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As filed with the Securities and Exchange Commission on February 2, 1999
Registration No. 33-38702
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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Post Effective Amendment No. 1
to
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
QUANEX CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 38-1872178
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1900 West Loop South, Suite 1500 77027
Houston, Texas (Zip Code)
(Address of Principal Executive Offices)
Quanex Corporation Employee Savings Plan
(Full title of the plan)
WAYNE M. ROSE
QUANEX CORPORATION
1900 WEST LOOP SOUTH, SUITE 1500
HOUSTON, TEXAS 77027
(Name and address of agent for service)
(713) 961-4600
(Telephone number, including area code, of agent for service)
Copies to:
HARVA R. DOCKERY, ESQ.
FULBRIGHT & JAWORSKI L.L.P.
2200 ROSS AVENUE, SUITE 2800
DALLAS, TEXAS 75201-9975
(214) 855-8000
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. Incorporation of Documents by Reference.
Quanex Corporation, a Delaware corporation (the "Company" or
"Registrant"), and the Quanex Corporation Employee Savings Plan (the "Plan")
incorporate by reference, as applicable, in this Registration Statement the
following documents:
(a) The Registrant's original Registration Statement
on Form S-8, Reg. No. 33-38702, filed January 25, 1991;
(b) The Registrant's Annual Report on Form 10-K for
the fiscal year ended October 31, 1998;
(c) The Plan's Annual Report on Form 11-K for the
fiscal year ended December 31, 1997;
(d) All other reports filed by the Registrant or the
Plan pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), since
October 31, 1998;
(e) The description of the Registrant's common stock,
$.50 par value (the "Common Stock"), contained in the
Prospectus dated January 12, 1981, included in the
Registrant's Registration Statement (Registration No. 2-70313)
and filed with the Securities and Exchange Commission pursuant
to Rule 424(b) of the Securities Act of 1933; and
(f) The description of the rights to purchase Series
A Junior Participating Preferred Stock (the "Rights") set
forth in the Amended and Restated Certificate of Designation,
Preferences and Rights, filed as Exhibit 1 to Amendment No.1
to the Registrant's Form 8-A dated April 28, 1989.
All documents subsequently filed by the Registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of filing
of this Post Effective Amendment No. 1 to the Registration Statement on Form S-8
(this "Amendment No. 1") and before the filing of a post-effective amendment
which indicates that all securities offered have been sold or which deregisters
all securities then remaining unsold, are incorporated by reference in, and
constitute a part of, the Registration Statement from the date such documents
are filed.
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The language in this Amendment No. 1 modifies and supersedes
the language in any previously filed document that is incorporated by reference
in this Registration Statement. The language in any document that is filed after
the date of filing of this Amendment No. 1 that is incorporated by reference in
this Registration Statement modifies and supersedes the language in this
Registration Statement. However, such language constitutes a part of this
Registration Statement only to the extent that it modifies and supersedes this
Registration Statement.
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 145 of the General Corporation Law of the State of
Delaware provides that a corporation has the power to indemnify a director,
officer, employee or agent of the corporation and certain other persons serving
at the request of the corporation in related capacities against amounts paid and
expenses incurred in connection with an action or proceeding to which he is, or
is threatened to be made, a party by reason of such position, if such person
shall have acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation, and, in any criminal
proceeding, if such person had no reasonable cause to believe his conduct was
unlawful; provided that, in the case of actions brought by or in the right of
the corporation, no indemnification shall be made with respect to any matter as
to which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the adjudicating court determines that such
indemnification is proper under the circumstances.
The Registrant's Restated Certificate of Incorporation
eliminates the personal monetary liability of a director to the Registrant and
its stockholders for breach of his fiduciary duty of care as a director to the
extent currently allowed under the Delaware General Corporation Law. Article
XVII of the Registrant's Restated Certificate of Incorporation provides that a
director of the Registrant shall not be personally liable to the Registrant or
its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to the Registrant or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) based on the payment of an improper dividend or an improper
repurchase of the Registrant's stock under Section 174 of the General
Corporation Law of the State of Delaware, or (iv) for any transaction from which
the director derived an improper personal benefit.
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The Amended and Restated Bylaws of the Registrant provide
that, under certain circumstances, the Registrant is required to indemnify any
person who was, is, or is threatened to be made a party in any action, suit or
proceeding because such person is or was a director or officer of the
Registrant. The Registrant's Amended and Restated Bylaws were amended in
February 1987 to provide for indemnification by the Registrant of its officers
and directors to the fullest extent authorized by the General Corporation Law of
the State of Delaware. This right to indemnification under the Registrant's
Amended and Restated Bylaws is a contract right, and requires the Registrant to
provide for the payment of expenses in advance of the final disposition of any
suit or proceeding brought against the director or officer of the Registrant in
his official capacity as such, provided that such director or officer delivers
to the Registrant an undertaking to repay any amounts advanced if it is
ultimately determined that such director or officer is not entitled to
indemnification. The Registrant also maintains a directors' and officers'
liability insurance policy.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been informed that in the opinion of the Commission, such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
ITEM 7. Exemption from Registration Claimed.
Not applicable.
ITEM 8. Exhibits.
4.1 Restated Certificate of Incorporation of the Registrant, as
amended on February 27, 1997, filed as Exhibit 4.1 to the
Registrant's Registration Statement on Form S-8, Registration
No. 333-22977, and incorporated herein by reference.
4.2 Amended and Restated Bylaws of the Registrant, as amended
through December 12, 1996, filed as Exhibit 3.2 to the
Registrant's Annual Report on Form 10-K for the fiscal year
ended October 31, 1996, and incorporated herein by reference.
4.3 Form of Registrant's Common Stock certificate, filed as
Exhibit 4.1 to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended April 30, 1987, and incorporated herein
by reference.
4.4 Amended and Restated Rights Agreement between the Registrant
and Manufacturers Hanover Trust Company, as Rights Agent,
filed as Exhibit 1 to
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Amendment No. 1 to the Registrant's Form 8-A dated April 28,
1989, and incorporated herein by reference.
4.5 Amended and Restated Certificate of Designation, Preferences
and Rights of the Registrant's Series A Junior Participating
Preferred Stock, filed as Exhibit 1 to Amendment No. 1 to the
Registrant's Form 8-A dated April 28, 1989, and incorporated
herein by reference.
4.6 Quanex Corporation Employee Savings Plan as amended and
restated, filed as Exhibit 4.7 to the Registrant's original
Registration Statement on Form S-8, Registration No. 33-
38702, filed January 25, 1991, and incorporated herein by
reference.
4.7 Master Trust Agreement between Quanex Corporation and Fidelity
Management Trust Company dated as of February 1, 1999.
23.1 Consent of Deloitte & Touche LLP.
24.1 Powers of Attorney (previously filed on signature page of
original Registration Statement on Form S-8, Registration No.
33-38702, filed January 25, 1991).
The Registrant hereby undertakes to submit the Plan, and any
amendments thereto, to the Internal Revenue Service ("IRS") in a timely manner
and will make all changes required by the IRS in order to qualify the Plan.
ITEM 9. Undertakings.
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1993, as
amended (the "Securities Act");
(ii) To reflect in the prospectus any facts
or events arising after the effective date of this
Registration Statement (or the most recent
post-effective amendment hereof) which, individually
or in the aggregate, represent a fundamental change
in the information set forth in this Registration
Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered
(if the total dollar volume of securities offered
would not exceed that which was registered) and any
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deviation from the high or low end of the estimated
maximum offering range may be reflected in the form
of prospectus filed with the Securities and Exchange
Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent
no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement; and
(iii) To include any material information
with respect to the plan of distribution not
previously disclosed in this Registration Statement
or any material change to such information in this
Registration Statement;
Provided, however, that paragraphs (i) and (ii) do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section
13 or 15(d) of the Exchange Act that are incorporated by
reference in this 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 herein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of the
offering.
B. The undersigned Registrant hereby undertakes that, for the
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 into this Registration Statement shall be deemed to be
a new registration statement relating to the securities offered herein, 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 Securities 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
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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 of whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Post-Effective Amendment No. 1 to Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Houston,
State of Texas, on the 1st day of February, 1999.
QUANEX CORPORATION
By /s/ Vernon E. Oechsle
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Vernon E. Oechsle
Director, President and Chief Executive Officer
(Principal Executive Officer)
Pursuant to the requirements of the Securities Act of 1933,
this Post-Effective Amendment No. 1 to registration Statement has been signed
below by the following persons in the capacities and on the dates indicated.
Signature Title Date
==================================== ==================================== ====================================
* Director and February 1, 1999
- ------------------------------------ Chairman of the Board
Robert C. Snyder
/s/ Vernon E. Oechsle Director, President and February 1, 1999
- ------------------------------------ Chief Executive Officer
Vernon E. Oechsle (Principal Execute Officer)
/s/ James H. Davis Executive Vice President and February 1, 1999
- ------------------------------------ Chief Operating Officer
James H. Davis (Principal Operating Officer)
Director
- ------------------------------------
Donald G. Barger, Jr.
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Director
- ------------------------------------
Susan F. Davis
Director
- ------------------------------------
Russell M. Flaum
* Director February 1, 1999
- ------------------------------------
Carl E. Pfeiffer
* Director February 1, 1999
- ------------------------------------
Gerald B. Haeckel
* Director February 1, 1999
- ------------------------------------
John D. O'Connell
Director
- ------------------------------------
Vincent R. Scorsone
/s/ Michael J. Sebastian Director February 1, 1999
- ------------------------------------
Michael J. Sebastian
President, Engineered
/s/ Wayne M. Rose Products Group and February 1, 1999
- ------------------------------------ Chief Financial Officer
Wayne M. Rose (Principal Financial Officer)
/s/ Viren M. Parikh Controller February 1, 1999
- ------------------------------------ (Principal Accounting Officer)
Viren M. Parikh
*By /s/ Wayne M. Rose
--------------------------------
Wayne M. Rose
Attorney-in-fact
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The Plan. Pursuant to the requirements of the Securities Act
of 1933, the Administrative Committee of the Plan has duly caused this
Post-Effective Amendment No. 1 to Registration Statement on Form S-8 to be
signed on its behalf by the undersigned members of such committee, thereunto
duly authorized, in the City of Houston, State of Texas, on February 1, 1999.
QUANEX CORPORATION EMPLOYEE
SAVINGS PLAN
By: /s/ Vernon E. Oechsle
-----------------------------------
Vernon E. Oechsle
By: /s/ James H. Davis
-----------------------------------
James H. Davis
By: /s/ Wayne M. Rose
-----------------------------------
Wayne M. Rose
By: /s/ Paul J. Giddens
-----------------------------------
Paul J. Giddens
By: /s/ Viren M. Parikh
-----------------------------------
Viren M. Parikh
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EXHIBIT INDEX
Exhibit
- -------
Number Description
- ------ -----------
4.1 Restated Certificate of Incorporation of the Registrant, as
amended on February 27, 1997, filed as Exhibit 4.1 to the
Registrant's Registration Statement on Form S-8, Registration
No. 333-22977, and incorporated herein by reference.
4.2 Amended and Restated Bylaws of the Registrant, as amended
through December 12, 1996, filed as Exhibit 3.2 to the
Registrant's Annual Report on Form 10-K for the fiscal year
ended October 31, 1996, and incorporated herein by reference.
4.3 Form of Registrant's Common Stock certificate, filed as
Exhibit 4.1 to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended April 30, 1987, and incorporated herein
by reference.
4.4 Amended and Restated Rights Agreement between the Registrant
and Manufacturers Hanover Trust Company, as Rights Agent,
filed as Exhibit 1 to Amendment No. 1 to the Registrant's Form
8-A dated April 28, 1989, and incorporated herein by
reference.
4.5 Amended and Restated Certificate of Designation, Preferences
and Rights of the Registrant's Series A Junior Participating
Preferred Stock, filed as Exhibit 1 to Amendment No. 1 to the
Registrant's Form 8-A dated April 28, 1989, and incorporated
herein by reference.
4.6 Quanex Corporation Employee Savings Plan as amended and
restated, filed as Exhibit 4.7 to the Registrant's original
Registration Statement on Form S-8, Registration No. 33-38702,
filed January 25, 1991, and incorporated herein by reference.
4.7 Master Trust Agreement between Quanex Corporation and
Fidelity Management Trust Company dated as of February 1,
1999.
23.1 Consent of Deloitte & Touche LLP.
24.1 Powers of Attorney (previously filed on signature page of
original Registration Statement on Form S-8, Registration No.
33-38702, filed January 25, 1991).
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EXHIBIT 4.7
MASTER TRUST AGREEMENT
BETWEEN
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QUANEX CORPORATION
AND
FIDELITY MANAGEMENT TRUST COMPANY
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QUANEX EMPLOYEE SAVINGS
MASTER TRUST
DATED AS OF FEBRUARY 1, 1999
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TRUST AGREEMENT, dated as of the first day of February 1999, between
QUANEX CORPORATION a Delaware corporation, having an office at 1900 West Loop
South, Houston, Texas 77027 (the "Sponsor"), and FIDELITY MANAGEMENT TRUST
COMPANY, a Massachusetts trust company, having an office at 82 Devonshire
Street, Boston, Massachusetts 02109 (the "Trustee").
WITNESSETH:
WHEREAS, the Sponsor or one of its subsidiaries is the sponsor of the
Quanex Corporation Employee Savings Plan, the Quanex Corporation Hourly
Bargaining Unit Employees Savings Plan, the Piper Impact 401(k) Plan, the
Nichols-Homeshield 401(k) Savings Plan and the Nichols-Homeshield 401(k) Savings
Plan for Hourly Davenport Employees (collectively and individually, the "Plan");
and
WHEREAS, certain affiliates and subsidiaries of the Sponsor maintain,
or may in the future maintain, qualified defined contribution plans for the
benefit of their eligible employees; and
WHEREAS, the Sponsor desires to establish a single trust to hold all of
the assets of the Plan and or such other tax-qualified defined contribution
plans maintained by the Sponsor, or any of its subsidiaries or affiliates, as
are designated by the Sponsor as being eligible to participate therein; and
WHEREAS, the Trustee shall maintain a separate account reflecting the
equitable share of each Plan in the Trust and in all investments, receipts,
disbursements and other transactions hereunder, and shall report the value of
such equitable share at such times as may be mutually agreed upon by the Trustee
and the Sponsor. Such equitable share shall be used solely for the payments of
benefits, expenses and other charges properly allocable to each such Plan and
shall not be used for the payment of benefits, expenses or other charges
properly allocable to any other Plan; and
WHEREAS, the Trustee is willing to hold and invest the aforesaid plan
assets in trust pursuant to the provisions of this Trust Agreement, which trust
shall constitute a continuation, by means of an amendment and restatement, of
each of the prior trusts from which plan assets are transferred to the Trustee;
and
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WHEREAS, the Trustee is willing to hold and invest the aforesaid plan
assets in trust among several investment options selected by the Named
Fiduciary; and
WHEREAS, the Trustee is willing to perform recordkeeping and
administrative services for the Plan if the services are purely ministerial in
nature and are provided within a framework of plan provisions, guidelines and
interpretations conveyed in writing to the Trustee by the Administrator.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements set forth below, the Sponsor and the Trustee
agree as follows:
SECTION 1. DEFINITIONS. The following terms as used in this Trust Agreement have
the meaning indicated unless the context clearly requires otherwise:
(a) "Administrator" shall mean, with respect to the Plan, the person or
entity which is the "administrator" of such Plan within the meaning of
section 3(16)(A) of ERISA.
(b) "Agreement" shall mean this Trust Agreement, as the same may be amended
and in effect from time to time.
(c) "Code" shall mean the Internal Revenue Code of 1986, as it has been or
may be amended from time to time.
(d) "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as it has been or may be amended from time to time.
(e) "Existing Investment Contracts" shall mean shall mean each annuity
contract heretofore entered into by the Sponsor, any other Employer or
any predecessor trustee and specifically identified on Schedule "G"
attached hereto.
(f) "Fidelity Mutual Fund" shall mean any investment company advised by
Fidelity Management & Research Company or any of its affiliates.
(g) "Mutual Fund" shall refer both to Fidelity Mutual Funds and Non-Fidelity
Mutual Funds.
(h) "Named Fiduciary" shall mean, with respect to the application of any
provision of this Agreement to any Plan, the person or entity which is
the relevant fiduciary under such Plan with respect to such matter
(within the meaning of section 402(a) of the Employee Retirement Income
Security Act of 1974, as amended); and
(i) "Non-Fidelity Mutual Fund" shall mean certain investment companies not
advised by Fidelity Management & Research Company or any of its
affiliates.
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(j) "Participant" shall mean, with respect to the Plan, any employee (or
former employee) with an account under the Plan, which has not yet been
fully distributed and/or forfeited, and shall include the designated
beneficiary(ies) with respect to the account of any deceased employee (or
deceased former employee) until such account has been fully distributed
and/or forfeited.
(k) "Plan" shall mean the Quanex Corporation Employee Savings Plan, the
Quanex Corporation Hourly Bargaining Unit Employees Savings Plan, the
Piper Impact 401(k) Plan, the Nichols-Homeshield 401(k) Savings Plan, the
Nichols-Homeshield 401(k) Savings Plan for Hourly Davenport Employees and
such other tax-qualified, defined contribution plans which are maintained
by the Sponsor or any of its subsidiaries or affiliates for the benefit
of their eligible employees as may be designated by the Sponsor in
writing to the Trustee as a Plan hereunder, such writing to be in the
form of the Plan Designation Form attached hereto as Schedule "J". Each
reference to "a Plan" or "the Plan" in this Agreement shall mean and
include the Plan or Plans to which the particular provision of this
Agreement is being applied or all Plans, as the context may require.
(l) "Reporting Date" shall mean the last day of each calendar quarter, the
date as of which the Trustee resigns or is removed pursuant to Section 9
hereof and the date as of which this Agreement terminates pursuant to
Section 11 hereof.
(m) "Sponsor" shall mean Quanex Corporation, a Delaware corporation, or any
successor to all or substantially all of its businesses which, by
agreement, operation of law or otherwise, assumes the responsibility of
the Sponsor under this Agreement.
(n) "Sponsor Stock" shall mean the Common Stock of the Sponsor, or such other
publicly-traded stock of the Sponsor, or such other publicly-traded stock
of the Sponsor's affiliates as meets the requirements of section
407(d)(5) of ERISA with respect to the Plan.
(o) "Trust" shall mean the Quanex Employee Savings Master Trust, being the
trust established by the Sponsor and the Trustee pursuant to the
provisions of this Agreement.
(p) "Trustee" shall mean Fidelity Management Trust Company, a Massachusetts
trust company and any successor to all or substantially all of its trust
business as described in Section 10(c). The term Trustee shall also
include any successor trustee appointed pursuant to Section 10 to the
extent such successor agrees to serve as Trustee under this Agreement.
SECTION 2. TRUST. The Sponsor hereby establishes the Trust with the Trustee. The
Trust shall consist of the assets of the Plan that are transferred from the
previous trusts funding to the Plan, such additional sums of money and Sponsor
Stock as shall from time to time be delivered to the Trustee under a Plan, all
investments made therewith and proceeds thereof, and all earnings and profits
thereon, less the payments that are made by the Trustee as provided herein,
without distinction between principal and income. The Trustee hereby accepts the
Trust on the terms and conditions set forth in this Agreement. In accepting this
Trust, the Trustee shall be accountable for the assets received by it, subject
to the terms and conditions of this Agreement.
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SECTION 3. EXCLUSIVE BENEFIT AND REVERSION OF SPONSOR CONTRIBUTIONS.
Except as provided under applicable law, no part of the Trust allocable to a
Plan may be used for, or diverted to, purposes other than the exclusive benefit
of the Participants in the Plan or their beneficiaries prior to the satisfaction
of all liabilities with respect to the Participants and their beneficiaries.
SECTION 4. DISBURSEMENTS.
(a) Directions from Administrator. The Trustee shall make disbursements
in the amounts and in the manner that the Administrator directs from time to
time in writing. The Trustee shall have no responsibility to ascertain any
direction's compliance with the terms of the Plan or of any applicable law or
the direction's effect for tax purposes or otherwise; nor shall the Trustee have
any responsibility to see to the application of any disbursement.
(b) Limitations. The Trustee shall not be required to make any
disbursement under a Plan in excess of the net realizable value of the assets of
the Trust allocable to such Plan at the time of the disbursement. The Trustee
shall not be required to make any disbursement in cash unless the Named
Fiduciary has provided a written direction as to the assets to be converted to
cash for the purpose of making the disbursement.
SECTION 5. INVESTMENT OF TRUST.
(a) Selection of Investment Options. The Trustee shall have no
responsibility for the selection of investment options under the Trust and shall
not render investment advice to any person in connection with the selection of
such options.
(b) Available Investment Options. The Named Fiduciary with respect to a
Plan shall direct the Trustee as to the investment options in which Plan
Participants may invest, subject to the following limitations. The Named
Fiduciary may determine to offer as investment options only (i) Mutual Funds,
(ii) Sponsor Stock, (iii) notes evidencing loans to Participants in accordance
with the terms of the Plan, (iv) Existing Investment Contracts, and (v)
collective investment funds maintained by the Trustee for qualified plans.
The Named Fiduciary hereby directs the Trustee to continue to hold such
Existing Investment Contracts until the Named Fiduciary directs otherwise, it
being expressly understood that such direction is given in accordance with
Section 403(a) of ERISA. The Trustee shall be considered a fiduciary with
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investment discretion only with respect to Plan assets that are invested in
collective investment funds maintained by the Trustee for qualified plans.
The investment options initially selected by the Named Fiduciary are
identified on Schedules "A" and "C" attached hereto. The Named Fiduciary may add
additional investment options with the consent of the Trustee and upon mutual
amendment of this Trust Agreement and the Schedules thereto to reflect such
additions.
(c) Participant Direction. Each Participant shall direct the Trustee in
which investment option(s) to invest the assets in the Participant's individual
accounts. Such directions may be made by Participants by use of the telephone
exchange system maintained for such purposes by the Trustee or its agent, in
accordance with written Telephone Exchange Guidelines attached hereto as
Schedule "G". In the event that the Trustee fails to receive a proper direction,
the assets shall be invested in the securities of the Mutual Fund set forth for
such purpose on Schedule "C", until the Trustee receives a proper direction.
(d) Mutual Funds. The Sponsor hereby acknowledges that it has received
from the Trustee a copy of the prospectus for each Fidelity Mutual Fund selected
by the Named Fiduciary as a Plan investment option. All transactions involving
Non-Fidelity Mutual Funds shall be done in accordance with the Operational
Guidelines for Non-Fidelity Mutual Funds attached hereto as Schedule "H". Trust
investments in Mutual Funds shall be subject to the following limitations:
(i) Execution of Purchases and Sales. Purchases and sales of
Mutual Funds (other than for exchanges) shall be made on the date on which the
Trustee receives from the Sponsor in good order all information and
documentation necessary to accurately effect such purchases and sales (or in the
case of a purchase, the subsequent date on which the Trustee has received a wire
transfer of funds necessary to make such purchase). Exchanges of Mutual Funds
shall be made in accordance with the Telephone Exchange Guidelines attached
hereto as Schedule "G".
(ii) Voting. At the time of mailing of notice of each annual
or special stockholders' meeting of any Mutual Fund, the Trustee shall send a
copy of the notice and all proxy solicitation materials to each Participant who
has shares of the Mutual Fund credited to the Participant's accounts, together
with a voting direction form for return to the Trustee or its designee. The
Sponsor shall have the right to direct the Trustee as to the manner in which the
Trustee is to vote the mutual fund shares held in any short-term
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investment fund or liquidity reserve. The Participant shall have the right to
direct the Trustee as to the manner in which the Trustee is to vote the shares
credited to the Participant's accounts (both vested and unvested). The Trustee
shall vote the shares as directed by the Participant. The Trustee shall not vote
shares for which it has received no directions from the Participant. With
respect to all rights other than the right to vote, the Trustee shall follow the
directions of the Participant and if no such directions are received, the
directions of the Named Fiduciary. The Trustee shall have no duty to solicit
directions from Participants or the Sponsor.
(e) Sponsor Stock. Trust investments in Sponsor Stock shall be made via
the Quanex Corporation Stock Fund (the "Stock Fund") which shall consist of
shares of Sponsor Stock and short-term liquid investments, including Fidelity
Institutional Cash Portfolios: Money Market Portfolio: Class I or such other
Mutual Fund or commingled money market pool as agreed to by the Sponsor and
Trustee, necessary to satisfy the Fund's cash needs for transfers and payments.
A cash target range shall be maintained in the Stock Fund. Such target range may
be changed as agreed to in writing by the Sponsor and the Trustee. The Trustee
is responsible for ensuring that the actual cash held in the Stock Fund falls
within the agreed upon range over time. Each Participant's proportional interest
in the Stock Fund shall be measured in units of participation, rather than
shares of Sponsor Stock. Such units shall represent a proportionate interest in
all of the assets of the Stock Fund, which includes shares of Sponsor Stock,
short-term investments and at times, receivables for dividends and/or Sponsor
Stock sold and payables for Sponsor Stock purchased. A Net Asset Value ("NAV")
per unit will be determined daily for each unit outstanding of the Stock Fund.
The return earned by the Stock Fund will represent a combination of the
dividends paid on the shares of Sponsor Stock held by the Stock Fund, gains or
losses realized on sales of Sponsor Stock, appreciation or depreciation in the
market price of those shares owned, and interest on the short-term investments
held by the Stock Fund. Dividends received by the Stock Fund are reinvested in
additional shares of Sponsor Stock. Investments in Sponsor Stock shall be
subject to the following limitations:
(i) Acquisition Limit. Pursuant to the Plan, the Trust may be
invested in Sponsor Stock to the extent necessary to comply with investment
directions under Section 5(c) of this Agreement.
(ii) Fiduciary Duty of Named Fiduciary. The Named Fiduciary
shall continually monitor the suitability under the fiduciary duty rules of
section 404(a)(1) of ERISA (as modified by
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section 404(a)(2) of ERISA) of acquiring and holding Sponsor Stock. The Trustee
shall not be liable for any loss, or by reason of any breach, which arises from
the directions of the Named Fiduciary with respect to the acquisition and
holding of Sponsor Stock, unless it is clear on their face that the actions to
be taken under those directions would be prohibited by the foregoing fiduciary
duty rules or would be contrary to the terms of the Plan or this Agreement.
(iii) Execution of Purchases and Sales. (A) Purchases and
sales of Sponsor Stock (other than for exchanges) shall be made on the open
market on the date on which the Trustee receives from the Sponsor in good order
all information and documentation necessary to accurately affect such purchases
and sales (or, in the case of purchases, the subsequent date on which the
Trustee has received a wire transfer of the funds necessary to make such
purchases). Exchanges of Sponsor Stock shall be made in accordance with the
Telephone Exchange Guidelines attached hereto as Schedule "G". Such general
rules shall not apply in the following circumstances:
(1) If the Trustee is unable to determine the number
of shares required to be purchased or sold on such day; or
(2) If the Trustee is unable to purchase or sell the
total number of shares required to be purchased or sold on such day as a result
of market conditions; or
(3) If the Trustee is prohibited by the Securities
and Exchange Commission, the New York Stock Exchange, or any other regulatory
body from purchasing or selling any or all of the shares required to be
purchased or sold on such day.
In the event of the occurrence of the circumstances described in (1), (2), or
(3) above, the Trustee shall purchase or sell such shares as soon as possible
thereafter and shall determine the price of such purchases or sales to be the
average purchase or sales price of all such shares purchased or sold,
respectively. The Trustee may follow directions from the Named Fiduciary to
deviate from the above purchase and sale procedures provided that such direction
is made in writing by the Named Fiduciary.
(B) Purchases and Sales from or to Sponsor. If directed by the
Sponsor in writing prior to the trading date, the Trustee may purchase or sell
Sponsor Stock from or to the Sponsor if the
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purchase or sale is for adequate consideration (within the meaning of section
3(18) of ERISA) and no commission is charged. If Sponsor contributions or
contributions made by the Sponsor on behalf of the Participants under the Plan
are to be invested in Sponsor Stock, the Sponsor may transfer Sponsor Stock in
lieu of cash to the Trust. In either case, the number of shares to be
transferred will be determined by dividing the total amount of Sponsor Stock to
be purchased or sold by the 4:00 p.m. closing price of the Sponsor Stock on the
New York Stock Exchange on the trading date.
(C) Use of an Affiliated Broker. The Sponsor hereby directs
the Trustee to use Fidelity Capital Markets and its affiliates ("Capital
Markets") to provide brokerage services in connection with any purchase or sale
of Sponsor Stock in accordance with directions from Plan Participants. Capital
Markets shall execute such directions directly or through its affiliate,
National Financial Services Company ("NFSC"). The provision of brokerage
services shall be subject to the following:
(1) As consideration for such brokerage services, the
Sponsor agrees that Capital Markets shall be entitled to remuneration under this
authorization provision in an amount of no greater than three and two-fifths
cents ($.032) commission on each share of Sponsor Stock. Any change in such
remuneration may be made only by a signed agreement between Sponsor and Trustee.
(2) The Trustee will provide the Sponsor with a
description of Capital Markets' brokerage placement practices and a form by
which the Sponsor may terminate this direction to use a broker affiliated with
the Trustee. The Trustee will provide the Sponsor with this termination form
annually, as well as quarterly and annual reports which summarize all securities
transaction-related charges incurred by the Plan.
(3) Any successor organization of Capital Markets,
through reorganization, consolidation, merger or similar transactions, may, upon
consumption of such transaction, become the successor broker in accordance with
the terms of this direction provision.
(4) The Trustee and Capital Markets shall continue to
rely on this direction provision until notified to the contrary. The Sponsor
reserves the right to terminate this direction upon sixty (60) days written
notice to Capital Markets (or its successor) and the Trustee, in accordance with
Section 11 of this Agreement.
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(iv) Securities Law Reports. The Named Fiduciary shall be
responsible for filing all reports required under Federal or state securities
laws with respect to the Trust's ownership of Sponsor Stock, including, without
limitation, any reports required under section 13 or 16 of the Securities
Exchange Act of 1934, and shall immediately notify the Trustee in writing of any
requirement to stop purchases or sales of Sponsor Stock pending the filing of
any report. The Trustee shall provide to the Named Fiduciary such information on
the Trust's ownership of Sponsor Stock as the Named Fiduciary may reasonably
request in order to comply with Federal or state securities laws.
(v) Voting and Tender Offers. Notwithstanding any other
provision of this Agreement the provisions of this Section shall govern the
voting and tendering of Sponsor Stock. The Sponsor, after consultation with the
Trustee, shall provide and pay for all printing, mailing, tabulation and other
costs associated with the voting and tendering of Sponsor Stock.
(A) Voting.
(1) When the issuer of the Sponsor Stock
prepares for any annual or special meeting , the Sponsor shall notify the
Trustee at least thirty (30) days in advance of the intended record date and
shall cause a copy of all materials to be sent to the Trustee. Based on these
materials the Trustee shall prepare a voting instruction form. At the time of
mailing of notice of each annual or special stockholders' meeting of the issuer
of the Sponsor Stock, the Sponsor shall cause a copy of the notice and all proxy
solicitation materials to be sent to each Plan Participant with an interest in
Sponsor Stock held in the Trust, together with the foregoing voting instruction
form to be returned to the Trustee or its designee. The form shall show the
proportional interest in the number of full and fractional shares of Sponsor
Stock credited to the Participant's accounts held in the Stock Fund. The Sponsor
shall provide the Trustee with a copy of any materials provided to the
Participants pursuant to this Section 5(e)(v)(A) and shall certify to the
Trustee that the materials have been mailed or otherwise sent to Participants.
(2) Each Participant with an interest in the
Stock Fund shall have the right to direct the Trustee as to the manner in which
the Trustee is to vote (including not to vote) that number of shares of Sponsor
Stock reflecting such Participant's proportional interest in the Stock Fund
(both vested and unvested). Directions from a Participant to the Trustee
concerning the voting of Sponsor
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Stock shall be communicated in writing, or by mailgram or similar means. These
directions shall be held in confidence by the Trustee and shall not be divulged
to the Sponsor, or any officer or employee thereof, or any other person except
to the extent that the aggregate consequences of such directions are reflected
in reports regularly communicated to any such person in the ordinary course of
the performance of the Trustee's services hereunder. Upon its receipt of the
directions, the Trustee shall vote the shares of Sponsor Stock reflecting the
Participant's proportional interest in the Stock Fund as directed by the
Participant. Except as otherwise required by law, the Trustee shall vote shares
of Sponsor Stock reflecting a Participant's proportional interest in the Stock
Fund for which it has received no direction from the Participant in the same
proportion on each issue as it votes shares for which it has received voting
instructions from Participants.
(3) Except as otherwise required by law, the
Trustee shall vote that number of shares of Sponsor Stock not credited to
Participants' accounts which is determined by multiplying the total number of
shares not credited to Participant's accounts by a fraction of which the
numerator is the number of shares of Sponsor Stock reflecting a Participant's
proportional interest in the Stock Fund that are credited to Participant's
accounts for which the Trustee received voting directions from Participants and
of which the denominator is the total number of shares of Sponsor Stock
reflecting a Participant's proportional interest in the Stock Fund that are
credited to participants' accounts. The Trustee shall vote those shares of
Sponsor Stock not credited to Participant's accounts which are to be voted by
the Trustee pursuant to the foregoing formula in the same proportion on each
issue as it votes those shares reflecting a Participant's proportional interest
in the Stock Fund that are credited to Participants' accounts for which it
received voting directions from Participants. The Trustee shall not vote the
remaining shares of Sponsor Stock not credited to Participant's accounts.
(B) Tender Offers.
(1) Upon commencement of a tender offer for
any securities held in the Trust that are Sponsor Stock, the Sponsor shall
notify each Plan Participant with an interest in such Sponsor Stock of the
tender offer and utilize its best efforts to timely distribute or cause to be
distributed to the Participant the same information that is distributed to
shareholders of the issuer of Sponsor Stock in connection with the tender offer,
and, after consulting with the Trustee, shall provide and pay for a means by
which the Participant may direct the Trustee whether or not to tender the
Sponsor Stock reflecting such
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Participant's proportional interest in the Stock Fund (both vested and
unvested). The Sponsor shall provide the Trustee with a copy of any material
provided to the Participants pursuant to this Section 5(e)(v)(B) and shall
certify to the Trustee that the materials have been mailed or otherwise sent to
Participants.
(2) Each Participant shall have the right to
direct the Trustee to tender or not to tender some or all of the shares of
Sponsor Stock reflecting such Participant's proportional interest in the Stock
Fund (both vested and unvested). Directions from a Participant to the Trustee
concerning the tender of Sponsor Stock shall be communicated in writing, or by
mailgram or such similar means as is agreed upon by the Trustee and the Sponsor
under the preceding paragraph. These directions shall be held in confidence by
the Trustee and shall not be divulged to the Sponsor, or any officer or employee
thereof, or any other person except to the extent that the consequences of such
directions are reflected in reports regularly communicated to any such persons
in the ordinary course of the performance of the Trustee's services hereunder.
The Trustee shall tender or not tender shares of Sponsor Stock as directed by
the Participant. Except as otherwise required by law, the Trustee shall not
tender shares of Sponsor Stock reflecting a Participant's proportional interest
in the Stock Fund for which it has received no direction from the Participant.
(3) Except as otherwise required by law, the
Trustee shall tender that number of shares of Sponsor Stock not credited to
Participants' accounts which is determined by multiplying the total number of
shares of Sponsor Stock not credited to Participants' accounts by a fraction of
which the numerator is the number of shares of Sponsor Stock reflecting the
Participants' proportional interests in the Stock Fund that are credited to
Participants' accounts for which the Trustee has received directions from
Participants to tender and of which the denominator is the total number of
shares of Sponsor Stock reflecting the Participants' proportional interests in
the Stock Fund that are credited to Participants' accounts.
(4) A Participant who has directed the
Trustee to tender some or all of the shares of Sponsor Stock reflecting the
Participant's proportional interest in the Stock Fund may, at any time prior to
the tender offer withdrawal date, direct the Trustee to withdraw some or all of
the tendered shares reflecting the Participant's proportional interest, and the
Trustee shall withdraw the directed number of shares from the tender offer prior
to the tender offer withdrawal deadline. Prior to the withdrawal deadline, if
any shares of Sponsor Stock not credited to Participants' accounts have been
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tendered, the Trustee shall redetermine the number of shares of Sponsor Stock
that would be tendered under Section 5(e)(v)(B)(3) if the date of the foregoing
withdrawal were the date of determination, and withdraw from the tender offer
the number of shares of Sponsor Stock not credited to Participants' accounts
necessary to reduce the amount of tendered Sponsor Stock not credited to
Participants' accounts to the amount so redetermined. A Participant shall not be
limited as to the number of directions to tender or withdraw that the
Participant may give to the Trustee.
(5) A direction by a Participant to the
Trustee to tender shares of Sponsor Stock reflecting the Participant's
proportional interest in the Stock Fund shall not be considered a written
election under the Plan by the Participant to withdraw, or have distributed, any
or all of his withdrawable shares. The Trustee shall credit to each proportional
interest of the Participant from which the tendered shares were taken the
proceeds received by the Trustee in exchange for the shares of Sponsor Stock
tendered from that interest. Pending receipt of directions (through the
Administrator) from the Participant or the Named Fiduciary, as provided in the
Plan, as to which of the remaining investment options the proceeds should be
invested in, the Trustee shall invest the proceeds in the Mutual Fund described
in Schedule "C".
(vi) Shares Credited. For all purposes of this Section, the
number of shares of Sponsor Stock deemed "credited" or "reflected" to a
Participant's proportional interest shall be determined as of the relevant date
(the record date or the date specified in the tender offer) shall be calculated
by reference to the number of shares reflected on the books of the transfer
agent as of the relevant date.
(vii) General. With respect to all rights other than the right
to vote, the right to tender, and the right to withdraw shares previously
tendered, in the case of Sponsor Stock credited to a Participant's proportional
interest in the Stock Fund, the Trustee shall follow the directions of the
Participant and if no such directions are received, the directions of the Named
Fiduciary. The Trustee shall have no duty to solicit directions from
Participants. With respect to all rights other than the right to vote and the
right to tender, in the case of Sponsor Stock not credited to Participants'
accounts, the Trustee shall follow the directions of the Named Fiduciary.
(viii) Conversion. All provisions in this Section 5(e) shall
also apply to any securities received as a result of a conversion of Sponsor
Stock.
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(f) Participant Loans. The Administrator shall act as the Trustee's
agent for the purpose of holding all trust investments in participant loan notes
and related documentation and as such shall (i) hold physical custody of and
keep safe the notes and other loan documents, (ii) separately account for
repayments of such loans and clearly identify such assets as Plan assets, (iii)
collect and remit all principal and interest payments to the Trustee, and (iv)
cancel and surrender the notes and other loan documentation when a loan has been
paid in full. To originate a participant loan, the Plan participant shall direct
the Trustee as to the type of loan to be made from the participant's individual
account. Such directions shall be made by Plan participants by use of the
telephone exchange system maintained for such purpose by the Trustee or its
agent. The Trustee shall determine, based on the current value of the
participant's account, the amount available for the loan. Based on the interest
rate supplied by the Sponsor in accordance with the terms of the Plan, the
Trustee shall advise the participant of such interest rate, as well as the
installment payment amounts. The Trustee shall forward the loan document to the
participant for execution and submission for approval to the Administrator. The
Administrator shall have the responsibility for approving the loan and
instructing the Trustee to send the loan proceeds to the Administrator or to the
participant if so directed by the Administrator. In all cases, if the Trustee
does not receive approval or disapproval by the Administrator within thirty (30)
days of the participant's initial request (the origination date) the participant
will be required to reinitiate the loan request process.
(g) Commingled Pool Investments. To the extent that the Named Fiduciary
selects as an investment option the Managed Income Portfolio of the Fidelity
Group Trust for Employee Benefit Plans (the "Group Trust"), the Sponsor hereby
(i) agrees to the terms of the Group Trust and adopts said terms as a part of
this Agreement and (ii) acknowledges that it has received from the Trustee a
copy of the Group Trust, the Declaration of Separate Fund for the Managed Income
Portfolio of the Group Trust, and the Circular for the Managed Income Portfolio.
(h) Reliance of Trustee on Directions.
(i) The Trustee shall not be liable for any loss, or by reason
of any breach, which arises from any Participant's exercise or non-exercise of
rights under this Section 5 over the assets in the Participant's accounts.
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(ii) The Trustee shall not be liable for any loss, or by
reason of any breach, which arises from the Named Fiduciary's exercise or
non-exercise of rights under this Section 5, unless it was clear on their face
that the actions to be taken under the Named Fiduciary's directions were
prohibited by the fiduciary duty rules of Section 404(a) of ERISA or were
contrary to the terms of the Plan or this Agreement.
(i) Trustee Powers. The Trustee shall have the following powers and
authority:
(i) Subject to paragraphs (b), (c) and (d) of this Section 5,
to sell, exchange, convey, transfer, or otherwise dispose of any property held
in the Trust, by private contract or at public auction. No person dealing with
the Trustee shall be bound to see to the application of the purchase money or
other property delivered to the Trustee or to inquire into the validity,
expediency, or propriety of any such sale or other disposition.
(ii) Subject to paragraphs (b) and (c) of this Section 5, to
invest in Investment Contracts and short term investments (including interest
bearing accounts with the Trustee or money market mutual funds advised by
affiliates of the Trustee) and in collective investment funds maintained by the
Trustee for qualified plans, in which case the provisions of each collective
investment fund in which the Trust is invested shall be deemed adopted by the
Sponsor and the provisions thereof incorporated as a part of this Trust as long
as the fund remains exempt from taxation under sections 401(a) and 501(a) of the
Code.
(iii) To cause any securities or other property held as part
of the Trust to be registered in the Trustee's own name, in the name of one or
more of its nominees, or in the Trustee's account with the Depository Trust
Company of New York and to hold any investments in bearer form, but the books
and records of the Trustee shall at all times show that all such investments are
part of the Trust.
(iv) To keep that portion of the Trust in cash or cash
balances as the Named Fiduciary or Sponsor may, from time to time, deem to be in
the best interest of the Trust.
(v) To make, execute, acknowledge, and deliver any and all
documents of transfer or conveyance and to carry out the powers herein granted.
(vi) To borrow funds from a bank not affiliated with the
Trustee in order to provide sufficient liquidity to process Plan transactions in
a timely fashion, provided that the cost of borrowing shall be allocated in a
reasonable fashion to the investment fund(s) in need of liquidity.
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(vii) To settle, compromise, or submit to arbitration any
claims, debts, or damages due to or arising from the Trust; to commence or
defend suits or legal or administrative proceedings; to represent the Trust in
all suits and legal and administrative hearings; and to pay all reasonable
expenses arising from any such action, from the Trust if not paid by the
Sponsor.
(viii) To employ legal, accounting, clerical, and other
assistance as may be required in carrying out the provisions of this Agreement
and to pay their reasonable expenses and compensation from the Trust if not paid
by the Sponsor.
(ix) To invest all of any part of the assets of the Trust in
any collective investment trust or group trust which then provides for the
pooling of the assets of plans described in section 401(a) and exempt from tax
under section 501(a) of the Code, or any comparable provisions of any future
legislation that amends, supplements, or supersedes those sections, provided
that such collective investment trust or group trust is exempt from tax under
the Code or regulations or rulings issued by the Internal Revenue Service; the
provisions of the document governing such collective investment trusts or group
trusts, as it may be amended from time to time, shall govern any investment
therein and are hereby made a part of this Trust Agreement.
(x) To do all other acts that are in accordance with the
powers granted to the Trustee under common law, the applicable state trust law
and other applicable statutes.
SECTION 6. RECORDKEEPING AND ADMINISTRATIVE SERVICES TO BE PERFORMED.
(a) General. The Trustee shall perform those recordkeeping and
administrative functions described in Schedule "A" attached hereto. These
recordkeeping and administrative functions shall be performed within the
framework of the Named Fiduciary's written directions regarding the Plan's
provisions, guidelines and interpretations.
(b) Accounts. The Trustee shall keep accurate accounts of all
investments, receipts, disbursements, and other transactions hereunder, and
shall report the value of the assets held in the Trust as of each Reporting
Date. Within thirty (30) days following each Reporting Date or within sixty (60)
days in the case of a Reporting Date caused by the resignation or removal of the
Trustee, or the termination of this Agreement, the Trustee shall file with the
Sponsor a written account setting forth all investments, receipts,
disbursements, and other transactions affected by the Trustee between the
Reporting Date and the prior
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Reporting Date, and setting forth the value of the Trust as of the Reporting
Date. Except as otherwise required under ERISA, upon the expiration of six (6)
months from the date of filing such account with the Sponsor, the Trustee shall
have no liability or further accountability to anyone with respect to the
propriety of its acts or transactions shown in such account, except with respect
to such acts or transactions as to which the Sponsor shall within such six (6)
month period file with the Trustee written objections.
(c) Inspection and Audit. All records generated by the Trustee in
accordance with paragraphs (a) and (b) shall be open to inspection and audit,
during the Trustee's regular business hours prior to the termination of this
Agreement, by the Sponsor or any person designated by the Sponsor. Upon the
resignation or removal of the Trustee or the termination of this Agreement, the
Trustee shall provide to the Sponsor, at no expense to the Sponsor, in the
format regularly provided to the Sponsor, a statement of each Participant's
accounts as of the resignation, removal, or termination, and the Trustee shall
provide to the Sponsor or the Plan's new recordkeeper such further records as
are reasonable, at the Sponsor's expense.
(d) Effect of Plan Amendment. A confirmation of the current qualified
status of each Plan is attached hereto as Schedule "F". The Trustee's provision
of the recordkeeping and administrative services set forth in this Section 6
shall be conditioned on the Sponsor delivering to the Trustee a copy of any
amendment to the Plan as soon as administratively feasible following the
amendment's adoption, with, if requested, an IRS determination letter or an
opinion of counsel substantially in the form of Schedule "F" covering such
amendment, and on the Sponsor providing the Trustee on a timely basis with all
the information the Sponsor deems necessary for the Trustee to perform the
recordkeeping and administrative services and such other information as the
Trustee may reasonably request.
(e) Returns, Reports and Information. The Sponsor shall be responsible
for the preparation and filing of all returns, reports, and information required
of the Trust or Plan by law. The Trustee shall provide the Sponsor with such
information as the Sponsor may reasonably request to make these filings. The
Sponsor shall also be responsible for making any disclosures to Participants
required by law including, without limitation, such disclosures as may be
required by law, except such disclosure as may be required under federal or
state truth-in-lending laws with regard to Participant loans, which shall be
provided by the Trustee.
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(f) Allocation of Plan Interests. All transfers to, withdrawals from,
or other transactions regarding the Trust shall be conducted in such a way that
the proportionate interest in the Trust of each Plan and the fair market value
of that interest may be determined at any time. Whenever the assets of more than
one Plan are commingled in the Trust or in any investment option, the undivided
interest therein of each such Plan shall be debited or credited (as the case may
be) (i) for the entire amount of every contribution received on behalf of such
Plan, every benefit payment, or other expense attributable solely to such Plan,
and every other transaction relating only to such Plan; and (ii) for its
proportionate share of every item of collected or accrued income, gain or loss,
and general expense, and of any other transactions attributable to the Trust or
that investment option as a whole.
SECTION 7. COMPENSATION AND EXPENSES. Within thirty (30) days of receipt of the
Trustee's bill, which shall be computed and billed in accordance with Schedule
"B" attached hereto and made a part hereof, as amended from time to time, the
Sponsor shall send to the Trustee a payment in such amount or the Sponsor may
direct the Trustee to deduct such amount from Participants' account. All
expenses of the Trustee relating directly to the acquisition and disposition of
investments constituting part of the Trust, and all taxes of any kind whatsoever
that may be levied or assessed under existing or future laws upon or in respect
of the Trust or the income thereof, shall be a charge against and paid from the
appropriate Participants' accounts.
SECTION 8. DIRECTIONS AND INDEMNIFICATION.
(a) Identity of Sponsor and Named Fiduciaries. The Trustee shall be
fully protected in relying on the fact that the Sponsor and the Named
Fiduciaries under a Plan are the individuals or persons named as such on the
Authorization Letters in the form of Schedules "D" and "E" attached hereto or on
a Plan Designation Form in accordance with Schedule "J" attached hereto or such
other individuals or persons as the Sponsor may notify the Trustee in writing.
(b) Directions from Sponsor or Administrator. Whenever the Sponsor or
Administrator provides a direction to the Trustee, the Trustee shall not be
liable for any loss, or by reason of any breach, arising from the direction if
the direction is contained in a writing (or is oral and immediately confirmed in
a writing) signed by any individual whose name and signature have been submitted
(and not withdrawn) in writing to the Trustee by the Sponsor in the form
attached hereto as Schedule "D", provided the Trustee reasonably believes the
signature of the individual to be genuine. Such direction may also be made via
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Electronic Data Transfer ("EDT") in accordance with procedures agreed to by the
Sponsor and the Trustee; provided, however, that the Trustee shall be fully
protected in relying on such direction as if it were a direction made in writing
by the Sponsor. The Trustee shall have no responsibility to ascertain any
direction's (i) accuracy, (ii) compliance with the terms of the Plan or any
applicable law, or (iii) effect for tax purposes or otherwise.
(c) Directions from Named Fiduciary. Whenever a Named Fiduciary
provides a direction to the Trustee, the Trustee shall not be liable for any
loss, or by reason of any breach, arising from the direction (i) if the
direction is contained in a writing (or is oral and immediately confirmed in a
writing) signed by any individual whose name and signature have been submitted
(and not withdrawn) in writing to the Trustee by the Named Fiduciary in the form
attached hereto as Schedule "E" and (ii) if the Trustee reasonably believes the
signature of the individual to be genuine, unless it is clear on the direction's
face that the actions to be taken under the direction would be prohibited by the
fiduciary duty rules of section 404(a) of ERISA or would be contrary to the
terms of the Plan or this Agreement.
(d) Co-Fiduciary Liability. In any other case, the Trustee shall not be
liable for any loss, or by reason of any breach, arising from any act or
omission of another fiduciary under the Plan except as provided in section
405(a) of ERISA. Without limiting the foregoing, the Trustee shall have no
liability for the acts or omissions of any predecessor or successor trustee.
(e) Indemnification. The Sponsor shall indemnify the Trustee against,
and hold the Trustee harmless from, any and all loss, damage, penalty,
liability, cost, and expense, including without limitation, reasonable
attorneys' fees and disbursements, that may be incurred by, imposed upon, or
asserted against the Trustee by reason of any claim, regulatory proceeding, or
litigation arising from any act done or omitted to be done by any individual or
person with respect to the Plan or Trust, excepting only any and all loss, etc.,
arising from the Trustee's breach of its fiduciary duties under ERISA.
(f) Survival. The provisions of this Section 8 shall survive the
termination of this Agreement.
SECTION 9. RESIGNATION OR REMOVAL OF TRUSTEE.
(a) Resignation. The Trustee may resign at any time upon sixty (60)
days' notice in writing to the Sponsor, unless a shorter period of notice is
agreed upon by the Sponsor.
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(b) Removal. The Sponsor may remove the Trustee at any time upon sixty
(60) days' notice in writing to the Trustee, unless a shorter period of notice
is agreed upon by the Trustee.
SECTION 10. SUCCESSOR TRUSTEE.
(a) Appointment. If the office of Trustee becomes vacant for any
reason, the Sponsor may in writing appoint a successor trustee under this
Agreement. The successor trustee shall have all of the rights, powers,
privileges, obligations, duties, liabilities, and immunities granted to the
Trustee under this Agreement. The successor trustee and predecessor trustee
shall not be liable for the acts or omissions of the other with respect to the
Trust.
(b) Acceptance. When the successor trustee accepts its appointment
under this Agreement, title to and possession of the Trust assets shall
immediately vest in the successor trustee without any further action on the part
of the predecessor trustee. The predecessor trustee shall execute all
instruments and do all acts that reasonably may be necessary or reasonably may
be requested in writing by the Sponsor or the successor trustee to vest title to
all Trust assets in the successor trustee or to deliver all Trust assets to the
successor trustee.
(c) Corporate Action. Any successor of the Trustee or successor
trustee, through sale or transfer of the business or trust department of the
Trustee or successor trustee, or through reorganization, consolidation, or
merger, or any similar transaction, shall, upon consummation of the transaction,
become the successor trustee under this Agreement.
SECTION 11. TERMINATION. This Agreement may be terminated at any time by the
Sponsor upon sixty (60) days' notice in writing to the Trustee. On the date of
the termination of this Agreement, the Trustee shall forthwith transfer and
deliver to such individual or entity as the Sponsor shall designate, all cash
and assets then constituting the Trust. If, by the termination date, the Sponsor
has not notified the Trustee in writing as to whom the assets and cash are to be
transferred and delivered, the Trustee may bring an appropriate action or
proceeding for leave to deposit the assets and cash in a court of competent
jurisdiction. The Trustee shall be reimbursed by the Sponsor for all costs and
expenses of the action or proceeding including, without limitation, reasonable
attorneys' fees and disbursements.
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SECTION 12. RESIGNATION, REMOVAL, AND TERMINATION NOTICES. All notices of
resignation, removal, or termination under this Agreement must be in writing and
mailed to the party to which the notice is being given by certified or
registered mail, return receipt requested, to the Sponsor c/o Chief Financial
Officer, Quanex Corporation, 1900 West Loop South, Suite 1500, Houston, TX 77027
and to the Trustee c/o John M. Kimpel, Fidelity Investments, 82 Devonshire
Street, Boston, Massachusetts 02109, or to such other addresses as the parties
have notified each other of in the foregoing manner.
SECTION 13. DURATION. This Trust shall continue in effect without limit as to
time, subject, however, to the provisions of this Agreement relating to
amendment, modification, and termination thereof.
SECTION 14. AMENDMENT OR MODIFICATION. This Agreement may be amended or modified
at any time and from time to time only by an instrument executed by both the
Sponsor and the Trustee. Notwithstanding the foregoing, to reflect increased
operating costs the Trustee may once each calendar year amend Schedule "B"
without the Sponsor's consent upon seventy-five (75) days written notice to the
Sponsor.
SECTION 15. ELECTRONIC SERVICES.
(a) The Trustee may provide communications and services via electronic
medium ("Electronic Services"), including, but not limited to, Fidelity Plan
Sponsor WebStation, Client Intranet, Client e-mail, interactive software
products or any other information provided in an electronic format. The Sponsor,
its agents and employees agree to keep confidential and not publish, copy,
broadcast, retransmit, reproduce, commercially exploit or otherwise
redisseminate the data, information, software or services without the Trustee's
written consent.
(b) The Sponsor shall be responsible for installing and maintaining all
Electronic Services on its computer network and/or Intranet upon receipt in a
manner so that the information provided via the Electronic Service will appear
in the same form and content as it appears on the form of delivery, and for any
programming required to accomplish the installation. Materials provided for Plan
Sponsor's intranet web sites shall be installed by the Sponsor and shall be
clearly identified as originating from Fidelity. The Sponsor shall promptly
remove Electronic Services from its computer network and/or Intranet, or replace
the Electronic Service with an updated service provided by the Trustee, upon
written notification (including written notification via facsimile) by the
Trustee.
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(c) All Electronic Services shall be provided to the Sponsor without
any express or implied legal warranties or acceptance of legal liability by the
Trustee relative to the use of material or Electronic Services by the Sponsor.
No rights are conveyed to any property, intellectual or tangible, associated
with the contents of the Electronic Services and related material.
(d) To the extent that any Electronic Services utilize Internet
services to transport data or communications, the Trustee will take, and Plan
Sponsor agrees to follow, reasonable security precautions; however, the Trustee
disclaims any liability for interception of any such data or communications. The
Trustee shall not be responsible for, and makes no warranties regarding access,
speed or availability of Internet or network services. The Trustee shall not be
responsible for any loss or damage related to or resulting from any changes or
modifications to the electronic material after delivering it to the Plan
Sponsor.
SECTION 16. GENERAL.
(a) Performance by Trustee, its Agents or Affiliates. The Sponsor
acknowledges and authorizes that the services to be provided under this
Agreement shall be provided by the Trustee, its agents or affiliates, including
Fidelity Investments Institutional Operations Company or its successor, and that
certain of such services may be provided pursuant to one or more other
contractual agreements or relationships.
(b) Delegation by Employer. By authorizing the assets of any Plan as to
which it is an Employer to be deposited in the Trust, each Employer, other than
the Sponsor, hereby irrevocably delegates and grants to the Sponsor full and
exclusive power and authority to exercise all of the powers conferred upon the
Sponsor and each Employer by the terms of this Agreement, and to take or refrain
from taking any and all action which such Employer might otherwise take or
refrain from taking with respect to this Agreement, including the sole and
exclusive power to exercise, enforce or waive any rights whatsoever which such
Employer might otherwise have with respect to the Trust, and irrevocably
appoints the Sponsor as its agent for all purposes under this Agreement. The
Trustee shall have no obligation to account to any such Employer or to follow
the instructions of or otherwise deal with any such Employer, the intention
being that the Trustee shall deal solely with the Sponsor.
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(c) Entire Agreement. This Agreement contains all of the terms agreed
upon between the parties with respect to the subject matter hereof.
(d) Waiver. No waiver by either party of any failure or refusal to
comply with an obligation hereunder shall be deemed a waiver of any other or
subsequent failure or refusal to so comply.
(e) Successors and Assigns. The stipulations in this Agreement shall
inure to the benefit of, and shall bind, the successors and assigns of the
respective parties.
(f) Partial Invalidity. If any term or provision of this Agreement or
the application thereof to any person or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement, or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and each
term and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
(g) Section Headings. The headings of the various sections and
subsections of this Agreement have been inserted only for the purposes of
convenience and are not part of this Agreement and shall not be deemed in any
manner to modify, explain, expand or restrict any of the provisions of this
Agreement.
SECTION 17. GOVERNING LAW.
(a) Massachusetts Law Controls. This Agreement is being made in the
Commonwealth of Massachusetts, and the Trust shall be administered as a
Massachusetts trust. The validity, construction, effect, and administration of
this Agreement shall be governed by and interpreted in accordance with the laws
of the Commonwealth of Massachusetts, except to the extent those laws are
superseded under section 514 of ERISA.
(b) Trust Agreement Controls. The Trustee is not a party to the Plan,
and in the event of any conflict between the provisions of the Plan and the
provisions of this Agreement, the provisions of this Agreement shall control.
SECTION 18. PLAN QUALIFICATION. The Sponsor shall be responsible for verifying
that while any assets of a particular Plan are held in the Trust, the Plan (i)
is qualified within the meaning of section 401(a) of the
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Code; (ii) is permitted by existing or future rulings of the United States
Treasury Department to pool its funds in a group trust; and (iii) permits its
assets to be commingled for investment purposes with the assets of other such
plans by investing such assets in this Trust. If any Plan ceases to be qualified
within the meaning of section 401(a) of the Code, the Sponsor shall notify the
Trustee as promptly as is reasonable. Upon receipt of such notice, the Trustee
shall promptly segregate and withdraw from the Trust, the assets which are
allocable to such disqualified Plan, and shall dispose of such assets in the
manner directed by the Sponsor.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
QUANEX CORPORATION
Attest: ______________________ By: _______________________________
Secretary
Name: _______________________________
Title: _______________________________
Date: _______________________________
FIDELITY MANAGEMENT TRUST COMPANY
Attest: ______________________ By: ______________________________
Assistant Clerk
Name: ______________________________
Title: ______________________________
Date: ______________________________
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SCHEDULE "A"
ADMINISTRATIVE SERVICES
Administration
* Establishment and maintenance of Participant account and election
percentages.
* Maintenance of the following investment options:
- Quanex Corporation Stock Fund
- Fidelity Balanced Fund
- Fidelity Contrafund
- Fidelity Growth & Income Portfolio
- Fidelity Low-Priced Stock Fund
- Fidelity Magellan Fund
- Fidelity Money Market Trust: Retirement Government Money Market
Portfolio
- Fidelity Overseas Fund
- Fidelity Puritan Fund
- Fidelity Asset Manager
- Managed Income Portfolio
- Neuberger & Berman Partners Trust
- Templeton Foreign Fund
- Fidelity Blue Chip Growth Fund
- Fidelity Retirement Growth Fund
* Maintenance of the following money classifications for the Quanex
Corporation Employee Savings Plan:
- Elective Deferrals
- Employee After-tax
- Company Match
- Rollover
- Qualified Non-elective Employer Contribution
* Maintenance of the following money classifications for the Quanex
Corporation Hourly Bargaining Unit Employees Savings Plan:
- Elective Deferrals
- Employee After-tax
- Company Match
- Rollover
- Supplemental Employer Contributions
* Maintenance of the following money classifications for the Piper Impact
401(k) Plan:
- Employee Deferral
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- Employer Match
- Supplemental Employer Contribution
- Rollover
* Maintenance of the following money classifications for the
Nichols-Homeshield 401(k) Savings Plan:
- Salary Deferral Contribution Account
- Supplemental Employer Contribution Account
- Rollover Account
- Qualified Non-elective Employer Contribution Account
* Maintenance of the following money classifications for the
Nichols-Homeshield 401(k) Savings Plan for Hourly Davenport Employees:
- Salary Deferral Contribution Account
- Supplemental Employer Contribution Account
- Rollover Account
- Qualified Non-elective Employer Contribution Account
The Trustee will provide the recordkeeping and administrative services set
forth on this Schedule "A" and as detailed in the Plan Administrative
Manual and no others.
A) PROVIDE PARTICIPANT TELEPHONE SERVICES
1. Fidelity registered representatives are available from 8:30 a.m. -
12:00 midnight ET each business day to provide toll free telephone
service for Participant inquiries and transactions. Additionally,
Participants have 24 hour account balance and transaction inquiry
access utilizing our automated voice response system and the internet.
2. For security purposes, all calls are recorded. In addition, several
levels of security are available including the verification of a
Personal Identification Number (PIN) and/or any other indicative data
resident on the system.
3. Through our telephone services, Fidelity provides the following
services:
o Provide Plan investment option information.
o Maintain Plan specific provisions.
o Process exchanges (transfers) between investment options on a
daily basis.
o Maintain and process changes to Participants' contribution
allocations for all money sources.
o Allow Participants to change their deferral and after-tax
percentages and provide updates via EDT for customer to
apply to its payrolls accordingly.
o Consult with Participants in various loan scenarios and
generate all documentation.
o Process all Participant loan and withdrawal requests via
Fidelity's toll-free telephone service according to Plan
provisions on a daily basis.
o Process in-service withdrawals via telephone due to certain
circumstances previously approved by the Sponsor.
o Process hardship withdrawals via telephone as directed and
approved by the Sponsor.
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o Enroll new Participants via telephone; provide confirmation of
enrollment within five (5) days of the request.
B) PLAN ACCOUNTING
1. Process payroll contributions according to payroll frequency via
electronic data transfer (EDT), consolidated magnetic tape or diskette.
The data format will be provided by Fidelity.
2. Provide Plan and Participant level accounting for up to nine (9)
money classifications for the Plan.
3. Audit and reconcile the Plan and Participant accounts daily.
4. Provide daily Plan and Participant level accounting for the Plan
investment options.
5. Reconcile and process Participant withdrawal requests as approved
and directed by the Sponsor. All requests are paid based on the current
market values of Participants' accounts, not advanced or estimated
values. A distribution report will accompany each check.
6. Track individual Participant loans; process loan withdrawals;
re-invest loan repayments; and prepare and deliver comprehensive
reports to the Sponsor to assist in the administration of Participant
loans.
7. Fidelity's Guaranteed Investments Daily Equity System (GUIDE) is an
automatic Investment Contract daily portfolio accounting system. GUIDE
provides the Sponsor with daily valuation of its Plan assets whether
individually managed or in our Managed Income Portfolio.
8. Maintain and process changes to Participants' prospective and
existing investment mix elections via Fidelity's toll-free telephone
service.
C) PARTICIPANT REPORTING
1. Mail confirmation to Participants of all transactions initiated via
Fidelity Telephone Services within three (3) calendar days of the
transaction.
2. Prepare and mail via first class to each Plan Participant a
quarterly detailed Participant statement reflecting all activity for
the period. Statements will be mailed no later than twenty (20)
calendar days after each quarter end.
3. Mail required 402(f) notification for distribution from the Plan.
This notice advises Participants of the tax consequences of their Plan
distributions.
D) PLAN REPORTING
1. Prepare, reconcile and deliver a monthly Trial Balance Report
presenting all money classes and investments. This report is based on
the market value as of the last business day of the month. The report
will be delivered not later than twenty (20) days after the end of each
month in the absence of unusual circumstances.
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2. Prepare, reconcile and deliver a Quarterly Administrative Report
presenting both on a Participant and a total Plan basis all money
classes, investment positions and a summary of all activity of the
Participant and Plan as of the last business day of the quarter. The
report will be delivered not later than twenty (20) days after the end
of each quarter in the absence of unusual circumstances.
E) GOVERNMENT REPORTING
1. Process year-end tax reports for Participants - 1099R, as well as
financial reporting to assist in the preparation of Form 5500.
F) COMMUNICATION SERVICES
1. Employee communications describing available investment options,
including multimedia informational materials and group presentations.
G) OTHER
1. Performance of non-discrimination limitation testing upon request.
In order to obtain this service, the client shall be required to
provide the information identified in the Fidelity Discrimination
Testing Package Guidelines.
2. Monitor and process required minimum distribution amounts (MRD) as
follows: the Trustee will notify the MRD Participant and, upon
notification from the MRD Participant, will use the MRD Participant's
information to process their distributions. If the MRD Participant does
not respond to the Trustee's notification, the Sponsor directs the
Trustee to automatically begin the required distributions for the
Participant.
3. The Fidelity Recordkeeping System is available on-line to the
Sponsor via our Plan Sponsor Webstation ("PSW"). PSW is a graphical,
Windows-based application that provides current plan and
participant-level information, including indicative data, account
balances, activity and history. PSW also provides Sponsors with the
ability to instruct the Trustee to process particular transactions.
4. NetBenefits: Plan participants may access their accounts and conduct
transactions via the Internet's World Wide Web, including obtaining
current account balances, exchanges, contributions, dividend/capital
gains, new loans and repayments, new withdrawals, quotes on all plan
level investment options, fund performance on all plan level investment
options, and Plan literature ordering
QUANEX CORPORATION FIDELITY MANAGEMENT TRUST COMPANY
By: _______________________ By: ________________________________
Date Vice President Date
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SCHEDULE "B"
FEE SCHEDULE
Annual Participant Fee: $15.00 per Participant* per year, billed and
payable quarterly.
Loan Fee: Establishment fee of $35.00 per loan account;
annual fee of $15.00 per loan account.
Minimum Required Distribution: $25.00 per Participant per MRD withdrawal.
Plan Sponsor Webstation (PSW): Two (2) user IDs provided free of charge, each
additional user ID, $500 per year.
Return of Excess Contribution Fee: $25.00 per Participant, one-time charge per
calculation and check generation.
Non-Fidelity Mutual Funds: .35% annual administration fee on the following
Non-Fidelity Mutual Fund assets which are
equity/balanced funds: AMR Funds, Calvert Funds,
Franklin/Templeton Funds, Founders Funds, Pilgrim
Baxter Funds and Warburg Pincus Funds. .25% annual
administration fee on all other Non-Fidelity Mutual
Fund assets (to be paid by the Non-Fidelity Mutual
Fund vendor.)
o Other Fees: separate charges for optional non-discrimination testing,
extraordinary expenses resulting from large numbers of simultaneous manual
transactions, from errors not caused by Fidelity, reports not contemplated
in this Agreement, or extraordinary and/or duplicative expenses associated
with electronic services. The Administrator may withdraw reasonable
administrative fees from the Trust by written direction to the Trustee.
* This fee will be imposed pro rata for each calendar quarter, or any part
thereof, that it remains necessary to keep a Participant's account(s) as
part of the Plan's records, e.g., vested, deferred, forfeiture, top-heavy
and terminated Participants who must remain on file through calendar
year-end for 1099-R reporting purposes.
TRUSTEE FEE
o To the extent that assets are invested in Mutual Funds, 0.02% per year
payable pro rata quarterly on the basis of such assets in the Trust as of
the calendar quarter's last valuation date, but no less than $2,500.00 nor
more than $5,000.00 per year.
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o To the extent that assets are invested in Sponsor Stock, 0.25% of such
assets in the Trust payable pro rata quarterly on the basis of such assets
as of the calendar quarter's last valuation date, but no less than $10,000
per year.
QUANEX CORPORATION FIDELITY MANAGEMENT TRUST COMPANY
By: __________________________ By: ____________________________
Date Vice President Date
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SCHEDULE "C"
INVESTMENT OPTIONS
In accordance with Section 5(b), the Named Fiduciary hereby directs the
Trustee that Participants' individual accounts may be invested in the following
investment options:
- Quanex Corporation Stock Fund
- Fidelity Balanced Fund
- Fidelity Contrafund
- Fidelity Growth & Income Portfolio
- Fidelity Low-Priced Stock Fund
- Fidelity Magellan Fund
- Fidelity Money Market Trust: Retirement Government Money Market
Portfolio
- Fidelity Overseas Fund
- Fidelity Puritan Fund
- Fidelity Asset Manager
- Managed Income Portfolio
- Neuberger & Berman Partners Trust
- Templeton Foreign Fund
- Fidelity Blue Chip Growth Fund
- Fidelity Retirement Growth Fund
The investment option referred to in Section 5(c) and Section
5(e)(v)(B)(5) shall be Fidelity Money Market Trust: Retirement Government Money
Market Portfolio.
QUANEX CORPORATION
By: ______________________
Date
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SCHEDULE "D"
[Administrator's Letterhead]
[DATE]
Mr. David Phillips
Fidelity Investments Institutional Operations Company, Inc.
82 Devonshire Street - MM3H
Boston, Massachusetts 02109
[Name of Plan]
*** NOTE: This schedule should contain names and
signatures for ALL individuals who will be providing
directions to Fidelity representatives in connection
with the Plan.
Fidelity representatives will be unable to accept
directions from any individual whose name does not
appear on this schedule.***
Dear Mr. Phillips:
This letter is sent to you in accordance with Section 8(b) of the Trust
Agreement, dated as of [date], between [name of Plan Sponsor] and Fidelity
Management Trust Company. [I or We] hereby designate [name of individual], [name
of individual], and [name of individual], as the individuals who may provide
directions, on behalf of the Administrator, upon which Fidelity Management Trust
Company shall be fully protected in relying. Only one such individual need
provide any direction. The signature of each designated individual is set forth
below and certified to be such.
You may rely upon each designation and certification set forth in this
letter until [I or we] deliver to you written notice of the termination of
authority of a designated individual.
Very truly yours,
[SPONSOR]
By
[signature of designated individual]
[name of designated individual]
[signature of designated individual]
[name of designated individual]
[signature of designated individual]
[name of designated individual]
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SCHEDULE "E"
[Named Fiduciary's Letterhead]
[DATE]
Mr. David Phillips
Fidelity Investments Institutional Operations Company, Inc.
82 Devonshire Street - MM3H
Boston, Massachusetts 02109
[Name of Plan]
Dear Mr. Phillips:
This letter is sent to you in accordance with Section 8(c) of the Trust
Agreement, dated as of [date], between [name of Plan Sponsor] and Fidelity
Management Trust Company. [I or We] hereby designate [name of individual], [name
of individual], and [name of individual], as the individuals who may provide
directions, on behalf of the Named Fiduciary, upon which Fidelity Management
Trust Company shall be fully protected in relying. Only one such individual need
provide any direction. The signature of each designated individual is set forth
below and certified to be such.
You may rely upon each designation and certification set forth in this
letter until [I or we] deliver to you written notice of the termination of
authority of a designated individual.
Very truly yours,
[NAMED FIDUCIARY]
By
[signature of designated individual]
[name of designated individual]
[signature of designated individual]
[name of designated individual]
[signature of designated individual]
[name of designated individual]
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SCHEDULE "G"
TELEPHONE EXCHANGE GUIDELINES
The following telephone exchange guidelines are currently employed by Fidelity
Investments Institutional Operations Company, Inc. (FIIOC).
Telephone exchange hours via a Fidelity Representative are 8:30 a.m. (ET) to
12:00 midnight (ET) on each business day. A "business day" is any day on which
the New York Stock Exchange ("NYSE") is open. Exchanges via the Internet and
Fidelity's voice response system are intended to be available virtually 24 hours
a day.
FIIOC reserves the right to change these telephone exchange guidelines at its
discretion.
Note: The NYSE's normal closing time is 4:00 p.m. (ET); in the event the NYSE
alters its closing time, all references below to 4:00 p.m. shall mean the NYSE
closing time as altered.
MUTUAL FUNDS
EXCHANGES BETWEEN MUTUAL FUNDS
Participants may call on any business day to exchange between the mutual
funds. If the request is received before 4:00 p.m. (ET), it will receive
that day's trade date. Calls received after 4:00 p.m.
(ET) will be processed on a next day basis.
MANAGED INCOME PORTFOLIO
I. EXCHANGES BETWEEN MUTUAL FUNDS AND MANAGED INCOME PORTFOLIO
Participants who wish to exchange between a mutual fund and the Managed
Income Portfolio may call on any business day. If the request is
received before 4:00 p.m. (ET), it will receive that day's trade date.
Calls received after 4:00 p.m. (EST) will be processed on a next day
basis.
II. EXCHANGE RESTRICTIONS
Participants will not be permitted to make direct transfers from the
Managed Income Portfolio into a competing fund. Participants who wish
to exchange from the Managed Income Portfolio into a competing fund
must first exchange into a non-competing fund for a period of 90 days.
QUANEX CORPORATION STOCK FUND
I. EXCHANGES BETWEEN MUTUAL FUNDS AND SPONSOR STOCK FUND
Participants may call on any business day to exchange between the
mutual funds and the Sponsor Stock Fund. If the request is received
before 4:00 p.m. (ET), it will receive that day's trade date. Calls
received after 4:00 p.m. (ET) will be processed on a next day basis.
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II. EXCHANGES BETWEEN SPONSOR STOCK FUND AND MANAGED INCOME PORTFOLIO
Participants who wish to exchange between the Sponsor Stock Fund and
the Managed Income Portfolio may call on any business day. If the
request is received before 4:00 p.m. (ET), it will receive that day's
trade date. Calls received after 4:00 p.m. (ET) will be processed on a
next day basis.
III. EXCHANGE RESTRICTIONS
Investments in the Sponsor Stock Fund will consist primarily of shares
of Sponsor Stock. In order to satisfy daily Participant requests for
exchanges, loans and withdrawals, the Stock Fund will also hold cash or
other short-term liquid investments in an amount that has been agreed
to in writing by the Sponsor and the Trustee. The Trustee will be
responsible for ensuring that the percentage of these investments falls
within the agreed upon range over time. However, if there is
insufficient liquidity in the Sponsor Stock Fund to allow for such
activity, the Trustee will sell shares of Sponsor Stock in the open
market. Exchange and redemption transactions will be processed as soon
as proceeds from the sale of Sponsor Stock are received.
QUANEX CORPORATION
By: _____________________
Date
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SCHEDULE "H"
OPERATIONAL GUIDELINES FOR NON-FIDELITY MUTUAL FUNDS
PRICING
By 7:00 p.m. Eastern Time ("ET") each Business Day, the Non-Fidelity Mutual
Fund Vendor (Fund Vendor) will input the following information ("Price
Information") into the Fidelity Participant Recordkeeping System ("FPRS")
via the remote access price screen that Fidelity Investments Institutional
Operations Company, Inc. ("FIIOC"), an affiliate of the Trustee, has
provided to the Fund Vendor: (1) the net asset value for each Fund at the
Close of Trading, (2) the change in each Fund's net asset value from the
Close of Trading on the prior Business Day, and (3) in the case of an income
fund or funds, the daily accrual for interest rate factor ("mil rate").
FIIOC must receive Price Information each Business Day (a "Business Day" is
any day the New York Stock Exchange is open). If on any Business Day the
Fund Vendor does not provide such Price Information to FIIOC, FIIOC shall
pend all associated transaction activity in the Fidelity Participant
Recordkeeping System ("FPRS") until the relevant Price Information is made
available by Fund Vendor.
TRADE ACTIVITY AND WIRE TRANSFERS
By 7:00 a.m. ET each Business Day following Trade Date ("Trade Date plus
One"), FIIOC will provide, via facsimile, to the Fund Vendor a consolidated
report of net purchase or net redemption activity that occurred in each of
the Funds up to 4:00 p.m. ET on the prior Business Day. The report will
reflect the dollar amount of assets and shares to be invested or withdrawn
for each Fund. FIIOC will transmit this report to the Fund Vendor each
Business Day, regardless of processing activity. In the event that data
contained in the 7:00 a.m. ET facsimile transmission represents estimated
trade activity, FIIOC shall provide a final facsimile to the Fund Vendor by
no later than 9:00 a.m. ET. Any resulting adjustments shall be processed by
the Fund Vendor at the net asset value for the prior Business Day.
The Fund Vendor shall send via regular mail to FIIOC transaction confirms
for all daily activity in each of the Funds. The Fund Vendor shall also send
via regular mail to FIIOC, by no later than the fifth Business Day following
calendar month close, a monthly statement for each Fund. FIIOC agrees to
notify the Fund Vendor of any balance discrepancies within twenty (20)
Business Days of receipt of the monthly statement.
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For purposes of wire transfers, FIIOC shall transmit a daily wire for
aggregate purchase activity and the Fund Vendor shall transmit a daily wire
for aggregate redemption activity, in each case including all activity
across all Funds occurring on the same day.
PROSPECTUS DELIVERY
FIIOC shall be responsible for the timely delivery of Fund prospectuses and
periodic Fund reports ("Required Materials") to Plan participants, and shall
retain the services of a third-party vendor to handle such mailings. The
Fund Vendor shall be responsible for all materials and production costs, and
hereby agrees to provide the Required Materials to the third-party vendor
selected by FIIOC. The Fund Vendor shall bear the costs of mailing annual
Fund reports to Plan participants. FIIOC shall bear the costs of mailing
prospectuses to Plan participants.
PROXIES
The Fund Vendor shall be responsible for all costs associated with the
production of proxy materials. FIIOC shall retain the services of a
third-party vendor to handle proxy solicitation mailings and vote
tabulation. Expenses associated with such services shall be billed directly
to the Fund Vendor by the third-party vendor.
PARTICIPANT COMMUNICATIONS
The Fund Vendor shall provide internally-prepared fund descriptive
information approved by the Funds' legal counsel for use by FIIOC in its
written Participant communication materials. FIIOC shall utilize historical
performance data obtained from third-party vendors (currently Morningstar,
Inc., FACTSET Research Systems and Lipper Analytical Services) in telephone
conversations with plan Participants and in quarterly Participant
statements. The Sponsor hereby consents to FIIOC's use of such materials and
acknowledges that FIIOC is not responsible for the accuracy of such
third-party information. FIIOC shall seek the approval of the Fund Vendor
prior to retaining any other third-party vendor to render such data or
materials under this Agreement.
COMPENSATION
FIIOC shall be entitled to fees as set forth in a separate agreement with
the Fund Vendor.
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SCHEDULE "I"
[Sponsor's Letterhead]
Mr. David Phillips
Fidelity Investments Institutional Operations Company, Inc.
82 Devonshire Street
Boston, Massachusetts 02109
[Name of Plan]
Dear Mr. Phillips:
This letter is sent to you in accordance with Section 8(a) of the Trust
Agreement dated as of the [ ] day of [ ], 199X, between [ ] and Fidelity
Management Trust Company.
Each of the plans identified below is a tax-qualified defined
contribution plan which meets the requirements of Section 18 of said Trust
Agreement and which is maintained by the undersigned, or one of its subsidiaries
or affiliates, for the benefit of their eligible employees. Each such plan is
hereby designated as a "Plan" for purposes of said Trust Agreement. The
following individuals or entities are the Administrator and Named Fiduciary
(ies) of said Plan(s).
Plans Administrator Named Fiduciary(ies)
----- ------------- ----- --------------
We hereby further certify that each Employer with respect to each of
the foregoing Plan(s) has authorized the assets of such Plan to be deposited in
the Trust and, as a result, is bound by Section 16(b) of said Trust Agreement.
You may rely upon the foregoing designations and certifications until
we deliver to you written notice of a change in any of the information set forth
therein.
Very truly yours,
[SPONSOR]
By
xiv
1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Post-Effective Amendment
No. 1 to Registration Statement No. 33-38702 of Quanex Corporation on Form S-8
of our reports dated November 23, 1998 and May 22, 1998, appearing in the
Annual Report on Form 10-K of Quanex Corporation for the fiscal year ended
October 31, 1998 and in the Annual Report on Form 11-K of Quanex Corporation
Employee Savings Plan for the year ended December 31, 1997, respectively.
DELOITTE & TOUCHE LLP
Houston, Texas
February 1, 1999
