<PAGE> 1
As filed with Securities and Exchange Commission on September 20, 1996
Registration No.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
NEMATRON CORPORATION
(Exact name of registrant as specified in its charter)
MICHIGAN 38-2483796
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
5840 INTERFACE DRIVE
ANN ARBOR, MICHIGAN 48103
(Address of principal executive offices)
NEMATRON CORPORATION 401(K) PLAN AND TRUST
(Full title of the plan)
David P. Gienapp
Vice President, Chief Financial Officer,
Treasurer and Secretary
Nematron Corporation
5840 Interface Drive
Ann Arbor, Michigan 48103
(313) 994-0591
(Name, address and telephone number,
including area code, of agent for service)
Copies to:
Aleksandra A. Miziolek, Esq.
Dykema Gossett PLLC
400 Renaissance Center
Detroit, Michigan 48243-1668
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Title of Proposed Maximum Proposed Maximum Amount of
Securities to Amount to be Offering Aggregate Registration
be Registered Registered* Price Per Share** Offering Price** Fee
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock 200,000 shares $8.625 $1,725,000 $595.00
</TABLE>
- -------------------------------------------------------------------------------
* Pursuant to Rule 416 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.
** Estimated solely for the purpose of calculating the registration fee,
based on the average of the high and low sale prices of the Common
Stock on the Nasdaq National Market on September 18, 1996, in accordance
with Rule 457(h).
================================================================================
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed by Nematron Corporation (the
"Company") with the Securities and Exchange Commission (the "Commission") are
incorporated herein by reference:
(a) The description of Common Stock contained in the
Registration Statement on Form 10, No. 0-21142, filed
under the Exchange Act.
(b) Annual Report on Form 10-KSB for the year ended
September 30, 1995, as amended by Form 10-KSB/A filed
February 2, 1996 and Form 10-KSB/A2 filed May 20, 1996.
(c) Quarterly Reports on Form 10-QSB for the quarters ended
December 31, 1995, March 31, 1996 and June 30,
1996.
All documents filed by the Company and the Company's 401(K) Plan
and Trust (the "Plan") with the Commission pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Securities Exchange Act of 1934, as amended, subsequent to
the date of this Registration Statement and 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 this Registration Statement and to be a
part hereof from the date of filing of each such document.
Item 4. DESCRIPTION OF SECURITIES
The Common Stock to be offered is registered under Section 12 of
the Securities Exchange Act.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sections 561 through 571 of the Michigan Business Corporation
Act (the "MBCA") govern the indemnification of officers, directors and other
persons. In this regard, the MBCA provides for indemnification of directors
and officers acting in good faith and in a manner they reasonably believe to be
in, or not opposed to, the best interest of the corporation or its shareholders
(and, with respect to a criminal proceeding, if they have no reasonable cause
to believe their conduct to be unlawful). Such indemnification may be made
against (a) expenses (including attorneys' fees), judgments, penalties, fines
and amounts paid in settlement, which were
II-1
<PAGE> 3
actually and reasonably incurred in connection with any threatened, pending or
completed action, suit or proceeding (other than an action by, or in the right
of, the corporation) arising out of a position with the corporation (or with
some other entity at the corporation's request), and (b) expenses (including
attorneys' fees) and amounts paid in settlement actually and reasonably
incurred in connection with a threatened, pending or completed action or suit
by, or in the right of, the corporation, unless the director or officer is
found liable to the corporation and an appropriate court does not determine
that he or she is nevertheless fairly and reasonably entitled to
indemnification. The MBCA requires indemnification for expenses to the extent
that a director or officer is successful in defending against any such action,
suit or proceeding, and otherwise requires in general that the indemnification
provided for in (a) and (b) above be made only on a determination by a majority
vote of a quorum of the board of directors comprised of members who were not
parties to or threatened to be made parties to such action. In certain
circumstances, the MBCA further permits advances to cover such expenses before
a final determination that indemnification is permissible, upon receipt of (i)
a written affirmation by the director or officer of his good faith belief that
he has met the applicable standard of conduct set forth in the MBCA, and (ii) a
written undertaking by or on behalf of the director or officer to repay such
amounts unless it shall ultimately be determined that he is entitled to
indemnification and a determination that the facts then known to those making
the advance would not preclude indemnification. The Company's Articles of
Incorporation provide the same indemnification rights as the MBCA.
Subject to the exceptions recited in the following sentence, the
Company's Articles of Incorporation provide that no director shall be
personally liable to the Company or its shareholders for damages for breach of
his or her duty as a director. Such exculpatory language does not, however,
eliminate or limit the liability of a director for (a) breach of the duty of
loyalty, (b) acts or omissions that are not in good faith or involve
intentional misconduct or a knowing violation of law, (c) certain other
violations of the Michigan Business Corporation Act, or (d) responsibility of
any transaction from which the director has derived an improper personal
benefit.
The MBCA permits the Company to purchase insurance on behalf of
its directors and officers against liabilities arising out of their positions
with the Company, whether or not such liabilities would be within the
indemnification provisions of the MCBA. Under an insurance policy maintained
by the Company, the directors and officers of the Company are insured, within
the limits and subject to the limitations of the policy, against certain
expenses in connection with the defense of certain claims, actions, suits or
proceedings, and certain liabilities which might be imposed as a result of such
claims, actions, suits or proceedings, which may be brought against them by
reason of being or having served as directors and officers of the Company or
certain other entities.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to officers and directors pursuant to the
foregoing provisions, the Company has been informed that, in the opinion of the
Commission, such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable.
II-2
<PAGE> 4
Item 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
Item 8. EXHIBITS
The following exhibits are filed with this Registration
Statement:
5 Determination letter of Internal Revenue Service with
respect to the acceptability of the form of the Plan
under the Internal Revenue Code.
23.1 Consent of KPMG Peat Marwick LLP, independent
accountants.
23.2 Consent of Deloitte and Touche LLP, independent
accountants.
24 Power of Attorney (contained on signature page).
99.1 Amended Adoption Agreement to 401(k) Plan and Trust,
effective as of October 1, 1996.
Item 9. UNDERTAKINGS
(1) The undersigned registrant hereby undertakes (a) 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, (b) that, for the purpose of
determining any liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof, and
(c) 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.
(2) 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 Section
15(d) of the Securities Exchange Act of 1934 and each filing of the 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.
II-3
<PAGE> 5
(3) 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.
II-4
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Ann Arbor, State of Michigan on September 19,
1996.
NEMATRON CORPORATION
By: /s/ David P. Gienapp
-----------------------------
David P. Gienapp
Vice President,
Chief Financial Officer,
Treasurer and Secretary
Each person whose signature appears below constitutes and
appoints Frank G. Logan, III and David P. Gienapp, his attorneys-in-fact, each
with power of substitution for him in any and all capacities, to sign any
amendments to this Registration Statement (including post-effective amendments)
and to file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each such attorney-in-fact or his or her substitute may 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 below by the following persons in the
indicated capacities as of September 19, 1996.
Signature Title
--------- -----
/s/ Frank G. Logan, III Chairman, President,
- --------------------------- Chief Executive Officer and a
Frank G. Logan, III Director
(Principal Executive Officer)
/s/ David P. Gienapp Vice President,
- --------------------------- Chief Financial Officer,
David P. Gienapp Treasurer, Secretary and
a Director
(Principal Financial and Accounting Officer)
/s/ Gregory J. Chandler Vice President and
- -------------------------- a Director
Gregory J. Chandler
II-5
<PAGE> 7
/s/ Hugo E. Braun Director
- ---------------------------
Hugo E. Braun
/s/ Garnel F. Graber Director
- ---------------------------
Garnel F. Graber
/s/ Michael L. Hershey Director
- ---------------------------
Michael L. Hershey
/s/ Harry A. Sundblad Director
- ---------------------------
Harry A. Sundblad
Pursuant to the requirements of the Securities Act of 1933, the
Plan Administrator has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Ann
Arbor, State of Michigan, on September 19, 1996.
NEMATRON CORPORATION 401(K) PLAN AND
TRUST
By: David P. Gienapp
Its: Plan Administrator
/s/ David P. Gienapp
----------------------------------------
II-6
<PAGE> 8
INDEX TO EXHIBITS
Number Description
- ------ ----------------------------------------------------------------------
5 Determination letter of Internal Revenue Service with respect to the
acceptability of the form of the Plan under the Internal
Revenue Code.
23.1 Consent of KPMG Peat Marwick LLP, independent accountants.
23.2 Consent of Deloitte and Touche LLP, independent accountants.
24 Power of Attorney (contained on signature page).
99.1 Amended Adoption Agreement to 401(k) Plan and Trust, effective as of
October 1, 1996.
<PAGE> 1
EXHIBIT 5
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
Plan Description: Prototype Standardized Washington, DC 20224
Profit Sharing Plan Person to Contact: Ms. Arrington
with CODA Telephone No.: (202) 622-8173
FFN: 50251860005-001 Refer Reply to: CP:E:EP:T5
Case: 9401341 Date: 03/24/95
EIN: 34-0797057
SPD: 05
Plan: 001
Letter Serial No: D263688a
SOCIETY NATIONAL BANK
127 PUBLIC SQUARE
CLEVELAND, OHIO 44114
Dear Applicant:
In our opinion, the form of the plan identified above is acceptable under
section 401 of the Internal Revenue Code for use by employers for the benefit
of their employees. This opinion relates only to the acceptability of the form
of the plan under the Internal Revenue Code. It is not an opinion of the
effect of other Federal or local statutes.
You must furnish a copy of this letter to each employer who adopts this plan.
You are also required to send a copy of the approved form of the plan, any
approved amendments and related documents to each Key District Director of
Internal Revenue Service in whose jurisdiction there are adopting employers.
Our opinion on the acceptability of the form of the plan is not a ruling or
determination as to whether an employer's plan qualifies under Code section
401(a). An employer who adopts this plan will be considered to have a plan
qualified under Code section 401(a) provided all the terms of the plan are
followed, and the eligibility requirements and contribution or benefit
provisions are not more favorable for highly compensated employees than for
other employees. Except as stated below, the Key District Director will not
issue a determination letter with regard to this plan.
Our opinion does not apply to the form of the plan for purposes of Code section
401(a)(16) if: (1) an employer ever maintained another qualified plan for one
or more employees who are covered by this plan, other than a specified paired
plan within the meaning of section 7 of Rev. Proc. 89-9, 1989-1 C.B. 780; or
(2) after December 31, 1985, the employer maintains a welfare benefit fund
defined in Code section 419(e), which provides postretirement medical benefits
allocated to separate accounts for key employees as defined in Code section
419A(d)(3).
<PAGE> 2
An employer that has adopted a standardized plan may not rely on this opinion
letter with respect to: (1) whether any amendment or series of amendments to
the plan satisfies the nondiscrimination requirements of section
1.401(a)(4)-5(a) of the regulations, except with respect to plan amendments
granting past service that meet the safe harbor described in section
1.401(a)(4)-5(a)(5) and are not part of a pattern of amendments that
significantly discriminates in favor of highly compensated employees; or (2)
whether the plan satisfies the effective availability requirement of section
1.401(a)(4)-4(c) of the regulations with respect to any benefit, right or
feature.
An employer that has adopted a standardized plan as an amendment to a plan
other than a standardized plan may not rely on this opinion letter with respect
to whether a benefit, right or other feature that is prospectively eliminated
satisfies the current availability requirements of section 1.401(a)-4 of the
regulations.
The employer may request a determination (1) as to whether the plan, considered
with all related qualified plans and, if appropriate, welfare benefit funds,
satisfies the requirements of Code section 401(a)(16) as to limitations on
benefits and contributions in Code section 415; (2) regarding the
nondiscriminatory effect of grants of past service; and (3) with respect to
whether a prospectively eliminated benefit, right or feature satisfies the
current availability requirements.
Our opinion does not apply to the form of the plan for purposes of section
401(a) of the Code unless the terms of the plan, as adopted or amended, that
pertain to the requirements of sections 401(a)(4), 401(a)(5), 401(a)(17),
401(1), 410(b) and 414(c) of the Code, as amended by the Tax Reform Act of 1986
or subsequent legislation, (a) are made effective retroactively to the first
day of the first plan year beginning after December 31, 1988 (or such other
date on which these requirements first became effective with respect to this
plan); or (b) are made effective no later than the first day on which the
employer is no longer entitled, under regulations, to rely on a reasonable,
good faith interpretation of these requirements, and the prior provisions of
the plan constitute such an interpretation.
Because you submitted this plan for approval after March 31, 1991, the
continued, interim and extended reliance provisions of sections 13 and 17.03 of
Rev. Proc. 89-9, 1989-1 C.B. 780, are not applicable.
Because you submitted this plan on or after July 1, 1994, it does not meet the
requirements for the extension of the remedial amendment period provided by
Rev. Proc. 95-12, 1995-3 I.R.S. 24.
This letter may not be relied upon with respect to whether the plan satisfies
the qualification requirements as amended by Uruguay Round Agreements Act, Pub.
L. 103-465.
If you, the sponsoring organization, have any questions concerning the IRS
processing of this case, please call the above telephone number. This number
is only for use of the sponsoring organization. Individual participants
2
<PAGE> 3
and/or adopting employers with questions concerning the plan should contact the
sponsoring organization. The plan's adoption agreement must include the
sponsoring organization's address and telephone number for inquiries by
adopting employers.
If you write to the IRS regarding this plan, please provide your telephone
number and the most convenient time for us to call in case we need more
information. Whether you call or write, please refer to the Letter Serial
Number and File Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record. Please notify us if you
modify or discontinue sponsorship of this plan.
Sincerely yours,
/s/ Jeanne Royal Singlay
-------------------------------
Chief, Employee Plans Technical Branch 5
3
<PAGE> 1
EXHIBIT 23.1
Board of Directors
Nematron Corporation
We consent to the use of our report incorporated herein by reference from Form
10-KSB, as amended by Form 10-KSB/A filed February 2, 1996, and as amended by
Form 10-KSB/A-2 filed May 20, 1996 for the year ended September 30, 1995.
KPMG Peat Marwick LLP
Detroit, Michigan
September 17, 1996
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Nematron Corporation on Form S-8 of our report dated December 9, 1994 (which
expresses an unqualified opinion and includes an explanatory paragraph relating
to substantial doubt about the Company's ability to continue as a going
concern), appearing in the Annual Report on Form 10-KSB of Nematron Corporation
for the year ended September 30, 1994 and included and incorporated by
reference in the Annual Report on Form 10-KSB of Nematron Corporation for the
year ended September 30, 1995, as amended by Form 10-KSB/A filed on February 2,
1996 and Form 10-KSB/A-2 filed on May 20, 1996
Deloitte & Touche LLP
Ann Arbor, Michigan
September 19, 1996
<PAGE> 1
EXHIBIT 99.1
03/24/95
BASIC PLAN DOCUMENT # 05
PLAN # 001
IRS LETTER SERIAL NO.: D263688A
PRISM(R) PROTOTYPE RETIREMENT PLAN & TRUST
SECTION 401(K) PROFIT SHARING PLAN
(STANDARDIZED)
ADOPTION AGREEMENT(1)
The Employer(2), designated below, hereby establishes a profit-sharing plan
(optionally including a cash or deferred arrangement (as defined in Section
401(k) of the Internal Revenue Code)) for all Eligible Employees as defined in
this Adoption Agreement pursuant to the terms of the PRISM(R) PROTOTYPE
RETIREMENT PLAN & TRUST BASIC PLAN DOCUMENT # 05.
A. EMPLOYER INFORMATION:
1. NAME: Nematron Corporation
2. ADDRESS: 5840 Interface Drive
3. ADDRESS: Ann Arbor, Michigan
4. ATTENTION: David Gienapp TELEPHONE: (313) 994-0591
5. EMPLOYER TAXPAYER IDENTIFICATION NUMBER(3): 38-2483796
B. BASIC PLAN PROVISIONS:
1. PLAN NAME (SELECT ONE):
A. / / This plan is established effective _____, 19__, (the
"Effective Date") as a profit sharing plan and trust
(optionally with a "cash or deferred arrangement" as defined
in Code Section 401(k)) to be known as _____ Plan and Trust
(the "Plan") in the form of the PRISM(R) PROTOTYPE RETIREMENT
PLAN & TRUST.
- ---------------
(1) Footnotes in this Adoption Agreement are not to be construed as part of the
Plan provisions but are explanatory only. To the extent a footnote is
inconsistent with the provisions of the Basic Plan Document or applicable
law, the provisions of the Plan shall be construed in conformity with the
Basic Plan Document or law.
(2) Terms that are capitalized are defined in the PRISM(R) PROTOTYPE RETIREMENT
PLAN & TRUST BASIC PLAN DOCUMENT.
(3) The Plan will have an individual TIN, distinct from the Employer TIN.
<PAGE> 2
B. /X/ This plan is an amendment and restatement in the form of the
PRISM(R) PROTOTYPE RETIREMENT PLAN & TRUST, effective June 1,
1995, (the "Effective Date") of the Nematron Corporation
401(k) Plan and Trust (the "Plan"), originally effective as
of February 26, 1993 (the "Original Effective Date").
2. EMPLOYER'S THREE DIGIT PLAN NUMBER: 001
3. COMMITTEE MEMBERS(4):
4. DEFINITIONS:
A. COMPENSATION for allocation purposes:
I Will be determined over the following applicable period
(select only one):
(A) / / the Plan Year
(B) /X/ the period of Plan participation during the Plan
Year
(C) / / a consecutive 12 month period commencing on ______
and ending with, or within, the Plan Year.
II /X/ If selected, Compensation will include Employer
contributions made pursuant to a Salary Reduction
Agreement, or other arrangement, which are not
includible in the gross income of the Employee under
Section Section 125, 402(e)(3), 402(h)(1)(B) or
403(b) of the Internal Revenue Code.
III Shall be limited to $ ______ , which shall be the
maximum amount of compensation considered for plan
allocation purposes (but not for testing purposes),
and may not be an amount in excess of the
Internal Revenue Code Section 401(a)(17) limit in
effect for the Plan Year(5). If no amount is
specified, Compensation shall be limited to the
Internal Revenue Code Section 401(a)(17) amount, as
adjusted by the Secretary of the Treasury from time
to time.
B. EARLY RETIREMENT DATE:
- --------------
(4) Committee members direct the day to day operation of the Plan. Committee
members serve at the pleasure of the Employer. See Section 11.4 for changes
in Committee membership. If no Committee members are specified, the Employer
shall assume responsibility for the operations of the Plan.
(5) If no amount is specified, the maximum amount of Compensation allowed under
Code Section 401(a)(17) (the "$150,000 limit" ("$200,000 limit" prior to the
Plan Year beginning before January 1, 1994)), as adjusted from time to time,
shall be used.
PAGE 2
<PAGE> 3
I /X/ is not applicable to this Plan
II / / is the latter of the date on which the Participant
attains age _______ (not less than 55) and the date
on which the Participant completes ___ Years of
Service.
C. HOUR OF SERVICE shall be determined on the basis of the method
selected below. Only one method may be selected. The method
shall be applied to all Employees covered under the Plan as
follows (select only one):
I /X/ On the basis of actual hours for which an Employee is
paid, or entitled to be paid.
II / / On the basis of days worked. An Employee shall be
credited with ten (10) Hours of Service if under
Section 1.1(U) of the Plan such Employee would be
credited with at least one (1) Hour of Service during
the day.
III / / On the basis of weeks worked. An Employee shall be
credited with forty-five (45) Hours of Service if
under Section 1.1(U) of the Plan such Employee would
be credited with at least one (1) Hour of Service
during the week.
IV / / On the basis of semi-monthly payroll periods. An
Employee shall be credited with ninety-five (95) Hours
of Service if under Section 1.1(U) of the Plan such
Employee would be credited with at least one (1) Hour
of Service during the semi-monthly payroll period.
V / / On the basis of months worked. An Employee shall be
credited with one hundred ninety (190) Hours of
Service if under Section 1.1(U) of the Plan such
Employee would be credited with at least one (1) Hour
of Service during the month.
D. LIMITATION YEAR shall mean the 12 month period commencing on
January 1 and ending on December 31.
E. NORMAL RETIREMENT DATE for each Participant shall mean (select
one):
I / / the date the Participant attains age: ______ (not to
exceed 65)
II /X/ the latter of the date the Participant attains age
59.5 (not to exceed 65) or the ____ (not to exceed 5th)
anniversary of the participation commencement date.
If for the Plan Years beginning before January 1,
1988, Normal Retirement Date was determined with
reference to the anniversary of the participation
commencement date (more than 5 but not to exceed 10
years), the anniversary date for Participants who
first commenced participation under the Plan before
the first Plan Year beginning on or
PAGE 3
<PAGE> 4
after January 1, 1988 shall be the earlier of (A) the
tenth anniversary of the date the Participant
commenced participation in the Plan (or such
anniversary as had been elected by the employer, if
less than 10) or (B) the fifth anniversary of the
first day of the first Plan Year beginning on or after
January 1, 1988. Notwithstanding any other provisions
of the Plan, the participant commencement date is the
first day of the first Plan Year in which the
Participant commenced participation in the Plan.
F. PERMITTED DISPARITY LEVEL, for purposes of allocating Employer
Contributions, shall mean (select only one):
I /X/ Not applicable - the Plan does not use permitted
disparity.
II / / The Taxable Wage Base, which is the contribution and
benefit base under section 230 of the Social Security
Act at the beginning of the year.
III / / __ % (not greater than 100%) of the Taxable Wage Base
as defined in B(4)(f)(ii) above.
IV / / $ _____ , provided that the amount does not exceed
the Taxable Wage Base as defined in B(4)(f)(ii) above.
G. PLAN YEAR shall mean (select and complete only one of the
following):
I /X/ the 12-consecutive month period which coincides with
the Limitation Year. The first Plan Year shall be
the period commencing on the Effective Date and ending
on the last day of the Limitation Year.
II / / the 12-consecutive month period commencing on _____,
19__, and each annual anniversary thereof.
III / / the calendar year (January 1 through December 31).
H. QUALIFIED DISTRIBUTION DATE, for purposes of
making distributions under the provisions of a Qualified
Domestic Relations Order (as defined in Internal Revenue Code
Section 414(p)), /X/ SHALL / / SHALL NOT be the date the order
is determined to be qualified. If SHALL is selected, the
Alternate Payee will be entitled to an immediate
distribution of benefits as directed by the Qualified Domestic
Relations Order. If SHALL NOT is selected, the Alternate Payee
may only take a distribution on the earliest date that the
Participant is entitled to a distribution.
I. SPOUSE:
/ / If selected, Spouse shall mean only that person who
has actually been the Participant's spouse for at
least one year.
PAGE 4
<PAGE> 5
J. YEAR OF SERVICE shall mean:
I For ELIGIBILITY purposes (select one of the following):
(A) /X/ the 12 consecutive months during which an
Employee is credited with 1000 (not more than
1000) Hours of Service.
(B) / / a Period of Service (using the elapsed time
method of counting Service, as described in
Section 1.1(N)(3) of the Plan).
II For ALLOCATION accrual purposes (select one of the
following):
(A) /X/ the 12 consecutive months during which an
Employee is credited with 501 (not more than
501) Hours of Service.
(B) / / a Period of Service (using the elapsed time
method of counting Service, as described in
Section 1.1(N)(3) of the Plan).
III For VESTING service purposes (select one of the following):
(A) /X/ the 12 consecutive months during which an
Employee is credited with 1000 (not more than
1000) Hours of Service.
(B) / / a Period of Service (using the elapsed time
method of counting Service, as described in
Section 1.1(N)(3) of the Plan).
IV For purpose of computing Years of Service in plans where
Year of Service is defined in terms of Hours of Service,
the consecutive 12 month period shall be:
(A) For ELIGIBILITY purposes, the first Year of Service
shall be computed using the 12 month period commencing
on the Employee's date of hire and ending on the first
annual anniversary of the Employee's date of hire (the
"Initial Computation Period"). In the event an
employee does not complete an eligibility Year of
Service during this initial computation period, the
computation period shall be (select only one):
(1) / / the period commencing on each annual
anniversary of the Employee's date of
hire and ending on the
PAGE 5
<PAGE> 6
next annual anniversary of the Employee's
date of hire.
(2) /X/ the Plan Year, commencing with the Plan Year
in which the Initial Computation Period ends.
(B) For VESTING purposes, Years of Service shall be
computed on the basis of:
(1) / / the period commencing on each annual
anniversary of the Employee's date of hire
and ending on the next annual anniversary
of the Employee's date of hire.
(2) /X/ the Plan Year, commencing with the first
Plan Year an Employee completes an Hour of
Service.
(C) For ALLOCATION accrual purposes, Year of Service shall
be computed on the basis of the Plan Year.
V / / For ELIGIBILITY purposes, Years of Service with the
following Predecessor Employers shall count in
fulfilling the eligibility requirements for this Plan:
-----
VI / / For VESTING purposes, Years of Service with the
following Predecessor Employers shall count for
purposes of determining the nonforfeitable amount of a
Participant's account:
-----
5. COVERAGE:
This Plan is extended by the Employer to the following Employees
who have met the eligibility requirements (select as many as
appropriate):
I / / All Employees
II /X/ All Employees except (select as applicable):
(A) /X/ those who are members of a unit of Employees
covered by a collective bargaining agreement
between the Employer and Employee
representatives, if retirement benefits were
the subject of good faith bargaining and
if two percent or less of the Employees who
are covered pursuant to that agreement are
professionals as defined in Section
1.410(b)-9 of the Regulations. For this
purpose, the term "Employee representatives"
does not include
PAGE 6
<PAGE> 7
any organization more than half of whose
members are Employees who are owners,
officers, or executives of the Employer.
(B) /X/ those who are nonresident aliens (within the
meaning of Internal Revenue Code Section
7701(b)(1)(B)) and who receive no earned
income (within the meaning of Internal
Revenue Code Section 911(d)(2)) from the
Employer which constitutes income from
sources within the United States (within the
meaning of Internal Revenue Code Section
861(a)(3)).
6. ELIGIBILITY:
An Employee covered by the Plan may become a Participant upon
completion of the following eligibility requirements:
A. SERVICE (6):
I / / There shall be no minimum service requirement for an
Employee to become a Participant.
II /X/ The Employee must complete 1 Year of Service (not
more than 2 years) to be a Participant for purposes
of receiving allocations of Employer Profit Sharing
Contributions.
B. AGE:
I / / There shall be no minimum age requirement for an
Employee to become a Participant.
II /X/ The Employee must attain age 21 (not more than 21) to
be a Participant in the Plan.
C. WAIVER OF AGE AND SERVICE REQUIREMENTS:
I /X/ Notwithstanding the provisions of Items B(6)(a) and
(b), Employees who have not satisfied the age and
service requirements, but would otherwise be eligible
to participate in the plan, shall be eligible to
participate on the Effective Date.
II / / For new Plans, notwithstanding the provisions of Items
B(6)(a) and (b), Employees who have not satisfied the
age and service requirements, but would otherwise be
eligible
- --------------
(6) If a fractional year is elected, the elapsed time method of computing
service shall be used for the fractional year. Eligibility provisions for
optional cash or deferred arrangements are contained in Item C of this
Adoption Agreement.
PAGE 7
<PAGE> 8
to participate in the plan, shall be eligible to
participate on the Effective Date.
D. ENTRY DATES:
Upon completion of the eligibility requirements, an Employee
shall commence participation in the Plan (select only one):
I / / As soon as practicable under the payroll practices
utilized by the Employer, and consistently applied to
all Employees, or if earlier, the first day of the
Plan Year (7).
II /X/ As of the first day of the month following the
completion of the eligibility requirements.
III / / As of the earliest of the first day of the Plan Year,
fourth, seventh or tenth month of the Plan Year next
following completion of the eligibility requirements.
IV / / As of the earliest of the first day of the Plan Year
or seventh month of the Plan Year next following
completion of the eligibility requirements.
V / / As of the first day of the Plan Year next following
completion of the eligibility requirements (may only
be selected if the eligibility year of service
requirement is 6 months or less).
7. VESTING:
A. The percentage of a Participant's Employer Contribution Account
(attributable to Employer Profit Sharing Contributions) to be
vested in him or her upon termination of employment prior to
attainment of the Plan's Normal Retirement Date shall be (8):
COMPLETED YEARS OF SERVICE
1 2 3 4 5 6 7
---- ---- ---- ---- ---- ---- ----
I / / ___ 100%
II / / ___ ___ 100%
III / / ___ 20% 40% 60% 80% 100%
IV / / ___ ___ 20% 40% 60% 80% 100%
V / / 10% 20% 30% 40% 60% 80% 100%
VI /X/ 20% 40% 60% 80% 100%
- --------------
(7) Notwithstanding the foregoing, an Employee who has met the eligibility
requirements may not enter the Plan later than six months following the date
on which the Employee first completes the eligibility requirements.
(8) Notwithstanding the selection made in this Item B(7)(a), a Participant shall
be fully vested in his or her Employer Contribution Accounts if the
Participant dies or becomes Disabled while in the employ of the Employer.
PAGE 8
<PAGE> 9
VII / / ___ ___ ___ ___ ___ ___ 100%
VII / / Full and immediate vesting upon entry into the Plan (9)
Notwithstanding anything to the contrary in the Plan,
the amount inserted in the blanks above shall not
exceed the limits specified in Code Section
411(a)(2).
B. For purposes of computing a Participant's vested account
balance, Years of Service for vesting purposes /X/ SHALL
/ / SHALL NOT include Years of Service before the Employer
maintained this Plan or any predecessor plan, and / / SHALL
/X/ SHALL NOT include Years of Service before the Employee
attained age 18.
C. Notwithstanding the provisions of this Item B(7)(c) of the
Adoption Agreement, a Participant shall become fully vested in
his Participant's Employer Contribution if(10):
I the Participant's job is eliminated without the Participant
being offered a comparable position elsewhere with the
Employer.
II for such reason as is described below:
----
8. EMPLOYER PROFIT SHARING CONTRIBUTIONS:
A. CONTRIBUTIONS:
I / / In its discretion, the Employer may contribute
Employer Profit Sharing Contributions to the Plan.
II / / The Employer shall contribute Employer Profit Sharing
Contributions to the Plan in the amount of ___ % of
the Compensation of all Eligible Participants under
the Plan.
III /X/ If selected, the Employer may make Employer Profit
Sharing Contributions without regard to current or
accumulated Net Profits of the Employer for the
taxable year ending with, or within the Plan Year.
IV / / If selected, the Employer may designate all or any
part of the Employer Profit Sharing Contributions as
Qualified Nonelective Contributions, provided,
however, that contributions so designated will be
subject to the same vesting, distribution, and
withdrawal restrictions as Before Tax Contributions
(11).
- --------------
(9) If more than one Year of Service is an eligibility requirement, Item viii
must be selected.
(10) The provisions of this section will be administered by the Employer on a
consistent and nondiscriminatory basis.
(11) Amounts designated as Qualified Nonelective Contributions will be allocated
pursuant to Section 3.1(A)(14) of the Basic Plan Document.
PAGE 9
<PAGE> 10
B. ALLOCATIONS:
Employer Profit Sharing Contributions shall be allocated to the
accounts of eligible Participants according to the following
selected allocation formula:
I /X/ The Employer Profit Sharing Contributions shall be
allocated to each eligible Participant's account in
the ratio which the Participant's Compensation bears
to the Compensation of all eligible Participants.
Employer Profit Sharing Plan Contributions, shall be
allocated to the accounts of Participants who have
completed a Year of Service(12) (select one):
(A) / / as of the last day of the month preceding the
month in which the contribution was made.
(B) / / as of the last day of the Plan quarter
preceding the quarter in which the
contribution was made.
(C) /X/ as of the last day of the Plan Year.
II / / The Employer Profit Sharing Contributions shall be
allocated in accordance with the following formula:
(A) If the Plan is Top-Heavy, the contribution shall
be first credited to each eligible Participant's
Account in the ratio which the Participant's
Compensation bears to the total Compensation of
all eligible Participants, up to 3% of each
Participant's Compensation.
(B) If the Plan is Top-Heavy, any Employer Profit
Sharing Contribution remaining after the
allocation in (a) above shall be credited to each
eligible Participant's account in the ratio which
the Participant's Excess Compensation(13)
bears to the total Excess Compensation of all
eligible Participants, up to 3% of each eligible
Participant's Excess Compensation.
(C) Any contributions remaining after the allocation
in (b) above shall be credited to each eligible
Participant's account in the ratio which the sum
of the Participant's total Compensation and
Excess Compensation bears to
- --------------
(12) In the event contributions are allocated on a basis other than a full plan
year, the Year of Service shall be based on the elapsed time method of
calculation, and a Participant shall be deemed to have completed an
appropriate Period of Service for allocation purposes if the Participant
has completed a pro-rata Period of Service corresponding to the interval
on which contributions are allocated.
(13) Excess Compensation means a Participant's Compensation in excess of the
Permitted Disparity Level specified in the Definitions section of this
Adoption Agreement.
PAGE 10
<PAGE> 11
the sum of the total Compensation and Excess
Compensation of all eligible Participants,
up to an amount equal to the maximum Excess
Percentage times the sum of ____ the Participant's
Compensation and Excess Compensation. If the
Plan is Top-Heavy, the maximum Excess Percentage
is N/A% (insert percentage). If the Plan is not
Top-Heavy, the maximum Excess Percentage is N/A%
(insert percentage, which shall not exceed the
prior Excess Percentage limitation specified by
more than 3).
NOTE: If the Permitted Disparity Level defined at Item
B(4)(f) is the Taxable Wage Base (which is the
contribution and benefit base under section 230
of the Social Security Act at the beginning of
the year), then the maximum Excess Percentage
should be 2.7% if the Plan is Top-Heavy and 5.7%
if the Plan is not Top-Heavy.
If the Permitted Disparity Level defined at Item
B(4)(f) is greater than 80% but less than
100% of the Taxable Wage Base, then the maximum
Excess Percentage should be 2.4% if the Plan is
Top-Heavy and 5.4% if the Plan is not Top-Heavy.
If the Permitted Disparity Level defined at Item
B(4)(f) is greater than the greater of $10,000 or
20% of the Taxable Wage Base, but not more
than 80%, then the maximum Excess Percentage
should be 1.3% if the Plan is Top-Heavy and 4.3%
if the Plan is not Top-Heavy.
(D) Any remaining Employer Profit Sharing
Contribution shall be allocated among eligible
Participants' accounts in the ratio which the
Participant's Compensation bears to the total
Compensation of all Participants.
III /X/ A Participant who terminates before the end of the
period for which contributions are allocated shall
share in the allocation of Employer Profit Sharing
Contributions if termination of employment was the
result of (select all that apply):
(A) /X/ retirement
(B) /X/ disability
PAGE 11
<PAGE> 12
(C) /X/ death
(D) / / other, as specified below:
-----
9. ROLLOVER & TRANSFER CONTRIBUTIONS (SELECT ONE):
A. /X/ Subject to policies, applied in a consistent
and nondiscriminatory manner, adopted by the Committee, each
Employee, who would otherwise be eligible to participate in
the Plan except that such Employee has not yet met the
eligibility requirements, and each Participant may make a
Rollover Contribution as described in Internal Revenue Code
Sections 402(a)(5), 403(a)(4) or 408(d)(3).
B. / / Subject to policies, applied in a consistent and
nondiscriminatory manner, adopted by the Committee, each
Participant may make a Rollover Contribution as described in
Internal Revenue Code Sections 402(a)(5), 403(a)(4)
or 408(d)(3).
C. / / No Employee shall make Rollover Contributions to the Plan.
10. DISTRIBUTIONS:
A. DISTRIBUTIONS UPON SEPARATION FROM SERVICE:
The Normal Form of Benefit under the Plan shall be a single lump
sum distribution, made /X/ (if selected) as soon as
administratively practical after receipt of a distribution
request from a Participant entitled to a distribution or / / (if
selected) upon the Participant's attainment of the Plan's Early
Retirement Date or the Plan's Normal Retirement Date, whichever
is earlier.
In addition to the Normal Form of Benefit, the Participant
shall be entitled to select from among the following optional
forms of benefit specified by the employer (select as many as
apply):
I /X/ Installment payments
II /X/ Such other forms as may be specified below:
annuity
B. IN-SERVICE DISTRIBUTIONS (SELECT AS MAY BE APPROPRIATE):
I / / There shall be no in-service distribution of
Participant account balances derived from Employer
Profit Sharing Contributions.
II /X/ Participants may request an in-service distribution
of their account balance attributable to Employer
Profit Sharing Contributions, for the following
reasons:
PAGE 12
<PAGE> 13
(A) /X/ For purposes of satisfying a financial
hardship, as determined in accordance
with the uniform nondiscriminatory policy
of the Committee;
(B) /X/ Attainment of age 59 1/2 by the Participant;
or
(C) /X/ Attainment of the Plan's Normal Retirement
Date by the Participant.
11. FORFEITURES:
A. Forfeitures of amounts attributable to Employer Profit Sharing
Contributions shall be reallocated as of:
I /X/ the last day of the Plan Year in which the Forfeiture
occurred.
II / / the last day of the Plan Year following the Plan Year
in which the Forfeiture occurred.
III / / the last day of the Plan Year in which the Participant
suffering the Forfeiture has incurred five consecutive
One Year Breaks in Service.
B. Forfeitures of Employer Profit Sharing Contributions shall be
reallocated as follows:
I / / Not applicable as Employer Profit Sharing
Contributions are always 100% vested and
nonforfeitable.
II /X/ Used first to pay the expenses of administering the
Plan, and then allocated pursuant to one of the
following two options (14):
III / / Forfeitures shall be allocated to Participant's
accounts in the same manner as Employer Profit Sharing
Contributions, Employer Matching Contributions,
Qualified Nonelective Contributions or Qualified
Matching Contributions, in the discretion of the
Employer, for the year in which the Forfeiture arose.
IV /X/ Forfeitures shall be applied to reduce the Employer
Profit Sharing Contributions, Employer Matching
Contributions, Qualified Nonelective Contributions
or Qualified Matching Contributions, in the discretion
of the Employer, for the Plan Year following the Plan
Year in which the Forfeiture arose.
- --------------
(14) If this option is selected, iii or iv must be selected to reallocate
Forfeitures of Employer Profit Sharing Contributions remaining after
expenses of administering the Plan have been paid.
PAGE 13
<PAGE> 14
12. LIMITATIONS ON ALLOCATIONS:
If the Employer maintains or ever maintained another qualified
retirement plan in which any Participant in this Plan is (or was)
a participant, or could possibly become a participant, the
Employer must complete the following:
A. If the Participant is covered under another qualified defined
contribution plan maintained by the Employer other than a
Master or Prototype Plan:
I / / The provisions of this Plan shall apply as if the
other plan were a Master or Prototype plan; or,
II / / The following provisions will be effective to limit
the total Annual Additions to the Maximum
Permissible Amount, and will properly reduce any
Excess Amounts, in a manner that precludes Employer
discretion:
_____
B. If the Participant is or ever has been a participant in a
qualified defined benefit plan maintained by the Employer,
the following provisions will be effective to satisfy the 1.0
limitation of Internal Revenue Code Section 415(e), in a manner
that precludes Employer discretion:
_____
13. INTERNAL REVENUE CODE Section 411(D)(6) PROTECTED BENEFITS:
/ / If selected, the Plan has Internal Revenue Code Section 411(d)
(6) Protected Benefits from a prior plan that this Plan amends,
that must be protected.
14. TOP-HEAVY PLAN PROVISIONS:
For each Plan Year in which the Plan is a Top-Heavy Plan the
following provisions will apply:
A. The percentage of a Participant's Employer Contribution Account
to be vested in him upon termination of employment prior to
retirement shall be:
I / / a percentage determined in accordance with the
following schedule:
YEARS OF SERVICE PERCENTAGE
---------------- ----------
Less than two 0
Two but less than three 20
Three but less than four 40
Four but less than five 60
Five but less than six 80
PAGE 14
<PAGE> 15
Six or more 100;
II / / 100% vesting after ___ (not to exceed 3) Years of
Service; provided, however, that Years of Service may
not exceed two (2) if the service requirement for
eligibility exceeds 1 year; or
III /X/ computed in accordance with the vesting schedule
selected by the Employer in Items B(7)(a) or
C(4)(d) as long as the benefits under the vesting
schedule in Items B(7)(a) or C(4)(d) vest at least as
rapidly as the two options specified in this Item
B(14)(a), above.
If the vesting schedule under the Plan shifts in or out of
the schedules above for any Plan Year because of the Plan's
Top-Heavy status, such shift is an amendment to the vesting
schedule and the election in Section 2.2 of the Basic Plan
Document applies.
B. For purposes of minimum Top-Heavy allocations, contributions
and forfeitures equal to 3% (not less than 3%) of each Non-key
Employee's Compensation will be allocated to each Participant's
Contribution Account when the Plan is a Top-Heavy Plan, except
as otherwise provided in the Basic Plan Document.
This Item 14 will not apply to any Participant to the extent the
Participant is covered under any other plan or plans of the
Employer and the Employer completes the following: (Insert the
name of the plan or plans which will meet the minimum allocation
or benefit requirement applicable to Top-Heavy plans.)
______
C. The Valuation Date as of which account balances or accrued
benefits are valued for purposes of computing the Top-Heavy
Ratio shall be the last day of each Plan Year.
D. If the Employer maintains or has ever maintained one or more
defined benefit plans which have covered or could cover a
Participant in this Plan, complete the following:
Present Value: For purposes of establishing Present Value to
compute the Top-Heavy Ratio, any benefit shall be
discounted only for mortality and interest based on the
following:
Interest rate _____ % Mortality table _____
15. INVESTMENTS:
A. Investments made pursuant to the investment direction provisions
of the Basic Plan Document shall be made into any appropriate
Investment
PAGE 15
<PAGE> 16
Fund as selected by the Employer. In addition, investment of
Plan assets is expressly authorized, as required by Revenue
Ruling 81-100, in each of the following common or collective
funds sponsored by the Trustee, or an affiliate of the
Trustee (15):
SOCIETY NATIONAL BANK EB MANAGED GUARANTEED INCOME CONTRACT
FUND, THE SOCIETY NATIONAL BANK MULTIPLE INVESTMENT TRUST FOR
EMPLOYEE BENEFIT TRUSTS, AND OTHER COLLECTIVE TRUSTS EXEMPT FROM
TAX UNDER IRC SECTION 501 AND AS DESCRIBED IN REV. RUL. 81-100.
B. / / If selected, an Employer Stock Fund shall be
available as an Investment Fund pursuant to the terms of the
Basic Plan Document.
/ / If selected, and an Employer Stock Fund is available
as an Investment Fund, Participants will have the
right, notwithstanding any other provisions of
the Plan, to direct that a portion of the Plan assets
held for their benefit and invested in the Employer
Stock Fund be diversified pursuant to the provisions
of Section 10.7(F) of the Basic Plan Document.
C. Participants may make changes of existing account balances and
future contributions from among the Investment Funds offered:
I /X/ Once during each business day that the Trustee and
the New York Stock Exchange are open.
II / / Once during each calendar month.
III / / Once during each quarter of the Plan Year.
IV / / Once during each rolling ___ day period.
D. / / If selected, the Participant shall be restricted in making
changes of existing account balances from any Investment
Fund, as specified in the terms or conditions of such
Investment Fund, and the Employer shall attach an addendum
specifying such restriction.
E. The Participant will designate into which Investment Funds all
contributions to their accounts are made, EXCEPT the following:
I / / Employer Profit Sharing Contributions
II / / Employer Mandatory Matching Contributions
III / / Employer Discretionary Matching Contributions
IV / / Qualified Matching Contributions
- --------------
(15) This Item is for use in identifying collective trust funds, which, pursuant
to Revenue Ruling 81-100 must be specifically referenced in the Plan.
Actual Investment Funds are referenced on the Investment Fund Designation
form attached to this Adoption Agreement.
PAGE 16
<PAGE> 17
V / / Qualified Nonelective Contributions
F. / / If selected, and to the extent a selection is made above,
the Employer shall attach an Investment Direction Addendum
specifying how the contributions so specified shall be
invested among the Investment Fund.
G. / / If selected, the Participant shall be restricted in the
use of the Employer Stock Fund as an Investment Fund for
designating the investment of contributions in the
Participant's account, as follows:
I / / The Participant may not direct the investment of
Plan assets held in their account into the
Employer Stock Fund.
II / / The Participant may direct _____% of the
following contributions into the Employer Stock
Fund:
(A) / / Employer Profit Sharing Contributions
(B) / / Employer Mandatory Matching
Contributions
(C) / / Employer Discretionary Matching
Contributions
(D) / / Qualified Matching Contributions
(E) / / Qualified Nonelective Contributions
III / / ____ % of the following contributions will be
invested into the Employer Stock Fund, with the
balance invested among:
(A) / / the other Investment Funds, including
the Employer Stock Fund
(B) / / the other Investment Funds, NOT
including the Employer Stock Fund
16. LOANS (SELECT ONE):
A. /X/ Loans may be made from the Plan in accordance with the Basic
Plan Document and such policies and procedures as the
Committee may adopt and apply on a consistent and
nondiscriminatory basis (16).
- --------------
(16) If this option is selected, the Employer must establish appropriate
procedures for implementation of the Plan's loan program.
PAGE 17
<PAGE> 18
B. / / No loans shall be made from the Plan.
17. TRUSTEE:
The Trustee of this Plan shall be Society Bank, Michigan (a bank or
trust company affiliated with KeyCorp within the meaning of Internal
Revenue Code Section 1504).
18. EFFECTIVE DATE ADDENDUM:
/ / If selected, the following provisions shall have the effective
dates (which are different from the date specified in Item B(1)):
_____
PAGE 18
<PAGE> 19
C. SECTION 401(K) PLAN PROVISIONS:
1. SERVICE:
An Eligible Employee shall be required to fulfill the following
eligibility service requirements in order to participate in the
Plan through a salary reduction agreement and for purposes of
receiving an allocation of Employer Matching Contributions:
A. /X/ The Employee must complete 1 Month of Service (not
more than 1 year) to be a Participant for purposes of
receiving allocations of Employer Matching Contributions.
B. /X/ The Employee must complete 1 Month of Service (not
more than 1 year) to be a Participant for purposes of
entering into a Salary Reduction Agreement and having
Employee Before Tax Contributions or Employee After Tax
Contributions contributed to the Plan on the Employee's
behalf.
2. EMPLOYEE SALARY DEFERRALS:
A. /X/ Participants shall be entitled to enter into a
Salary Reduction Agreement providing for Before Tax
Contributions to be made to the Plan.
I The minimum Before Tax Contribution shall be 1% of the
Participant's Compensation.
II The maximum Before Tax Contribution shall be 15% of the
Participant's Compensation.
B. / / Participants shall be entitled to enter into a Salary
Reduction Agreement providing for After Tax Contributions
to be made to the Plan.
I The minimum After Tax Contribution shall be ___ % of
the Participant's Compensation.
II The maximum After Tax Contribution shall be ___ % of
the Participant's Compensation.
III / / If selected, notwithstanding the above, a
Participant shall not be able to enter into a
Salary Reduction Agreement providing for After
Tax Contributions to be made to the Plan unless
the Participant has entered into a Salary
Reduction Agreement that provides for Before Tax
Contributions to be made to the Plan in an amount
PAGE 19
<PAGE> 20
of at least ____ % of the Participant's
Compensation.
C. / / If selected, a Participant shall be entitled to enter into a
Salary Reduction Agreement providing that any extraordinary
item of compensation, not yet payable (including bonuses), be
withheld from the Participant's Compensation and contributed
to the Plan as either a Before Tax Contribution, or After Tax
Contribution (provided such contributions are authorized
above, and to the extent that such contribution, when
aggregated with either the Participants other Before Tax
Contributions or After Tax Contributions do not exceed the
limitations specified above, on an annual basis).
3. CONTRIBUTION CHANGES:
A. Participants may increase or decrease the amount of
contributions made to the Plan pursuant to a Salary Reduction
Agreement once each:
I / / Plan Year
II / / Semi-annual period, based on the Plan Year
III /X/ Quarter, based on the Plan Year
IV / / Month
V / / Other, as specified below (provided that it is at
least once per year):
_____
B. Claims for returns of Excess Before Tax Contributions for the
Participant's preceding taxable year must be made in writing,
and submitted to the Committee by _____ (specify a date between
March 1 and April 15)(17).
4. EMPLOYER MATCHING CONTRIBUTIONS(18):
A. MANDATORY MATCHING CONTRIBUTIONS:
The Employer shall make contributions to the Plan, in an amount
as specified below:
- --------------
(17) The date specified is for the refund of amount deferred in excess of the
Code Section 402(g) limit (the $7,000 limit) for the Participant's taxable
year.
(18) The Employer shall have the right to designate all, or any portion of
Employer Matching Contributions as Qualified Matching Contributions, which
shall then be subject to the same vesting, distribution, and withdrawal
restrictions as Before Tax Contributions.
PAGE 20
<PAGE> 21
I / / An amount, equal to ___% of each Participant's Before
Tax Contributions, however, no match shall be made on
Participant's Before Tax Contributions in excess of
____ % (or $____) of the Participant's Compensation.
II / / An amount, equal to ____ % of each Participant's
After Tax Contributions, but not to exceed ____ % of
the Participant's Compensation, or $____.
III / / An amount, equal to ____ % of each Participant's
contributions made pursuant to a Salary Reduction
Agreement (including both Before Tax Contributions and
After Tax Contributions), but only if the
Participant has entered into a Salary Reduction
Agreement providing for Before Tax Contributions of at
least ____ % of the Participant's Compensation, but
not to exceed ____ % of the Participant's
Compensation, or $ _____.
IV / / An amount equal to the sum of the following:
(A) ____ % of the first ____ % of the Participant's
Compensation deferred pursuant to a Salary
Reduction Agreement; plus,
(B) ____ % of the next ____ % of the Participant's
Compensation deferred pursuant to a Salary
Reduction Agreement; plus,
(C) ____ % of the next ____ % of the Participant's
Compensation deferred pursuant to a
Salary Reduction Agreement, but not to
exceed ____ % of the Participant's
Compensation, or $ ____.
NOTE: The percentages specified above in (b) and (c)
cannot exceed the percentage specified in (a).
In addition, the percentage specified in (c)
cannot exceed the percentage specified in (b).
V / / An amount equal to $ ____, for each Participant who
enters into a Salary Reduction Agreement providing
for / / Before Tax Contributions, / / After Tax
Contributions, or / / either Before Tax Contributions
or After Tax Contributions (or a combination of both)
equal to or exceeding ____% of the Participant's
Compensation. Such contributions shall be made and
allocated:
(A) / / only during the first Plan Year the Plan is
in effect, or if a restatement, for the
first Plan Year beginning with, or
containing the restatement Effective Date.
PAGE 21
<PAGE> 22
(B) / / each Plan Year that a Participant has in
force a Salary Reduction Agreement meeting
the criteria specified above.
(C) / / during the first Plan Year that the
Participant participates through a Salary
Reduction Agreement meeting the criteria
specified above.
B. DISCRETIONARY MATCHING CONTRIBUTIONS:
/X/ The Employer shall make contributions to the Plan,
in an amount determined by resolution of the Board
of Directors on an annual basis. The Board
resolution shall provide for the percentage and/or
amount of Before Tax Contributions and/or After Tax
Contributions to be matched and the maximum
percentage and/or amount of Before Tax
Contributions and/or After Tax Contributions
eligible for matching.
C. ALLOCATION OF MATCHING CONTRIBUTIONS:
Employer Matching Contributions shall be allocated pursuant
to the terms of the Basic Plan Document, notwithstanding
the foregoing:
I /X/ A Participant who terminates before the end of the
period for which contributions are allocated shall
share in the allocation of Employer Matching
Contributions if termination of employment was the
result of (select all that apply):
(A) /X/ retirement
(B) /X/ disability
(C) /X/ death
II /X/ Employer Matching Contributions shall be allocated to
the accounts of Participants (select one):
(A) / / as of each pay period for which a
contribution was made pursuant to a Salary
Reduction Agreement.
(B) / / semi-monthly.
(C) /X/ as of the last day of the month preceding the
month in which the contribution was made.
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<PAGE> 23
(D) / / as of the last day of the Plan quarter
preceding the quarter in which the
contribution was made.
(E) / / as of the last day of the Plan Year.
III /X/ If selected, the Employer may make Employer Matching
Contributions without regard to current or accumulated
Net Profits of the Employer for the taxable year
ending with, or within the Plan Year (19).
D. The percentage of a Participant's Employer Matching
Contribution Account 20 (attributable to Employer Matching
Contributions) to be vested in him or her upon termination of
employment prior to attainment of the Plan's Normal Retirement
Date shall be (21):
COMPLETED YEARS OF SERVICE
1 2 3 4 5 6 7
---- ---- ---- ---- ---- ---- ----
I / / ___ 100%
II / / ___ ___ 100%
III / / ___ 20% 40% 60% 80% 100%
IV / / ___ ___ 20% 40% 60% 80% 100%
V / / 10% 20% 30% 40% 60% 80% 100%
VI /X/ 20% 40% 60% 80% 100%
VII / / ___ ___ ___ ___ ___ ___ 100%
VII / / Full and immediate vesting upon entry into the Plan
Notwithstanding anything to the contrary in the Plan,
the amount inserted in the blanks above shall not
exceed the limits specified in Code Section 411(a)(2).
E. Notwithstanding the provisions of this Item C(3)(e) of the
Adoption Agreement, a Participant shall become fully vested in
his Participant's Employer Matching Contribution Account if (22):
I / / the Participant's job is eliminated without the
Participant being offered a comparable position
elsewhere with the Employer.
- --------------
(19) Net Profits will never be required for the contribution of Before Tax
Contributions, After Tax Contributions, Qualified Nonelective Contributions
or Qualified Matching Contributions.
(20) Notwithstanding anything in the Adoption Agreement to the contrary, amounts
in a Participant's account attributable to Before Tax Contributions,
Qualified Nonelective Contributions, and Qualified Matching Contributions
shall be 100% vested and nonforfeitable at all time.
(21) Notwithstanding the selection made in this Item B(7)(b), a Participant
shall be fully vested in his or her Employer Contribution Accounts if the
Participant dies or becomes Disabled while in the employ of the Employer.
(22) The provisions of this section will be administered by the Employer on a
consistent and nondiscriminatory basis.
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<PAGE> 24
II / / for such reason as is described below:
____
F. CORRECTIVE CONTRIBUTIONS:
I /X/ If selected, the Employer shall be authorized to make
Qualified Matching Contributions, subject to the
terms of the Basic Plan Document, in an amount
determined by resolution of the Board of Directors on
an annual basis.
II / / If selected, the Employer shall be authorized to make
Qualified Nonelective Contributions, subject to the
terms of the Basic Plan Document, in an amount
determined by resolution of the Board of Directors on
an annual basis.
5. GAP EARNINGS:
/ / If selected, Gap Earnings, as defined in Section
3.2(G)(1) of the Basic Plan Document, will be calculated
for Excess Elective Deferrals, Excess Contributions and
Excess Aggregate Contributions, and refunded to the
Participant as provided for in Article III of the Basic
Plan Document.
6. FORFEITURES:
A. Forfeitures of amounts attributable to Employer Matching
Contributions shall be reallocated as of:
I /X/ the last day of the Plan Year in which the Forfeiture
occurred.
II / / the last day of the Plan Year following the Plan Year
in which the Forfeiture occurred.
III / / the last day of the Plan Year in which the Participant
suffering the Forfeiture has incurred the fifth
consecutive One Year Break in Service.
B. Forfeitures of Employer Matching Contributions shall be
reallocated as follows:
I / / Not applicable as Employer Matching Contributions are
always 100% vested and nonforfeitable.
II /X/ Used first to pay the expenses of administering the
Plan, and then allocated pursuant to one of the
following two options:
III / / Forfeitures shall be allocated to Participant's
accounts in the same manner as Employer Profit Sharing
Contributions, Employer Matching Contributions,
Quali-
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<PAGE> 25
fied Nonelective Contributions or Qualified
Matching Contributions, in the discretion of the
Employer, for the year in which the Forfeiture arose.
IV /X/ Forfeitures shall be applied to reduce the Employer
Profit Sharing Contributions, Employer Matching
Contributions, Qualified Nonelective Contributions or
Qualified Matching Contributions, in the discretion of
the Employer, for the Plan Year following the Plan
Year in which the Forfeiture arose.
C. Forfeitures of Excess Aggregate Contributions shall be:
I /X/ Applied to reduce Employer contributions for the Plan
Year in which the excess arose, but allocated as below,
to the extent the excess exceeds Employer contributions
for the Plan Year, or the Employer has already
contributed for such Plan Year.
II / / Allocated after all other forfeitures under the Plan:
(A) /X/ to the Matching Contribution account of each
Non-highly Compensated Participant who
made Before Tax Contributions or After
Tax Contributions in the ratio which each
such Participant's Compensation for the
Plan Year bears to the total Compensation
of all such Participants for the Plan
Year; or,
(B) / / to the Matching Contribution account of each
Non-highly Compensated Eligible Participant
in the ratio which each Eligible
Participant's Compensation for the Plan Year
bears to the total Compensation of all
Eligible Participants for the Plan Year.
7. IN-SERVICE DISTRIBUTIONS (SELECT AS MAY BE APPROPRIATE):
A. / / There shall be no in-service distribution of
Participant account balances derived from Before Tax
Contributions (including Qualified Nonelective Contributions
and Qualified Matching Contributions treated as Before Tax
Contributions under the terms of the Basic Plan Document), or
Employer Matching Contributions.
B. /X/ Participants may request an in-service distribution of their
account balance attributable to Employer Matching
Contributions, for the following reasons:
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<PAGE> 26
I /X/ For purposes of satisfying a financial hardship, as
determined in accordance with the uniform
nondiscriminatory policy of the Committee;
II /X/ Attainment of age 59 1/2 by the Participant; or
III /X/ Attainment of the Plan's Normal Retirement Date by
the Participant.
C. /X/ Participants may request an in-service distribution of their
account balance attributable to Employee Before Tax
Contributions, for the following reasons:
I / / For purposes of satisfying a financial hardship, as
determined by the facts and circumstances of an
Employee's situation, in accordance with the
provisions of Section 3.9 of the Basic Plan Document;
II /X/ For purposes of satisfying a financial hardship, using
the "safe harbor" provisions of Section 3.9 of the
Basic Plan Document.
III /X/ Attainment of age 59 1/2 by the Participant; or
IV /X/ Attainment of the Plan's Normal Retirement Date by
the Participant.
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<PAGE> 27
NOTICE: An adopting Employer who has ever maintained or who later adopts any
plan (including a welfare benefit fund, as defined in Section 419(e) of the
Code, which provides post-retirement medical benefits allocated to separate
accounts for key Employees, as defined in Section 419A(d)(3) of the Code, or an
individual medical account, as defined in Section 415(1)(2) of the Code) in
addition to this plan (other than in Paired Plan No. 1) may not rely on the
opinion letter issued by the National Office of the Internal Revenue Service as
evidence that this Plan is qualified under Section 401 of the Internal Revenue
Code. If the Employer who adopts or maintains multiple plans wishes to obtain
reliance that his or her plan(s) are qualified, application for a determination
letter should be made to the appropriate Key District Director of Internal
Revenue.
The Employer may not rely on the opinion letter issued by the National Office
of the Internal Revenue Service as evidence that this plan is qualified under
Section 401 of the Code unless the terms of the plan, as herein adopted or
amended, that pertain to the requirements of Sections 401(a)(4), 401(a)(17),
401(l), 401(a)(5), 410(b), and 414(s) of the Code, as amended by the Tax Reform
Act of 1986, or later laws, (a) are made effective retroactively to the first
day of the first plan year beginning after December 31, 1988 (or such later
date of which these requirements first become effective with respect to this
plan); or (b) are made effective no later than the first day on which the
Employer is no longer entitled, under regulations, to rely on a reasonable,
good faith interpretation of these requirements, and the prior provisions of
the plan constitute such an interpretation.
This Adoption Agreement may only be used in conjunction with Basic Plan
Document # 05.
This Plan document may only be used under the express authority of KeyCorp, its
subsidiaries and affiliates, and is not effective as completed until executed
by a duly authorized officer of KeyCorp, one of its subsidiaries or affiliates,
and approved by KeyCorp's counsel.
KeyCorp, as sponsor, may amend or discontinue this prototype plan document upon
proper notification to all adopting Employers pursuant to Revenue Ruling 89-13.
Failure to properly fill out an Adoption Agreement may result in
disqualification of the Plan, and adverse tax consequences to the Employer and
Plan Participants.
This Plan is sponsored by:
KeyCorp, on behalf of its operating subsidiaries, banking and trust
company affiliates
127 Public Square
Cleveland, Ohio 44114
(800) 982-3811
PAGE 27
<PAGE> 28
IN WITNESS WHEREOF, the Employer and the Trustee, by their respective duly
authorized officers, have caused this Adoption Agreement to be executed on this
23rd day of August, 1995.
EMPLOYER:
-----
By: David P. Gienapp
---------------------------------------------
Title: CFO VP Operations
------------------------------------------
TRUSTEE:
By: Charles S. Wright
---------------------------------------------
Title: Charles S. Wright
------------------------------------------
Vice President
Corporate Trust
and
By: Eric P. Helber
---------------------------------------------
Title: Sr. Employee Benefits Development Officer
------------------------------------------
APPROVED ON BEHALF OF TRUSTEE:
Initials: Date:
----------- -----------
PAGE 28
<PAGE> 29
INVESTMENT FUND DESIGNATION
Nematron Corporation (the "Named Fiduciary"), as an independent fiduciary
with respect to the Nematron Corporation 401(k) Plan and Trust (the "Plan"), an
employee pension benefit plan covered by the applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") and
its employees who participate therein (the "Participants"), hereby designates
the following investment funds from among the investment fund options available
for adopting employers of the PRISM(R) PROTOTYPE RETIREMENT PLAN & TRUST (as
defined in Section 10.7 of the Plan), available for selection by Participants
for the investment of Plan assets held for their benefit:
(a) EB MaGIC Fund
(b) Victory Investment Quality Bond Fund
(c) Fidelity Advisor Income and Growth Fund
(d) Victory Diversified Stock Fund
(e) Fidelity Advisor Growth Opportunities Fund
(f) Templeton Foreign Fund
(g) ------
(h) ------
/X/ In addition, if selected, an Employer Stock Fund will also be
available.
In making the selection of Investment Funds, the Named Fiduciary hereby
confirms and acknowledges that:
- The Named Fiduciary has had made available to it copies of the
prospectuses (to the extent required under applicable federal
securities law and regulation) for each investment fund
available for selection by adopting employers of the PRISM(R)
PROTOTYPE RETIREMENT PLAN & TRUST, and has received copies of
each such prospectus for the Investment Funds selected;
- The Named Fiduciary acknowledges that the Trustee of the Plan
may receive certain fees for services provide to, or on behalf
of an Investment Fund, or the sponsors or distributors
thereof, pursuant to plans of distribution adopted by the fund
under the provisions of Rule 12b-1 of the Investment Company
Act of 1940, and further acknowledges that (i) such fee, if
paid, is appropriate for services rendered to the fund, and
when aggregated with other fees for service payable to the
Trustee constitutes reasonable compensation for the Trustee's
services to the Plan; and (ii) the Plan will be able to redeem
its interest in any such Investment Fund on reasonably short
notice without penalty;
- The Named Fiduciary further acknowledges that it has selected
the Investment Funds on its determination, after due inquiry,
that the Investment Funds are appropriate vehicles for the
investment of Plan assets pursuant to the terms of the Plan,
considering all relevant facts and circumstances, including
but not limited to (i) the investment policy and philosophy of
the Named Fiduciary developed pursuant to ERISA Section 404;
(ii) the ability of Participants, using an appropriate mix of
Investment Funds, to diversify the
PAGE 29
<PAGE> 30
investment of Plan assets held for their benefit; and, (iii) the
ability of Participants to, utilizing an appropriate mix of
Investment Funds, to structure an investment portfolio within their
account in the Plan with risk and return characteristics within the
normal range of risk and return characteristics for individuals with
similar investment backgrounds, experience and expectations; and,
- The Named Fiduciary acknowledges that it has not relied on any
representations or recommendations from the Trustee or any of
its employees in selecting the Investment Funds.
The Trustee agrees to follow the Named Fiduciary's direction with respect to
offering the Investment Funds available for selection by the Participants in
the Plan for the investment of Plan assets held for their benefit:
IN WITNESS WHEREOF, the Employer, by its duly authorized representative,
has executed this document in connection with adoption of the Plan utilizing
the PRISM(R) PROTOTYPE RETIREMENT PLAN & TRUST documents, as provided by the
Trustee.
NAMED FIDUCIARY:
By: David P. Gienapp
-------------------------------
Title: CFO VP Operations
---------------------------
Seen and accepted by the Trustee, who shall provide the Investment Funds
selected by the Employer pursuant to the terms of this document, and pursuant
to the Plan.
TRUSTEE:
By: Charles S. Wright
-------------------------------
Title: Charles S. Wright
---------------------------
Vice President
Corporate Trust
PAGE 30
