses, unless under the circumstances it is clearly prudent not to do so.
14.02 Investment in Insurance Policies: At the direction of the Plan
Administrator, the Trustee shall have the power to apply for, purchase, hold as
owner, maintain, surrender or transfer as an investment of any Participant's
account any insurance policy, including a group deposit administration contract
with pooled separate account funding; provided, however, that at no time may
more than one-half (1/2) of the aggregate of the Company Contributions and the
forfeitures allocated to a Participant's account which have been accumulated for
less than two (2) years be used to purchase any pay premiums on ordinary life
insurance contracts, and provided further, however, that at no time may more
than one-fourth (1/4) of the aggregate of the Company Contributions and
forfeitures allocated to a Participant's account that have been accumulated for
less than two (2) years be used to purchase and pay premiums on term life
insurance contracts; and provided further, that the Trustee shall, at or before
the retirement of a Participant, either distribute such life insurance contract
to the Participant or convert the entire value of any such life insurance
contracts into cash or convert such policies to provide periodic income so that
no portion of such value may be used to continue life insurance protection
beyond the Participant's retirement.
14.03 Investment Powers of Trustee: Except as provided in sections
13.07, 13.09, 13.10 and 13.11, the Trustee shall have exclusive authority and
discretion to manage and control the assets of the Plan. The Trustee shall have
full power and authority to do all acts and to exercise any and all powers which
are necessary to exercise such authority and control. These powers shall
include all powers conferred upon the Trustee by law and by other provisions of
this Agreement as well as the following powers, offered by way of illustration
but not of limitation:
(a) to invest and reinvest the assets of the Trust in any form of
property whatsoever, without restriction to investments now or hereafter
authorized for fiduciaries, including the investment in one or more collective
funds specifically maintained for qualified employee benefit plans by an
insurance company, a bank or the Trustee;
(b) to pool any part of the assets allocated to Participant's
Accounts for investment purposes and assigning to such separate Participant's
Accounts a fractional interest in said pooled investments;
(c) to sell, convey, exchange, or otherwise dispose of, or grant
options with respect to, any property, real or personal, held hereunder at
public or private sale, upon such terms and conditions as the Trustee shall deem
advisable; to lease such property for any term, to renovate, develop, improve
and manage such property;
(d) to compromise, adjust and settle any and all claims against or in
favor of the Trust;
(e) to make execute, acknowledge and deliver any and all instruments
that the Trustee shall deem necessary or appropriate to carry out the powers
herein granted;
(f) to borrow in such amounts and upon such terms and conditions as
the Trustee may deem advisable, and to secure the repayment of such loans by
pledging or mortgaging all or any part of the Trust, provided, however, that the
proceeds of any borrowing on any insurance policy allocated to a particular
Account shall be used exclusively in payment of amounts due or to become due on
such insurance policy or any policy allocated to the same Participant's Account;
and
(g) to hold any trust investment, unregistered or registered, in the
name of the Trustee or in the name of nominees, but the records of the Trustee
shall at all times show that all such investments are part of the Trust.
14.04 Prohibited Transactions: Subject to the provisions of section
14.05, the Trustee shall not cause the Plan to engage in any transaction if he
knows or should know that such transaction constitutes a direct or indirect:
(a) sale or exchange , or leasing of any property between the Plan
and a Disqualified Person;
(b) lending of money or extension of credit between the Plan and a
Disqualified Person;
(c) furnishing of goods, services or facilities between the Plan and
a Disqualified Person;
(d) transfer to or use by or for the benefit of a Disqualified Person
of any assets of the Plan;
(e) acquisition, on behalf of the Plan of any employer security or
employer real property in violation of the Employee Retirement Income Security
Act of 1974, as amended;
(f) act by a Disqualified Person who is a Fiduciary whereby he deals
with the income or assets of the Plan in his own interest or for his own
account; or
(g) receipt of any consideration for his own personal account by any
Disqualified Person who is a Fiduciary from any party dealing with the Plan in
connection with a transaction involving the income or assets of the Plan.
14.05 Exemptions from Prohibition: The prohibitions provided in
section 14.04 shall not apply to any of the following transactions:
(a) any contract, or reasonable arrangement made with a Disqualified
Person for office space, or legal, accounting or other services necessary for
establishment or operation of the Plan, if no more than reasonable compensation
is paid therefor;
(b) the investment of all or part of the Trust funds in deposits
which bear a reasonable rate of interest in a bank or similar financial
institution which is supervised by the United States or a State and which is a
Disqualified Person, such investment being expressly authorized by the Plan
Administrator, who is hereby empowered so to instruct the Trustee with respect
to such investment;
(c) the provision of any ancillary service by such a bank or similar
financial institution if such bank or institution is a Fiduciary of the Plan and
if (1) such service is provided at not more than reasonable compensation, (2)
such bank or similar financial institution has adopted adequate internal
safeguards which assure that the provision of such service is consistent with
sound banking and financial practice, as determined by Federal or State
supervisory authority, and (3) the extent to which such service is provided is
subject to specific guidelines issued by such bank or similar financial
institution, under which such bank or similar financial institution does not
provide such service in an excessive or unreasonable manner and in a manner
inconsistent with the best interest of the Participants and their beneficiaries;
(d) the exercise of a privilege to convert securities to the extent
provided in regulations to be issued by the Secretary of the Treasury under
section 4975(d) of the I.R.C., but only if the Plan receives no less than
adequate consideration pursuant to such conversion;
(e) any sale or purchase or use by the Plan of an interest in a
common or collective trust fund or pooled investment fund which is (1)
maintained by a bank or trust company supervised by a State or Federal agency,
(2) managed by an advisor contracted by a bank or trust company supervised by a
State or Federal agency or (3) maintained by an insurance company qualified to
do business in a State if such bank, trust company, advisor or insurance company
receives not more than reasonable compensation, such a sale or purchase being
expressly authorized hereby;
(f) receipt by a Disqualified Person of any benefit to which he may
be entitled as a Participant or beneficiary of the Plan so long as such benefit
is computed and paid on a basis consistent with the terms of the Plan as applied
to all other Participants and beneficiaries;
(g) receipt by a Disqualified Person of any reasonable compensation
for services rendered or for reimbursement of expenses properly and actually
incurred in the performance of duties with the Plan, except that no person
receiving full-time pay from an employer, an association of employees or an
employee organization, whose members are Participants may receive compensation
from the Plan other than reimbursement of expenses properly and actually
incurred; and
(h) service by a Disqualified Person as a Fiduciary, including Plan
Administrator, Trustee or a member of the Committee, in addition to being
officer, employee, agent or other representative of a Disqualified Person.
14.06 Distribution: The Plan Administrator may direct the Trustee to
distribute assets of the Trust which a Participant is entitled to receive (a) to
the Participant, (b) to any person having custody of the Participant, (c) to the
legal guardian of the property of the Participant, (d) to any person who, or
corporation which, shall be furnishing maintenance, support or hospitalization
to the Participant, or (e) to the beneficiaries of the Participant who are
entitled to receive the benefits in accordance with this Plan. The receipt of
such person or corporation to whom, or to which, the disbursements are made
shall be sufficient release for the Trustee and the recipient shall not be
required to account to the Company, the Plan Administrator, the Trustee, any
court or any other person for the disposition of the proceeds.
14.07 Records and Reports: The Trustee shall keep full accounts of all
receipts and disbursements under this Plan. Records with respect to the assets
under this Plan shall be open to inspection by an officer of the company or the
Plan Administrator during business hours of the Trustee. The Trustee shall
render an annual report to the Plan Administrator, said report to contain a
complete accounting showing the total assets in the Trust Fund as of the
Anniversary Date of the Plan, and the fair market value placed on each asset as
of that date, as well as a statement of purchases, sales and any investment
changes and all income, expenses, and disbursements since the last such report,
and to be in such form and to contain such other information concerning the
trust fund and the management thereof by the Trustee as shall be required in
writing by the Plan Administrator or by regulations issued by the Commissioner
of Internal Revenue and the Secretary of Labor.
14.08 Compensation and Expenses: The Trustee, if he is not an Employee
of the Company, shall be paid by the Company such reasonable compensation as
shall be agreed upon by the Plan Administrator and the Trustee. In addition to
the reasonable compensation provided from herein, if Participant Accounts are
established by the Plan Administrator as permitted in section 13.09, then the
Trustee as directed by the Plan Administrator may collect 12(b)(1) fees from
investment funds provided to Participants under the Plan. The Trustee, in
performing its duties under this Plan, may employ counsel, accountants and other
agents as it shall deem advisable. The Trustee shall be entitled to
reimbursement by the Company for all other proper charges and expenses incurred
in carrying out the Trustee's duties under this Agreement, including
compensation of counsel, accountants, investment managers and other agents. All
taxes of any nature that may be levied or assessed under existing or future laws
upon or in respect to the Trust, its assets or income shall be paid by the
Company as an expense of the Trust. The Trustee may make any payments referred
to in this subsection from the assets of the Trust until paid therefor by the
Company.
14.09 Prior or Subsequent Breaches: A Trustee shall not be liable or
responsible in any way for any acts or omissions in the management of the Trust
prior to the date he became a Trustee or after the date he shall cease to be a
Trustee. A successor Trustee shall not have any duty to review the actions or
accountings of any prior Trustee.
14.10 Two or More Trustees: If at any time National City Bank or its
successor shall not be Trustee of the Plan and there shall be two or more
Trustees, the Trustees shall jointly manage and control the assets of the Trust,
except as provided in section 14.11. Such management or control shall be
conducted by unanimous vote if there are two Trustees or by a majority vote if
there are more than two Trustees. Any act may be performed by any Trustee and
such act shall have the same force and effect as if the act had been performed
by all the Trustees.
14.11 Allocation of Trustees' Duties: If at any time National City
Bank or its successor shall not be Trustee of the Plan and there shall be two or
more Trustees, the Plan Administrator may allocate specific responsibilities,
obligations, and duties among the Trustees. If the Plan Administrator shall
make such an allocation, then the specified Trustee shall be responsible for the
duties allocated to him and the other Trustees shall not be liable for any
breach of fiduciary responsibility for the duties allocated except as provided
by law.
14.12 Liability for Acts of Another Fiduciary: A Trustee shall be
liable for the acts or omissions of another Trustee or Fiduciary (including the
Plan Administrator, any member of the Committee and any Investment Manager
appointed pursuant to section 13.07) when: (a) the Trustee knowingly
participates in, or knowingly attempts to conceal the act or omission of the
other Trustee or Fiduciary and the Trustee knows the act or omission is a breach
of a fiduciary responsibility by the other Trustee or Fiduciary; or (b) the
Trustee has knowledge of a breach by the other Trustee or Fiduciary and shall
not make reasonable efforts to remedy the breach; or (c) the Trustee's breach of
his own fiduciary responsibility permits the other Trustee or Fiduciary to
commit a breach.
14.13 Indemnification: The Company shall indemnify any Trustee of
this Plan against any and all claims, losses, damages, expenses and liabilities
arising from his duties and responsibilities pursuant to the provisions of this
Plan, unless the same is determined to be due to gross negligence or willful
misconduct.
14.14 Successor or Additional Trustee: Any Trustee may resign by
giving written notice to the Company. Such resignation shall become effective
no sooner than thirty (30) days after the receipt of such written notice by the
Company unless the Company shall agree to an earlier date. The Company may at
any time remove any Trustee by giving written notice of such removal, which
shall become effective upon receipt of such by the Trustee. The Company may
appoint a successor Trustee in the place of any removed or resigning Trustee and
may at any time appoint one or more additional Trustees to serve with an
existing Trustee. Such appointments shall become effective upon acceptance in
writing by such Trustee.
14.15 Written Directions: All directions by the Plan Administrator to
the Trustee shall be in writing, signed by an officer of the Plan Administrator
or by such other person or persons as may be designated from time to time by the
Committee. The Company shall deliver to the Trustee certificates evidencing any
appointment and termination of office of the members of the Committee as Plan
Administrator, and the Plan Administrator shall deliver to the Trustee
certificates designating any other person authorized to act on its behalf,
together with specimens of their signatures.
The Company warrants that all certificates delivered to the
Trustee hereunder shall be genuine and executed by the proper person or persons
and that all directions issued to the Trustee by any of its officers or agents,
or by the Plan Administrator, will be in accordance with the terms of the Plan
and not contrary to the provisions of ERISA and regulations issued thereunder.
SECTION FIFTEEN
AMENDMENT AND TERMINATION
15.01 Amendment: The Company may amend the Plan at any time, such
amendment to be effective upon delivery of a written instrument to the Trustee,
provided, however, that:
(a) no amendment shall affect the rights, responsibilities or duties
of the Trustee without the Trustee's written consent;
(b) no amendment revising the Participant's Vested Interest set forth
in section 8.01 shall be effective if the nonforfeitable percentage of the
Accrued Benefit derived from the Company's Contributions (determined as of the
later of the date such amendment is adopted or the date such amendment becomes
effective) of any Employee who is a Participant in the plan is less than such
nonforfeitable percentage computed without regard to such plan amendment;
(c) no amendment shall revise the vesting schedule set forth in
section 8.01 unless each Participant with three (3) or more Years of Service is
permitted to elect within a reasonable period after the adoption of such
amendment to have his Vested Interest calculated under section 8.01 without
regard to such amendment; such reasonable period shall end sixty (60) days after
the later of the date such amendment is adopted, the effective date of such
amendment, or the date upon which such Participant received written notice of
such amendment;
(d) no amendment shall be effective if the Accrued Benefit of any
Participant is decreased, other than an amendment described in section 412(c)(8)
of the I.R.C. or section 4281 of the Employee Retirement Income Security Act of
1974. For purposes of this paragraph (d) of section 15.01, an amendment which
eliminates or decreases a Participant's account balance or eliminates an
optional form of benefit with respect to benefits attributable to service before
the amendment shall be treated as reducing Accrued Benefits;
(e) no amendment shall provide for the use of funds or assets held
under the Plan other than for the benefit of Participants or their
beneficiaries; and
(f) no amendment shall revest any assets of the Trust in the Company.
15.02 Retroactive Amendment: The Company may amend this Plan to
qualify it under the provisions of Section 401(a) of the I.R.C., and any such
amendment, by its terms, may be effective retroactively.
15.03 Merger, Consolidation or Transfer of Assets: No merger or
consolidation of this Plan with, or transfer of assets or liabilities of this
Plan to, any other plan shall occur unless each Participant in the Plan would
(if the Plan then terminated) receive a benefit immediately after the merger,
consolidation, or transfer which is equal to or greater than the benefit he
would have been entitled to receive immediately before the merger, consolidation
or transfer (if this Plan had then terminated).
15.04 Suspension of Contributions: The Company reserves the right
temporarily to suspend contributions to this Plan at any time. Such suspension
shall not operate as a termination of the Plan.
15.05 Termination: While it is the intention of the Company to
continue this Plan and the contributions hereunder indefinitely, the Company
reserves the right to terminate this Plan at any time by an instrument in
writing executed by the Company and delivered to the Trustee. Such termination
shall become effective upon receipt of such written instrument by the Trustee.
This Plan shall become terminated if the Company shall be dissolved, be
adjudicated as bankrupt, become insolvent, or be merged with another company;
provided, however, that in the event of a dissolution, merger or consolidation
of the Company, provisions may be made by a successor for the continuance of the
Plan, or the merger or consolidation of the Plan, or the transfer of Plan assets
in accordance with section 15.03, and no termination shall result therefrom.
15.06 Vesting Upon Termination: Upon the termination or partial
termination of this Plan, or upon complete discontinuance of contributions under
this Plan, the Vested Interest of the Accrued Benefit of each Participant
affected by such termination, partial termination or discontinuance shall be
equal to one hundred percent (100%) of such Accrued Benefit.
15.07 Distribution of Assets: In the event that this Plan is
terminated in accordance with section 15.05, the Accrued Benefit of each
Participant shall be distributed to him in accordance with the provisions of
Section Twelve.
15.08 Partial Termination or Discontinuance: If there shall be a
partial termination or complete discontinuance of contributions such that
Accrued Benefits become one hundred percent (100%) vested in accordance with
section 15.06, the Trustee, at his discretion, shall decide whether to terminate
the Plan, making at that time full distribution of all Accrued Benefits in
accordance with Section Twelve, or to continue the Plan, in which case
distribution shall be made in accordance with the provisions of this Plan in the
usual manner.
SECTION SIXTEEN
MISCELLANEOUS PROVISIONS
16.01 Employment Rights: This Plan shall not be construed to confer
upon any Participant or other Employee any right of employment or to alter any
contract of employment between the Company and its Employees. The Company
reserves and retains the right to deal with its Employees, whether or not
Participants hereunder, and to terminate their employment at any time, to the
same extent as though this Plan had not been created.
16.02 Spendthrift: The interest and benefits under this Plan of any
Participant or beneficiary shall not be subject to assignment, alienation,
pledge, attachment, garnishment, sequestration or other legal process, or to the
claims of creditors. This prohibition shall not, however, apply to any
voluntary and revocable assignment of up to ten percent (10%) of any benefit
made by any Participant who is receiving benefits under this Plan. Any such
assignment or alienation shall neither be for the purpose nor have the effect of
defraying Plan administration costs. This provision shall not apply in the case
of a Qualified Domestic Relations Order.
16.03 Return of Certain Company Contributions: Notwithstanding any
other provision of this Plan, the following Company Contributions shall be
returned to the Company in the following manner:
(a) Any Company Contribution which is made by the Company by a
mistake of fact shall be returned to the Company within one (1) year after the
payment of the Company Contribution. However, any earnings attributable to the
excess Company Contribution may not be returned to the Company, but losses
attributable thereto must reduce the amount to be so returned. If the
withdrawal of the amount attributable to the mistaken Contribution would cause
the balance of the individual account of any Participant to be reduced to less
than the balance which would have been in the account had the mistaken amount
not been contributed, then the amount to be returned to the Company will be
limited so as to avoid such reduction;
(b) Any Company Contribution which is conditioned upon the initial
qualification of this Plan under I.R.C. section 401 shall be returned to the
Company within one (1) year after the date of an adverse determination if the
Plan receives such determination with respect to its initial qualification, but
only if the application for determination is made by the time prescribed by law
for filing the Company's return for the taxable year in which this Plan was
adopted or such later date as the Secretary of the Treasury may prescribe. If a
Company Contribution is returned to the Company due to initial disqualification
of the Plan, then the entire assets of the Plan attributable to Company
Contributions may be returned to the Company; and
(c) Any Company Contribution which is conditioned upon the
deductibility of such Company Contribution under I.R.C. section 404 shall be
returned to the Company, to the extent the deduction is disallowed, within one
(1) year after the disallowance. However, any earnings attributable to the
excess Company Contribution may not be returned to the Company, but losses
attributable thereto must reduce the amount to be so returned. If the
withdrawal of the amount attributable to the nondeductible Contribution would
cause the balance of the individual account of any Participant to be reduced to
less than the balance which would have been in the account had the nondeductible
amount not been contributed, then the amount to be returned to the Company will
be limited so as to avoid such reduction.
In no other manner, however, shall funds held in the Trust revert
to the Company.
16.04 Multiple Fiduciary Capacities: Any person or persons may at any
time and from time to time serve in more than one fiduciary capacity with
respect to the Plan, including simultaneous service as Trustee and Plan
Administrator or member of the Committee.
16.05 Credit for Qualified Military Service: Notwithstanding any
provision of this Plan to the contrary, effective as required by the Uniform
Services Employment Rights Act "USERRA" contributions, benefits and service
credit with respect to qualified military service will be provided in accordance
with I.R.C. section 414(u).
16.06 Severability: If any provision of this Plan shall be held
invalid and unenforceable, the valid and enforceable provisions which remain
shall continue to be given effect and to bind the parties hereto.
16.07 Rule Against Perpetuities: If the indefinite continuance of this
Plan and the Trust created herein would be in violation of the law, then this
Plan and Trust shall continue for the maximum period permitted by law and shall
then terminate, whereupon distribution of its assets shall be made as provided
by Section Twelve and Section Fifteen.
16.08 Usage: Whenever applicable the masculine gender, when used in
this Plan, shall include the feminine and neuter genders, and the singular shall
include the plural.
16.09 Captions: The captions of Sections and subsections contained
herein are inserted only as a matter of convenience and for reference and in no
way define, limit, enlarge or describe the scope or intent of the Plan nor in
any way shall affect the Plan or the construction of any provision thereof.
16.10 Law Governing: This Agreement shall be construed according to
the laws of the Commonwealth of Pennsylvania to the extent not preempted by the
Internal Revenue Code of 1986, as amended, and the Employee Retirement Income
Security Act of 1974.
IN WITNESS WHEREOF, the Company and the Trustee have caused these presents
to be duly executed the day and year first above written.
ATTEST: SPARTECH POLYCOM , INC.
______________________________ By:___________________________
Secretary President
(Corporate Seal)
ATTEST: NATIONAL CITY BANK
___________________ By:
Name:
Title:
SPARTECH POLYCOM, INC. 401(K) PROFIT SHARING PLAN
SUMMARY PLAN DESCRIPTION
This booklet is a summary of our retirement plan. It is not
the official plan, but a copy of the plan may be seen in the
office of the Plan Administrator, who is named on page 1.
This booklet together with the booklet entitled "Making
Retirement Work for You" prepared by the Trustee, who is
named on page 1, provide important information about our
retirement plan.
In case of any conflicts between this summary, the booklet
prepared by the Trustee and the plan, the plan will control.
Date: January 1, 2000
Plan Sponsor:
SPARTECH POLYCOM , INC.
Employer I.D. No.: 25-1325696
IMPORTANT INFORMATION ABOUT THE PLAN
Employer: Spartech Polycom , Inc.
90 West Chestnut Street
Washington, Pennsylvania 15301
Name of Plan: Spartech Polycom , Inc.
401(k) Profit Sharing Plan
Plan Year: January 1 through December 31
Trustee: National City Bank
20 Stanwix Street
16th Floor
Pittsburgh, PA 15222
(412) 644-8317
Plan Administrator: Spartech Polycom , Inc.
90 West Chestnut Street
Washington, Pennsylvania 15301
(724) 225-2220
Employer
Identification No.: 25-1325696
Plan Number: 001
Agent for Service
of Legal Process: Plan Administrator
1. Nature of the Plan: Our plan is a profit sharing plan, with a
deferred compensation feature designed to provide retirement benefit income.
Funds contributed to the Plan by you and the company are held by the Trustee
named on page 1 in a tax-exempt qualified trust, known as the Spartech Polycom ,
Inc. 401(k) Profit Sharing Trust. An account will be established in the trust
to identify your share of the assets. You give the Trustee investment
directions for your plan account, and you may change your investment choices
daily. The plan is run by the Plan Administrator whom you should contact with
your questions about the plan.
2. Eligibility and Participation: If you are a new employee and not a
member of the union, you will be eligible to participate in the plan when you
are 21 years old and have completed 6 consecutive months of service (months of
service are explained in paragraph 10).
Once you are eligible, you must wait to actually become a participant until
the next "entry date", which is the next January 1, April 1, July 1, or October
1, whichever comes first, after you have become eligible.
For example, if you are 21 years old and you start work on September 15,
1999, and work 6 consecutive months between then and March 14, 2000, you will
be eligible for the plan. Once you are considered eligible, you must wait until
the next entry date to actually become a participant. In this case you are
eligible on March 14, 2000, and you will actually join the plan on April 1,
2000 , the next entry date.
If you have worked for us for 6 consecutive months but are not yet 21
years old, then you are not eligible to participate in the plan. You will be
eligible to participate on your 21st birthday and will become a participant in
the plan on the next January 1, April 1, July 1, or October 1 following your
21st birthday.
3. Company Contributions: We, as the company, may make contributions to
the plan for each plan year from our profits for the plan year. We do not
always have to contribute any or all of our profits for a plan year. The amount
of our contribution will be decided by our Board of Directors in light of
business and other considerations.
4. Allocation of Company Contributions and Forfeitures: Our contributions
and any forfeitures are allocated on the last day of each plan year (December
31) to the separate accounts of participants who are still working for us on
the last day of the plan year and participants whose employment terminated
during the plan year by reason of retirement, disability, death, or transfer to
a category of employees excluded from the plan.
Your share of our contribution is determined by first taking any
compensation paid to you in a plan year in excess of the Social Security taxable
wage base. That amount is divided by the total compensation in excess of the
Social Security taxable wage base paid to all participants who are receiving a
contribution for the plan year and then multiplied by the amount of the
contribution. The amount of the contribution allocated in this manner cannot
exceed your excess compensation multiplied by 4.168%.
Your share of the remaining contribution is determined by multiplying the
company contribution by a fraction in which the numerator is your total
compensation for the plan year and the denominator is the total compensation
paid to all participants who are receiving a contribution for the plan year.
For example, if the company had the following employees:
A - $ 85,000 (plan year compensation)
B - $ 80,000 ( " " " )
C - $ 40,000 ( " " " )
D - $ 20,000 ( " " " )
$225,000
and made a $15,000 contribution for the 1999 plan year, the contribution would
be allocated as follows:
I. A - $80,000 - $72,600 = $7,400 x .04168 = $308.43
B - $85,000 - $72,600 = $12,400 x .04168 = $516.83
$825.26
II. The remaining $14,174.74 ($15,000 - $825.26) will be allocated as
follows:
A - ($80,000 , $225,000) x $14,174.74 = $ 5,039.91
B - ($85,000 , $225,000) x $14,174.74 = $ 5,354.90
C - ($40,000 , $225,000) x $14,174.74 = $ 2,519.95
D - ($20,000 , $225,000) x $14,174.74 = $ 1,259.98
$14,174.74
If in any plan year the plan is determined to be a top-heavy plan (that is,
if the present value of the cumulative accounts under the plan for "Key"
employees exceeds 60% of the present value of the cumulative accounts under the
plan for all employees), you will receive a contribution equal to at least 3% of
your compensation for that year, except that such percentage shall not exceed
the percentage at which contributions are made for the Key Employee for whom
such percentage is the highest for the year. 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.
5. Elective Deferrals: Commencing on April 1, 1997 and for each plan
year, you may elect to have up to 10% of your compensation contributed to the
plan instead of being paid directly to you. Such contributions are known as
"elective deferrals" or "401(k) contributions". You are not currently taxed on
the amount of your elective deferrals for federal income tax purposes, but such
amounts will be taxed to you when distributed from the plan. However, social
security taxes and certain state's income taxes on elective deferrals will be
currently deducted from your compensation. The amount of your elective
deferrals for any calendar year may not exceed $10,500 for 2000 (adjusted for
the cost-of-living). You must make your election to defer compensation on a form
provided by the Plan Administrator. All changes must be made using forms
provided by the Plan Administrator and must be made at the time and in the
manner prescribed by the Plan Administrator before the first day of each Plan
Year quarter (January 1, April 1, July 1 or October 1).
As decided, on an annual basis, by our Board of Directors in light of
business and other considerations, we may match your elective deferral
contributions each plan year. Any company matching contributions will be made
monthly.
The average ratio of the compensation of highly compensated participants to
their matching contributions cannot exceed a similar ratio for non-highly
compensated participants by more than the amount permitted by law. If the amount
is exceeded, excess employer matching contributions will be forfeited.
Any company matching contributions will vest in accordance with the same
schedule as company contributions (see paragraph 8).
6. Rollover Contributions: If you have an existing qualified retirement
plan account with a prior employer, you may rollover that account into the plan
subject to certain restrictions imposed by the Plan Administrator.
7. Benefits: You will be entitled to 100% of the amounts held for you in
your account if you become totally disabled or die while employed by us, or if
you retire on your normal or late retirement date. Your normal retirement date
will be the day on which you become 65. The time and manner in which we will
pay these amounts to you are discussed in paragraph 11.
8. Vesting: If you are discharged or quit work before you reach your
normal retirement date for a reason other than death or total disability, you
will be entitled to the amounts in your account which are "vested". The vested
part of your account belongs to you no matter what happens, although it may not
be paid until a later date.
Amounts which we contributed for you (after earnings and losses) are vested
according to the number of years of service for which you get credit. (See
paragraph 10, where years of service are explained). These amounts vest
according to the following schedule:
Years of Service Vested Amount
0 but less than 3 0%
3 but less than 4 20%
4 but less than 5 40%
5 but less than 6 60%
6 but less than 7 80%
7 or more 100%
This means that if you quit or are discharged before your normal retirement
date for a reason other than death or total disability and you have 4 years of
service, you will be entitled to 40% of the amounts we have contributed for you
(after adjusting for investment earnings and losses). If you leave and you have
less than 3 years of service, you will not be entitled to any of the amounts we
have contributed for you. If you leave after you have 7 years of service or
more, you will be entitled to 100% of the amounts in your account.
If in any year the plan is determined to be a top-heavy plan, as discussed
in paragraph 4, the following vesting schedule applies:
Years of Service Vested Amount
0 but less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 or more 100%
The time and the manner in which we will pay the amounts you are entitled
to are discussed in paragraph 11.
Amounts to which you are not entitled because they are not vested will be
forfeited: (a) immediately upon distribution of the amount of your vested
account; or (b) if your benefit has not been distributed, at the end of the plan
year in which you have a one-year break in service. (See paragraph 10, for an
explanation of a one-year break in service). These forfeited amounts are then
allocated at the end of the plan year in which they are forfeited in the same
way as our contributions are allocated to the separate accounts of participants
who are still working for us at the end of that year or participants who are no
longer working for us because they have died, become totally disabled, have
retired on or after their normal or late retirement date, or have transferred to
a category of employees excluded from the plan. (See paragraph 4).
Your elective deferrals to the plan (after adjusting for investment
earnings and losses) are always 100% vested.
9. Hours of Service: You get credit for one hour of service for each
hour:
(a) for which you get paid, directly or indirectly, for working for
us;
(b) for which you get paid but do not work for reasons like vacation,
sickness or temporary disability;
(c) for which you may be awarded back pay;
(d) for which you usually would have worked but did not because you
were on a leave-of-absence which has been approved by us as long as you
return to work for us within 90 days after the end of the leave-of-absence;
or
(e) for absences due to pregnancy, childbirth, or adoption (for the
mother or the father) only if necessary to avoid a one-year break in
service for one plan year.
10. Years of Service: 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 any part of which you have a hour of service with the company,
a subsidiary of the company or any of the following companies which have been
acquired by the company: Polycom Huntsman, Inc. and PH Chemicals, Inc. You
also get credit for years of service you worked before you became a participant.
A one-year break in service is any period of at least 12 consecutive months
in which you do not work for us except for maternity or paternity reasons.
If you have a one-year break in service, your years of service prior to
that year will not be taken into account until you complete a year of service
after your return.
If you have no vesting in amounts we have contributed for you (as explained
in paragraph 8), years of service before a plan year in which you have a one-
year break in service shall not be taken into account if the number of
consecutive years in which you have a one-year break in service equals or
exceeds your years of service beforehand or 5, whichever is greater.
If you have a One-Year Break in Service for 5 consecutive years, then
years of service after such 5 year period will not be taken into account in
determining your amount vested in contributions allocated to you before your
return to work.
11. Payment of Benefits: The amount of your elective deferral account
will be paid to you as soon as practicable after your termination of employment.
You will be paid the balance of the account to which you are entitled within 60
days of the close of the Plan Year in which you die, retire, become disabled, or
otherwise terminate your employment. You will be able to choose the following
methods for the payment of the value of your account:
(a) a single lump-sum payment; or
(b) a direct rollover; or
(c) a combination of the foregoing.
If the present value of your accrued benefit exceeds $5,000 a lump sum
distribution shall be made only if the participant and his spouse consent in
writing to such distribution. If the present value of the accrued benefit is
less than $5,000, a lump sum distribution, without the consent of the
participant, shall be made only if the distribution is an amount not less than
the present value of the participant's entire accrued benefit at the time of
distribution.
12. Payment of Death Benefits: In the event of your death, the entire
amount in your account will be paid to your surviving spouse or your designated
beneficiary in a lump sum.
13. Beneficiary Designation: The Plan Administrator will give you a
form on which you can name the beneficiary to receive your benefit if you die.
You can change your beneficiary at any time; just ask for another form. If you
do not pick a beneficiary, we will pay your benefit to your spouse, if any, or
to your estate, as provided in the plan.
14. Withdrawals and Loans: If you have vested amounts in your account
from elective deferrals and/or company 401(k) matching contributions, then upon
application to the Plan Administrator, you may be eligible to borrow up to the
lesser of (i) one-half (1/2) of your vested amounts from elective deferrals
and/or company matching contributions, or (ii)$50,000. Loans will not be made
in any amount less than $1,000. In addition, no participant may have more than
1 loan outstanding at any time.
You will be required to provide security for the loan, usually by pledging
up to 50% of your vested account balance under the plan. All such loans must be
repaid within one (1) to five (5) years. All loans must bear a reasonable rate
of interest based on market rates at the time of the loan. If you are married,
then your spouse must give written consent to the pledging of your vested
account balance as security for a loan. Loans will be made in accordance with
the terms and conditions of the Spartech Polycom , Inc. 401(k) Profit Sharing
Plan Participant Loan Program which has been established by the company.
In addition, you may apply to the Plan Administrator for a "hardship
withdrawal" of part or all of your elective deferrals. A withdrawal may be made
on account of hardship only if it is on account of an immediate and heavy
financial need of yours and is necessary to satisfy that need. If you receive a
hardship withdrawal, you will not be permitted to make any elective deferrals to
the plan for twelve months following the date of your receipt of the hardship
withdrawal. Also, the limit on the amount of your elective deferrals (see
paragraph 5) for the calendar year following the year of the hardship withdrawal
will be reduced by the amount of your hardship withdrawal.
15. Claims Procedure and Review: Within 30 days after you are notified of
the amount of your benefit (you will be notified of the amount within 90 days of
your retirement, death, total disability or leaving the company), you can submit
to the Plan Administrator a written claim disputing it. Within 30 days after
you submit your claim, the Plan Administrator will give you its decision. If
your claim is denied, the reasons for such denial will be given to you and you
will be told of any appropriate action you can take to get the claim approved.
If you are not satisfied with the Plan Administrator's decision, you can
give the Plan Administrator a written request for a hearing along with a written
statement of your position. You must file this within 60 days from the time you
receive notice of denial of your claim. You will be given a full and fair
hearing within 30 days. Then, within 30 days, the Plan Administrator will issue
to you its written decision.
16. Plan Creates No Contract: The adoption of the plan is voluntary on
our part and does not mean that there is any contractual relationship between us
and you, or that you have any right outside of our usual arrangement to be
retained in our employment.
17. Amendment and Termination: The plan can be changed at any time. We
will notify you of any changes that affect your benefits. While we expect to
continue the plan indefinitely, we must reserve the right to terminate the plan
due to business conditions or for other reasons. Your benefits under the plan
are not insured by the Pension Benefit Guaranty Corporation (PBGC); federal law
does not permit the PBGC to insure benefits under a defined contribution (profit
sharing) plan such as ours.
PARTICIPANT'S RIGHTS
The following statement of participant's rights is required by federal law
and regulation:
As a participant in the Spartech Polycom , Inc. 401(k) Profit Sharing Plan,
you are entitled to certain rights and protection under the Employee Retirement
Income Security Act of 1974 (ERISA). ERISA provides that all plan participants
shall be entitled to:
(a) Examine, without charge, at the Plan Administrator's office all
plan documents, including insurance contracts, collective bargaining
agreements and copies of all documents filed by the plan with the U.S.
Department of Labor, such as detailed annual reports and plan descriptions.
(b) 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.
(c) Receive a summary of the plan's annual financial report. The Plan
Administrator is required by law to furnish each participant with a copy of
this summary annual report.
(d) Obtain a statement telling you whether you have a right to
receive a pension at a normal retirement age and if so, what your benefits
would be at normal retirement age if you stop working now. If you do not
have a right to a pension, the statement will tell you how many more years
you have to work to get a right to a pension. 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 people who are responsible for the operation of the employee benefit
plan. The people who operate your plan, called "fiduciaries" of the plan, have
a duty to do so prudently and in the interest of you and other plan participants
and beneficiaries. No one, including your employer, or any other person, may
fire you or otherwise discriminate against you in any way to prevent you from
obtaining a pension benefit or exercising your rights under ERISA.
If your claim for a plan 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. For
instance, if you request materials from the Plan Administrator 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 you up to $110 a day until you receive the materials, unless the materials
were not sent because of reasons beyond the control of the Administrator. 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. 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
should pay court costs 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 this statement or your rights under ERISA,
you should contact the nearest Area Office of the U.S. Labor-Management Services
Administration, Department of Labor.
Exhibit 5
Spartech Corporation
120 South Central Avenue
Clayton, Missouri 63105
February 18, 2000
Securities and Exchange Commission
Washington, D.C. 20549
Ladies and Gentlemen:
I am the Vice President and General Counsel of Spartech Corporation, a Delaware
corporation (the "Registrant"). I am a duly licensed attorney and legal counsel
for the Registrant.
In my capacity as legal counsel for the Registrant, I have examined the form of
registration statement on Form S-8 (the "Registration Statement") proposed to be
filed by the Registrant with the Securities and Exchange Commission under the
provisions of the Securities Act of 1933, as amended, on or about the date of
this letter relating to 500,000 shares of the Registrant's common stock, par
value $.75 per share (the "Common Stock"), which are subject to issuance by the
Registrant pursuant to the Spartech Polycom, Inc. 401(k) Profit Sharing Plan
(the "Plan").
I have examined such records, documents and proceedings of the Registrant and
its board of directors as I have deemed relevant and necessary as a basis for
the opinion expressed herein.
Upon the basis of and in reliance on the foregoing, I am of the opinion that (a)
the Common Stock has been duly authorized by the Registrant for issuance
pursuant to the terms of the Plan, and (b) when so issued, the Common Stock will
have been duly and validly issued and will be fully paid and non-assessable.
I hereby consent to filing of this opinion with the Securities and Exchange
Commission as an exhibit to the Registration Statement and to any references to
me as counsel for the Registrant in the Prospectus forming a part of the
Registration Statement.
Very truly yours,
s/Jeffrey D. Fisher
Vice President and General Counsel
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated December 7, 1999,
incorporated by reference in Spartech Corporation's Annual Report on Form 10-K
for the fiscal year ended October 30, 1999, and to all references to our firm
included in or made a part of this registration statement.
s/ARTHUR ANDERSEN LLP
St. Louis, Missouri
February 18, 2000
