As filed with the Securities and Exchange Commission on May 4, 2000
Registration No. 333-_____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
----------------
FORM S-8
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
----------------
Sequa Corporation
(Exact name of registrant as specified in its charter)
Delaware 13-1885030
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
200 Park Avenue
New York, New York 10166
(Address of Principal Executive Offices and Zip Code)
----------------
Sequa 401(k) Plan
(Full title of the plan)
----------------
Norman E. Alexander
Chairman of the Board and Chief Executive Officer
Sequa Corporation
200 Park Avenue
New York, New York 10166
(Name and address of agent for service)
(212) 986-5500
(Telephone number, including area code, of agent for service)
----------------
Copy to:
W. Leslie Duffy, Esq.
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
(212) 701-3000
----------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=========================================================================================================================
Title of Securities to Amount to be Proposed Maximum Offering Proposed Maximum Amount of Regis-
be Registered Registered(1)(2) Price Per Share(3) Aggregate Offering Price(3) tration Fee (3)
- ------------------------ ---------------- ------------------------- --------------------------- -----------------
<S> <C> <C> <C> <C>
Class A
Common Stock,
no par value 200,000 shares $47.94 $9,588,000 $2,531.24
=========================================================================================================================
</TABLE>
(1) There are also registered hereunder such indeterminate number of additional
shares as may become subject to awards under the Plan as a result of the
antidilution provision contained therein.
(2) In addition, pursuant to Rule 416(c) of the Securities Act of 1933, as
amended (the "Securities Act"), this Registration Statement also covers an
indeterminate amount of interests to be offered or sold pursuant to the
employee benefit plan described herein.
(3) Estimated solely for purposes of calculating the registration fee. Pursuant
to Rules 457(c) and 457(h) under the Securities Act of 1933, as amended,
the registration fee has been calculated based on the average of the high
and low sale prices reported for the Class A Common Stock of Sequa
Corporation on April 27, 2000, which was $47.94 per share, as reported on
the New York Stock Exchange.
================================================================================
<PAGE>
EXPLANTORY NOTE
Information required by Part I of Form S-8 to be contained in the Section
10(a) prospectus is omitted from this Registration Statement in accordance with
the Note to Part I of Form S-8.
The Plan changed its name from the Chromalloy Incentive Savings Plan for
Salaried Employees/Sequa Thrift Plan to the Sequa 401(k) Plan as of April 28,
2000.
<PAGE>
PART II
INFORMATION REQUIRED
IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, which are on file with the Commission, are
incorporated in this Registration Statement by reference and made a part hereof:
1. Registrant's Annual Report on Form 10-K (File No. 1-804) for the year
ended December 31, 1999 (the "1999 Form 10-K").
2. Registrant's Proxy Statement on Schedule 14A (File No. 1-804) filed
April 5, 2000.
3. The description of Registrant's Class A Common Stock contained in our
Form 8-A (File No. 1-804) dated December 3, 1986.
All documents subsequently filed by the Registrant with the Commission
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act prior to the
filing of a post-effective amendment which indicates that all securities offered
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference in this Registration Statement and to
be part thereof from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Registration Statement to the extent that a statement contained herein or in any
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
This item is not applicable as Registrant's Class A Common Stock is
registered under Section 12 of the Exchange Act.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
This item is not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Reference is made to Section 102(b)(7) of the Delaware General Corporation
Law (the "DGCL"), which permits a corporation in its certificate of
incorporation or an amendment thereto to eliminate or limit the personal
liability of a director for violations of the director's fiduciary duty, except
(i) for any breach of the director's fiduciary duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii)
pursuant to Section 174 of the DGCL (providing for liability of directors for
unlawful payment of dividends or unlawful stock purchases or redemptions), or
(iv) for any transaction from which the director
<PAGE>
derived an improper personal benefit. The Company's Restated Certificate of
Incorporation contains provision permitted by Section 102(b)(7) of the DGCL.
Reference is made to Section 145 of the DGCL which provides that a
corporation may indemnify any persons, including directors and officers, who
are, or are threatened to be made, parties to any threatened, pending or
completed legal action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of such
corporation), by reason of the fact that such person is or was a director,
officer, employee or agent of another corporation, or is or was serving at the
request of such corporation as a director, officer, employee or agent of another
corporation or enterprise. The indemnity may include expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding, provided such director, officer, employee or agent acted in good
faith and in a manner he reasonably believed to be in or not opposed to the
corporation's best interest and, with respect to any criminal actions or
proceedings, had no reasonable cause to believe that his conduct was unlawful. A
Delaware corporation may indemnify directors and/or officers in an action or
suit by or in the right of the corporation under the same conditions, except
that no indemnification is permitted without judicial approval if the director
or officer is adjudged to be liable to the corporation. Where a director or
officer is successful on the merits or otherwise in the defense of any action
referred to above, the corporation must indemnify him or her against the
expenses which such director or officer actually and reasonably incurred.
The Company's Restated Certificate of Incorporation and By-laws provide for
the indemnification of directors and officers of the Company to the fullest
extent permitted by the DGCL.
The Company provides liability insurance for each director and officer for
certain losses arising from claims or charges made against them while acting in
their capacities as directors or officers of the Company.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
This item is not applicable.
ITEM 8. EXHIBITS.
The Exhibits to this Registration Statement are listed in the Exhibit Index
on Page E-1 of this Registration Statement, which Index is incorporated herein
by reference.
The Registrant will submit the Plan, including any amendments thereto to
the Internal Revenue Service (the "IRS") in a timely manner and will make all
changes required by the IRS in order to maintain the tax qualified status of the
Plan.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
<PAGE>
(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. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
section 13 or section 15(d) of the Exchange Act that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) 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, Sequa
Corporation, 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,
thereunder duly authorized, in the City of New York, New York on the 4th day of
May, 2000.
SEQUA CORPORATION
(Registrant)
By: /s/ Norman E. Alexander
---------------------------------
Norman E. Alexander
Chairman of the Board and Chief
Executive Officer
Each person whose signature appears below appoints Norman E. Alexander,
John J. Quicke and Stuart Z. Krinsly, and each of them, any of whom may act
without the joinder of the other, as his true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this registration statement on Form S-8
and to file the same, with all exhibits thereto and all other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents full power and authority to do and perform
each and every act and thing requisite and necessary to be done, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or their substitute or
substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
Chairman of the Board and Chief
/s/ Norman E. Alexander Executive Officer May 4, 2000
- ----------------------------------------- (Principal Executive Officer)
Norman E. Alexander
/s/ John J. Quicke President, Chief Operating
- ----------------------------------------- Officer and Director May 4, 2000
John J. Quicke
Senior Executive Vice
President, General Counsel and May 4, 2000
/s/ Stuart Z. Krinsly Director
- -----------------------------------------
Stuart Z. Krinsly
/s/ Martin Weinstein Executive Vice President, Gas
- ----------------------------------------- Turbine Operations and Director May 4, 2000
Martin Weinstein
/s/ Howard M. Leitner Senior Vice President, Finance
- ----------------------------------------- (Principal Financial Officer) May 4, 2000
Howard M. Leitner
<PAGE>
/s/ William P. Ksiazek Vice President and Controller
- ------------------------------------------ (Principal Accounting Officer) May 4, 2000
William P. Ksiazek
/s/ Leon D. Black Director May 4, 2000
- ------------------------------------------
Leon D. Black
/s/ Alvin Dworman Director May 4, 2000
- ------------------------------------------
Alvin Dworman
/s/ David S. Gottesman Director May 4, 2000
- ------------------------------------------
David S. Gottesman
/s/ Donald D. Kummerfeld Director May 4, 2000
- ------------------------------------------
Donald D. Kummerfeld
/s/ Richard S. Lefrak Director May 4, 2000
- ------------------------------------------
Richard S. LeFrak
/s/ Michael I. Sovern Director May 4, 2000
- ------------------------------------------
Michael I. Sovern
/s/ Fred R. Sullivan Director May 4, 2000
- ------------------------------------------
Fred R. Sullivan
/s/ Gerald Tsai, Jr. Director May 4, 2000
- ------------------------------------------
Gerald Tsai, Jr.
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, the Plan has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on this 4th day of May, 2000.
SEQUA 401(k) PLAN
By: /s/ Jesse Battino
-------------------------------------
Jesse Battino, Employee Benefits Plan
Administrative Committee
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Exhibit
3(i)(a) -- Restated Certificate of Incorporation and two Certificates of
Amendment of the Restated Certificate of Incorporation (incorporated
by reference to Exhibit 4(a) of Registration Statement No. 33-12420 on
Form S-8 filed on March 6, 1987).
3(i)(b) -- Certificate of Amendment of Certificate of Incorporation, dated May
7, 1987 (incorporated by reference to Exhibit 3(b) of the Annual
Report on Form 10-K, File No. 1-804, for the year ended December 31,
1988, filed on March 28, 1989).
3(i)(c) -- Certificate of Amendment of Certificate of Incorporation, dated
June 4, 1999.
3(ii) -- Restated and amended (as of August 26, 1993) by-laws (incorporated
by reference to Exhibit 3.3 of Registration Statement No. 33-50843 on
Form S-1, filed on October 29, 1993).
5 -- * Opinion of Cahill Gordon & Reindel
23(a) -- Consent of Cahill Gordon & Reindel (contained in Exhibit 5)
23(b) -- * Consent of Arthur Andersen LLP
24 -- Power of Attorney (set forth on the signature page of this
Registration Statement)
99(a) -- * Sequa 401(k) Plan, as amended and restated through April 27, 2000
99(b) -- * Trust Agreement effective as of September 1, 1998 by and between
Registrant and Vanguard Fiduciary Trust Company
- ----------------
* Filed herewith
E-1
Exhibit 5
(LETTERHEAD OF CAHILL GORDON & REINDEL)
May 4, 2000
(212) 701-3000
Sequa Corporation
200 Park Avenue
New York, New York 10166
Dear Ladies and Gentlemen:
We have acted as special counsel to Sequa Corporation, a Delaware
corporation (the "Company"), in connection with the filing of a Registration
Statement on Form S-8 under the Securities Act of 1933, as amended (the
"Registration Statement"), relating to the proposed sale, from time to time, of
interests in, and 200,000 shares of Class A Common Stock, no par value (the
"Class A Common Stock"), of the Company issued in accordance with the terms and
provisions of, the Sequa 401(k) Plan of the Company (the "Plan"), and to which
Registration Statement this opinion shall be filed as an exhibit (capitalized
terms used herein without definition have the meanings given such terms in the
Registration Statement).
We have examined (i) the Restated Certificate of Incorporation and two
Certificates of Amendment of the Restated Certificate of Incorporation, the
Certificate of Amendment of Certificate of Incorporation, dated May 7, 1987, the
Certificate of Amendment of Certificate of Incorporation, dated June 4, 1999,
and the Restated and Amended Bylaws of the Company, (ii) the Plan, (iii) the
Registration Statement and exhibits thereto and (iv) such other documents and
instruments that we have deemed necessary for the opinions hereinafter
expressed.
Based upon the foregoing, we advise you that such shares of Class A Common
Stock will be legally issued, fully paid and non-assessable.
We hereby consent to the filing of a copy of this opinion as an exhibit to
said Registration Statement.
Very truly yours,
/s/ CAHILL GORDON & REINDEL
Exhibit 23(b)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Form S-8 Registration Statement of Sequa Corporation of our
report dated March 17, 2000 included in Sequa Corporation's Form 10-K for the
year ended December 31, 1999, and to all references to our Firm included in this
Registration Statement.
ARTHUR ANDERSEN LLP
New York, New York
May 4, 2000
SEQUA 401(K) PLAN
As Amended and Restated Through April 27, 2000
<PAGE>
TABLE OF CONTENTS
-----------------
Page No.
--------
ARTICLE I: Definitions..........................................................
1.1. Account.............................................................
1.2. Actual Contribution Percentage or ACP...............................
1.3. Actual Deferral Percentage or ADP...................................
1.4. Administrative Committee............................................
1.5. Affiliated Group....................................................
1.6. Annual Addition.....................................................
1.7. Annuity Starting Date...............................................
1.8. Beneficiary.........................................................
1.9. Board...............................................................
1.10. Code................................................................
1.11. Company.............................................................
1.12. Compensation........................................................
1.13. Contribution........................................................
1.14. Contribution Period.................................................
1.15. Disability..........................................................
1.16. Effective Date......................................................
1.17. Eligible Employee...................................................
1.18. Employee............................................................
1.19. Employer............................................................
1.20. Employment Commencement Date........................................
1.21. Entry Date..........................................................
1.22. ERISA...............................................................
1.23. Highly Compensated Employee.........................................
1.24. Hour of Service.....................................................
1.25. Investment Fund.....................................................
1.26. Limitation Year.....................................................
1.27. Nonhighly Compensated Employee......................................
1.28. Normal Retirement Age...............................................
1.29. Normal Retirement Date..............................................
1.30. Participant.........................................................
1.31. Participating Employer..............................................
1.32. Period of Service...................................................
1.33. Period of Severance.................................................
1.34. Plan................................................................
1.35. Plan Administrator..................................................
1.36. Plan Year...........................................................
-i-
<PAGE>
1.37. Prior Plan..........................................................
1.38. Profit Sharing Plan.................................................
1.39. Qualified Joint and Survivor Annuity................................
1.40. Reemployment Commencement Date......................................
1.41. Sequa Common Stock Fund.............................................
1.42. Sequa Shares........................................................
1.43. Severance Date......................................................
1.44. Spouse..............................................................
1.45. Trust Agreement.....................................................
1.46. Trust Fund or Fund..................................................
1.47. Trustee.............................................................
1.48. Valuation Date......................................................
1.49. Year of Service.....................................................
ARTICLE II: Eligibility to Participate..........................................
2.1. Eligibility Requirements............................................
2.2. Participation upon Reemployment.....................................
2.3. Inactive Participants...............................................
2.4. Military Leave......................................................
ARTICLE III: Contributions......................................................
3.1. Employer Contributions..............................................
3.2. Modifying Levels of Before-Tax Deposits.............................
3.3. Maximum Annual Additions............................................
3.4. Limitation on Before-Tax Deposits...................................
3.5. Actual Deferral Percentage Test.....................................
3.6. Actual Contribution Percentage Test.................................
3.7. Restriction on Multiple Use of Alternative Limitations..............
3.8. Rollovers and Transfers.............................................
3.9. Forfeiture of Matching Deposits.....................................
ARTICLE IV: Participant Accounts and Investment Funds...........................
4.1. Maintenance of Participant Accounts.................................
4.2. Investment Funds....................................................
4.3. Sequa Common Stock Fund.............................................
4.4. Investment of Contributions.........................................
4.5. Transfer of Account Balances Among Investment Funds.................
ARTICLE V: Vesting and Forfeitures..............................................
-ii-
<PAGE>
5.1. Nonforfeitable Accounts.............................................
5.2. Forfeitable Accounts................................................
5.3. Restoration of Forfeitures..........................................
5.4. Vesting in Prior Contributions......................................
5.5. Partial Distributions or Withdrawals................................
ARTICLE VI: Distributions.......................................................
6.1. Events Allowing Distribution........................................
6.2. Forms of Distribution...............................................
6.3. Amount and Timing of Distributions..................................
6.4. Distributions Pursuant to a Qualified Domestic Relations Order......
6.5. Life Annuity and Qualified Joint and Survivor Annuity...............
6.6. Commencement of Benefits............................................
6.7. Methods of Distribution.............................................
6.8. Direct Rollover Distributions.......................................
ARTICLE VII: In-Service Withdrawals and Loans...................................
7.1. Hardship Withdrawals................................................
7.2. Withdrawals After Age 59 1/2........................................
7.3. Withdrawals from Supplementary Contribution Account.................
7.4. Spousal Consent.....................................................
7.5. Loans to Participants...............................................
ARTICLE VIII: Plan Administration...............................................
8.1. Plan Administrator..................................................
8.2. Administrative Committee............................................
8.3. Appointment, Removal or Resignation of Administrative
Committee Members.................................................
8.4. Conduct of Administrative Committee Business........................
8.5. Interested Committee Member.........................................
8.6. Information Required by Administrative Committee....................
8.7. Evidence............................................................
8.8. Nondiscrimination...................................................
8.9. Claims Procedure....................................................
8.10. Request for Review..................................................
8.11. Review and Decision.................................................
8.12. Freedom from Liability..............................................
8.13. Trustee Instructions................................................
8.14. Responsibility for Compliance and Reporting.........................
-iii-
<PAGE>
ARTICLE IX: Amendment and Termination...........................................
9.1. Amendment...........................................................
9.2. Termination.........................................................
9.3. Nonforfeitability on Termination, Partial Termination or
Discontinuance of Contributions...................................
9.4. Allocation and Distribution of Assets on Plan Termination...........
ARTICLE X: General Provisions...................................................
10.1. Fiduciaries.........................................................
10.2. Non-Alienation......................................................
10.3. Facility of Payment.................................................
10.4. No Contract.........................................................
10.5. Waiver of Notice....................................................
10.6. Controlling Law.....................................................
10.7. Absence of Guarantee................................................
10.8. Missing Persons.....................................................
10.9. Non-Diversion.......................................................
10.10. Return of Contributions.............................................
ARTICLE XI: Top Heavy Provisions................................................
11.1. Determination of Top Heavy..........................................
11.2. Minimum Contribution................................................
11.3. Impact on Maximum Benefits..........................................
ARTICLE XII: Adoption of the Plan by Other Entities.............................
12.1. Adoption of Plan....................................................
12.2. Withdrawal from Plan................................................
-iv-
<PAGE>
THIS AMENDMENT AND RESTATEMENT (the "Restatement") is made by Sequa
Corporation (the "Company") to the Chromalloy Incentive Savings Plan for
Salaried Employees / Sequa Thrift Plan ("CRISP/STP").
W I T N E S S E T H:
WHEREAS, the Company maintains the CRISP/STP, and desires to amend and
restate the CRISP/STP to consolidate all prior amendments and to comply with the
Uniformed Services Employment and Reemployment Rights Act of 1994, the Small
Business Job Protection Act of 1996, the Taxpayer Relief Act of 1997 and other
applicable law, and to rename the CRISP/STP to be known as "Sequa 401(k) Plan;"
and
WHEREAS, the Company may amend the CRISP/STP pursuant to Section 9.01
thereof;
NOW, THEREFORE, effective as of January 1, 2000, except as otherwise
provided or unless an alternative effective date is required by law to retain
the tax qualified status of the CRISP/STP, the Company hereby amends and
restates the CRISP/STP as set forth below. Furthermore, the CRISP/STP, upon
execution of this instrument by a duly authorized officer of the Company, shall
be known as the "Sequa 401(k) Plan" (the "Plan"). It is intended that the Plan,
as amended from time to time, meet all of the requirements of the Employee
Retirement Income Security Act of 1974, as amended, and qualify under Section
401(a) of the Internal Revenue Code of 1986, as amended (the "Code"), and that
the trust which is part of the Plan remain exempt from tax under Section 501(a)
of the Code. The rights and benefits of Participants (as defined below) who are
employed on or after the Effective Date (as defined below) of this Restatement
shall be determined as provided herein, except as specifically provided or
changed by subsequent amendment.
<PAGE>
Definitions
Unless otherwise provided or required by the context, the
following terms and phrases as used in the Plan shall have the meanings as set
forth in this Article I. Masculine pronouns used shall refer to men or women or
both and nouns and pronouns when stated in the singular shall include the plural
and when stated in the plural shall include the singular wherever appropriate.
Any headings used herein are included for ease of reference only, and are not to
be construed so as to alter any of the terms of the Plan.
Account
-------
means a record of each Participant's interest in the Trust Fund to which is
credited his share of Contributions and earnings or additions, and charged, as
the case may be, with withdrawals, losses and loans, collectively referred to as
the "Account" as follows:
Basic Contribution Account means an account attributable to a
Participant's Basic Contributions, if any;
Before-Tax Deposit Account means an account attributable to a
Participant's Before-Tax Deposits and a Participating Employer's QMACs and
QNECs, if any;
Matching Deposit Account means an account attributable to a
Participating Employer's Matching Deposits;
Profit Sharing Account means an account attributable to a
Participating Employer's Profit Sharing Contributions;
Rollover Deposit Account means an account attributable to a
Participant's Rollover Deposits; and
Supplementary Contribution Account means an account
attributable to a Participant's Supplementary Contributions.
Actual Contribution Percentage or ACP
-------------------------------------
means the ratio calculated for each Eligible Employee who has satisfied the
eligibility conditions of Article II for a Plan Year by multiplying 100 by (a)
and dividing by (b), where:
equals the amount of Matching Deposits and any QNECs or QMACs
(to the extent permitted to be counted under Treasury Regulations) actually paid
to the Plan on behalf of the Eligible Employee for such Plan Year, and
2
<PAGE>
equals the Eligible Employee's Section 414(s) Compensation for
such Plan Year.
Actual Deferral Percentage
--------------------------
or ADP means the ratio calculated for each Eligible Employee who has satisfied
the eligibility conditions of Article II for a Plan Year by multiplying 100 by
(a) and dividing by (b), where:
equals the amount of Before-Tax Deposits and any QNECs or
QMACs (to the extent permitted to be counted under Treasury Regulations)
actually paid to the Plan on behalf of the Eligible Employee during such Plan
Year, and
equals the Eligible Employee's Section 414(s) Compensation for
such Plan Year.
Administrative Committee
------------------------
means the Employee Benefit Plans Administrative Committee appointed by the Board
in accordance with Section 8.2.
Affiliated Group
----------------
of an organization means such organization and all other entities required to be
aggregated with such organization under Sections 414(b), (c), (m) or (o) of the
Code but only for the period in which such other entity is required to be so
aggregated with the organization.
Annual Addition
---------------
means the total credited to a Participant's Account for any Limitation Year of:
Before-Tax Deposits, Matching Deposits and any Profit Sharing
Contributions;
Amounts allocated to an individual medical account as
described in Section 415(l)(1) of the Code which is part of a pension or annuity
plan maintained by the Employer; and
Amounts which are attributable to post-retirement medical
benefits allocated to the separate account of a key employee as described in
Section 419A(d) of the Code.
Annuity Starting Date
---------------------
means the first day of the first period for which an amount is payable as an
annuity, or in the case of a benefit not payable in the form of an annuity, the
first day on which all events have occurred which entitle the Participant to
such benefit.
2
<PAGE>
Beneficiary
-----------
means a person(s) or entity(ies) designated by the Participant to receive
benefits payable from the Plan as a result of the death of the Participant. In
the event no Beneficiary is designated, the Beneficiary shall be the
Participant's Spouse, if any. If the Participant has no Spouse at the time of
death, or if no other person designated as Beneficiary survives the Participant,
the Beneficiary shall be the Participant's estate.
Board
-----
means the Board of Directors of the Company.
Code
----
means the Internal Revenue Code of 1986 as amended from time to time. All
references to specific Code sections are deemed to be references to such
sections as they may be amended or superseded.
Company
-------
means Sequa Corporation, a Delaware corporation.
Compensation.
-------------
Plan Compensation. For purposes of determining Contributions
to the Plan, and subject to the terms of any Appendix annexed hereto,
Compensation means a Participant's base wages, overtime, commissions, bonuses
and other remuneration for services required to be reported on a federal Form
W-2 for the Participant with respect to the Plan Year. Plan Compensation shall
include amounts contributed by a Participating Employer on behalf of a
Participant pursuant to a salary reduction agreement which are not includible in
the gross income of a Participant under Section 125 or Section 402(e)(3) of the
Code, but shall exclude reimbursements or other expense allowances, cash and
noncash fringe benefits, moving expenses, nonqualified deferred compensation,
welfare benefits and severance pay paid after the last day of employment.
Section 415 Compensation. For the purpose of applying the
limitations of Section 415 of the Code, Section 415 Compensation means the
Participant's wages, within the meaning of Section 3401(a) of the Code, and all
other payments of remuneration to the Participant by the Participating Employer
(in the course of the Participating Employer's trade or business) for which the
Participating Employer is required to furnish the Participant a written
statement under Sections 6041(d), 6051(a)(3) and 6052 of the Code. Section 415
Compensation shall prior to the Plan Year beginning January 1, 1998 exclude any
amount which is contributed by the Participating Employer pursuant to a salary
reduction agreement and which is not includible in the gross income of an
Eligible Employee under Sections 125 and 402(e)(3) of the Code, and for Plan
Years beginning on and after January 1, 1998 include such amounts. Section 415
Compensation shall exclude amounts paid by the Participating Employer as
reimbursement for moving expenses incurred by the Eligible Employee to the
extent that at the time of payment it is reasonable to believe that these
amounts are deductible by the Eligible Employee under Section 217 of the Code.
Section 415 Compensation shall be determined without regard to any rules that
limit the remuneration included in wages based on the nature or location of the
employment or the services performed.
3
<PAGE>
Section 414(s) Compensation. For the purposes of
discrimination testing, Section 414(s) Compensation means Section 415
Compensation, reduced by all of the following items (even if includible in gross
income): reimbursements or other expense allowances, cash and noncash fringe
benefits, moving expenses, amounts contributed to a nonqualified plan of
deferred compensation, and welfare benefits. Section 414(s) Compensation shall
at all times include any amount which is contributed by the Participating
Employer pursuant to a salary reduction agreement and which is not includible in
the gross income of an Eligible Employee under Sections 125 and 402(e)(3) of the
Code.
Section 401(a)(17) Limit. For the purposes of paragraphs (a)
and (c) of this Section, Compensation for any Plan Year shall not exceed one
hundred seventy thousand dollars ($170,000), as adjusted for increases in the
cost of living in accordance with Section 401(a)(17)(B) of the Code (the
"Section 401(a)(17) Limit"). The cost of living adjustment in effect on January
1 of any calendar year shall apply to any determination period beginning in such
calendar year. For this purpose, the "determination period" is any period not
exceeding twelve (12) months over which Compensation is determined. If a
determination period consists of fewer than twelve (12) months, the Section
401(a)(17) Limit will be multiplied by a fraction, the numerator of which is the
number of months in the determination period, and the denominator of which is
twelve (12).
Contribution
------------
means an amount contributed to the Plan as follows:
Basic Contribution means an amount a Participant contributed
to the Stock Purchase Plan or the CRISP/STP, as appropriate from the context, on
an after-tax basis prior to September 1, 1984;
Before-Tax Deposit means an amount contributed to the Plan by
a Participating Employer on behalf of a Participant pursuant to a Compensation
deferral agreement;
Matching Deposit means an amount contributed to the Plan by a
Participating Employer in respect of a Before-Tax Deposit which is made on
behalf of a Participant;
Profit Sharing Contribution means an amount contributed to a
Profit Sharing Plan by a Participating Employer or an amount contributed by
Chromalloy Component Services, Inc. pursuant to Appendix D;
4
<PAGE>
Qualified Matching Contribution or QMAC means an amount
contributed to the Plan by a Participating Employer which (1) may not be
distributed to a Participant prior to his attainment of age 59 1/2 or Severance
Date, (2) shall be fully vested at all times, and (3) may be considered as a
Before-Tax Deposit or Matching Deposit in computing either the Actual Deferral
Percentage or Actual Contribution Percentage test. A QMAC shall be credited to a
Participant's Before-Tax Deposit Account;
Qualified Nonelective Contribution or QNEC means an amount
contributed to the Plan by a Participating Employer which (1) may not be
distributed to a Participant prior to his attainment of age 59 1/2 or Severance
Date, (2) shall be fully vested at all times and (3) may be considered as a
Before-Tax Deposit or Matching Deposit in computing either the Actual Deferral
Percentage or Actual Contribution Percentage test. A QNEC shall be credited to a
Participant's Before-Tax Deposit Account;
Rollover Deposit means an amount contributed to the Plan by an
Eligible Employee or Participant from another qualified plan or conduit
Individual Retirement Account; and
Supplementary Contribution means the amount of a Participant's
pay which the Participant voluntarily contributed to the Stock Purchase Plan or
the CRISP/STP, as appropriate from the context, on an after-tax basis as a
supplement to his pre-tax deferrals. Supplementary Contribution also means those
pre-tax deferrals to any such plan which were deemed Supplementary
Contributions.
Contribution Period
-------------------
means the payroll period with respect to which the contributions described in
Section 3.1 are made on behalf of any Participant.
Disability
----------
means that the Participant has applied for and is receiving disability insurance
benefits under the federal Social Security Act or under an Employer sponsored
long term disability plan.
Effective Date
--------------
means January 1, 2000 except as otherwise expressly provided and unless an
alternative effective date is required to retain the tax qualified status of the
Plan.
Eligible Employee
-----------------
means each Employee of a Participating Employer other than:
5
<PAGE>
an Employee who is included in a unit of Employees covered by
a collective bargaining agreement between Employee representatives and one or
more Participating Employers;
a nonresident alien (within the meaning of Code Section
7701(b)(1)(B)) while not receiving earned income (within the meaning of Code
Section 911(d)(2)) from a Participating Employer which constitutes income from
sources within the United States (within the meaning of Code Section 861(a)(3));
an Employee of a Participating Employer who is a citizen of
the United States but a permanent resident of a foreign jurisdiction; or
any leased employee within the meaning of Section 414(n) of
the Code.
Employee
--------
means any person who is employed by an Employer and whose remuneration is paid
out of a United States payroll as opposed to accounts payable, including leased
employees within the meaning of Section 414(n) of the Code, but excluding a
person who is an independent contractor or a consultant on the books and records
of the Employer. The Administrative Committee may deem an individual to be an
independent contractor or consultant for purposes of the Plan notwithstanding
any determination by a governmental agency or instrumentality to the contrary.
Employer
--------
means the Company, the Participating Employers and any other member of their
respective Affiliated Groups.
Employment Commencement Date
----------------------------
means the first day for which the Employee is entitled to be credited with an
Hour of Service.
Entry Date
----------
means the first day of each payroll period.
ERISA
-----
means the Employee Retirement Income Security Act of 1974, as amended from time
to time. All references to specific sections of ERISA are deemed to be
references to such sections as they may be amended or superseded.
6
<PAGE>
Highly Compensated Employee
---------------------------
includes a Highly Compensated Active Employee and a Highly Compensated Former
Employee, as further defined below:
Highly Compensated Active Employee: A Highly Compensated
Active Employee is any Eligible Employee who:
was a 5% owner (as defined in Code Section 416) of the
Employer at any time during the Determination Year or the
Look-Back Year; or
during the Look-Back Year (A) received Section 414(s)
Compensation from the Employer in excess of the amount set forth
under Code Section 414(q)(1)(B)(i), as such amount may be
adjusted for inflation by the Secretary of the Treasury ($85,000
for Look-Back Year 2000), and (B) if the Company elects, was in
the Top-Paid Group.
Highly Compensated Former Employee. A Highly Compensated
Former Employee includes a former Employee who was a Highly Compensated Employee
upon separation from service or who was a Highly Compensated Employee at any
time after attaining age 55.
For purposes of this Section:
the term "Determination Year" means the Plan Year for which
the determination as to who is a Highly Compensated Employee is
being made;
the term "Look-Back Year" means the 12 month period
immediately preceding the Determination Year, or if the Company
elects, the Determination Year; and
the term "Top-Paid Group" means the top 20% of Employees of
the Employer ranked on the basis of their Section 414(s)
Compensation for a Plan Year.
Notwithstanding anything herein to the contrary, this Section
shall be effective for Plan Years beginning on or after January 1, 1997.
Hour of Service
---------------
means each hour for which:
an Employee is paid or entitled to payment for the performance
of duties for the Employer;
7
<PAGE>
an Employee is paid, or entitled to payment, by the Employer
on account of a period of time during which no duties are performed
(irrespective of whether the employment relationship has terminated) to the
extent such hour must be credited under Department of Labor Regulation Section
2530.200b-2(a)(1); or
back pay, irrespective of mitigation of damages, is either
awarded or agreed to by the Employer.
Solely to the extent required by law, an Employee who is absent from employment
because of a leave of absence under the Family and Medical Leave Act of 1993
shall receive credit for Hours of Service for eligibility and vesting purposes
and shall be deemed not to be absent from employment for no more than twelve
(12) weeks during a Plan Year, provided, however, that the same Hours of Service
shall not be credited more than once with respect to any period.
Investment Fund
---------------
means each of the funds in which Accounts may be invested pursuant to Section
4.2.
Limitation Year
---------------
means calendar year, unless the Company elects a different twelve (12)
consecutive month period as provided by Treasury Regulation Section 1.415-2(b).
Nonhighly Compensated Employee
------------------------------
means any Eligible Employee who is not a Highly Compensated Employee.
Normal Retirement Age
---------------------
means the Participant's 65th birthday.
Normal Retirement Date
----------------------
means the first day of the month coinciding with or next following the
Participant's Normal Retirement Age.
Participant
-----------
means an Eligible Employee who satisfies the eligibility requirements under
Section 2.1, who either elects to have Before-Tax Deposits contributed on his
behalf by a Participating Employer, or has a Profit Sharing Contribution
allocated to his Profit Sharing Account, and continues to have an Account
balance under the Plan. The term "Participant" shall include an Active
Participant and an Inactive Participant, as further defined below:
8
<PAGE>
Active Participant
------------------
means a Participant who is actively having Contributions credited to an Account
under the Plan.
Inactive Participant
--------------------
means a Participant who ceases to be an Eligible Employee or ceases to have
Before-Tax Deposits contributed to the Plan on his behalf by a Participating
Employer, but in respect of whom an Account balance is maintained under the
Plan.
Participating Employer
----------------------
means the Company and any other member of its Affiliated Group or other entity
which, with the approval of the Board, and subject to such conditions as the
Board may impose, adopts this Plan for all or a portion of its Eligible
Employees.
Period of Service
-----------------
means, subject to the service spanning rules set forth in paragraphs (a) and (b)
below, a period commencing on the later of the date the Employee attains age 18
and the Employee's Employment Commencement Date or Reemployment Commencement
Date, whichever is applicable, and ending on the Employee's Severance Date.
Unless otherwise specified, a Period of Service shall be credited for employment
with an Employer, and with the approval of the Board, may be credited for
employment with an Employer prior to the time it became an Employer. Except as
otherwise provided by resolution of the Board or by an applicable Appendix,
Service of an Employee shall include employment recognized by a predecessor
employer's plan that is merged into the Plan, subject to (a) and (b) below,
provided that the Employee was employed by such predecessor employer on the date
of the merger with or acquisition by a Participating Employer and continued in
the employ of a Participating Employer after such date. Predecessor employer
means any company, facility, trade or business whose assets or stock are
acquired by a Participating Employer.
If an Employee severs from service due to a quit, discharge,
or retirement and then performs an Hour of Service within twelve (12) months of
the Severance Date, the Period of Severance shall be treated as a Period of
Service.
If an Employee severs from service by reason of quit,
discharge or retirement during an absence from service of twelve (12) months or
less (where such absence was for any reason other than a quit, discharge or
retirement), and then performs an Hour of Service for the Employer within twelve
(12) months of the date on which the Employee was first absent, the Period of
Severance shall be treated as a Period of Service.
Period of Severance
-------------------
means the period of time commencing on a Severance Date and ending on the date
the Employee again performs an Hour of Service.
9
<PAGE>
Plan
----
means the Sequa 401(k) Plan (formerly known as the "Chromalloy Incentive Savings
Plan for Salaried Employees / Sequa Thrift Plan"), as it may be amended from
time to time.
Plan Administrator
------------------
means the Company, which is primarily responsible for overseeing operation and
administration of the Plan pursuant to Article VIII.
Plan Year
---------
means the calendar year.
Prior Plan
----------
shall refer to the Plan's predecessor plans as follows. Chromalloy American
Corporation ("Chromalloy") established the Chromalloy Stock Purchase and Savings
Plan for Salaried Employees effective as of January 1, 1975 (the "Stock Purchase
Plan"). Chromalloy amended and restated the Stock Purchase Plan effective as of
January 1, 1978. Chromalloy further amended and restated the Stock Purchase Plan
effective as of September 1, 1984, and renamed it the Chromalloy Incentive
Savings Plan for Salaried Employees ("CRISP"). Chromalloy amended and restated
the CRISP effective as of January 1, 1985. The CRISP, as amended and restated,
was merged with the Sequa Savings Plan effective as of July 1, 1991. The merged
plan was amended and restated effective as of January 1, 1989, and was renamed
the Chromalloy Incentive Savings Plan for Salaried Employees / Sequa Thrift Plan
("CRISP/STP") effective as of July 1, 1992. The Company amended the CRISP/STP by
First Amendment dated February 1, 1994, Second Amendment dated January 25, 1996,
Third Amendment dated August 21, 1997, Fourth Amendment dated December 11, 1997,
Fifth Amendment dated November 9, 1998, Sixth Amendment dated February 25, 1999,
Seventh Amendment dated July 1, 1999 and Eighth Amendment dated July 1, 1999.
Profit Sharing Plan
-------------------
means any qualified plan which from time to time is merged into the Plan and
which maintains Profit Sharing Accounts. Profit Sharing Plan shall also include
the features under the Plan set forth under Appendix D providing for Profit
Sharing Contributions by Chromalloy Component Services, Inc. with respect to its
hourly Eligible Employees.
Qualified Joint and Survivor Annuity
------------------------------------
means an immediate life annuity purchased with the Participant's Account balance
with continuing payments for the life of his surviving Spouse equal to 50% of
the amount of the payments made to the Participant.
10
<PAGE>
Reemployment Commencement Date
------------------------------
means the first date on which the Employee performs an Hour of Service following
a Period of Severance which is not required to be treated as a Period of
Service.
Sequa Common Stock Fund
-----------------------
means a unitized Investment Fund which shall invest in Sequa Shares and cash in
accordance with Section 4.3.
Sequa Shares
------------
means shares of Class A common stock, no par value, of the Company.
Severance Date
--------------
means the earlier of (a) the date the Employee quits, retires, dies or is
discharged from the Employer, or (b) the first anniversary of the first date of
a continuous period in which an Employee remains absent from service (with or
without Plan Compensation) with the Employer for any reason other than quit,
retirement, death or discharge, such as vacation, holiday, sickness, disability,
leave of absence or layoff. Provided, however, that in the case of absence from
service due to disability, the term "second anniversary" shall be substituted
for "first anniversary" in the preceding sentence. Provided further, that an
Employee who is on leave from employment because he is on leave granted by the
Employer to enable him to serve in the armed forces of the United States shall
not incur a Severance Date under this subsection unless he fails to return to
active employment with an Employer within the period provided by law for the
protection of his re-employment rights.
The Severance Date of an Employee who is absent from employment because of the
Employee's pregnancy, the birth of the Employee's child, the placement of a
child with the Employee in connection with the adoption of such child by the
Employee, or the need to care for such child for a period beginning immediately
following such birth or placement, shall be the second anniversary of the first
date of such absence. The period between the first and second anniversaries of
the first date of absence from work shall be neither a Period of Service nor a
Period of Severance. This rule shall apply only if the Employee furnishes to the
Administrative Committee such timely information as it may require to establish
that the absence was for the reasons referred to above and the period for which
there was such an absence. An Employee who transfers employment between
Employers shall not be deemed to have incurred a Severance from Service by
virtue of such transfer.
11
<PAGE>
Spouse
------
means the person to whom the Participant is legally married on his Annuity
Starting Date or, if earlier, on his date of death. For purposes of this
Section, the term "legally married" shall exclude any common law marriage and
any domestic partnership.
Trust Agreement
---------------
means the agreement and any and all amendments and supplements thereto entered
into between the Company and the Trustee. The Trust Agreement shall be deemed to
be part of this Plan as if all of the terms and provisions were fully set forth
herein.
Trust Fund or Fund
------------------
means all sums of money, insurance or annuity contracts and all other property
including all earnings, appreciation, or additions, held for the exclusive use
of Participants and their Beneficiaries, from which benefits provided by this
Plan will be paid.
Trustee
-------
means Vanguard Fiduciary Trust Company or any successor thereto appointed by the
Board to administer the Trust Fund.
Valuation Date
--------------
means, subject to the following, any business day the New York Stock Exchange is
open for trading. For the period prior to September 1, 1998, "Valuation Date"
means the last day of each calendar month or such other date or dates as may be
established by the Administrative Committee to assure proper administration of
the Plan. Such special Valuation Date shall be deemed equivalent to a regular
Valuation Date.
Year of Service
---------------
means a Period of Service of twelve (12) months. Periods of Service which are
less than whole years shall be aggregated on the basis that three hundred
sixty-five (365) days equal a whole Year of Service.
Eligibility to Participate
--------------------------
Eligibility Requirements.
------------------------
Each Eligible Employee who was a Participant in the Plan prior
to the Effective Date of this Restatement shall continue to be a Participant,
subject to the terms and conditions herein.
12
<PAGE>
Each Eligible Employee other than one referred to in paragraph
(a) shall, subject to an applicable Appendix, become eligible to participate in
the Plan on the first Entry Date coinciding with or next following the
attainment of age twenty-one (21) and completion of a Period of Service of three
(3) calendar months.
An Eligible Employee who elects not to participate on the
first Entry Date coinciding with or next following the attainment of age
twenty-one (21) and completion of a Period of Service of three calendar months
may elect to commence participation as of any subsequent Entry Date.
An Eligible Employee may commence participation in the Plan
following the satisfaction of the eligibility requirements by submitting a
completed enrollment form to the Administrative Committee at least five (5)
business days prior to the applicable Entry Date. Enrollment forms shall be in
writing and signed by the Eligible Employee unless the Administrative Committee
approves of an electronic enrollment form. An enrollment form shall include,
without limitation, an election to defer Plan Compensation as a Before-Tax
Deposit and have it contributed to the Plan, a Beneficiary designation and an
investment direction.
Participation upon Reemployment.
-------------------------------
An Eligible Employee who met the eligibility requirements of
Section 2.1 but who separated from service before the next Entry Date and
returned to employment with a Participating Employer after such Entry Date but
prior to incurring a one-year Period of Severance shall be eligible to
participate in the Plan immediately upon such reemployment.
A Participant who is reemployed prior to incurring a one-year
Period of Severance shall be eligible to participate in the Plan immediately
upon performance of an Hour of Service with a Participating Employer. A
Participant who has incurred a one-year Period of Severance and who has a
nonforfeitable right to benefits derived from Employer Contributions at the time
of separation shall be eligible to participate in the Plan immediately upon
performance of an Hour of Service with a Participating Employer.
A Participant who did not have a nonforfeitable right to
benefits derived from Employer Contributions at the time of separation, and
whose number of consecutive one-year Periods of Severance equaled or exceeded
the greater of five (5) or the aggregate number of Years of Service before such
period shall be treated as a new Employee upon reemployment, and any prior
service shall not be taken into account for eligibility purposes.
Inactive Participants.
----------------------
An Inactive Participant shall continue to be credited with Years of Service for
eligibility and vesting purposes until employment with an Employer ceases but
shall not be eligible to have Contributions made on his behalf. Except as
provided in Section 2.2, an Inactive Participant shall again become a
Participant in the Plan upon return to employment with a Participating Employer
as an Eligible Employee.
13
<PAGE>
Military Leave.
---------------
Notwithstanding anything herein to the contrary, Contributions, benefits and
Periods of Service with respect to qualified military service shall be provided
in accordance with Section 414(u) of the Code with respect to Employees
reemployed by an Employer on or after December 12, 1994.
Contributions
-------------
Employer Contributions.
-----------------------
Subject to the limitations set forth below, Contributions may be made on behalf
of a Participant as follows:
Before-Tax Deposits. A Eligible Employee may elect to have his
Plan Compensation reduced by a specified percentage indicated on his enrollment
application and have such amounts contributed to the Plan as Before-Tax
Deposits. Such election shall be expressed in a whole percentage no less than
one percent (1%) and no more than twenty percent (20%) of Plan Compensation.
Before-Tax Deposits shall be contributed by the Participating Employer to the
Trust Fund as soon as practicable after each applicable Contribution Period.
Notwithstanding the foregoing, the Administrative Committee may, in its
discretion, limit the Before-Tax Deposits of certain or all Highly Compensated
Employees, provided that it notifies such affected Employees of the limitation.
Matching Deposits. The Participating Employer shall make
Matching Deposits in an amount equal to fifty percent (50%) of the Before-Tax
Deposits made by the Participant during each Contribution Period. Such Matching
Deposits shall not exceed three percent (3%) of the Participant's Plan
Compensation received during the Contribution Period. Notwithstanding the
foregoing, subject to the discretion of the Board, the amount of Matching
Deposits to be made with respect to Before-Tax Deposits may be prospectively
increased or decreased at any time by any Participating Employer or any one or
more divisions of any Participating Employer with respect to some or all of its
Eligible Employees.
Profit Sharing Contributions. A Participating Employer may,
with the approval of the Board, and pursuant to the terms of an applicable
Appendix, make a Profit Sharing Contribution for the benefit of some or all of
its Eligible Employees who are Participants. Such Profit Sharing Contributions
shall be allocated in accordance with the terms of such Appendix.
14
<PAGE>
Deductibility. Matching Deposits shall be contributed to the
Trust by the Participating Employer no later than the time prescribed by law for
the filing of its federal income tax return for the taxable year in which the
Plan Year ends, including extensions thereof. In no event shall the amount of
such Matching Deposits exceed the maximum amount permitted to be deducted by the
Participating Employer under Section 404 of the Code.
Modifying Levels of Before-Tax Deposits.
---------------------------------------
Changing Deposit Levels. A Participant may elect to change the
level of Before-Tax Deposits to be effective as of any Entry Date provided that
he files such election with the Administrative Committee at least five (5)
business days prior to such date or by such other date reasonably determined by
the Administrative Committee with respect to a particular Participating Employer
or division thereof.
Suspending Deposits. A Participant may elect to suspend making
Before-Tax Deposits at any time. Such election shall be effective as soon as
practicable after it is filed with the Administrative Committee. No Matching
Deposits shall be made on behalf of a Participant during any period during which
Before-Tax Deposits are suspended.
Resuming Deposits. A Participant may elect to resume making
Before-Tax Deposits effective on any Entry Date after suspending Before-Tax
Deposits in accordance with paragraph (b) above by filing an election with the
Administrative Committee at least five (5) business days prior to such Entry
Date, or by such other date reasonably determined by the Administrative
Committee with respect to a particular Participating Employer or division
thereof.
Maximum Annual Additions.
------------------------
The maximum Annual Addition credited for a Limitation Year
shall equal the lesser of thirty thousand dollars ($30,000) or twenty-five
percent (25%) of the Participant's Section 415 Compensation for such Limitation
Year.
The following procedures shall apply if, as a result of an
allocation of forfeitures, a reasonable error in estimating Plan Compensation or
for any other reason permitted by the Internal Revenue Service, the Annual
Addition for a Participant exceeds the maximum permitted under Section 3.3(a) as
of the end of a Limitation Year:
Before-Tax Deposits shall be refunded to the
Participant and, to the extent necessary, the Plan will hold
the excess Matching Deposits unallocated in a suspense account
to reduce future Matching Deposits in the current Plan Year
for all other Participants in the Plan, provided that the
reallocation does not cause the Annual Additions to such other
Participants to exceed such limitations. If the reallocation
causes the Annual Additions to such other Participants to
exceed the Code Section 415 limit, such reallocation shall be
made in a subsequent Plan Year before any other Contributions
are allocated to Participants' Accounts in such year.
15
<PAGE>
If excess Annual Additions exist after application of
subsection (1) and the Participant is covered by the Plan at
the end of the Limitation Year, such excess will be credited
to a suspense account and used to reduce future Matching
Deposits for such Participant in the next Limitation Year and
each succeeding Limitation Year, if necessary.
If excess Annual Additions exist after application of
subsection (1) and the Participant is not covered by the Plan
at the end of the Limitation Year, such excess will be
credited to a suspense account and used to reduce future
Matching Deposits for all Active Participants to the Plan by
the Participating Employer in the next Limitation Year and
each succeeding Limitation Year, if necessary.
Limitation on Before-Tax Deposits.
---------------------------------
No Participant shall be permitted in any calendar year to have
Before-Tax Deposits made to this Plan, or to any other qualified plan maintained
by the Employer, in excess of the dollar limitation contained in Section 402(g)
of the Code in effect at the beginning of such calendar year.
Return of Excess Deferral Amounts.
The Plan will return Before-Tax Deposits which exceed
the dollar limitation described in subsection (a) above for a
calendar year ("Excess Deferral Amount") to the Participant on
whose behalf such Before-Tax Deposits were made, and any
income or loss allocable to such Excess Deferral Amounts, no
later than April 15th of the year following the calendar year
in which such Before-Tax Deposits were made.
A Participant seeking the return of an Excess
Deferral Amount for the preceding calendar year must submit
such request in writing to the Participating Employer no later
than March 1. The claim must specify the Participant's Excess
Deferral Amount for such year and must be accompanied by the
Participant's written statement that if such amounts are not
distributed, such Excess Deferral Amount, when added to
amounts deferred under other plans or arrangements described
in Sections 401(k), 408(k) or 403(b) of the Code, will exceed
the limit imposed on the Participant by Section 402(g) of the
Code for the year in which the deferral occurred.
The income or loss allocable to the Excess Deferral
Amount for the preceding calendar year shall be determined
using any reasonable method, provided that such method does
not violate Section 401(a)(4) of the Code, is consistently
applied and is used in allocating income to Participants'
Accounts under the Plan.
16
<PAGE>
Actual Deferral Percentage Test.
-------------------------------
The Administrative Committee shall, subject to Section 3.7
below, cause Actual Deferral Percentages to be calculated as of each December
31st for each Eligible Employee who has met the participation requirements set
forth in Section 2.1. The average of the Actual Deferral Percentages of the
Highly Compensated Employees shall either:
not exceed one hundred and twenty-five percent (125%)
of the average of Actual Deferral Percentages of all Nonhighly
Compensated Employees for the prior Plan Year, or
not exceed two hundred percent (200%) of the average
of Actual Deferral Percentages of all Nonhighly Compensated
Employees for the prior Plan Year, provided that the excess of
the average of Actual Deferral Percentages of Highly
Compensated Employees over the average of Actual Deferral
Percentages of all such Nonhighly Compensated Employees is not
greater than two (2) percentage points.
If the Administrative Committee finds that neither of the
above tests is satisfied, it shall, within one year of the end of the Plan Year
during which such failure occurs, make one or more of the following adjustments:
reduce the Before-Tax Deposits of the Highly
Compensated Employee with the highest amount of Before-Tax
Deposits until the Actual Deferral Percentage Test is met, or
until such Participant's Before-Tax Deposit is reduced to the
same amount as the Participant who is the Highly Compensated
Employee with the next highest amount of Before-Tax Deposits
for the Plan Year. This process shall be repeated until one of
the Actual Deferral Percentage Tests is satisfied. The reduced
amounts, which are referred to herein as "Excess
Contributions," including any Allocable Income (as defined
below) as to such amounts, shall be distributed to each
affected Participant no later than the last day of the Plan
Year next following the year in which they became Excess
Contributions, and/or
authorize the use of any accumulated forfeitures as a
QNEC or QMAC to the Plan. The Administrative Committee may
allocate a QNEC or a QMAC to all Participants other than
Highly Compensated Employees or to a select group of
Participants who are Nonhighly Compensated Employees, and/or
17
<PAGE>
advise one or more Participating Employers that they
may elect to contribute a QNEC or QMAC to the Plan to all
Participants other than Highly Compensated Employees or to a
select group of Participants who are Nonhighly Compensated
Employees. Any QNECs or QMACs contributed pursuant to
paragraph (2) or this paragraph (3) shall be counted in the
computation of the Actual Deferral Percentage test.
For purposes of this Section, the term "Allocable Income"
shall include allocable income on Excess Contributions for the Plan Year and
allocable income on Excess Contributions for the period between the end of the
Plan Year and the date of distribution of such Excess Contributions pursuant to
Treasury Regulation Section 1.401(k)-l(f)(4).
The amount of Excess Contributions which would otherwise be
distributed to the Participant shall be reduced, in accordance with regulations,
by the Excess Deferral Amounts distributed to the Participant pursuant to
Section 3.4.
This Section 3.5 shall be effective as of January 1, 1997.
Actual Contribution Percentage Test.
-----------------------------------
The Administrative Committee shall, subject to Section 3.7
below, cause Actual Contribution Percentages to be calculated as of each
December 31st for each Eligible Employee who has met the participation
requirements set forth in Section 2.1. The average of the Actual Contribution
Percentages of the Highly Compensated Employees shall either:
not exceed one hundred and twenty-five percent (125%)
of the average of Actual Contribution Percentages of all
Nonhighly Compensated Employees for the prior Plan Year, or
not exceed two hundred percent (200%) of the average
of Actual Contribution Percentages of all Nonhighly
Compensated Employees for the prior Plan Year, provided that
the excess of the average of Actual Contribution Percentages
of Highly Compensated Employees over the average of Actual
Contribution Percentages of all Nonhighly Compensated
Employees is not greater than two (2) percentage points.
If the Actual Contribution Percentage test is not satisfied,
the Administrative Committee may, within one year of the end of the Plan Year,
make one or more of the following adjustments:
reduce the Matching Deposits of the Highly
Compensated Employee with the highest amount of Matching
Deposits until the Actual Contribution Percentage Test is met,
or until such Participant's Matching Deposits are reduced to
the same amount as the Participant who is the Highly
Compensated Employee with the next highest amount of Matching
Deposits for the Plan Year. This process shall be repeated
until one of the Actual Contribution Percentage Tests is
satisfied. The reduced amounts, which are referred to herein
as "Excess Aggregate Contributions," including any Allocable
Income (as defined below) as to such amounts, shall be
forfeited and used to reduce future Matching Contributions.
Excess Aggregate Contributions shall be forfeited no later
than the last day of the Plan Year next following the year in
which they became Excess Aggregate Contributions, and/or
18
<PAGE>
authorize the use of any accumulated forfeitures as a
QNEC or a QMAC to the Plan. The Administrative Committee may,
in its discretion, allocate a QNEC or a QMAC to all
Participants other than Highly Compensated Employees or to a
select group of Participants who are Nonhighly Compensated
Employees, and/or
advise one or more Participating Employers that they
may elect to contribute a QNEC or QMAC to the Plan to all
Participants other than Highly Compensated Employees or to a
select group of Participants who are Nonhighly Compensated
Employees. Any QNECs or QMACs contributed pursuant to
paragraph (2) or this paragraph (3) shall be counted in the
computation of the Actual Contribution Percentage test.
For purposes of this Section, the term "Allocable Income"
shall include allocable income on Excess Aggregate Contributions for the Plan
Year and allocable income on Excess Aggregate Contributions for the period
between the end of the Plan Year and the date of distribution of such Excess
Aggregate Contributions pursuant to Treasury Regulation Section
1.401(m)-l(e)(3).
Amounts forfeited by Highly Compensated Employees under this
Section 3.6 shall be treated as Annual Additions under Section 3.3 and applied
to reduce future Matching Deposits, QNECs or QMACs.
This Section 3.6 shall be effective as of January 1, 1997.
Restriction on Multiple Use of Alternative Limitations.
------------------------------------------------------
For any Plan Year in no event shall the sum of the average of
the Actual Deferral Percentages and the average of the Actual Contribution
Percentages for Participants who are Highly Compensated Employees exceed the
greater of the amount determined under (1) and (2):
the sum of:
1.25 times the greater of the average of
Actual Deferral Percentages or the
average of Actual Contribution
Percentages for Participants who are
Nonhighly Compensated Employees for
the prior Plan Year; and
2 percentage points plus the lesser of
the average of Actual Deferral
Percentages or Actual Contribution
Percentages for Participants who are
Nonhighly Compensated Employees for
the prior Plan Year, which amount
may not exceed twice the lesser of
the average of Actual Deferral
Percentages or the average of Actual
Contribution Percentages for
Participants who are Nonhighly
Compensated Employees for the prior
Plan Year; or
the sum of:
1.25 times the lesser of the average of
Actual Deferral Percentages or the
average of Actual Contribution
Percentages for Participants who are
Nonhighly Compensated Employees for
the prior Plan Year; and
2 percentage points plus the greater
of the average of Actual Deferral
Percentages or Actual Contribution
Percentages for Participants who are
Nonhighly Compensated Employees for
the prior Plan Year, which amount
may not exceed twice the greater of
the average of Actual Deferral
Percentages or the average of Actual
Contribution Percentages for
Participants who are Nonhighly
Compensated Employees for the prior
Plan Year.
20
<PAGE>
This Section 3.7 shall be effective as of January 1, 1997.
Rollovers and Transfers.
-----------------------
An Eligible Employee, regardless of whether he has satisfied
the eligibility requirements of Article II, who has received a distribution from
a plan which meets the requirements of Section 401(a) of the Code may, in
accordance with procedures established by the Administrative Committee, transfer
the distribution to the Trust Fund, provided the following conditions are met:
the distribution qualifies for rollover pursuant to Section
402(c)(4) of the Code;
the transfer occurs on or before the sixtieth (60th) day
following the Eligible Employee's receipt of the distribution
from the other plan, or, if such distribution had previously been
transferred into an individual retirement account or individual
retirement annuity described in Section 408 of the Code, on or
before the sixtieth (60th) day following the Employee's receipt
of the distribution from such account or annuity;
21
<PAGE>
the amount transferred does not exceed the fair market value
of all the property the Eligible Employee receives in the
distribution, reduced by any Employee after-tax contributions
(other than accumulated deductible employee contributions within
the meaning of Section 72(o)(5) of the Code); and
the Eligible Employee provides the Administrative Committee
with whatever information is necessary to determine that the
proposed rollover will meet the requirements of this Section.
The Administrative Committee, on direction of the Board, may
permit the direct transfer of amounts from another plan to this Plan, provided
the Administrative Committee is satisfied that the transferor plan and trust are
qualified under Sections 401(a) and 501(a) of the Code and that transfer of such
amounts to the Plan will not jeopardize the qualified status of the Plan and
Trust under such Code sections.
Amounts which are rolled over into the Plan shall be allocated
to the Eligible Employee's Rollover Deposit Account.
If the Administrative Committee reasonably concludes that a
contribution by an Eligible Employee qualifies as an eligible rollover
contribution in accordance with paragraph (a) or (b) above, permits transfer of
such contribution to the Plan and later determines that the contribution was not
an eligible rollover contribution, the amount of the invalid rollover
contribution, plus any earnings attributable thereto, may be distributed to the
Eligible Employee within a reasonable time after such determination.
Amounts directly transferred into the Plan which are not
distributed to the Eligible Employee in accordance with paragraph (d) and which
do not qualify for rollover pursuant to Section 402(c)(4) of the Code shall be
allocated to the Participant Account which corresponds to the type of
contribution transferred.
Forfeiture of Matching Deposits.
--------------------------------
Notwithstanding any other provision of the Plan, in the event a Participant
receives a distribution of Excess Deferral Amounts pursuant to Section 3.4 or a
distribution of Excess Contributions pursuant to Sections 3.5 or 3.7, any
Matching Deposit which relates to such Excess Deferral Amounts or Excess
Contributions shall be forfeited and applied in accordance with Section 5.2.
22
<PAGE>
Participant Accounts and Investment Funds
-----------------------------------------
Maintenance of Participant Accounts.
-----------------------------------
The Administrative Committee shall cause a separate Account to
be maintained with respect to each Participant in such a manner as to show
separately the portion thereof that is attributable to Basic Contributions,
Before-Tax Deposits, Matching Deposits, Profit Sharing Contributions, Rollover
Deposits, Supplementary Contributions and such other contributions that may be
made from time to time, and to identify the investment gains or losses
attributable to each such category of contributions.
Each Valuation Date, the value of each Participant Account
shall be adjusted to reflect the effect on each sub-account of any change in the
value of each Investment Fund from the last Valuation Date, as well as the
effect of any deposits, withdrawals, distributions or other transactions
occurring since the last Valuation Date.
All routine Plan administrative expenses for such services as
Account record keeping, required audits, legal services, governmental filings
and selection of investment contracts performed by third-party service providers
shall be charged against Plan investment earnings unless and to the extent the
Company pays for them. Expenses incurred in connection with the sale, holding,
disposition, investment or reinvestment of a Participant's Account, including
but not limited to brokerage fees, commissions, insurance charges, governmental
charges and transfer and other taxes, shall be paid by the Plan and charged to
the Account of such Participant.
Investment Funds.
----------------
The Administrative Committee shall determine what Investment
Fund options to offer under the Plan and may, from time to time, remove, add to,
replace or change the Investment Fund options offered hereunder. The
Administrative Committee may also, from time to time, limit the dollar or
percentage amount a Participant may invest in any Investment Fund, the type of
Contribution that may be invested in any Investment Fund or the timing or
frequency of directions for the investment of any Account in any Investment
Fund, or impose such other limitations or restrictions with respect to the
Investment Funds as it deems necessary or appropriate. A list of Investment
Funds shall be annexed hereto as Appendix A. Such Appendix shall be updated from
time to time by the Administrative Committee.
The Administrative Committee shall cause the Trustee to
perform a valuation of each Investment Fund as of each Valuation Date to
determine the value of each Investment Fund and to reconcile the Investment
Funds from the prior Valuation Date. Such valuation shall recognize any
appreciation or depreciation in the fair market value of all securities or other
property held by each respective Investment Fund, and any cash and accrued
earnings, and shall take into account any accrued expenses and proper charges
against the Investment Fund as of such Valuation Date.
23
<PAGE>
Participants and alternate payees shall assume full
responsibility for the investment performance of monies invested in accordance
with their direction, as provided under Section 404(c) of ERISA.
Sequa Common Stock Fund.
-----------------------
The Sequa Common Stock Fund may from time to time acquire,
hold and dispose of Sequa Shares and cash for the Sequa Common Stock Fund in
accordance with the directions of Participants. The Trustee shall take
reasonable efforts to retain approximately 0.5% of the total value of such fund
as of any Valuation Date in cash, with an understanding that such amount shall
not exceed 2%. Cash held by the Sequa Common Stock Fund shall be invested in a
money market fund or in such other manner as the Administrative Committee may
from time to time approve.
The Sequa Common Stock Fund shall, to the extent possible,
regardless of market fluctuations, purchase, retain and sell Sequa Shares only
to permit distributions and transfers from and investments in the Sequa Common
Stock Fund. The Sequa Shares and cash held by the Plan for the Sequa Common
Stock Fund shall be allocated to the Account of each Participant in proportion
to such Participant's investment in the Sequa Common Stock Fund. Dividends and
other distributions (if any) received by the Plan with respect to Sequa Shares
held for the Sequa Common Stock Fund shall be reinvested in the Sequa Common
Stock Fund by the Trustee.
All voting, tender and similar rights appurtenant to Sequa
Shares allocated to a Participant's Account shall be passed through to the
Participant. The Participant shall direct the Trustee as to the exercise of such
rights and, upon timely receipt of a valid direction, the Trustee shall exercise
such rights as directed by the Participant in accordance with the Trust
Agreement, except in the case where the Trustee determines that to do so would
be inconsistent with the provisions of Title 1 of ERISA. In the absence of a
timely and valid affirmative exercise of voting rights by a Participant, Sequa
Shares allocated to a Participant's Account will be voted in the same
proportions as Sequa Shares for which the Trustee has received timely and valid
instructions from Participants, except in the case where the Trustee determines
that to do so would be inconsistent with the provisions of Title 1 of ERISA.
With respect to the exercise of all other rights appurtenant to Sequa Shares
allocated to a Participant's Account, including tender offer rights, a
Participant who does not issue valid directions to the Trustee to sell, offer to
sell, exchange or otherwise dispose of such shares shall be deemed to have
directed the Trustee not to sell, offer to sell, exchange, dispose of or take
any other affirmative action with respect to such shares, except in the case
where the Trustee determines that to do so would be inconsistent with the
provisions of Title 1 of ERISA.
Procedures shall be established and maintained to ensure the
confidentiality of all information regarding a Participant's investment in the
Sequa Common Stock Fund, including but not limited to the Participant's exercise
of voting, tender and similar rights appurtenant to Sequa Shares allocated to
his Account, except to the extent necessary to comply with federal law or state
law not preempted by ERISA. The Administrative Committee is hereby designated as
the fiduciary responsible for ensuring that these confidentiality procedures are
adequate and are followed. In the event that the Administrative Committee
determines that a particular situation exists which involves a potential for
undue influence by a Participating Employer upon Participants and Beneficiaries
with respect to the exercise of rights appurtenant to Sequa Shares held in the
Sequa Common Stock Fund, the Administrative Committee shall designate an
independent fiduciary, who shall not be a director, officer, employee or
affiliate of an Employer, to assume responsibility for all activities under this
Section 4.3(d).
24
<PAGE>
Notwithstanding anything contained herein to the contrary, all
investments in the Sequa Common Stock Fund by Participants shall comply with the
requirements of Section 16 of the Securities Exchange Act of 1934, 15 U.S.C. 78p
and accompanying rules issued by the Securities and Exchange Commission. In
addition, Participants are bound by and shall at all times comply with the
insider trading policies of the Company with respect to all investment decisions
concerning the Sequa Common Stock Fund.
Investment by Participants and Beneficiaries in the Sequa
Common Stock Fund shall at all times be subject to such additional restrictions
and administrative procedures as may from time to time be imposed by the
Administrative Committee.
Investment of Contributions.
---------------------------
A Participant may direct that any Contributions made to his
Account be allocated to one or more of the Investment Funds selected by the
Administrative Committee in accordance with Section 4.2(a) in multiples of one
percent (1%) by completing a form prescribed by the Administrative Committee, or
by means of a telephonic voice response system or internet link maintained by
the Plan record keeper and in accordance with instructions supplied by the Plan
record keeper. Such direction shall continue in effect until such time as the
Participant requests a different allocation.
Participants shall give their investment direction changes to
the Plan record keeper in writing or by means of a telephonic voice response
system or internet link maintained by the Plan record keeper and in accordance
with instructions supplied by the Plan record keeper. Subject to paragraph (c)
below, elections received by 4:00 p.m. E.T., or such other time as may be
determined by the Administrative Committee in its sole discretion, shall be
effective on the same business day. Elections received after 4:00 p.m. E.T. (or
such other time) shall be effective as of the following business day.
The unit price applicable to Participant investments in and
distributions or transfers from the Sequa Common Stock Fund shall be determined
in such manner as the Trustee shall from time to time determine.
25
<PAGE>
If a Participant fails to designate any Investment Fund, his
Contributions shall be deposited in the Vanguard Federal Money Market Fund or
such other fund designated by the Administrative Committee.
Transfer of Account Balances Among Investment Funds.
---------------------------------------------------
A Participant may elect, at any time, to transfer amounts
attributable to his Account among Investment Funds in increments of one percent
(1%) or one dollar.
The timing, volume and frequency of transfers among Investment
Fund options may be restricted by the Administrative Committee in its sole
discretion.
Direct transfers from the Vanguard Retirement Savings Trust
Fund to the Vanguard Federal Money Market Fund shall not be allowed.
Participants shall be permitted to initiate transfers among
Investment Funds with respect to their Accounts by utilizing the telephonic
voice response system or internet link made available by the Plan record keeper.
Subject to paragraph (e) below, elections received by 4:00 p.m. E.T., or such
other time as may be determined by the Administrative Committee in its sole
discretion, shall be effective on the same business day. Elections received
after 4:00 p.m. E.T. (or such other time) shall be effective as of the following
business day.
The unit price applicable to Participant transfers to and from
the Sequa Common Stock Fund shall be determined in such manner as the Trustee
shall from time to time determine.
Vesting and Forfeitures
-----------------------
Nonforfeitable Accounts.
------------------------
A Participant shall be vested in and have a nonforfeitable right to the value of
his entire Basic Contribution Account, Before-Tax Deposit Account, Rollover
Deposit Account and Supplementary Contribution Account.
Forfeitable Accounts.
--------------------
Subject to an Appendix, a Participant's Matching Deposit
Account and Profit Sharing Account shall be divided into the portion to which
the Participant has a vested and nonforfeitable right and the portion to which
he has not acquired a vested and nonforfeitable right. The portion of the
Matching Deposit Account and Profit Sharing Account to which a Participant has a
vested and nonforfeitable right shall be determined by multiplying the entire
value of his Matching Deposit Account and Profit Sharing Account by a Vesting
Percentage. The Vesting Percentage shall be determined in accordance with the
following schedule:
26
<PAGE>
Completed Years of Vesting Percentage Applicable to
Service Matching Deposit Account and Profit
Sharing Account
---------------------- ---------------------------------------
0 0%
1 20%
2 40%
3 60%
4 80%
5 or more 100%
In addition, a Participant shall be fully vested in his
Matching Deposit Account and Profit Sharing Account upon his death, Disability,
attainment of Normal Retirement Age, if such event occurs while he is employed
by an Employer, or upon termination of the Plan or occurrence of such other
event described in Section 9.3, if such event occurs prior to the time the
Participant has incurred a forfeiture.
If a Participant separates from service prior to acquiring a
nonforfeitable right to the entire value of his Matching Deposit Account or
Profit Sharing Account, the nonvested portion of such Accounts shall be
forfeited upon the earlier to occur of (1) or (2) below where:
is the date on which the Participant receives full payment
of his vested Account, and
is the date on which the Participant incurs five (5)
consecutive one-year Periods of Severance.
Such forfeitures shall, in the discretion of the Administrative Committee, be
used to reduce subsequent Employer Contributions used to fund Matching Deposits,
QNECs, QMACs or Profit Sharing Contributions.
Restoration of Forfeitures.
---------------------------
If a Participant whose Matching Deposit Account or Profit Sharing Account has
been forfeited under Section 5.2 is reemployed by a Participating Employer prior
to incurring five (5) consecutive one-year Periods of Severance, the dollar
amount forfeited shall be restored to the Participant's Matching Deposit Account
or Profit Sharing Account, as the case may be, if he repays the full amount of
any distribution received upon separation from service before the earlier of
five (5) years after the first date on which the Participant is subsequently
reemployed by the Participating Employer or the close of the first period of
five (5) consecutive one-year Periods of Severance commencing on the date of the
distribution. The funds for such restoration shall be taken from any available
forfeited amounts at the time the Participant repays the distribution, or if
such forfeited amounts are insufficient to provide the restoration, shall be
provided by the Participating Employer that most recently employs the
Participant.
27
<PAGE>
Vesting in Prior Contributions.
-------------------------------
If a Participant returns to employment with a Participating Employer after
incurring five (5) consecutive one-year Periods of Severance, his Years of
Service subsequent to such five (5) year period shall not be taken into account
for purposes of determining the Vesting Percentage applicable to Matching
Deposits or Profit Sharing Contributions which accrued before such five (5) year
period.
Partial Distributions or Withdrawals.
-------------------------------------
A Participant whose Vesting Percentage is less than one hundred percent (100%)
and who:
has received an in-service withdrawal of any portion of his
Matching Deposit Account or Profit Sharing Account pursuant to Article VII, or
has received a distribution under Article VI and has not
repaid the amount of his distribution as provided under Section 5.3,
shall have the vested portion of his Matching Deposit Account or Profit Sharing
Account, as the case may be, computed by the formula P (A + D) - D, where "P"
equals the Vesting Percentage at the relevant time, "A" equals the Matching
Deposit Account or Profit Sharing Account balance at the relevant time, and "D"
equals the amount of the previous withdrawal or unrepaid distribution.
Distributions
-------------
Events Allowing Distribution.
----------------------------
A Participant (or his Beneficiary(ies) as the case may be),
shall be eligible to receive a distribution of his vested Account balance upon
retirement from the Employer, death, separation from service from all Employers,
or termination of this Plan without establishment or maintenance of another
defined contribution plan, other than an employee stock ownership plan as
defined in Section 4975(e)(7) of the Code. A Participant shall also be eligible
to receive a distribution of his vested Account balance upon disposition by his
Participating Employer of substantially all of the assets (within the meaning of
Section 409(d)(2) of the Code) used by such Participating Employer in a trade or
business or upon the disposition by such Participating Employer of its interest
in a subsidiary (within the meaning of Section 409(d)(3) of the Code), but only
if the Participant continues employment with the corporation acquiring such
assets or with such subsidiary, as the case may be, and only if the acquiring
entity is not an Employer. Distributions shall be payable as provided in
Sections 6.2 and 6.3.
28
<PAGE>
Notwithstanding the foregoing, a Participant shall not receive
a distribution on account of a separation from service if he returns to
employment with a Participating Employer prior to receiving such distribution.
Forms of Distribution.
---------------------
Subject to paragraphs (b) and (c), any applicable Appendix and
the conditions and limitations set forth in any other provisions of the Plan,
distributions to or with respect to a Participant shall be made in one single
sum in cash, which shall be the normal form of payment. All amounts payable in
cash under this Article VI shall be paid by check or by such electronic transfer
method as may be acceptable to the Trustee. A Participant may, in lieu of the
normal form of payment, elect to have his Account paid in the form of a life
annuity; provided, however, that the benefits of a married Participant who
elects an annuity shall be paid in the form of a Qualified Joint and Survivor
Annuity in accordance with Section 6.5 unless the Participant waives such
annuity in accordance with Section 6.5.
A Participant who elects the normal form of payment and who
holds the equivalent of no more than a total of 99 Sequa Shares in the Sequa
Common Stock Fund on the date he elects to receive a distribution pursuant to
Section 6.1 shall have the option of receiving his distribution from such
Investment Fund in cash or in kind. Such Participant may elect in the manner
prescribed by the Administrative Committee to receive the value of his Account
which is invested in the Sequa Common Stock Fund in cash or in kind. If the
Participant elects to receive his Sequa Common Stock Fund accumulation in Sequa
Shares, the value of any fractional Sequa Shares and any cash shall be paid in
cash. The distribution of any other amounts hereunder shall be paid in cash.
Notwithstanding the foregoing, no part of the benefits payable to a Participant
whose Account is invested in whole or in part in the Sequa Common Stock Fund on
the date he elects to receive a distribution and who elects to have his Account
paid in either the life annuity or Qualified Joint and Survivor Annuity form of
payment may be paid in kind.
A Participant who elects the normal form of payment and who
holds the equivalent of more than 99 Sequa Shares in the Sequa Common Stock Fund
on the date he elects to receive a distribution pursuant to Section 6.1 must
receive his distribution from such Investment Fund entirely in full Sequa
Shares, to the extent possible; the value of any fractional Sequa Shares and
cash shall be paid in cash. The distribution of any other amounts hereunder
shall be paid in cash. Notwithstanding the foregoing, no part of the benefits
payable to a Participant whose Account is invested in whole or in part in the
Sequa Common Stock Fund on the date he elects to receive a distribution and who
elects to have his Account paid in either the life annuity or Qualified Joint
and Survivor Annuity form of payment may be paid in kind.
29
<PAGE>
Notwithstanding anything in this Plan to the contrary, if a
Participant dies while legally married prior to the distribution of his Account,
the value of such Account as determined under 6.3 below but reduced by any
security interest held by the Plan by reason of a loan outstanding to the
Participant shall be distributed by payment in a single cash sum to the
Participant's surviving Spouse unless the Participant and his surviving Spouse
had made a "Qualified Election" prior to his death. If a Qualified Election had
been made, payment shall be made in a single sum to or for the benefit of a
non-Spouse Beneficiary or Beneficiaries.
Qualified Election means an election made by the
Participant that the balance of his Account will be
distributed in full to a Beneficiary(ies) other than the
surviving Spouse, where
the Participant's Spouse consents in
writing to such election and to the
designation of the non-Spouse
Beneficiary and acknowledges the
effect of such election on forms
provided by and filed with the
Administrative Committee and
witnessed by a Plan representative
or a notary public; or
it is established that the Participant
has no Spouse or that such Spouse
cannot be located, or under such
other circumstances as may be
provided by the Code or applicable
regulations thereunder.
Any Qualified Election consented to by a Spouse
pursuant to this paragraph shall be irrevocable and shall be
effective only with respect to such Spouse. Any election may
be revoked at any time by the Participant, but the designated
Beneficiary may not be changed by the Participant without
consent of the Participant's Spouse in accordance with this
paragraph.
Amount and Timing of Distributions.
----------------------------------
A Participant eligible to receive a distribution in accordance
with Section 6.1 shall receive the value of his vested Account balance as of the
Valuation Date on which authorized distribution directions are received by the
Trustee, provided that distribution instructions received after 4:00 p.m. E.T.
(or such other time as may be determined by the Administrative Committee in its
sole discretion) shall be deemed to have been received on the following
Valuation Date. Such distribution shall be made available to the Participant in
a form described in Section 6.2 above, not later than six months after the close
of the Plan Year in which the events described in Section 6.1 occurred. Any
distribution to a Participant's Beneficiary shall commence not later than six
(6) months after the close of the Plan Year in which the events described in
Section 6.1 occurred. If the Participant's vested Account balance is zero, the
Participant shall be deemed to have received a distribution of such vested
Account.
30
<PAGE>
Notwithstanding anything in this Article to the contrary, if
the value of the Participant's vested Account balance is greater than five
thousand dollars ($5,000) at the time of distribution (three thousand five
hundred dollars ($3,500) with respect to Participants who retire, die or
separate from service from all Employers on or before May 31, 2000), no
distribution shall be made prior to the Participant's Normal Retirement Date
without the consent of the Participant. In the event the Participant does not
consent to such distribution, the Administrative Committee shall distribute the
Participant's vested Account balance in accordance with this Article VI
following the earlier of the last day of the Plan Year in which the Participant
attains his Normal Retirement Age or dies. If the value of the Participant's
vested Account balance is equal to or less than five thousand dollars ($5,000)
at the time of distribution (three thousand five hundred dollars ($3,500) with
respect to Participants who retire, die or separate from service from all
Employers on or before May 31, 2000), a distribution of the Participant's
Account may be made prior to the Participant's Normal Retirement Date without
the consent of the Participant or his Spouse.
Distributions Pursuant to a Qualified Domestic Relations Order.
---------------------------------------------------------------
Distribution of a Participant's Account to an alternate payee under a qualified
domestic relations order meeting the requirements of Section 4l4(p) of the Code
shall be made in any of the forms of payment permitted by Section 6.2 and may
commence prior to the time the Participant would be eligible to receive a
distribution under the terms of the Plan. Such distribution shall be subject to
the rules set forth in Section 6.3.
Life Annuity and Qualified Joint and Survivor Annuity.
-----------------------------------------------------
This Section shall apply to any Participant who elects to have
his Account balance paid as an annuity pursuant to the provisions of Section
6.2.
The Account balance of a Participant who elects to have his
Account balance paid as an annuity pursuant to the provisions of Section 6.2 and
who is not married on his Annuity Starting Date shall be payable in the form of
a life annuity. The Account balance of a Participant who elects to have his
Account balance paid as an annuity pursuant to the provisions of Section 6.2 and
who is married on his Annuity Starting Date shall be payable in the form of a
Qualified Joint and Survivor Annuity unless the Participant waives such annuity
in accordance with paragraphs (c) through (g) below.
No more than ninety (90) days before, or on or within a
reasonable time after, the Annuity Starting Date, the Administrative Committee
shall provide a married Participant with a written non-technical explanation
(the "Benefits Explanation") of: the terms and conditions of the Qualified Joint
and Survivor Annuity; the Participant's right to waive the Qualified Joint and
Survivor Annuity and the effect of such election; the rights of the
Participant's Spouse with respect to such election; the right to make, and the
effect of, a revocation of a previous election to waive the Qualified Joint and
Survivor Annuity; and a general description of the material features and the
relative values of the various forms of benefit under the Plan.
31
<PAGE>
Subject to paragraph (f) below, a married Participant may, at
any time after receiving the Benefits Explanation and up to and including the
later of his Annuity Starting Date and the thirtieth (30th) day following the
provision of the Benefits Explanation, elect to waive the Qualified Joint and
Survivor Annuity with the consent of his Spouse in accordance with paragraph (g)
below and to receive payment under the life annuity payment form.
A married Participant may revoke his election of the life
annuity form under paragraph (d) at any time up to and including the "Revocation
Date." The Revocation Date shall be the later of (1) his Annuity Starting Date,
and (2) the earlier of (A) the thirtieth day following the date on which the
Benefits Explanation is provided, and (B) where the Participant has waived the
thirty-day election period in accordance with paragraph (f) below, the seventh
day following the date on which the Benefits Explanation is provided.
Distribution of a Participant's Account balance may commence at any time after
the applicable Revocation Date and before the expiration of 90 days from the
date on which the Benefits Explanation was provided.
A married Participant may waive his right to the thirty-day
election period referred to in paragraph (d) above, and distribution of such
Participant's Accrued Benefit may commence on the later of the day after the
Annuity Starting Date and the eighth day following the date on which the
Benefits Explanation is provided to such Participant, if:
the Participant is provided with information that
clearly indicates that he has a right to at least 30 days to
consider whether to waive the Qualified Joint and Survivor
Annuity and consent to the life annuity form of distribution;
and
the Participant waives such 30-day requirement with
the consent of his Spouse in accordance with paragraph (g)
below.
A Participant who is married at his Annuity Starting Date may
waive the Qualified Joint and Survivor Annuity and elect to receive payment
under the life annuity payment form only if the Participant's Spouse consents in
writing to such waiver. Such consent shall be witnessed by a notary public or
Plan representative and filed with the Administrative Committee. No consent is
required if it is established to the satisfaction of the Administrative
Committee that the Participant does not have a Spouse or that the Spouse cannot
be located. Any consent by a Spouse pursuant to this paragraph shall be
irrevocable and shall be effective only with respect to such Spouse. Spousal
consent must be obtained for any subsequent change in the designated form of
benefit or alternate Beneficiary. A married Participant's election to waive the
normal form of benefit payment may be revoked without the consent of the
Participant's Spouse.
In the event a married Participant elects an annuity as his
form of payment in accordance with this Section 6.5 and dies prior to his
Annuity Starting Date, the Participant's surviving Spouse shall receive an
annuity for life purchased with not less than fifty percent (50%) of the
Participant's vested Account balance as of the date of death.
32
<PAGE>
Commencement of Benefits. Unless the Participant elects
otherwise in writing, payment of his Account under the Plan shall commence no
later than the sixtieth (60th) day after the close of the Plan Year in which the
last of the following occurs:
The Participant attains age sixty-five (65);
The tenth (10th) anniversary of the Participant's initial
participation in the Plan; or
The Participant separates from service with all Employers.
Methods of Distribution.
-----------------------
The provisions of this Section will apply to any distribution
of a Participant's interest and will take precedence over any inconsistent
provisions of this Plan.
All distributions required under this Section shall be made in
accordance with the following requirements and shall otherwise comply with
Section 401(a)(9) of the Code and the regulations thereunder, including the
minimum distribution incidental benefit requirements of Proposed Treasury
Regulation Section 1.401(a)(9)-2.
Distribution of Accounts, if not made in a single sum, shall
be made over one of the following periods (or a combination thereof): (1) the
life of such Participant; (2) the lives of such Participant and a designated
Beneficiary; (3) a period not extending beyond the life expectancy of such
Participant; or (4) a period not extending beyond the life expectancy of such
Participant and a designated Beneficiary.
If the distribution of the Participant's interest has begun in
accordance with the preceding paragraph and the Participant dies before his
entire interest has been distributed to him, the remaining portion of such
interest shall be distributed at least as rapidly as under the method of
distribution used as of his date of death.
If the Participant dies before distribution commences, his or
her entire interest will be distributed no later than five (5) years after the
Participant's death except that:
Payments of any portion of such interest to or for
the benefit of a Beneficiary may be made over the life or life
expectancy of such Beneficiary commencing no later than one
year after the Participant's death; and
33
<PAGE>
Payments of any portion of such interest to the
Participant's surviving Spouse are not required to begin
earlier than the date on which the Participant would have
attained age seventy and one half (70 1/2), and if the Spouse
dies before payments begin, subsequent distributions are not
required to begin earlier than the date the Spouse would have
attained age seventy and one half (70 1/2).
Under Treasury Regulations, any amount paid to a child shall
be treated as if it had been paid to the surviving Spouse if such amount will
become payable to the surviving Spouse when the child reaches the age of
majority or any other designated event permitted under regulations.
For purposes of this Section, any distribution required under
the incidental death benefit requirements of Section 401(a) of the Code shall be
treated as a distribution required under Section 40l(a)(9) of the Code.
Direct Rollover Distributions.
-----------------------------
Direct Rollover Election. Notwithstanding any provision of the
Plan to the contrary that would otherwise limit a Distributee's election under
this Section, a Distributee may elect, at the time and in the manner prescribed
by the Administrative Committee, to have all or any portion of an Eligible
Rollover Distribution to which he is otherwise entitled paid directly to any one
Eligible Retirement Plan specified by the Distributee in a Direct Rollover.
Definitions.
-----------
Eligible Rollover Distribution means any distribution
of all or any portion of the balance to the credit of the
Distributee, except that an Eligible Rollover Distribution
does not include: (A) any distribution that is one of a series
of substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the
Distributee or the joint lives (or joint life expectancies) of
the Distributee and the Distributee's designated Beneficiary,
or for a specified period of ten (10) years or more; (B) any
distribution to the extent such distribution is required under
Section 401(a)(9) of the Code; (C) the portion of any
distribution that is not includible in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities); and (D) any
hardship withdrawal under Section 7.1 described in Code
Section 401(k)(2)(B)(i)(IV).
Eligible Retirement Plan means an individual
retirement account described in Section 408(a) of the Code, an
individual retirement annuity described in Section 408(b) of
the Code, an annuity plan described in Section 403(a) of the
Code, or a qualified trust described in Section 401(a) of the
Code, that accepts the Distributees' Eligible Rollover
Distribution. However, in the case of an Eligible Rollover
Distribution to the surviving Spouse, an Eligible Retirement
Plan includes only an individual retirement account or
individual retirement annuity.
34
<PAGE>
Distributee means an Employee or former Employee. In
addition, the Employee's or former Employee's surviving Spouse
and the Employee's or former Employee's Spouse or former
Spouse who is the alternate payee under a qualified domestic
relations order, as defined in Section 414(p) of the Code, are
Distributees with regard to the interest of the Spouse or
former Spouse.
Direct Rollover means a payment by the Plan to the
Eligible Retirement Plan specified by the Distributee.
In-Service Withdrawals and Loans
--------------------------------
Hardship Withdrawals.
--------------------
Hardship Defined. A Participant may, while in-service, request
in writing or in such electronic medium acceptable to the Administrative
Committee to withdraw a single sum from his Account in the event of an
"immediate and heavy financial need." Immediate and heavy financial need shall
include any of the following occurrences:
Unreimbursed medical expenses and amounts necessary to
obtain medical care for the Participant, the Participant's Spouse
and any dependent;
Purchase of the Participant's principal residence (but not
ongoing mortgage payments);
Payment of tuition, related educational fees, and room and
board expenses for the immediately forthcoming twelve (12) month
period of post-secondary education for the Participant, his
Spouse or dependents;
Payment to prevent eviction from or foreclosure on a
Participant's principal residence; and
Such other occurrences that are recognized as immediate and
heavy needs by the Commissioner of Internal Revenue through the
publication of revenue rulings, notices and other documents of
general application.
For the purposes of this Section, "dependents" shall be those persons considered
to be dependents for the purposes of Section 152 of the Code.
35
<PAGE>
Availability of Hardship Withdrawals. The Administrative
Committee or the Director, Compensation and Benefits of the Company will approve
a request for a hardship withdrawal only if each of the following conditions are
met:
The distribution is not in excess of that which is
required to meet the immediate and heavy financial need of the
Participant, including any amounts necessary to pay any
federal, state, or local income taxes or penalties reasonably
anticipated to result from the distribution.
The Participant has obtained all distributions (other
than hardship withdrawals) and nontaxable plan loans available
from the Plan or from any other qualified and nonqualified
plan sponsored by the Employer, but only to the extent that
such distributions and nontaxable loans will not increase the
amount needed to meet the hardship.
The Participant's Before-Tax Deposits to the Plan are
suspended for the twelve (12) consecutive month period
commencing on the date of the hardship withdrawal.
The Participant's Before-Tax Deposits for the
Participant's taxable year immediately following that in which
the hardship withdrawal occurs are reduced by the amount of
Before-Tax Deposits made on behalf of the Participant during
the taxable year in which the hardship withdrawal occurs. A
Participant may make only one hardship withdrawal in any
twelve (12) month period.
Amounts Available for Hardship Withdrawal. A Participant may
withdraw on account of hardship an amount equal to his vested Account balance
(excluding income credited after December 31,1988 on Before-Tax Deposits and any
amounts attributable to QMACs and QNECs, and excluding his Matching Deposit
Account and Supplementary Contribution Account).
Withdrawals After Age 59 1/2.
-----------------------------
A Participant who has attained age 59 1/2 may request in writing or in an
electronic medium acceptable to the Administrative Committee to withdraw in a
single sum all or any part of the value of his vested Account after giving at
least five (5) business days notice to the Administrative Committee. The value
of such vested Account will be determined as of the Valuation Date on which
authorized distribution directions are received by the Trustee, provided that
distribution instructions received after 4:00 p.m. E.T. (or such other time as
may be determined by the Administrative Committee in its sole discretion) shall
be deemed to have been received on the following Valuation Date. In no event may
a Participant have more than one such withdrawal in any six month period.
36
<PAGE>
Withdrawals from Supplementary Contribution Account.
----------------------------------------------------
A Participant may request in writing or in such electronic medium acceptable to
the Administrative Committee to withdraw an amount from his Supplementary
Contribution Account (excluding earnings) after giving at least five (5)
business days notice to the Administrative Committee. Only one withdrawal shall
be permitted in any six-month period and any such withdrawal shall be for a
minimum of $500, or, if less, the entire value of such Account.
Spousal Consent. Notwithstanding anything in this Section to
the contrary, no amounts may be withdrawn pursuant to this Article VII without
the written consent of the Participant's Spouse on forms provided by or in such
electronic medium acceptable to the Administrative Committee and permitted by
law. Such consent must be obtained prior to the time of the withdrawals and
shall be binding on any subsequent Spouse.
Loans to Participants.
----------------------
An Active Participant who has participated in the Plan for at least one year or
any "party in interest" within the meaning of ERISA who is: (i) an Inactive
Participant; (ii) a Beneficiary; or (iii) to the extent provided in a qualified
domestic relations order, an alternate payee, may apply for a loan from the
Plan. Such application must be filed with the Administrative Committee which
shall determine whether the loan application will be granted. A Participant may
have two outstanding loans (prior to September 1, 1998, one loan) at a time.
Loans that are granted shall be subject to the following conditions:
A Participant's loan, when added to the balance of any other
outstanding loans the Participant may have, shall not exceed the lesser of:
$50,000 reduced by the excess of (1) the highest
outstanding loan balance of the Participant's loans
outstanding during the immediately prior 12-month period
(ending the day before the new loan is granted) over (2) the
total of all outstanding loans the day the new loan is
granted, or
50% of the Participant's vested Account balance. For
purposes of this Section, the Participant's vested Account
balance shall be determined as of the Valuation Date
immediately preceding the date of the loan. However, under no
circumstances may the loan amount exceed the Participant's
vested Account balance as of the date of the loan.
No loan shall be for an amount which is less than $1,000.
37
<PAGE>
Each loan shall be secured by the Participant's vested Account
balance or by such other security as the Administrative Committee may deem to be
adequate. The Participant's Spouse must consent in writing to the use of the
Participant's vested Account balance as security for such loan. Such consent
must be obtained no earlier than the beginning of the ninety (90) day period
that ends on the date on which the loan is to be so secured. The consent, which
shall be binding with respect to the consenting Spouse or any subsequent Spouse
with respect to that loan, must acknowledge the effect of the loan and must be
witnessed by a Plan representative or notary public. A new consent shall be
required if the Account balance is used for renegotiation, extension, renewal,
or other revision of the loan.
All loans shall become due and payable upon the earlier of
separation from service or the expiration of five (5) years from the date of the
loan, except that the five (5) year repayment period may be extended to fifteen
(15) years at the request of the Participant for any loan used for the purpose
of purchasing a Participant's principal residence.
Each loan shall be made from the Investment Fund(s) on a
pro-rata basis. Each loan shall be treated as a separate investment of the
Participant.
Repayment of loans shall be by payroll deduction, or other
approved method, on a level amortization basis with payments not less than
quarterly; provided, however, that a Participant may prepay the outstanding
principal balance of his loan at any time. Participant payments shall be
credited to the Participant's sub-account or the various Investment Funds in the
same proportions as the Contributions are made to such Investment Funds on
behalf of the Participant at the time such loan repayments are made. A
Participant who transfers employment to an Employer which is not a Participating
Employer may continue to repay his loan by payroll deduction.
In the event of default, foreclosure on the note and
attachment of security shall not take place until a distributable event under
the Plan occurs. No distribution shall be made to any Participant or to a
Beneficiary of any Participant until all outstanding loans to such Participant,
including interest (if any) accrued thereon, have been liquidated.
The Administrative Committee shall set loan interest rates at
the prime rate issued by Chase Manhattan Bank, as reported in the Wall Street
Journal for the first business day of the month in which the loan was taken,
plus 1% in accordance with regulations issued by the Department of Labor.
The Administrative Committee and the Trustee may establish
such other procedures or rules as may be reasonable, necessary or desirable to
administer this loan program in accordance with all applicable laws.
38
<PAGE>
Plan Administration
-------------------
Plan Administrator.
-------------------
The Company shall be the Plan Administrator who shall be the named fiduciary
having authority to control and manage the operation and administration of the
Plan.
Administrative Committee.
-------------------------
The Board shall appoint an employee benefit plans administrative committee to
carry out certain of the Plan Administrator's responsibilities (the
"Administrative Committee"). The Administrative Committee shall have the power
and the duty to take all action and to make all decisions necessary or proper to
carry out the terms of the Plan. The determination of the Administrative
Committee as to any question involving the general administration and
interpretation of the Plan shall be final, conclusive and binding. Any
discretionary actions to be taken under the Plan by the Administrative Committee
with respect to the classification of Employees, Eligible Employees,
Participants, joint or contingent annuitants, Beneficiaries, Contributions, or
benefits shall be uniform in their nature and applicable to all persons
similarly situated. Without limiting the generality of the foregoing, the
Administrative Committee shall, in addition to the powers, rights and duties
specifically given to the Plan Administrator elsewhere in the Plan and the Trust
Agreement or by direct written delegation from the Company, have the following
powers and duties:
to require any person to furnish such information as it may
request for the purpose of the proper administration of the Plan as a condition
to receiving any benefits under the Plan,
to make and enforce such rules and regulations and prescribe
the use of such forms as it shall deem necessary for the efficient
administration of the Plan,
to interpret all Plan provisions and to determine all
questions arising under the Plan, including the power to determine the rights or
eligibility of Eligible Employees or Participants and any other persons, and the
amounts of their benefits under the Plan, and to remedy ambiguities,
inconsistencies or omissions,
to adopt such rules, procedures and regulations as in its
opinion may be necessary for the proper and efficient administration of the Plan
and as are consistent with the Plan and Trust Agreement,
to enforce the Plan in accordance with the terms of the Plan
and the Trust Agreement and the rules and regulations as it may adopt,
to direct the Trustee with respect to payments or
distributions from the Trust Fund in accordance with the provisions of the Plan,
to allocate any such powers and duties to or among individual
members of the Administrative Committee,
39
<PAGE>
to designate persons other than Administrative Committee
members to carry out any duty or power which would otherwise be a responsibility
of the Administrative Committee, under the terms of the Plan,
to furnish the Participating Employers with such information
as may be required by them for tax or other purposes in connection with the
Plan, and
to employ agents and attorneys, or other persons (who also may
be employed by a Participating Employer) and to allocate or delegate to them
such powers, rights and duties as it may consider necessary or advisable to
properly carry out the administration of the Plan, provided that such allocation
or delegation and the acceptance thereof by such agents, attorneys or other
persons shall be in writing.
Appointment, Removal or Resignation of Administrative
Committee Members.
- ------------------
The Board shall appoint the members of the Administrative Committee, which shall
consist of not less than three (3) nor more than five (5) persons. A member of
the Committee may be removed by the Board at any time by written notice to him
and the other members of the Administrative Committee. A member of the
Administrative Committee may resign at any time by giving thirty (30) days
written notice to the Board and the other members of the Administrative
Committee. The Board may fill any vacancy in the membership of the
Administrative Committee; provided, however, that if a vacancy reduces the
membership of the Committee to less than three (3), such vacancy shall be filled
as soon as practicable. The Board shall give prompt written notice thereof to
the members of the Administrative Committee. Until any such vacancy is filled,
the remaining members may exercise all of the powers, rights and duties
conferred on the Administrative Committee.
Conduct of Administrative Committee Business.
---------------------------------------------
The Administrative Committee shall select a Chairman and may select a Secretary
(who may, but need not be, a member of the Administrative Committee). A majority
of the members of the Administrative Committee at the time in office shall
constitute a quorum for the transaction of the business at any meeting. Any
determination or action of the Administrative Committee may be made or taken by
a majority of the members present at any meeting, or without a meeting by a
resolution or written memorandum agreed to by a majority of members then in
office. If there is an even division of opinion among the Administrative
Committee members as to a matter, a disinterested party selected by the
Administrative Committee shall decide the matter and his decision shall control.
Except as otherwise provided by law, no member of the Administrative Committee
shall be liable or responsible for an act or omission of the other
Administrative Committee members in which the former has not concurred. The
certificate of the Secretary of the Administrative Committee or of a majority of
the Administrative Committee members that the Administrative Committee has taken
or authorized any action shall be conclusive in favor of any person relying on
the certificate.
40
<PAGE>
Interested Committee Member.
----------------------------
A member of the Administrative Committee who is also a Participant in the Plan
may not decide or determine any issue concerning the amount of his benefit or
its distribution to him unless such decision or determination could be made by
him under the Plan if he were not serving on the Administrative Committee.
Information Required by Administrative Committee.
-------------------------------------------------
The Administrative Committee may, from time to time, require each Participant
who is entitled to benefits to file with it such person's post office address
and each change of post office address. Any communication, statement or notice
addressed to any such person at the last post office address filed with the
Administrative Committee will be binding upon such person for all purposes of
the Plan. Each person entitled to benefits under the Plan also shall furnish the
Administrative Committee with such documents, evidence, data or information as
the Administrative Committee considers necessary or desirable for the purpose of
administering the Plan. Each Participating Employer shall furnish the
Administrative Committee with such data and information as the Administrative
Committee may deem necessary or desirable in order to administer the Plan. The
records of any Participating Employer with respect to periods of employment,
termination of employment and the reason therefor, leave of absence,
re-employment and earnings will be conclusive on all persons unless determined
to the satisfaction of the Administrative Committee to be incorrect.
Evidence.
---------
Evidence required of anyone under the Plan may be by certificate, affidavit,
document or other information which the person acting on it considers pertinent
and reliable, and signed, made or presented by the proper party or parties.
Nondiscrimination.
------------------
The Administrative Committee shall not take action or direct the Trustee to take
any action with respect to any of the benefits provided hereunder or otherwise
in pursuance of the powers conferred herein upon it which would be
discriminatory in favor of Participants or Eligible Employees who are officers,
shareholders or Highly Compensated Employees, or which would result in
benefiting one Participant, or group of Participants, at the expense of another
or in discrimination between Participants similarly situated or in the
application of different rules to substantially similar sets of facts.
41
<PAGE>
Claims Procedure.
----------------
The claims procedure under the Plan shall be as follows:
Claim. A Participant or Beneficiary or other person who
believes that he is being denied a benefit to which he is entitled (hereinafter
referred to as "Claimant") may file a written request for such benefit with the
Administrative Committee setting forth his claim. The request must be addressed
to the Administrative Committee.
Claim Decision. The Administrative Committee shall respond
within ninety (90) days of receipt of the claim. However, the Administrative
Committee may extend the reply period, upon written notification to the
Claimant, for an additional ninety (90) days for reasonable cause. If the claim
is denied in whole or in part the Administrative Committee shall adopt a written
opinion using non-technical language calculated to be understood by the
Participant setting forth:
the specific reason or reasons for denial;
the specific references to pertinent Plan provisions on
which the denial is based;
a description of any additional material or information
necessary for the Claimant to perfect the claim and an
explanation of why such material or such information is
necessary;
appropriate information as to the steps to be taken if the
Claimant wishes to submit the claim for review; and
the time limits for requesting a review.
Request for Review.
-------------------
Within sixty (60) days after the receipt by the Claimant of the written opinion
described above, the Claimant may request in writing that the Administrative
Committee review its determination. Such request shall be addressed to the
Administrative Committee. The Claimant or his duly authorized representative may
review the pertinent documents and submit issues and comments in writing for
consideration by the Administrative Committee. If the Claimant does not request
a review of the Administrative Committee's determination within such sixty (60)
day period, he shall be barred and stopped from challenging the Administrative
Committee's determination.
Review and Decision.
--------------------
The Administrative Committee shall review its determination within sixty (60)
days after receipt of a Claimant's request for review, provided, however, that
for reasonable cause such period may be extended to no more than one hundred
twenty (120) days. After considering all materials presented by the Claimant,
the Administrative Committee will render a written opinion, written in a manner
calculated to be understood by the Claimant, setting forth the specific reasons
for the decision and containing specific references to the pertinent Plan
provisions on which the decision is based.
42
<PAGE>
Freedom from Liability.
-----------------------
To the extent permitted by law, the members of the Administrative Committee, and
each of them, shall be free from all liability, joint and several, for their
acts and conduct, and for the acts and conduct of their duly constituted agents,
in the administration of the Plan. The Participating Employers shall indemnify
and save and hold each of the members of the Administrative Committee harmless
from the effects and consequences of their acts and conduct in their official
capacity, except to the extent that such effects and consequences flow from
their own willful misconduct.
Trustee Instructions.
---------------------
Such instructions and directions as the Administrative Committee shall give to
the Trustee from time to time or as may be requested by the Trustee shall be in
writing, and the Trustee shall be fully protected in acting upon such written
directions and instructions.
Responsibility for Compliance and Reporting.
--------------------------------------------
The Administrative Committee shall exercise such authority and responsibility as
it deems appropriate in order to comply with the reporting and disclosure
requirements of ERISA.
Amendment and Termination
-------------------------
Amendment.
----------
Except as provided herein, the Board reserves the right to amend or terminate
this Plan at any time and in any manner. The Board may delegate this authority
to any officer(s) of the Company. Any action by the Board shall be evidenced by
a valid resolution. Any action by any officer(s) shall be evidenced by a valid
officer's certificate. The resolutions and officer's certificates shall be
attached to this Plan and considered a part hereof. Any modification or
amendment shall satisfy the following rules:
The duties and liabilities of the Trustee under the Plan shall
not be changed substantively without its consent;
No amendment shall reduce the amount of a Participant's
Account balance or eliminate an optional form of distribution except to the
extent permitted under Section 412(c)(8) of the Code or other applicable
Treasury Regulations;
43
<PAGE>
No merger or consolidation with, or transfer of assets or
liabilities to, any other plan shall be made unless each Participant and each
other person entitled to benefits under the Plan shall be entitled to a benefit
immediately after such merger, consolidation or transfer (if the plan into which
such persons were merged then terminated) which is equal to or greater than the
benefit such persons would have been entitled to receive immediately before the
merger, consolidation or transfer (if the plan from which such persons were
merged had then terminated);
Under no condition shall any amendment result in the return or
repayment to any Employer of any part of the Trust Fund or the income thereon,
or result in the distribution of the Trust Fund for the benefit of anyone other
than Participants and any other persons entitled to benefits under the Plan; and
No modification or amendment of the Plan shall be made
retroactively unless deemed by the Company to be necessary or appropriate to
conform the Plan to or to satisfy the conditions of any law, governmental
regulation or ruling or to permit the Plan and the Trust to meet the
requirements of Sections 401, 404 and 501 of the Code, or the corresponding
provisions of any subsequent law, and ERISA, as amended from time to time.
Termination.
------------
Although it is the intention of the Company that this Plan shall be continued
and that Contributions to it will be made regularly, this Plan is entirely
voluntary on the part of the Company and the Participating Employers, and the
continuance of the Plan and the payments thereunder are not assumed as a
contractual obligation of any of them. The Company and the Participating
Employers specifically reserve the right, in their sole and uncontrolled
discretion and by their official and authorized act, to modify, to suspend (in
whole or in part) or to discontinue at any time its Contributions to this Plan.
The Plan will terminate as to all Participating Employers on any date specified
by the Board, provided written notice of the termination is given to the
Administrative Committee, the Trustee and the other Participating Employers in
advance of such termination. The Plan will terminate as to a Participating
Employer on the first to occur of the following:
the date it is terminated by that Participating Employer
through action taken by its Board of Directors;
the date the Participating Employer is judicially declared
bankrupt or insolvent; and
the dissolution, merger, consolidation or reorganization of
that Participating Employer, the sale of a majority of the voting shares of that
Participating Employer by the Company, or the sale by that Participating
Employer of all or substantially all of its assets, except that:
44
<PAGE>
in any such event arrangements may be made with the
consent of the Board whereby the Plan will be continued by any
successor to that Participating Employer or any purchaser of
all or substantially all of its assets, in which case the
successor or purchaser will be substituted for that
Participating Employer under the Plan and the Trust Agreement;
and
If a Participating Employer is merged, dissolved or
in any way reorganized into, or consolidated with, any other
Participating Employer, the Plan as applied to the former
Participating Employer will automatically continue in effect
without a termination thereof.
Nonforfeitability on Termination, Partial Termination or
Discontinuance of Contributions.
- ---------------------------------
If there is a termination or partial termination of the Plan with respect to any
Participating Employer or a complete discontinuance of Contributions to the Plan
by such Participating Employer, the rights of all affected Participants to
Accounts as of the date of such event shall be nonforfeitable. The
Administrative Committee shall have sole discretion in determining whether and
the extent to which a partial termination occurs and shall consider all relevant
facts and circumstances.
Allocation and Distribution of Assets on Plan Termination.
----------------------------------------------------------
On termination of the Plan with respect to any Participating Employer, the
Administrative Committee will direct the allocation and distribution of Plan
assets allocable to Participants employed by that Participating Employer and
other persons entitled to benefits under the Plan. Such allocation and
distribution will be made only after payment of or provision for all expenses
and charges of administration applicable to the Plan, and after appropriate
adjustment of the Accounts of Participants as of the date of termination in the
manner described in Section 4.1. Each affected Participant will receive a
distribution equal to the value of his respective Account as of the Valuation
Date preceding the distribution.
General Provisions
------------------
Fiduciaries.
------------
The Plan Administrator shall be the named fiduciary under this Plan and shall
exercise its duties hereunder in accordance with the requirements of ERISA. No
"fiduciary" under the Plan or the Trust Agreement shall be liable for an act or
omission of another person in carrying out any fiduciary responsibility where
such fiduciary responsibility is allocated to such other person by the Plan or
the Trust Agreement except to the extent that such fiduciary is in violation of
his duty under Sections 405(a) or 405(c)(2) of ERISA. The Plan Administrator
shall have exclusive responsibility for the specific matters delegated to it by
the Company. The Trustee shall have responsibility or management and control of
the assets of the Plan as provided in the Trust Agreement.
45
<PAGE>
Non-Alienation.
--------------
Protected Benefits. None of the benefits under the Plan are
subject to the claims of creditors of the Company, the Participants or their
Beneficiaries, and will not be subject to attachment, garnishment or any other
legal process. Neither a Participant nor his Beneficiary may assign, sell,
borrow on, or otherwise encumber any of his beneficial interest in the Plan and
Trust Fund, nor shall any such benefits be in any manner liable for or subject
to the deeds, contracts, liabilities, engagements or torts of any Participant or
Beneficiary. If any Participant or Beneficiary becomes bankrupt or attempts to
anticipate, sell, alienate, transfer, pledge, assign, encumber or charge any
benefit specifically provided for herein, or if a court of competent
jurisdiction enters an order purporting to subject such interest to the claim of
any creditor, then the Administrative Committee shall hold or apply such benefit
to or for the benefit of such Participant or Beneficiary in such manner as it
may deem proper.
Qualified Domestic Relations Order. The foregoing Section
10.2(a) shall also apply to the creation, assignment or recognition of a right
under a domestic relations order, unless such order is determined to be a
qualified domestic relations order as defined in Section 414(p) of the Code (and
those other domestic relations orders permitted to be so treated by the
Administrative Committee under the provisions of the Retirement Equity Act of
1984). The Administrative Committee shall establish a written procedure to
determine the qualified status of domestic relations orders and to administer
distributions under such qualified orders.
Facility of Payment.
--------------------
In making any distribution to or for the benefit of any minor or incompetent
Participant or Beneficiary, or any other Beneficiary who in the opinion of the
Administrative Committee is incapable of properly using, expending, investing or
otherwise disposing of such distribution, the Administrative Committee in its
discretion may, but need not, make such distribution to a legal or natural
guardian or other relative of such minor or to a court appointed committee of
any incompetent, or to any adult with whom such person temporarily or
permanently resides. Any such distribution for the use and benefit of such
person shall be a complete discharge to the Trustee without any responsibility
on its part or on the part of the Administrative Committee to see to the
application thereof.
46
<PAGE>
No Contract.
------------
This Plan shall not be deemed to constitute a contract between the Employer and
any Participant or to be a consideration or an inducement for the employment of
any Participant or Employee. Nothing contained in this Plan shall be deemed to
give any Participant or Employee the right to be retained in the service of the
Employer or to interfere with the right of the Employer to discharge any
Participant or Employee at any time regardless of the effect which such
discharge shall have upon such individual as a Participant in the Plan.
Waiver of Notice.
----------------
Any notice required under the Plan may be waived by the person entitled to
notice.
Controlling Law.
----------------
The Plan and Trust Agreement and all matters relating thereto shall be governed,
construed and administered in accordance with the applicable laws of the United
States and the State of New York except that if any trust agreement or any
contract of insurance entered into under the Plan shall provide that it shall be
governed, construed or administered in accordance with the laws of any other
state, such agreement or contract shall (to the extent permitted by applicable
law) be so governed, construed or administered.
Absence of Guarantee.
---------------------
Neither the Administrative Committee nor any Participating Employer in any way
guarantees the Trust Fund from loss or depreciation. Except as required by
applicable law, the Participating Employers do not guarantee any payment to any
person. The liability of the Trustee or the Administrative Committee to make any
payment under the Plan will be limited to the assets held by the Trustee which
are available for that purpose.
Missing Persons.
----------------
If the Administrative Committee or Trustee is unable to make payment to any
Participant or other person to whom a payment is due under the Plan because it
cannot ascertain the identity or whereabouts of such Participant or other person
after reasonable efforts have been made to do so (including mailing the payment
to the last known address of such Participant or such other person as shown on
the records of the Participating Employer), such payment and any subsequent
payments otherwise due may be forfeited twenty-four (24) months after the date
such payment first became due; provided, however, that such payment and any
subsequent payments shall be reinstated retroactively not later than sixty (60)
days after the date on which the Participant or such other person entitled to
payment is identified or located.
Non-Diversion.
--------------
There shall be no diversion of any portion of the assets of the Trust Fund other
than for the exclusive benefit of Participants and their Beneficiaries.
47
<PAGE>
Return of Contributions.
------------------------
All Contributions are made conditioned upon their deductibility for federal
income tax purposes under Section 404 of the Code and upon continuing
qualification of the Plan under Section 401 of the Code. Amounts contributed by
a Participating Employer shall be returned to the Participating Employer under
the following conditions:
If a Contribution was made by a Participating Employer by a
mistake of fact, the excess of the amount of such Contribution over the amount
that would have been contributed had there been no mistake of fact shall be
returned to the Participating Employer within one year after the payment of the
Contribution; and
If a Participating Employer makes a Contribution which is not
deductible under Section 404 of the Code, such contribution (but only to the
extent disallowed) shall be returned to the Participating Employer within one
year after the disallowance of the deduction.
Earnings attributable to the Contribution shall not be returned to the
Participating Employer, but losses attributable to such excess Contribution must
reduce the amount to be so returned.
Top Heavy Provisions
--------------------
The following provisions shall become effective in any year in which the Plan is
determined to be a Top Heavy Plan.
Determination of Top Heavy.
--------------------------
The Plan is top heavy for a Plan Year if, as of the last day of the preceding
Plan Year:
Section 416(g)(1)(A)(ii) of the Code applies to the Plan; or
The Plan and any other plan of an Employer that is qualified
under Section 401(a) of the Code, in which a key employee, as defined in Section
416(i)(1) of the Code (referred to herein as a "Key Employee") is a Participant,
and any other plan of an Employer which enables any such plan to meet the
requirements of Section 401(a)(4) or 410 of the Code, constitute a top heavy
group within the meaning of Section 416(g)(2)(B) of the Code.
Minimum Contribution.
---------------------
For any Plan Year for which the Plan is top heavy, each Participating Employer
shall make such additional contribution as shall be necessary to provide
contributions for each Eligible Employee eligible to participate under Section
2.1 who is not a Key Employee equal to 3% of that Participant's Section 415
Compensation.
48
<PAGE>
Impact on Maximum Benefits.
---------------------------
In the event that the aggregate of the sum of the Accounts of Participants who
are Key Employees under the Plan exceeds sixty percent (60%) but is not more
than ninety percent (90%) of the aggregate of the sum of the Accounts of all
Participants, Section 11.2 shall be modified by substituting "four percent (4%)"
for "three percent (3%)" wherever it appears therein.
Adoption of the Plan by Other Entities
--------------------------------------
Adoption of Plan.
-----------------
Any entity which is a member of the Affiliated Group of the Company or any other
entity may adopt this Plan as a Participating Employer for all or a portion of
its Eligible Employees, provided that the Board approves such participation. The
Board may, in its resolution to permit the adoption by a Participating Employer,
modify any of the terms of the Plan with respect to Eligible Employees of such
Participating Employer; provided, however, that in no event shall the powers and
rights of the Company as provided in the Plan be abridged, nor shall the
resolution contain any provision which could adversely affect the tax qualified
status of the Plan. Each such Participating Employer shall have the obligation
to make the Contributions that relate to its Eligible Employees and no other
Participating Employer shall have such obligation.
Withdrawal from Plan.
---------------------
A Participating Employer may, with the permission of the Board, withdraw at any
time from the Plan by complying with the appropriate provisions of the Plan and
Trust. The Board may, in its discretion, terminate a Participating Employer's
participation in the Plan at any time.
IN WITNESS WHEREOF, this Restatement is hereby executed on the 27th day of
April, 2000, to be generally effective as of January 1, 2000, except as
otherwise expressly provided and unless an alternative effective date is
required to retain the tax qualified status of the Plan.
SEQUA CORPORATION
By: /s/ Jesse Battino
---------------------------------
Jesse Battino
Vice President Human Resources
ATTEST:
<PAGE>
Sequa 401(k) Plan
Appendix A
List of Investment Funds
(1) Vanguard Federal Money Market Fund
(2) Vanguard Retirement Savings Trust
(3) Vanguard LifeStrategy Moderate Growth Fund
(4) Vanguard 500 Index Fund
(5) Vanguard Total Stock Market Index Fund
(6) Vanguard Total International Stock Index Fund
(7) Vanguard Small-Cap Index Fund
(8) Sequa Common Stock Fund
<PAGE>
Sequa 401(k) Plan
Appendix B
B-1 Merger, Purpose, Use of Term. The assets and liabilities of
the CIP 401(k) Retirement Plan (the "CIP Plan") were merged
into and became a part of the Plan effective as of November 1,
1997. The purpose of this Appendix B is to set forth the terms
and conditions which apply to individuals who were
participants in the CIP Plan prior to November 1, 1997. Except
where expressly defined below or where the context indicates
to the contrary, terms used and defined in the Plan shall have
the same respective meanings for purposes of this Appendix B.
Effective as of November 1, 1997, Can Industry Products, Inc.
("CIP") became a Participating Employer in the Plan. As used
in this Appendix B, the term "Eligible Employee" means an
Eligible Employee of CIP.
B-2 Eligibility. Notwithstanding Section 2.1, each Eligible
Employee of CIP who was a participant in the CIP Plan as of
October 31, 1997, shall become eligible to participate under
the Plan effective as of November 1, 1997. Each other Eligible
Employee of CIP shall become eligible to participate under the
Plan in accordance with Section 2.1 of the Plan.
B-3 Vesting Service. Notwithstanding Section 5.2, the Years of
Service for vesting purposes of each Eligible Employee of CIP
who becomes a Participant under the Plan as of November 1,
1997 in accordance with paragraph B-2 above, shall be equal to
his years of service for vesting purposes as of the end of the
Eligible Employee's employment year that includes November 1,
1997, determined under the CIP Plan plus his Years of Service
after such year under the terms of this Plan, provided,
however, that if an Eligible Employee did not complete a year
of service under the terms of the CIP Plan for the Eligible
Employee's employment year that includes November 1, 1997,
such Eligible Employee shall be credited with a Year of
Service for such year in accordance with the terms of this
Plan.
<PAGE>
Sequa 401(k) Plan
Appendix C
C-1 Purpose, Use of Term. The purpose of this Appendix C is to set
forth the terms and conditions under which certain salaried
individuals who are employed by Thermo Wisconsin, Inc.
("Thermo") as of February 6, 1999 may participate in the Plan.
Except where the context indicates to the contrary, terms used
and defined in the Plan shall have the same respective
meanings for purposes of this Appendix. Effective as of April
1, 1999, Thermo shall be a Participating Employer in the Plan.
As used in this Appendix C, the term "Eligible Employee" means
an Eligible Employee of Thermo.
C-2 Eligibility. Notwithstanding Section 2.1, Eligible Employees
of Thermo who were actively employed as of February 6, 1999,
shall become eligible to participate under the Plan effective
as of April 1, 1999. Eligible Employees of Thermo who
commenced employment on or after February 6, 1999, shall
become eligible to participate under the Plan in accordance
with Section 2.1 of the Plan.
C-3 Vesting Service. Notwithstanding Section 5.2, the employment
of Eligible Employees of Thermo who were actively employed as
of February 6, 1999, including employment prior to the closing
date of the sale of Thermo to the Company, shall be recognized
for vesting purposes hereunder.
<PAGE>
Sequa 401(k) Plan
Appendix D
D-1 Purpose, Use of Term. The purpose of this Appendix D is to set
forth the terms and conditions under which certain individuals
who become employed by Chromalloy Component Services, Inc.
("CCS") may participate hereunder. Except where expressly
defined below or where the context indicates to the contrary,
terms used and defined in the Plan shall have the same
respective meanings for purposes of this Appendix D. Effective
as of June 1, 1999, CCS shall be a Participating Employer in
the Plan. As used in this Appendix D, the term "Eligible
Employee" means an Eligible Employee of CCS.
D-2 Eligibility. Notwithstanding Section 2.1, Eligible Employees
of CCS who were previously employed by the United States
Government at Kelly Air Force Base and who commence employment
with CCS on or before July 31, 1999, shall become eligible to
participate under the Plan effective as of such Employment
Commencement Date. Each Eligible Employee of CCS who commences
employment with CCS after July 31, 1999 shall become eligible
to participate under the Plan in accordance with Section 2.1
of the Plan.
D-3 Profit Sharing Contribution. In accordance with Section 3.1(c)
of the Plan, there shall be a Profit Sharing Contribution for
certain Participants who are hourly Eligible Employees of CCS
as provided below. For each Contribution Period, CCS shall
contribute a Profit Sharing Contribution for each hourly
Eligible Employee of CCS in an amount equal to 2% of each such
hourly Eligible Employee's Plan Compensation paid in respect
of such Contribution Period. Any such Profit Sharing
Contribution shall be allocated to a Profit Sharing Account
established with respect to each such hourly Eligible Employee
pursuant to Section 4.1.
D-4 Article V - "Vesting and Forfeitures" shall be deleted and replaced with the
following provisions:
Article V
Vesting and Forfeitures
-----------------------
5.1 Nonforfeitable Accounts. (a) Hourly Employees. A Participant who is an
hourly Eligible Employee of CCS shall be vested in and have a
nonforfeitable right to the value of his entire Account at all times.
(b) Salaried Employees. A Participant who is a salaried Eligible Employee
shall be vested in and have a nonforfeitable right to the value of his
Before-Tax Deposit Account and Rollover Deposit Account at all times.
<PAGE>
5.2 Matching Deposit Accounts - Salaried Employees. The
Matching Deposit Account of a Participant who is a salaried Eligible Employee of
CCS shall be divided into a portion to which the Participant has a vested and
nonforfeitable right and the portion to which he has not acquired a vested and
nonforfeitable right. The portion of the Matching Deposit Account to which a
Participant who is a salaried Eligible Employee has a vested and nonforfeitable
right shall be determined by multiplying the entire value of his Matching
Deposit Account by a Vesting Percentage. The Vesting Percentage shall be
determined in accordance with the following schedule:
Completed Years of Vesting Percentage Applicable to
Service Matching Deposit Account
--------------------- ---------------------------------------
0 0%
1 20%
2 40%
3 60%
4 80%
5 or more 100%
In addition, a salaried Eligible Employee who is a Participant shall be fully
vested in his Matching Deposit Account upon his death, Disability, attainment of
Normal Retirement Age, or upon termination of the Plan or occurrence of such
other event described in Section 9.3, if such event occurs prior to the time
such a Participant has incurred a forfeiture.
A salaried Eligible Employee who transfers his class of employment to become an
hourly Eligible Employee shall thereupon become fully vested in his entire
Participant Account. An hourly Eligible Employee who transfers his class of
employment to become a salaried Eligible Employee shall remain fully vested in
his entire Participant Account.
If a Participant who is a salaried Eligible Employee separates from service
prior to acquiring a nonforfeitable right to the entire value of his Matching
Deposit Account, the nonvested portion of such Account shall be forfeited upon
the earlier to occur of (a) or (b) below where:
<PAGE>
(a) is the date on which the Participant receives full payment of his
vested Account, and
(b) is the date on which the Participant incurs five (5) consecutive
one-year Periods of Severance.
5.3 Restoration of Forfeitures. If a Participant who is a salaried Eligible
Employee whose Matching Deposit Account has been forfeited under Section
5.2 is reemployed prior to incurring five (5) consecutive one-year Periods
of Severance, the dollar amount forfeited shall be restored to the
Participant's Matching Deposit Account if he repays the full amount of any
distribution received upon separation from service before the earlier of
five (5) years after the first date on which the Participant is
subsequently reemployed by a Participating Employer or the close of the
first period of five (5) consecutive one-year Periods of Severance
commencing on the date of the distribution. The funds for such restoration
shall be taken from any available forfeited amounts at the time the
Participant repays the distribution or if such forfeited amounts are
insufficient to provide the restoration, shall be provided by CCS.
5.4 Vesting in Prior Contributions. If a Participant returns to employment
after incurring five (5) consecutive one-year Periods of Severance, his
Years of Service subsequent to such five (5) year period shall not be taken
into account for purposes of determining the Vesting Percentage applicable
to Matching Deposits which accrue before such five (5) year period.
5.5 Partial Distributions or Withdrawals. A Participant who is a salaried
Eligible Employee whose Vesting Percentage is less than one hundred percent
(100%) and who:
(a) has received an in-service withdrawal of any portion of his Matching
Deposit Account pursuant to Article VII, or
(b) has received a distribution of his Matching Deposit Account under
Article VI and has not repaid the amount of such distribution as
provided under Section 5.3, shall have the vested portion of his
Matching Deposit Account computed by the formula P (A + D) - D, where
P equals the Vesting Percentage at the relevant time, A equals the
Matching Deposit Account balance at the relevant time, and D equals
the amount of the previous withdrawal or unrepaid distribution.
D-5 Definitions. For purposes of this Appendix D, the following definitions
shall replace the corresponding definitions set forth in the Plan:
<PAGE>
1.12(a) Plan Compensation. Hourly Employees. For purposes of
determining Contributions to the Plan for hourly Eligible
Employees of CCS, Plan Compensation means such Employee's base
wages, exclusive of overtime, commissions, bonuses and other
compensation for services reported on a Federal Form W-2
received by such an Employee during a Plan Year, and further
excluding reimbursement or other expense allowances, cash and
non-cash fringe benefits, moving expenses, deferred
compensation, or welfare benefits. Plan Compensation shall
also include amounts contributed by CCS pursuant to a salary
reduction agreement which are not includible in the gross
income of an Employee under Section 125 or Section 402(e)(3)
of the Code.
Salaried Employees. For purposes of determining
Contributions to the Plan for salaried Eligible Employees of
CCS, Plan Compensation means such an Employee's base wages,
inclusive of overtime, commissions, bonuses and other
compensation for services reported on a Federal Form W-2
received by such an Employee during a Plan Year, and excluding
reimbursement or other expense allowances, cash and non-cash
fringe benefits, moving expenses, deferred compensation, or
welfare benefits. Plan Compensation shall also include amounts
contributed by CCS pursuant to a salary reduction agreement
which are not includible in the gross income of an Employee
under Section 125 or Section 402(e)(3) of the Code.
<PAGE>
Sequa 401(k) Plan
Appendix E
E-1 Purpose. The purpose of this Appendix E is to set forth the vesting
schedule and the distribution provisions applicable to the account balances
of participants, or of the beneficiaries of deceased participants, in the
Chromalloy Porous Materials Technology Division of Chromalloy American
Corporation Money Purchase Pension Plan (the "Chromalloy Plan") which were
transferred to the Plan on or about December 31, 1990. Except as expressly
provided in this Appendix E, the provisions of the Plan, including those of
Article VI of the Plan, shall apply to the such accounts.
E-2 Maintenance of Separate Chromalloy Accounts. The Administrative Committee
shall cause to be maintained for each Participant or beneficiary to which
this Appendix E applies a separate sub-account (a "Chromalloy Account") to
which is credited the Participant's account balance transferred from the
Chromalloy Plan to the Plan, together with any earnings or additions
thereto, and to which is charged, as the case may be, any withdrawals,
losses and loans.
E-3 Vesting. Except as provided in the following sentence, a Participant shall
become fully vested in his Chromalloy Account in accordance with the
vesting schedule set forth in Section 5.2. Notwithstanding the foregoing, a
Participant shall always be fully vested in the portion of his Chromalloy
Account attributable to his Voluntary Contribution Account, as that term
was defined in the Chromalloy Plan.
E-4 Time of Distribution. The distribution of a Participant's Chromalloy
Account shall be made only in the event of the Participant's retirement,
death, Disability, termination of employment or termination of the Plan.
Payment of such benefits shall be made as soon as practicable following
such event.
E-5 Form of Payment of Chromalloy Accounts. Upon retirement, Disability or
termination of employment, the Chromalloy Account of a Participant shall be
distributed as follows:
(a) The Chromalloy Account of a Participant who is married on his Annuity
Starting Date shall be payable in the form of a Qualified Joint and
Survivor Annuity, unless the Participant waives such form of payment
with the consent of his Spouse in accordance with the provisions of
Section 6.5. Such election shall designate a Beneficiary (or a form of
benefits) that may not be changed without spousal consent (unless the
consent of the Spouse expressly permits designations by the
Participant without the requirement of further consent by the Spouse).
<PAGE>
(b) The Chromalloy Account of a Participant who is not married on his
Annuity Starting Date shall be payable in the form of a life annuity,
unless the Participant waives such form of payment in accordance with
the provisions of Section 6.5 (without the requirement of Spousal
consent).
(c) The Chromalloy Account of a Participant who has waived the applicable
normal form of payment in accordance with paragraph (a) or (b) above
shall be payable, at the election of the Participant, in the form of a
life annuity or in one single sum in cash.
E-6 Payment of Death Benefits. Where a Participant dies before his Annuity
Starting Date, distribution of his Chromalloy Account shall be made in the
manner specified in this Appendix E-6.
(a) Each Participant may designate one or more Beneficiaries to receive
any death benefits from his Chromalloy Account. For a Participant who
is married, the Beneficiary shall be the Participant's Spouse, unless
the Participant has elected a Beneficiary other than the Spouse and
the Spouse has consented to such election in the manner provided for
Qualified Elections in Section 6.2(d)(1).
(b) If the Spouse is the Beneficiary, the death benefit will be in the
form of an annuity for the life of the Spouse in an amount equal to
the annuity which can be purchased with not less than half of the
Participant's Chromalloy Account, unless the Spouse elects to receive
the amount in a single sum in cash.
(c) Subject to paragraph (b) above, the Participant, or, if the
Participant's Spouse is the Beneficiary, the Spouse, shall have the
right to elect payment of death benefits from the Participant's
Chromalloy Account in the form of either a life annuity for a period
not extending beyond the Beneficiary's life or life expectancy or in a
single sum in cash.
(d) Subject to paragraph (b) above, if the Participant has not specified a
payment mode, the Trustee shall pay death benefits in one single sum
in cash to the Participant's Beneficiary.
E-7 In-Service Withdrawals from Voluntary Contribution Accounts. With the
approval of the Administrative Committee, a Participant may withdraw all or
part of that portion of his Chromalloy Account that is attributable to his
Voluntary Contribution Account, as that term was defined in the Chromalloy
Plan, after giving at least 30 days' notice of his intention to the
Administrative Committee. If the Participant is married, the Participant's
Spouse must join in making such request, unless the Administrative
Committee determines that, under the terms of the Chromalloy Plan and
applicable law, such consent would not be required. Such spousal consent
must be obtained prior to the time of the withdrawal and shall be binding
on any subsequent Spouse. Only one withdrawal shall be permitted in any
six-month period. Requests for withdrawals and spousal consents under this
Appendix E-7 must be made in writing or in such electronic medium
acceptable to the Administrative Committee and permitted by law.
<PAGE>
Sequa 401(k) Plan
Appendix F
F-1 Purpose. The purpose of this Appendix F is to set forth the vesting
schedule and distribution provisions applicable to the account balances of
participants, or of the beneficiaries of deceased participants, in the
Sturm Machine Company, Inc. Profit Sharing Plan (the "Sturm Plan") which
were transferred to the Plan on or about February 27, 1990. Except as
expressly provided in this Appendix F, the provisions of the Plan,
including those of Article VI of the Plan, shall apply to such accounts.
F-2 Maintenance of Separate Sturm Accounts. The Administrative Committee shall
cause to be maintained for each Participant or beneficiary to which this
Appendix F applies a separate sub-account (a "Sturm Account") to which is
credited the Participant's account balance transferred from the Sturm Plan
to the Plan, together with any earnings or additions thereto, and to which
is charged, as the case may be, any withdrawals, losses and loans.
F-3 Vesting. A Participant shall become fully vested in his Sturm Account in
accordance with the vesting schedule set forth in Section 5.2.
F-4 Time of Distribution. The distribution of a Participant's Sturm Account
shall be made only in the event of the Participant's retirement, death,
Disability, termination of employment or termination of the Plan. Payment
of such benefits shall be made as soon as practicable following such event.
F-5 Form of Payment of Sturm Accounts. Upon retirement, Disability, termination
of employment or termination of the Plan, the Sturm Account of a
Participant may, subject to Appendix F-6 below, be distributed at the
election of the Participant in one or a combination of the following forms:
(a) Payment of the balance of the Sturm Account in a single sum, in cash.
This shall be the normal form of payment.
(b) Payment of the balance of the Sturm Account in a series of
substantially equal annual installments for a specified number of
years not to exceed fifteen (15) years and subject to the provisions
of Section 6.7; provided, however, that the Administrative Committee
may cause the balance at any time remaining in the Participant's Sturm
Account to be distributed in a single sum, in cash, to the person(s)
currently entitled to receive installment distribution, subject to the
provisions of Section 6.3.
<PAGE>
(c) Payment of the balance of the Sturm Account in a 50% joint and
survivor annuity form.
F-6 Sturm Qualified Joint and Survivor Annuity.
(a) The benefits payable to a married Participant who selects the 50%
joint and survivor annuity form of payment set out in paragraph (c) of
Appendix F-5 above, or who has selected the Sturm Qualified
Preretirement Survivor Annuity form of payment of death benefits
specified in paragraph (c) of Appendix F-7, shall, subject to
paragraph (b) below, be paid in the form of a Sturm Qualified Joint
and Survivor Annuity. A Sturm Qualified Joint and Survivor Annuity
shall be a 50% joint and survivor annuity in favor of the
Participant's Spouse.
(b) Once a Sturm Qualified Joint and Survivor Annuity is applicable for
any reason, the Participant may waive the Sturm Qualified Joint and
Survivor Annuity in accordance with the written explanation, waiver,
Spousal consent and election procedures set forth in Section 6.5 and
elect another form of benefit payment as provided in Appendix F-5.
F-7 Payment of Death Benefits. Where a Participant dies before his Annuity
Starting Date, distribution of his Sturm Account shall be made at the
election of the Participant in one or a combination of the following forms:
(a) Payment of the balance of the Sturm Account in a single sum, in cash.
(b) Payment of the balance of the Sturm Account in a series of
substantially equal annual installments for a specified number of
years not to exceed fifteen (15) years and subject to the provisions
of Section 6.7; provided, however, that the Administrative Committee
may cause the balance at any time remaining in the Participant's Sturm
Account to be distributed in a single sum, in cash, to the person(s)
currently entitled to receive installment distribution, subject to the
provisions of Section 6.3.
(c) Payment of the balance of the Sturm Account in a Sturm Qualified
Preretirement Survivor Annuity form. A Sturm Qualified Preretirement
Survivor Annuity shall be an annuity for the life of the Participant's
surviving Spouse, the actuarial equivalent of which shall not be less
than 50% of the Participant's Sturm Account as of the date of death.
<PAGE>
Sequa 401(k) Plan
Appendix G
G-1 Purpose. The purpose of this Appendix G is to set forth the vesting
schedule and distribution provisions applicable to the account balances of
participants, or of the beneficiaries of deceased participants, in the
Gemoco Division of Chromalloy American Corporation Profit Sharing Plan (the
"Gemoco Plan") which were transferred to the Plan on or about January 10,
1990. Except as expressly provided in this Appendix G, the provisions of
the Plan, including those of Article VI of the Plan, shall apply to such
accounts.
G-2 Maintenance of Separate Gemoco Accounts. The Administrative Committee shall
cause to be maintained for each Participant or beneficiary to which this
Appendix G applies a separate sub-account (a "Gemoco Account") to which is
credited the Participant's account balance transferred from the Gemoco Plan
to the Plan, together with any earnings or additions thereto, and to which
is charged, as the case may be, any withdrawals, losses and loans.
G-3 Vesting. A Participant shall become fully vested in his Gemoco Account in
accordance with the vesting schedule set forth in Section 5.2.
G-4 Time of Distribution. The distribution of a Participant's Gemoco Account
shall be made only in the event of the Participant's retirement, death,
Disability, termination of employment or termination of the Plan. Payment
of such benefits shall be made as soon as practicable following such event.
G-5 Form of Payment of Gemoco Accounts. Upon retirement, Disability,
termination of employment or termination of the Plan, the Gemoco Account of
a Participant may be distributed at the election of the Participant in one
or a combination of the following forms:
(a) Payment of the balance of the Gemoco Account in a single sum, in cash.
(b) Payment of the balance of the Gemoco Account in a series of
substantially equal annual installments for a specified number of
years not to exceed fifteen (15) years, subject to the provisions of
Section 6.7; provided, however, that the Administrative Committee may
cause the balance at any time remaining in the Participant's Gemoco
Account to be distributed in a single sum, in cash, to the person(s)
currently entitled to receive installment distribution, subject to the
provisions of Section 6.3.
G-6 Payment of Death Benefits. Where a Participant dies before his Annuity
Starting Date, distribution of his Gemoco Account shall be made in a single
sum in cash to the Participant's Beneficiary. Unless a Participant elects
otherwise in accordance with the Qualified Election Provisions of Section
6.2(d), a Participant's Spouse will be deemed to be the Participant's
Beneficiary.
T R U S T A G R E E M E N T
------------------------------
THIS AGREEMENT OF TRUST (the "Agreement") effective the 1st day of
September, 1998, by and between SEQUA CORPORATION (the "Company"), and VANGUARD
FIDUCIARY TRUST COMPANY, a trust company incorporated under Chapter 10 of the
Pennsylvania Banking Code (the "Trustee"),
WITNESSETH
WHEREAS, the Company has adopted and is maintaining the CHROMALLOY
INCENTIVE SAVINGS PLAN FOR SALARIED EMPLOYEES / SEQUA THRIFT PLAN (the "Plan")
for the exclusive benefit of its Employees; and
WHEREAS, the CRISP / STP PLAN ADMINISTRATIVE COMMITTEE (the "Plan
Administrator") is the fiduciary named in the Plan as having the authority to
control and manage the operation and administration of the Plan;
WHEREAS, the Company and the Trustee deem it necessary and desirable to
enter into a written agreement of trust;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereto, intending to be legally bound, hereby agree and
declare as follows:
ARTICLE I
ESTABLISHMENT OF THE TRUST
Section 1.1. The Company and the Trustee hereby agree to the
establishment of a trust consisting of such sums as shall from time to time be
paid to the Trustee under the Plan and such earnings, income and appreciation as
may accrue thereon, which, less payments made by the Trustee to carry out the
purposes of the Plan, are referred to herein as the "Fund". The Trustee shall
<PAGE>
carry out the duties and responsibilities herein specified, but shall be under
no duty to determine whether the amount of any contribution by the Company or
any Participant is in accordance with the terms of the Plan nor shall the
Trustee be responsible for the collection of any contributions required under
the Plan. Notwithstanding the above, the Trustee shall calculate certain Company
matching contributions under the Plan according to the directions provided by
the Plan Administrator.
Section 1.2. The Fund shall be held, invested, reinvested and
administered by the Trustee in accordance with the terms of the Plan and this
Agreement solely in the interest of Participants and their Beneficiaries and for
the exclusive purpose of providing benefits to Participants and their
Beneficiaries and defraying reasonable expenses of administering the Plan.
Forfeitures under the Plan shall be used to reduce Company matching
contributions in accordance with the Plan document. Except as provided in
Section 5.2, no assets of the Plan shall inure to the benefit of the Company.
Section 1.3. The Trustee shall pay benefits and expenses from the Fund
only upon the written direction of the Plan Administrator. The Trustee may issue
such benefits under the Plan through an automated distribution system which
shall be programmed to distribute benefits according to the procedures furnished
by the Plan Administrator. The Trustee shall be fully entitled to rely on such
directions furnished by the Plan Administrator, and shall be under no duty to
ascertain whether the directions are in accordance with the provisions of the
Plan
ARTICLE II
INVESTMENT OF THE FUND
Section 2.1. The Company shall have the exclusive authority and
discretion to select the investment funds ("Investment Funds") available for
investment under the Plan. In making such selection, the Company shall use the
care, skill, prudence and diligence under the circumstances then prevailing that
a prudent person 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. The
available investments under the Plan shall be sufficiently diversified so as to
minimize the risk of large losses, unless under the circumstances it is clearly
prudent not to do so. The Company shall notify the Trustee in writing of the
selection of the Investment Funds currently available for investment under the
Plan, and any changes thereto.
Pg. 2
<PAGE>
Section 2.2. Each Participant shall have the exclusive right, in
accordance with the provisions of the Plan, to direct the investment by the
Trustee of all amounts allocated to the separate accounts of the Participant
under the Plan among any one or more of the available Investment Funds. All
investment directions by Participants shall be timely furnished to the Trustee
by the Plan Administrator, except to the extent such directions are transmitted
telephonically or otherwise by Participants directly to the Trustee or its
delegate in accordance with rules and procedures established and approved by the
Plan Administrator and communicated to the Trustee. In making any investment of
the assets of the Fund, the Trustee shall be fully entitled to rely on such
directions furnished to it by the Plan Administrator or by Participants in
accordance with the Plan Administrator's approved rules and procedures, and
shall be under no duty to make any inquiry or investigation with respect
thereto. If the Trustee receives any contribution under the Plan that is not
accompanied by instructions directing its investment, the Trustee shall
immediately notify the Plan Administrator of that fact, and the Trustee may, in
its discretion, hold or return all or a portion of the contribution uninvested
without liability for loss of income or appreciation pending receipt of proper
investment directions. Otherwise, it is specifically intended under the Plan and
this Agreement that the Trustee shall have no discretionary authority to
determine the investment of the assets of the Fund.
Section 2.3. Subject to the provisions of Sections 2.1 and 2.2, the
Trustee shall have the authority, in addition to any authority given by law, to
exercise the following powers in the administration of the Trust:
(a) to invest and reinvest all or a part of the Fund in
accordance with Participants' investment directions in any
available Investment Fund selected by the Company without
restriction to investments authorized for fiduciaries, including,
without limitation on the amount that may be invested therein,
any common, collective or commingled trust fund maintained by the
Trustee. Any investment in, and any terms and conditions of, any
common, collective or commingled trust fund available only to
employee trusts which meets the requirements of the Internal
Revenue Code of 1986, as amended (the "Code"), or corresponding
provisions of subsequent income tax laws of the United States,
shall constitute an integral part of this Agreement and the Plan;
Pg. 3
<PAGE>
(b) to dispose of all or any part of the investments,
securities, or other property which may from time to time or at
any time constitute the Fund in accordance with the investment
directions by Participants furnished to it pursuant to Section
2.2 or the written directions by the Plan Administrator furnished
to it pursuant to Section 1.3, and to make, execute and deliver
to the purchasers thereof good and sufficient deeds of conveyance
therefor, and all assignments, transfers and other legal
instruments, either necessary or convenient for passing the title
and ownership thereto, free and discharged of all trusts and
without liability on the part of such purchasers to see to the
application of the purchase money;
(c) to hold cash uninvested to the extent necessary to pay
benefits or expenses of the Plan;
(d) to cause any investment of the Fund to be registered in
the name of the Trustee or the name of its nominee or nominees or
to retain such investment unregistered or in a form permitting
transfer by delivery; provided that the books and records of the
Trustee shall at all times show that all such investments are
part of the Fund;
(e) except as provided further in Article IV hereof with
respect to shares of common stock of the Company ("Company
Stock") that are held by the Fund, to vote in person or by proxy
with respect to all mutual fund shares which are held by the Plan
solely in accordance with directions furnished to it by the
Company, and to vote in person or by proxy with respect to all
other securities credited to a Participant's separate accounts
under the Plan solely in accordance with directions furnished to
it by the Participant;
(f) upon the written direction of the Plan Administrator, to
apply for, purchase, hold or transfer any life insurance, retirement
income, endowment or annuity contract;
(g) to consult and employ any suitable agent to act on behalf
of the Trustee and to contract for legal, accounting, clerical and
other services deemed necessary by the Trustee to manage and
administer the Fund according to the terms of the Plan and this
Agreement;
(h) upon the written direction of the Plan Administrator, to
make loans from the Fund to Participants in amounts and on terms
approved by the Plan Administrator in accordance with the
provisions of the Plan; provided that the Plan Administrator
shall have the responsibility for collecting all loan repayments
required to be made under the Plan and for furnishing the Trustee
with copies of all promissory notes evidencing such loans; and
Pg. 4
<PAGE>
(i) to pay from the Fund all taxes imposed or levied with
respect to the Fund or any part thereof under existing or future
laws, and to contest the validity or amount of any tax,
assessment, claim or demand respecting the Fund or any part
thereof.
Section 2.4. Except as may be authorized by regulations promulgated by
the Secretary of Labor, the Trustee shall not maintain the indicia of ownership
in any assets of the Fund outside of the jurisdiction of the district courts of
the United States.
ARTICLE III
DUTIES AND RESPONSIBILITIES
Section 3.1. The Trustee, the Company and the Plan Administrator shall
each discharge their assigned duties and responsibilities under this Agreement
and the Plan solely in the interest of Participants and their Beneficiaries in
the following manner:
(a) for the exclusive purpose of providing benefits to
Participants 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 person 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 available investments under the Plan
so as to minimize the risk of large losses, unless under the
circumstances it is clearly prudent not to do so; and
(d) in accordance with the provisions of the Plan and this
Trust Agreement insofar as they are consistent with the
provisions of the Employee Retirement Income Security Act of
1974, as amended ("ERISA").
Pg. 5
<PAGE>
Section 3.2. The Trustee shall keep full and accurate accounts of all
receipts, investments, disbursements and other transactions hereunder, including
such specific records as may be agreed upon in writing between the Company and
the Trustee. All such accounts, books and records shall be open to inspection
and audit at all reasonable times by any authorized representative of the
Company or the Plan Administrator. A Participant may examine only those
individual account records pertaining directly to him.
Section 3.3. Within 120 days after the end of each Plan Year or within
120 days after its removal or resignation, the Trustee shall file with the Plan
Administrator a written account of the administration of the Fund showing all
transactions effected by the Trustee subsequent to the period covered by the
last preceding account to the end of such Plan Year or date of removal or
resignation and all property held at its fair market value at the end of the
accounting period. Upon approval of such accounting by the Plan Administrator,
neither the Company nor the Plan Administrator shall be entitled to any further
accounting by the Trustee. The Plan Administrator may approve such accounting by
written notice of approval delivered to the Trustee or by failure to express
objection to such accounting in writing delivered to the Trustee within 90 days
from the date on which the accounting is delivered to the Plan Administrator.
Section 3.4. In accordance with the terms of the Plan, the Trustee shall
open and maintain separate accounts in the name of each Participant in order to
record all contributions by or on behalf of the Participant under the Plan and
any earnings, losses and expenses attributable thereto. The Plan Administrator
shall furnish the Trustee with written instructions enabling the Trustee to
allocate properly all contributions and other amounts under the Plan to the
separate accounts of Participants. In making such allocation, the Trustee shall
be fully entitled to rely on the instructions furnished by the Plan
Administrator and shall be under no duty to make any inquiry or investigation
with respect thereto.
Section 3.5. The Trustee shall furnish each Participant with statements
quarterly, reflecting the current fair market value of the Participant's
separate Accounts under the Plan and any transactions which occurred during the
previous quarter.
Section 3.6. The Trustee shall not be required to determine the facts
concerning the eligibility of any Participant to participate in the Plan, the
amount of benefits payable to any Participant or Beneficiary under the Plan, or
the date or method of payment or disbursement. The Trustee shall be fully
entitled to rely solely upon the written advice and directions of the Plan
Administrator as to any such question of fact.
Pg. 6
<PAGE>
Section 3.7. Unless resulting from the Trustee's negligence, willful
misconduct, lack of good faith, or breach of its fiduciary duties under this
Agreement or ERISA, the Company shall indemnify and save harmless the Trustee
from, against, for and in respect of any and all damages, losses, obligations,
liabilities, liens, deficiencies, costs and expenses, including without
limitation, reasonable attorney's fees incident to any suit, action,
investigation, claim or proceedings suffered, sustained, incurred or required to
be paid by the Trustee in connection with the Plan or this Agreement.
ARTICLE IV
VOTING AND OTHER RIGHTS OF COMPANY STOCK
Section 4.1. Each Participant (or Beneficiary of a deceased Participant)
shall have the right to direct the Trustee as to the manner of voting and the
exercise of all other rights which a shareholder of record has with respect to
shares (and fractional shares) of Company Stock which have been allocated to the
Participant's separate account in the Company Stock Fund (including, but not
limited to the right to sell or retain shares in a public or private tender
offer). Upon receipt of instructions from Participants, the Trustee shall vote
or exercise the right with respect to such stock in accordance with Participant
instructions. All shares (and fractional shares) of Company Stock in the Company
Stock Fund for which the Trustee has not received timely voting or exercise
directions shall be voted or exercised by the Trustee in the same proportion
that the shares (and fractional shares) of Company Stock in the Company Stock
Fund for which the Trustee received timely voting or exercise directions from
Participants are to be voted or exercised, except in the case where the Trustee
determines that to do so would be inconsistent with the provisions of Title I of
ERISA. Notwithstanding anything herein to the contrary, in the event of a tender
offer for Company Stock, the Trustee shall not tender any shares (or fractional
shares) of Company Stock in the Company Stock Fund for which it does not receive
timely directions to tender such shares (or fractional shares) from
Participants, except in the case where the Trustee determines that to do so
would be inconsistent with the provisions of Title I of ERISA.
Pg. 7
<PAGE>
ARTICLE V
APPOINTMENT OF INVESTMENT MANAGERS
Section 5.1. The Plan Administrator may appoint one or more Investment
Managers with respect to some or all of the assets of the Fund as contemplated
by section 402(c)(3) of ERISA. Any such investment manager shall acknowledge to
the Plan Administrator in writing that it accepts such appointment and that it
is an ERISA fiduciary with respect to the Plan and the Fund. The Plan
Administrator shall provide the Trustee with a copy of the written agreement
(and any amendments thereto) between the Plan Administrator and the Investment
manager. By notifying the Trustee of the appointment of an Investment Manager,
the Plan Administrator shall be deemed to certify that such Investment Manager
meets the requirements of section 3(38) of ERISA. The authority of the
Investment Manager shall continue until the Plan Administrator rescinds the
appointment or the Investment Manager has resigned.
Section 5.2. The assets with respect to which a particular Investment
Manager has been appointed shall be specified by the Plan Administrator and
shall be segregated in a separate account for the Investment Manager (the
"Separate Account") and the Investment Manager shall have the power to direct
the Trustee in every aspect of the investment of the assets of the Separate
Account. The Investment Manager shall be responsible for making any proxy voting
or tender offer decisions with respect to securities held in the Separate
Account and the Investment Manager shall maintain a record of the reasons for
the manner in which it voted proxies or responded to tender offers. The Trustee
shall not be liable for the acts or omissions of an Investment manager and shall
have no liability or responsibility for acting or not acting pursuant to the
direction of, or failing to act in the absence of, any direction from an
Investment Manager, unless the Trustee knows that by such action or failure to
act it would be itself committing a breach of fiduciary duty or participating in
a breach of fiduciary duty by such Investment Manager, it being the intention of
the parties that the Trustee shall have the full protection of section 405(d) of
ERISA.
ARTICLE VI
PROHIBITION OF DIVERSION
Section 6.1. Except as provided in Section 6.2 of this Article, at no
time prior to the satisfaction of all liabilities with respect to Participants
and their Beneficiaries under the Plan shall any part of the corpus or income of
the Fund be used for, or diverted to, purposes other than for the exclusive
benefit of Participants or their Beneficiaries, or for defraying reasonable
expenses of administering the Plan.
Pg. 8
<PAGE>
Section 6.2. The provisions of Section 6.1 notwithstanding,
contributions made by the Company under the Plan may be returned to the Company
under the following conditions:
(a) If a contribution is made by mistake of fact, such
contribution may be returned to the Company within one year of the
payment of such contribution;
(b) Contributions to the Plan are specifically conditioned
upon their deductibility under the Code. To the extent a deduction is
disallowed for any such contribution, it may be returned to the
Company within one year after the disallowance of the deduction.
Contributions which are not deductible in the taxable year in which
made but are deductible in subsequent taxable years shall not be
considered to be disallowed for purposes of this subsection; and
(c) Contributions to the Plan are specifically conditioned on
initial qualification of the Plan under the Code. If the Plan is
determined to be disqualified, contributions made in respect of any
period subsequent to the effective date of such disqualification may
be returned to the Company within one year after the date of denial
of qualification.
Pg. 9
<PAGE>
ARTICLE VII
COMMUNICATION WITH PLAN ADMINISTRATOR AND COMPANY
Section 7.1. Whenever the Trustee is permitted or required to act upon
the directions or instructions of the Plan Administrator, the Trustee shall be
entitled to act upon any written communication signed by any person or agent
designated to act as or on behalf of the Plan Administrator. Such person or
agent shall be so designated either under the provisions of the Plan or in
writing by the Company and their authority shall continue until revoked in
writing. The Trustee shall incur no liability for failure to act on such
person's or agent's instructions or orders without written communication, and
the Trustee shall be fully protected in all actions taken in good faith in
reliance upon any instructions, directions, certifications and communications
believed to be genuine and to have been signed or communicated by the proper
person.
Section 7.2. The Company shall notify the Trustee in writing as to the
appointment, removal or resignation of any person designated to act as or on
behalf of the Plan Administrator. After such notification, the Trustee shall be
fully protected in acting upon the directions of, or dealing with, any person
designated to act as or on behalf of the Plan Administrator until it receives
notice to the contrary. The Trustee shall have no duty to inquire into the
qualifications of any person designated to act as or on behalf of the Plan
Administrator.
ARTICLE VIII
TRUSTEE'S COMPENSATION
Section 8.1. The Trustee shall be entitled to reasonable compensation
for its services as is agreed upon with the Company. If approved by the Plan
Administrator, the Trustee shall also be entitled to reimbursement for all
direct expenses properly and actually incurred on behalf of the Plan. Such
compensation or reimbursement shall be paid to the Trustee out of the Fund
unless paid directly by the Company.
Pg. 10
<PAGE>
ARTICLE IX
RESIGNATION AND REMOVAL OF TRUSTEE
Section 9.1. The Trustee may resign at any time by written notice to the
Company which shall be effective 30 days after delivery unless prior thereto a
successor trustee shall have been appointed.
Section 9.2. The Trustee may be removed by the Company at any time upon
30 days written notice to the Trustee; such notice, however, may be waived by
the Trustee.
Section 9.3. The appointment of a successor trustee hereunder shall be
accomplished by and shall take effect upon the delivery to the resigning or
removed Trustee, as the case may be, of written notice of the Company appointing
such successor trustee, and an acceptance in writing of the office of successor
trustee hereunder executed by the successor so appointed. Any successor trustee
may be either a corporation authorized and empowered to exercise trust powers or
one or more individuals. All of the provisions set forth herein with respect to
the Trustee shall relate to each successor trustee so appointed with the same
force and effect as if such successor trustee had been originally named herein
as the Trustee hereunder. If within 30 days after notice of resignation shall
have been given under the provisions of this article a successor trustee shall
not have been appointed, the resigning Trustee or the Company may apply to any
court of competent jurisdiction for the appointment of a successor trustee.
Section 9.4. Upon the appointment of a successor trustee, the resigning
or removed Trustee shall transfer and deliver the Fund to such successor
trustee, after reserving such reasonable amount as it shall deem necessary to
provide for its expenses in the settlement of its account, the amount of any
compensation due to it and any sums chargeable against the Fund for which it may
be liable. If the sums so reserved are not sufficient for such purposes, the
resigning or removed Trustee shall be entitled to reimbursement for any
deficiency from the successor trustee and the Company who shall be jointly and
severally liable therefor.
Pg. 11
<PAGE>
ARTICLE X
INSURANCE COMPANIES
Section 10.1. If any contract issued by an insurance company shall form
a part of the Trust assets, the insurance company shall not be deemed a party to
this Agreement. A certification in writing by the Trustee as to the occurrence
of any event contemplated by this Agreement or the Plan shall be conclusive
evidence thereof and the insurance company shall be protected in relying upon
such certification and shall incur no liability for so doing. With respect to
any action under any such contract, the insurance company may deal with the
Trustee as the sole owner thereof and need not see that any action of the
Trustee is authorized by this Agreement or the Plan. Any change made or action
taken by an insurance company upon the direction of the Trustee shall fully
discharge the insurance company from all liability with respect thereto, and it
need not see to the distribution or further application of any moneys paid by it
to the Trustee or paid in accordance with the direction of the Trustee.
ARTICLE XI
AMENDMENT AND TERMINATION OF THE TRUST AND PLAN
Section 11.1. The Company may, by delivery to the Trustee of an
instrument in writing, amend, terminate or partially terminate this Agreement at
any time; provided, however, that no amendment shall increase the duties or
liabilities of the Trustee without the Trustee's consent; and, provided further,
that no amendment shall divert any part of the Fund to any purpose other than
providing benefits to Participants and their Beneficiaries or defraying
reasonable expenses of administering the Plan.
Section 11.2. If the Plan is terminated in whole or in part, or if the
Company permanently discontinues its contributions to the Plan, the Trustee
shall distribute the Fund or any part thereof in such manner and at such times
as the Plan Administrator shall direct in writing. In the absence of receipt of
such written directions within 90 days after the effective date of such
termination, the Trustee shall distribute the Fund in accordance with the
provisions of the Plan.
Pg. 12
<PAGE>
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.1. Unless the context of this Agreement clearly indicates
otherwise, the terms defined in the Plan shall, when used herein, have the same
meaning as in the Plan.
Section 12.2. Except as otherwise required in the case of any qualified
domestic relations order within the meaning of Section 414(p) of the Code, the
benefits or proceeds of any allocated or unallocated portion of the assets of
the Fund and any interest of any Participant or Beneficiary arising out of or
created by the Plan either before or after the Participant's retirement shall
not be subject to execution, attachment, garnishment or other legal or judicial
process whatsoever by any person, whether creditor or otherwise, claiming
against such Participant or Beneficiary. No Participant or Beneficiary shall
have the right to alienate, encumber or assign any of the payments or proceeds
or any other interest arising out of or created by the Plan and any action
purporting to do so shall be void. The provisions of this Section shall apply to
all Participants and Beneficiaries, regardless of their citizenship or place of
residence.
Section 12.3. Nothing contained in this Agreement or in the Plan shall
require the Company to retain any Employee in its service.
Section 12.4. Any person dealing with the Trustee may rely upon a copy
of this Agreement and any amendments thereto certified to be true and correct by
the Trustee.
Section 12.5. The Trustee hereby acknowledges receipt of a copy of the
Plan. The Company will cause a copy of any amendment to the Plan to be delivered
to the Trustee.
Section 12.6. The construction, validity and administration of this
Agreement and the Plan shall be governed by the laws of the Commonwealth of
Pennsylvania, except to the extent that such laws have been specifically
superseded by ERISA.
Pg. 13
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
Attest: SEQUA CORPORATION
By: /s/ John Fitzgerald
---------------------------
Title: Director of Compensation
and Benefits
---------------------------
Attest: VANGUARD FIDUCIARY TRUST COMPANY
By:
---------------------------
Title: Secretary
---------------------------
