FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
STEWART & STEVENSON SERVICES, INC.
(Exact name of registrant as specified in its charter)
TEXAS 74-1051605
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
STEWART & STEVENSON 401(k) SAVINGS PLAN
(Full title of Plan)
LAWRENCE E. WILSON
P.O. BOX 1637
HOUSTON, TEXAS 77251-1637
(Name and address of agent for service)
(713) 868-7700
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title Proposed Proposed
of Securities Amount to maximum offering maximum aggregate Amount of
to be registered be registered<F1> price per share<F2> offering price<F2> registration fee
_________________ ________________ ___________________ __________________ ________________
<S> <C> <C> <C> <C>
Common Stock,
without par value
per share 30,000 $ 47.875 $ 1,436,250 $ 495.26
<FN>
<F1> 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.
<F2> Pursuant to Rule 457(h) under the Securities Act of 1933, the offering price of shares of Common Stock to be purchased pursuant
to the Plan is based on the average of the high and low quoted transaction prices on March 25, 1994, for the purposes of calculating
the registration fee.
</TABLE>
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The Company's Annual Report on Form 10-K for the year ended January 31,
1993, Quarterly Report on Form 10-Q for the three months ended April 30, 1993,
Quarterly Report on Form 10-Q for the three months ended July 31, 1993,
Quarterly Report on Form 10-Q for the three months ended October 31, 1993 and
the description of Company's Common Stock included in its registration statement
on Form 8-A filed May 31, 1977, pursuant to Section 12(g) of the Securities
Exchange Act of 1934 are incorporated herein by reference. All documents
subsequently filed by the Company or the Plan pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934, prior to the filing of a
post-effective amendment which indicates that all securities registered
hereunder have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference herein and to be a part
hereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The consolidated financial statements and schedules of the Company
incorporated by reference in this Registration Statement from the Company's
Annual Report on Form 10-K for the year ended January 31, 1993, have been
audited by Arthur Andersen & Co., independent accountants, as indicated in their
report with respect thereto and are incorporated herein in reliance upon the
authority of said firm as experts in accounting and auditing. The validity of
the issuance of the shares of Common Stock registered hereby will be passed upon
by Lawrence E. Wilson, Vice President and General Counsel of the Company. Mr.
Wilson beneficially owns 459 shares and has options to purchase 26,000 shares of
Common Stock, of which options to purchase 9,500 shares may be exercised within
60 days.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 2.02-1 of the Texas Business Corporation Act provides that:
1) A corporation may indemnify any officer or director from and against
any judgments, penalties, fines, settlements and reasonable expenses actually
incurred by him in connection with a threatened, pending or completed action,
suit, investigation or other proceeding to which he is, was or is threatened to
be a party; provided that it is determined by the Board of Directors, a
committee thereof, special legal counsel or a majority of the stockholders that
such officer or director: (a) acted in good faith; (b) reasonably believed that
his conduct was in the best interest of the corporation or was, in some
circumstances, at least not opposed to the corporation's interest and (c) in a
criminal case, had no reasonable cause to believe his conduct was unlawful.
Such indemnity is limited to the reasonable expenses actually incurred in
matters as to which the officer or director is found liable to the corporation
or is found liable on the basis that a personal benefit was improperly received
by him. No indemnification is permitted with respect to any proceeding in which
the officer or director is found liable for willful or intentional misconduct in
the performance of his duty to the corporation.
2) A corporation shall indemnify a director against reasonable expenses
incurred by him in connection with a threatened, pending or completed action,
suit, investigation or other proceeding to which he is, was or was threatened to
be a party if he has been wholly successful in its defense.
3) A corporation may advance an officer or director the reasonable costs
of defending an action, suit, investigation or other proceeding in certain
cases.
4) A corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liability under the provisions of this Article.
The bylaws of the Company provide in relevant part:
"Section 6.9. Indemnification of Officers and Directors. The Corporation
shall indemnify any person against any judgment, penalty, fine, settlement and
reasonable expenses incurred by him in connection with any threatened, pending
or completed action, suit or proceeding in which such person is or is threatened
to be made a party because he is or was serving as an officer or director of the
Corporation or at the request of the Corporation as an officer, director,
partner, venturer, proprietor, trustee, employee, agent or other functionary of
another entity and (i) such person is wholly successful in the defense thereof,
or (ii) it is determined in the manner required by law that such person
conducted himself in good faith, reasonably believed that his conduct was in the
best interest of the Corporation and had no reasonable cause to believe that his
conduct was unlawful; provided, however, that no person shall be indemnified
with respect to any matter as to which such person is found liable to the
Corporation. Any such indemnification shall be reported in writing to the
stockholders of the Corporation on or before the notice or waiver of notice of
the next stockholders' meeting and in any event within twelve (12) months of the
indemnification. The right of indemnification under this Section 6.9 shall be
in addition to any other rights to which such persons may be entitled."
The Company has entered into indemnification agreements with each officer
and director under which the Company has agreed to indemnify such persons to the
fullest extent permitted by applicable laws and the bylaws of the Company. The
Company has also purchased a directors and officers liability and corporation
reimbursement policy in the amount of $10,000,000, which, subject to certain
exceptions, protects the officers and directors of the Company against
liabilities arising from any claim for breach of duty, neglect, error,
misstatement, misleading statement, omission or other act attempted, committed
or allegedly committed by reason of the director or officer acting in such
capacity.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4.1 Stewart & Stevenson 401(k) Savings Plan
5.1 Opinion of Lawrence E. Wilson, Vice President and General Counsel.
The Company undertakes to submit or has submitted the plan and any
amendment thereto to the Internal Revenue Service ("IRS") in a timely
manner and has made or will make all changes required by the IRS in
order to qualify the plan pursuant to Section 401 of the Internal
Revenue Code.
23.1 Consent of Arthur Andersen & Co.
23.2 Consent of Lawrence E. Wilson
ITEM 9. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(l) 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 (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Company
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934 and are incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination
of the offering.
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, 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.
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.
<PAGE>
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 Houston, and the State of Texas, on the 30th day of
March, 1994.
STEWART & STEVENSON SERVICES, INC.
By: /s/ Bob H. O'Neal
____________________
Bob H. O'Neal
President
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed on behalf of the Stewart & Stevenson 401(k) Savings
Plan, by each member of such plan's administrative committee, in the City of
Houston, and the State of Texas, on the 30th day of March, 1994.
STEWART & STEVENSON 401(k) SAVINGS PLAN
By: Stewart & Stevenson 401(k) Savings Plan
Administrative Committee
/s/ Bob H. O'Neal /s/ Robert L. Hargrave
______________________________ ______________________________
Bob H. O'Neal Robert L. Hargrave
Member Member
/s/ Donald E. Stevenson /s/ Jack T. Currie
______________________________ ______________________________
Donald E. Stevenson Jack T. Currie
Member Member
/s/ Bobby W. Brown /s/ David R. Stewart
______________________________ ______________________________
Bobby W. Brown David R. Stewart
Member Member
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities
indicated on the 30th day of March, 1994.
/s/ Bob H. O'Neal /s/ Robert L. Hargrave
______________________________ ______________________________
Bob H. O'Neal Robert L. Hargrave
Director and Principal Director, Principal Financial
Executive Officer Officer and Principal
Accounting Officer
/s/ C. Jim Stewart II /s/ J. Carsey Manning
______________________________ ______________________________
C. Jim Stewart II J. Carsey Manning
Director Director
/s/ Donald E. Stevenson /s/ Donald J. Atwood
______________________________ ______________________________
Donald E. Stevenson Donald J. Atwood
Director Director
/s/ Robert H. Parsley
______________________________ ______________________________
Robert H. Parsley James H. Elder, Jr.
Director Director
/s/ J.W. Lander, Jr.
______________________________ ______________________________
J.W. Lander, Jr. Jack T. Currie
Director Director
/s/ Robert S. Sullivan
______________________________
Robert S. Sullivan
Director
<PAGE>
EXHIBIT INDEX
4.1 Stewart & Stevenson Services, Inc. 1993 Nonofficer Employee Stock
Option Plan
5.1 Opinion of Lawrence E. Wilson, Vice President and General Counsel of
the Company
23.1 Consent of Arthur Andersen & Co.
23.2 Consent of Lawrence E. Wilson
STEWART & STEVENSON
401(k) SAVINGS PLAN
W I T N E S S E T H :
WHEREAS, STEWART & STEVENSON SERVICES, INC. (the "Company"), desiring to
aid its employees in making provision for their retirement, has decided to adopt
the following STEWART & STEVENSON 401(k) SAVINGS PLAN (the "Plan");
NOW THEREFORE, the Plan is hereby adopted as follows, effective as of
January 1, 1994:
I.
Definitions and Construction
1.1 Definitions. Where the following words and phrases appear in the
Plan, they shall have the respective meanings set forth below, unless their
context clearly indicates to the contrary.
(1) Accounts: The total of the amounts credited to a Member's Cash or Deferred
Account, Employer Contribution Account and Rollover Account.
(2) Act: The "Employee Retirement Income Security Act of 1974, as amended."
(3) Benefit Commencement Date: With respect to each Member or beneficiary, the
date such Member's or beneficiary's benefit is paid to him from the Trust Fund.
(4) Cash or Deferred Account: An individual account for each Member which is
credited with the Cash or Deferred Contributions made by the Employer on such
Member's behalf and the Employer Safe Harbor Contributions, if any, made on such
Member's behalf pursuant to Section 3.3 to satisfy the restrictions set forth in
Section 3.1(e) and which is credited (or debited) with such account's allocation
of net income (or net loss) of the Trust Fund.
(5) Cash or Deferred Contributions: Contributions made to the Plan by the
Employer on a Member's behalf in accordance with the Member's elections to defer
Compensation under the Plan's qualified cash or deferred arrangement as
described in Section 3.1.
(6) Code: The Internal Revenue Code of 1986, as amended.
(7) Commencement Date: The date on which an Employee first performs an Hour of
Service.
(8) Committee: The administrative committee appointed by the Directors to
administer the Plan.
(9) Company: Stewart & Stevenson Services, Inc.
(10) Compensation: The total of all wages, salaries, fees for professional
service and other amounts received in cash or in kind by a Member for services
actually rendered or labor performed for the Employer while a Member to the
extent such amounts are includable in gross income, subject to the following
adjustments and limitations:
(A) The following shall be excluded:
(i) reimbursements and other expense allowances;
(ii) cash and noncash fringe benefits;
(iii) moving expenses;
(iv) Employer contributions to or payments from this or any other
deferred compensation program whether such program is qualified under section
401(a) of the Code or nonqualified;
(v) welfare benefits;
(vi) amounts realized from the receipt or exercise of a stock option
which is not an incentive stock option within the meaning of section 422 of the
Code;
(vii) amounts realized at the time property described in section 83 of
the Code is freely transferable or no longer subject to a substantial risk of
forfeiture;
(viii) amounts realized as a result of an election described in section
83(b) of the Code;
(ix) any amount realized as a result of a disqualifying disposition
within the meaning of section 421(a) of the Code; and
(x) any other amounts which receive special tax benefits under the Code
but are not hereinafter included.
(B) The following shall be included:
(i) elective contributions made on a Member's behalf by the Employer
that are not includable in income under section 125, section 402(e)(3), section
402(h) or section 403(b) of the Code;
(ii) compensation deferred under an eligible deferred compensation plan
within the meaning of section 457(b) of the Code; and
(iii) employee contributions described in section 414(h) of the Code that
are picked up by the employing unit and are treated as employer contributions.
(C) The Compensation of any Member taken into account for purposes of the Plan
shall be limited to $150,000 for any Plan Year with such limitation to be:
(i) adjusted automatically to reflect any amendments to section
401(a)(17) of the Code and any cost-of-living increases authorized by section
401(a)(17) of the Code;
(ii) prorated for a Plan Year of less than twelve months and to the
extent otherwise required by applicable law; and
(iii) in the case of a Member who is either a five-percent owner of the
Employer (within the meaning of section 416(i)(1)(A)(iii) of the Code) or is one
of the ten most Highly Compensated Employees for the Plan Year and who has a
spouse and/or lineal descendants who are under the age of nineteen as of the end
of a Plan Year who receive Compensation during such Plan Year, prorated and
allocated among such Member, his spouse and/or lineal descendants under the age
of nineteen based on the Compensation for such Plan Year of each such
individual.
(11) Controlled Entity: Each corporation that is a member of a controlled group
of corporations, within the meaning of section 1563(a) (determined without
regard to sections 1563(a)(4) and 1563(e)(3)(C)) of the Code, of which the
Employer is a member, each trade or business (whether or not incorporated) with
which the Employer is under common control and each member of an affiliated
service group, within the meaning of section 414(m) of the Code, of which the
Employer is a member.
(12) Direct Rollover: A payment by the Plan to an Eligible Retirement Plan
specified by a Distributee.
(13) Directors: The Board of Directors of the Company.
(14) Distributee: A Member entitled to an Eligible Rollover Distribution. In
addition, a Member's surviving spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined in section 414(p)
of the Code, is a Distributee with regard to the interest of such spouse or
former spouse in an Eligible Rollover Distribution.
(15) Effective Date: January 1, 1994.
(16) Eligible Employee: Any Employee other than (A) an Employee whose terms and
conditions of employment are governed by a collective bargaining agreement
unless such agreement provides for his coverage under the Plan, (B) any
nonresident alien who has no United States source income, and (C) any Employee
who is a Leased Employee. Notwithstanding any provision in the Plan to the
contrary, no individual who is designated, compensated or otherwise classified
or treated by the Employer as an independent contractor shall be eligible to
become a Member of the Plan.
(17) Eligible Retirement Plan: An individual retirement account described in
section 408(a) of the Code, an individual retirement annuity described in
section 408(b) of the Code, an annuity plan described in section 403(a) of the
Code or a qualified trust described in section 401(a) of the Code, that accepts
a Distributee's Eligible Rollover Distribution. However, in the case of an
Eligible Rollover Distribution to a surviving spouse, an Eligible Retirement
Plan is an individual retirement account or individual retirement annuity.
(18) Eligible Rollover Distribution: Any distribution of all or any portion of
the Accounts of a 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 section 401(a)(9) of the Code; 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).
(19) Employee: Any individual employed by the Employer and any Leased Employee.
(20) Employer: The Company and any entity which has adopted the Plan pursuant
to the provisions of Article XVIII.
(21) Employer Contribution Account: An individual account for each Member which
is credited with the sum of (A) the Employer Matching Contributions made on such
Member's behalf and (B) the Employer Safe Harbor Contributions, if any, made on
such Member's behalf pursuant to Section 3.3 to satisfy the restrictions set
forth in Section 3.4 and which is credited (or debited) with such account's
allocation of net income (or net loss) of the Trust Fund.
(22) Employer Contributions: The total of Employer Matching Contributions and
Employer Safe Harbor Contributions.
(23) Employer Matching Contributions: Contributions made to the Plan by the
Employer pursuant to Section 3.2.
(24) Employer Safe Harbor Contributions: Contributions made to the Plan by the
Employer pursuant to Section 3.3.
(25) Fund: A portion of the Trust Fund which is invested in a specified manner.
(26) Highly Compensated Employee: Any Employee who performs services during the
Plan Year for which the determination of who is highly compensated is being made
(the "Determination Year") and who (A) is a five-percent owner of the Employer
(within the meaning of section 416(i)(1)(A)(iii) of the Code) at any time during
the Determination Year or the twelve-month period immediately preceding the
Determination Year (the "Look-Back Year"), (B) receives compensation (within the
meaning of section 415(c)(3) of the Code, including elective or salary reduction
contributions to a cafeteria plan, cash or deferred arrangement or tax-sheltered
annuity; "compensation" for purposes of this Paragraph) in excess of $75,000
(with such amount to be adjusted automatically to reflect any cost-of-living
adjustments authorized by section 414(q)(1) of the Code) during the Look-Back
Year, (C) receives compensation in excess of $50,000 (with such amount to be
adjusted automatically to reflect any cost-of-living adjustments authorized by
section 414(q)(1) of the Code) during the Look-Back Year and is a member of the
top 20% of Employees for the Look-Back Year (other than Employees described in
section 414(q)(8) of the Code) ranked on the basis of compensation received
during the year, (D) is an officer (within the meaning of section 416(i) of the
Code) during the Look-Back Year and receives compensation in the Look-Back Year
greater than 50% of the amount in effect under section 415(b)(1)(A) of the Code
for the calendar year in which the Look-Back Year begins, or (E) is described in
clauses (B), (C), or (D) above (after modifying such clauses to substitute the
Determination Year for the Look-Back Year) and is one of the 100 Employees who
receives the most compensation from the Employer or a Controlled Entity during
the Determination Year. For purposes of the preceding sentence, (i) no more
than 50 Employees (or, if lesser, the greater of three Employees or 10% of the
Employees) shall be treated as officers, (ii) if no officer has compensation in
excess of 50% of the amount in effect under section 415(b)(1)(A) of the Code,
then the highest-paid officer shall be deemed to be a Highly Compensated
Employee, (iii) all employers aggregated with the Employer under section 414(b),
(c), (m) or (o) of the Code shall be treated as a single employer, (iv) a former
Employee who had a separation year (generally, the Determination Year such
Employee separates from service) prior to the Determination Year and who was an
active Highly Compensated Employee for either such separation year or any
Determination Year ending on or after such Employee's fifty-fifth birthday shall
be deemed to be a Highly Compensated Employee and (v) the Committee may elect,
in accordance with the provisions of applicable Treasury Regulations, rulings
and notices, to make the Look-Back Year calculation for a Determination Year on
the basis of the calendar year ending with or within the applicable
Determination Year (or, in the case of a Determination Year that is shorter than
twelve months, the calendar year ending with or within the twelve-month period
ending with the end of the applicable Determination Year). Further, if any
individual is a member of the family of a five-percent owner or of a Highly
Compensated Employee in the group consisting of the ten Highly Compensated
Employees paid the greatest compensation during the year, then such individual
shall not be considered a separate employee and any compensation paid to such
individual (and any applicable contribution or benefit on behalf of such
individual) shall be treated as if it were paid to (or on behalf of) the five-
percent owner or Highly Compensated Employee. For purposes of the preceding
sentence, the term "family" means, with respect to any active or former
Employee, such Employee's spouse and lineal ascendants and descendants and the
spouses of such lineal ascendants and descendants. To the extent that the
provisions of this Paragraph are inconsistent or conflict with the definition of
a "highly compensated employee" set forth in section 414(q) of the Code and the
Treasury Regulations thereunder, the relevant terms and provisions of section
414(q) of the Code and the Treasury Regulations thereunder shall govern and
control.
(27) Hour of Service: Each hour for which an individual is directly or
indirectly paid, or entitled to payment, by the Employer or a Controlled Entity
for the performance of duties or for reasons other than the performance of
duties; provided, however, that no more than 501 Hours of Service shall be
credited to an individual on account of any continuous period during which he
performs no duties. Such Hours of Service shall be credited to the individual
for the computation period in which such duties were performed or in which
occurred the period during which no duties were performed. An Hour of Service
also includes each hour, not credited above, for which back pay, irrespective of
mitigation of damages, has been either awarded or agreed to by the Employer or a
Controlled Entity. These Hours of Service shall be credited to the individual
for the computation period to which the award or agreement pertains rather than
the computation period in which the award, agreement or payment is made.
The number of Hours of Service to be credited to an individual for any
computation period shall be governed by section 2530.200b-2(b) and (c) of the
Labor Department Regulations relating to the Act. Hours of Service shall also
include any hours required to be credited by federal law other than the Act or
the Code, but only under the conditions and to the extent so required by such
federal law.
The above notwithstanding, in determining Participation Service, Hours of
Service with the predecessor employers listed on Appendix A shall be treated as
Hours of Service with the Employer beginning on the date listed in Appendix A
for such employer.
(28) Leased Employee: Any person who is not an employee of the Employer or a
Controlled Entity but who performs services for the Employer or a Controlled
Entity pursuant to an agreement (oral or written) between the Employer or a
Controlled Entity and any leasing organization, provided that such person has
performed such services for the Employer or a Controlled Entity or for related
persons (within the meaning of section 144(a)(3) of the Code) on a substantially
full-time basis for a period of at least one year and such services are of a
type historically performed by the Employer's or Controlled Entity's employees
in the Employer's or Controlled Entity's field of business.
(29) Member: Any individual who has met the eligibility requirements for
participation in the Plan and elected to participate in the Plan.
(30) Normal Retirement Date: The date a Member attains the age of sixty-five.
(31) Participation Service: The measure of service used in determining an
Employee's eligibility to participate in the Plan as determined pursuant to
Section 2.2.
(32) Period of Service: Each period of an individual's Service commencing on
his Commencement Date or a Reemployment Commencement Date, if applicable, and
ending on a Severance from Service Date. Notwithstanding the foregoing, a
period during which an individual is absent from Service by reason of the
individual's pregnancy, the birth of a child of the individual, the placement of
a child with the individual in connection with the adoption of such child by the
individual, or for the purposes of caring for such child for the period
immediately following such birth or placement shall not constitute a Period of
Service between the first and second anniversary of the first date of such
absence. A Period of Service shall also include any period required to be
credited as a Period of Service by federal law other than the Act or the Code,
but only under the conditions and to the extent so required by such federal law.
(33) Period of Severance: Each period of time commencing on an individual's
Severance from Service Date and ending on a Reemployment Commencement Date.
(34) Plan: The Stewart & Stevenson 401(k) Savings Plan, as amended from time to
time.
(35) Plan Year: The twelve-consecutive month period commencing January 1 of
each year.
(36) Reemployment Commencement Date: The first date upon which an individual
performs an Hour of Service following a Severance from Service Date.
(37) Rollover Account: An individual account for an Eligible Employee which is
credited with the Rollover Contributions of such Employee and which is credited
(or debited) with such account's allocation of net income (or net loss) of the
Trust Fund.
(38) Rollover Contributions: Contributions made by an Eligible Employee
pursuant to Section 3.8.
(39) Service: The period of an individual's employment with the Employer or a
Controlled Entity and with the predecessor employers listed on Appendix A
beginning on the date listed on Appendix A for such employer.
(40) Severance from Service Date: The first date on which an individual
terminates his Service following his Commencement Date or a Reemployment
Commencement Date, if applicable. Notwithstanding the foregoing, the Severance
from Service Date of an individual who is absent from Service by reason of the
individual's pregnancy, the birth of a child of the individual, the placement of
a child with the individual in connection with the adoption of such child by the
individual, or for purposes of caring for such child for the period immediately
following such birth or placement shall be the second anniversary of the first
date of such absence.
(41) Trust: The trust(s) established under the Trust Agreement(s) to hold and
invest contributions made under the Plan, and income thereon, and from which the
Plan benefits will be distributed.
(42) Trust Agreement: The agreement(s) entered into between the Company and the
Trustee establishing the Trust, as such agreement(s) may be amended from time to
time.
(43) Trust Fund: The funds and properties held pursuant to the provisions of
the Trust Agreement for the use and benefit of the Members, together with all
income, profits and increments thereto.
(44) Trustee: The trustee or trustees qualified and acting under the Trust
Agreement at any time.
(45) Valuation Dates: Each and every business day.
(46) Vested Interest: The portion of a Member's Accounts which, pursuant to the
Plan, is nonforfeitable.
(47) Vesting Service: The measure of service used in determining a Member's
Vested Interest as determined pursuant to Section 8.3.
1.2 Number and Gender. Wherever appropriate herein, words used in the
singular shall be considered to include the plural and the plural to include the
singular. The masculine gender, where appearing in this Plan, shall be deemed
to include the feminine gender.
1.3 Headings. The headings of Articles and Sections herein are included
solely for convenience and if there is any conflict between such headings and
the text of the Plan, the text shall control.
II.
Participation
2.1 Eligibility. On or after the Effective Date, any Eligible Employee
shall be eligible to become a Member as of the first day of the first payroll
period commencing after the later of the date on which such Eligible Employee
has completed one year of Participation Service or the date on which such
Eligible Employee attained the age of twenty-one. Notwithstanding the
foregoing:
(a) an Eligible Employee who was a Member of the Plan, or who was eligible
to become a Member of the Plan, prior to a termination of employment shall be
eligible to remain or become a Member immediately upon his reemployment as an
Eligible Employee;
(b) an Employee who has completed one year of Participation Service and
has attained the age of twenty-one but who has not become a Member of the Plan
because he was not an Eligible Employee shall be eligible to become a Member of
the Plan immediately upon becoming an Eligible Employee as a result of a change
in his employment status;
(c) an Eligible Employee who had completed one year of Participation
Service, but who had not attained the age of twenty-one prior to a termination
of his employment, shall be eligible to become a Member immediately upon his
reemployment or his attainment of age twenty-one, whichever is later;
(d) an Eligible Employee who had met the requirements of this Section to
become a Member of the Plan but who terminated employment prior to the date upon
which he would have been eligible to become a Member shall be eligible to become
a Member immediately upon his reemployment; and
(e) a Member who ceases to be an Eligible Employee but remains an Employee
shall continue to be a Member but, on and after the date he ceases to be an
Eligible Employee, he shall no longer be entitled to defer Compensation
hereunder or share in allocations of Employer Contributions unless and until he
shall again become an Eligible Employee.
Membership in the Plan is voluntary. Any Eligible Employee may become a Member
upon the date on which he first becomes eligible by executing and filing with
the Committee, within the time limits prescribed by the Committee, the
Compensation reduction agreement prescribed by the Committee. Any Eligible
Employee who does not become a Member upon the date on which he first becomes
eligible may become a Member on the first day of any subsequent payroll period
by executing and filing with the Committee a Compensation reduction agreement
within the time limits prescribed by the Committee.
2.2 Participation Service. The completion of 1,000 or more Hours of
Service during the twelve-consecutive month period beginning with the
individual's Commencement Date or during any Plan Year commencing after such
individual's Commencement Date shall constitute one year of Participation
Service.
III.
Contributions
3.1 Cash or Deferred Contributions.
(a) A Member may elect to defer an integral percentage of from 1% to 15%
(or, with respect to a Member who is a Highly Compensated Employee, such lesser
percentage as may be prescribed from time to time by the Committee) of his
Compensation for a Plan Year by having the Employer contribute the amount so
deferred to the Plan. Compensation for a Plan Year not so deferred by such
election shall be received by such Member in cash. A Member's election to defer
an amount of his Compensation pursuant to this Section shall be made by
executing a Compensation reduction agreement pursuant to which the Member
authorizes the Employer to reduce his Compensation in the elected amount and the
Employer, in consideration thereof, agrees to contribute an equal amount to the
Plan. The reduction in a Member's Compensation for a Plan Year pursuant to his
election under a Compensation reduction agreement shall be effected by
Compensation reductions as of each payroll period within such Plan Year
following the effective date of such agreement. The amount of Compensation
elected to be deferred by a Member for a Plan Year pursuant to this Section
shall become a part of the Employer's Cash or Deferred Contributions for such
Plan Year.
(b) A Member's Compensation reduction agreement shall remain in force and
effect for all periods following the date of its execution until modified or
terminated or until such Member terminates his employment. A Member who has
elected to defer a portion of his Compensation may change his deferral election
percentage (within the percentage limits set forth in Paragraph (a) above),
effective as the first day of any payroll period by executing and delivering to
the Committee a new Compensation reduction agreement within the time period
prescribed by the Committee.
(c) A Member may cancel his Compensation reduction agreement, effective as
of the first day of any payroll period, by executing and delivering to the
Committee a Compensation reduction cancellation agreement in the form prescribed
by the Committee within the time period prescribed by the Committee. A Member
who so cancels his Compensation reduction agreement may resume Compensation
deferrals, effective as of the first day of any payroll period, by executing and
delivering to the Committee a new Compensation reduction agreement within the
time period prescribed by the Committee.
(d) In restriction of the Members' elections provided in Paragraphs (a),
(b) and (c) above, the Cash or Deferred Contributions and the elective deferrals
(within the meaning of section 402(g)(3) of the Code) under all other plans,
contracts and arrangements of the Employer on behalf of any Member for any
calendar year shall not exceed $7,000 (with such amount to be adjusted
automatically to reflect any cost-of-living adjustments authorized by section
402(g)(5) of the Code), reduced by any "excess deferrals" from other plans
allocated to the Plan by March 1 of the next following calendar year within the
meaning of, and pursuant to the provisions of, section 402(g)(2) of the Code.
(e) In further restriction of the Members' elections provided in
Paragraphs (a), (b) and (c) above, it is specifically provided that one of the
"actual deferral percentage" tests set forth in section 401(k)(3) of the Code
and the Treasury Regulations thereunder must be met in each Plan Year. If
multiple use of the alternative limitation (within the meaning of section
401(m)(9) of the Code and Treasury Regulation Section 1.401(m)-2(b)) occurs
during a Plan Year such multiple use shall be corrected in accordance with the
provisions of Treasury Regulation Section 1.401(m)-2(c); provided, however, that
if such multiple use is not eliminated by making Employer Safe Harbor
Contributions, then the "actual contribution percentages" of all Highly
Compensated Employees participating in the Plan shall be reduced, and the excess
contributions distributed, in accordance with the provisions of Section 3.7(c)
and applicable Treasury Regulations so that there is no such multiple use.
(f) If the restrictions set forth in Paragraph (e) above would not
otherwise be met for any Plan Year, the Compensation deferral elections made
pursuant to Paragraphs (a), (b) and (c) above of Members who are Highly
Compensated Employees may be reduced by the Committee on a temporary and
prospective basis in such manner as the Committee shall determine.
(g) As soon as administratively feasible following the end of each payroll
period, the Employer shall contribute, as Cash or Deferred Contributions with
respect to each Member, an amount equal to the amount of Compensation elected to
be deferred, pursuant to Paragraphs (a) and (b) above (as adjusted pursuant to
Paragraph (f) above), by such Member during such month. Such contributions, as
well as the contributions pursuant to Sections 3.2 and 3.3, shall be made
without regard to current or accumulated profits of the Employer.
Notwithstanding the foregoing, the Plan is intended to qualify as a profit
sharing plan for purposes of sections 401(a), 402, 412 and 417 of the Code.
3.2 Employer Matching Contributions. As soon as administratively feasible
following the end of each payroll period, the Employer shall contribute, as
Employer Matching Contributions, an amount which equals 25% of the Cash or
Deferred Contributions which were made pursuant to Section 3.1 on behalf of each
of the Members for such payroll period and which were not in excess of 6% of
each such Member's Compensation for such payroll period.
3.3 Employer Safe Harbor Contributions. In addition to the Employer
Matching Contributions made pursuant to Section 3.2, for each Plan Year, the
Employer, in its discretion, may contribute, as a "safe harbor contribution" for
such Plan Year, the amounts necessary to cause the Plan to satisfy the
restrictions set forth in Section 3.1(e) and Section 3.4, respectively. Amounts
contributed in order to satisfy the restrictions set forth in Section 3.1(e)
shall be considered "qualified matching contributions" (within the meaning of
Treasury Regulation Section 1.401(k)-1(g)(13)) for purposes of such Section, and
amounts contributed in order to satisfy the restrictions set forth in
Section 3.4 shall be considered Employer Matching Contributions for purposes of
such Section. Any amounts contributed pursuant to this Paragraph shall be
allocated in accordance with the provisions of Sections 4.2(c) and (d).
3.4 Restrictions on Employer Contributions. In restriction of the
Employer Contributions hereunder, it is specifically provided that one of the
"actual contribution percentage" tests set forth in section 401(m) of the Code
and the Treasury Regulations thereunder must be met in each Plan Year. The
Committee may elect, in accordance with applicable Treasury Regulations, to
treat Cash or Deferred Contributions to the Plan as Employer Matching
Contributions for purposes of meeting this requirement.
3.5 Payments to Trustee. Contributions under the Plan shall be paid by
the Employer directly to the Trustee as soon as practicable. On or about the
date of any such payment, the Committee shall be informed as to the amount of
such payment.
3.6 Return of Contributions. Anything to the contrary herein
notwithstanding, the establishment of the Plan and contributions made under the
Plan are contingent upon an initial determination by the Internal Revenue
Service that the Plan is, as of the Effective Date, a qualified Plan and Trust
within the meaning of sections 401(a) and 501(a) of the Code. If such a
determination is not received by the Employer after it has had an opportunity to
amend the Plan and Trust to so qualify, the Plan shall not be effective and the
Employer's contributions to the Plan, adjusted for any net earnings or losses of
the Trust Fund attributable thereto, shall be returned to the Employer by the
Trustee within one year after the date of denial of qualification of the Plan.
Moreover, the Employer's contributions to the Plan are contingent upon the
deductibility of such contributions under section 404 of the Code. To the
extent that a deduction for contributions is disallowed, such contributions
shall, upon the written demand of the Employer, be returned to the Employer by
the Trustee within one year after the date of disallowance, reduced by any net
losses of the Trust Fund attributable thereto but not increased by any net
earnings of the Trust Fund attributable thereto. Finally, if Employer
contributions are made under a mistake of fact, such contributions shall, upon
the written demand of the Employer, be returned to the Employer by the Trustee
within one year after the payment thereof, reduced by any net losses of the
Trust Fund attributable thereto but not increased by any net earnings of the
Trust Fund attributable thereto.
3.7 Disposition of Excess Deferrals and Excess Contributions.
(a) Anything to the contrary herein notwithstanding, any Cash or Deferred
Contributions to the Plan for a calendar year on behalf of a Member in excess of
the limitations set forth in Section 3.1(d) shall be distributed to such Member
not later than April 15 of the next following calendar year.
(b) Anything to the contrary herein notwithstanding, if, for any Plan
Year, the aggregate Cash or Deferred Contributions made by the Employer on
behalf of Highly Compensated Employees exceeds the maximum amount of Cash or
Deferred Contributions permitted on behalf of such Highly Compensated Employees
pursuant to Section 3.1(e) (determined by reducing Cash or Deferred
Contributions on behalf of Highly Compensated Employees in order of the "actual
deferral percentages" (as that term is defined in section 401(k)(3)(B) of the
Code and the Treasury Regulations thereunder) beginning with the highest of such
percentages), such excess shall be distributed to the Highly Compensated
Employees on whose behalf such excess was contributed before the end of the next
following Plan Year. For purposes of this Paragraph, the determination and
correction of excess Cash or Deferred Contributions of a Member whose actual
deferral percentage is determined under the family aggregation rules of sections
401(k) and 414(q) of the Code shall be made in accordance with the provisions of
such sections and the Treasury Regulations thereunder.
(c) Anything to the contrary herein notwithstanding, if, for any Plan
Year, the aggregate Employer Contributions allocated to the Accounts of Highly
Compensated Employees exceeds the maximum amount of such Employer Contributions
permitted on behalf of such Highly Compensated Employees pursuant to Section 3.4
(determined by reducing Employer Contributions made on behalf of Highly
Compensated Employees in order of the "contribution percentages" (as that term
is defined in section 401(m)(3) of the Code and Treasury Regulations thereunder)
beginning with the highest of such percentages), such excess shall be
distributed to the Highly Compensated Employees on whose behalf such excess
contributions were made (or, if such excess contributions are forfeitable, they
shall be forfeited) before the end of the next following Plan Year. For
purposes of this Paragraph, the determination and correction of excess Employer
Contributions allocated to the Account of a Member whose contribution percentage
is determined under the family aggregation rules of sections 401(m) and 414(q)
of the Code shall be made in accordance with the provisions of such sections and
the Treasury Regulations thereunder. Employer Contributions shall be forfeited
pursuant to this Paragraph only if distribution of all vested Employer
Contributions is insufficient to meet the requirements of this Paragraph. If
vested Employer Contributions are distributed to a Member and nonvested Employer
Contributions remain credited to such Member's Accounts, such nonvested Employer
Contributions shall vest at the same rate as if such distribution had not been
made.
(d) In coordinating the disposition of excess deferrals and excess
contributions pursuant to this Section, such excess deferrals and excess
contributions shall be disposed of in the following order:
(1) first, excess deferrals described in Paragraph (a) above shall be
distributed;
(2) second, excess Cash or Deferred Contributions described in
Paragraph (b) above which are not considered in determining the amount of
Employer Matching Contributions pursuant to Section 3.2 shall be distributed;
(3) third, excess Cash or Deferred Contributions described in
Paragraph (b) above which are considered in determining the amount of Employer
Matching Contributions pursuant to Section 3.2 shall be distributed, and the
Employer Matching Contributions with respect to such Cash or Deferred
Contributions shall be forfeited; and
(4) fourth, excess Employer Contributions described in Paragraph (c)
above shall be distributed (or, if forfeitable, forfeited).
(e) Any distribution or forfeiture of excess deferrals or excess
contributions pursuant to the provisions of this Section shall be adjusted for
income or loss allocated thereto in accordance with the provisions of Section
4.3 through the Valuation Date next preceding the date of the distribution or
forfeiture. Any forfeiture pursuant to the provisions of this Section shall be
considered to have occurred on the date which is 2 1/2 months after the end of
the Plan Year.
3.8 Rollover Contributions.
(a) Qualified indirect Rollover Contributions may be made to the Plan by
any Eligible Employee of amounts received by such Eligible Employee from an
individual retirement account or annuity or from another qualified plan, but
only if such Rollover Contributions are made pursuant to and in accordance with
applicable provisions of the Code. Any Eligible Employee desiring to effect
indirect Rollover Contributions must execute and file with the Committee the
form prescribed by the Committee for such purpose. An indirect Rollover
Contribution shall be credited to the Rollover Account of the Eligible Employee
making such Rollover Contribution as of the last day of the month in which the
Rollover Contribution is made.
(b) Qualified direct Rollover Contributions may be made to the Plan by any
Eligible Employee of amounts which are eligible rollover distributions within
the meaning of section 402(f)(2)(A) of the Code from an employees' trust
described in section 401(a) of the Code which is exempt from tax under section
501(a) of the Code, but only if such Rollover Contributions are made pursuant to
and in accordance with applicable provisions of the Code. Any Eligible Employee
desiring to effect direct Rollover Contributions to the Plan must execute and
file with the Committee the form prescribed by the Committee for such purposes.
Direct Rollover Contributions to the Plan must be in cash and may be effectuated
only by wire transfer directed to the Trustee or by issuance of a check made
payable to the Trustee which is negotiable only by the Trustee and which
identifies the Eligible Employee for whose benefit the Rollover Contribution is
being made. A direct Rollover Contribution shall be credited to the Rollover
Account of the Eligible Employee for whose benefit such Rollover Contribution is
being made as of the last day of the month in which the Rollover Contribution is
made.
(c) An Eligible Employee who has made a Rollover Contribution in
accordance with this Section who has not otherwise become a Member of the Plan
shall become a Member coincident with such Rollover Contribution; provided,
however, that such Member shall not have a right to defer Compensation or have
Employer Contributions made on his behalf until he has otherwise satisfied the
requirements imposed by Article II.
IV.
Allocations
4.1 Suspense Account. All contributions, forfeitures and the net income
(or net loss) of the Trust Fund shall be held in suspense until allocated to the
Accounts of the Members as provided herein.
4.2 Allocation of Contributions and Forfeitures.
(a) Cash or Deferred Contributions made by the Employer on a Member's
behalf pursuant to Section 3.1 shall be allocated to such Member's Cash or
Deferred Account as of the date received by the Trustee.
(b) Employer Matching Contributions for each Plan Year pursuant to Section
3.2 shall be allocated as of the date received by the Trustee to the Employer
Contribution Accounts of the Members for whom such contributions were made.
(c) The Employer Safe Harbor Contribution, if any, made pursuant to
Section 3.3 for a Plan Year in order to satisfy the restrictions set forth in
Section 3.1(e) shall be allocated in the following priority as of the last day
of such Plan Year to the Cash or Deferred Accounts of Members who (1) received
an allocation of Cash or Deferred Contributions for such Plan Year and (2) were
not Highly Compensated Employees for such Plan Year (each such Member
individually referred to as an "Eligible Member" for purposes of this
Paragraph):
(A) first, subject to the limitations set forth in Section 4.4, to
the Cash or Deferred Account of the Eligible Member who received the least
amount of Compensation for such Plan Year, then to the Cash or Deferred Account
of the Eligible Member who received the next smallest amount of Compensation for
such Plan Year and continuing in such manner until the restrictions set forth in
Section 3.1(e) have been satisfied; and
(B) next, the remaining portion, if any, of such Employer Safe Harbor
Contribution shall be allocated to the Cash or Deferred Accounts of the Eligible
Members who did not receive an allocation pursuant to clause (A) above based on
the ratio of each such Eligible Member's Cash or Deferred Contributions for such
Plan Year to the total of all such Eligible Members' Cash or Deferred
Contributions for such Plan Year.
(d) The Employer Safe Harbor Contribution, if any, made pursuant to
Section 3.3 for a Plan Year in order to satisfy the restrictions set forth in
Section 3.4 shall be allocated in the following priority as of the last day of
such Plan Year to the Employer Contribution Accounts of Members who (1) received
an allocation of Employer Matching Contributions for such Plan Year and (2) were
not Highly Compensated Employees for such Plan Year (each such Member
individually referred to as an "Eligible Member" for purposes of this
Paragraph):
(A) first, subject to the limitations set forth in Section 4.4, to
the Employer Contribution Account of the Eligible Member who received the least
amount of Compensation for such Plan Year, then to the Employer Contribution
Account of the Eligible Member who received the next smallest amount of
Compensation for such Plan Year and continuing in such manner until the
restrictions set forth in Section 3.4 have been satisfied; and
(B) next, the remaining portion, if any, of such Employer Safe Harbor
Contribution shall be allocated to the Employer Contribution Accounts of the
Eligible Members who did not receive an allocation pursuant to clause (A) above
based on the ratio of each such Eligible Member's share of Employer Matching
Contributions for such Plan Year to the total of all such Eligible Members'
share of Employer Matching Contributions for such Plan Year.
(e) Any amounts which are forfeited under any provision hereof during a
Plan Year shall be applied to reduce Employer Matching Contributions next coming
due.
4.3 Allocation of Net Income or Loss and Changes in Value Among Accounts.
As of each Valuation Date, the Trustee shall determine the fair market value of
the assets of each Fund and the net income (or net loss) of each Fund since the
next preceding Valuation Date. Any net increase (or net decrease) in fair
market value and any net income (or net loss) of each Fund since the next
preceding Valuation Date shall be allocated among the Accounts invested in such
Fund in proportion to the value of such Accounts on the next preceding Valuation
Date.
4.4 Limitations.
(a) For purposes of this Section, the following terms and phrases shall
have these respective meanings:
(1) "Annual Additions" of a Member for any Limitation Year shall mean
the total of (A) the Employer Contributions and Cash or Deferred Contributions
allocated to such Member's Accounts for such year and (B) amounts referred to in
sections 415(l)(1) and 419A(d)(2) of the Code.
(2) "Limitation Year" shall mean the Plan Year.
(3) "Maximum Annual Additions" of a Member for any Limitation Year
shall mean the lesser of (A) $30,000 (or, if greater, one-fourth of the dollar
limitation in effect under section 415(b)(1)(A) of the Code for such Limitation
Year) or (B) 25% of such Member's compensation, within the meaning of section
415(c)(3) of the Code and applicable Treasury Regulations thereunder, during
such year except that the limitation in this Clause (B) shall not apply to any
contribution for medical benefits (within the meaning of section 419A(f)(2) of
the Code) after separation from service with the Employer or a Controlled Entity
which is otherwise treated as an Annual Addition or to any amount otherwise
treated as an Annual Addition under section 415(l)(1) of the Code.
(b) Contrary Plan provisions notwithstanding, in no event shall the Annual
Additions credited to a Member's Accounts for any Limitation Year exceed the
Maximum Annual Additions for such Member for such year. If as a result of a
reasonable error in estimating a Member's compensation, a reasonable error in
determining the amount of elective deferrals (within the meaning of section
402(g)(3) of the Code) that may be made with respect to any individual under the
limits of section 415 of the Code, or because of other limited facts and
circumstances, the Annual Additions which would be credited to a Member's
Accounts for a Limitation Year would nonetheless exceed the Maximum Annual
Additions for such Member for such year, the excess Annual Additions which, but
for this Section, would have been allocated to such Member's Accounts shall be
disposed of as follows:
(1) first, any such excess Annual Additions in the form of Cash or
Deferred Contributions on behalf of such Member which would not have been
considered in determining the amount of Employer Contributions allocated to such
Member's Accounts pursuant to Section 4.2 shall be distributed to such Member,
adjusted for income or loss allocated thereto;
(2) next, any such excess Annual Additions in the form of Cash or
Deferred Contributions on behalf of such Member which would have been considered
in determining the amount of Employer Contributions allocated to such Member's
Accounts pursuant to Section 4.2 shall be distributed to such Member, adjusted
for income or loss allocated thereto, and the Employer Contributions which would
have been allocated to such Member's Accounts based upon such distributed Cash
or Deferred Contributions shall, to the extent such amounts would have otherwise
been allocated to such Member's Accounts, be allocated to a suspense account and
shall be held there until used to reduce future Employer Matching Contributions
in the same manner as a forfeiture.
(c) If a suspense account is in existence at any time during a Limitation
Year pursuant to this Section, it will not participate in allocations of the net
income (or net loss) of the Trust Fund.
(d) For purposes of determining whether the Annual Additions under this
Plan exceed the limitations herein provided, all defined contribution plans of
the Employer are to be treated as one defined contribution plan. In addition,
all defined contribution plans of Controlled Entities shall be aggregated for
this purpose. For purposes of this Section only, a "Controlled Entity" shall be
determined by application of a more than 50% control standard in lieu of an 80%
control standard for purposes of section 1563(a)(1) of the Code. If the Annual
Additions credited to a Member's Accounts for any Limitation Year under this
Plan plus the additions credited on his behalf under other defined contribution
plans required to be aggregated pursuant to this Paragraph would exceed the
Maximum Annual Additions for such Member for such Limitation Year, the Annual
Additions under this Plan and the additions under such other plans shall be
reduced on a pro rata basis and allocated, reallocated or returned in accordance
with applicable plan provisions regarding Annual Additions in excess of Maximum
Annual Additions.
(e) In the case of a Member who also participated in a defined benefit
plan of the Employer or a Controlled Entity (as defined in Paragraph (d) above),
the Employer shall reduce the Annual Additions credited to the Accounts of such
Member under this Plan pursuant to the provisions of Paragraph (b) to the extent
necessary to prevent the limitation set forth in section 415(e) of the Code from
being exceeded. Notwithstanding the foregoing, the provisions of this Paragraph
shall only apply if such defined benefit plan does not provide for a reduction
of benefits thereunder to ensure that the limitation set forth in section 415(e)
of the Code is not exceeded.
(f) If the limitations set forth in this Section would not otherwise be
met for any Limitation Year, the Compensation deferral elections pursuant to
Section 3.1 of affected Members may be reduced by the Committee on a temporary
and prospective basis in such manner as the Committee shall determine.
V.
Investment of Funds
5.1 Investment Designation. Each Member shall designate, in accordance
with the procedures established from time to time by the Committee, the manner
in which the amounts allocated to his Accounts shall be invested from among the
Funds made available from time to time by the Committee. A Member may designate
one of such Funds for all the amounts allocated to his Accounts or he may split
the investment of the amounts allocated to his Accounts between such Funds in
such increments as the Committee may prescribe. If a Member fails to make a
proper designation, then his Accounts shall be invested in the Fund or Funds
designated by the Committee from time to time in a uniform and nondiscriminatory
manner.
5.2 Change of Investment Designation. A Member may change his investment
designation for future contributions to be allocated to his Accounts. Any such
change shall be made in accordance with the procedures established by the
Committee, and the frequency of such changes may be limited by the Committee. A
Member may elect to convert his investment designation with respect to the
amounts already allocated to his Accounts. Any such conversion shall be made in
accordance with the procedures established by the Committee, and the frequency
of such conversions may be limited by the Committee.
VI.
Retirement Benefits
A Member who terminates his employment on or after his Normal Retirement
Date shall be entitled to a benefit pursuant to Article X equal to the value of
his Accounts as of his Benefit Commencement Date. Any contribution allocable to
a Member's Accounts after his Benefit Commencement Date shall be distributed as
soon as administratively feasible after the date that such contribution is paid
to the Trust Fund.
VII.
Disability Benefits
7.1 Disability Benefits. In the event a Member's employment is terminated
due to total and permanent disability, as of the Committee's certification
thereof, such Member shall be entitled to a benefit pursuant to Article X equal
to the value of his Accounts as of his Benefit Commencement Date. Any
contribution allocable to a Member's Accounts after his Benefit Commencement
Date shall be distributed as soon as administratively feasible after the date
that such contribution is paid to the Trust Fund.
7.2 Total and Permanent Disability Determined. The Committee shall
determine whether a Member has become totally and permanently disabled and shall
so notify such Member within sixty days thereafter. A Member shall be
considered totally and permanently disabled if such disability is so certified
by the Committee and, unless waived by the Committee as unnecessary, supported
by a written medical opinion that such Member will be permanently incapable of
performing his job for physical or mental reasons.
VIII.
Severance Benefits
8.1 No Benefits Unless Herein Set Forth. Except as set forth in this
Article, upon termination of employment of a Member prior to his Normal
Retirement Date for any reason other than total and permanent disability or
death, such Member shall acquire no right to any benefit from the Plan or the
Trust Fund.
8.2 Severance Benefit.
(a) Each Member whose employment is terminated prior to his Normal
Retirement Date for any reason other than total and permanent disability or
death shall be entitled to a benefit pursuant to Article X equal to the value of
his Vested Interest in his Accounts as of his Benefit Commencement Date. A
Member's Vested Interest in any contribution allocable to his Accounts after his
Benefit Commencement Date shall be distributed as soon as administratively
feasible after the date that such contribution is paid to the Trust Fund, and
any portion of such contribution which is not vested shall be forfeited and
applied in accordance with the provisions of Section 8.4(e).
(b) For purposes of this Section, a Member's Vested Interest in his
Employer Contribution Account shall be determined by such Member's years of
Vesting Service in accordance with the following schedule:
Years of Vesting Service Vested Interest
________________________ _______________
Less than 3 years 0%
3 years 20%
4 years 40%
5 years 60%
6 years 80%
7 years or more 100%
(c) Paragraph (b) above notwithstanding, a Member shall have a 100% Vested
Interest in his Employer Contribution Account upon attainment of his Normal
Retirement Date.
(d) A Member shall have a 100% Vested Interest in his Cash or Deferred
Account and Rollover Account at all times.
8.3 Vesting Service.
(a) Subject to the remaining Paragraphs of this Section, an individual
shall be credited with Vesting Service in an amount equal to his aggregate
Periods of Service whether or not such Periods of Service are completed
consecutively.
(b) Paragraph (a) above notwithstanding, if an individual terminates his
Service (other than during a leave of absence) and subsequently resumes his
Service, if his Reemployment Commencement Date is within twelve months of his
Severance from Service Date, such Period of Severance shall be treated as a
Period of Service for purposes of Paragraph (a) above.
(c) Paragraph (a) above notwithstanding, if an individual terminates his
Service during a leave of absence and subsequently resumes his Service, if his
Reemployment Commencement Date is within twelve months of the beginning of such
leave of absence, such Period of Severance shall be treated as a Period of
Service for purposes of Paragraph (a) above.
(d) In the case of a Member who incurs a Period of Severance of five
consecutive years, such Member's years of Vesting Service completed after such
Period of Severance shall be disregarded in determining such Member's Vested
Interest in any Plan benefits derived from Employer Contributions on his behalf
prior to such Period of Severance.
(e) In the case of an individual who terminates employment at a time when
he does not have any Vested Interest in his Employer Contribution Account and
who then incurs a Period of Severance which equals or exceeds the greater of (1)
five years or (2) the individual's Period of Service before such Period of
Severance, such individual's Period of Service completed before such Period of
Severance shall be disregarded in determining his years of Vesting Service.
8.4 Forfeitures.
(a) With respect to a Member who terminates employment with the Employer
with a Vested Interest in his Employer Contribution Account which is less than
100% and either is not entitled to a distribution from the Plan or receives a
distribution from the Plan in the form of a lump sum distribution by the close
of the second Plan Year following the Plan Year in which his employment is
terminated, the forfeitable amount credited to the terminated Member's Employer
Contribution Account as of the Valuation Date next preceding his Benefit
Commencement Date shall become a forfeiture as of his Benefit Commencement Date
(or as of his date of termination of employment if no amount is payable from the
Trust Fund on behalf of such Member with such Member being considered to have
received a distribution of zero dollars on his date of termination of
employment).
(b) In the event that an amount credited to a terminated Member's Employer
Contribution Account becomes a forfeiture pursuant to Paragraph (a) above, the
terminated Member shall, upon subsequent reemployment with the Employer prior to
incurring a Period of Severance of five consecutive years, have the forfeited
amount restored to such Member's Employer Contribution Account, unadjusted by
any subsequent gains or losses of the Trust Fund; provided, however, that such
restoration shall be made only if such Member repays in cash an amount equal to
the amount so distributed to him pursuant to Paragraph (a) above within five
years from the date the Member is reemployed. A reemployed Member who was not
entitled to a distribution from the Plan on his date of termination of
employment shall be considered to have repaid a distribution of zero dollars on
the date of his reemployment. Any such restoration shall be provided by an
additional Employer Contribution (which shall be made without regard to current
or accumulated earnings and profits) and shall be made as soon as
administratively feasible after the date of repayment.
(c) With respect to a Member whose Vested Interest in his Employer
Contribution Account is less than 100% and who makes a withdrawal from or
receives a termination distribution from his Employer Contribution Account other
than a lump sum distribution by the close of the second Plan Year following the
Plan Year in which his employment is terminated, any amount remaining in his
Employer Contribution Account shall continue to be maintained as a separate
account. At any relevant time, such Member's nonforfeitable portion of his
separate account shall be determined in accordance with the following formula:
X=P(AB + (R x D)) - (R x D)
For purposes of applying the formula: X is the nonforfeitable portion of such
separate account at the relevant time; P is the Member's Vested Interest in his
Employer Contribution Account at the relevant time; AB is the balance of such
separate account at the relevant time; R is the ratio of the balance of such
separate account at the relevant time to the balance of such separate account
after the withdrawal or distribution; and D is the amount of the withdrawal or
distribution. For all other purposes of the Plan, a Member's separate account
shall be treated as an Employer Contribution Account. Upon his incurring a
Period of Severance of five consecutive years, the forfeitable portion of a
terminated Member's separate account and Employer Contribution Account shall be
forfeited.
(d) With respect to a Member who terminates employment with the Employer
with a Vested Interest in his Employer Contribution Account less than 100% and
who is not otherwise subject to the forfeiture provisions of Paragraph (a) or
Paragraph (c) above, the forfeitable portion of his Employer Contribution
Account shall be forfeited when the terminated Member completes a Period of
Severance of five consecutive years.
(e) Any forfeitures occurring pursuant to Paragraphs (a), (c) or (d) above
shall be held in a suspense account and shall be applied to reduce Employer
Matching Contributions next coming due. For all Valuation Dates prior to such
application, forfeited amounts held in the suspense account shall receive
allocations of net income (or net loss) and changes in value pursuant to Section
4.3.
(f) Distributions of benefits described in this Section shall be subject
to the time of payment requirements of Section 10.1.
IX.
Death Benefits
9.1 Death Benefits. Upon the death of a Member while an Employee, the
Member's designated beneficiary shall be entitled to a benefit pursuant to
Article X equal to the value of his Accounts as of his Benefit Commencement
Date. Any contribution allocable to a Member's Accounts after his Benefit
Commencement Date shall be distributed as soon as administratively feasible
after the date that such contribution is paid to the Trust Fund.
9.2 Designation of Beneficiaries.
(a) Each Member shall have the right to designate the beneficiary or
beneficiaries to receive payment of his Article X benefit in the event of his
death. Each such designation shall be made by executing the beneficiary
designation form prescribed by the Committee and filing same with the Committee.
Any such designation may be changed at any time by execution of a new
designation in accordance with this Section. Notwithstanding the foregoing, if
a Member who is married on the date of his death designates other than his
surviving spouse as his beneficiary, such designation shall not be effective
unless (1) such spouse has consented thereto in writing and such consent (A)
acknowledges the effect of such specific designation, (B) either consents to the
specific designated beneficiary (which designation may not subsequently be
changed by the Member without spousal consent) or expressly permits such
designation by the Member without the requirement of further consent by the
spouse, and (C) is witnessed by a Plan representative (other than the Member) or
a notary public or (2) such consent may not be obtained because such spouse
cannot be located or because of other circumstances described by applicable
Treasury Regulations. Any such consent by such surviving spouse shall be
irrevocable.
(b) If no such designation is on file with the Committee at the time of
the death of the Member or such designation is not effective for any reason as
determined by the Committee, the designated beneficiary or beneficiaries to
receive such Article X benefit shall be as follows:
(1) If a Member leaves a surviving spouse, his Article X benefit
shall be paid to such surviving spouse;
(2) If a Member leaves no surviving spouse, his Article X benefit
shall be paid to such Member's executor or administrator or to his heirs at law
if there is no administration of such Member's estate.
(c) Notwithstanding the preceding provisions of this Section and to the
extent not prohibited by state or federal law, if a Member is divorced from his
spouse and at the time of his death is not remarried to the person from whom he
was divorced, any designation of such divorced spouse as his beneficiary under
the Plan filed prior to the divorce shall be null and void unless the contrary
is expressly stated in writing filed with the Committee by the Member. In the
event the designation of a divorced spouse as a Member's beneficiary is null and
void pursuant to the provisions of this Paragraph, such Member's designated
beneficiary shall be determined in accordance with the provisions of Paragraph
(b) above as if such divorced spouse did not survive the Member.
X.
Time and Manner of Payment of Benefits
10.1 Time and Manner of Payment.
(a) Subject to the provisions of the remaining Paragraphs of this Section,
payment of a Member's benefit hereunder shall be made as soon as
administratively feasible after the date the Member or his beneficiary becomes
entitled to a benefit pursuant to Article VI, VII, VIII or IX.
(b) Unless (1) the Member has attained age sixty-five or died, (2) the
Member consents to a distribution pursuant to Paragraph (a) within the ninety
day period ending on the date payment of his benefit hereunder is to commence
pursuant to Paragraph (a), or (3) the Member's Vested Interest in his Accounts
is not in excess of $3,500, the Member's Benefit Commencement Date shall be
deferred until after the earlier of the date the Member attains age sixty-five
or the Member's date of death, except that the Member may elect an earlier
Benefit Commencement Date by written notice to the Committee. No less than
thirty days and no more than ninety days before his Benefit Commencement Date,
the Committee shall inform the Member of his right to defer his Benefit
Commencement Date and shall describe the Member's election rights pursuant to
Paragraph (h) below. If a distribution is one to which sections 401(a)(11) and
417 of the Code do not apply, such distribution may commence less than thirty
days after the notice required under section 1.411(a)-11(c) of the Treasury
Regulations is given, provided that (i) the plan administrator clearly informs
the Member that the Member has a right to a period of at least thirty days after
receiving the notice to consider the decision of whether or not to elect a
distribution (and, if applicable, a particular distribution option), and (ii)
the Member, after receiving the notice, affirmatively elects a distribution.
(c) A Member's Benefit Commencement Date shall in no event be later than
the sixtieth day following the close of the Plan Year during which such Member
attains, or would have attained, his Normal Retirement Date or, if later,
terminates his employment with the Employer or a Controlled Entity.
(d) A Member's Benefit Commencement Date shall be in compliance with the
provisions of section 401(a)(9) of the Code and applicable Treasury Regulations
thereunder and shall in no event be later than:
(1) In the case of a Member who attains the age of seventy and one-
half prior to January 1, 1988 and is not a "five-percent owner" (within the
meaning of section 416(i) of the Code) at any time during the five Plan Year
period ending in the calendar year in which such Member attains the age of
seventy and one-half, April 1st following the later of (A) the calendar year in
which such Member attains the age of seventy and one-half, or (B) the calendar
year in which such Member terminates his employment with the Employer, or if
such Member becomes a "five-percent owner" following the end of such five Plan
Year period, April 1st of the calendar year following the calendar year in which
such Member becomes a "five-percent owner;"
(2) In the case of a Member who does not attain the age of seventy
and one-half prior to January 1, 1988 or is a "five-percent owner" (within the
meaning of section 416(i) of the Code) at any time during the five Plan Year
period ending in the calendar year in which such Member attains the age of
seventy and one-half, April 1st of the calendar year following the calendar year
in which such Member attains the age of seventy and one-half; and
(3) In the case of a benefit payable pursuant to Article IX, the last
day of the five-year period following the death of such Member.
The preceding provisions of this Section notwithstanding, a Member may not elect
to defer the receipt of his benefit hereunder to the extent that such deferral
creates a death benefit that is more than incidental within the meaning of
section 401(a)(9)(G) of the Code and applicable Treasury Regulations thereunder.
(e) Subject to the provisions of Paragraphs (c) and (d) above, a Member's
Benefit Commencement Date shall not occur before the expiration of the latest to
end of the following periods:
(1) a period during which the Member is employed by the Employer or
any Controlled Entity; or
(2) a period during which the Member is employed by a purchaser of
assets from the Employer or a Controlled Entity if such Member transfers to
employment with such purchaser in connection with such purchase.
(f) Subject to the provisions of Paragraph (g) below, a Member's benefit
shall be provided from the Member's Account balance(s) under the Plan and shall
be paid in cash in one lump sum on the Member's Benefit Commencement Date. The
Member's benefit shall be paid to the Member unless the Member has died prior to
his Benefit Commencement Date, in which case the Member's benefit shall be paid
to his beneficiary designated in accordance with the provisions of Section 9.2.
(g) Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a Distributee's election under this Paragraph, a Distributee may
elect, at the time and in the manner prescribed by the Committee, to have any
portion of an Eligible Rollover Distribution (other than any portion
attributable to the offset of an outstanding loan balance of such Member
pursuant to the Plan's loan procedure) paid directly to an Eligible Retirement
Plan specified by the Distributee in a Direct Rollover. The provisions of this
Paragraph shall apply only if the Member's Eligible Rollover Distribution is
$200 or more or, if less than 100% of the Member's Eligible Rollover
Distribution is to be a Direct Rollover, the Direct Rollover is $500 or more.
Prior to any Direct Rollover pursuant to this Paragraph, the Distributee shall
furnish the Committee with a statement from the plan, account or annuity to
which the benefit is to be transferred that it is, or is intended to be, an
Eligible Retirement Plan.
10.2 Unclaimed Benefits. In the case of a benefit payable on behalf of a
Member, if the Committee is unable to locate the Member or beneficiary to whom
such benefit is payable, upon the Committee's determination thereof, such
benefit shall be forfeited, held in a suspense account and applied to reduce
Employer Matching Contributions next coming due. For all Valuation Dates prior
to such application, forfeited amounts held in the suspense account shall
participate in allocations of the net income (or net loss) and changes in value
of the Trust Fund. Notwithstanding the foregoing, if subsequent to any such
forfeiture the Member or beneficiary to whom such benefit is payable makes a
valid claim for such benefit, such forfeited benefit shall be restored to the
Plan in the manner provided in Section 8.4(b).
10.3 Claims Review. In any case in which a claim for Plan benefits of a
Member or beneficiary is denied or modified, the Committee shall furnish written
notice to the claimant within ninety days (or within 180 days if additional
information requested by the Committee necessitates an extension of the ninety-
day period), which notice shall:
(a) state the specific reason or reasons for the denial or modification;
(b) provide specific reference to pertinent Plan provisions on which the
denial or modification is based;
(c) provide a description of any additional material or information
necessary for the Member, his beneficiary or representative to perfect the claim
and an explanation of why such material or information is necessary; and
(d) explain the Plan's claim review procedure as contained herein.
In the event a claim for Plan benefits is denied or modified, if the Member, his
beneficiary or a representative of such Member or beneficiary desires to have
such denial or modification reviewed, he must, within sixty days following
receipt of the notice of such denial or modification, submit a written request
for review by the Committee of its initial decision. In connection with such
request, the Member, his beneficiary or the representative of such Member or
beneficiary may review any pertinent documents upon which such denial or
modification was based and may submit issues and comments in writing. Within
sixty days following such request for review the Committee shall, after
providing a full and fair review, render its final decision in writing to the
Member, his beneficiary or the representative of such Member or beneficiary
stating specific reasons for such decision and making specific references to
pertinent Plan provisions upon which the decision is based. If special
circumstances require an extension of such sixty-day period, the Committee's
decision shall be rendered as soon as possible, but not later than 120 days
after receipt of the request for review. If an extension of time for review is
required, written notice of the extension shall be furnished to the Member,
beneficiary or the representative of such Member or beneficiary prior to the
commencement of the extension period.
XI.
Withdrawals and Loans
11.1 Withdrawals.
(a) A Member who has attained age fifty-nine and one-half may withdraw
from his Accounts an amount not exceeding the then value of his Vested Interest
in such Accounts. Such withdrawal shall come pro rata from the Member's
Accounts.
(b) A Member who has a financial hardship, as determined by the Committee,
and who has made all available withdrawals pursuant to Paragraph (a) above and
pursuant to the provisions of any other plans of the Employer and any Controlled
Entities of which he is a member and who has obtained all available loans
pursuant to Section 11.2 and pursuant to the provisions of any other plans of
the Employer and any Controlled Entities of which he is a member may withdraw
from his Accounts amounts not to exceed the lesser of (1) his Vested Interest in
such Accounts or (2) the amount determined by the Committee as being available
for withdrawal pursuant to this Paragraph. Such withdrawal shall come pro rata
from the Member's Accounts. For purposes of this Paragraph, financial hardship
means the immediate and heavy financial needs of the Member. A withdrawal based
upon financial hardship pursuant to this Paragraph shall not exceed the amount
required to meet the immediate financial need created by the hardship and not
reasonably available from other resources of the Member. The amount required to
meet the immediate financial need may include any amounts necessary to pay any
federal, state or local income taxes or penalties reasonably anticipated to
result from the distribution. The determination of the existence of a Member's
financial hardship and the amount required to be distributed to meet the need
created by the hardship shall be made by the Committee. A withdrawal shall be
deemed to be made on account of an immediate and heavy financial need of a
Member if the withdrawal is for:
(1) expenses of medical care described in section 213(d) of the Code
previously incurred by the Member, the Member's spouse or any dependents of the
Member (as defined in section 152 of the Code) or necessary for those persons to
obtain medical care described in section 213(d) of the Code and not reimbursed
or reimbursable by insurance;
(2) costs directly related to the purchase of a principal residence
of the Member (excluding mortgage payments);
(3) payment of tuition and related educational fees for the next
twelve months of post-secondary education for the Member, or the Member's
spouse, children or dependents (as defined in section 152 of the Code);
(4) payments necessary to prevent the eviction of the Member from his
principal residence or foreclosure on the mortgage of the Member's principal
residence; or
(5) such other financial needs which the Commissioner of Internal
Revenue may deem to be immediate and heavy financial needs through the
publication of revenue rulings, notices and other documents of general
applicability.
The decision of the Committee shall be final and binding, provided that all
Members similarly situated shall be treated in a uniform and nondiscriminatory
manner. The above notwithstanding, withdrawals under this Paragraph from a
Member's Cash or Deferred Account shall be limited to the sum of the Member's
Cash or Deferred Contributions to the Plan, less any previous withdrawals of
such amounts. A Member who makes a withdrawal from his Cash or Deferred Account
under this Paragraph may not again make elective contributions or employee
contributions to the Plan or any other qualified or nonqualified plan of the
Employer or any Controlled Entity for a period of twelve months following such
withdrawal. Further, such Member may not make elective contributions under the
Plan or any other plan maintained by the Employer or any Controlled Entity for
such Member's taxable year immediately following the taxable year of the
withdrawal in excess of the applicable limit set forth in Section 3.1(d) for
such next taxable year less the amount of such Member's elective contributions
for the taxable year of the withdrawal.
(f) All withdrawals pursuant to this Section shall be made by executing
and timely filing with the Committee the form prescribed by the Committee.
Notwithstanding the provisions of this Section, no withdrawal shall be made from
an Account to the extent such Account has been pledged to secure a loan under
Section 11.2. If a Member's Account from which a withdrawal is made is invested
in more than one Fund, the withdrawal shall be made pro rata from each Fund in
which such Account is invested. All withdrawals under this Section shall be
paid in cash. Any withdrawal hereunder shall be subject to the benefit transfer
election described in Section 10.1(g).
(g) This Section shall not be applicable to a Member following termination
of employment and the amounts in such Member's Accounts shall be distributable
in accordance with the provisions of Article X.
11.2 Loans.
(a) Upon application by (1) any Member who is an Employee or (2) any
Member no longer employed by the Employer, a beneficiary of a deceased Member or
an alternate payee under a qualified domestic relations order who retains an
Account balance under the Plan and who is a party-in-interest, as that term is
defined in section 3(14) of the Act, as to the Plan (an individual who is
eligible to apply for a loan under this Section being hereinafter referred to as
a "Member" for purposes of this Section), the Committee may in its discretion
direct the Trustee to make a loan or loans to such Member, not to exceed 50% of
the then value of the Member's Vested Interest in his Accounts. Such loans
shall be made pursuant to the provisions of the Committee's written loan
procedure, which procedure is hereby incorporated by reference as a part of the
Plan.
(b) Paragraph (a) above to the contrary notwithstanding, the amount of a
loan made to a Member under this Section shall not exceed an amount equal to the
difference between:
(1) the lesser of $50,000 (reduced by the excess, if any, of (A) the
highest outstanding balance of loans from the Plan during the one-year period
ending on the day before the date on which the loan is made, over (B) the
outstanding balance of loans from the Plan on the date on which the loan is
made) or one-half of the present value of the Member's total nonforfeitable
accrued benefit under all qualified plans of the Employer or a Controlled
Entity; minus
(2) the total outstanding loan balance of the Member under all other
loans from all qualified plans of the Employer or a Controlled Entity.
XII.
Administration of the Plan
12.1 Appointment of Committee. The general administration of the Plan
shall be vested in the Committee appointed by the Directors under the Stewart &
Stevenson Pension Plan in accordance with the procedures for the Committee
established pursuant to such plan. For purposes of the Act, the Committee shall
be the Plan "administrator" and shall be the "named fiduciary" with respect to
the general administration of the Plan (except as to the investment of the
assets of the Trust Fund).
12.2 Self-Interest of Members. No member of the Committee shall have any
right to vote or decide upon any matter relating solely to himself under the
Plan or to vote in any case in which his individual right to claim any benefit
under the Plan is particularly involved. In any case in which a Committee
member is so disqualified to act and the remaining members cannot agree, the
Directors shall appoint a temporary substitute member to exercise all the powers
of the disqualified member concerning the matter in which he is disqualified.
12.3 Compensation and Bonding. The members of the Committee shall not
receive compensation with respect to their services for the Committee. To the
extent required by the Act or other applicable law, or required by the Company,
members of the Committee shall furnish bond or security for the performance of
their duties hereunder.
12.4 Committee Powers and Duties. The Committee shall supervise the
administration and enforcement of the Plan according to the terms and provisions
hereof and shall have all powers necessary to accomplish these purposes,
including, but not by way of limitation, the right, power, authority and duty:
(a) to make rules, regulations and bylaws for the administration of the
Plan which are not inconsistent with the terms and provisions hereof, provided
such rules, regulations and bylaws are evidenced in writing and copies thereof
are delivered to the Trustee and to the Company;
(b) to construe all terms, provisions, conditions and limitations of the
Plan. In all cases, the construction necessary for the Plan to qualify under
the applicable provisions of the Code shall control;
(c) to correct any defect or supply any omission or reconcile any
inconsistency that may appear in the Plan, in such manner and to such extent as
it shall deem expedient to effectuate the purposes of the Plan;
(d) to employ and compensate such accountants, attorneys, investment
advisors and other agents and employees as the Committee may deem necessary or
advisable in the proper and efficient administration of the Plan;
(e) to determine all questions relating to eligibility;
(f) to prescribe procedures to be followed by distributees in obtaining
benefits hereunder;
(g) to prepare, file and distribute, in such manner as the Committee
determines to be appropriate, such information and material as is required by
the reporting and disclosure requirements of the Act;
(h) to make a determination as to the right of any person to a benefit
under the Plan;
(i) to select the Funds to be made available to Members for the investment
of amounts in their Accounts pursuant to Article V;
(j) to receive and review reports from the Trustee as to the financial
condition of the Trust Fund, including its receipts and disbursements; and
(k) to instruct the Trustee as to the loans to Members pursuant to the
provisions of Section 11.2.
12.5 Employer to Supply Information. The Employer shall supply full and
timely information to the Committee relating to the Compensation of all Members,
their ages, their retirement, death or other cause for termination of employment
and such other pertinent facts as the Committee may require. The Employer shall
advise the Trustee of such of the foregoing facts as are deemed necessary for
the Trustee to carry out the Trustee's duties under the Plan. When making a
determination in connection with the Plan, the Committee shall be entitled to
rely upon the aforesaid information furnished by the Employer.
12.6 Indemnification. The Company shall indemnify and hold harmless each
member of the Committee against any and all expenses and liabilities arising out
of his or her administrative functions or fiduciary responsibilities, including
any expenses and liabilities which are caused by or result from an act or
omission constituting the negligence of such individual in the performance of
such functions or responsibilities, but excluding expenses and liabilities which
are caused by or result from such individual's own gross negligence or willful
misconduct. Expenses against which such person shall be indemnified hereunder
include, without limitation, the amounts of any settlement or judgment, costs,
counsel fees and related charges reasonably incurred in connection with a claim
asserted or a proceeding brought or settlement thereof.
XIII.
Administration of Funds
13.1 Payment of Expenses. All expenses incident to the administration of
the Plan and Trust, including but not limited to, legal, accounting, Trustee
fees, expenses of the Committee and the cost of furnishing any bond or security
required of the Committee, shall be paid by the Trustee from the Trust Fund and,
until paid, shall constitute a claim against the Trust Fund which is paramount
to the claims of Members and beneficiaries; provided, however, that (a) the
obligation of the Trustee to pay such expenses from the Trust Fund shall cease
to exist to the extent such expenses are paid by the Employer and (b) in the
event the Trustee's compensation is to be paid, pursuant to this Section, from
the Trust Fund, any individual serving as Trustee who already receives full-time
pay from an employer or an association of employers whose employees are
participants in the Plan, or from an employee organization whose members are
participants in the Plan, shall not receive any additional compensation for
serving as Trustee. This Section shall be deemed a part of any contract to
provide for expenses of Plan and Trust administration, whether or not the
signatory to such contract is, as a matter of convenience, the Employer.
13.2 Trust Fund Property. All income, profits, recoveries, contributions,
forfeitures and any and all moneys, securities and properties of any kind at any
time received or held by the Trustee hereunder shall be held for investment
purposes as a commingled Trust Fund. The Committee shall maintain Accounts in
the name of each Member, but the maintenance of an Account designated as the
Account of a Member shall not mean that such Member shall have a greater or
lesser interest than that due him by operation of the Plan and shall not be
considered as segregating any funds or property from any other funds or property
contained in the commingled fund. No Member shall have any title to any
specific asset in the Trust Fund.
13.3 Distributions from Members' Accounts. Distributions from a Member's
Accounts shall be made by the Trustee only if, when, and in the amount and
manner directed in writing by the Committee. Any distribution made to a Member
or for his benefit shall be debited to such Member's Account or Accounts. All
distributions hereunder shall be made in cash except as otherwise specifically
provided herein.
XIV.
Trustee
As a means of administering the assets of the Plan, the Company has entered into
a Trust Agreement with Merrill Lynch Trust Company, as Trustee.
XV.
Fiduciary Provisions
15.1 Article Controls. This Article shall control over any contrary,
inconsistent or ambiguous provisions contained in the Plan.
15.2 General Allocation of Duties. Each fiduciary with respect to the Plan
shall have only those specific powers, duties, responsibilities and obligations
as are specifically given him under the Plan. The Directors shall have the sole
authority to appoint and remove the Trustee or members of the Committee. Except
as otherwise specifically provided, the Committee shall have the sole
responsibility for the administration of the Plan, which responsibility is
specifically described herein. It is intended under the Plan that each
fiduciary shall be responsible for the proper exercise of his own powers,
duties, responsibilities and obligations hereunder and shall not be responsible
for any act or failure to act of another fiduciary except to the extent provided
by law or as specifically provided herein.
15.3 Fiduciary Duty. Each fiduciary under the Plan, including but not
limited to the Committee and the Trustee as "named fiduciaries," shall discharge
his duties and responsibilities with respect to the Plan:
(a) solely in the interest of the Members, for the exclusive purpose of
providing benefits to Members, and their beneficiaries, and defraying reasonable
expenses of administering the Plan;
(b) 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 a like character and
with like aims;
(c) by diversifying the investments of the Plan so as to minimize the risk
of large losses, unless under the circumstances it is prudent not to do so; and
(d) in accordance with the documents and instruments governing the Plan
insofar as such documents and instruments are consistent with applicable law.
No fiduciary shall cause the Plan or Trust Fund to enter into a "prohibited
transaction" as provided in section 4975 of the Code.
15.4 Delegation and Allocation. The Committee may appoint subcommittees,
individuals or any other agents as it deems advisable and may delegate to any of
such appointees any or all of the powers and duties of the Committee. Such
appointment and delegation must be in writing, specifying the powers or duties
being delegated, and must be accepted in writing by the delegatee. Upon such
appointment, delegation and acceptance, the delegating Committee members shall
have no liability for the acts or omissions of any such delegatee, as long as
the delegating Committee members do not violate their fiduciary responsibility
in making or continuing such delegation.
15.5 Investment Manager. The Committee may, in its sole discretion,
appoint an "investment manager," with power to manage, acquire or dispose of any
asset of the Plan and to direct the Trustee in this regard, so long as:
(a) the investment manager is (1) registered as an investment adviser
under the Investment Advisers Act of 1940, (2) a bank, as defined in the
Investment Advisers Act of 1940, or (3) an insurance company qualified to do
business under the laws of more than one state; and
(b) such investment manager acknowledges in writing that he is a fiduciary
with respect to the Plan.
Upon such appointment, the Committee shall not be liable for the acts of the
investment manager, as long as the Committee members do not violate their
fiduciary responsibility in making or continuing such appointment. The Trustee
shall follow the directions of such investment manager and shall not be liable
for the acts or omissions of such investment manager. The investment manager
may be removed by the Committee at any time and within its sole discretion.
XVI.
Amendments
16.1 Right to Amend. Subject to Section 16.2 and any other limitations
contained in the Act or the Code, the Directors may from time to time amend, in
whole or in part, any or all of the provisions of the Plan on behalf of the
Company and all Employers. Specifically, but not by way of limitation, the
Directors may make any amendment necessary to acquire and maintain a qualified
status for the Plan under the Code, whether or not retroactive.
16.2 Limitation on Amendments. No amendment of the Plan may be made which
would vest in the Employer, directly or indirectly, any interest in or control
of the Trust Fund. No amendment may be made which would vary the Plan's
exclusive purpose of providing benefits to Members, and their beneficiaries, and
defraying reasonable expenses of administering the Plan or which would permit
the diversion of any part of the Trust Fund from that exclusive purpose. No
amendment shall be made which would reduce any then nonforfeitable interest of a
Member. No amendment shall increase the duties or responsibilities of the
Trustee unless the Trustee consents thereto in writing.
XVII.
Discontinuance of Contributions
Termination and Merger or Consolidation
17.1 Right to Terminate. The Employer has established the Plan with the
bona fide intention and expectation that from year to year it will be able to,
and will deem it advisable to, make its contributions as herein provided.
However, the Directors realize that circumstances not now foreseen, or
circumstances beyond its control, may make it either impossible or inadvisable
to continue to make its contributions to the Trustee. Therefore, the Directors
shall have the power to discontinue contributions to the Plan, terminate the
Plan or partially terminate the Plan at any time hereafter. Each member of the
Committee and the Trustee shall be notified of such discontinuance, termination
or partial termination.
17.2 Administration of Plan in Case of Discontinuance of Contributions or
Termination.
(a) If the Plan is amended so as to permanently discontinue Employer
contributions, or if Employer contributions are in fact permanently
discontinued, the Vested Interest of each affected Member shall be 100%,
effective as of the date of discontinuance. In case of discontinuance, the
Committee shall remain in existence and all other provisions of the Plan which
are necessary, in the opinion of the Committee, for equitable operation of the
Plan shall remain in force.
(b) If the Plan is terminated or partially terminated, the Vested Interest
of each affected Member shall be 100%, effective as of the termination date.
Unless the Plan is otherwise amended prior to dissolution of the Company, the
Plan shall terminate as of the date of dissolution of the Company.
(c) Upon discontinuance or termination, any previously unallocated
contributions, forfeitures and net income (or net loss) shall be allocated among
the Accounts of the Members on such date of discontinuance or termination
according to the provisions of Article IV. Thereafter, the net income (or net
loss) shall continue to be allocated to the Accounts of the Members until the
balances are distributed.
(d) In the case of a total or partial termination of the Plan, and in the
absence of a Plan amendment to the contrary, the Trustee shall pay the balance
of the Accounts of a Member for whom the Plan is terminated to such Member,
subject to the time of payment, manner of payment and consent provisions of
Article X.
17.3 Merger, Consolidation or Transfer. This Plan and Trust Fund may not
merge or consolidate with, or transfer its assets or liabilities to, any other
plan, unless immediately thereafter each Member would, in the event such other
plan terminated, be entitled to a benefit which is equal to or greater than the
benefit to which he would have been entitled if the Plan were terminated
immediately before the merger, consolidation or transfer.
XVIII.
Adopting Employers
18.1 Designation of Other Employers.
(a) The Committee may designate any entity or organization eligible by law
to participate in the Plan as an Employer by written instrument delivered to the
Secretary of the Company and the designated Employer. Such written instrument
shall specify the effective date of such designated participation, may
incorporate specific provisions relating to the operation of the Plan which
apply to the designated Employer only and shall become, as to such designated
Employer and its Employees, a part of the Plan.
(b) Each designated Employer shall be conclusively presumed to have
consented to its designation and to have agreed to be bound by the terms of the
Plan and any and all amendments thereto upon its submission of information to
the Committee required by the terms of or with respect to the Plan or upon
making a contribution to the Trust Fund pursuant to the terms of the Plan;
provided, however, that the terms of the Plan may be modified so as to increase
the obligations of an Employer only with the consent of such Employer, which
consent shall be conclusively presumed to have been given by such Employer upon
its submission of any information to the Committee required by the terms of or
with respect to the Plan or upon making a contribution to the Trust Fund
pursuant to the terms of the Plan following notice of such modification.
(c) The provisions of the Plan shall apply separately and equally to each
Employer and its employees in the same manner as is expressly provided for the
Company and its Employees, except that the power to appoint or otherwise affect
the Committee or the Trustee and the power to amend or terminate the Plan and
Trust Agreement shall be exercised by the Company alone.
(d) Transfer of employment among Employers shall not be considered a
termination of employment hereunder, and Service with one shall be considered as
Service with all others.
(e) Any Employer may, by appropriate action of its Board of Directors or
noncorporate counterpart which is communicated in writing to the Secretary of
the Company and to the Committee, terminate its participation in the Plan.
Moreover, the Committee may, in its discretion, terminate an Employer's Plan
participation at any time by written instrument delivered to the Secretary of
the Company and the designated Employer.
18.2 Single Plan. For purposes of the Code and the Act, the Plan as
adopted by the Employers shall constitute a single plan rather than a separate
plan of each Employer. All assets in the Trust Fund shall be available to pay
benefits to all Members and their beneficiaries.
XIX.
Miscellaneous
19.1 Not Contract of Employment. The adoption and maintenance of this Plan
shall not be deemed to be a contract between the Employer and any person or to
be consideration for the employment of any person. Nothing herein contained
shall be deemed to give any person the right to be retained in the employ of the
Employer or to restrict the right of the Employer to discharge any person at any
time nor shall the Plan be deemed to give the Employer the right to require any
person to remain in the employ of the Employer or to restrict any person's right
to terminate his employment at any time.
19.2 Payments Solely from Trust Fund. All benefits payable under the Plan
shall be paid or provided for solely from the Trust Fund and neither the
Employer nor the Trustee assumes any liability or responsibility for the
adequacy thereof. The Committee or the Trustee may require execution and
delivery of such instruments as are deemed necessary to assure proper payment of
any benefits.
19.3 Alienation of Interest Forbidden. Except as otherwise provided with
respect to "qualified domestic relations orders" pursuant to section 206(d) of
the Act and sections 401(a)(13) and 414(p) of the Code and except as otherwise
provided under other applicable law, no right or interest of any kind in any
benefit shall be transferable or assignable by any Member or any beneficiary or
be subject to anticipation, adjustment, alienation, encumbrance, garnishment,
attachment, execution or levy of any kind. Plan provisions to the contrary
notwithstanding, the Committee shall comply with the terms and provisions of any
"qualified domestic relations orders," including orders which require
distributions to an alternate payee prior to a Member's "earliest retirement
age" as such term is defined in section 206(d)(3)(E)(ii) of the Act and section
414(p)(4)(B) of the Code, and shall establish appropriate procedures to effect
the same.
19.4 No Benefits to the Employer. No part of the corpus or income of the
Trust Fund shall be used for any purpose other than the exclusive purpose of
providing benefits for the Members and their beneficiaries and defraying
reasonable expenses of administering the Plan. Anything to the contrary herein
notwithstanding, the Plan shall never be construed to vest any rights in the
Employer other than those specifically given hereunder.
19.5 Severability. If any provision of this Plan shall be held illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining provisions hereof; instead, each provision shall be fully severable
and the Plan shall be construed and enforced as if said illegal or invalid
provision had never been included herein.
19.6 Jurisdiction. The situs of the Plan hereby created is Texas. All
provisions of the Plan shall be construed in accordance with the laws of Texas
except to the extent preempted by federal law.
XX.
Top-Heavy Status
20.1 Article Controls. Any Plan provisions to the contrary
notwithstanding, the provisions of this Article shall control to the extent
required to cause the Plan to comply with the requirements imposed under section
416 of the Code.
20.2 Definitions. For purposes of this Article, the following terms and
phrases shall have these respective meanings:
(a) Account Balance: As of any Valuation Date, the aggregate amount
credited to an individual's account or accounts under a qualified defined
contribution plan maintained by the Employer or a Controlled Entity (excluding
employee contributions which were deductible within the meaning of section 219
of the Code and rollover or transfer contributions made after December 31, 1983
by or on behalf of such individual to such plan from another qualified plan
sponsored by an entity other than the Employer or a Controlled Entity),
increased by (1) the aggregate distributions made to such individual from such
plan during a five-year period ending on the Determination Date and (2) the
amount of any contributions due as of the Determination Date immediately
following such Valuation Date.
(b) Accrued Benefit: As of any Valuation Date, the present value
(computed on the basis of the Assumptions) of the cumulative accrued benefit
(excluding the portion thereof which is attributable to employee contributions
which were deductible pursuant to section 219 of the Code, to rollover or
transfer contributions made after December 31, 1983 by or on behalf of such
individual to such plan from another qualified plan sponsored by an entity other
than the Employer or a Controlled Entity, to proportional subsidies or to
ancillary benefits) of an individual under a qualified defined benefit plan
maintained by the Employer or a Controlled Entity increased by (1) the aggregate
distributions made to such individual from such plan during a five-year period
ending on the Determination Date and (2) the estimated benefit accrued by such
individual between such Valuation Date and the Determination Date immediately
following such Valuation Date. Solely for the purpose of determining top-heavy
status, the Accrued Benefit of an individual shall be determined under (1) the
method, if any, that uniformly applies for accrual purposes under all qualified
defined benefit plans maintained by the Employer and the Controlled Entities or
(2) if there is no such method, as if such benefit accrued not more rapidly than
under the slowest accrual rate permitted under section 411(b)(1)(C) of the Code.
(c) Aggregation Group: The group of qualified plans maintained by the
Employer and each Controlled Entity consisting of (1) each plan in which a Key
Employee participates and each other plan which enables a plan in which a Key
Employee participates to meet the requirements of sections 401(a)(4) or 410 of
the Code or (2) each plan in which a Key Employee participates, each other plan
which enables a plan in which a Key Employee participates to meet the
requirements of sections 401(a)(4) or 410 of the Code and any other plan which
the Employer elects to include as a part of such group; provided, however, that
the Employer may elect to include a plan in such group only if the group will
continue to meet the requirements of sections 401(a)(4) and 410 of the Code with
such plan being taken into account.
(d) Assumptions: The interest rate and mortality assumptions specified
for top-heavy status determination purposes in any defined benefit plan included
in the Aggregation Group including the Plan.
(e) Determination Date: For the first Plan Year of any plan, the last day
of such Plan Year and for each subsequent Plan Year of such plan, the last day
of the preceding Plan Year.
(f) Key Employee: A "key employee" as defined in section 416(i) of the
Code and the Treasury Regulations thereunder.
(g) Plan Year: With respect to any plan, the annual accounting period
used by such plan for annual reporting purposes.
(h) Remuneration: Compensation within the meaning of section 415(c)(3) of
the Code, as limited by section 401(a)(17) of the Code.
(i) Valuation Date: With respect to any Plan Year of any defined
contribution plan, the most recent date within the twelve-month period ending on
a Determination Date as of which the trust fund established under such plan was
valued and the net income (or loss) thereof allocated to participants' accounts.
With respect to any Plan Year of any defined benefit plan, the most recent date
within a twelve-month period ending on a Determination Date as of which the plan
assets were valued for purposes of computing plan costs for purposes of the
requirements imposed under section 412 of the Code.
20.3 Top-Heavy Status.
(a) The Plan shall be deemed to be top-heavy for a Plan Year, if, as of
the Determination Date for such Plan Year, (1) the sum of Account Balances of
Members who are Key Employees exceeds 60% of the sum of Account Balances of all
Members unless an Aggregation Group including the Plan is not top-heavy or (2)
an Aggregation Group including the Plan is top-heavy. An Aggregation Group
shall be deemed to be top-heavy as of a Determination Date if the sum (computed
in accordance with section 416(g)(2)(B) of the Code and the Treasury Regulations
promulgated thereunder) of (1) the Account Balances of Key Employees under all
defined contribution plans included in the Aggregation Group and (2) the Accrued
Benefits of Key Employees under all defined benefit plans included in the
Aggregation Group exceeds 60% of the sum of the Account Balances and the Accrued
Benefits of all individuals under such plans. Notwithstanding the foregoing,
the Account Balances and Accrued Benefits of individuals who are not Key
Employees in any Plan Year but who were Key Employees in any prior Plan Year
shall not be considered in determining the top-heavy status of the Plan for such
Plan Year. Further, notwithstanding the foregoing, the Account Balances and
Accrued Benefits of individuals who have not performed services for the Employer
or any Controlled Entity at any time during the five-year period ending on the
applicable Determination Date shall not be considered.
(b) If the Plan is determined to be top-heavy for a Plan Year, the Vested
Interest in his Employer Contribution Account of each Member who is credited
with an Hour of Service during such Plan Year shall be determined in accordance
with the following schedule:
Years of Vesting Service Vested Interest
________________________ _______________
Less than 2 years 0%
2 years 20%
3 years 40%
4 years 60%
5 years 80%
6 years or more 100%
(c) If the Plan is determined to be top-heavy for a Plan Year, the
Employer shall contribute to the Plan for such Plan Year on behalf of each
Member who is not a Key Employee and who has not terminated his employment as
of the last day of such Plan Year an amount equal to the lesser of (1) 3% of
such Member's Remuneration for such Plan Year or (2) a percent of such Member's
Remuneration for such Plan Year equal to the greatest percent determined by
dividing for each Key Employee the amounts allocated to such Key Employee's Cash
or Deferred Account and Employer Contribution Account for such Plan Year by such
Key Employee's Remuneration. The minimum contribution required to be made for a
Plan Year pursuant to this Paragraph for a Member employed on the last day of
such Plan Year shall be made regardless of whether such Member is otherwise
ineligible to receive an allocation of the Employer's contributions for such
Plan Year. The minimum contribution required to be made pursuant to this
Paragraph shall also be made for an Eligible Employee who is not a Key Employee
and who is excluded from participation in the Plan solely because of failing to
make Cash or Deferred Contributions. Notwithstanding the foregoing, if the Plan
is deemed to be top-heavy for a Plan Year, the Employer's contribution for such
Plan Year pursuant to this Paragraph shall be increased by substituting "4%" in
lieu of "3%" in Clause (1) hereof to the extent that the Directors determine to
so increase such contribution to comply with the provisions of section 416(h)(2)
of the Code. Notwithstanding the foregoing, no contribution shall be made
pursuant to this Paragraph for a Plan Year with respect to a Member who is a
participant in another defined contribution plan sponsored by the Employer or a
Controlled Entity if such Member receives under such other defined contribution
plan (for the plan year of such plan ending with or within the Plan Year of this
Plan) a contribution which is equal to or greater than the minimum contribution
required by section 416(c)(2) of the Code. Notwithstanding the foregoing, no
contribution shall be made pursuant to this Paragraph for a Plan Year with
respect to a Member who is a participant in a defined benefit plan sponsored by
the Employer or a Controlled Entity if such Member accrues under such defined
benefit plan (for the plan year of such plan ending with or within the Plan Year
of this Plan) a benefit which is at least equal to the benefit described in
section 416(c)(1) of the Code. If the preceding sentence is not applicable, the
requirements of this Paragraph shall be met by providing a minimum benefit under
such defined benefit plan which, when considered with the benefit provided under
the Plan as an offset, is at least equal to the benefit described in section
416(c)(1) of the Code.
20.4 Termination of Top-Heavy Status. If the Plan has been deemed to be
top-heavy for one or more Plan Years and thereafter ceases to be top-heavy, the
provisions of this Article shall cease to apply to the Plan effective as of the
Determination Date on which it is determined to no longer be top-heavy.
Notwithstanding the foregoing, the Vested Interest of each Member as of such
Determination Date shall not be reduced and, with respect to each Member who has
five or more years of Vesting Service on such Determination Date, the Vested
Interest of each such Member shall continue to be determined in accordance with
the schedule set forth in Section 20.3(b).
20.5 Effect of Article. Notwithstanding anything contained herein to the
contrary, the provisions of this Article shall automatically become inoperative
and of no effect to the extent not required by the Code or the Act.
EXECUTED this 31st day of December, 1993.
STEWART & STEVENSON SERVICES, INC.
By /s/ Robert L. Hargrave
______________________________
<PAGE>
STEWART & STEVENSON
401(k) SAVINGS PLAN
APPENDIX A
Predecessor Employer Beginning Service Date
____________________ _______________________
Sandia Detroit Diesel, Inc. Last Date of Hire by
Sandia Detroit Diesel, Inc.
Amarillo Diesel, Inc. Last Date of Hire by
Amarillo Diesel, Inc.
DECA Equipment Company Last Date of Hire by
DECA Equipment Inc.
George Engine Diesel, Inc. Last Date of Hire by
George Engine Diesel, Inc.
Pow-R-Quick, Ltd. Last Date of Hire by
Pow-R-Quik, Ltd.
Quality Oilfield Products, Inc. Last Date of Hire by
Quality Oilfield Products,
Inc.
Foley Pressure Control Products, Inc. 9/15/90
LEGAL OPINION
Stewart & Stevenson Services, Inc.
Houston, Texas
As General Counsel of Stewart & Stevenson Services, Inc. (the "Company"), a
Texas corporation, I have participated in the preparation and adoption of the
Stewart & Stevenson 401(k) Savings Plan (the "Plan") and the preparation of a
Registration Statement on Form S-8 (the "Registration Statement") with respect
to 30,000 shares (the "Shares") of Common Stock, without par value, of the
Company to be acquired by the Plan and of an indeterminate amount of interests
(the "Interests") to be offered or sold pursuant to the Plan.
It is my opinion that (a) the Shares have been duly authorized and, when
acquired by the Plan, the Shares will be validly issued, fully paid and
nonassessable and (b) the interests in the Plan have been duly authorized and,
when issued to the participants in the Plan, will be validly issued, fully paid
and nonassessable.
/s/ Lawrence E. Wilson
Lawrence E. Wilson
Vice President & General Counsel
March 30, 1994
AUDITOR'S CONSENT
Stewart & Stevenson Services, Inc.
Houston, Texas
We consent to the incorporation by reference in this Registration Statement
on Form S-8 of our report on the financial statements and schedules included in
the Annual Report on Form 10-K of Stewart & Stevenson Services, Inc. for the
year ended January 31, 1993.
/s/ Arthur Andersen & Co.
ARTHUR ANDERSEN & CO.
Houston, Texas
March 30, 1994
CONSENT OF LEGAL COUNSEL
Stewart & Stevenson Services, Inc.
Houston, Texas
I hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of my opinion regarding legality.
/s/ Lawrence E. Wilson
Lawrence E. Wilson
Vice President & General Counsel
March 30, 1994
