<PAGE> 1
As filed with the Securities and Exchange Commission on November 6, 1998
Registration No. __________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
--------------------
THE TIMKEN COMPANY
-----------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Ohio 34-0577130
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1835 Dueber Avenue, S.W., Canton, Ohio 44706-2798
----------------------------------------------------------------------
(Address of principal executive offices including zip code)
MPB EMPLOYEES' SAVINGS PLAN
---------------------------------------------------------------------
(Full title of the plan)
Larry R. Brown
Senior Vice President and General Counsel
1835 Dueber Avenue, S.W.
Canton, Ohio 44706-2798
---------------------------------------------------------------------
(Name and address of agent for service)
(330) 438-3000
---------------------------------------------------------------------
(Telephone number, including area code, of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
================================================================================
Proposed Proposed
Title of maximum maximum
securities Amount offering aggregate Amount of
to be to be price per offering registration
registered(1) registered (1) share price (2)(3) fee
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock
without par value 100,000 shares $18.47 $1,847,000 $513.47
================================================================================
</TABLE>
(1) Pursuant to Rule 416(c) under the Securities Act of 1933, as amended (the
"Securities Act") the Registration Statement also covers an indeterminate
amount of interests to be offered pursuant to The MPB Savings Plan, as
amended.
(2) Estimated pursuant to paragraphs (c) and (h) of Rule 457 under the
Securities Act, on the basis of the average of the high and low sale prices
for Common Stock on the New York Stock Exchange on November 2, 1998.
(3) Estimated solely for the purposes of determining the registration fee.
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The document(s) containing the information specified in Part I
of Form S-8 will be sent or given to participating employees as specified by
Rule 428(b)(1) of the Securities Act. These documents and the documents
incorporated by reference into this Registration Statement pursuant to Item 3 of
Part II of this Registration Statement, taken together, constitute a prospectus
that meets the requirements of Section 10(a) of the Securities Act.
PART II
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents heretofore filed by The Timken Company (the
"Company") or the MPB Employees' Savings Plan, as amended (the "Plan"), with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended (the "Exchange Act") (File No. _______) are incorporated herein
by reference:
(1) Annual Report of the Company on Form 10-K for the year ended
December 31, 1997;
(2) Quarterly Reports of the Company on Form 10-Q for the quarters
ended March 31, 1998, and June 30, 1998;
(3) Annual Report of the Plan on Form 11-K for the year ended
December 31, 1997;
(4) Current Report of the Company on Form 8-K dated April 21, 1998;
and
(5) The description of the Company's common stock, without par
value, contained in the Company's Registration Statements filed
pursuant to Section 12 of the Exchange Act and any amendments
and reports filed for the purpose of updating that description.
All documents that shall be filed by the Company or the Plan
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent
to the filing of this registration statement and prior to the filing of a
post-effective amendment indicating that all securities offered under the Plan
have been sold or deregistering all securities then remaining unsold thereunder
shall be deemed to be incorporated herein by reference and shall be deemed to be
a part hereof from the date of filing thereof.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 1 of Article IV of the Company's Amended Code of Regulations
provides that the Company shall indemnify its directors, officers and employees,
and may indemnify its agents, to the fullest extent permitted by law under
prescribed conditions and subject to various qualifications. Article IV of the
Company's Amended Code of Regulations is set forth in Exhibit 4(b) hereto and is
incorporated herein by reference.
II-1
<PAGE> 3
Reference is made to Section 1701.13(E) of the Ohio Revised Code
relating to indemnification of directors, officers, employees and agents of an
Ohio corporation.
The Company has entered into contracts with certain of its directors
and officers that indemnify them against many of the types of claims that may be
made against them. The Company also maintains insurance coverage for the benefit
of directors and officers with respect to many types of claims that may be made
against them, some of which may be in addition to those described in Article IV
of the Company's Amended Code of Regulations.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4(a) Amended Articles of Incorporation of the Company (filed as
Exhibit 4(a) to the Company's Registration Statement No. 333-02553
on Form S-8 and incorporated herein by reference).
4(b) Amended Code of Regulations of the Company (filed as Exhibit 3.1
to the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1992, and incorporated herein by reference).
4(c) MPB Employees' Savings Plan, as amended.
5 Opinion of Counsel.
23(a) Consent of Independent Auditors.
23(b) Consent of Counsel (included in Exhibit 5).
24 Power of Attorney.
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; (ii)
to reflect in the prospectus any facts or events arising after the effective
date of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement; (iii) to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement; PROVIDED, HOWEVER, that paragraphs
(a)(1)(i) and (a)(1)(ii) do not apply if the registration statement is on
Form S-3 or Form S-8, and 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.
II-2
<PAGE> 4
(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 (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to 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 may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Canton, State of Ohio, on this 6 day of November
1998.
THE TIMKEN COMPANY
By: /s/ Gene E. Little
______________________________________________
Gene E. Little
Senior Vice President - Finance
II-3
<PAGE> 5
Pursuant to the requirements of the Securities Act, this
Registration Statement on Form S-8 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
*W. R. Timken, Jr. Chairman, President and November 6, 1998
------------------------ Chief Executive Officer;
W. R. Timken, Jr. Director
(Principal Executive Officer)
*Gene E. Little Senior Vice President - Finance November 6, 1998
------------------------ (Principal Financial and
Gene E. Little Accounting Officer)
*Joseph F. Toot, Jr. Director November 6, 1998
------------------------
Joseph F. Toot, Jr.
*Stanley C. Gault Director November 6, 1998
------------------------
Stanley C. Gault
*J. Clayburn LaForce, Jr. Director November 6, 1998
------------------------
J. Clayburn LaForce, Jr.
*Robert W. Mahoney Director November 6, 1998
------------------------
Robert W. Mahoney
*Jay A. Precourt Director November 6, 1998
------------------------
Jay A. Precourt
*John M. Timken, Jr. Director November 6, 1998
------------------------
John M. Timken, Jr.
*Ward J. Timken Director November 6, 1998
------------------------
Ward J. Timken
*Martin D. Walker Director November 6, 1998
------------------------
Martin D. Walker
*Charles H. West Director November 6, 1998
------------------------
Charles H. West
*Alton W. Whitehouse Director November 6, 1998
------------------------
Alton W. Whitehouse
</TABLE>
II-4
<PAGE> 6
* This Registration Statement has been signed on behalf of the above-named
directors and officers of the Company by Gene E. Little, Senior Vice President
- Finance of the Company, as attorney-in-fact pursuant to a power of attorney
filed with the Securities and Exchange Commission as Exhibit 24 to the
Registration Statement.
DATED: November 6, 1998 By: /s/ Gene E. Little
_______________________________________
Gene E. Little, Attorney-in-Fact
II-5
<PAGE> 7
THE PLAN. Pursuant to the requirements of the Securities Act, the Plan
has duly caused this Registration Statement on Form S-8 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Keene,
State of New Hampshire, on this 6 day of November, 1998.
MPB EMPLOYERS' SAVINGS PLAN
By: /s/ Wayne F. Crowell
_______________________________________
Wayne F. Crowell
Secretary and Treasurer of MPB Corporation
II-6
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Description
- ------- -------------------
<S> <C>
4(a) Amended Articles of Incorporation of the Company (filed as
Exhibit 4(a) to the Company's Registration Statement
No. 333-02553 on Form S-8 and incorporated herein by reference).
4(b) Amended Code of Regulations of the Company (filed as
Exhibit 3.1 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1992, and incorporated herein
by reference).
4(c) MPB Employees' Savings Plan, as amended.
5 Opinion of Counsel.
23(a) Consent of Independent Auditors.
23(b) Consent of Counsel (included in Exhibit 5 hereto).
24 Power of Attorney.
</TABLE>
II-7
<PAGE> 1
Exhibit 4(c)
Updated September 1, 1998
================================================================================
MPB EMPLOYEES' SAVINGS PLAN
================================================================================
<PAGE> 2
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
INTRODUCTION......................................................................................................1
ARTICLE I - DEFINITIONS...........................................................................................2
ARTICLE II - ELIGIBILITY AND PARTICIPATION.......................................................................11
Section 2.1 Eligibility...........................................................................11
Section 2.2 Ineligible Employees..................................................................11
Section 2.3 Ineligible or Former Participants.....................................................11
ARTICLE III - CONTRIBUTIONS......................................................................................12
Section 3.1 Employer Contributions................................................................12
Section 3.2 Employee Elective Deferrals...........................................................12
Section 3.3 After-Tax Employee Contributions......................................................13
Section 3.4 Rollover Contributions................................................................13
Section 3.5 Trustee-to-Trustee Transfers..........................................................14
Section 3.6 Deduction Limitation..................................................................14
ARTICLE IV - 401(K) AND 401(M)...................................................................................15
Section 4.1 Distribution of Excess Employee Elective Deferrals....................................15
Section 4.2 Actual Deferral Percentage Test.......................................................16
Section 4.3 Distribution of Excess Contributions..................................................18
Section 4.4 Actual Contribution Percentage Test...................................................19
Section 4.5 Distribution of Excess Aggregate Contributions........................................22
Section 4.6 Recharacterization....................................................................23
ARTICLE V - ALLOCATIONS, VALUATION AND VESTING...................................................................24
Section 5.1 Allocation of Contributions...........................................................24
Section 5.2 Participants Who Will Receive an Allocation...........................................24
Section 5.3 Allocation of Forfeitures.............................................................24
Section 5.4 Allocation Limitations................................................................25
Section 5.5 Valuation.............................................................................31
Section 5.6 Vesting and Accrual...................................................................31
ARTICLE VI - DISTRIBUTIONS.......................................................................................32
Section 6.1 Distributions of Small Account Balances...............................................32
Section 6.2 Distributions While In-Service........................................................32
Section 6.3 Distributions Upon Separation From Service............................................38
Section 6.4 Distributions Upon Retirement.........................................................38
Section 6.5 Distributions Upon Death..............................................................38
Section 6.6 Distributions Upon Disability.........................................................39
</TABLE>
i
<PAGE> 3
TABLE OF CONTENTS (CONT'D)
--------------------------
<TABLE>
<CAPTION>
<S> <C>
Section 6.7 Special Beneficiary Provisions........................................................39
Section 6.8 Consent of the Participant Required for Distributions if
Account Balances Greater Than $5,000..................................................40
Section 6.9 Commencement of Benefits..............................................................41
Section 6.10 Required Distributions................................................................41
Section 6.11 Special Distribution Rules for 401(k) Contributions...................................47
Section 6.12 Form of Distribution..................................................................47
Section 6.13 Trustee-to-Trustee Transfers..........................................................48
Section 6.14 Normal Form of Benefit................................................................48
Section 6.15 Rollovers to Other Plans or IRAs......................................................48
Section 6.16 Installment Payments..................................................................49
Section 6.17 Accounts for QDRO Beneficiaries (Alternate Payees)....................................49
ARTICLE VII - LOANS..............................................................................................51
Section 7.1 Availability of Loans.................................................................51
Section 7.2 Amount of Loans.......................................................................51
Section 7.3 Terms of Loans........................................................................51
ARTICLE VIII - PLAN ADMINISTRATION...............................................................................54
Section 8.1 Duties of the Employer................................................................54
Section 8.2 The Committee.........................................................................54
Section 8.3 Appointment of Advisor................................................................55
Section 8.4 Powers and Duties of the Committee....................................................55
Section 8.5 Organization and Operation of the Committee...........................................56
Section 8.6 Claims Procedure......................................................................56
Section 8.7 Records and Reports...................................................................57
Section 8.8 Liability.............................................................................58
Section 8.9 Reliance on Statements................................................................58
Section 8.10 Remuneration and Bonding..............................................................58
Section 8.11 Committee Decisions Final.............................................................59
Section 8.12 Participant-Directed Investments......................................................59
ARTICLE IX - TRUST AGREEMENT.....................................................................................60
Section 9.1 Establishment of Trust................................................................60
ARTICLE X - AMENDMENT, TERMINATION AND MERGER....................................................................61
Section 10.1 Amendment.............................................................................61
Section 10.2 Termination...........................................................................61
Section 10.3 Merger, Consolidation or Transfer.....................................................62
</TABLE>
ii
<PAGE> 4
TABLE OF CONTENTS (CONT'D)
--------------------------
<TABLE>
<CAPTION>
<S> <C>
ARTICLE XI - TOP-HEAVY PROVISIONS................................................................................63
Section 11.1 Applicability.........................................................................63
Section 11.2 Definitions...........................................................................63
Section 11.3 Minimum Allocation....................................................................66
Section 11.4 Nonforfeitability of Minimum Allocation...............................................66
Section 11.5 Allocation Limitations................................................................67
Section 11.6 Minimum Vesting Schedules.............................................................67
ARTICLE XII - GENERAL PROVISIONS.................................................................................68
Section 12.1 Governing Law.........................................................................68
Section 12.2 Power to Enforce......................................................................68
Section 12.3 Alienation of Benefits................................................................68
Section 12.4 Not an Employment Contract............................................................68
Section 12.5 Discretionary Acts....................................................................69
Section 12.6 Interpretation........................................................................69
Section 12.7 Limited Return of Contributions.......................................................69
ARTICLE XIII - SIGNATURE PAGE....................................................................................70
</TABLE>
iii
<PAGE> 5
INTRODUCTION
------------
PURPOSE.
The primary purpose of the MPB Employees' Savings Plan (the "Plan") is to
provide the Employees of MPB Corporation with retirement benefits in recognition
of the contribution of the Employees to the successful operation of the
Employer. The Plan is intended to be a profit sharing plan, qualified under
section 401(a) of the Internal Revenue Code (the "Code"), which permits salary
deferral contributions as provided by section 401(k) of the Code; and its
affiliated Trust is intended to be exempt from tax under section 501(a) of the
Code. In addition, it is intended that the Plan meet the applicable requirements
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA").
EFFECTIVE DATE.
The Plan was originally established effective October 1, 1978. Pursuant to the
terms of the Plan which permit its amendment by the Employer, this document is
an amendment and restatement, in its entirety, of the Plan, generally effective
January 1, 1998.
The terms of this document now set forth the controlling provisions of the Plan
for all persons who are Employees or Participants on or after the Effective
Date; provided, however, that to the extent required under section 411(d)(6) of
the Code (and related Treasury Regulations), the applicable provisions of the
preceding Plan documents are incorporated herein by reference.
1
<PAGE> 6
ARTICLE I - DEFINITIONS
-----------------------
The following words and phrases, wherever capitalized, shall have the meanings
set forth below, unless the context in which they appear within the Plan clearly
indicates otherwise:
ACCOUNT(S) means the aggregate (or as otherwise specified) interest of a
Participant in the assets of the Trust. Each Participant's interest will be
segregated into one or more of the following Accounts, which will reflect, in
addition to contributions allocated thereto, appropriate allocations of
earnings, gains, losses and expenses of the Trust:
- EMPLOYEE DEFERRAL ACCOUNT. The separate Account maintained for each
Participant to which are credited his Employee Elective Deferrals.
- AFTER-TAX EMPLOYEE CONTRIBUTION ACCOUNT. The separate Account
maintained for each Participant, in accordance with Section 3.3,
reflecting his After-Tax Employee Contributions.
- ROLLOVER ACCOUNT. The separate Account maintained for each applicable
Participant to which contributions are made under Section 3.4.
- TRANSFER ACCOUNT. The separate Account maintained for each applicable
Participant to which amounts have been transferred under Section 3.5.
- EMPLOYER MATCHING CONTRIBUTION ACCOUNT. The separate Account
maintained for each Participant to which are credited any Employer
Matching Contributions allocated to him and made in accordance with
Section 3.1.
- STOCK MATCHING CONTRIBUTIONS ACCOUNT. The separate Account maintained
for each Participant to which are credited any Stock Matching
Contributions allocated to him and made on his behalf in accordance
with Section 3.1.
- EMPLOYER SUPPLEMENTAL CONTRIBUTION ACCOUNT. The separate Account
maintained for each Participant to which are credited any Employer
Supplemental Contributions allocated to him and made in accordance
with Section 3.1.
The Administrator may, in its discretion, establish subaccounts within each
separate Account.
ADMINISTRATIVE DELEGATE means one or more persons or institutions to whom the
Administrator and/or the Committee has delegated certain administrative
functions pursuant to a written agreement.
2
<PAGE> 7
ADMINISTRATOR means the Employer which may delegate all or a portion of the
duties of the Administrator under the Plan to a Committee in accordance with
Section 8.1.
AFFILIATE means a member of a controlled group of corporations, within the
meaning of section 414(b) of the Code, which includes the Employer; a trade or
business (whether or not incorporated) which is in common control with the
Employer as determined in accordance with section 414(c) of the Code; or any
organization which is a member of an affiliated service group, within the
meaning of section 414(m) of the Code, which includes the Employer; and any
other organization required to be aggregated with the Employer pursuant to
section 414(o) of the Code.
AFTER-TAX EMPLOYEE CONTRIBUTIONS means contributions to the Plan, if any, made
by an Employee on an after-tax, nondeductible basis.
ALTERNATE PAYEE means a spouse, former spouse, child, or other dependent of a
Participant who is entitled to benefits pursuant to a Qualified Domestic
Relations Order (QDRO).
BENEFICIARY means the person or persons or a trust affirmatively designated by a
Participant to receive all or a portion of such Participant's benefits in the
event the Participant dies leaving benefits payable to such a Beneficiary in
accordance with the provisions of Article VI.
CODE means the Internal Revenue Code of 1986, as amended from time to time.
COMMITTEE means the person or persons described in Section 8.2.
COMPANY STOCK means shares of common stock of the Timken Company.
COMPENSATION means all of each Participant's base pay and overtime, including
shift differential, paid to an Eligible Employee by an Employer while a
Participant during the current period.
Notwithstanding the above, Compensation shall include any amount which is
contributed by the Employer pursuant to a salary reduction agreement and which
is not includible in the gross income of the Employee under sections 125,
402(e)(3), 402(h) or 403(b) of the Code.
Notwithstanding the above, for purposes other than allocations pursuant to
provision(s) providing for permitted disparity and/or Top-Heavy allocations,
Compensation shall be determined by excluding the following:
- Bonuses
- Commissions
- Premium pay for welfare insurance benefits
- Fringe benefits (cash and non-cash)
- Reimbursements, or other expense allowances
- Moving expenses
- Deferred compensation
3
<PAGE> 8
- Welfare benefits
4
<PAGE> 9
Compensation shall include only that Compensation which is actually paid to the
Participant during the determination period. Except as provided elsewhere in
this Plan, the determination period shall be the Plan Year.
Notwithstanding the above, effective for Plan Years beginning after December 31,
1993, the annual Compensation Limit shall not exceed $150,000, adjusted for
calendar years beginning after 1994 at the same time and in the same manner as
under section 415(d) of the Code, but only if and when the aggregate of such
potential adjustments totals at least $10,000, and then only in amounts of
$10,000, in the manner described in section 401(a)(17) of the Code.
If Compensation for any prior determination period is taken into account in
determining an Employee's allocations or benefits for the current determination
period, the Compensation for such prior period is subject to the applicable
annual Compensation Limit in effect for that prior period.
DEFINED BENEFIT PLAN means a pension plan maintained by the Employer which is
qualified under section 401(a) of the Code and which is not a Defined
Contribution Plan, except to the extent that it maintains separate accounts with
respect to which it is treated as a Defined Contribution Plan.
DEFINED CONTRIBUTION PLAN means a plan qualified under section 401(a) of the
Code and maintained by the Employer which provides for an account for each
individual who participates in the plan, from which account all benefits
attributable to amounts allocated to each such Participant's account (and any
income and expenses or gains or losses attributable to such accounts, both
realized and unrealized) are paid.
DISABILITY means a Participant's total and permanent, mental or physical
disability resulting in termination of employment as evidenced by presentation
of medical evidence satisfactory to the Administrator.
EFFECTIVE DATE The provisions of this amendment and restatement are generally
effective January 1, 1998, except for the retroactive effective dates required
by any statutory or regulatory changes. Further, to the extent the Plan was
operated in accordance with the provisions of this amendment and restatement as
of an effective date earlier than that required by law, such date shall be the
Effective Date.
5
<PAGE> 10
ELIGIBLE EMPLOYEE means an Employee of an Employer who is employed on a regular
basis, as such term is defined in the Employer's personnel policy and procedures
manual, except any Employee:
(a) whose compensation and conditions of employment are covered by a
collective bargaining agreement to which an Employer is a party unless
the agreement calls for the Employee's participation in the Plan; or
(b) who is treated as an Employee because he or she is a Leased Employee.
EMPLOYEE means any common law Employee of the Employer or any Related Company.
The term Employee shall also include any Leased Employee deemed to be an
Employee of the Employer or any Affiliate or Related Company as provided in
section 414(n) or (o) of the Code.
EMPLOYEE ELECTIVE DEFERRALS means pre-tax contributions to the Plan from an
Employee's salary, which the Employee could have received currently in
Compensation.
EMPLOYER means MPB Corporation, any successor through merger, consolidation or
purchase of substantially all of the assets or business of the entity which is
the Employer immediately prior to such succession, which successor, within 90
days after such succession, agrees to continue this Plan; and any Related
Company which adopts the Plan.
EMPLOYER MATCHING CONTRIBUTIONS means those contributions made by the Employer
as described under Section 3.1 which are allocated to Participants' Employer
Matching Contribution Accounts.
EMPLOYER SUPPLEMENTAL CONTRIBUTIONS means those contributions made by the
Employer as described under Section 3.1 which are allocated to Participants'
Employer Supplemental Contribution Accounts.
ERISA means the Employee Retirement Income Security Act of 1974, as amended from
time to time.
HIGHLY COMPENSATED EMPLOYEE means and includes active highly compensated
Employees and former highly compensated Employees.
An active highly compensated Employee includes any Employee who performed
service for the Employer during the Plan Year and who: (1) during the preceding
Plan Year received Compensation from the Employer in excess of $80,000 (as
adjusted pursuant to section 415(d) of the Code), and, if elected by the
Employer, was a member of the top-paid group for such year; or (2) during the
current or preceding Plan Year was an owner of more than 5 percent of the
Employer.
6
<PAGE> 11
A former highly compensated Employee includes any Employee who separated (or was
deemed to have separated) from service prior to the determination year, who has
performed no service for the Employer during the determination year, and who was
a highly compensated active Employee for either the year of his separation from
service or any determination year ending on or after the Employee's 55th
birthday.
The determination of who is a Highly Compensated Employee (including the
determination of the number and identity of Employees in the top-paid group and
the Compensation that is considered) will be made in accordance with section
414(q) of the Code and the Regulations promulgated thereunder. For purposes of
this definition, the Employer shall include any Affiliate.
HOUR OF SERVICE means:
(a) Each hour for which an Employee is paid, or entitled to payment, for
the performance of duties for the Employer. These hours will be
credited to the Employee for the computation period in which the
duties are performed;
(b) Each hour for which 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) due to vacation, holiday, illness, incapacity (including
Disability), layoff, jury duty, military duty or leave of absence. No
more than 501 hours of service will be credited under this paragraph
for any single continuous period (whether or not such period occurs in
a single computation period). Hours under this paragraph will be
calculated and credited pursuant to section 2530.200b-2 of the
Department of Labor regulations, which section is incorporated herein
by this reference; and
(c) Each hour for which back pay, irrespective of mitigation of damages,
is either awarded or agreed to by the Employer. The same hours of
service will not be credited both under paragraph (a) or paragraph
(b), as the case may be, and under this paragraph (c). These hours
will be credited to the Employee for the computation period or periods
to which the award or agreement pertains rather than the computation
period in which the award, agreement or payment is made.
(d) Each hour for which payment is not due because of a Leave of Absence
(and these hours shall be based upon his or her normal scheduled hours
per week or a 40 hour week if there is no regular schedule).
7
<PAGE> 12
For purposes of this definition, Employer includes any Affiliate. Hours of
Service will be credited for employment with other members of any affiliated
service group (under section 414(m) of the Code), controlled group of
corporations (under section 414(b) of the Code), or group of trades or
businesses under common control (under section 414(c) of the Code) of which the
adopting Employer is a member, and any other entity required to be aggregated
with the Employer pursuant to section 414(o) of the Code and the Regulations
promulgated thereunder.
Hours of Service will also be credited with respect to any individual considered
an Employee for purposes of this Plan under section 414(n) of the Code and the
Regulations promulgated thereunder.
Hours of Service will be credited for all employment with the Employer
regardless of whether the Employee was at the time an Eligible Employee.
An Employee's service with a predecessor or acquired company shall only be
counted in the determination of his or her Hours of Service for eligibility
and/or vesting purposes if (1) the Employer directs that credit for such service
be granted, or (2) a qualified plan of the predecessor or acquired company is
subsequently maintained by any Employer or Related Company.
Service will be determined on the basis of the actual hours for which an
Employee is paid or entitled to payment.
INELIGIBLE means the Plan status of an individual during the period in which he
or she is (1) an Employee of a Related Company which is not then an Employer,
(2) an Employee, but not an Eligible Employee, or (3) not an Employee.
INVESTMENT FUND means the investment funds designated by the Administrator
and/or Committee pursuant to the Trust.
LATE RETIREMENT DATE means the date, occurring after Normal Retirement Age, on
which an Employee actually retires from employment with the Employer.
LEASED EMPLOYEE means any person (other than an Employee of the Employer) who,
pursuant to an agreement between the Employer and any other person (the "leasing
organization"), has performed services for the Employer (or for the Employer and
related persons determined in accordance with section 414(n)(6) of the Code) on
a substantially full time basis for a period of at least one year, and such
services are of a type historically performed by Employees in the business field
of the Employer. Contributions or benefits provided to a Leased Employee by the
leasing organization which are attributable to services performed for the
Employer shall be treated as provided by the Employer.
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A Leased Employee shall not be considered an Employee of the Employer if (i)
such Employee is covered by a money purchase pension plan maintained by the
leasing organization providing: (a) a non-integrated employer contribution rate
of at least 10 percent of Compensation, as defined in section 415(c)(3) of the
Code, but including amounts contributed pursuant to a salary reduction agreement
which are excludable from the Employee's gross income under section 125, section
402(e)(3), section 402(h) or section 403(b) of the Code, (b) immediate
participation, and (c) full and immediate vesting; and (ii) Leased Employees do
not constitute more than 20 percent of the Employer's non-highly compensated
workforce.
LEAVE OF ABSENCE means a period during which an individual is deemed to be an
Employee, but is absent from active employment, provided that the absence:
(a) was authorized by a Related Company; or
(b) was due to military service in the United States armed forces and the
individual returns to active employment within the period during which
he or she retains employment rights under federal law.
NON-HIGHLY COMPENSATED EMPLOYEE means an Employee who is not a Highly
Compensated Employee.
NORMAL RETIREMENT AGE means age 65.
ONE-YEAR BREAK IN SERVICE means a 12-consecutive-month period during which the
Participant does not complete more than 500 Hours of Service.
PARTICIPANT means an Employee of the Employer who participates in the Plan
pursuant to Article II; a former Employee who participated in the Plan under
Article II and who continues to be entitled to a Vested benefit under the Plan;
or a former Employee who participated in the Plan under Article II, and who has
not yet incurred a One-Year Break in Service. For purposes of Section 6.15,
"Participant" shall include a former Participant, as well as a former
Participant's Surviving Spouse and Participant's or former Participant'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 (who shall be deemed Participants
with respect to such Spouse's interest under the Plan).
PLAN means the MPB Employees' Savings Plan, as set forth herein.
PLAN YEAR means the 12-consecutive-month period which begins on January 1 and on
each anniversary thereof.
QDRO means a domestic relations order which the Administrator has determined to
be a qualified domestic relations order within the meaning of Code section
414(p).
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REGULATIONS means the Treasury regulations pertaining to the Internal Revenue
Code of 1986, as amended from time to time.
RELATED COMPANY means with respect to any Employer, that Employer and any
corporation, trade or business which is, together with that Employer, a member
of the same controlled group of corporations, a trade or business under common
control, or an affiliated service group within the meaning of Code section
414(b), (c), (m) or (o).
REQUIRED DISTRIBUTIONS shall be as described in Section 6.10 of the Plan.
SPOUSAL CONSENT means the written consent given by a spouse to a Participant's
election or waiver of a specified form of benefit, including a loan or
in-service withdrawal, or Beneficiary designation. The spouse's consent must
acknowledge the effect on the spouse of the Participant's election, waiver or
designation and be duly witnessed by a Plan representative or notary public.
Spousal Consent shall be valid only with respect to the spouse who signs the
Spousal Consent and only for the particular choice made by the Participant which
requires Spousal Consent. A Participant may revoke (without Spousal Consent) a
prior election, waiver or designation that required Spousal Consent at any time
before payments begin. Spousal Consent also means a determination by the
Administrator that there is no spouse, the spouse cannot be located, or such
other circumstances as may be established by applicable law.
SPOUSE means the Spouse or surviving Spouse of the Participant, provided that a
former Spouse shall be treated as the Spouse or surviving Spouse to the extent
provided under a "qualified domestic relations order" as defined in section
414(p) of the Code.
STOCK MATCHING CONTRIBUTIONS means those contributions made by the Employer as
described under Section 3.1 which are allocated to Participants' Stock Matching
Contribution Accounts.
TOP-HEAVY shall have the meaning and effect described in Article XI of the Plan.
TRUST means the Trust as established under Article IX and maintained for
purposes of the Plan which is administered by the Trustee in accordance with the
provisions of the agreement of Trust between the Employer and the Trustee. The
Trust is governed by a separate agreement entered into between the Employer and
the Trustee (which shall be incorporated by reference herein and become part of
the Plan). To the extent the terms of such Trust agreement conflict with the
Plan, the terms of such Trust agreement will control except to the extent that
it is necessary to follow the terms of the Plan in order to maintain the
qualified status of the Plan under section 401(a) of the Code.
TRUSTEE means the party or parties named under the Trust who shall have
exclusive authority and discretion to manage and control the assets of the Plan.
Notwithstanding the above, to the extent the Plan and/or Trust expressly
provides, the Trustee shall be subject to the direction of the Administrator
and/or the Committee and/or Investment Manager.
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TRUST FUND means all money and other property received or held by the Trustee
under the Trust, plus all income and gains and minus all losses, expenses, and
distributions chargeable to the Trust assets.
VALUATION DATE means any day on which the New York Stock Exchange is open for
business.
VESTED means nonforfeitable.
YEAR OF SERVICE means a 12-consecutive-month period during which an Employee is
credited with at least 1,000 Hours of Service.
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<PAGE> 16
ARTICLE II - ELIGIBILITY AND PARTICIPATION
------------------------------------------
SECTION 2.1 ELIGIBILITY.
All Participants as of January 1, 1998 shall continue their eligibility to
participate. Each other Eligible Employee shall become a Participant on the
first day of the next month after the date he or she completes a six month
eligibility period in which he or she is credited with at least 500 Hours of
Service. The initial eligibility period begins on the date an Employee first
performs an Hour of Service. Subsequent eligibility periods begin with the start
of each half of the Plan Year beginning after the first Hour of Service is
performed.
SECTION 2.2 INELIGIBLE EMPLOYEES.
If an Employee completes the above eligibility requirements, but is Ineligible
at the time participation would otherwise begin (if he or she were not
Ineligible), he or she shall become a Participant on the first subsequent date
on which he or she is an Eligible Employee.
SECTION 2.3 INELIGIBLE OR FORMER PARTICIPANTS
A Participant may not make or share in Plan contributions, nor generally be
eligible for a new Plan loan, during the period he or she is Ineligible, but he
or she shall continue to participate for all other purposes. An Ineligible
Participant or former Participant shall automatically become an active
Participant on the date he or she again becomes an Eligible Employee.
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ARTICLE III - CONTRIBUTIONS
---------------------------
SECTION 3.1 EMPLOYER CONTRIBUTIONS.
EMPLOYER MATCHING CONTRIBUTIONS:
For each period for which Participant contributions are made, the Employer will
make an Employer Matching Contribution of 25 percent of After-Tax Employee
Contributions and Employee Elective Deferrals up to 6 percent of Participant's
Compensation for the Plan Year.
STOCK MATCHING CONTRIBUTIONS:
For each period for which Participant contributions are made, the Employer will
make a Stock Matching Contribution of 25 percent of After-Tax Employee
Contributions and Employee Elective Deferrals up to 6 percent of Participant's
Compensation for the Plan Year. The Stock Matching Contributions shall be funded
with Company Stock.
EMPLOYER SUPPLEMENTAL CONTRIBUTIONS:
For each half of the Plan Year, the Employer may make Employer Supplemental
Contributions, as described in the allocation method set forth in Section
5.2(c), on behalf of each Participant who contributed during the period and was
an Eligible Employee on the last day of the period.
SECTION 3.2 EMPLOYEE ELECTIVE DEFERRALS.
Each Participant may elect to defer up to 16 percent of Compensation (Employee
Elective Deferrals) which will be contributed by the Employer to the Plan. A
Participant may change his election or make a new election as of any business
day. Notification must be given to the Plan Administrator or its designee by a
Participant prior to the first pay period affected by a modification.
Each Plan Year, the sum of each Participant's After-Tax Employee Contributions
and Employee Elective Deferrals may not be greater than 16 percent of
Compensation.
In addition, a Participant may cease to have Employee Elective Deferrals made as
of any payroll period if notice is given to the Plan Administrator or its
designee prior to such date. The Plan Administrator may reduce or completely
prohibit Employee Elective Deferrals at any time if the Administrator determines
such action is necessary to ensure compliance with section 401(k), 401(m),
402(g), or 415 of the Code.
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<PAGE> 18
Employee Elective Deferrals under this and all other qualified plans maintained
by the Employer may not be made on behalf of any Participant during any taxable
year to the extent such would exceed the dollar limitation of section 402(g) of
the Code in effect at the beginning of the taxable year ($7,000 as adjusted for
cost of living).
SECTION 3.3 AFTER-TAX EMPLOYEE CONTRIBUTIONS.
Each Plan Year, each Participant may elect to contribute up to 16 percent of
Compensation on an after-tax basis (After-Tax Employee Contributions). After-Tax
Employee Contributions are permitted on a nondiscriminatory basis as determined
by the Administrator.
Each Plan Year, the sum of each Participant's After-Tax Employee Contributions
and Employee Elective Deferrals may not be greater than 16 percent of
Compensation. The Plan Administrator may reduce or completely prohibit After-Tax
Employee Contributions at any time if the Administrator determines such action
is necessary to ensure compliance with section 401(k), 401(m), 402(g) or 415 of
the Code.
SECTION 3.4 ROLLOVER CONTRIBUTIONS.
(a) An Eligible Employee, regardless of whether he has become a Participant
under Section 2.1, may roll over into the Plan an eligible rollover
distribution (as defined in section 402(c) of the Code) from another
qualified plan, or from an individual retirement account in the manner
described in section 408(d)(3)(A)(ii) of the Code. If such rollover is
not a direct transfer as described in section 401(a)(31) of the Code,
it must be received by the Plan within 60 days of the date it was
received by the Eligible Employee from the distributing qualified plan
or individual retirement account.
(b) The Plan Administrator shall develop such procedures, and may require
such information from an Employee desiring to make such a rollover, as
he deems necessary or desirable to determine that the proposed rollover
will meet the requirements of this Section. Upon approval by the Plan
Administrator, the amount rolled over shall be deposited in the Trust
and shall be credited to the Employee's Rollover Account. Such Account
shall share in allocations of earnings, losses and expenses of the
Trust Fund, but shall not share in allocations of Employer
contributions. The Employee's Rollover Account shall be distributed in
accordance with Article VI.
(c) In the event of a rollover contribution on behalf of an Eligible
Employee who has not yet become a Participant in the Plan under Section
2.1, such Employee's Rollover Account shall represent his sole interest
in the Plan until he becomes a Participant and said Eligible Employee
shall only be allowed to transfer the rollover contribution between the
Plan's investments and may not request any other type of transactions
except for distribution on account of termination of employment.
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SECTION 3.5 TRUSTEE-TO-TRUSTEE TRANSFERS.
The Administrator may instruct the Trustee to receive assets in cash or in kind
directly from another qualified plan; provided that a transfer should not be
directed if:
(a) any amounts are not exempted by Code section 401(a)(11)(B) from the annuity
requirements of Code section 417; or
(b) any amounts include benefits protected by Code section 411(d)(6) which
would not be preserved under applicable Plan provisions.
The Trustee may refuse the receipt of any transfer if:
(a) the Trustee finds the in-kind assets unacceptable; or
(b) instructions for posting amounts to Participants' Accounts are incomplete.
Such amounts shall be posted to the appropriate Accounts of Participants as of
the date received by the Trustee.
In the event of a Trustee-to-Trustee transfer on behalf of an Eligible Employee
who has not yet become a Participant in the Plan under Section 2.1, such
Employee's Transfer Account shall represent his sole interest in the Plan until
he becomes a Participant and said Eligible Employee shall be only allowed to
transfer the Trustee-to-Trustee transfer between the Plan's investments and may
not request any other type of transactions except for distributions on account
of termination of employment.
SECTION 3.6 DEDUCTION LIMITATION.
Employer contributions made with respect to any Plan Year under this Article III
are conditioned upon such contributions being deductible by the Employer for
such Plan Year under section 404 of the Code.
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<PAGE> 20
ARTICLE IV - 401(k) AND 401(m)
------------------------------
SECTION 4.1 DISTRIBUTION OF EXCESS EMPLOYEE ELECTIVE DEFERRALS.
(a) Excess Employee Elective Deferrals shall be distributed in accordance with
the provisions of this Section 4.1. Excess Employee Elective Deferrals are
those elective deferrals that are includible in a Participant's gross
income because they exceed the dollar limitation ($7,000 as adjusted for
cost of living) imposed under Code section 402(g). Excess Employee Elective
Deferrals shall be treated as Annual Additions under the Plan, except to
the extent they are distributed on or before the April 15 first following
the close of a Participant's tax year. Excess amounts shall be first taken
from unmatched Employee Elective Deferrals, then from matched Employee
Elective Deferrals. Any Employer Matching Contribution, Stock Matching
Contribution, or Employer Supplemental Contribution attributable to
refunded excess Employee Elective Deferrals shall be deemed a contribution
made by reason of a mistake of fact and removed from the Participant's
Account.
(b) A Participant may attribute to this Plan any excess Employee Elective
Deferrals made during a taxable year of the Participant by notifying the
Plan Administrator, through written notification, on or before March 1
following the calendar year when the excess Employee Elective Deferrals are
made of the amount of the excess Employee Elective Deferrals to be
attributed to the Plan.
(c) Notwithstanding any other provision of the Plan, excess Employee Elective
Deferrals, plus any income and minus any loss as determined under
subsection (d), shall be distributed no later than April 15 to any
Participant to whose Account excess Employee Elective Deferrals were
attributed for the preceding year and who claims excess Employee Elective
Deferrals for such taxable year. With respect to any taxable year, a
Participant's Employee Elective Deferrals are the sum of all Employer
contributions made on behalf of such Participant pursuant to an election to
defer under any qualified cash or deferred arrangement as described in
section 401(k) of the Code, any simplified employee pension cash or
deferred arrangement as described in section 402(h)(1)(B) of the Code, any
eligible deferred compensation plan under section 457 of the Code, any plan
described under section 501(c)(18) of the Code, and any Employer
contributions made on the behalf of a Participant for the purchase of an
annuity contract under section 403(b) of the Code pursuant to a salary
reduction agreement, but shall not include amounts distributed pursuant to
the provisions of Section 5.4(a)(3) of this Plan.
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(d) Excess Employee Elective Deferrals shall be adjusted for any income or loss
during the Plan Year in which the excess accrued. The income or loss
allocable to excess Employee Elective Deferrals is the income or loss
allocable to the Participant's Employee Deferral Account for the taxable
year multiplied by a fraction, the numerator of which is such Participant's
excess Employee Elective Deferrals for the year and the denominator is the
Participant's Account balance attributable to Employee Elective Deferrals
without regard to any income or loss occurring during such taxable year.
SECTION 4.2 ACTUAL DEFERRAL PERCENTAGE TEST.
(a) For each Plan Year, the Actual Deferral Percentage (ADP) for Participants
who are Highly Compensated Employees must bear a relationship to the ADP
for Participants who are Non-Highly Compensated Employees which satisfies
either of the following tests for nondiscrimination:
(1) The ADP for Participants who are Highly Compensated Employees is not
more than the ADP for Participants who are Non-Highly Compensated
Employees multiplied by 1.25; or
(2) The ADP for Participants who are Highly Compensated Employees is not
more than the ADP for Participants who are Non-Highly Compensated
Employees multiplied by two, and the ADP for Participants who are
Highly Compensated Employees does not exceed the ADP for Participants
who are Non-Highly Compensated Employees by more than two percentage
points.
Actual Deferral Percentage means, for a specified group of Participants for
a Plan Year, the average of the ratios (calculated separately for each
Participant in such group) of (i) the amount of Employer contributions
actually paid over to the Trust on behalf of such Participant for the Plan
Year to (ii) the Participant's Compensation for such Plan Year. Employer
contributions on behalf of any Participant shall include: (i) any Employee
Elective Deferrals made pursuant to the Participant's deferral election,
including excess Employee Elective Deferrals of Highly Compensated
Employees, but excluding (A) Excess Employee Elective Deferrals by
Non-Highly Compensated Employees which are attributable solely to Employee
Elective Deferrals made under the Plan or any other plan(s) of the Employer
and (B) Employee Elective Deferrals that are taken into account in the
Contribution Percentage test (provided the ADP test is satisfied both with
and without exclusion of these Employee Elective Deferrals); and (ii) at
the election of the Employer, Qualified Non-Elective Contributions and
Qualified Matching Contributions made either to the Plan or another plan of
the Employer qualified under section 401(a) of the Code. In addition,
Deferrals may include Stock Matching Contributions, but only to the extent
that (1) the Employer elects to use them, (2) they are not used or counted
in the ACP Test, and (3) such Contributions are fully vested when made and
not withdrawable
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by an Employee before he or she attains age 59 1/2. For purposes of
computing Actual Deferral Percentages, any Employee who would be a
Participant but for the failure to make Employee Elective Deferrals shall
be treated as a Participant on whose behalf no Employee Elective Deferrals
are made. Compensation will be limited to that which is received for the
period the Employee is a Participant.
(b) The ADP for any Participant who is a Highly Compensated Employee for the
Plan Year shall be determined by aggregating his employee elective
deferrals in all plans maintained by the Employer. If a Highly Compensated
Employee participates in two or more cash or deferred arrangements having
different plan years, all cash or deferred arrangements ending with or
within the same calendar year shall be treated as a single arrangement.
Notwithstanding the above, any plans required to be mandatorily segregated
pursuant to Regulations promulgated under section 401(k) of the Code shall
not be aggregated for purposes of this Section 4.2.
(c) In the event that this Plan satisfies the requirements of sections 401(k),
401(a)(4), or 410(b) of the Code only if aggregated with one or more other
plans, or if one or more other Plans satisfy the requirements of such
sections of the Code only if aggregated with this Plan, then this Section
shall be applied by determining the ADP of Employees as if all such plans
were a single plan. For Plan Years beginning after December 31, 1989, plans
may be aggregated in order to satisfy section 401(k) of the Code only if
they have the same Plan Year.
(d) For purposes of determining the ADP of a Participant who is a 5-percent
owner or one of the ten most highly paid Highly Compensated Employees, the
Employee Elective Deferrals (and Qualified Non-Elective Contributions or
Qualified Matching Contributions, or both, if treated as Employee Elective
Deferrals for purposes of the ADP test) and Compensation of such
Participant shall include, respectively, the Employee Elective Deferrals
(and, if applicable, Qualified Non-Elective Contributions and Qualified
Matching Contributions, or both) and Compensation for the Plan Year of
family members (as defined in section 414(q)(6) of the Code). Such family
members shall be disregarded as separate Employees in determining the ADP
both for Participants who are Non-Highly Compensated Employees and for
Participants who are Highly Compensated Employees.
(e) In order to be considered for purposes of performing the ADP test(s),
Employee Elective Deferrals, Qualified Non-Elective Contributions and
Qualified Matching Contributions must be made before the last day of the
twelve-month period immediately following the Plan Year to which such
contributions relate.
(f) The Employer shall maintain annual records sufficient to demonstrate
satisfaction of the ADP test and identify the amount of Qualified
Non-Elective Contributions or Qualified Matching Contributions, or both,
used in such test.
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<PAGE> 23
(g) The determination and treatment of the amounts considered in determining
the ADP with respect to each Participant shall satisfy such other
requirements as may be prescribed by the Secretary of the Treasury.
SECTION 4.3 DISTRIBUTION OF EXCESS CONTRIBUTIONS.
(a) Discriminatory Employee Elective Deferrals (Excess Contributions) are, with
respect to any Plan Year, the excess of:
(1) The aggregate amount of Employer contributions actually taken into
account in computing the ADP of Highly Compensated Employees for such
Plan Year, over
(2) The maximum amount of such contributions permitted pursuant to the ADP
test described under Section 4.2(a) (determined by reducing
contributions made on behalf of Highly Compensated Employees in order,
beginning with the contributions made on behalf of the Employee with
the highest ADP).
(b) Notwithstanding any other provision of this Plan, Excess Contributions,
plus any income and minus any loss allocable thereto, shall be distributed
no later than the last day of each Plan Year to Participants to whose
Accounts such Excess Contributions were allocated for the preceding Plan
Year. Such distributions shall be made to Highly Compensated Employees on
the basis of the respective portions of the Excess Contributions
attributable to each of such Employees, calculated as described above.
Excess Contributions shall be allocated to Participants who are subject to
the family member aggregation rules of section 414(q)(6) of the Code in
proportion to the Employee Elective Deferrals (and amounts treated as
Employee Elective Deferrals) of each family member whose Employee Elective
Deferrals are included in the combined ADP. Excess Contributions (including
any amounts recharacterized as After-Tax Employee Contributions as
permitted under Section 4.6) shall be treated as Annual Additions under the
Plan.
(c) Excess Contributions shall be adjusted for any income or loss during the
Plan Year. The income or loss allocable to Excess Contributions is the
income or loss allocable to the Participant's Employee Deferral Account
(and, if applicable, his Qualified Non-Elective Contribution Account or
Qualified Matching Contributions Account, or both) for the Plan Year
multiplied by a fraction, the numerator of which is such Participant's
Excess Contributions for the year and the denominator of which is the
Participant's Account balance attributable to Employee Elective Deferrals
(and Qualified Non-Elective Contributions or Qualified Matching
Contributions, or both, if any of such contributions are included in the
ADP test) without regard to any income or loss occurring during such Plan
Year.
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<PAGE> 24
(d) Excess Contributions shall be distributed from the Participant's Employee
Deferral Account and Qualified Matching Contributions Account (if
applicable) in proportion to the Participant's Employee Elective Deferrals
and Qualified Matching Contributions (to the extent used in the ADP test)
for the Plan Year. Excess amounts shall first be taken from unmatched
Employee Elective Deferrals and then from matched Employee Elective
Deferrals. Any Employer Matching Contribution, Stock Matching Contribution
and Employer Supplemental Contribution attributable to refunded Employee
Elective Deferral Contributions shall be deemed a contribution made by
reason of a mistake of fact and removed from the Participant's Account.
Excess Contributions shall be distributed from the Participant's Qualified
Non-Elective Contribution Account only to the extent that such Excess
Contributions exceed the balance of the Participant's Employee Deferral
Account and Qualified Matching Contributions Account.
SECTION 4.4 ACTUAL CONTRIBUTION PERCENTAGE TEST.
(a) For each Plan Year, the Actual Contribution Percentage (ACP) of Highly
Compensated Employees must bear a relationship to the ACP for Non-Highly
Compensated Employees which satisfies either of the following tests for
nondiscrimination:
(1) The ACP for Participants who are Highly Compensated Employees is not
more than the ACP for Participants who are Non-Highly Compensated
Employees multiplied by 1.25; or
(2) The ACP for Participants who are Highly Compensated Employees is not
more than the ACP for Participants who are Non-Highly Compensated
Employees multiplied by two, and the ACP for participants who are
Highly Compensated Employees does not exceed the ACP for Participants
who are Non-Highly Compensated Employees by more than two percentage
points.
(b) If any Highly Compensated Employees have both Employee Elective Deferrals
and Matching Contributions and/or After-Tax Employee Contributions made on
their behalf to plans maintained by the Employer, and the sum of the ADP
and ACP of such Highly Compensated Employees subject to either or both
tests exceeds the Aggregate Limit, then the ACP of each such Highly
Compensated Employee will be reduced (beginning with that of the Highly
Compensated Employee whose ACP is the highest) so that the limit is not
exceeded. The amount by which each Highly Compensated Employee's
Contribution Percentage Amount is reduced shall be treated as an Excess
Aggregate Contribution. The ADP and ACP of the Highly Compensated Employees
are determined after any corrections required to meet the ADP and ACP
tests. Multiple use does not occur if either the ADP or ACP of the Highly
Compensated Employees does not exceed 1.25 multiplied by the ADP and ACP of
the Non-Highly Compensated Employees.
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<PAGE> 25
(c) For purposes of this Section, the Actual Contribution Percentage for any
Participant who is a Highly Compensated Employee and who is eligible to
have Contribution Percentage Amounts allocated to his or her Account under
two or more plans described in section 401(a) of the Code, or arrangements
described in section 401(k) of the Code that are maintained by the
Employer, shall be determined as if the total of such Contribution
Percentage Amounts was made under each plan. If a Highly Compensated
Employee participates in two or more cash or deferred arrangements that
have different plan years, all cash or deferred arrangements ending with or
within the same calendar year shall be treated as a single arrangement.
Notwithstanding the above, to the extent mandatorily disaggregated pursuant
to Treasury Regulations promulgated under section 401(m) of the Code,
applicable plans shall continue to be treated as separate.
(d) In the event that this Plan satisfies the requirements of sections 401(m),
401(a)(4) or 410(b) of the Code only if aggregated with one or more other
plans, or if one or more other plans satisfy the requirements of such
sections of the Code only if aggregated with this Plan, then this Section
shall be applied by determining the Contribution Percentage of Employees as
if all such plans were a single plan. For plan years beginning after
December 31, 1989, plans may be aggregated in order to satisfy section
401(m) of the Code only if they have the same plan year.
(e) For purposes of determining the Actual Contribution Percentage of a
Participant who is a five-percent owner or one of the ten most highly paid
Highly Compensated Employees, the Contribution Percentage Amounts and
Compensation of such Participant shall include the Contribution Percentage
Amounts and Compensation for the Plan Year of family members as defined in
section 414(q)(6) of the Code. Family members, with respect to Highly
Compensated Employees, shall be disregarded as separate Employees in
determining the Contribution Percentage both for Participants who are
Non-Highly Compensated Employees and for Participants who are Highly
Compensated Employees.
(f) For purposes of determining the ACP test, Employee Contributions are
considered to have been made in the Plan Year in which contributions were
made to the Trust. Matching Contributions and Qualified Non-Elective
Contributions will be considered made for a Plan Year if made no later than
the end of the twelve-month period beginning on the day after the close of
the Plan Year.
(g) The Employer shall maintain records sufficient to demonstrate satisfaction
of the ACP test and identify the amount of Qualified Non-Elective
Contributions or Qualified Matching Contributions, or both, used in such
test.
(h) The determination and treatment of the Contribution Percentage of any
Participant shall satisfy such other requirements as may be prescribed by
the Secretary of the Treasury.
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(i) Definitions:
"Average Contribution Percentage" means, for a specified group of
Participants for a Plan Year, the average of the ratios (calculated
separately for each Participant in such group) of the Participant's
Contribution Percentage Amounts to the Participant's Compensation for the
Plan Year (whether or not the Employee was a Participant for the entire
Plan Year).
"Aggregate Limit" -- In general, for purposes of this Section, the
Aggregate Limit is the greater of:
(1) The sum of:
(A) 1.25 times the greater of the Relevant Actual Deferral Percentage
or the Relevant Actual Contribution Percentage, and
(B) Two percentage points plus the lesser of the Relevant Actual
Deferral Percentage or the Relevant Actual Contribution
Percentage. In no event, however, shall this amount exceed twice
the lesser of the Relevant Actual Deferral Percentage or the
Relevant Actual Contribution Percentage; or
(2) The sum of:
(A) 1.25 times the lesser of the Relevant Actual Deferral Percentage
or the Relevant Actual Contribution Percentage, and
(B) Two percentage points plus the greater of the Relevant Actual
Deferral Percentage or the Relevant Actual Contribution
Percentage. In no event, however, shall this amount exceed twice
the greater of the Relevant Actual Deferral Percentage or the
Relevant Actual Contribution Percentage.
"Relevant Actual Deferral Percentage" means the Actual Deferral Percentage
of the group of Non-Highly Compensated Employees eligible under the
arrangement subject to section 401(k) of the Code for the Plan Year, and
the term "Relevant Actual Contribution Percentage" means the Actual
Contribution Percentage of the group of Non-Highly Compensated Employees
eligible under the Plan subject to section 401(m) of the Code for the Plan
Year beginning with or within the Plan Year of the arrangement subject to
section 401(k) of the Code.
"Contribution Percentage" means the ratio (expressed as a percentage) of
the Participant's Contribution Percentage Amounts to the Participant's
Compensation for the Plan Year (whether or not the Employee was a
Participant for the entire Plan Year).
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"Contribution Percentage Amounts" means the sum of the Employee
Contributions, Matching Contributions, and Qualified Matching Contributions
(to the extent not taken into account for purposes of the ADP test) made
under the Plan on behalf of the Participant for the Plan Year. Such
Contribution Percentage Amounts shall not include Matching Contributions
which are forfeited either in order to correct Excess Aggregate
Contributions or because the contributions to which they relate are Excess
Employee Deferrals, Excess Contributions, or Excess Aggregate
Contributions. The Employer may include Qualified Non-Elective
Contributions in the Contribution Percentage Amounts. The Employer also may
elect to use Employee Elective Deferrals in the Contribution Percentage
Amounts so long as the ADP test is met before the Employee Elective
Deferrals are used in the ACP test and continues to be met following the
exclusion of those Employee Elective Deferrals that are used to meet the
ACP test.
"Eligible Participant" means any Employee who is eligible to make an
After-Tax Employee Contribution, or an Employee Elective Deferral (if the
Employer takes such contributions into account in the calculation of the
Contribution Percentage), or to receive a Matching Contribution or a
Qualified Matching Contribution.
"After-Tax Employee Contribution" means any contribution made to the Plan
by or on behalf of a Participant that is included in the Participant's
gross income in the year in which made and that is maintained under a
separate Account to which earnings and losses are allocated.
"Matching Contribution" means an Employer contribution made to this or any
other Defined Contribution Plan on behalf of a Participant on account of an
Employee Contribution made by such Participant, or on account of a
Participant's Employee Elective Deferral, under a plan maintained by the
Employer.
SECTION 4.5 DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS.
(a) "Excess Aggregate Contributions" means, with respect to any Plan Year, the
excess of:
(1) The Actual Contribution Percentage (ACP) amounts taken into account in
computing the numerator of the Contribution Percentage actually made
on behalf of Highly Compensated Employees for such Plan Year, over
(2) The maximum contribution percentage amounts permitted by the ACP test
(determined by reducing contributions made on behalf of Highly
Compensated Employees in order of such Employees' Actual Contribution
Percentages beginning with the highest of such percentages).
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(b) Notwithstanding any other provision of this Plan, Excess Aggregate
Contributions, plus any income and minus any loss thereto, shall be
forfeited if forfeitable or, if not forfeitable, distributed no later than
the last day of each Plan Year to Participants to whose Accounts such
Excess Aggregate Contributions were allocated for the preceding Plan Year.
Excess Aggregate Contributions of Participants who are subject to the
family member aggregation rules of section 414(q)(6) of the Code shall be
allocated among applicable family members in proportion to the After-Tax
Employee and Employer Matching Contributions (or amounts treated as
Matching Contributions) of each family member whose contributions are
included in the combined ACP. Excess Aggregate Contributions shall be
treated as Annual Additions under the Plan.
(c) Excess Aggregate Contributions shall be adjusted for any income or loss
during the Plan Year. The income or loss allocable to Excess Aggregate
Contributions shall be the income or loss allocable to the Participant's
Matching Contribution Account (if any, and if all amounts therein are not
used in the ADP test) and, if applicable, Qualified Non-Elective
Contribution Account and Employee Deferral Account for the Plan Year
multiplied by a fraction, the numerator of which is such Participant's
Excess Aggregate Contributions for the year and the denominator is the
Participant's Account balance(s) attributable to contribution percentage
amounts without regard to any income or loss occurring during such Plan
Year.
(d) Excess Aggregate Contributions shall be distributed first from unmatched
After-Tax Employee Contributions and then as a proportional combination of
matched After-Tax Employee Contributions, Employer Matching Contributions,
Stock Matching and Employer Supplemental Contributions.
SECTION 4.6 RECHARACTERIZATION.
(a) The Administrator may treat Excess Contributions as an amount which is
distributed to the Participant and then contributed by the Participant to
the Plan as an After-Tax Employee Contribution in order for the Plan to
satisfy the ADP test. Recharacterized amounts will remain nonforfeitable
and subject to the same distribution requirements as Employee Elective
Deferrals. Amounts may not be recharacterized to the extent that such
amount in combination with other Employee Contributions made by that
Employee would exceed any stated limit under the Plan applicable to
Employee Contributions.
(b) Recharacterization must occur no later than two and one-half months after
the last day of the Plan Year in which such Excess Contributions arose and
is deemed to occur no earlier than the date the last Highly Compensated
Employee is informed in writing of the amount recharacterized and the
consequences thereof. Recharacterized amounts will be taxable to the
Participant for the Participant's tax year in which the Participant would
have received them in cash.
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ARTICLE V - ALLOCATIONS, VALUATION AND VESTING
----------------------------------------------
SECTION 5.1 ALLOCATION OF CONTRIBUTIONS.
As of the Valuation Date, Employee Elective Deferrals, After-Tax Contributions,
Employer Matching Contributions, Employer Supplemental Contributions and Stock
Matching Contributions will be allocated to Participants' Accounts in the
amounts in which they were contributed to the Plan by the Employer with respect
to each Participant pursuant to Article III.
SECTION 5.2 PARTICIPANTS WHO WILL RECEIVE AN ALLOCATION.
(a) An allocation of Employer Matching Contributions made under Section 3.1
shall only be made with respect to those Participants who contributed
during the relevant period and have performed at least 1 Hour of Service
during the Plan Year.
(b) An allocation of Stock Matching Contributions made under Section 3.1 shall
only be made with respect to those Participants who contributed during the
relevant period and have performed at least 1 Hour of Service during the
Plan Year.
(c) The Employer Supplemental Contributions for each period shall be in an
amount determined by the Employer and allocated in proportion to the sum of
each eligible Participant's Employee Elective Deferrals and After-Tax
Employee Contributions for the period, to the total of all such
contributions for all such eligible Participants.
SECTION 5.3 ALLOCATION OF FORFEITURES.
No Participant will receive an allocation of Forfeitures because all
contributions under this Plan are immediately 100 percent Vested.
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<PAGE> 30
SECTION 5.4 ALLOCATION LIMITATIONS.
(a) If the Participant does not participate in, and has never participated in
another qualified plan maintained by the Employer, or a welfare benefit
fund, as defined in section 419(e) of the Code maintained by the Employer,
or an individual medical account, as defined in section 415(l)(2) of the
Code, maintained by the Employer, which provides an Annual Addition as
defined in subsection (d)(1), the following provisions shall apply:
(1) The amount of Annual Additions which may be credited to the
Participant's Account for any Limitation Year shall not exceed the
lesser of the Maximum Permissible Amount, as defined in subsection
(d)(9), or any other limitation contained in this Plan. If
contributions that would otherwise be contributed or allocated to the
Participant's Account would cause the Annual Additions for the
Limitation Year to exceed the Maximum Permissible Amount, the amount
contributed or allocated will be reduced (Employee Elective Deferrals
first) so that the Annual Additions for the Limitation Year will equal
the Maximum Permissible Amount.
(2) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the Limitation
Year will be determined on the basis of the Participant's actual
Section 415 Compensation for the Limitation Year.
(3) If there is an excess Annual Addition due to a reasonable error in
estimating a Participant's Compensation or in determining permissible
Employee Elective Deferrals, or any other facts and circumstances as
determined by the Committee and which are found by the Commissioner of
Internal Revenue to justify the availability of the procedures for
correcting the excess as set forth in this subsection, the excess will
be corrected as follows:
(A) Any After-Tax Employee Contributions, to the extent their return
would reduce the excess, will be returned to the Participant;
however, to the extent After-Tax Contributions were matched, the
applicable Employer Matching, Stock Matching and Employer
Supplemental Contributions shall be forfeited in proportion to
the returned After-Tax matched;
(B) Any portion of the excess directly attributable to and arising
from Employee Elective Deferrals, to the extent its return would
reduce the excess, will be returned to the Participant; however,
to the extent Employee Elective Deferral contributions were
matched, the applicable Employer Matching, Stock Matching and
Employer Supplemental Contributions shall be forfeited in
proportion to the returned After-Tax matched;
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<PAGE> 31
(C) If after the application of paragraphs (A) and (B) an excess
still exists, and the Participant is covered by the Plan at the
end of the Limitation Year, the excess in the Participant's
Account together with any amounts forfeited under (A) and (B)
will be used to reduce Employer contributions beginning with
Employee Elective Deferrals, if any, for the next Limitation
Year, and each succeeding Limitation Year if necessary;
(D) If after the application of paragraphs (A) and (B) an excess
still exists, and the Participant is not covered by the Plan at
the end of a Limitation Year, the excess will be held unallocated
in a suspense account. The suspense account together with any
amounts forfeited under (A) and (B) will be applied to reduce
future contributions beginning with Employee Elective Deferrals,
if any, for all remaining Participants for the next Limitation
Year, and each succeeding Limitation Year if necessary;
(E) If a suspense account is in existence at any time during a
Limitation Year pursuant to this Section, it will not receive any
allocation of the investment gains and losses of the Trust. If a
suspense account is in existence at any time during a particular
Limitation Year, all amounts in the suspense account must be
allocated and reallocated to Participants' Accounts before any
Employer or any After-Tax Employee Contributions may be made to
the Plan for that Limitation Year. The excess amount may not be
distributed to Participants or former Participants.
(b) If a Participant, whose Account is credited with an excess Annual Addition
also is covered under another qualified Defined Contribution Plan
maintained by the Employer, a welfare benefit fund (as defined in section
419(e) of the Code) maintained by the Employer, or an individual medical
account (as defined in section 415(l)(2) of the Code) maintained by the
Employer, which provides an Annual Addition as defined in subsection
(d)(1), during any Limitation Year, the excess shall be corrected by
reducing the Annual Addition to this Plan only after all possible
reductions have been made to the other defined contribution plans.
(c) If the Employer maintains, or at any time maintained, a qualified Defined
Benefit Plan covering any Participant in this Plan, the sum of a
Participant's Defined Benefit Fraction and Defined Contribution Fraction
shall not exceed 1.0 in any Limitation Year. If the sum of the fractions
exceeds 1.0, the annual benefit provided under the Defined Benefit Plan
will be reduced until the sum of the fractions equals 1.0.
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<PAGE> 32
(d) Definitions:
(1) ANNUAL ADDITIONS: The sum of the following amounts which are credited to a
Participant's Account for the Limitation Year:
(A) Employer contributions,
(B) After-Tax Employee Contributions (if any), and
(C) Amounts allocated, after March 31, 1984, to an individual medical
account, as defined in section 415(1)(2) of the Code, which is part of
a pension or annuity plan maintained by the Employer, as well as
amounts derived from contributions paid or accrued after December 31,
1985, in taxable years ending after such date, attributable to
post-retirement medical benefits and allocated to the separate account
of a Key Employee, as defined in section 419(d)(3) of the Code, under
a welfare benefit fund, as defined in section 419(e) of the Code,
maintained by the Employer.
For this purpose, any excess applied under Sections (a)(3) or (b)(5) in the
Limitation Year to reduce Employer contributions will be considered Annual
Additions for such Limitation Year.
(2) SECTION 415 COMPENSATION: For purposes of this Section, wages as defined in
section 3401(a) of the Code together with all other compensatory payments
to an Employee by the Employer with respect to which the Employer must
furnish to the Employee a written statement pursuant to section 6041(d) and
6051(a)(3) of the Code, but determined without regard to any rules (such as
the exception for agricultural labor in section 3401(a)(2) of the Code)
which limit the remuneration included in wages based on the nature or
location of the employment or services performed.
For Limitation Years beginning after December 31, 1991, for purposes of
applying the limitations of this Article, Section 415 Compensation for a
Limitation Year is the compensation actually paid or made available during
such Limitation Year. Section 415 Compensation does not include accrued
compensation unless it is uniform and consistent and paid within two weeks.
Notwithstanding the preceding sentence, Section 415 Compensation for a
Participant in a Defined Contribution Plan who is permanently and totally
disabled (as defined in section 22(e)(3) of the Code) is the compensation
such Participant would have received for the Limitation Year if the
Participant had been paid at the rate of compensation at which he was paid
immediately before
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<PAGE> 33
becoming permanently and totally disabled; such imputed compensation for
the disabled Participant may be taken into account only if the Participant
is not a Highly Compensated Employee (as defined in section 414(q) of the
Code) and contributions made on behalf of such Participant are
nonforfeitable when made.
(3) DEFINED BENEFIT FRACTION: A fraction, the numerator of which is the sum of
the Participant's Projected Annual Benefit under all Defined Benefit Plans
(whether or not terminated) maintained by the Employer, and the denominator
of which is the lesser of 125 percent of the dollar limitation determined
for the Limitation Year under sections 415(b) and (d) of the Code or 140
percent of the highest average Section 415 Compensation, including any
adjustments under section 415(b) of the Code.
Notwithstanding the above, if the Participant was a Participant, as of the
first day of the first Limitation Year beginning after December 31, 1986,
in one or more Defined Benefit Plans maintained by the Employer which were
in existence on May 6, 1986, the denominator of this fraction will not be
less than 125 percent of the sum of the annual benefits under such plans
which the Participant had accrued as of the close of the last Limitation
Year beginning before January 1, 1987, disregarding any changes in the
terms and conditions of the plan(s) after May 5, 1986. The preceding
sentence applies only if the Defined Benefit Plans individually and in the
aggregate satisfied the requirements of section 415 of the Code for all
Limitation Years beginning before January 1, 1987.
(4) DEFINED CONTRIBUTION DOLLAR LIMITATION: $30,000 or, if greater, one-fourth
of the defined benefit dollar limitation set forth in section 415(b)(1) of
the Code, as indexed, as in effect for the applicable Limitation Year.
(5) DEFINED CONTRIBUTION FRACTION: A fraction, the numerator of which is the
sum of the Annual Additions to the Participant's Account under this and all
other Defined Contribution Plans (whether or not terminated) maintained by
the Employer for the current and all prior Limitation Years (including the
annual additions attributable to the Participant's nondeductible Employee
contributions to all Defined Benefit Plans, whether or not terminated,
maintained by the Employer, and the annual additions attributable to all
welfare benefit funds, as defined in section 419(e) of the Code, and
individual medical accounts, as defined in section 415(1)(2) of the Code,
maintained by the Employer), and the denominator of which is the sum of the
maximum aggregate amounts for the current and all prior Limitation Years
which also constituted Years of Service with the Employer (regardless of
whether a Defined Contribution Plan was maintained by the Employer). The
maximum aggregate amount for any Limitation Year is the lesser of (A) 125
percent of the dollar limitation determined under sections 415(b) and (d)
of the Code in effect under section 415(c)(1)(A) of the Code or (B) 35
percent of the Participant's Section 415 Compensation for such year.
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<PAGE> 34
If the Employee was a Participant as of the end of the first day of the
first Limitation Year beginning after December 31, 1986 in one or more
Defined Contribution Plans maintained by the Employer which were in
existence on May 6, 1986, the numerator of this fraction will be adjusted
if the sum of this fraction and the Defined Benefit Fraction would
otherwise exceed 1.0 under the terms of this Plan. Under the adjustment, an
amount equal to the product of (1) the excess of the sum of the fractions
over 1.0, multiplied by (2) the denominator of this fraction, will be
permanently subtracted from the numerator of this fraction. The adjustment
is calculated using the fractions as they would be computed as of the end
of the last Limitation Year beginning before January 1, 1987, and
disregarding any changes in the terms and conditions of the Plan made after
May 5, 1986, but using the Code section 415 limitation applicable to the
first Limitation Year beginning on or after January 1, 1987.
The Annual Addition for any Limitation Year beginning before January 1,
1987, shall not be recomputed to treat all Employee contributions as Annual
Additions.
In determining the Defined Contribution Fraction under section 415(e)(3)(B)
of the Code and pursuant to this Section of the Plan, "100 percent" shall
be substituted for "125 percent" unless the minimum allocation percentage
under section 416(c)(2)(A) of the Code and Section 11.3(a) of the Plan is
increased from "three percent" to "four percent" and the Plan would not be
a Top-Heavy Plan if the phrase "90 percent" were substituted for each
reference to the phrase "60 percent" in Section 11.2(b) of the Plan.
(6) EMPLOYER: For purposes of this Article, any entity that adopts this Plan,
and all members of a controlled group of corporations (as defined in
section 414(b) of the Code as modified by section 415(h) of the Code), all
commonly controlled trades or businesses (as defined in section 414(c) of
the Code as modified by section 415(h) of the Code) or affiliated service
groups (as defined in section 414(m) of the Code) of which the adopting
Employer is part, and any other entity required to be aggregated with the
Employer pursuant to Regulations under section 414(o) of the Code.
(7) HIGHEST AVERAGE COMPENSATION: The average Section 415 Compensation for the
three consecutive Years of Service with the Employer which produces the
highest average.
(8) LIMITATION YEAR: The Limitation Year is the Plan Year. All qualified plans
maintained by the Employer must use the same Limitation Year. If the
Limitation Year is amended to a different 12-consecutive-month period, the
new Limitation Year must begin on a date within the Limitation Year in
which the amendment is made.
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(9) MAXIMUM PERMISSIBLE AMOUNT: The maximum Annual Addition that may be
contributed or allocated to a Participant's Account under the Plan for any
Limitation Year shall not exceed the lesser of:
(A) the Defined Contribution Dollar Limitation, or
(B) 25 percent of the Participant's Section 415 Compensation for the
Limitation Year.
The Section 415 Compensation limitation referred to in (B) shall not apply
to any contribution for medical benefits (within the meaning of section
401(h) or section 419A(f)(2) of the Code) which is otherwise treated as an
Annual Addition under sections 415(1)(1) or 419A(d)(2) of the Code.
If a short Limitation Year is created because an amendment changes the
Limitation Year to a different 12-consecutive-month period, the Maximum
Permissible Amount shall not exceed the Defined Contribution Dollar
Limitation multiplied by the following fraction:
NUMBER OF MONTHS IN THE SHORT LIMITATION YEAR 12
(10) PROJECTED ANNUAL BENEFIT: The annual retirement benefit (adjusted to an
actuarially equivalent straight life annuity if such benefit is expressed
in a form other than a straight life annuity or qualified joint and
survivor annuity) to which the Participant would be entitled under the
terms of the Plan assuming:
(A) The Participant will continue employment until Normal Retirement Age
under the Plan (or current age, if later), and
(B) The Participant's Section 415 Compensation for the current Limitation
Year and all other relevant factors used to determine benefits under
the Plan will remain constant for all future Limitation Years.
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SECTION 5.5 VALUATION.
The assets of the Trust will be valued on each Valuation Date at fair market
value. On such date, the earnings and losses of the Trust will be allocated to
each Participant's Account according to the ratio of such Account balance to all
Account balances, or by utilizing any other formula as is appropriate under the
circumstances.
SECTION 5.6 VESTING AND ACCRUAL.
All Plan contributions are 100 percent Vested.
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ARTICLE VI - DISTRIBUTIONS
--------------------------
SECTION 6.1 DISTRIBUTIONS OF SMALL ACCOUNT BALANCES.
If a Participant terminates employment with all Related Companies, and the value
of the Participant's Vested Account balance derived from Employer and Employee
contributions is not greater than $5,000, the Participant will receive a
distribution of the value of the entire Vested portion of such Account balance.
SECTION 6.2 DISTRIBUTIONS WHILE IN-SERVICE.
Subject to the provisions of Section 6.13, in-service distributions must be at
least $500 and shall be made, at the election of a Participant who is an
Employee, in the following circumstance(s):
(a) Over age 59 1/2.
The Administrator, at the election of the Participant, shall direct the
Trustee to distribute to any Participant up to his entire Vested Account
balance after he has attained age 59 1/2. The maximum number of over age 59
1/2 withdrawals permitted to a Participant in any Plan Year is one.
(1) Age 59 1/2 withdrawals are available from the following Accounts and
will be withdrawn from the Participant's accounts in the following
hierarchy with the exception that the Participant may instead choose
to have amounts taken from his or her After-Tax Account first:
(A) Rollover Account and Transfer Account
(B) Employee Deferral Account
(C) Stock Matching Contribution Account
(D) Employer Matching Contribution Account
(E) Employer Supplemental Contribution Account
(F) After-Tax Employee Contribution Account
(2) Withdrawals will be taken from the investment funds on a pro rata
basis.
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(b) After-Tax Employee Contributions.
The Administrator, at the election of the Participant, shall direct the
Trustee to distribute to any Participant up to the entire balance of his
After-Tax Employee Contribution Account. The maximum number of After-Tax
Employee Contribution Account withdrawals permitted to a Participant in any
Plan Year is one.
(c) Employer Approved Hardship.
In-service distributions shall be permitted upon a showing of hardship as
determined by the Administrator pursuant to this subsection (c) (which may
be more liberal than that required for an IRS Approved Hardship as
described in Section 6.2(d) below).
(1) Requirements. A Participant who is an Employee may request the
withdrawal of up to the amount necessary to satisfy a financial need
including amounts necessary to pay any federal, state or local income
taxes or penalties reasonably anticipated to result from the
withdrawal. Only requests for withdrawals (1) on account of a
Participant's "Deemed Financial Need" or "Demonstrated Financial
Need", and (2) which are "Demonstrated as Necessary" to satisfy the
financial need will be approved.
(2) "Deemed Financial Need." Financial commitments relating to:
(A) the payment of unreimbursable medical expenses described under
Code section 213(d) incurred (or to be incurred) by the Employee,
his or her Spouse or dependents;
(B) the purchase (excluding mortgage payments) of the Employee's
principal residence;
(C) the payment of unreimbursable tuition and related educational
fees for up to the next 12 months of post-secondary education for
the Employee, his or her Spouse or dependents;
(D) the payment of funeral expenses of an Employee's family member;
(E) the payment of amounts necessary for the Employee to prevent
losing his or her principal residence through eviction or
foreclosure on the mortgage; or
(F) any other circumstance specifically permitted under Code section
401(k)(2)(B)(i)(IV).
<PAGE> 39
(3) "Demonstrated Financial Need." A determination by the Administrator that
the Participant has an immediate and heavy financial need based on all
relevant facts and circumstances and has resulted from:
(A) a sudden and unexpected illness or accident to the Employee or his or
her spouse or dependents;
(B) the loss, due to casualty, of the Employee's property other than
nonessential property (such as a boat or a television); or
(C) some other similar extraordinary (but not necessarily reasonably
foreseeable) circumstances arising as a result of events beyond the
control of the Employee.
(4) "Demonstrated as Necessary." A withdrawal is "demonstrated as necessary" to
satisfy the financial need only if the withdrawal amount does not exceed
the financial need including any federal, state or local income taxes or
penalties reasonably anticipated to result from the withdrawal, the
Employee represents that he or she is unable to relieve the financial need
(without causing further hardship) by doing any or all of the following and
the Administrator does not have actual knowledge to the contrary:
(A) receiving any reimbursement or compensation from insurance or
otherwise;
(B) reasonably liquidating his or her assets and the assets of his or her
spouse or minor children that are reasonably available to the
Employee;
(C) ceasing all of his or her contributions to this Plan;
(D) obtaining all other possible withdrawals and nontaxable loans
available from all plans maintained by Related Companies; and
(E) obtaining all possible loans from commercial sources on reasonable
commercial terms.
(5) Permitted Frequency. The maximum number of Employer Approved Hardship
withdrawals permitted to a Participant in any Plan Year is one.
(6) Account Sources for Withdrawal. Employer Approved Hardship withdrawals are
available from the following Accounts and will be withdrawn from the
Participant's Accounts in the following hierarchy:
(A) After-Tax Employee Contribution Account
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(B) Rollover Account and Transfer Account
(C) Employer Matching Contribution Account
(D) Employer Supplemental Contribution Account
Withdrawals will be taken from the investment funds on a pro rata
basis.
(d) IRS Approved Hardship.
In-service distributions shall be permitted upon a showing of hardship to
the Administrator pursuant to this subsection (d) which is permitted under
Code section 401(k) and related regulations.
(1) Requirements. A Participant who is an Employee may request the
withdrawal of up to the amount necessary to satisfy a financial need
including amounts necessary to pay any federal, state or local income
taxes or penalties reasonably anticipated to result from the
withdrawal. Only requests for withdrawals (1) on account of a
Participant's "Deemed Financial Need", and (2) which are "Deemed
Necessary" or "Demonstrated as Necessary" to satisfy the financial
need will be approved.
(2) "Deemed Financial Need." Financial commitments relating to:
(A) the payment of unreimbursable medical expenses described under
Code section 213(d) incurred (or to be incurred) by the Employee,
his or her Spouse or dependents;
(B) the purchase (excluding mortgage payments) of the Employee's
principal residence;
(C) the payment of unreimbursable tuition and related educational
fees for up to the next 12 months of post-secondary education for
the Employee, his or her Spouse or dependents;
(D) the payment of funeral expenses of an Employee's family member;
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(E) the payment of amounts necessary for the Employee to prevent losing
his or her principal residence through eviction or foreclosure on the
mortgage; or
(F) any other circumstance specifically permitted under Code section
401(k)(2)(B)(i)(IV),
(3) "Deemed Necessary." A withdrawal is "deemed necessary" to satisfy the
financial need only if the withdrawal amount does not exceed the financial
need including any federal, state or local income taxes or penalties
reasonably anticipated to result from the withdrawal, and all of these
conditions are met:
(A) the Employee has obtained all other possible withdrawals and
nontaxable loans available from all plans maintained by Related
Companies;
(B) the Employee shall be suspended from making any contributions to all
qualified and nonqualified plans of deferred compensation and all
stock option or stock purchase plans maintained by Related Companies
for 12 months from the date the withdrawal payment is made; and
(C) the Administrator shall reduce the dollar limit imposed under Code
section 402(g) on Employee Elective Deferrals for the Employee for the
calendar year next following the calendar year of the withdrawal by
the amount of the Employee's Elective Deferrals for the calendar year
of the withdrawal.
(4) "Demonstrated as Necessary." A withdrawal is "demonstrated as necessary" to
satisfy the financial need only if the withdrawal amount does not exceed
the financial need including any federal, state or local income taxes or
penalties reasonably anticipated to result from the withdrawal, the
Employee represents that he or she is unable to relieve the financial need
(without causing further hardship) by doing any or all of the following and
the Administrator does not have actual knowledge to the contrary:
(A) receiving any reimbursement or compensation from insurance or
otherwise;
(B) reasonably liquidating his or her assets and the assets of his or her
spouse or minor children that are reasonably available to the
Employee;
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(C) ceasing all of his or her contributions to all qualified and
nonqualified plans of deferred compensation and all stock option
or stock purchase plans maintained by Related Companies;
(D) obtaining all other possible withdrawals and nontaxable loans
available from all plans maintained by Related Companies; and
(E) obtaining all possible loans from commercial sources on
reasonable commercial terms.
(5) Account Sources for Withdrawal.
IRS Approved Hardship withdrawals are available from the following
Accounts and will be withdrawn from the Participant's Accounts in the
following hierarchy:
(A) After-Tax Employee Contribution Account
(B) Rollover Account and Transfer Account
(C) Employer Matching Contribution Account
(D) Employer Supplemental Contribution Account
(E) Employee Deferral Account
The amount that may be withdrawn from a Participant's Employee
Deferral Account shall not include any earnings credited to his or her
Employee Deferral Account after the start of the first Plan Year
beginning after December 31, 1988.
(6) Permitted Frequency. The maximum number of IRS Approved Hardship
withdrawals permitted to a Participant in any 12-month period is one.
(7) Suspension from Further Contributions. Upon making an IRS Approved
Hardship withdrawal, a Participant may not make additional Employee
Elective Deferrals or After-Tax Employee Contributions for a period of
12 months from the date the withdrawal payment is made.
(e) Rollover or Transfer Account Distributions.
No in-service withdrawals are permitted from a Participant's Rollover
Account or Transfer Account except as provided elsewhere in this Section.
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SECTION 6.3 DISTRIBUTIONS UPON SEPARATION FROM SERVICE.
After a Participant's termination of employment from all Related Companies and
subject to the provisions of Sections 6.8 and 6.9, upon the request of the
Participant and after approval of the Plan Administrator, the Trustee shall
distribute the value of the Participant's Vested Account balance in one lump
sum, partial payments or in installment payments (as set forth below in Section
6.16) as elected by the Participant. Such distribution shall begin as soon as
administratively feasible following the Participant's request and approval by
the Administrator.
SECTION 6.4 DISTRIBUTIONS UPON RETIREMENT.
After a Participant's retirement from all Related Companies and subject to the
provisions of Sections 6.8 and 6.9, upon the request of the Participant and
after approval of the Plan Administrator, the Trustee shall distribute the value
of the Participant's Vested Account balance in one lump sum, partial payments or
in installment payments (as set forth below in Section 6.16) as elected by the
Participant. Such distribution shall begin as soon as administratively feasible
following the Participant's request and approval by the Administrator.
SECTION 6.5 DISTRIBUTIONS UPON DEATH.
(a) Subject to the provisions of Sections 6.8 and 6.9, upon the death of a
Participant, the Administrator shall instruct the Trustee, in accordance
with this Article, to distribute the Account of a deceased Participant to
that Participant's Beneficiary. The Administrator may require such proof of
death and such evidence of the right of any person to be a Beneficiary as
it shall deem proper under the circumstances. The Administrator's
determination of death and of the right of any Beneficiary to receive
payments shall be conclusive.
(b) Each Participant may complete a beneficiary designation form indicating the
Beneficiary who is to receive the Participant's remaining Plan interest at
the time of his or her death. The designation shall be made on a form
approved by and filed with the Administrator, and may be revoked or changed
at any time by filing a new form with the Administrator. However, a
Participant's Spouse shall be the sole primary Beneficiary unless the
designation includes Spousal Consent for another Beneficiary. If no proper
designation is in effect at the time of a Participant's death or if the
Beneficiary does not survive the Participant, the Beneficiary shall be, in
the order listed, the:
(1) Participant's Spouse,
(2) Participant's children, in equal shares, per stirpes (by right of
representation), or
(3) Participant's estate.
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(c) Payment to a Beneficiary must either: (1) be completed by the end of the
calendar year that contains the fifth anniversary of the Participant's
death or (2) begin by the end of the calendar year that contains the first
anniversary of the Participant's death and be completed within the period
of the Beneficiary's life or life expectancy, except that:
(1) If the Participant dies after the April 1 immediately following the
end of the calendar year in which he or she attains age 70 1/2,
payment to her or her Beneficiary must be made at least as rapidly as
provided in the Participant's distribution election;
(2) If the surviving Spouse is the Beneficiary, payments need not begin
until the end of the calendar year in which the Participant would have
attained age 70 1/2 and must be completed within the Spouse's life or
life expectancy; and
(3) If the Participant and the surviving Spouse who is the Beneficiary die
(1) before the April 1 immediately following the end of the calendar
year in which the Participant would have attained age 70 1/2 and (2)
before payments have begun to the Spouse, the Spouse will be treated
as the Participant in applying these rules.
SECTION 6.6 DISTRIBUTIONS UPON DISABILITY.
Upon a Participant's disability resulting in termination of employment from all
Related Companies and subject to the provisions of Sections 6.8 and 6.9,
following the request of the Participant and after approval of the Plan
Administrator, the Trustee shall distribute the value of the Participant's
Vested Account balance in one lump sum, partial payments or in installment
payments (as set forth below in Section 6.16) as elected by the Participant.
Such distribution shall begin as soon as administratively feasible following the
Participant's request and approval by the Administrator.
SECTION 6.7 SPECIAL BENEFICIARY PROVISIONS.
(a) LOST BENEFICIARY. If, after five years have expired following reasonable
efforts of the Committee to locate a Participant or his Beneficiary,
including sending a registered letter, return receipt requested to the last
known address, the Committee is unable to locate the Participant or
Beneficiary, then the amounts distributable to such Participant or
Beneficiary shall, pursuant to applicable state and Federal laws, be
treated as a Forfeiture under the Plan. Where a Participant or Beneficiary
is located subsequent to a Forfeiture, such benefits shall be reinstated by
the Committee, and shall not count as an Annual Addition under section 415
of the Code.
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(b) MINOR BENEFICIARY. The Committee may instruct the Trustee to distribute a
sum payable to a minor instead to his or her legal guardian, or if there is
no guardian, to a parent or other responsible adult who maintains the
residence of the minor. In the alternative such distribution could be made
to the appropriate custodian under the Uniform Gifts to Minors Act or Gift
to Minors Act if applicable under the state laws of the state in which the
minor resides. Any payment in this format shall discharge all fiduciaries
involved in the distribution including the Trustee, Employer, and Plan from
liability in regard to the transaction.
SECTION 6.8 CONSENT OF THE PARTICIPANT REQUIRED FOR DISTRIBUTIONS IF
ACCOUNT BALANCES GREATER THAN $5,000.
If the value of a Participant's Vested Account balance derived from Employer and
Employee contributions exceeds (or at the time of any prior distribution
exceeded) $5,000, and the Account balance is immediately distributable, the
Participant (or where either the Participant or the Spouse has died, the
survivor) must consent to any distribution of such Account balance. An Account
balance is immediately distributable if any part of the Account balance could be
distributed to the Participant (or Surviving Spouse) before the Participant
attains or would have attained if not deceased the later of Normal Retirement
Age or age 62.
The consent of the Participant shall not be required to the extent that a
distribution is required to satisfy section 401(a)(9) or section 415 of the
Code. In addition, upon termination of this Plan, if the plan does not offer an
annuity option (purchased from a commercial provider) and if the Employer or any
entity within the same controlled group as the Employer does not maintain
another Defined Contribution Plan (other than an employee stock ownership plan
as defined in section 4975(e)(7) or 409 of the Code or a simplified employee
pension plan as defined in section 408(k) of the Code), the Participant's
Account balance may, without the Participant's consent, be distributed to the
Participant. However, if any entity within the same controlled group as the
Employer maintains another Defined Contribution Plan (other than an employee
stock ownership plan as defined in section 4975(e)(7) or 409 of the Code or a
simplified employee pension plan as defined in section 408(k) of the Code) then
the Participant's Account balance will be transferred, without the Participant's
consent, to the plan if the Participant does not consent to an immediate
distribution.
If a distribution is one to which sections 401(a)(11) and 417 of the Code do not
apply, such distribution may commence less than 30 days after the notice
required under section 1.411(a)-11(c) of the Income Tax Regulations is given,
provided that:
(a) the Plan Administrator clearly informs the Participant that the Participant
has a right to a period of at least 30 days after receiving the notice to
consider the decision of whether or not to elect a distribution (and, if
applicable, a particular distribution option), and
(b) the Participant, after receiving the notice, affirmatively elects a
distribution either in writing or by other permitted electronic medium.
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SECTION 6.9 COMMENCEMENT OF BENEFITS.
Unless the Participant elects otherwise, distribution of benefits will begin no
later than the 60th day after the latest of the close of the Plan Year in which:
(a) the Participant attains age 65 (or Normal Retirement Age, if earlier);
(b) occurs the 10th anniversary of the year in which the Participant commenced
participation in the Plan; or
(c) the Participant terminates service with the Employer.
Notwithstanding the foregoing, the failure of a Participant, Spouse or
Beneficiary to consent to a distribution while a benefit is immediately
distributable, within the meaning of Section 6.8 of the Plan, shall be deemed to
be an election to defer commencement of payment of any benefit sufficient to
satisfy this Section.
SECTION 6.10 REQUIRED DISTRIBUTIONS.
(a) The requirements of this Article shall apply to any distribution of a
Participant's interest and will take precedence over any inconsistent
provisions of this Plan. Unless otherwise specified, the provisions of this
Article apply to calendar years beginning after December 31, 1984. All
distributions shall be determined and made in accordance with the proposed
Regulations promulgated under section 401(a)(9) of the Code, including the
minimum distribution incidental benefit requirement of section
1.401(a)(9)-2 of the proposed Regulations.
(b) The entire interest of a Participant must be distributed or must begin to
be distributed no later than the Participant's Required Beginning Date
(defined below) which is generally the April 1st following his attainment
of age 70 1/2.
Distributions may not be made over a period which exceeds each of the following
(or a combination thereof):
(1) the life of the Participant,
(2) the life of the Participant and a Designated Beneficiary,
(3) a period certain not extending beyond the Life Expectancy of the
Participant, or
(4) a period certain not extending beyond the joint life and last survivor
expectancy of the Participant and a Designated Beneficiary.
(c) If the Participant's interest is to be distributed in other than a single
sum, the following minimum distribution rules shall apply on or after the
Required Beginning Date:
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(1) DISTRIBUTIONS DURING THE PARTICIPANT'S LIFE: If a Participant's benefit is
to be distributed over (1) a period not extending beyond the Life
Expectancy of the Participant or the joint life and last survivor
expectancy of the Participant and the Participant's Designated Beneficiary
or (2) a period not extending beyond the Life Expectancy of the Designated
Beneficiary, then the amount required to be distributed for each calendar
year, beginning with distributions for the first Distribution Calendar
Year, must at least equal the quotient obtained by dividing the
Participant's benefit by the Applicable Life Expectancy.
For calendar years beginning before January 1, 1989, if the Participant's
Spouse is not the Designated Beneficiary, the method of distribution
selected must assure that at least 50 percent of the present value of the
amount available for distribution is paid within the Life Expectancy of the
Participant.
For calendar years beginning after December 31, 1988, the amount to be
distributed each year, beginning with distributions for the first
Distribution Calendar Year shall not be less than the quotient obtained by
dividing the Participant's benefit by the lesser of (1) the Applicable Life
Expectancy or (2) if the Participant's Spouse is not the Designated
Beneficiary, the applicable divisor determined from the table set forth in
Q&A-4 of section 1.401(a)(9)-2 of the proposed Regulations. Distributions
after the death of the Participant shall be made using the Applicable Life
Expectancy above as the relevant divisor without regard to proposed
Regulations section 1.401(a)(9)-2.
The minimum distribution required for the Participant's first Distribution
Calendar Year must be made on or before the Participant's Required
Beginning Date. The minimum distribution for other calendar years,
including the minimum distribution for the Distribution Calendar Year in
which the Employee's Required Beginning Date occurs, must be made on or
before December 31 of that Distribution Calendar Year.
(2) DISTRIBUTIONS AFTER THE PARTICIPANT'S DEATH: If the Participant dies after
distribution of his interest has begun and after attaining age 70 1/2, the
remaining portion of such interest, if any, will continue to be distributed
at least as rapidly as under the method of distribution being used prior to
the Participant's death.
If the Participant dies before distribution of his interest began or prior
to attaining age 70 1/2, distribution of the Participant's entire interest
shall be completed by the later of December 31 of the calendar year
containing the fifth anniversary of the Participant's death or, if any
portion of the Participant's interest is payable to a Designated
Beneficiary, distributions may be made over the life or over a period
certain not greater than the Life Expectancy of the Designated Beneficiary
commencing on or before December 31 of the calendar year immediately
following the calendar year in which the Participant died notwithstanding
the above, however, but if the Designated Beneficiary is the Participant's
Surviving Spouse,
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distributions are required to begin not earlier than the later of (a)
December 31 of the calendar year in which the Participant died, or (b)
December 31 of the calendar year in which the Participant would have
attained age 70 1/2.
If the Participant has not made an election pursuant to this Section by the
time of his or her death, the Participant's Designated Beneficiary must
elect the method of distribution no later than the earlier of (1) December
31 of the calendar year in which distributions would be required to begin
under this Section, or (2) December 31 of the calendar year which contains
the fifth anniversary of the date of death of the Participant. If the
Participant has no Designated Beneficiary, or if the Designated Beneficiary
does not elect a method of distribution, distribution of the Participant's
entire interest must be completed by December 31 of the calendar year
containing the fifth anniversary of the Participant's death.
For purposes of the above paragraphs, if the surviving Spouse dies after
the Participant, but before payments to such Spouse begin, the provisions
above, except for the spousal exception rule, shall be applied as if the
surviving Spouse were the Participant.
Any amount paid to a child of the Participant will be treated as if it has
been paid to the surviving Spouse if the amount becomes payable to the
surviving Spouse when the child reaches the age of majority.
Distribution of a Participant's interest is considered to begin on the
Participant's Required Beginning Date (or, if applicable, the date
distribution is required to begin to the surviving Spouse pursuant to the
above).
(3) DEFINITIONS:
(A) APPLICABLE LIFE EXPECTANCY: The Life Expectancy (or joint life and
last survivor expectancy) calculated using the attained age of the
Participant (or Designated Beneficiary) as of the Participant's (or
Designated Beneficiary's) birthday in the applicable calendar year
reduced by one (1) for each calendar year which has elapsed since the
date the Life Expectancy was first calculated. If Life Expectancy is
being recalculated, the Applicable Life Expectancy shall be the Life
Expectancy as so recalculated. The applicable calendar year shall be
the first Distribution Calendar Year and if Life Expectancy is being
recalculated, such succeeding calendar year.
(B) DESIGNATED BENEFICIARY: An individual affirmatively elected by the
Participant or the Participant's surviving Spouse. If no Beneficiary
is elected, the Designated Beneficiary shall be the Spouse of the
Beneficiary under the Plan in accordance with section 401(a)(9) of the
Code and the proposed Regulations thereunder.
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(C) DISTRIBUTION CALENDAR YEAR: A calendar year for which a minimum
distribution is required. For distributions beginning before the
Participant's death, the first Distribution Calendar Year is the
calendar year immediately preceding the calendar year which contains
the Participant's Required Beginning Date. For distributions beginning
after the Participant's death, the first Distribution Calendar Year is
the calendar year in which distributions are required to begin
pursuant to the above.
(D) LIFE EXPECTANCY: Life Expectancy and joint life and last survivor
expectancy are computed by use of the expected return multiples in
Tables V and VI of section 1.72-9 of the Regulations.
Unless the Participant or the surviving Spouse elects otherwise by the
time distributions are required to begin, life expectancies shall be
recalculated annually. An election shall be irrevocable as to the
Participant or surviving Spouse and shall apply to all subsequent
years. The Life Expectancy of a non-Spouse Beneficiary may not be
recalculated.
(E) PARTICIPANT'S BENEFITS:
(i) The Account balance as of the last Valuation Date in the calendar
year immediately preceding the Distribution Calendar Year
(valuation calendar year) increased by the amount of any
contributions allocated to the Account balance as of dates in the
valuation calendar year after the Valuation Date and decreased by
distributions made in the valuation calendar year after the
Valuation Date.
(ii) For purposes of paragraph (a) above, if any portion of the
minimum distribution for the first Distribution Calendar Year is
made in the second Distribution Calendar Year on or before the
Required Beginning Date, the amount of the minimum distribution
made in the second Distribution Calendar Year shall be treated as
if it had been made in the immediately preceding Distribution
Calendar Year.
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(F) REQUIRED BEGINNING DATE:
(i) General Rule. The Required Beginning Date of a Participant is the
first day of April of the calendar year following the calendar year
in which the Participant attains age 70 1/2 subject to the
transitional rules below.
(ii) Transitional rules. The Required Beginning Date of a Participant
who attains age 70 1/2 before January 1, 1988, shall be determined in
accordance with (a) or (b) below:
(a) Non-5-percent owners. The Required Beginning Date of a
Participant who is not a 5-percent owner is the first day of
April of the calendar year following the calendar year in which
the later of retirement or attainment of age 70 1/2 occurs.
(b) 5-percent owners. The Required Beginning Date of a Participant
who is a 5-percent owner during any year beginning after
December 31, 1979, is the first day of April following the
later of:
(I) the calendar year in which the Participant attains age
70 1/2, or
(II) the earlier of the calendar year with or within which
ends the Plan Year in which the Participant becomes a
5-percent owner, or the calendar year in which the
Participant retires.
(III) The Required Beginning Date of a Participant who is not a
5-percent owner who attains age 70 1/2 during 1988 and
who has not retired as of January 1, 1989, is April 1,
1990.
(iii) 5-percent owner. A Participant is treated as a 5-percent owner for
purposes of this Section if such Participant is a 5-percent owner as
defined in section 416(i) of the Code (determined in accordance with
section 416 of the Code but without regard to whether the Plan is
Top-Heavy) at any time during the Plan Year ending with or within the
calendar year in which such owner attains age 66 1/2 or any subsequent
Plan Year.
(iv) Once distributions have begun to a 5-percent owner under this Section,
they must continue to be distributed even if the Participant ceases to be
a 5-percent owner in a subsequent year.
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(d) TRANSITIONAL RULES FOR TEFRA ELECTIONS:
Notwithstanding the other requirements of this Section and subject to the
joint and survivor annuity requirements, distribution on behalf of any
Employee, including a 5-percent owner, may be made if all of the following
requirements are satisfied (regardless of when such distribution
commences):
(1) The distribution by the Trust is one which would not have
disqualified the Trust under section 401(a)(9) of the Code as in
effect prior to amendment by the Deficit Reduction Act of 1984.
(2) The distribution is in accordance with a method of distribution
designated by the Employee whose interest in the Trust is being
distributed or, if the Employee is deceased, by a Beneficiary of
such Employee.
(3) Such designation was in writing, was signed by the Employee or the
Beneficiary, and was made before January 1, 1984.
(4) The Employee had accrued a benefit under the Plan as of December 31,
1983.
(5) The method of distribution designated by the Employee or the
Beneficiary specifies the time at which distribution will commence,
the period over which distributions will be made, and in the case of
any distribution upon the Employee's death, the Beneficiaries of the
Employee listed in order of priority.
A distribution upon death will not be covered by this transitional rule
unless the information in the designation contains the required
information described above with respect to the distributions to be made
upon the death of the Employee.
For any distribution which commences before January 1, 1984, but continues
after December 31, 1983, the Employee or the Beneficiary to whom such
distribution is being made, will be presumed to have designated the method
of distribution under which the distribution is being made if the method
of distribution was specified in writing and the distribution satisfied
the requirements of (1) and (5) above.
If a designation is revoked, any subsequent distribution must satisfy the
requirements of section 401(a)(9) of the Code and the proposed Regulations
thereunder. If a designation is revoked subsequent to the date
distributions are required to begin, the Trust must distribute by the end
of the calendar year following the calendar year in which the revocation
occurs the total amount not yet distributed which would have been required
to have been distributed to satisfy section 401(a)(9) of the Code and the
proposed Regulations thereunder, but for the section 242(b)(2) election.
For calendar years beginning after December 31, 1988, such distributions
must meet the minimum distributions incidental benefit requirements in
section 1.401(a)(9)-2 of the proposed Regulations. Any changes in the
designation will be considered to be a revocation of the
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designation. However, the mere substitution or addition of another
Beneficiary (one not named in the designation) under the designation will
not be considered to be a revocation of the designation, so long as such
substitution or addition does not alter the period over which
distributions are to be made under the designation, directly or indirectly
(for example, by altering the relevant measuring life). In the case in
which an amount is transferred or rolled over from the Plan to another
plan, the rules in Q&A J-2 and Q&A J-3 of the proposed Regulations shall
apply.
SECTION 6.11 SPECIAL DISTRIBUTION RULES FOR 401(k) CONTRIBUTIONS.
Employee Elective Deferrals and allocable income are not distributable to a
Participant or his or her Beneficiary or Beneficiaries, in accordance with such
Participant's or Beneficiary's or Beneficiaries' election, earlier than upon
separation from service, death, or Disability other than upon the occurrence of
one or more of the following events:
(a) Termination of the Plan without the establishment of another Defined
Contribution Plan other than an employee stock ownership plan (as
defined in section 4975(e) or 409 of the Code), or a simplified
employee pension plan (as defined in section 408(k) of the Code).
(b) The transfer by the Employer, if a corporation, to an unrelated
corporation of substantially all of the assets (within the meaning of
section 409(d)(2) of the Code) used in a trade or business of such
corporation if the Employer continues to maintain this Plan after the
disposition, but only with respect to Employees who continue employment
with the corporation acquiring such assets.
(c) The transfer by the Employer, if a corporation, to an unrelated entity
of such corporation's interest in a subsidiary (within the meaning of
section 409(d)(3) of the Code) if the Employer continues to maintain
this Plan, but only with respect to Employees who continue employment
with such subsidiary.
(d) A distribution made pursuant to an event described in subsection (a),
(b), or (c) above shall be made in the form of a lump sum.
(e) The attainment of age 59 1/2.
(f) Distribution of Employee Elective Deferrals (and earnings thereon
accrued as of the end of the last Plan Year ending before July 1, 1989)
may be made to a Participant in the event of hardship pursuant to a
showing of immediate and heavy financial need, as described in Section
6.2 of the Plan.
SECTION 6.12 FORM OF DISTRIBUTION.
Distributions shall be made in cash, except that in the case of Company Stock
distributions may be made in cash or in-kind as elected by the Participant.
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SECTION 6.13 TRUSTEE-TO-TRUSTEE TRANSFERS.
Subject to Plan Administrator approval, at the direction of a Participant, the
Trustee of this Plan will make a transfer of such Participant's applicable
Account balance to the trustee of another plan designated by the Participant,
and qualified under section 401(a) of the Code.
SECTION 6.14 NORMAL FORM OF BENEFIT
The Participant will receive a distribution in the form of one lump sum, unless
the Participant elects otherwise as permitted under this Article.
SECTION 6.15 ROLLOVERS TO OTHER PLANS OR IRAS.
Effective with respect to any distribution made on or after January 1, 1993 and
notwithstanding any provision of the Plan to the contrary that would otherwise
limit a Participant's election under this Section, a Participant may elect, at
the time and in the manner prescribed by the Administrator, to have any portion
of an eligible rollover distribution paid, in a direct rollover, to an eligible
retirement plan specified by the Participant.
Definitions:
(a) ELIGIBLE ROLLOVER DISTRIBUTION. An eligible rollover distribution is any
distribution of all or any portion of the balance to the credit of the
Participant, except:
(1) any distribution that is one of a series of substantially equal
periodic payments (made not less frequently than annually) made over
the life (or life expectancy) of the distributee or the joint lives
(or joint life expectancies) of the Participant and the
Participant's designated Beneficiary, or over a specified period of
ten years or more;
(2) any distribution to the extent such distribution is required under
section 401(a)(9) of the Code; and
(3) 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).
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(b) ELIGIBLE RETIREMENT PLAN. An eligible retirement plan is 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 distributee's
eligible rollover distribution. However, in the case of an eligible
rollover distribution to a surviving Spouse, an eligible retirement plan
is an individual retirement account or individual retirement annuity.
(c) DIRECT ROLLOVER. A direct rollover is a payment by the Plan to an eligible
retirement plan specified by the Participant.
SECTION 6.16 INSTALLMENT PAYMENTS.
The frequency of the installment payments shall be payable over a term not
exceeding the joint life expectancy of the Participant and Beneficiary, at the
Participant's election as follows:
(a) monthly,
(b) quarterly,
(c) semi-annually,
(d) annually.
SECTION 6.17 ACCOUNTS FOR QDRO BENEFICIARIES (ALTERNATE PAYEES)
A Participant's rights and benefits shall be subject to the rights afforded to
an Alternate Payee under a qualified domestic relations order. A separate
Account shall be established for an Alternate Payee entitled to any portion of a
Participant's Account under a QDRO as of the date and in accordance with the
directions specified in the QDRO. In addition, a separate Account may be
established during the period of time the Administrator, a court of competent
jurisdiction or other appropriate person is determining whether a domestic
relations order qualifies as a QDRO. Such a separate Account shall be valued and
accounted for in the same manner as any other Account.
(a) Distributions Pursuant to QDROs. If a QDRO so provides, the portion of a
Participant's Account payable to an Alternate Payee may be distributed, in
a form as permissible under Section 6.3, to the Alternate Payee at the
time specified in the QDRO, regardless of whether the Participant is
entitled to a distribution from the Plan at such time.
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(b) Participant Loans. Except to the extent required by law, an Alternate
Payee, on whose behalf a separate Account has been established, shall not
be entitled to borrow from such Account. If a QDRO specifies that the
Alternate Payee is entitled to any portion of the Account of a Participant
who has an outstanding loan balance, all outstanding loans shall generally
continue to be held in the Participant's Account and shall not be divided
between the Participant's and Alternate Payee's Accounts.
(c) Investment Direction. Where a separate Account has been established on
behalf of an Alternate Payee and has not yet been distributed, the
Alternate Payee may direct the investment of such Account in the same
manner as if he or she were a Participant.
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ARTICLE VII - LOANS
-------------------
SECTION 7.1 AVAILABILITY OF LOANS.
Loans shall be permitted under this Plan only to Participants who are active
Eligible Employees or active full-time employees of related companies as
established by the policy of the Plan Administrator. Any such loan shall be
subject to such conditions and limitations as the Plan Administrator deems
necessary for administrative convenience and to preserve the tax-qualified
status of the Plan. A Participant may only have one outstanding loan at any
given time.
SECTION 7.2 AMOUNT OF LOANS.
No loan to any Participant may be made to the extent that such loan, when added
to the outstanding balance of all other loans to the Participant would exceed
the lesser of (a) $50,000 reduced by the excess (if any) of the highest
outstanding balance of loans during the one-year period ending on the day before
the loan is made, over the outstanding balance of loans from the Plan on the
date the loan is made, or (b) one-half the present value of the nonforfeitable
accrued benefit of the Participant. For the purpose of the above limitation, all
loans from all plans of the Employer and other members of a group of employers
described in sections 414(b), 414(c), 414(m), and 414(o) of the Code are
aggregated. Furthermore, any loan shall by its terms require that repayment
(principal and interest) be amortized in substantially level payments, not less
frequently than quarterly, over a period not extending beyond five years from
the date of the loan. If such loan is used to acquire a dwelling unit which
within a reasonable time (determined at the time the loan is made) will be used
as the principal residence of the Participant, the repayment period will not
extend beyond thirty years from the date of the loan. An assignment or pledge of
any portion of the Participant's interest in the Plan and a loan, pledge, or
assignment with respect to any insurance contract purchased under the Plan, will
be treated as a loan under this paragraph.
SECTION 7.3 TERMS OF LOANS.
(a) Loans shall be made available to all Participants who are active
Eligible Employees or active full-time employees of related companies
on a reasonably equivalent basis.
(b) Loans shall not be made available to Highly Compensated Employees (as
defined in section 414(q) of the Code) in an amount greater than the
amount made available to other Employees.
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(c) Loans must be adequately secured using not more than 50 percent of the
Participant's Vested Account balance, and bear a reasonable interest rate.
(d) No Participant loan shall exceed one-half of the present value of the
Participant's Vested accrued benefit. A Participant loan for less than
$1,000 dollars is not permitted.
(e) In the event of default, foreclosure on the note and attachment of
security will not occur until a distributable event occurs in the Plan.
(f) The Administrator shall have the right to call any Participant loan once a
Participant's employment with all Related Companies has terminated or if
the Plan is terminated.
(g) Loans granted or renewed on or after the last day of the first Plan Year
beginning after December 31, 1988 shall be made pursuant to a written
Participant loan program incorporated herein by reference which will
include the following:
(1) the basis on which loans will be approved or denied;
(2) procedures for applying for the loans;
(3) person or positions authorized to administer the Participant loan
program;
(4) limitations, if any, on the types and amounts of loans offered;
(5) procedures under the program for determining the rates of interest;
(6) the types of collateral which may secure a Participant loan; and
(7) the events constituting default and the steps that will be taken to
preserve Plan assets.
(h) Loans are available from the following accounts and will be withdrawn from
the Participant's accounts in the following hierarchy:
(1) Employee Deferral Account
(2) Stock Matching Contribution Account
(3) Employer Matching Contribution Account
(4) Employer Supplemental Contribution Account
(5) Rollover Account and Transfer Account
(6) After-Tax Employee Contribution Account
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(i) Loans will be taken from the investment funds on a pro rata basis.
(j) A Participant is not required to obtain Spousal Consent in order to take
out a loan under the Plan.
(k) Loan principal repayments shall be credited to the Participant's Accounts
in the inverse of the order used to fund the loan. Loan interest shall be
credited to the Participant's Accounts in direct proportion to the
principal payment. Loan payments credited to contribution Accounts for
which the Participant directs investment are credited by investment type
based upon the Participant's current investment election for new
contributions. Loan payments credited to contribution Accounts for which
the Participant does not direct investment as described in Section 8.12
are credited to the investment funds specified by the Administrator for
such contribution Account.
(l) The Administrator may agree to a suspension of loan payments for up to 12
months for a Participant who is on a Leave of Absence without pay. During
the suspension period interest shall continue to accrue on the outstanding
loan balance. At the expiration of the suspension period all outstanding
loan payments and accrued interest thereon shall be due unless otherwise
agreed upon by the Administrator.
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ARTICLE VIII - PLAN ADMINISTRATION
----------------------------------
For the purposes of this Article, except for Sections 8.2, 8.5 and 8.8, the
Committee shall be also deemed to include the Administrator.
SECTION 8.1 DUTIES OF THE EMPLOYER.
The Employer shall have overall responsibility for selecting and appointing the
Trustee, and for the establishment, amendment, termination, administration, and
operation of the Plan. The Employer shall discharge this responsibility by
appointing a Committee, to which shall be delegated overall responsibility for
administering and operating the Plan. The Employer shall be the "named
fiduciary" (as defined in section 402(a)(2) of ERISA), the "Administrator" (as
defined in section 3(16) of ERISA and section 414(g) of the Code), and an agent
for service of process of the Plan.
Upon written notice to the Trustee and the Committee, the Employer may appoint
one or more investment managers as described in ERISA section 3(38), which shall
have the power to manage, acquire, or dispose of all or part of the Trust assets
in accordance with the provisions of the Plan and Trust agreement. The Committee
and investment manager shall execute a written agreement specifying the Trust
assets to be managed and the investment manager's duties and responsibilities
with respect to such assets, and in such agreement the investment manager shall
acknowledge that it is a fiduciary with respect to the Plan and Trust. The
Committee may authorize the investment manager to give written instructions to
the Trustee with respect to acquiring, managing, and disposing of assets managed
by the investment manager, and the Trustee shall follow such instructions and
shall be under no duty to make an independent determination regarding whether
the instruction is proper. The fees and expenses of an investment manager shall
be paid by the Trust except to the extent paid by the Employer.
SECTION 8.2 THE COMMITTEE.
The Committee shall consist of officers or other Employees of the Employer, or
any other person(s) who shall be appointed by the Employer. The members of the
Committee shall serve at the direction of the Employer. In the absence of such
appointment, the Employer shall serve as the Committee. Any member of the
Committee may resign by delivering his written resignation to the Employer and
to the Committee, which shall become effective upon the date specified therein.
In the event of a vacancy on the Committee, the remaining members shall
constitute the Committee with full power to act until the Employer appoints a
new Committee member. The Employer may from time to time remove any Committee
member with or without cause and appoint a successor thereto.
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SECTION 8.3 APPOINTMENT OF ADVISOR.
The Committee may employ any such person or entity as it deems necessary to
assist in the Administration of the Plan and provide services including but not
limited to tax advice, amendment, termination and operation of the Plan, and
advice concerning reports filed with the Internal Revenue Service. Any such
advisor shall not be the Administrator of the Plan (as defined in section 3(16)
of ERISA and section 414(g) of the Code).
The Committee shall have the authority and discretion to engage an
Administrative Delegate who shall perform, without discretionary authority or
control, administrative functions within the framework of policies,
interpretations, rules, practices and procedures made by the Committee or other
Plan fiduciary. Any action made or taken by the Administrative Delegate may be
appealed by an affected Participant to the Committee in accordance with the
claims review procedures provided in Section 8.6. Any decisions which call for
interpretations of Plan provisions not previously made by the Committee shall be
made only by the Committee. The Administrative Delegate shall not be considered
a fiduciary with respect to the services it provides.
SECTION 8.4 POWERS AND DUTIES OF THE COMMITTEE.
(a) The Committee, on behalf of the Participants and Beneficiaries of the
Plan, shall enforce the Plan and Trust in accordance with the terms
thereof, and shall have all powers necessary to carry out such provisions.
The Committee shall have the discretionary authority to interpret the Plan
and Trust and shall determine all questions arising in the administration
and application of the Plan and Trust. Any such interpretation or
determination by the Committee shall be conclusive and binding on all
persons.
The Committee shall establish rules and regulations necessary for the
proper conduct and administration of the Plan, and from time to time may
change or amend these rules and regulations. The Committee shall also have
the power to authorize all disbursements from the Trust by the Trustee in
accordance with the Plan's terms.
(b) At the direction of the Committee, distributions to minors or persons
declared incompetent may be made by the Trustee directly to such persons
or to the legal guardians or conservators of such persons. The Employer,
the Committee, and the Trustee shall not be required to see to the proper
application of such distributions made to any of such persons, but his or
their receipt thereof shall be a full discharge of the Employer, the
Committee, and the Trustee of any obligation under the Plan or the Trust.
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SECTION 8.5 ORGANIZATION AND OPERATION OF THE COMMITTEE.
(a) The Committee shall act by a majority of its members then in office, and
such action may be taken either by a vote at a meeting or by written
consent without a meeting. The Committee may authorize any one or more of
its members to execute any document or documents on behalf of the
Committee, in which event the Committee shall notify the Employer, in
writing, of such authorization and the name or names of its member or
members so designated. The Employer thereafter shall accept and rely on
any documents executed by said member of the Committee or members as
representing action by the Committee until the Committee shall file with
the Employer a written revocation of such designation.
(b) The Committee may adopt such bylaws and regulations as it deems desirable
for the conduct of its affairs and may employ and appropriately compensate
such accountants, counsel, specialists, actuaries, and other persons as it
deems necessary or desirable in connection with the administration and
maintenance of the Plan. The Committee shall have the discretionary
authority to control and manage the operation and administration of the
Plan.
SECTION 8.6 CLAIMS PROCEDURE.
(a) A claim for benefits under the Trust shall be filed on an application form
supplied by the Committee. Written notice of the disposition of the claim
shall be furnished to the claimant within 90 days after an application
form is received by the Committee, unless special circumstances (as
determined by the Committee) require an extension for processing the
claim. If such an extension is required, the Committee shall render a
decision as soon as possible subsequent to the 90-day period, but such
decision shall not be rendered later than 180 days after the application
form is received by the Committee. Written notice of such extension shall
be furnished to the claimant prior to the commencement of the extension
indicating the special circumstances requiring such extension and the date
by which the Committee expects to render the decision on the claim. In the
event the claim is denied, the Committee shall set forth in writing the
reasons for the denial and shall cite pertinent provisions of the Plan and
Trust upon which the decision is based. In addition, the Committee shall
provide a description of any additional material or information necessary
for the claimant to perfect the claim, an explanation of why such
information is necessary, and appropriate information as to the steps to
be taken if the Participant or Beneficiary wish to submit such claim for
review as provided in (b) below.
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(b) A Participant or Beneficiary whose claim described in (a) above has been
denied in whole or in part shall be entitled to the following rights if
exercised within 60 days after written denial of a claim is received:
(1) to request a review of the claim upon written application to the
Committee;
(2) to review documents associated with the claim; and
(3) to submit issues and comments in writing to the Committee.
(c) If a Participant or a Beneficiary requests a review of the claim under (b)
above, the Committee shall conduct a full review (including a formal
hearing if desired) of such request, and a decision on such request shall
be made within 60 days after the Committee has received the written
request for review from the Participant or the Beneficiary. Special
circumstances (such as a need for full hearing on request) can allow the
Committee to extend the decision on such request, but the decision shall
be rendered no later than 120 days after receipt of the request for
review. Written notice of such an extension shall be furnished to the
Participant or the Beneficiary prior to the commencement of the extension.
The decision of the Committee on review shall be set forth in writing and
shall include specific reasons for the decision as well as specific
references to the pertinent provisions of the Plan or Trust on which the
decision is based.
SECTION 8.7 RECORDS AND REPORTS.
(a) The Committee shall be entitled to rely upon certificates, reports, and
opinions provided by an accountant, tax or pension advisor, actuary or
legal counsel employed by the Employer or Committee. The Committee shall
keep a record of all its proceedings and acts, and shall keep all such
books of account, records, and other data as may be necessary for the
proper administration of the Plan. The regularly kept records of the
Committee, the Employer, and the Trustee shall be conclusive evidence of a
Participant's service, his Compensation, his age, his marital status, his
status as an Employee, and all other matters contained therein and
relevant to this Plan; provided, however, that a Participant may request a
correction in the record of his age at any time prior to his retirement
and such correction shall be made if within 90 days after such request he
furnishes a birth certificate, baptismal certificate, or other documentary
proof of age satisfactory to the Committee in support of this correction.
(1) Each Participant and each Participant's designated Beneficiary must
notify the Committee in writing of his mailing address and each
change thereof. Any communication, statement or notice addressed to
a Participant or Beneficiary at the last mailing address filed with
the Committee, or if no address is filed with the Committee, the
last mailing address as shown on the Employer's records, will be
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binding on the Participant and his Beneficiary for all purposes of the
Plan. Neither the Committee nor the Trustee shall be required to search
for or locate a Participant or a Beneficiary.
SECTION 8.8 LIABILITY.
(a) A member of the Committee shall not be liable for any act, or failure to
act, of any other member of the Committee, except to the extent that such
member:
(1) Knowingly participates in, or undertakes to conceal, an act or
omission of another Committee member, knowing that such act or
omission is a breach of fiduciary duty to the Plan;
(2) Fails to comply with the specific responsibilities given him as a
member of the Committee, and such failure enables another member of
the Committee to commit a breach of fiduciary duty to the Plan; or
(3) Has knowledge of a breach of fiduciary duty to the Plan by another
member of the Committee, unless such member makes reasonable effort
under the circumstances to remedy such breach.
(b) Each member of the Committee shall be liable with respect to his own acts
of willful misconduct or gross negligence concerning the Plan. The
Employer may indemnify the Committee or each of its members for part or
all expenses, costs, or liabilities arising out of the performance of
duties required by the terms of the Plan or Trust, except for those
expenses, costs, or liabilities arising out of a member's willful
misconduct or gross negligence.
SECTION 8.9 RELIANCE ON STATEMENTS.
The Committee, in any of its dealings with Participants hereunder, may
conclusively rely on any written statement, representation, or documents made or
provided by such Participants.
SECTION 8.10 REMUNERATION AND BONDING.
(a) Unless otherwise determined by the Committee, the members of the Committee
shall serve without remuneration for services to the Plan and Trust.
However, all expenses of the Committee shall be paid by the Trust except
to the extent paid by the Employer. Such expenses shall include any
expenses incidental to the functioning of the Committee, including but not
limited to fees of accountants, legal counsel, and other specialists, or
any other costs entailed in administering the Plan.
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(b) Title I of ERISA requires certain persons with discretion over Plan assets
to be bonded. Except as required by ERISA or other federal law, the
members of the Committee shall serve without bond.
SECTION 8.11 COMMITTEE DECISIONS FINAL.
Any decision of the Committee with respect to matters within its jurisdiction
shall be final, binding, and conclusive upon the Employer and the Trustee and
upon each Employee, Participant, former Participant, Beneficiary, Alternate
Payee and every other person or party interested or concerned, and shall be
given maximum possible deference allowed by law.
SECTION 8.12 PARTICIPANT-DIRECTED INVESTMENTS.
The Committee authorizes the Trustee to accept investment direction from
Participants. The Trustee shall invest in the Investment Funds in accordance
with investment directions given by the Participants, Beneficiaries, and
Alternate Payees for whose accounts such assets are held, to the extent
authorized. All such directions by the Participants, Beneficiaries or Alternate
Payees to the Trustee will be made by electronic media or in such other manner
as is acceptable to the Trustee. Participants, Beneficiaries, and Alternate
Payees will be deemed responsible for purposes of such investment selection and
allocation.
Where the Committee, a Participant, a Beneficiary, an Alternate Payee or an
Investment Manager other than the Trustee has the power and authority to direct
the investment of assets of the Trust Fund, the Trustee does not have any duty
to question any direction, to review any securities or other property, or to
make any suggestions in connection therewith. The Trustee will promptly comply
with any direction given by the Committee, a Participant, a Beneficiary, an
Alternate Payee or Investment Manager. The Trustee will neither be liable for
failing to invest any assets of the Trust Fund under the management and control
of the Committee, a Participant, a Beneficiary, an Alternate Payee or an
Investment Manager in the absence of investment directions regarding such
assets. The Trustee and the Committee shall be indemnified by the Participant
from and against any personal liability to which the Trust and the Committee may
be subject due to carrying out an elective investment directed by the
Participant or for failure to act in absence of restrictions from the
Participant.
Notwithstanding the above, a Participant cannot direct the investment of his or
her Stock Matching Contribution Account, which Account shall be invested in the
Investment Funds specified by the Administrator, until the Participant attains
age 55 or is no longer employed by any Related Company. Future amounts allocated
to an over age 55 Participant's Stock Matching Contribution Account will
continue to be entirely invested in the Investment Fund specified by the
Administrator, until otherwise directed by the Participant. Also a Beneficiary,
or an Alternate Payee may direct the Investment in his or her Stock Matching
Contribution Account.
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ARTICLE IX - TRUST AGREEMENT
----------------------------
SECTION 9.1 ESTABLISHMENT OF TRUST.
The Employer and the Trustee have entered into a trust agreement which is set
forth in a separate document and is incorporated herein. The trust agreement
establishes a Trust consisting of such sums of money and other property as may
from time to time be contributed or transferred to the Trustee under the terms
of the Plan, along with any property to which the Trust Fund may from time to
time be converted, and which provides for the investment of Plan assets and the
operation of the Trust. The trust agreement, as amended from time to time, shall
be deemed part of the Plan, and all rights and benefits provided to persons
under the Plan shall be subject to the terms of the trust agreement.
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ARTICLE X - AMENDMENT, TERMINATION AND MERGER
---------------------------------------------
SECTION 10.1 AMENDMENT.
(a) The Employer shall have the right to amend the Plan and Trust at any time
to the extent permitted under the Code and ERISA. The Employer may adopt
any change by action of its board of directors in accordance with its
normal procedures.
(b) The Committee, if acting as Administrator in accordance with Section 8.1,
shall have the authority to adopt Plan amendments which have no
substantial adverse financial impact upon any Employer or the Plan. The
Committee may adopt any such amendment in the manner specified in Section
8.5.
(c) Any amendment must be (1) set forth in writing, and (2) signed and dated
by an officer of the Company or, in the case of an amendment adopted by
the Committee, at least one of its members.
(d) No amendment affecting the rights or duties of the Trustee shall be
effective without the written consent of the Trustees.
(e) No amendment to the Plan shall be effective to the extent that it has the
effect of decreasing a Participant's accrued benefit. Notwithstanding the
preceding sentence, a Participant's Account balance may be reduced to the
extent permitted under section 412(c)(8) of the Code. For purposes of this
paragraph, a Plan amendment which has the effect of decreasing a
Participant's Account balance or eliminating an optional form of benefit,
with respect to benefits attributable to service before the amendment,
shall be treated as reducing an accrued benefit.
SECTION 10.2 TERMINATION.
(a) The Employer intends to continue the Plan indefinitely and to fund the
Plan as required by law and its terms. However, the Employer shall have
the right to terminate the Plan at any time. The Employer may terminate
this Plan by action of its board of directors in accordance with its
normal procedures.
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(b) If the Plan is totally or partially terminated, or in the event of a
complete discontinuation of contributions under the Plan, a Participant
whose participation in the Plan is terminated as a result of such total or
partial termination or who is affected by the complete discontinuation of
contributions to the Plan shall be 100 percent Vested with respect to his
Accounts, determined as of the date of such total or partial termination.
(c) Upon termination of the Plan, the Employer shall allocate the assets of
the Plan, after the payment of or set aside for the payment of all
expenses, among the Participants and their Beneficiaries in accordance
with the Code and ERISA.
(d) Upon termination of the Plan, and after all liabilities of the Plan to
Participants and Beneficiaries have been satisfied, any residual assets of
the Plan which are attributable to a contribution in excess of Code
section 415 limits shall be distributed to the Employer, provided such
distribution does not contravene any provision of the law or the Plan.
(e) The allocation of benefits under this Article shall be accomplished either
through the continuance of the Trust, the creation of a new Trust, the
payment of the benefits to be provided to the Participants or
Beneficiaries, or the purchase of annuity contracts, as determined by the
Employer.
(f) If no successor plan is established or maintained, lump sum distributions
shall be made in accordance with the terms of the Plan as in effect at the
time of the Plan's termination or as thereafter amended provided that a
post-termination amendment shall not be effective to the extent that it
violates Section 10.1 unless it is required in order to maintain the
qualified status of the Plan upon its termination. The Trustee's and
Employer's authority shall continue beyond the Plan's termination date
until all Trust assets have been liquidated and distributed.
SECTION 10.3 MERGER, CONSOLIDATION OR TRANSFER.
The Employer shall have the right at any time to merge or consolidate the Plan
with any other plan, or transfer the assets or liabilities of the Trust to any
other plan provided each Participant would (if the Plan were then terminated)
receive a benefit immediately after such merger, consolidation or transfer which
would equal or exceed the benefit the Participant would have been entitled to
immediately before such merger, consolidation or transfer (if the Plan were then
terminated).
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ARTICLE XI - TOP-HEAVY PROVISIONS
---------------------------------
SECTION 11.1 APPLICABILITY.
The provisions of this Article shall not apply to the Plan with respect to any
Plan Year in which the Plan is not Top-Heavy. If the Plan is or becomes
Top-Heavy in any Plan Year, the provisions of this Article will supersede any
conflicting provisions in the Plan.
SECTION 11.2 DEFINITIONS.
(a) KEY EMPLOYEE: Any Employee or former Employee (and the Beneficiaries of
such Employee) who at any time during the "Determination Period" was (1)
an officer of the Employer if such individual's Annual Compensation
exceeds 50 percent of the dollar limitation under section 415(b)(1)(A) of
the Code, (2) an owner (or considered an owner under section 318 of the
Code) of one of the ten largest interests in the Employer if such
individual's Annual Compensation exceeds 100 percent of the dollar
limitation under section 415(c)(1)(A) of the Code, (3) a
more-than-5-percent owner of the Employer, or (4) a more-than-1-percent
owner of the Employer who has annual Compensation of more than $150,000.
Annual Compensation means compensation as defined in section 415(c)(3) of
the Code, but including amounts contributed by the Employer pursuant to a
salary reduction agreement which are excludable from the Employee's gross
income under section 125, section 402(e)(3), section 402(h) or section
403(b) of the Code. The "Determination Period" is the Plan Year containing
the Determination Date and the four (4) preceding Plan Years.
The determination of who is a Key Employee will be made in accordance with
section 416(i)(1) of the Code and the Regulations thereunder.
(b) TOP-HEAVY PLAN: For any Plan Year beginning after December 31, 1983, this
Plan is Top-Heavy if any of the following conditions exists:
(1) If the Top-Heavy Ratio for this Plan exceeds 60 percent and this
Plan is not part of any Required Aggregation Group or Permissive
Aggregation Group of plans.
(2) If this Plan is a part of a Required Aggregation Group of plans, but
not part of a Permissive Aggregation Group of plans and the
Top-Heavy Ratio for the Permissive Aggregation Group exceeds 60
percent.
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(3) If this Plan is a part of a Required Aggregation Group and part of a
Permissive Aggregation Group of plans and the Top-Heavy Ratio for
the Permissive Aggregation Group exceeds 60 percent.
(c) SUPER-TOP-HEAVY PLAN: A plan is Super-Top-Heavy if such a plan would be
Top-Heavy if "90 percent" were substituted for "60 percent" each place it
appears in (b) above.
(d) TOP-HEAVY RATIO:
(1) If the Employer maintains one or more Defined Contribution Plans
(including any simplified employee pension plan) and the Employer
has not maintained any Defined Benefit Plan which during the 5-year
period ending on the Determination Date(s) has or has had accrued
benefits, the Top-Heavy Ratio for this Plan alone or for the
required or Permissive Aggregation Group, as appropriate, is a
fraction, the numerator of which is the sum of the Account balances
of all Key Employees as of Determination Date(s) (including any part
of any Account balance distributed in the 5-year period ending on
the Determination Date(s)), and the denominator of which is the sum
of all Account balances (including any part of any Account balance
distributed in the 5-year period ending on the Determination
Date(s)), both computed in accordance with section 416 of the Code
and the Regulations thereunder. Both the numerator and denominator
of the Top-Heavy Ratio are increased to reflect any contribution not
actually made as of the Determination Date, but which is required to
be taken into account on that date under section 416 of the Code and
the Regulations thereunder.
(2) If the Employer maintains one or more Defined Contribution Plans
(including any simplified employee pension plan) and the Employer
maintains or has maintained one or more Defined Benefit Plans which
during the 5-year period ending on the Determination Date(s) has or
has had any accrued benefits, the Top-Heavy Ratio for any required
or Permissive Aggregation Group as appropriate, is a fraction, the
numerator of which is the sum of account balances under the
aggregated Defined Contribution Plan or Plans for all Key Employees,
determined in accordance with (1) above, and the Present Value of
accrued benefits under the aggregated Defined Benefit Plan or Plans
for all Key Employees as of the Determination Date(s), and the
denominator of which is the sum of the account balances under the
aggregated Defined Contribution Plan or Plans for all Participants,
determined in accordance with (1) above, and the Present Value of
accrued benefits under the Defined Benefit Plan or Plans for all
Participants as of the Determination Date(s), are determined in
accordance with section 416 of the Code and the Regulations
thereunder. The accrued benefits under a Defined Benefit Plan in
both the numerator and denominator of the Top-Heavy Ratio are
increased for any distribution of an accrued benefit made in the
five-year period ending on the Determination Date.
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(3) For purposes of (1) and (2) above, the value of account balances and
the Present Value of accrued benefits will be determined as of the
most recent Valuation Date that falls within or ends with the
12-month period ending on the Determination Date, except as provided
in section 416 of the Code and the Regulations thereunder for the
first and second plan years of a Defined Benefit Plan. The account
balances and accrued benefits of a Participant (a) who is not a Key
Employee but who was a Key Employee in a prior year, or (b) who has
not been credited with at least one Hour of Service with any
Employer maintaining the Plan at any time during the 5-year period
ending on the Determination Date will be disregarded. The
calculation of the Top-Heavy Ratio, and the extent to which
distributions, rollovers and transfers are taken into account will
be made in accordance with section 416 of the Code and the
Regulations thereunder. Employee contributions previously deductible
under section 219 of the Code will not be taken into account for
purposes of computing the Top-Heavy Ratio. When aggregating plans,
the value of account balances and accrued benefits will be
calculated with reference to the Determination Dates that fall
within the same calendar year.
The accrued benefit of a Participant other than a Key Employee shall
be determined under either (a) the method, if any, that uniformly
applies for accrual purposes under all Defined Benefit Plans
maintained by the Employer, or (b) if there is no such method, as if
such benefit accrued not more rapidly than the slowest accrual rate
permitted under the fractional rule of section 411(b)(1)(C) of the
Code.
(e) PERMISSIVE AGGREGATION GROUP: The Required Aggregation Group of plans plus
any other plan or plans of the Employer which, when considered as a group
with the Required Aggregation Group, would continue to satisfy the
requirements of sections 401(a)(4) and 410 of the Code.
(f) REQUIRED AGGREGATION GROUP: (1) Each qualified plan of the Employer in
which at least one Key Employee participates or participated at any time
during the Determination Period (regardless of whether the plan has
terminated), and (2) any other qualified plan of the Employer which
enables a plan described in (1) to meet the requirements of sections
401(a)(4) or 410 of the Code.
(g) DETERMINATION DATE: For any Plan Year subsequent to the first Plan Year,
the last day of the preceding Plan Year. For the first Plan Year of the
Plan, the last day of that year.
(h) VALUATION DATE: The date as defined in Article I of the Plan as of which
Account balances or accrued benefits are valued for purposes of
calculating the Top-Heavy Ratio.
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(i) PRESENT VALUE: Present Value shall be determined using the interest and
mortality rates specified in the applicable plans. Notwithstanding the
foregoing, all determinations shall be made in accordance with section 416
of the Code and the Regulations promulgated thereunder.
SECTION 11.3 MINIMUM ALLOCATION.
(a) Except as otherwise provided in (c) and (d) below, Employer contributions,
not including Employee Elective Deferrals, allocated on behalf of any
Participant who is not a Key Employee shall not be less than the lesser of
three percent (four percent if the Plan is super-Top-Heavy) of such
Participant's Compensation or, in the case where the Employer has no
Defined Benefit Plan which designates this Plan to satisfy section 401 of
the Code, the largest percentage of Employer contributions, as a
percentage of the first $200,000 of the Key Employee's Compensation,
allocated on behalf of any Key Employee for that year. The minimum
allocation is determined without regard to any Social Security
contribution. This minimum allocation shall be made even though, under the
Plan provisions, the Participant would not otherwise be entitled to
receive an allocation, or would have received a lesser allocation for the
year because of (1) the Participant's failure to complete 1,000 hours of
service (or any equivalent provided in the Plan), or (2) the Participant's
failure to make mandatory Employee contributions to the Plan or (3)
Compensation less than a stated amount.
(b) For purposes of computing the minimum allocation, Compensation means
Compensation as defined in Article I of the Plan.
(c) The provision in (a) above shall not apply to any Participant who was not
employed by the Employer on the last day of the Plan Year.
(d) The provision in (a) above shall not apply to any Participant to the
extent the Participant is covered under any other plan or plans of the
Employer and the minimum allocation or benefit requirement applicable to
Top-Heavy Plans will be met in the other plan or plans.
SECTION 11.4 NONFORFEITABILITY OF MINIMUM ALLOCATION.
The minimum allocation required (to the extent required to be nonforfeitable
under section 416(b) of the Code) may not be forfeited under section
411(a)(3)(D) of the Code.
67
<PAGE> 72
SECTION 11.5 ALLOCATION LIMITATIONS.
In determining the Defined Contribution Fraction under section 415(e)(3)(B) of
the Code and pursuant to Section 5.4 of the Plan "100 percent" shall be
substituted for "125 percent" unless the minimum allocation percentage under
section 416(c)(2)(A) of the Code and Section 11.3(a) of the Plan is increased
from "three percent" to "four percent" and the Plan would not be a Top-Heavy
Plan if "90 percent" were substituted for "60 percent" each place it appears in
Section 11.2(b) of the Plan.
SECTION 11.6 MINIMUM VESTING SCHEDULES.
For any Plan Year during which the Plan is Top-Heavy, the vesting schedule(s)
set forth in Article V of the Plan will be followed, as such schedule(s) already
satisfy the requirements of section 416 of the Code.
68
<PAGE> 73
ARTICLE XII - GENERAL PROVISIONS
--------------------------------
SECTION 12.1 GOVERNING LAW.
(a) The Plan is established under, and its validity, construction and effect
shall be governed by, the laws of the State of New Hampshire, except to
the extent governed by ERISA.
(b) The parties to the Trust intend that the Trust be exempt from taxation
under section 501(a) of the Code, and any ambiguities in its construction
shall be resolved in favor of an interpretation which will effect such
intention.
SECTION 12.2 POWER TO ENFORCE.
The Administrator and/or Committee shall have authority to enforce the Plan on
behalf of any and all persons having or claiming any interest in the Trust or
Plan.
SECTION 12.3 ALIENATION OF BENEFITS.
Benefits under the Plan shall not be subject to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance or charge and any attempt to
anticipate, alienate, sell, transfer, assign, pledge, encumber or charge the
same shall be void, nor shall any such benefits be in any way liable for or
subject to the debts, contracts, liabilities, engagements or torts of any person
entitled to such benefits. This Section shall also apply to the creation,
assignment or recognition of a right to any benefit payable with respect to a
Participant pursuant to 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, or any domestic relations order entered before January 1,
1985.
SECTION 12.4 NOT AN EMPLOYMENT CONTRACT.
The Plan is not and shall not be deemed to constitute a contract between the
Employer and any Employee, or to be a consideration for, or an inducement to, or
a condition of, the employment of any Employee. Nothing contained in the Plan
shall give or be deemed to give an Employee the right to remain in the
employment of the Employer or to interfere with the right to be retained in the
employ of the Employer, any legal or equitable right against the Employer, or to
interfere with the right of the Employer to discharge or retire any Employee at
any time.
69
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SECTION 12.5 DISCRETIONARY ACTS.
Any discretionary acts to be undertaken under the Plan with respect to the
classification of Employees, contributions, or benefits shall be
nondiscriminatory and uniform in nature and applicable to all persons similarly
situated.
SECTION 12.6 INTERPRETATION.
(a) SAVINGS CLAUSE. If any provision or provisions of the Plan shall for any
reason be invalid or unenforceable, the remaining provisions of the Plan
shall be carried into effect, unless the effect thereof would be to
materially alter or defeat the purposes of the Plan.
(b) GENDER. Wherever appropriate, pronouns of either gender shall be deemed
synonymous as shall singular and plural pronouns.
(c) HEADINGS. Headings and titles of sections and subsections within the Plan
document are inserted solely for convenience of reference. They constitute
no part of the Plan itself and shall not be considered in the construction
of the Plan.
(d) FAMILY AGGREGATION. Notwithstanding anything to the contrary in the Plan,
the family aggregation rules do not apply after December 31, 1996.
SECTION 12.7 LIMITED RETURN OF CONTRIBUTIONS.
Except as provided in this paragraph, (1) Plan assets shall not revert to the
Employer nor be diverted for any purposes other than the exclusive benefit of
Participants or their Beneficiaries; and (2) a Participant's vested interest
shall not be subject to divestment. As provided in ERISA section 403(c)(2), the
actual amount of a contribution made by the Employer (or the current value of
the contribution if a net loss has occurred) may revert to the Employer if:
(a) such contribution is made by reason of a mistake of fact;
(b) initial qualification of the Plan under Code section 401(a) is not
received and a request for such qualification is made within the time
prescribed under Code section 401(b) (the existence of and contributions
under the Plan are hereby conditioned upon such qualification); or
(c) such contribution is not deductible under Code section 404 (such
contributions are hereby conditioned upon such deductibility) in the
taxable year of the Employer for which the contribution is made.
The reversion to the Employer must be made (if at all) within one year of the
mistaken payment of the contribution, the date of denial of qualification, or
the date of disallowance of deduction, as the case may be. A Participant shall
have no rights under the Plan with respect to any such reversion.
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ARTICLE XIII - SIGNATURE PAGE
-----------------------------
IN WITNESS WHEREOF, this Plan has been restated as of the Effective Date.
Signed, sealed, and delivered on this ____ day of _______________, 1998, in the
presence of:
MPB Corporation
By
-------------------------------
-------------------------------
- ------------------------------
WITNESS AS TO EMPLOYER(S)
It is the responsibility of MPB Corporation to have this Plan reviewed by their
legal counsel.
71
<PAGE> 1
Exhibit 5
November 6, 1998
The Timken Company
1835 Dueber Avenue S.W.
Canton, Ohio 44706
RE: MPB Employee's Savings Plan
Gentlemen and Mesdames:
MPB Corporation ("MPB") is a Delaware corporation and a wholly-owned
subsidiary of The Timken Company (the "Company"), an Ohio corporation. MPB
adopted the MPB Employee's Savings Plan, as amended (the "Plan") which provides
for the issuance of shares of the Company's common stock, without par value (the
"Common Stock"), as well as the resulting participation interests (the
"Participation Interests") offered to eligible employees of MPB. We have acted
as legal counsel for the Company in connection with the recent action of the
Company's Board to authorize the issuance of an addition 100,000 shares of
Common Stock pursuant to the Plan (the "Shares"). A Form S-8 Registration
Statement is being filed with the Securities and Exchange Commission to cover
the Shares and the Participation Interests.
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates of
public authorities, and other documents and instruments, and have made such
other factual inquiries, as we have deemed necessary or appropriate in
connection with this opinion.
On the basis of the foregoing, we are of the opinion that:
1. The Shares are duly authorized.
2. When the Shares have been issued and delivered against payment
therefor in accordance with the terms of the Plan, such Shares
will be duly authorized, validly issued under the Ohio General
Corporation Law, fully paid, and nonassessable, assuming that
such Shares remain duly authorized on the date of such
issuance and delivery and assuming that no change occurs in
the applicable law or pertinent facts between the date hereof
and the date of such issuance and delivery.
<PAGE> 2
The Timken Company
November 6, 1998
Page 2
3. When contributions are made to the Plan and are allocated in
accordance with the terms of the Plan, the resulting
Participation Interests will have been validly created, fully
paid, and nonassessable, assuming that as of the date(s) of
such contributions and allocations the applicable terms of the
Plan remain in substantially the same form as at the date
hereof, and further assuming that no other change occurs in
the pertinent facts or the applicable law between the date
hereof and the date(s) of such contributions and allocations.
We hereby consent to your use of this opinion as an exhibit to the said
Form S-8 Registration Statement and your reference to this opinion in any of the
materials constituting the prospectus thereof, as any of the same may be
amended, updated, and/or supplemented from time to time.
Very truly yours,
DAY, KETTERER, RALEY, WRIGHT
& RYBOLT, LTD.
<PAGE> 1
Exhibit 23(a)
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement on
Form S-8 pertaining to the MPB Employees' Savings Plan of our reports (a) dated
February 5, 1998, with respect to the consolidated financial statements and
schedule of The Timken Company included in its Annual Report (Form 10-K) and (b)
dated May 29, 1998, with respect to the financial statements and schedules of
the MPB Employees' Savings Plan included in the Plan's Annual Report
(Form 11-K), both for the year ended December 31, 1997, filed with the
Securities and Exchange Commission.
ERNST & YOUNG LLP
Canton, Ohio
November 5, 1998
<PAGE> 1
EXHIBIT 24
DIRECTORS AND OFFICERS OF
THE TIMKEN COMPANY
REGISTRATION STATEMENT ON FORM S-8
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned
directors and officers of The Timken Company, an Ohio corporation (the
"Company"), hereby: (1) constitutes and appoints W.R. Timken, Jr., Stephen A.
Perry, Gene E. Little and Larry R. Brown, collectively and individually, as his
agent and attorney-in-fact, with full power of substitution and resubstitution,
to (a) sign and file on his behalf and in his name, place and stead in any and
all capacities (i) a Registration Statement on Form S-8 (the "Registration
Statement") with respect to the registration under the Securities Act of 1933,
as amended, of participation interests issuable under MPB Employees' Savings
Plan and up to 100,000 shares of the Company's Common Stock, without par value,
for issuance under the Plan, (ii) any and all amendments, including
post-effective amendments, and exhibits to the Registration Statement and (iii)
any and all applications or other documents to be filed with the Securities and
Exchange Commission or any state securities commission or other regulatory
authority with respect to the securities covered by the Registration Statement,
and (b) do and perform any and all other acts and deeds whatsoever that may be
necessary or required in the premises; and (2) ratifies and approves any and all
actions that may be taken pursuant hereto by any of the above-named agents and
attorneys-in-fact or their substitutes.
IN WITNESS WHEREOF, the undersigned directors and officers of the
Company have hereunto set their hands as of the 6th day of November, 1998.
/s/ Stanley C. Gault /s/ Ward J. Timken
- ----------------------------------- -----------------------------------
Stanley C. Gault Ward J. Timken
/s/ J. Clayburn LaForce, Jr. /s/ W. R. Timken, Jr.
- ----------------------------------- -----------------------------------
J. Clayburn LaForce, Jr. W. R. Timken, Jr.
/s/ Gene E. Little /s/ Joseph F. Toot, Jr.
- ----------------------------------- -----------------------------------
Gene E. Little Joseph F. Toot, Jr.
/s/ Robert W. Mahoney /s/ Martin D. Walker
- ----------------------------------- -----------------------------------
Robert W. Mahoney Martin D. Walker
/s/ Jay A. Precourt /s/ Charles H. West
- ----------------------------------- -----------------------------------
Jay A. Precourt Charles H. West
/s/ John M. Timken, Jr. /s/ Alton W. Whitehouse
- ----------------------------------- -----------------------------------
John M. Timken, Jr. Alton W. Whitehouse
