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As filed with the Securities and Exchange Commission on March 7, 1997
Registration No. 333-______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------------
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
HOUSTON, TEXAS 77027
(Address of Principal Executive Offices) (Zip Code)
PIPER IMPACT 401(K) 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)
-------------------------------------
With Copy to:
Harva R. Dockery, Esq.
Fulbright & Jaworski L.L.P.
1301 McKinney, Suite 5100
Houston, Texas 77010-3095
(713) 651-5151
---------------------------------
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
Proposed maximum Proposed maximum Amount of
Amount to be offering price per aggregate offering registration
Title of securities to be registered registered share(2) price(2) fee
- ------------------------------------------------------------------------------------------------------------------------------------
Common Stock, $.50 par value . . . . . . 25,000 shares(1) $26.69 $667,250 $203
- ------------------------------------------------------------------------------------------------------------------------------------
Rights to purchase shares of Series A
Junior Participating Preferred Stock . . 25,000(1)
====================================================================================================================================
(1) Estimated number of shares of Common Stock and accompanying Rights
that could be purchased with the participant contributions, based upon
the price of the Common Stock set forth herein.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933 and based
upon the average of the high and low sales prices of a share of Common
Stock as reported by the New York Stock Exchange, Inc. on March 3,
1997.
In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
Registration Statement also covers an indeterminate amount of interests to be
offered or sold pursuant to the Piper Impact 401(k) Plan described herein.
================================================================================
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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 Piper Impact 401(k) Plan (the "Plan") incorporate by
reference in this Registration Statement the following documents:
1. The Registrant's Annual Report on Form 10-K for the fiscal
year ended October 31, 1996, and the Plan's latest annual report filed pursuant
to Section 13(a) or 15(d) of the Securities Exchange Act of 1934;
2. All other reports filed by the Registrant and the Plan
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 since
October 31, 1996;
3. 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
4. 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 filed by the Registrant or the Plan pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934
subsequent to the date of the filing hereof and prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in this Registration Statement and to be a part
hereof from the date of filing of such documents.
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
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ITEM 8. EXHIBITS.
4.1 Restated Certificate of Incorporation of the Registrant, as
amended on February 27, 1997.
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 Form of Indenture relating to the Registrant's 6.88%
Cumulative Subordinated Debentures due 2007 between the
Registrant and Chemical Bank, as Trustee, filed as Exhibit
19.2 to the Registrant's Quarterly Report on Form 10-Q for
the quarter ended April 30, 1992, and incorporated herein
by reference.
4.7 $250,000,000 Revolving Credit and Term Loan Agreement dated
as of July 23, 1996, among the Registrant, Comerica Bank,
as Agent, and Harris Trust and Savings Bank and Wells Fargo
Bank (Texas), N.A., as Co-Agents, filed as Exhibit 4.1 to
the Registrant's Report on Form 8-K, dated August 9, 1996,
and incorporated herein by reference.
4.8 Piper Impact 401(k) Plan.
4.9 Form of Trust Agreement between Piper Impact, Inc. and
Fidelity Management Trust Company dated as of March 5, 1997.
23.1 Consent of Deloitte & Touche LLP.
24.1 Powers of Attorney (contained on pages II-6 and II-7
hereof).
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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.
As permitted by Item 601(b)(4)(iii)(A) of Regulation S-K, the
Registrant has not filed with this Registration Statement certain instruments
defining the rights of holders of long-term debt of the Registrant and its
subsidiaries because the total amount of securities authorized under any of
such instruments does not exceed 10% of the total assets of the Registrant and
its subsidiaries on a consolidated basis. The Registrant agrees to furnish a
copy of any such agreements to the Securities and Exchange Commission upon
request.
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(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
deviation from the low or high 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 (1)(i) and (1)(ii) do not apply
if the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished to
the Securities and Exchange Commission by the Registrant pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered herein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
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(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 and each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934
that is incorporated by reference in 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.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 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
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Houston, State of Texas, on February 27, 1997.
QUANEX CORPORATION
By: /s/ VERNON E. OECHSLE
--------------------------------
Vernon E. Oechsle
Director, President and
Chief Executive Officer
(Principal Executive Officer)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Robert C. Snyder, Vernon E. Oechsle and
Wayne M. Rose, and each of them, either one of whom may act without joinder of
the other, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, and each of them, or the substitute
or substitutes of any or all of them, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ ROBERT C. SNYDER Director and February 27, 1997
- -------------------------------- Chairman of the Board
Robert C. Snyder
/s/ VERNON E. OECHSLE Director, President and February 27, 1997
- -------------------------------- Chief Executive Officer
Vernon E. Oechsle (Principal Executive Officer)
/s/ JAMES H. DAVIS Executive Vice President and February 27, 1997
- -------------------------------- Chief Operating Officer
James H. Davis (Principal Operating Officer)
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/s/ CARL E. PFEIFFER Director February 27, 1997
- --------------------------------
Carl E. Pfeiffer
/s/ GERALD B. HAECKEL Director February 27, 1997
- --------------------------------
Gerald B. Haeckel
/s/ JOHN D. O'CONNELL Director February 27, 1997
- --------------------------------
John D. O'Connell
/s/ DONALD G. BARGER, JR. Director February 27, 1997
- --------------------------------
Donald G. Barger, Jr.
/s/ VINCENT R. SCORSONE Director February 27, 1997
- --------------------------------
Vincent R. Scorsone
/s/ MICHAEL J. SEBASTIAN Director February 27, 1997
- --------------------------------
Michael J. Sebastian
/s/ WAYNE M. ROSE Vice President-Finance and February 27, 1997
- -------------------------------- Chief Financial Officer
Wayne M. Rose (Principal Financial Officer)
/s/ VIREN M. PARIKH Controller February 27, 1997
- -------------------------------- (Principal Accounting Officer)
Viren M. Parikh
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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 Registration
Statement 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 27, 1997.
PIPER IMPACT 401(k) 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/ JOSEPH K. PEERY
--------------------------------------
Joseph K. Peery
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EXHIBIT INDEX
Exhibit Number Description
-------------- ----------------------------------------
4.1 Restated Certificate of Incorporation of the Registrant, as amended
on February 27, 1997.
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 Form of Indenture relating to the Registrant's 6.88% Cumulative
Subordinated Debentures due 2007 between the Registrant and
Chemical Bank, as Trustee, filed as Exhibit 19.2 to the
Registrant's Quarterly Report on Form 10-Q for the quarter ended
April 30, 1992, and incorporated herein by reference.
4.7 $250,000,000 Revolving Credit and Term Loan Agreement dated as of
July 23, 1996, among the Registrant, Comerica Bank, as Agent, and
Harris Trust and Savings Bank and Wells Fargo Bank (Texas), N.A.,
as Co-Agents, filed as Exhibit 4.1 to the Registrant's Report on
Form 8-K, dated August 9, 1996, and incorporated herein by
reference.
4.8 Piper Impact 401(k) Plan.
4.9 Form of Trust Agreement between Piper Impact, Inc. and Fidelity
Management Trust Company dated as of March 5, 1997.
23.1 Consent of Deloitte & Touche LLP.
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24.1 Powers of Attorney (contained on pages II-6 and II-7
hereof).
As permitted by Item 601(b)(4)(iii)(A) of Regulation S-K, the
Registrant has not filed with this Registration Statement certain instruments
defining the rights of holders of long-term debt of the Registrant and its
subsidiaries because the total amount of securities authorized under any of such
instruments does not exceed 10% of the total assets of the Registrant and its
subsidiaries on a consolidated basis. The Registrant agrees to furnish a copy of
any such agreements to the Securities and Exchange Commission upon request.
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EXHIBIT 4.1
QUANEX CORPORATION
CERTIFICATE OF AMENDMENT
TO
RESTATED CERTIFICATE OF INCORPORATION
Quanex Corporation, a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware (the "Company"),
does hereby certify:
FIRST: That the Board of Directors of the Company, at a meeting
duly called and held on December 12, 1996, adopted resolutions proposing and
declaring advisable the following amendment to the Restated Certificate of
Incorporation of the Company and directed that such amendment be considered at
the next annual meeting of stockholders of the Company:
To amend the first paragraph of Article Fourth of the Restated
Certificate of Incorporation in its entirety to read as follows:
"FOURTH: The total number of shares of all classes of
stock which the Corporation shall have authority to issue is Fifty-One
Million (51,000,000), of which Fifty Million (50,000,000) shall be
shares of Common Stock, par value Fifty Cents ($.50) per share, and of
which One Million (1,000,000) shares shall be Preferred Stock, no par
value."
SECOND: That at the annual meeting of stockholders of the Company
duly called and held on February 27, 1997, in accordance with Section 222 of
the General Corporation Law of the State of Delaware, the holders of a majority
of the shares of Common Stock of the Company entitled to vote on such amendment
voted in favor of such amendment.
THIRD: That the aforesaid amendment was duly adopted in
accordance with the applicable provisions of Section 242 of the General
Corporation Law of the State of Delaware.
IN WITNESS WHERETO, the Company has caused this Certificate of
Amendment to be signed by Wayne M. Rose, its Vice President-Finance and Chief
Financial Officer, this 27th day of February, 1997.
QUANEX CORPORATION
By: /s/ Wayne M. Rose
-------------------------------------
Wayne M. Rose
Vice President-Finance and
Chief Financial Officer
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RESTATED CERTIFICATE
OF
INCORPORATION
OF
QUANEX CORPORATION
The original Certificate of Incorporation of Quanex Corporation (the
"Company") was filed with the Delaware Secretary of State on June 3, 1968 under
the name of Michigan Seamless Tube Company. On August 24, 1995 the Board of
Directors of the Company duly adopted resolutions authorizing the restatement
and integration of the provisions of the Certificate of Incorporation of the
Company and authorizing the filing of this Restated Certificate of
Incorporation in accordance with Section 245 of the General Corporation Law of
the State of Delaware. This Restated Certificate of Incorporation only
restates and integrates and does not further amend any of the provisions of the
Certificate of Incorporation of the Company presently in effect and there is no
discrepancy between the provisions of the Certificate of Incorporation of the
Company as presently in effect and the provisions of this Restated Certificate
of Incorporation.
The following Restated Certificate of Incorporation supersedes the
Certificate of Incorporation of the Company as presently in effect:
FIRST: The name of the Corporation is
QUANEX CORPORATION
SECOND: Its registered office in the state of Delaware is located
at Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801.
The name and address of its registered agent is The Corporation Trust Company,
Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801.
THIRD: The nature of the business, or objects or purposes to be
transacted, promoted or carried on are:
To manufacture and fabricate tubing and pipe of every type and
character, seamless, non-seamless, metal or non-metal, and of every
size and description, of every shape and form, and to buy, sell, and
trade in tubing and pipe and products made thereof, in whole or in
part, and in any and all materials used or required in connection with
the production and marketing of such products; to manufacture,
deliver, buy, sell, deal in and with machines and equipment, tools,
dies, fixtures, goods, wares, and merchandise and property of every
kind and description.
To establish, maintain, conduct and carry on a general merchandising
business; and in conjunction therewith to produce, buy, import,
purchase and otherwise acquire, contract for, own, store, hold, use,
sell, export, distribute, lease, pledge and otherwise dispose of and
generally deal in and with, at wholesale or retail, as principal or
agent for others, upon
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commission, consignment or otherwise, goods, wares, commodities,
merchandise and personal property of every class, name, nature and
description.
To import, export, manufacture, produce, buy, sell and otherwise deal
in and with, goods, wares and merchandise of every class and
description.
To manufacture, purchase or otherwise acquire, invest in, own,
mortgage, pledge, sell, assign and transfer or otherwise dispose of,
trade, deal in and deal with goods, wares and merchandise and personal
property of every class and description.
To acquire, and pay for in cash, stock or bonds of this corporation or
otherwise, the good will, rights, assets and property, and to
undertake or assume the whole or any part of the obligations or
liabilities of any person, firm, association or corporation.
To acquire, hold, use, sell, assign, lease, grant licenses in respect
of, mortgage or otherwise dispose of letters patent of the United
States or any foreign country, patent rights, licenses and privileges,
inventions, improvements and processes, copyrights, trade-marks and
trade names, relating to or useful in connection with any business of
this corporation.
To acquire by purchase, subscription or otherwise, and to receive,
hold, own, guarantee, sell, assign, exchange, transfer, mortgage,
pledge or otherwise dispose of or deal in and with any of the shares
of the capital stock, or any voting trust certificates in respect of
the shares of capital stock, scrip, warrants, rights, bonds,
debentures, notes, trust receipts, and other securities, obligations,
chooses in action and evidences of indebtedness or interest issued or
created by any corporations, joint stock companies, syndicates,
associations, firms, trusts or persons, public or private, or by the
government of the United States of America, or by any foreign
government, or by any state, territory, province, municipality or
other political subdivision or by any governmental agency, and as
owner thereof to possess and exercise all the rights, powers and
privileges of ownership, including the right to execute consents and
vote thereon, and to do any and all acts and things necessary or
advisable for the preservation, protection, improvement and
enhancement in value thereof.
To enter into, make and perform contracts of every kind and
description with any person, firm, association, corporation,
municipality, county, state, body politic or government or colony or
dependency thereof.
To borrow or raise moneys for any of the purposes of the corporation
and, from time to time without limit as to amount, to draw, make,
accept, endorse, execute and issue promissory notes, drafts, bills of
exchange, warrants, bonds, debentures and other negotiable or
non-negotiable instruments and evidences of indebtedness, and to
secure the payment of
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any thereof and of the interest thereon by mortgage upon or pledge,
conveyance or assignment in trust of the whole or any part of the
property of the corporation, whether at the time owned or thereafter
acquired, and to sell, pledge or otherwise dispose of such bonds or
other obligations of the corporation for its corporate purposes.
To loan to any person, firm or corporation any of its surplus funds,
either with or without security.
To purchase, hold, sell and transfer the shares of its own capital
stock; provided it shall not use its funds or property for the
purchase of its own shares of capital stock when such use would cause
any impairment of its capital except as otherwise permitted by law,
and provided further that shares of its own capital stock belonging to
it shall not be voted upon directly or indirectly.
To have one or more offices, to carry on all or any of its operations
and business and without restriction or limit as to amount to purchase
or otherwise acquire, hold, own, mortgage, sell, convey or otherwise
dispose of, real and personal property of every class and description
in any of the states, districts, territories or colonies of the United
States, and in any and all foreign countries, subject to the laws of
such state, district, territory, colony or country.
In general, to carry on any other business in connection with the
foregoing, and to have and exercise all the powers conferred by the
laws of Delaware upon corporations formed under the General
Corporation Law of the State of Delaware, and to do any or all of the
things hereinbefore set forth to the same extent as natural persons
might or could do.
The objects and purposes specified in the foregoing clauses shall,
except where otherwise expressed, be in nowise limited or restricted by
reference to, or inference from, the terms of any other clause in this Restated
Certificate of Incorporation, but the objects and purposes specified in each of
the foregoing clauses of this Article shall be regarded as independent objects
and purposes.
FOURTH: The total number of shares of all classes of stock which
the Corporation shall have authority to issue is Twenty-Six Million
(26,000,000), of which Twenty-Five Million (25,000,000) shall be shares of
Common Stock, par value Fifty Cents ($.50) per share, and of which One Million
(1,000,000) shares shall be Preferred Stock, no par value.
Any amendment to this Restated Certificate of Incorporation which
shall increase or decrease the authorized stock of the corporation may be
adopted by the affirmative vote of the holders of a majority of the outstanding
shares of stock of the corporation entitled to vote.
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The designations and the powers, preferences and rights, and the
qualifications, limitations or restrictions thereof, of the Preferred Stock
shall be as follows:
(1) The Board of Directors is expressly
authorized at any time, and from time to time, to provide for the
issuance of shares of Preferred Stock in one or more series, with such
voting powers, full or limited but not to exceed one vote per share,
or without voting powers and with such designations, preferences and
relative, participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, as shall be
stated and expressed in the resolution or resolutions providing for
the issue thereof adopted by the Board of Directors, and as are not
stated and expressed in this Restated Certificate of Incorporation, or
any amendment thereto, including (but without limiting the generality
of the foregoing) the following:
(a) the designation of such series;
(b) the dividend rate of such series, the
conditions and dates upon which such dividends shall be
payable, the preference or relation which such dividends
shall bear to the dividends payable on any other class or
classes or of any other series of capital stock, and
whether such dividends shall be cumulative or
non-cumulative;
(c) whether the shares of such series shall be
subject to redemption by the corporation, and, if made
subject to such redemption, the times, prices and other
terms and conditions of such redemption;
(d) the terms and amount of any sinking fund
provided for the purchase or redemption of the shares of
such series;
(e) whether or not the shares of such series
shall be convertible into or exchangeable for shares of
any other class or classes or of any other series of any
class or classes of capital stock of the corporation,
and, if provision be made for conversion or exchange, the
times, prices, rates, adjustments, and other terms and
conditions of such conversion or exchanges;
(f) the extent, if any, to which the holders of
the shares of such series shall be entitled to vote as a
class or otherwise with respect to the election of the
directors or otherwise; provided, however, that in no
event shall any holder of any series of Preferred
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Stock be entitled to more than one vote for each share of
such Preferred Stock held by him;
(g) the restrictions, if any, on the issue or
reissue of any additional Preferred Stock; and
(h) the rights of the holders of the shares of
such series upon the dissolution of, or upon the
distribution of assets of, the corporation.
(2) Except as otherwise required by law and
except for such voting powers with respect to the election of
directors or other matters as may be stated in the resolutions of the
Board of Directors creating any series of Preferred Stock, the holders
of any such series shall have no voting power whatsoever.
Pursuant to the authority conferred upon the Board of Directors by the
Certificate of Incorporation of the said Corporation, the said Board of
Directors on April 26, 1989, adopted the resolution set forth on Exhibit A to
this Restated Certificate of Incorporation amending and restating the
preferences and rights of a series of 150,000 shares of Preferred Stock, no par
value, designated as Series A Junior Participating Preferred Stock.
FIFTH: The corporation is to have perpetual existence.
SIXTH: The private property of the stockholders shall not be
subject to the payment of corporate debts to any extent whatever.
SEVENTH: In furtherance and not in limitation of the powers
conferred by statute, the Board of Directors is expressly authorized:
To authorize and cause to be executed mortgages and liens upon the
real and personal property of the Corporation.
To set apart out of any of the funds of the Corporation available for
dividends a reserve or reserves for any proper purpose and to abolish
any such reserve in the manner in which it was created.
By resolution passed by a majority of the whole Board, to designate
one or more committees, each committee to consist of two or more of
the directors of the Corporation, which, to the extent provided in the
resolution or in the bylaws of the Corporation, shall have and may
exercise the powers of the Board of Directors in the management of the
business and affairs of the Corporation, and may authorize the seal of
the Corporation to be affixed to all papers which may require it.
Such committee or committees shall have such name or names as may be
stated in the bylaws of the Corporation or as may be determined from
time to time by resolution adopted by the board of directors.
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EIGHTH: Meetings of stockholders may be held outside the State of
Delaware, if the bylaws so provide. The books of the corporation may be kept
(subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
board of directors or in the bylaws of the corporation. Elections of directors
need not be by ballot unless the bylaws of the corporation shall so provide.
NINTH: The corporation reserves the right to amend, alter,
change or repeal any provision contained in this Restated Certificate of
Incorporation, in the manner now or hereafter prescribed by statute, and all
rights conferred upon stockholders herein are granted subject to this
reservation.
TENTH: Whenever a compromise or arrangement is proposed between
this corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this corporation under
the provisions of section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers
appointed for this corporation under the provisions of section 279 of Title 8
of the Delaware Code order a meeting of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of this corporation, as the
case may be, to be summoned in such manner as the said court directs. If a
majority in number representing three-fourths in value of the creditors or
class of creditors, and/or of the stockholders or class of stockholders of this
corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this corporation, as the case may be,
and also on this corporation.
ELEVENTH: The Board of Directors shall be divided into three classes
as nearly equal in number as possible, with the term of office of one class
expiring each year. At the annual meeting of stockholders in 1974, directors
of the first class shall be elected to hold office for a term expiring at the
next succeeding annual meeting, directors of the second class shall be elected
to hold office for a term expiring at the second succeeding annual meeting and
directors of the third class shall be elected to hold office for a term
expiring at the third succeeding annual meeting. During the intervals between
annual meetings of stockholders, any vacancy occurring in the Board of
Directors caused by resignation, removal, death, or other incapacity and any
newly created directorships resulting from an increase in the number of
directors shall be filled by a majority vote of the directors then in office,
whether or not a quorum. Each director chosen to fill a vacancy shall hold
office for the unexpired term in respect of which such vacancy occurred. Each
director chosen to fill a newly created directorship shall hold office until
the next election of the class for which such director shall have been chosen.
When the number of directors is changed, any newly created directorships
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or any decreases in directorships shall be so apportioned among the classes as
to make all classes as nearly equal in number as possible.
Any director may be removed from office as a director at any time, but
only for cause, by the affirmative vote of stockholders of record holding a
majority of the outstanding shares of stock of the corporation entitled to vote
in elections of directors at a meeting of the stockholders called for that
purpose.
TWELFTH: (A) Except as set forth in paragraph (B) of this Article,
the affirmative vote or consent of the holders of not less than four-fifths
(80%) of the outstanding shares of stock of this corporation (the
"Corporation") entitled to vote in elections of directors, voting for purposes
of this Article as one class, shall be required:
(1) to adopt any agreement for, or to approve, the merger or
consolidation of the Corporation or any subsidiary (as
hereinafter defined) with or into any other person (as
hereinafter defined),
(2) to authorize any sale, lease, transfer, exchange,
mortgage, pledge or other disposition to any other person
of all or substantially all of the assets of the
Corporation or any subsidiary, or
(3) to authorize the issuance or transfer by the Corporation
or any subsidiary of any voting securities of the
Corporation or any subsidiary in exchange or payment for
the securities or assets of any other person, if such
authorization is otherwise required by law or by any
agreement between the Corporation and any national
securities exchange or by any other agreement to which
the Corporation or any subsidiary is a party, if, in any
such case, as of the record date for the determination of
stockholders entitled to notice thereof and to vote
thereon or consent thereto, such other person is, or at
any time within the preceding twelve months has been, the
beneficial owner (as hereinafter defined) of 5 percent or
more of the outstanding shares of stock of the
Corporation entitled to vote in elections of directors.
If such other person is not, and has not been a 5 percent
beneficial owner, the provisions of this paragraph (A)
shall not apply, the provisions of Delaware law shall
apply.
(B) The provisions of paragraph (A) of this Article shall not
apply, and the provisions of Delaware law shall apply, to (1) any transaction
described therein if the Board of Directors by resolution shall have approved a
memorandum of understanding with such other person setting forth the principal
terms of such transaction and such transaction is substantially consistent
therewith, provided that a majority of those members of the Board of Directors
voting in favor of such resolution were duly elected and acting members of the
Board of Directors prior to the time such other person became the beneficial
owner of 5 percent or more of the outstanding shares of stock of
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the Corporation entitled to vote in elections of directors; or (2) any
transaction described therein if such other person is a corporation of which a
majority of the outstanding shares of all classes of stock entitled to vote in
elections of directors is owned of record or beneficially by the Corporation or
its subsidiaries.
(C) The affirmative vote or consent of the holders of not
less than four-fifths (80%) of the outstanding shares of stock of the
Corporation entitled to vote in elections of directors, voting for purposes of
this Article as one class, shall be required for the adoption of any plan for
the dissolution of the Corporation if the Board of Directors shall not have, by
resolution, recommended to the stockholders the adoption of such plan for
dissolution of the Corporation. If the Board of Directors shall have so
recommended to the stockholders such plan for dissolution of the Corporation,
the provisions of Delaware law shall apply.
(D) For purposes of this Article,
(1) any specified person shall be deemed to be
the "beneficial owner" of shares of stock of the Corporation (a) which
such specified person or any of its affiliates or associates (as such
terms are hereinafter defined) owns, directly or indirectly, whether
of record or not, (b) which such specified person or any of its
affiliates or associates has the right to acquire pursuant to any
agreement, or upon exercise of conversion rights, warrants or options,
or otherwise, or (c) which are beneficially owned, directly or
indirectly (including shares deemed owned through application of
clauses (a) and (b) above), by any other person with which such
specified person or any of its affiliates or associates has any
agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of stock of the Corporation;
(2) a "subsidiary" is any corporation more than
49 percent of the voting securities of which are owned, directly or
indirectly, by the Corporation;
(3) a "person" is any individual, corporation or
other entity;
(4) an "affiliate" of a specified person is any
person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common
control with, the specified person; and
(5) an "associate" of a specified person is (a)
any person of which such specified person is an officer or partner or
is, directly or indirectly, the beneficial owner of 10 percent or more
of any class of equity securities, (b) any trust or other estate in
which such specified person has a substantial beneficial interest or
as to which such specified person serves as trustee or in a similar
capacity, or (c) any relative or spouse of such specified person, or
any relative of such spouse, who has the same home as such specified
person or who is a director or officer of
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such specified person or any corporation which controls or is
controlled by such specified person.
(E) For purposes of determining whether a person owns
beneficially 5 percent or more of the outstanding shares of stock of the
Corporation entitled to vote in elections of directors, the outstanding shares
of stock of the Corporation shall include shares deemed owned through
application of clauses (a), (b) or (c) of paragraph (D)(1) above but shall not
include any other shares which may be issuable pursuant to any agreement or
upon exercise of conversion rights, warrants or options, or otherwise.
(F) The Board of Directors shall have the power and duty to
determine, for purposes of this Article, on the basis of information known to
such Board,
(1) whether any person referred to in paragraph
(A) of this Article owns beneficially 5 percent or more of the
outstanding shares of stock of the Corporation entitled to vote in
elections of directors; and
(2) whether a proposed transaction is
substantially consistent with any memorandum of understanding of the
character referred to in paragraph (B) of this Article.
Any such determination shall be conclusive and binding for all
purposes of this Article.
THIRTEENTH: Notwithstanding the provisions of this Restated
Certificate of Incorporation and any provisions of the Bylaws of the
corporation, no amendment to this Restated Certificate of Incorporation shall
amend, modify or repeal any or all of the provisions of Article Eleventh,
Article Twelfth or this Article Thirteenth of this Restated Certificate of
Incorporation, and the stockholders of the corporation shall not have the right
to amend, modify or repeal any or all provisions of the Bylaws of the
corporation relating to the number or term of office of directors, unless so
adopted by the affirmative vote or consent of the holders of not less than
four-fifths (80%) of the outstanding shares of stock of the corporation
entitled to vote in elections of directors, considered for purposes of this
Article as a class; provided, however, that in the event the Board of Directors
of the corporation shall by resolution adopted by a majority of the then
directors in office recommend to the stockholders the adoption of any such
amendment, the stockholders of record holding a majority of the outstanding
shares of stock of the corporation entitled to vote in elections of directors
may amend, modify or repeal any or all of such provisions.
FOURTEENTH: (A) Except as set forth in paragraph (3) of this Article,
notwithstanding any other provision of law or requirement of these Articles,
the affirmative vote of the holders of a majority of all of the outstanding
shares of the capital stock of this Corporation (the "Corporation") entitled to
vote generally in the election of directors ("Voting Stock"), voting for the
purposes of this Article as one class, other than holders who are Related
Holders (as hereinafter defined), or Affiliates (as
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hereinafter defined) or Associates (as hereinafter defined) of the Related
Holder, shall be required
(1) to adopt any agreement for, or to approve,
the merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with or into any
Related Holder or any Affiliate of a Related Holder; or
(2) to authorize or approve any sale, lease,
transfer, exchange, mortgage, pledge or other disposition
(in one transaction or a series of transactions) to any
Related Holder or any Affiliate of a Related Holder of
any assets of the Corporation or any Subsidiary, having
an aggregate Fair Market Value (as hereinafter defined)
of $5,000,000 or more; or
(3) to authorize or approve the issuance or
transfer by the Corporation or any Subsidiary of any
Voting Stock of the Corporation or any Subsidiary in
exchange or payment for securities or other assets of any
Related Holder or any Affiliate of a Related Holder,
which securities or assets have an aggregate Fair Market
Value of $5,000,000 or more; or
(4) to adopt any plan or proposal for the
liquidation or dissolution of the Corporation proposed by
or on behalf of any Related Holder or any Affiliate of a
Related Holder; or
(5) to authorize or approve the reclassification
of securities (including any reverse stock split), or
recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its
Subsidiaries or any other transaction (whether or not
with or into or otherwise involving any Related Holder)
which has the effect, directly or indirectly, of
increasing the proportionate share of the outstanding
shares of any class of equity securities or securities
convertible into equity securities of the Corporation or
any Subsidiary which is directly or indirectly owned by
any Related Holder or any Affiliate of a Related Holder;
if there is a Related Holder as of the date in question
regarding any transaction described in this paragraph (A)
or immediately prior to the consummation of any
transaction described in this paragraph (A).
(B) The provisions of paragraph (A) of this Article shall not
apply to transactions set forth below in Sections (1), (2) and (3) of this
paragraph (B) and such transactions shall require only such affirmative vote as
is otherwise required by law or any other provision of this Certificate of
Incorporation:
(1) any transaction described in paragraph (A) of this
Article, if the Board of Directors by resolution shall have approved a
memorandum of understanding with such Related Holder, or such
Affiliate of such Related Holder, setting forth
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the principal terms of such transaction and such transaction is
effected on terms substantially consistent with such memorandum of
understanding, provided that a majority of the Continuing Directors
(as hereinafter defined) vote in favor of such resolution; or
(2) any transaction described in subparagraphs (A)(1),
(A)(2), (A)(3) and (A)(4) of this Article, if such Related Holder, or
such Affiliate of such Related Holder, is a corporation of which a
majority of the outstanding shares of each class of Voting Stock is
owned of record or beneficially by the Corporation or its
Subsidiaries; or
(3) any transaction described in paragraph (a) of this
Article, if the aggregate amount of the cash and the Fair Market Value
of consideration other than cash to be received per share by holders
of common, preferred or preference stock in such transactions shall be
at least equal to the higher of the following:
(a) with respect to common, preferred or
preference stock, the highest per share price (including
any brokerage commissions, transfer taxes and soliciting
dealers fees) paid or agreed to be paid by such Related
Holder to acquire beneficial ownership of any shares of
such series or class of stock, within the three-year
period immediately prior to the date of the first public
announcement of the proposed transaction described in
paragraph (A);
(b) the highest closing per share price of
common, preferred or preference stock, during the
three-month period immediately preceding the date of the
first public announcement off the proposed transaction
described in paragraph (A);
(c) with respect to preferred or preference
stock, if the highest preferential amount per share of a
series of preferred or preference stock to which the
holders thereof would be entitled in the event of any
voluntary or involuntary liquidation, dissolution or
winding-up of the affairs of the Corporation (regardless
of whether the transaction, as described in paragraph
(A), to be consummated constitutes such an event) is
greater than the aggregate amount to which the holders
thereof would be entitled pursuant to subparagraphs
(B)(3)(a) or (b), holders of such series of preferred or
preference stock shall receive an amount for each such
share at least equal to the highest preferential amount
applicable to such series of preferred or preference
stock;
except that if at any time after a Related Holder becomes such, if any
of the following events shall occur which are not approved by a
majority of the Continuing Directors, the provisions of this paragraph
(B)(3) shall not apply and the provisions of paragraph (A) shall
apply:
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(1) any failure to declare and pay at the regular
date therefor any full quarterly dividend (whether or not
cumulative) on outstanding preferred or preference stock;
or
(2) any reduction on the annual rate of dividends
paid on the common stock (except as necessary to reflect
any subdivision of the common stock); or
(3) any failure to increase the annual rate of
dividends paid on the common stock as necessary to
reflect any reclassification (including any reverse stock
split), recapitalization, reorganization or any similar
transaction that has the effect of reducing the number of
outstanding shares of the common stock; or
(4) the receipt by the Related Holder, after such
Related Holder has become a Related Holder, of a direct
or indirect benefit (except proportionately as a
shareholder) from any loans, advances, guarantees,
pledges or other financial assistance or any tax credits
or other tax advantages provided by the Corporation or
any Subsidiary of the Corporation, whether in
anticipation of or in connection with a transaction
described in paragraph (A) or otherwise.
(C) For purposes of this Article,
(1) a "Person" means any individual, corporation
or other entity;
(2) a "Related Holder" means any Person (other
than the Corporation, a Subsidiary of the Corporation, or
a profit-sharing, employee stock ownership or other
employee benefit plan of the Corporation, or a Subsidiary
of the Corporation, or any trustee of, or fiduciary with
respect to, any such plan acting in such capacity) which
is, or within the preceding twelve-month period was, the
Beneficial Owner of shares of Voting Stock of the
Corporation having 5 percent or more of the voting power
of the outstanding capital stock of the Corporation;
(3) a Person shall be deemed to be a "Beneficial
Owner" of shares of stock of the Corporation (a) which
such Person and its Affiliates and Associates
beneficially own, directly or indirectly, whether of
record or not, or (b) which such Person or any of its
Affiliates or Associates has the right to acquire
pursuant to any agreement, upon the exercise of
conversion rights, warrants, options, or otherwise, or
(c) which such Person or any of its Affiliates or
Associates has the right to sell or vote pursuant to any
agreement, or (d) which are beneficially owned, directly
or indirectly, by any other Person with which such first
mentioned Person or any of its Affiliates or Associates
has any agreement, arrangement or understanding for
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the purposes of acquiring, holding, voting or disposing
of securities of the Corporation;
(4) a "Subsidiary" means any corporation more
than forty-nine percent (49%) of the voting securities of
which are beneficially owned, directly or indirectly, by
the Corporation;
(5) an "Affiliate" of a Related Holder means any
person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is
under common control with, the Related Holder;
(6) an "Associate" of a Related Holder means (a)
any person of which such Related Holder is an officer,
director, or partner or is, directly or indirectly, the
Beneficial Owner of ten percent (10%) or more of any
class of equity securities of such person, or (b) any
trust or other estate in which such Related Holder has a
substantial beneficial interest or as to which such
Related Holder serves as trustee or in a similar
fiduciary capacity, or (c) any relative or spouse of such
Related Holder, or any relative of such spouse, who has
the same home as such Related Holder, or (d) any person
who is a director or officer of such Related Holder or
any corporation which controls or is controlled by such
Related Holder, or (e) any other member or partner in a
partnership, limited partnership, syndicate or other
group, formal or informal, of which such Related Holder
is a member or partner and which is acting together for
the purpose of acquiring, holding or disposing of
securities of the Corporation;
(7) "Voting Stock" shall be the outstanding
shares of the capital stock of the Corporation entitled
to vote generally in the election of directors;
(8) "Fair Market Value" means: (i) in the case
of stock, the highest closing price during the 90-day
period immediately preceding the date in question of a
share of such stock on the Composite Tape for New York
Stock Exchange-Listed Stocks, or, if such stock is not
quoted on the Composite Tape, on the New York Stock
Exchange, or, if such stock is not listed on such
Exchange, the fair market value on the date in question
of a share of such stock as determined by the Board in
good faith, which determination shall include
consideration of the highest closing price, or, in the
event there is no closing price, the highest closing bid
in the primary market in which such stock is traded
during the 90-day period preceding the date in question;
and (ii) in the case of property other than cash or
stock, the fair market value of such property on the date
in question as determined by the Board in good faith;
(9) a "Continuing Director" means a member of the
Board of Directors of the Corporation who is unaffiliated
with the Related
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Holder or any Affiliate or Associate of the Related
Holder and was a duly elected and acting member of the
Board prior to the time such Related Holder became the
Beneficial Owner of 5 percent or more of the Voting Stock
of the Corporation, and any successor to a Continuing
Director who is unaffiliated with the Related Holder and
who is recommended to succeed a Continuing Director by a
majority of the then Continuing Directors.
(D) A majority of the total number of Continuing Directors
(whether or not there exist any vacancies in previously authorized
directorships at the time any such determination as is hereinafter in this
paragraph (D) specified is to be made by the Board) shall have the power to
determine, on the basis of information known to them after reasonable inquiry,
all facts necessary to determine compliance with this Article, including,
without limitation, (1) whether a person is a Related Holder, (2) the number of
shares of Voting Stock beneficially owned by any person, (3) whether a person
is an Affiliate or Associate of another, (4) whether the applicable conditions
set forth in paragraph (B) have been met with respect to any transaction
described therein, and (5) whether the assets which are the subject of any
transaction referred to in section (2) of paragraph (A) have, or the
consideration to be received for the issuance or transfer of securities by the
Corporation or any Subsidiary in any transaction referred to in section (3) of
paragraph (A) has, an aggregate Fair Market Value of $5,000,000 or more.
(E) Notwithstanding any other provision of this Certificate
of Incorporation or any provision of the Bylaws of the Corporation, no
amendment to this Certificate of Incorporation shall amend, modify or repeal
any or all of the provisions of this Article, unless adopted by the affirmative
vote of the holders of a majority of all of the outstanding shares of the
Voting Stock of the Corporation, voting for the purposes of this Article as a
class, other than holders who are the Related Holder or Affiliates or
Associates of the Related Holder.
FIFTEENTH: (A) Except for (1) any action which may be taken
solely upon the vote or consent of holders of Preferred Stock or any series
thereof, or, (2) except for any action with respect to which other Articles
expressly provide stockholder consent requirements, no action required to be
taken or which may be taken at any annual or special meeting of stockholders of
the Corporation may be taken by written consent without a meeting, except that
any such action may be taken without prior notice and without a vote, if a
consent in writing, setting forth the action so taken, shall be signed by all
the stockholders of the Corporation entitled to vote thereon.
(B) This Article shall not be amended, modified or repealed
except by the affirmative vote of the holders of not less than four-fifths
(80%) of the voting power of all of the then outstanding shares of capital
stock of the Corporation then entitled to vote generally in the election of
directors.
SIXTEENTH: (A) The power to adopt, alter, amend or repeal
bylaws shall be vested in the Board of Directors, which may take such action by
the vote of a majority of the directors present and voting at a meeting where a
quorum is present,
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provided that if, as of the date such action shall occur, there is a Related
Holder as defined in Article FOURTEENTH of the Certificate of Incorporation,
such majority shall include a majority of the Continuing Directors as defined
in Article FOURTEENTH of the Certificate of Incorporation. In addition, the
stockholders, by the affirmative votes of the holders of not less than
four-fifths (80%) of the voting power of all of the then outstanding shares of
capital stock of the Corporation then entitled to vote generally in the
election of directors, may adopt new bylaws, or alter, amend or repeal bylaws
adopted by either the stockholders or the Board of Directors.
(B) This Article shall not be amended, modified or repealed
except by the affirmative vote of the holders of not less than four-fifths
(80%) of the voting power of all of the then outstanding shares of capital
stock of the Corporation then entitled to vote generally in the election of
directors.
SEVENTEENTH: A director of the Corporation shall not personally
liable to the Corporation or its stockholders for monetary damages for breach
of fiduciary duty of the director, except for liability (i) or any breach of
the director's duty of loyalty to the Corporation or its shareholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or
knowing violation of law, (iii) under Section 174 of the General Corporation
Law of the State of Delaware, or (iv) or any transaction from which the
director derived an improper personal benefit.
IN WITNESS WHEREOF, Quanex Corporation has caused this Restated
Certificate of Incorporation to be signed this 10th day of November, 1995.
QUANEX CORPORATION
By: /s/ WAYNE M. ROSE
---------------------------------
Wayne M. Rose
Vice President and
Chief Financial Officer
Filed: November 17, 1995.
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EXHIBIT A
RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of its
Certificate of Incorporation, a series of Preferred Stock, no par value, of the
Corporation be and it hereby is created, and that the designation and amount
thereof and the powers, preferences and relative, participating, optional and
other special rights of the shares of such series, and the qualifications,
limitations or restrictions thereof are as follows:
Section 1. Designation and Amount. The shares of such series
shall be designated as "Series A Junior Participating Preferred Stock", which
shall have no par value, and the number of shares constituting such series
shall be 150,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, that no decrease shall reduce
the number of shares of Series A Junior Participating Preferred Stock to a
number less than that of the shares then outstanding plus the number of shares
issuable upon exercise of outstanding rights, options or warrants or upon
conversion of outstanding securities issued by the Corporation.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock ranking prior and superior to the
shares of Series A Junior Participating Preferred Stock with respect to
dividends, the holders of shares of Series A Junior Participating Preferred
Stock, in preference to the holders of shares of Common Stock, par value $0.50
per share (the "Common Stock"), of the Corporation and any other junior stock,
shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, quarterly dividends
payable in cash on the first day of March, June, September and December in each
year (each such date being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Series A Junior Participating
Preferred Stock in an amount per share (rounded to the nearest cent) equal to
the greater of (a) $1.00, or (b) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share amount of all cash
dividends, and 100 times the aggregate per share amount (payable in kind) of
all non-cash dividends or other distributions other than a dividend payable in
shares of Common Stock or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock, since
the immediately preceding Quarterly Dividend Payment Date, or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Junior Participating Preferred Stock.
In the event the Corporation shall at any time after August 28, 1986 (the
"Rights Declaration Date") (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the amount to which holders of shares of Series A Junior
Participating Preferred Stock were entitled immediately prior to such event
under clause (b) of the preceding sentence shall be adjusted by multiplying
such amount by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.
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(B) The Corporation shall declare a dividend or distribution on
the Series A Junior Participating Preferred Stock as provided in paragraph (A)
above immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided that,
in the event no dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and the
next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share
on the Series A Junior Participating Preferred Stock shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Junior Participating Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue of such shares
of Series A Junior Participating Preferred Stock unless the date of issue of
such shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue from
the date of issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the determination
of holders of shares of Series A Junior Participating Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment Date
in either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series A
Junior Participating Preferred Stock in an amount less than the total amount of
such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by- share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series A Junior Participating Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 30 days prior to the date
fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A
Junior Participating Preferred Stock shall have the following voting rights:
(A) Each share of Series A Junior Participating Preferred Stock
shall entitle the holder thereof to one vote on all matters submitted to a vote
of the stockholders of the Corporation.
(B) Except as otherwise provided herein or by law, the holders of
shares of Series A Junior Participating Preferred Stock and the holders of
shares of Common Stock shall vote together as one class on all matters
submitted to a vote of shareholders of the Corporation.
(C) (i) If at any time dividends on any Series A Junior
Participating Preferred Stock shall be in arrears in an amount equal to six (6)
quarterly dividends thereon, the occurrence of such contingency shall mark the
beginning of a period (herein called a "default period") which shall extend
until such time when all accrued and unpaid dividends for all previous
quarterly dividend periods and for the current quarterly dividend period on all
shares of Series A Junior Participating Preferred Stock then outstanding shall
have been declared and paid or set apart for payment. During each default
period, the holders of the Series A Junior Participating Preferred Stock,
voting as a class together with the holders, if any, of other series of
Preferred Stock having the right to vote upon a default in the payment of
dividends, irrespective of series, shall have the right to elect two (2)
Directors.
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(ii) During any default period, such voting right of the
holders of Series A Junior Participating Preferred Stock may be exercised
initially at a special meeting called pursuant to subparagraph (iii) of this
Section 3(C) or at any annual meeting of stockholders, and thereafter at annual
meetings of stockholders, provided that neither such voting right nor the right
of the holders of any other series of Preferred Stock, if any, to increase, in
certain cases, the authorized number of Directors shall be exercised unless the
holders of ten percent (10%) in number of shares of Preferred Stock outstanding
shall be present in person or by proxy. The absence of a quorum of the holders
of Common Stock shall not affect the exercise by the holders of Preferred Stock
of such voting right. At any meeting at which the holders of Preferred Stock
shall exercise such voting right initially during an existing default period,
they shall have the right, voting as a class, to elect Directors to fill such
vacancies, if any, in the Board of Directors as may then exist up to two (2)
Directors or, if such right is exercised at an annual meeting, to elect two (2)
Directors. If the number which may be so elected at any special meeting does
not amount to the required number, the holders of the Preferred Stock shall
have the right to make such increase in the number of Directors as shall be
necessary to permit the election by them of the required number. After the
holders of the Preferred Stock shall have exercised their right to elect
Directors in any default period and during the continuance of such period, the
number of Directors shall not be increased or decreased except by vote of the
holders of Preferred Stock as herein provided or pursuant to the rights of any
equity securities ranking senior to or pari passu with the Series A Junior
Participating Preferred Stock.
(iii) Unless the holders of Preferred Stock shall, during
an existing default period, have previously exercised their right to elect
Directors, the Board of Directors may order, or any stockholder or stockholders
owning in the aggregate not less than ten percent (10%) of the total number of
shares of Preferred Stock outstanding, irrespective of series, may request, the
calling of a special meeting of the holders of Preferred Stock, which meeting
shall thereupon be called by the President, a Vice-President or the Corporate
Secretary of the Corporation. Notice of such meeting and of any annual meeting
at which holders of Preferred Stock are entitled to vote pursuant to this
paragraph (C)(iii) shall be given to each holder of record of Preferred Stock
by mailing a copy of such notice to him at his last address as the same appears
on the books of the Corporation. Such meeting shall be called for a time not
earlier than 20 days and not later than 60 days after such order or request or
in default of the calling of such meeting within 60 days after such order or
request, such meeting may be called on similar notice by any stockholder or
stockholders owning in the aggregate not less than ten percent (10%) of the
total number of shares of Preferred Stock outstanding. Notwithstanding the
provisions of this paragraph (C)(iii), no such special meeting shall be called
during the period within 60 days immediately preceding the date fixed for the
next annual meeting of the stockholders.
(iv) In any default period, the holders of Common Stock,
and other classes of stock of the Corporation if applicable, shall continue to
be entitled to elect the whole number of Directors until the holders of
Preferred Stock shall have exercised their right to elect two (2) Directors
voting as a class, after the exercise of which right (x) the Directors so
elected by the holders of Preferred Stock shall continue in office until their
successors shall have been elected by such holders or until the expiration of
the default period, and (y) any vacancy in the Board of Directors may (except
as provided in paragraph (C)(ii) of this Section 3) be filled by vote of a
majority of the remaining Directors theretofore elected by the holders of the
class of stock which elected the Director whose office shall have become
vacant. References in this paragraph (C) to Directors elected by the holders
of a particular class of stock shall
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include Directors elected by such Directors to fill vacancies as provided in
clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x) the
right of the holders of Series A Junior Participating Preferred Stock as a
class to elect Directors shall cease, (y) the term of any Directors elected by
the holders of Series A Junior Participating Preferred Stock as a class shall
terminate, and (z) the number of Directors shall be such number as may be
provided for in the Certificate of Incorporation or By-laws irrespective of any
increase made pursuant to the provisions of paragraph (C)(ii) of this Section 3
(such number being subject, however to change thereafter in any manner provided
by law or in the Certificate of Incorporation or By-laws). Any vacancies in
the Board of Directors effected by the provisions of clauses (y) and (z) in the
preceding sentence may be filled by a majority of the remaining Directors.
(D) Except as set forth herein, holders of Series A Junior
Participating Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate
action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Junior Participating Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares of
Series A Junior Participating Preferred Stock outstanding shall have been paid
in full, the Corporation shall not
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Junior Participating Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Junior Participating Preferred Stock except dividends paid
ratably on the Series A Junior Participating Preferred Stock and all
such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such
shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Junior Participating Preferred Stock provided that the
Corporation may at any time redeem, purchase or otherwise acquire
shares of any such parity stock in exchange for shares of any stock of
the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Junior
Participating Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series A Junior Participating Preferred Stock or any shares
of stock ranking on a parity with the Series A Junior Participating
Preferred Stock except in
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accordance with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such shares
upon such terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine in
good faith will result in fair and equitable treatment among the
respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Series A
Junior Participating Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and cancelled promptly
after the acquisition thereof. All such shares shall upon their cancellation
become authorized but unissued shares of Preferred Stock and may be reissued as
part of a new series of Preferred Stock to be created by resolution or
resolutions of the Board of Directors, subject to the conditions and
restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up. (A)
Upon any liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Junior Participating Preferred Stock unless, prior
thereto, the holders of shares of Series A Junior Participating Preferred Stock
shall have received per share, the greater of 100 times the exercise price per
Right or 100 times the payment made per share of Common Stock, plus an amount
equal to accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment (the "Series A Liquidation Preference").
Following the payment of the full amount of the Series A Liquidation
Preference, no additional distributions shall be made to the holders of shares
of Series A Junior Participating Preferred Stock unless, prior thereto, the
holders of shares of Common Stock shall have received an amount per share (the
"Common Adjustment") equal to the quotient obtained by dividing (i) the Series
A Liquidation Preference by (ii) 100 (as appropriately adjusted as set forth in
subparagraph C below to reflect such events as stock splits, stock dividends
and recapitalizations with respect to the Common Stock) (such number in clause
(ii), the "Adjustment Number"). Following the payment of the full amount of
the Series A Liquidation Preference and the Common Adjustment in respect of all
outstanding shares of Series A Junior Participating Preferred Stock and Common
Stock, respectively, holders of Series A Junior Participating Preferred Stock
and holders of shares of Common Stock shall receive their ratable and
proportionate share of the remaining assets to be distributed in the ratio of
the Adjustment Number to 1 with respect to such Preferred Stock and Common
Stock, on a par share basis, respectively.
(B) In the event there are not sufficient assets available to
permit payment in full of the Series A Liquidation Preference and the
liquidation preferences of all other series of Preferred Stock, if any, which
rank on a parity with the Series A Junior Participating Preferred Stock then
such remaining assets shall be distributed ratably to the holders of such
parity shares in proportion to their respective liquidation preferences. In
the event there are not sufficient assets available to permit payment in full
of the Common Adjustment, then such remaining assets shall be distributed
ratably to the holders of Common Stock.
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(C) In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the Adjustment Number in effect immediately prior to such event
shall be adjusted by multiplying such Adjustment Number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or changed
into other stock or securities, cash and/or any other property, then in any
such case the shares of Series A Junior Participating Preferred Stock shall at
the same time be similarly exchanged or changed in an amount per share (subject
to the provision for adjustment hereinafter set forth) equal to 100 times the
aggregate amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, into which or for which each share of Common
Stock is changed or exchanged. In the event the Corporation shall at any time
after the Rights Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the amount set forth in the preceding sentence with
respect to the exchange or change of shares of Series A Junior Participating
Preferred Stock shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that are outstanding immediately prior to such event.
Section 8. Redemption. The shares of Series A Junior
Participating Preferred Stock shall not be redeemable.
Section 9. Ranking. The Series A Junior Participating
Preferred Stock shall rank junior to all other series of the Corporation's
Preferred Stock as to the payment of dividends and the distribution of assets,
unless the terms of any such series shall provide otherwise.
Section 10. Amendment. The Restated Certificate of
Incorporation of the Corporation shall not be further amended in any manner
which would materially alter or change the powers, preferences or special
rights of the Series A Junior Participating Preferred Stock so as to affect
them adversely without the affirmative vote of the holders of a majority or
more of the outstanding shares of Series A Junior Participating Preferred Stock
voting separately as a class.
Section 11. Fractional Shares. Series A Junior
Participating Preferred Stock may be issued in fractions of a share which shall
entitle the holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in distributions and to
have the benefit of all other rights of holders of Series A Junior
Participating Preferred Stock.
A-6
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EXHIBIT 4.8
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PIPER IMPACT
401(k) PLAN
2
TABLE OF CONTENTS
Section
ARTICLE I - DEFINITIONS
Account .......................................................... 1.1
Active Service.................................................... 1.2
Actual Contribution Ratio......................................... 1.3
Actual Deferral Percentage........................................ 1.4
Actual Deferral Ratio............................................. 1.5
Affiliated Employer............................................... 1.6
Aggregate Accounts................................................ 1.7
Aggregation Group................................................. 1.8
Annual Additions.................................................. 1.9
Annual Compensation............................................... 1.10
Beneficiary....................................................... 1.11
Board of Directors................................................ 1.12
Code.............................................................. 1.13
Committee......................................................... 1.14
Considered Compensation........................................... 1.15
Contribution...................................................... 1.16
Contribution Percentage........................................... 1.17
Determination Date................................................ 1.18
Direct Rollover................................................... 1.19
Disability........................................................ 1.20
Distributee....................................................... 1.21
Eligible Retirement Plan.......................................... 1.22
Eligible Rollover Distribution.................................... 1.23
Employee.......................................................... 1.24
Employer.......................................................... 1.25
ERISA............................................................. 1.26
Excess Aggregate 401(m) Contributions............................. 1.27
Excess 401(k) Contributions....................................... 1.28
Family Member..................................................... 1.29
Highly Compensated Employee....................................... 1.30
Hour of Service................................................... 1.31
Key Employee...................................................... 1.32
Leased Employee................................................... 1.33
Limitation Year................................................... 1.34
Matched Salary Deferral Contribution.............................. 1.35
Member............................................................ 1.36
Non-Highly Compensated Employee................................... 1.37
Non-Key Employee.................................................. 1.38
Period of Service................................................. 1.39
Period of Severance............................................... 1.40
Plan.............................................................. 1.41
Plan Year......................................................... 1.42
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Regulation........................................................ 1.43
Required Beginning Date........................................... 1.44
Retirement Age.................................................... 1.45
Rollover Contribution............................................. 1.46
Section 401(m) Contributions...................................... 1.47
Section 401(k) Contributions...................................... 1.48
Service........................................................... 1.49
Severs Service.................................................... 1.50
Sponsor Stock..................................................... 1.51
Sponsor........................................................... 1.52
Top-Heavy Plan.................................................... 1.53
Transferred....................................................... 1.54
Trust............................................................. 1.55
Trustee........................................................... 1.56
Trust Fund........................................................ 1.57
Valuation Date.................................................... 1.58
ARTICLE II - ACTIVE SERVICE
When Active Service Begins........................................ 2.1
Aggregation of Service............................................ 2.2
Periods of Service of Less Than One Year.......................... 2.3
Service Prior to Severance........................................ 2.4
Periods of Severance Due to Child Birth or Adoption............... 2.5
Transfers......................................................... 2.6
Employment Records Conclusive..................................... 2.7
Coverage of Certain Previously Excluded Employees................. 2.8
Service Credit Required under Federal Law......................... 2.9
Special Transitional Rule......................................... 2.10
Credit for Service with Piper Impact, Inc. a
Tennessee Corporation.......................................... 2.11
ARTICLE III - ELIGIBILITY RULES
Eligibility Requirements.......................................... 3.1
Eligibility Upon Reemployment..................................... 3.2
Frozen Participation.............................................. 3.3
ARTICLE IV - CONTRIBUTIONS
Salary Deferral Contributions..................................... 4.1
Employer Matching Contributions................................... 4.2
Rollover Contributions and Plan-to-Plan Transfers................. 4.3
Qualified Nonelective Employer Contributions...................... 4.4
Restoration Contributions......................................... 4.5
$7,000 Limit on Salary Deferral
Contributions.................................................. 4.6
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4
Actual Deferral Percentage for Highly
Compensated Employees.......................................... 4.7
Contribution Percentage Test...................................... 4.8
Contribution Percentage Fail Safe Provision....................... 4.9
Income Allocable to Excess 401(k) Contributions
and Excess Aggregate 401(m) Contributions...................... 4.10
Additional Required Test if Alternative
Compliance is Used............................................. 4.11
Nondeductible Contributions Prohibited............................ 4.12
Form of Payment of Contributions.................................. 4.13
Deadline for Payment of Employee Contributions.................... 4.14
Return of Contributions for Mistake, Disqualification
or Disallowance of Deduction................................... 4.15
ARTICLE V - ALLOCATION AND VALUATION OF ACCOUNTS
Information Statements from Employer.............................. 5.1
Allocation of Salary Deferral Contribution........................ 5.2
Allocation of Matching Employer Contribution...................... 5.3
Allocation of Qualified Nonelective Employer
Contributions.................................................. 5.4
Allocation of Dividends on Sponsor Stock.......................... 5.5
Sponsor Stock Splits.............................................. 5.6
Valuation of Accounts............................................. 5.7
Allocation of Forfeitures......................................... 5.8
Restoration of Forfeited Amounts.................................. 5.9
No Vesting Unless Otherwise Prescribed............................ 5.10
ARTICLE VI - LIMITATIONS ON ALLOCATIONS
ARTICLE VII - BENEFITS
Valuation of Accounts for Withdrawals and
Distributions.................................................. 7.1
Death Benefit..................................................... 7.2
Retirement Benefit................................................ 7.3
Disability Benefit................................................ 7.4
Severance Benefit................................................. 7.5
Distributions to Divorced Spouse.................................. 7.6
Withdrawals....................................................... 7.7
Loans............................................................. 7.8
Forfeiture by Lost Members or Beneficiaries....................... 7.9
Forfeiture on Termination of Participation........................ 7.10
Claims Procedure.................................................. 7.11
Form of Distributions............................................. 7.12
Time of Distributions............................................. 7.13
Designation of Beneficiary........................................ 7.14
Distributions to Disabled......................................... 7.15
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ARTICLE VIII - TOP-HEAVY REQUIREMENTS
Application....................................................... 8.1
Top-Heavy Test.................................................... 8.2
Vesting Restrictions if Plan Becomes Top-Heavy.................... 8.3
Minimum Contributions if Plan Becomes Top-Heavy................... 8.4
Coverage Under Multiple Top-Heavy Plans........................... 8.5
Restrictions if Plan Becomes Super Top-Heavy...................... 8.6
ARTICLE IX - ADMINISTRATION OF THE PLAN
Appointment, Term of Service & Removal............................ 9.1
Powers............................................................ 9.2
Organization...................................................... 9.3
Quorum and Majority Action........................................ 9.4
Signatures........................................................ 9.5
Disqualification of Committee Member.............................. 9.6
Disclosure to Members............................................. 9.7
Standard of Performance........................................... 9.8
Liability of Committee and Liability Insurance.................... 9.9
Exemption from Bond............................................... 9.10
Compensation...................................................... 9.11
Persons Serving in Dual Fiduciary Roles........................... 9.12
Administrator..................................................... 9.13
ARTICLE X - TRUST FUND AND CONTRIBUTIONS
Funding of Plan................................................... 10.1
Incorporation of Trust............................................ 10.2
Authority of Trustee.............................................. 10.3
Allocation of Responsibility...................................... 10.4
ARTICLE XI - ADOPTION OF PLAN BY OTHER EMPLOYERS
Adoption Procedure................................................ 11.1
No Joint Venture Implied.......................................... 11.2
All Trust Assets Available to Pay All Benefits.................... 11.3
Qualification a Condition Precedent to Adoption and
Continued Participation....................................... 11.4
ARTICLE XII - AMENDMENT AND TERMINATION
Right to Amend and Limitations Thereon............................ 12.1
Mandatory Amendments.............................................. 12.2
Withdrawal of Employer............................................ 12.3
Termination of Plan............................................... 12.4
Partial or Complete Termination or Complete
Discontinuance of Contributions............................... 12.5
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Continuance Permitted Upon Sale or Transfer of Assets............. 12.6
Distributions Upon Termination of the Plan........................ 12.7
ARTICLE XIII - MISCELLANEOUS
Plan Not An Employment Contract................................... 13.1
Benefits Provided Solely From Trust............................... 13.2
Anti-Alienation Provisions........................................ 13.3
Requirements Upon Merger or Consolidation of Plans................ 13.4
Gender of Words Used.............................................. 13.5
Severability...................................................... 13.6
Reemployed Veterans............................................... 13.7
Governing Law; Parties to Legal Actions........................... 13.8
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7
PIPER IMPACT
401(k) PLAN
THIS AGREEMENT adopted by Piper Impact, Inc., a Delaware corporation (the
"Sponsor"),
W I T N E S S E T H:
WHEREAS, effective January 1, 1995, Piper Impact, Inc., a Tennessee
corporation (the "Prior Employer") established the Piper Impact 401(k) Plan (the
"Plan") which is intended to be a profit sharing plan that satisfies the
requirements of sections 401(a) and 401(k) of the Internal Revenue Code of 1986,
as amended; and
WHEREAS, effective as of March 29, 1996, the Sponsor purchased
substantially all of the assets of the Prior Employer;
WHEREAS, on August 9, 1996, the Sponsor assumed sponsorship of the Plan
and the Prior Employer terminated its participation in the Plan;
WHEREAS, the Sponsor desires to amend and restate the Plan;
NOW, THEREFORE, the Plan is hereby amended and restated in its entirety as
set forth below.
8
ARTICLE I
DEFINITIONS
The words and phrases defined in this Article shall have the meaning
set out in the definition unless the context in which the word or phrase appears
reasonably requires a broader, narrower or different meaning.
1.1 "ACCOUNT" means all ledger accounts pertaining to a Member which
are maintained by the Committee to reflect the Member's interest in the Trust
Fund. The Committee shall establish the following Accounts and any additional
Accounts that the Committee considers necessary to reflect the entire interest
of the Member in the Trust Fund. Each of the Accounts listed below and any
additional Accounts established by the Committee shall reflect the Contributions
or amounts transferred to the Trust Fund, if any, and the appreciation or
depreciation of the assets in the Trust Fund and the income earned or loss
incurred on the assets in the Trust Fund attributable to the Contributions
and/or other amounts transferred to the Account.
(a) Salary Deferral Contribution Account -- Member's before-tax
contributions.
(b) Matching Employer Contribution Account -- The Employer's
matching contributions.
(c) Qualified Nonelective Employer Contribution Account -- The
Employer's contributions made as a means of passing the Actual Deferral
Percentage test.
(d) Rollover Account -- Funds transferred from another qualified
plan or individual retirement account for the benefit of a Member.
1.2 "ACTIVE SERVICE" means the Periods of Service which are counted
for either eligibility or vesting purposes as calculated under Article II.
1.3 "ACTUAL CONTRIBUTION RATIO" means the ratio of Section 401(m)
Contributions actually paid into the Trust on behalf of an Employee for a Plan
Year to the Employee's Annual Compensation for the same Plan Year earned while
the Employee was a Member.
1.4 "ACTUAL DEFERRAL PERCENTAGE" means for a specified group of
Employees for a Plan Year the average of the ratios (calculated separately for
each Employee in the group) of the amount of Section 401(k) Contributions
actually paid into the Trust on behalf of the Employee for that Plan Year to the
Employee's Annual Compensation for the same Plan Year earned while the Employee
was a Member.
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1.5 "ACTUAL DEFERRAL RATIO" means for an Employee the ratio of
Section 401(k) Contributions actually paid into the Trust on behalf of the
Employee for a Plan Year to the Employee's Annual Compensation for the same Plan
Year.
1.6 "AFFILIATED EMPLOYER" means the Employer and any employer which
is a member of the same controlled group of corporations within the meaning of
Section 414(b) of the Code or which is a trade or business (whether or not
incorporated) which is under common control (within the meaning of Section
414(c) of the Code), which is a member of an affiliated service group (within
the meaning of Section 414(m) of the Code) with the Employer, or which is
required to be aggregated with the Employer under Section 414(o) of the Code.
For purposes of the limitation on allocations contained in Article VI, the
definition of Affiliated Employer is modified by substituting the phrase "more
than 50 percent" in place of the phrase "at least 80 percent" each place the
latter phrase appears in Section 1563(a)(1) of the Code.
1.7 "AGGREGATE ACCOUNTS" means the total of all Account balances
derived from Employer Contributions and Rollover Contributions.
1.8 "AGGREGATION GROUP" means (a) each plan of the Employer or any
Affiliated Employer in which a Key Employee is a Member and (b) each other plan
of the Employer or any Affiliated Employer which enables any plan in (a) to meet
the requirements of either Section 401(a)(4) or 410 of the Code. Any Employer
may treat a plan not required to be included in the Aggregation Group as being a
part of the group if the group would continue to meet the requirements of
Section 401(a)(4) and 410 of the Code with that plan being taken into account.
1.9 "ANNUAL ADDITIONS" means the sum of the following amounts
credited on behalf of a Member for the Limitation Year: (a) Employer
contributions, (b) Employee contributions and (c) forfeitures. Excess 401(k)
Contributions for a Plan Year are treated as Annual Additions for that Plan Year
even if they are corrected through distribution. Excess Deferrals that are
timely distributed as set forth in Section 4.6 will not be treated as Annual
Additions.
1.10 "ANNUAL COMPENSATION" means the Employee's wages from the
Affiliated Employers as defined in section 3401(a) of the Code for purposes of
federal income tax withholding at the source (but determined without regard to
any rules that limit the remuneration included in wages based on the nature or
location of the employment or the services performed) modified by including
elective contributions under a cafeteria plan described in section 125 of the
Code and elective contributions to any plan qualified under section 401(k),
408(k), or 403(b) of the Code. However, for purposes of Article VI of the Plan,
effective for Limitation Years beginning before January 1, 1998, "Annual
Compensation" does not include any salary deferral contributions to plan
qualified under section 401(k) of the Code or any amount that is deferred at the
election of the Employee and is not includible in the gross income of the
Employee by reason of section 125 of the Code. Except for purposes of Article VI
of the Plan, Annual Compensation in excess of $150,000.00 (as adjusted by the
Secretary of Treasury) shall be disregarded. If the Plan Year is ever less than
twelve months the $150,000.00 limitation (as adjusted by the Secretary of
Treasury) will be prorated by
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multiplying the limitation by a fraction, the numerator of which is the number
of months in the Plan Year, and the denominator of which is 12.
1.11 "BENEFICIARY" or "BENEFICIARIES" means the person or persons,
or the trust or trusts created for the benefit of a natural person or persons or
the Member's or retired Member's estate, designated by the Member or retired
Member to receive the benefits payable under this Plan upon his death.
1.12 "BOARD OF DIRECTORS" means the board of directors, the
executive committee or other body given management responsibility for the
Sponsor.
1.13 "CODE" means the Internal Revenue Code of 1986, as amended from
time to time.
1.14 "COMMITTEE" means the committee appointed by the Sponsor to
administer the Plan.
1.15 "CONSIDERED COMPENSATION" means as to each Employee, that
Employee's Annual Compensation modified by including elective contributions
under a cafeteria plan described in section 125 of the Code and elective
contributions to any plan qualified under section 401(k), 408(k) or 403(b) of
the Code, and modified further by excluding the following items (even if
includable in gross income), reimbursements or other expense allowances, fringe
benefits (cash and noncash), moving expenses, deferred compensation, overtime
wages, and welfare benefits. Considered Compensation in excess of $150,000.00
(as adjusted by the Secretary of Treasury) shall be disregarded. If the Plan
Year is ever less than twelve months the $150,000.00 limitation (as adjusted by
the Secretary of Treasury) will be prorated by multiplying the limitation by a
fraction, the numerator of which is the number of months in the Plan Year, and
the denominator of which is 12.
1.16 "CONTRIBUTION" means the total amount of contributions made
under the terms of this Plan. Each specific type of Contribution shall be
designated by the type of contribution made as follows:
(a) Salary Deferral Contribution -- Contributions made by the
Employer under the Employee's salary deferral agreement.
(b) Matching Employer Contribution -- matching contributions made by
the Employer.
(c) Qualified Nonelective Employer Contribution -- Contributions
made by the Employer as a means of passing the Actual Deferral Percentage
test or the Actual Contribution Percentage test.
(d) Rollover Contribution - Contributions made by a Member which
consist of any part of an eligible rollover distribution (as defined in
section 402 of the Code) from a qualified employee trust described in
section 401(a) of the Code.
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1.17 "CONTRIBUTION PERCENTAGE" means, for a specified group of
Employees for a Plan Year, the average of the ratios (calculated separately for
each Employee in the group) of the amount of Section 401(m) Contributions
actually paid into the Trust on behalf of the Employee for the Plan Year to the
Employee's Annual Compensation for the Plan Year earned while the Employee was a
Member.
1.18 "DETERMINATION DATE" means for a given Plan Year the last day
of the preceding Plan Year or in the case of the first Plan Year the last day of
that Plan Year.
1.19 "DIRECT ROLLOVER" means a payment by the Plan to the Eligible
Retirement Plan specified by the Distributee.
1.20 "DISABILITY" means a mental or physical disability which, in
the opinion of a physician selected by the Committee, shall prevent the Member
from earning a reasonable livelihood with any Affiliated Employer and which can
be expected to result in death or which has lasted or can be expected to last
for a continuous period of not less than 12 months and which: (a) was not
contracted, suffered or incurred while the Member was engaged in, or did not
result from having engaged in, a felonious criminal enterprise; (b) did not
result from alcoholism or addiction to narcotics; and (c) did not result from an
injury incurred while a member of the Armed Forces of the United States for
which the Member receives a military pension.
1.21 "DISTRIBUTEE" means an Employee or former Employee. In
addition, the Employee's or former Employee's surviving spouse and the
Employee's or former Employee's spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined in section 414(p)
of the Code, are Distributees with regard to the interest of the spouse or
former spouse.
1.22 "ELIGIBLE RETIREMENT PLAN" means an individual retirement
account described in section 408(a) of the Code, an individual retirement
annuity described in section 408(b) of the Code, an annuity plan described in
section 403(a) of the Code, or a qualified trust described in section 401(a) of
the Code, that accepts the Distributee's Eligible Rollover Distribution.
However, in the case of an Eligible Rollover Distribution to the surviving
spouse, an Eligible Retirement Plan is an individual retirement account or
individual retirement annuity.
1.23 "ELIGIBLE ROLLOVER DISTRIBUTION" as defined in section 402 of
the Code means any distribution of all or any portion of the balance to the
credit of the Distributee, except that an Eligible Rollover Distribution does
not include: (a) any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life (or life
expectancy) of the Distributee or the joint lives (or joint life expectancies)
of the Distributee and the Distributee's Beneficiary, or for a specified period
of ten years or more; (b) any distribution to the extent the distribution is
required under section 401(a)(9) of the Code; and (c) the portion of any
distribution that is not includable in gross income.
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1.24 "EMPLOYEE" means, except as otherwise specified in this
Section, all common law employees of an Affiliated Employer and all Leased
Employees.
1.25 "EMPLOYER" or "EMPLOYERS" means the Sponsor and any other
business organization which has adopted this Plan.
1.26 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
1.27 "EXCESS AGGREGATE 401(m) CONTRIBUTIONS" means, with respect to
any Plan Year, the excess of (a) the aggregate amount of Section 401(m)
Contributions actually paid into the Trust on behalf of Highly Compensated
Employees for the Plan Year over (b) the maximum amount of those contributions
permitted under the limitations set out in the first sentence of Section 4.8 of
the Plan. To calculate the amount of Excess Aggregate 401(m) Contributions, the
Actual Contribution Ratio of the Highly Compensated Employee with the highest
Actual Contribution Ratio shall be reduced to equal the ratio of the Highly
Compensated Employee with the next highest Actual Contribution Ratio. However,
if a lesser reduction would enable the Plan to pass the test, only that lesser
reduction shall be made. This leveling process shall be repeated until the
Contribution Percentage test is satisfied.
1.28 "EXCESS 401(k) CONTRIBUTIONS" means, with respect to any Plan
Year, the excess of (a) the aggregate amount of Section 401(k) Contributions
actually paid into the Trust on behalf of Highly Compensated Employees for the
Plan Year over (b) the maximum amount of those contributions permitted under the
limitations set out in the first sentence of Section 4.7 of the Plan. To
calculate the amount of Excess 401(k) Contributions, the Actual Deferral Ratio
of the Highly Compensated Employee with the highest Actual Deferral Ratio is
reduced to equal the ratio of the Highly Compensated Employee with the next
highest Actual Deferral Ratio. However, if a lesser reduction would enable the
Plan to pass the Actual Deferral Percentage test, only that lesser reduction may
be made. This leveling process is repeated until the Actual Deferral Percentage
test is satisfied.
1.29 "FIVE PERCENT OWNER" means an Employee who is a five percent
owner as defined in section 416(i) of the Code.
1.30 "HIGHLY COMPENSATED EMPLOYEE" means an Employee or an employee
or an Affiliated Employer who, during the Plan Year or the preceding Plan Year,
(a) was at any time a Five Percent Owner at any time during the Plan Year or the
preceding Plan Year or (b) had Annual Compensation from the Affiliated Employers
in excess of $80,000 (as adjusted from time to time by the Secretary of the
Treasury) for the preceding Plan Year.
1.31 "HOUR OF SERVICE" means each hour for which an Employee is paid
or entitled to payment for the performance of duties for an Affiliated Employer.
1.32 "KEY EMPLOYEE" means an Employee or former or deceased Employee
or Beneficiary of an Employee who at any time during the Plan Year or any
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of the four preceding Plan Years is (a) an officer of an Employer or any
Affiliated Employer having Annual Compensation greater than 50% of the annual
addition limitation of Section 415(b)(1)(A) of the Code for the Plan Year, (b)
one of the 10 employees having Annual Compensation from an Employer or any
Affiliated Employer of greater than 100% of the annual addition limitation of
Section 415(c)(1)(A) of the Code for the Plan Year and owning or considered as
owning (within the meaning of Section 318 of the Code) the largest interest in
an Employer or any Affiliated Employer, treated separately, (c) a Five Percent
Owner of an Employer or any Affiliated Employer, treated separately, or (d) a 1%
owner of an Employer or any Affiliated Employer, treated separately, having
Annual Compensation from an Employer or any Affiliated Employer of more than
$150,000. For this purpose no more than 50 employees or, if lesser, the greater
of three employees or 10% of the employees shall be treated as officers. Section
416(i) of the Code shall be used to determine percentage of ownership. For the
purpose of the test set out in (b) above, if two or more employees have the same
interest in an Employer, the employee with the greater Annual Compensation from
the Employer shall be treated as having the larger interest.
1.33 "LEASED EMPLOYEE". "Leased Employee" shall mean any person who
(a) is not a common law employee of an Affiliated Employer, (b) pursuant to an
agreement between an Affiliated Employer and any other person, has performed
services for an Affiliated Employer (or for an Affiliated Employer and related
persons determined in accordance with Section 414(n)(6) of the Code) on a
substantially full time basis for a period of at least one year and (c) performs
the services under primary direction and control of the recipient.
1.34 "LIMITATION YEAR". "Limitation Year" shall mean the calendar
year.
1.35 "MATCHED SALARY DEFERRAL CONTRIBUTION" means that portion of
the Salary Deferral Contribution attributable to each Member that does not
exceed six percent of the Member's Considered Compensation earned while the
Employee was a Member.
1.36 "MEMBER" means the person or persons employed by an Employer
during the Plan Year and eligible to participate in this Plan.
1.37 "NON-HIGHLY COMPENSATED EMPLOYEE" means an Employee of the
Employer who is not a Highly Compensated Employee.
1.38 "NON-KEY EMPLOYEE" means any Employee who is not a Key
Employee.
1.39 "PERIOD OF SERVICE" means a period of employment with an
Affiliated Employer which commences on the day on which an Employee performs his
initial Hour of Service or performs his initial Hour of Service upon returning
to the employ of an Affiliated Employer, whichever is applicable, and ends on
the date the Employee Severs Service.
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1.40 "PERIOD OF SEVERANCE" means the period of time commencing on
the date an Employee Severs Service and ending on the date the Employee again
performs an Hour of Service.
1.41 "PLAN" means this Plan, including all subsequent amendments.
1.42 "PLAN YEAR" means the calendar year. The Plan Year shall be the
fiscal year of this Plan.
1.43 "REGULATION" means the Internal Revenue Service regulation
specified, as it may be changed from time to time.
1.44 "REQUIRED BEGINNING DATE" means:
(a) in the case of an individual who is not a Five Percent Owner
with respect to the Plan Year ending in the calendar year in which he
attains age 70 1/2, the Required Beginning Date is April 1 of the calendar
year following the later of (i) the calendar year in which the individual
attains age 70 1/2, or (ii) the calendar year in which the individual
Severs Service; and
(b) in the case of an individual who is a Five Percent Owner with
respect to the Plan Year ending in the calendar year in which he attains
age 70 1/2, the Required Beginning Date is April 1 of the calendar year in
which he attains age 70 1/2.
1.45 "RETIREMENT AGE" means the later of a time a Member attains age
65 or the fifth anniversary of the date he commenced participation in the Plan.
Once a Member has attained his Retirement Age he shall be 100% vested at all
times.
1.46 "ROLLOVER CONTRIBUTION" means the amount contributed by a
Member of this Plan which consists of any part of an eligible rollover
distribution (as defined in Section 402 of the Code) from a qualified employee
trust described in Section 401(a) of the Code.
1.47 "SECTION 401(k) CONTRIBUTIONS" means the sum of Salary Deferral
Contributions made on behalf of the Member during the Plan Year and Qualified
Nonelective Employer Contributions that the Employer elects to have treated as
Section 401(k) Contributions pursuant to Code Section 401(k)(3)(d)(ii) to the
extent that those other amounts are not used to enable the Plan to satisfy the
minimum contribution requirements of Section 416 of the Code.
1.48 "SECTION 401(m) CONTRIBUTIONS" means the sum of Matching
Employer Contributions made on behalf of the Member during the Plan Year and
other amounts that the Employer elects to have treated as Section 401(m)
Contributions pursuant to Section 401(m)(3)(B) of the Code. However, Matching
Employer Contributions and Salary Deferral Contributions that the Employer could
otherwise elect to have treated as Section 401(m) Contributions are not Section
401(m)
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Contributions to the extent that they are used to enable the Plan to satisfy the
minimum contribution requirements of Section 416 of the Code.
1.49 "SERVICE" means the period or periods that a person is paid or
is entitled to payment for performance of duties with an Affiliated Employer.
1.50 "SEVERS SERVICE" means the earlier of the following events: (a)
the Employee's quitting, retiring, dying or being discharged, (b) the completion
of a period of 365 continuous days in which the Employee remains absent from
Service (with or without pay) for any reason other than quitting, retiring,
dying or being discharged, such as vacation, holiday, sickness, disability,
leave of absence, layoff or any other absence or (c) the second anniversary of
the commencement of a continuous period of absence occasioned by the reason of
the pregnancy of the Employee, the birth of a child of the Employee, the
placement of a child with the Employee in connection with the adoption of the
child by the Employee or the caring for the child for a period commencing
immediately after the child's birth or placement.
1.51 "SPONSOR" means Piper Impact, Inc., a Delaware corporation.
1.52 "SPONSOR STOCK" means the common stock of Quanex Corporation, a
Delaware corporation, the parent of the Sponsor.
1.53 "TOP-HEAVY PLAN" means any plan which has been determined to be
top-heavy under the test described in Article VIII of this Plan.
1.54 "TRANSFERRED" means, when used with respect to an Employee, the
termination of employment with one Employer and the contemporaneous commencement
of employment with another Employer.
1.55 "TRUST" means the one or more trust estates created to fund
this Plan.
1.56 "TRUSTEE" means collectively one or more persons or
corporations with trust powers which have been appointed by the initial Sponsor
and have accepted the duties of Trustee and any and all successor or successors
appointed by the Sponsor or successor Sponsor.
1.57 "TRUST FUND" means all of the trust estates established under
the terms of this Plan to fund this Plan, whether held to fund a particular
group of Accounts or held to fund all of the Accounts of Members, collectively.
1.58 "VALUATION DATE" means the day or days each Plan Year selected
by the Committee on which the Trust Fund is to be valued which cannot be less
frequent than annually. One or more Accounts may have different Valuation Dates
from other Accounts. The Valuation Date must be announced to all Members and
shall remain the same until changed by the Committee and announced to the
Members. Until changed by the Committee, the Valuation Dates shall be each
business day of the Plan Year.
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ARTICLE II
ACTIVE SERVICE
2.1 WHEN ACTIVE SERVICE BEGINS. For purposes of eligibility and
vesting, Active Service begins when an Employee first performs an Hour of
Service for an Affiliated Employer. Once an Employee has begun Active Service
for purposes of eligibility or vesting and Severs Service he shall recommence
Active Service for those purposes when he again performs an Hour of Service for
an Affiliated Employer.
2.2 AGGREGATION OF SERVICE. When determining an Employee's Active
Service, all Periods of Service, whether or not completed consecutively, shall
be aggregated on a per day basis. For purposes of eligibility and vesting, only
full years of Active Service shall be counted. In aggregating Active Service, 30
days shall be counted as one month and 12 months shall be counted as one year.
No fractional years shall be counted for purposes of eligibility or vesting.
2.3 PERIODS OF SERVICE OF LESS THAN ONE YEAR. If an Employee
performs an Hour of Service within 12 months after he Severs Service, the
intervening Period of Severance shall be counted as a Period of Service.
2.4 SERVICE PRIOR TO SEVERANCE. If an Employee Severs Service at a
time when he does not have any vested right to amounts credited to his Matching
Employer Contribution Account and the Period of Severance continues for a
continuous period of five years or more, the Period of Service completed by the
Employee before the Period of Severance shall not be taken into account if his
Period of Severance equals or exceeds his Period of Service, whether or not
consecutive, completed before the Period of Severance.
2.5 PERIODS OF SEVERANCE DUE TO CHILD BIRTH OR ADOPTION. If the
period of time between the first anniversary of the first day of an absence from
Service by reason of the pregnancy of the Employee, the birth of a child of the
Employee, the placement of a child with the Employee in connection with the
adoption of the child by the Employee or for purposes for caring for the child
for a period beginning immediately following the birth or placement and the
second anniversary of the first day of the absence occurs during or after the
first Plan Year beginning after December 31, 1984, it shall neither be counted
as a Period of Service nor of Severance.
2.6 TRANSFERS. If an Employee of one Employer is Transferred to the
service of another Employer, his Active Service shall not be interrupted and he
shall continue to be in Active Service for purposes of eligibility, vesting and
allocation of Contributions and/or forfeitures. If an Employee is transferred to
the service of an Affiliated Employer that has not adopted the Plan he will not
Sever Service; however, even though he shall continue to be in Active Service
for eligibility and vesting purposes he shall not receive any allocation of
Contributions or forfeitures.
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2.7 EMPLOYMENT RECORDS CONCLUSIVE. The employment records of the
Employer shall be conclusive for all determinations of Active Service.
2.8 COVERAGE OF CERTAIN PREVIOUSLY EXCLUDED EMPLOYEES. Any Employee
who is no longer excludable because he or she is no longer a Leased Employee or
included in a unit of Employees covered by a collective bargaining agreement
between the Employees' representative and the Employer where retirement benefits
were the subject of good faith bargaining shall immediately become eligible for
membership if he meets the eligibility requirements. All his Service with any
Affiliated Employer that would have been counted had he not been previously
excluded shall now be counted as Active Service for eligibility and vesting
purposes.
2.9 SERVICE CREDIT REQUIRED UNDER FEDERAL LAW. An Employee shall be
credited with such additional Years of Vesting Service as is required under any
applicable law of the United States.
2.10 SPECIAL TRANSITIONAL RULE. Any person who was an Employee
before this Agreement is signed will have all or a portion of his Active Service
figured under the provisions of the Plan in effect before this Agreement if that
method of calculating service is more beneficial for the Employee than the
method otherwise set out in this Article II.
2.11 CREDIT FOR SERVICE WITH PIPER IMPACT, INC. A TENNESSEE
CORPORATION. For purposes of determining an Employee's Active Service for
eligibility to participate and vesting, his service with Piper Impact, Inc., a
Tennessee corporation will be counted as Active Service under the Plan.
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ARTICLE III
ELIGIBILITY RULES
3.1 ELIGIBILITY REQUIREMENTS. Effective April 1, 1997, each Employee
shall be eligible to participate in this Plan beginning on the entry date which
occurs with or next follows the date on which the Employee completes three
months of Active Service and attains the age of 21. However, all Employees who
are included in a unit of Employees covered by a collective bargaining agreement
between the Employees' representative and the Employer shall be excluded, even
if they have met the requirements for eligibility, if there has been good faith
bargaining between the Employer and the Employees' representative pertaining to
retirement benefits and the agreement does not require the Employer to include
such Employees in this Plan. In addition, a Leased Employee shall not be
eligible to participate in the Plan unless the Plan's qualified status is
dependent upon coverage of the Leased Employee. The Plan's entry dates will be
January 1, April 1, July 1 and October 1 of each Plan Year.
3.2 ELIGIBILITY UPON REEMPLOYMENT. If an Employee Severs Service
with the Employer for any reason after fulfilling the eligibility requirements
but prior to the date he initially begins participating in the Plan, the
Employee shall be eligible to begin participation in this Plan on the day he
first completes an Hour of Service upon his return to employment with an
Employer. Once an Employee has become eligible to be a Member, his eligibility
shall continue until he Severs Service. A former Member shall be eligible to
recommence participation in this Plan on the first day he completes an Hour of
Service upon his return to employment with an Employer.
3.3 FROZEN PARTICIPATION. An Employee employed by an Affiliated
Employer, which has not adopted this Plan, cannot actively participate in this
Plan even though he accrues Active Service. Likewise, if an Employee: (a) is
transferred from an Employer to an Affiliated Employer which has not adopted
this Plan, or (b) is a Member of this Plan when he is excluded under the
provisions of a collective bargaining agreement his participation becomes
inactive. Under these circumstances, the Member's Account becomes frozen and he
cannot contribute to the Plan nor can he share in the allocation of any Employer
Contribution or forfeitures for the period after he is transferred. However, his
Accounts shall continue to share in any appreciation or depreciation of the
Trust Fund and in any income earned or losses incurred by the Trust Fund during
the period of time that he is employed by an Affiliated Employer which has not
adopted this Plan, or is excluded from covered employment under the provisions
of a collective bargaining agreement.
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ARTICLE IV
CONTRIBUTIONS
4.1 SALARY DEFERRAL CONTRIBUTIONS. The Employer shall make a Salary
Deferral Contribution in an amount equal to the amount by which its Members'
Considered Compensation was reduced as a result of salary deferral agreements.
Any such salary deferral agreement shall be an agreement in a form satisfactory
to the Administrative Committee to prospectively receive Considered Compensation
from the Employer in a reduced amount and to have the Employer contribute an
amount equal to the amount of the reduction to the Trust Fund on account of the
Member. Any such salary deferral agreement shall be revocable in accordance with
its terms, provided that no revocation shall be retroactive or permit payment to
the Member of the amount required to be contributed to the Trust Fund. A Member
shall be entitled to prospectively modify his salary deferral agreement at least
once a year. A Member's right to benefits derived from Salary Deferral
Contributions made to the Plan on his behalf shall be nonforfeitable. The
election to have Salary Deferral Contributions made, the ability to change the
rate of Salary Deferral Contributions, the right to suspend Salary Deferral
Contributions, and the manner of commencing new Salary Deferral Contributions
shall be permitted under any uniform method determined by the Administrative
Committee from time to time.
4.2 EMPLOYER MATCHING CONTRIBUTIONS. The Employer shall make an
Employer Matching Contribution in an amount equal to 25 percent of the Matched
Salary Deferral Contributions for all Members.
4.3 ROLLOVER CONTRIBUTIONS AND PLAN-TO-PLAN TRANSFERS. The
Administrative Committee may permit Rollover Contributions by Members and/or
direct transfers to or from another qualified plan on behalf of Members from
time to time. If Rollover Contributions and/or direct transfers to or from
another qualified plan are permitted, the opportunity to make those
contributions and/or direct transfers must be made available to Members on a
nondiscriminatory basis. For this purpose only, all Employees in the Eligible
Class shall be considered to be Members of the Plan even though they may not
have met the eligibility requirements. However, they shall not be entitled to
elect to have Salary Deferral Contributions made or to share in Employer
Contributions or forfeitures unless and until they have met the requirements for
eligibility, contributions and allocations. A Rollover Contribution shall not be
accepted unless it is directly rolled over to this Plan in a rollover described
in Section 401(a)(31) of the Code. A Member shall not be permitted to make a
Rollover Contribution if the property he intends to contribute is for any reason
unacceptable to the Trustee. A Rollover Contribution Account shall be
established for any Employee who makes a Rollover Contribution.
A direct transfer of assets from another qualified plan in a
transfer subject to the requirements of Section 414(l) of the Code shall not be
accepted if it was at any time part of (a) a defined benefit plan (as defined in
Section 401(a) or 414(j) of the Code), (b) a defined contribution plan (as
defined in Sections 401(a) and 414(i) of the
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Code) which is subject to the minimum funding standards of Section 412 of the
Code, (c) any other qualified plan which has joint and survivor annuity benefits
or qualified preretirement survivor annuity benefits as described in Section 417
of the Code, or (d) a plan which permits a distribution or withdrawal in a form
not permitted under this Plan.
4.4 QUALIFIED NONELECTIVE EMPLOYER CONTRIBUTIONS. The Employer may
make a Qualified Nonelective Employer Contribution in such amount, if any, as
shall be determined by the Employer. A Member's right to benefits derived from
Qualified Nonelective Employer Contributions made to the Plan on his behalf
shall be nonforfeitable. In no event will Qualified Nonelective Employer
Contributions be distributed before Salary Deferral Contributions may be
distributed
4.5 RESTORATION CONTRIBUTIONS. The Employer shall, for each Plan
Year, make a restoration contribution in an amount equal to the sum of (a) such
amount, if any, as shall be necessary to fully restore all Matching Employer
Contribution Accounts required to be restored pursuant to the provisions of
Section 5.9, after application of all forfeitures and any appreciation in the
value of the Trust Fund available for such restoration; plus (b) an amount equal
in value to the value of forfeited benefits described in and payable under
Section 7.9.
4.6 $7,000 LIMIT ON SALARY DEFERRAL CONTRIBUTIONS. The maximum
Salary Deferral Contribution that a Member may elect to have made on his behalf
during the Member's taxable year may not, when added to the amounts deferred
under other plans or arrangements described in Code Sections 401(k), 408(k) and
403(b) exceed $7,000 (as adjusted by the Secretary of Treasury). If this dollar
limitation is exceeded during any taxable year of the Member, the excess of the
amounts deferred on behalf of the Member under plans or arrangements described
in Code Sections 401(k), 408(k) and 403(b) during the Member's taxable year over
the dollar limitation (the "Excess Deferral") as adjusted by any earnings or
losses thereon will be distributed to the Member no later than April 15
following the Member's taxable year in which the Excess Deferral was made.
The income allocable to Excess Deferrals for the taxable year of the
Member shall be determined by multiplying the income for the taxable year of the
Member allocable to Salary Deferral Contributions by a fraction. The numerator
of the fraction is the amount of Excess Deferrals made on behalf of the Member
for the taxable year. The denominator of the fraction is the Member's total
Salary Deferral Account balance as of the beginning of the taxable year plus the
Member's Salary Deferral Contributions for the Plan Year.
For purposes of applying the requirements of Code Sections 4.7 and
VIII, Excess Deferrals will not be disregarded merely because they are Excess
Deferrals or because they are distributed in accordance with this Section.
However, Excess Deferrals made to the Plan on behalf of Non-Highly Compensated
Employees are not to be taken into account under Section 4.7.
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4.7 ACTUAL DEFERRAL PERCENTAGE FOR HIGHLY COMPENSATED EMPLOYEES. The
Actual Deferral Percentage for Highly Compensated Employees for any Plan Year
must bear a relationship to the Actual Deferral Percentage for all other
eligible Employees for the Plan Year which meets either of the following tests:
(a) The Actual Deferral Percentage of the Highly Compensated
Employees is not more than the Actual Deferral Percentage of all other
eligible Employees multiplied by 1.25; or
(b) The excess of the Actual Deferral Percentage of the Highly
Compensated Employees over that of all other eligible Employees is not
more than two percentage points, and the Actual Deferral Percentage of the
Highly Compensated Employees is not more than the Actual Deferral
Percentage of all other eligible Employees multiplied by two.
For purposes of this test an eligible Employee is an Employee who is eligible to
make Salary Deferral Contributions for all or part of a Plan Year. A person who
is suspended from making Salary Deferral Contributions because he has made a
withdrawal is an eligible Employee. If no Salary Deferral Contributions are made
for an eligible Employee the deferral ratio that will be included for him in
determining the Actual Deferral Percentage is zero. If this Plan and any other
plan or plans which include cash or deferred arrangements are considered as one
plan for purposes of Section 401(a)(4) or 410(b) of the Code, the cash or
deferred arrangements included in this Plan and the other plans shall be treated
as one plan for these tests. If any Highly Compensated Employee is a Member of
this Plan and any other cash or deferred arrangements of the Employer, when
determining the deferral percentage of the Employee, all of the cash or deferred
arrangements are treated as one.
As soon as practicable after the close of each Plan Year, the
Committee shall determine whether the Actual Deferral Percentage for the Highly
Compensated Employees would exceed the limitation. If the limitation would be
exceeded for a Plan Year, before the close of the following Plan Year (a) the
amount of Excess 401(k) Contributions for that Plan Year (and any income
allocable to those Contributions as calculated in the specific manner required
by Section 4.10) shall be distributed, or (b) the Employer may make a Qualified
Nonelective Employer Contribution which is treated as a Section 401(k)
Contribution and allocated only to those Members who are Non-Highly Compensated
Employees. Qualified Nonelective Employer Contributions will be treated as
Section 401(k) Contributions only if the conditions described in Regulation
Section 1.401(k)-1(b)(5) are satisfied. Qualified Nonelective Employer
Contributions will be treated as Section 401(k) Contributions for a Plan Year
only if they are allocated to Members' Accounts as of a date within that Plan
Year and are actually paid to the Trust no later than the end of the 12-month
period immediately following the Plan Year to which the contributions relate.
Any distributions of the Excess 401(k) Contributions for any Plan Year are to be
made to Highly Compensated Employees on the basis of the respective portions of
the Excess 401(k) Contributions attributable to each of them. The amount of
Excess 401(k) Contributions to be distributed for any Plan Year must be reduced
by any excess Salary Deferral Contributions previously distributed for the
taxable year ending in the same Plan Year.
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A Salary Deferral Contribution will be taken into account under the
actual deferral percentage test of Code Section 401(k) and this Section for a
Plan Year only if it relates to Annual Compensation that either would have been
received by the Employee in the Plan Year (but for the deferral election) or is
attributable to services performed by the employee in the Plan Year and would
have been received by the Employee within 2 1/2 months after the close of the
Plan Year (but for the deferral election). In addition, a Section 401(k)
Contribution will be taken into account under the actual deferral percentage
test of Code Section 401(k) and this Section for a Plan Year only if it is
allocated to an Employee as of a date within that Plan Year. For this purpose a
Section 401(k) Contribution is considered allocated as of a date within a Plan
Year if the allocation is not contingent on participation or performance of
services after such date and the Section 401(k) Contribution is actually paid to
the Trust no later than 12 months after the Plan Year to which the Section 40(k)
Contribution relates.
Failure to correct Excess 401(k) Contributions by the close of the
Plan Year following the Plan Year for which they were made will cause the Plan
to fail to be a qualified cash or deferred arrangement for the Plan Year for
which the Excess Contributions were made and for all subsequent years they
remain in the Trust. Also, the Employer will be liable for a 10% excise tax on
the amount of Excess Contributions unless they are corrected within 2 1/2 months
after the close of the Plan Year for which they were made.
4.8 CONTRIBUTION PERCENTAGE TEST. The Contribution Percentage for
eligible Highly Compensated Employees for any Plan Year must not exceed the
greater of the following:
(a) The Contribution Percentage for all other eligible Employees
multiplied by 1.25; or
(b) The lesser of the Contribution Percentage for all other eligible
Employees multiplied by two, or the Contribution Percentage for all other
eligible Employees plus two percentage points.
For purposes of this test an eligible Employee is an Employee who is directly or
indirectly eligible to receive an allocation of Matching Employer Contributions
for all or part of the Plan Year. Except as provided below, an Employee who
would be eligible to receive an allocation of Matching Employer Contributions
but for his election not to participate is an eligible Employee. An Employee who
would be eligible to receive an allocation of Matching Employer Contributions
but for the limitations on his Annual Additions imposed by Section 415 of the
Code is an eligible Employee.
If no Section 401(m) Contributions are made on behalf of an eligible
Employee the Actual Contribution Ratio that shall be included for him in
determining the Contribution Percentage is zero. If this Plan and any other plan
or plans to which Section 401(m) Contributions are made are considered as one
plan for purposes of Section 401(a)(4) or 410(b) of the Code, this Plan and
those plans are to be treated as one. The Actual Contribution Ratio of a Highly
Compensated Employee who is eligible to participate in more than one plan of an
Affiliated employer to which employee or
IV-4
23
matching contributions are made is calculated by treating all the plans in which
the Employee is eligible to participate as one plan. However, plans that are not
permitted to be aggregated under Regulation Section 1.410(m)-1(b)(3)(ii) are not
aggregated for this purpose.
A Matching Employer Contribution will be taken into account under
this Section for a Plan Year only if (1) it is allocated to the Employee's
Account as of a date within the Plan Year, (2) it is paid to the Trust no later
than the end of the 12 month period beginning after the close of the Plan Year,
and (3) it is made on behalf of an Employee on account of his Salary Deferral
Contributions for the Plan Year.
At the election of the Employer, a Member's Salary Deferral
Contributions, and Qualified Nonelective Employer Contributions made on behalf
of the Member during the Plan Year shall be treated as Section 401(m)
Contributions that are Matching Employer Contributions provided that the
conditions set forth in Regulation Section 1.401(m)-1(b)(5) are satisfied.
Salary Deferral Contributions may not be treated as Employer Matching
Contributions for purposes of the contribution percentage test set forth in this
Section unless such contributions, including those taken into account for
purposes of the test set forth in this Section, satisfy the actual deferral
percentage test set forth in Section 4.7. Moreover, Salary Deferral
Contributions and Qualified Nonelective Employer Contributions may not be taken
into account for purposes of the test set forth in this Section to the extent
that such contributions are taken into account in determining whether any other
contributions satisfy the actual deferral percentage test set forth in Section
4.7. Finally, Salary Deferral Contributions and Qualified Nonelective Employer
Contributions may be taken into account for purposes of the test set forth in
this Section only if they are allocated to the employee's Account as of a date
within the Plan Year being tested within the meaning of Regulation Section
1.401(k)-1(b)(4).
4.9 CONTRIBUTION PERCENTAGE FAIL SAFE PROVISION. If the limitation
set forth in Section 4.8 would be exceeded for any Plan Year, before the close
of the following Plan Year (a) the amount of the Excess Aggregate 401(m)
Contributions for that Plan Year (and any income allocable to those
Contributions as calculated in the manner set forth in Section 4.10) shall be
either distributed, or forfeited to the extent they are not vested, or (b) the
Employer may make a Qualified Nonelective Employer Contribution which it elects
to have treated as a Section 401(m) Contribution. Any distributions of the
Excess Aggregate 401(m) Contributions for any Plan Year are to be made to Highly
Compensated Employees on the basis of the respective portions of the amounts
attributable to each of them. Forfeitures of Excess Aggregate 401(m)
Contributions shall be allocated to Members who are Non-Highly Compensated
Employees as if such contributions were additional Employer Matching
Contributions for the Plan Year.
4.10 INCOME ALLOCABLE TO EXCESS 401(k) CONTRIBUTIONS AND EXCESS
AGGREGATE 401(m) CONTRIBUTIONS. The income allocable to Excess 401(k)
Contributions for the Plan Year shall be determined by multiplying the income
for the Plan Year allocable to Section 401(k) Contributions by a fraction. The
numerator of the fraction shall be the amount of Excess 401(k) Contributions
made on behalf of the Member for
IV-5
24
the Plan Year. The denominator of the fraction shall be the Member's total
Account balance attributable to Section 401(k) Contributions as of the beginning
of the Plan Year plus the Member's Section 401(k) Contributions for the Plan
Year. The income allocable to Excess Aggregate 401(m) Contributions for a Plan
Year shall be determined by multiplying the income for the Plan Year allocable
to Section 401(m) Contributions by a fraction. The numerator of the fraction
shall be the amount of Excess Aggregate 401(m) Contributions made on behalf of
the Member for the Plan Year. The denominator of the fraction shall be the
Member's total Account balance attributable to Section 401(m) Contributions as
of the beginning of the Plan Year plus the Member's Section 401(m) Contributions
for the Plan Year.
4.11 ADDITIONAL REQUIRED TEST IF ALTERNATIVE COMPLIANCE IS USED. If
the second alternative permitted in Sections 4.7 and 4.8 is used for both the
Actual Deferral Percentage test and the Contribution Percentage test the
following additional limitation on Salary Deferral Contributions shall apply.
The Actual Deferral Percentage plus the Contribution Percentage of the eligible
Highly Compensated Employees cannot exceed the greater of (a) or (b), where
(a) is the sum of:
(i) 1.25 times the greater of the Actual Deferral Percentage
or the Contribution Percentage of the eligible Non-Highly
Compensated Employees, and
(ii) the lesser of (x) two percentage points plus the lesser
of the Actual Deferral Percentage or the Contribution Percentage of
the eligible Non-Highly Compensated Employees or (y) two times the
lesser of the Actual Deferral Percentage or the Contribution
Percentage of the group of eligible Non-Highly Compensated
Employees; and
(b) is the sum of:
(i) 1.25 times the lesser of the Actual Deferral Percentage or
the Contribution Percentage of the eligible Non-Highly Compensated
Employees, and
(ii) the lesser of (x) two percentage points plus the greater
of the Actual Deferral Percentage or the Contribution Percentage of
the eligible Non-Highly Compensated Employees or (y) two times the
greater of the Actual Deferral Percentage or the Contribution
Percentage of the group of eligible Non-Highly Compensated
Employees.
If the limitation would be exceeded for any Plan Year, before the
close of the following Plan Year the Actual Deferral Percentage or Contribution
Percentage of the eligible Highly Compensated Employees, or a combination of
both, shall be reduced by distributions made in the manner described in the
Regulations. These distributions
IV-6
25
shall be in addition to and not in lieu of distributions required for Excess
401(k) Contributions and Excess Aggregate 401(m) Contributions.
4.12 NONDEDUCTIBLE CONTRIBUTIONS PROHIBITED. Notwithstanding any
other provision of the Plan, no Employer shall make any contribution that would
be a "nondeductible contribution" within the meaning of Section 4972 of the
Code.
4.13 FORM OF PAYMENT OF CONTRIBUTIONS. Contributions may be paid to
the Trustee either in cash or in qualifying employer securities (as such term is
defined in Section 407(d) of ERISA) or any combination thereof, provided that
payment may not be made in any form constituting a prohibited transaction under
Section 4975 of the Code or Section 406 of ERISA.
4.14 DEADLINE FOR PAYMENT OF EMPLOYER CONTRIBUTIONS. The Employer's
Salary Deferral Contribution and Employer Matching Contribution shall be paid to
the Trustee in installments. The installment for each payroll period shall be
paid within 60 days after the end of the calendar quarter in which such payroll
period ends, and shall be in an amount equal to the amount by which all Members'
Considered Compensation was reduced pursuant to salary deferral agreements (as
described in Section ) for such period, plus the amount of the Employer Matching
Contribution for such period. The Qualified Nonelective Employer Contributions
of the Employer for each Plan Year shall be paid to the Trustee in one or more
installments, as the Employer may from time to time determine; provided,
however, that the Qualified Nonelective Employer Contribution may be paid not
later than the time prescribed by law (including extensions thereof) for filing
the Employer's income tax return for its taxable year ending with or within such
Plan Year.
4.15 RETURN OF CONTRIBUTIONS FOR MISTAKE, DISQUALIFICATION OR
DISALLOWANCE OF DEDUCTION. Subject to the limitations of Section 415 of the
Code, the assets of the Trust shall not revert to any Employer or be used for
any purpose other than the exclusive benefit of the Members and their
Beneficiaries and the reasonable expenses of administering the Plan except:
(a) any Contribution made because of a mistake of fact may be repaid
to the Employer within one year after the payment of the Contribution;
(b) any Contribution conditioned upon the Plan's initial
qualification under Section 401 of the Code or the initial qualification
of an Employer's adoption of the Plan, if later, may be repaid to the
Employer within one year after the date of denial of the initial
qualification of the Plan or of its adoption by the Employer; and
(c) any and all Employer Contributions are conditioned upon their
deductibility under Section 404 of the Code; therefore, to the extent the
deduction is disallowed, the Contributions may be repaid to the Employer
within one year after the disallowance.
IV-7
26
The Employer has the exclusive right to determine if a Contribution
or any part of it is to be repaid or is to remain as a part of the Trust Fund
except that the amount to be repaid is limited, if the Contribution is made by
mistake of fact or if the deduction for the Contribution is disallowed, to the
excess of the amount contributed over the amount that would have been
contributed had there been no mistake or over the amount disallowed. Earnings
which are attributable to any excess contribution cannot be repaid. Losses
attributable to an excess contribution must reduce the amount that may be
repaid. All repayments of mistaken Contributions or Contributions which are
disallowed are limited so that the balance in a Member's Account cannot be
reduced to less than the balance that would have been in the Member's Account
had the mistaken amount or the amount disallowed never been contributed.
IV-8
27
ARTICLE V
ALLOCATION AND VALUATION OF ACCOUNTS
5.1 INFORMATION STATEMENTS FROM EMPLOYER. As soon as practical after
the last day of each calendar quarter, the Employer shall provide the
Administrative Committee with a schedule setting forth the amount of its Salary
Deferral Contribution, Employer Matching Contribution, Qualified Nonelective
Employer Contribution, and restoration contribution; the names of its Members,
the number of Years of Vesting Service of each of its Members, the amount of
Considered Compensation paid to each Member, and the amount of Considered
Compensation paid to all its Members. Such schedules shall be conclusive
evidence of such facts.
5.2 ALLOCATION OF SALARY DEFERRAL CONTRIBUTION. The Administrative
Committee shall allocate the Employer's Salary Deferral Contribution among the
Employer's Members by allocating to each such Member the amount by which his
Considered Compensation was reduced pursuant to a salary deferral agreement (as
described in Section 4.1 and shall credit each such Member's share to the
Member's Salary Deferral Contribution Account.
5.3 ALLOCATION OF MATCHING EMPLOYER CONTRIBUTION. The Administrative
Committee shall separately allocate the Employer Matching Contribution among the
Employer's Members in the proportion which the Matched Salary Deferral
Contributions of each such Member bears to the total Matched Salary Deferral
Contributions of all such Members. Each Member's proportionate share shall be
credited to his Matching Employer Contribution Account.
5.4 ALLOCATION OF QUALIFIED NONELECTIVE EMPLOYER CONTRIBUTION. The
Administrative Committee shall separately allocate the Qualified Nonelective
Employer Contribution among the Non-Highly Compensated Employees who are Members
based upon each such Member's Considered Compensation as compared to the
Considered Compensation of all such Members.
5.5 ALLOCATION OF DIVIDENDS ON SPONSOR STOCK. Cash and Sponsor Stock
dividends paid with respect to Sponsor Stock shall be allocated among the
Members and former Members with Account balances in proportion to the number of
shares of Sponsor Stock (of the class with respect to which the dividend is
paid) allocated to Member's or former Member's Account as of the record date for
the dividend.
5.6 SPONSOR STOCK SPLITS. If the shares of Company Stock are
subdivided, the additional shares acquired by the Trustee upon the subdivision
will be allocated among the Members and former Members with Account balances in
proportion to the number of shares of Sponsor Stock (of the class with respect
to which the subdivision is made) allocated to the Member's or former Member's
Account as of the record date for the subdivision.
V-1
28
5.7 VALUATION OF ACCOUNTS. A Member's or former Member's Accounts
shall be valued at fair market value on each Valuation Date. The earnings and
losses attributable to any asset in the Trust Fund will be allocated solely to
the Account of the Member or former Member on whose behalf the investment in the
asset was made. In determining the fair market value of the Members' or former
Member's Accounts, the Trustee shall utilize such sources of information as it
may deem reliable including, but not limited to, stock market quotations,
statistical evaluation services, newspapers of general circulation, financial
publications, advice from investment counselors or brokerage firms, or any
combination of sources which in the opinion of the Trustee will provide the
price such assets were last traded at on a registered stock exchange; provided,
however, that with respect to regulated investment company shares, the Trustee
shall rely exclusively on information provided to it by the investment adviser
to such funds.
5.8 ALLOCATION OF FORFEITURES. At the time a forfeiture occurs, the
amount forfeited will first be used to reinstate any Account required to be
reinstated under Section 5.9, and any remaining amount will be applied to the
payment of Matching Employer Contributions.
5.9 RESTORATION OF FORFEITED AMOUNTS. If a Member or former Member
who forfeited any portion of his Matching Employer Contribution Account pursuant
to the provisions of Section 7.10 resumes employment covered under the Plan,
then the following provisions shall apply:
(a) REPAYMENT REQUIREMENT. The Member's Employer Matching
Contribution Account shall be restored if he repays to the Trustee the
full amount of any distribution from the Employer Matching Contribution
Account with respect to which the forfeiture arose. Such repayment must be
made prior to the earlier of (a) the date on which he incurs a Period of
Severance of five years, or (b) the fifth anniversary of the first date on
which the Member is subsequently re-employed by the Employer.
(b) MEMBERS WITH NO VESTED INTEREST. If a Member or former Member
who forfeited any portion of his Employer Matching Contribution Account
pursuant to the provisions of Section 7.10 received no distribution from
his Employer Matching Contribution Account as a result of his termination
of participation in the Plan (because his vested percentage was zero),
that Account will be restored if, and only if, he resumes employment
covered under the Plan prior to incurring a Period of Severance of five
years.
(c) AMOUNT RESTORED. The amount to be restored under the preceding
provisions of this Section shall be the dollar value of the amount in the
Member's Employer Matching Contribution Account, both the amount
distributed and the amount forfeited, unadjusted by any subsequent gains
or losses. The Member's Employer Matching Contribution Account balance
shall be restored as soon as administratively
V-2
29
practicable after the later of the date the Member resumes employment
covered under the Plan or the date on which any required repayment is
completed. No distribution shall be made to a Member from his Employer
Matching Contribution Account as a result of a prior Separation from
service after the restoration of such Account has been effectuated.
(d) NO OTHER BASIS FOR RESTORATION. Except as otherwise provided
above, a Member's Employer Matching Contribution Account shall not be
restored upon resumption of employment covered by the Plan. Any portion of
the Trust Fund attributable to Years of Service prior to resumption of
employment by a Member whose Employer Matching Contribution Account has
not been restored shall be held and distributed in accordance with
applicable provisions of the Plan and elections made thereunder. A
separate Employer Matching Contribution Account shall be established and
maintained for Employer Matching Contributions allocable to such a Member
after his resumption of employment covered by the Plan.
5.10 NO VESTING UNLESS OTHERWISE PRESCRIBED. No allocations,
adjustments, credits, or transfers shall ever vest in any Member or former
Member any right, title, or interest in the Trust Fund except at the times and
upon the terms and conditions herein set forth.
V-3
30
ARTICLE VI
LIMITATIONS ON ALLOCATIONS
The Annual Additions that may be credited to a Member's Accounts
under this Plan and any other qualified defined contribution plan maintained by
an Affiliated Employer for any Limitation Year will not exceed the lesser of
$30,000 (as adjusted by the Secretary of Treasury) or 25 percent of the Member's
Annual Compensation for the Limitation Year. The Plan will be operated in
compliance with section 415 of the Code and the Regulations thereunder, the
terms of which are incorporated herein by reference.
If Annual Additions are made in excess of the limitation set forth
in this Section, to the maximum extent permitted by law, all such excess Annual
Additions shall be attributed to this Plan.
If an excess Annual Addition attributed to this Plan is held or
contributed as a result of the allocation of forfeitures, a reasonable error in
estimating a Member's Annual Compensation, a reasonable error in calculating the
maximum Salary Deferral Contribution that may be made for a Member under section
415 of the Code or because of any other facts and circumstances that the
Commissioner of Internal Revenue finds to be justified, the excess Annual
Addition shall be corrected as follows:
(a) First, the excess Annual Addition shall be reduced to the extent
necessary by distributing to the Employee Salary Deferral Contributions
and earnings thereon. These distributed amounts are disregarded for
purposes of Sections 4.6 and 4.7 of the Plan.
(b) If the Member is still employed by the Employer at the end of
the Plan Year, any remaining excess funds shall be placed in an
unallocated suspense account to be applied to reduce future Employer
Contributions for that Member for as many Plan Years as are necessary to
exhaust the suspense account in keeping with the amounts which would
otherwise be allocated to that Member's Account.
(c) If the Member is not employed by the Employer at the end of the
Plan Year, the remaining excess funds shall be placed in an unallocated
suspense account to reduce future Employer Contributions for all remaining
Members for as many Plan Years as are necessary to exhaust the suspense
account.
(d) If the Plan terminates prior to the exhaustion of the suspense
account, the remaining amount shall revert to the Employer.
VI-1
31
ARTICLE VII
BENEFITS
7.1 VALUATION OF ACCOUNTS FOR WITHDRAWALS AND DISTRIBUTIONS. For the
purpose of making a distribution or withdrawal, a Member's Accounts shall be his
Accounts as valued as of the Valuation Date which is coincident with or next
follows the event which caused the distribution or withdrawal, adjusted for
Contributions, distributions and withdrawals, if any, made between the Valuation
Date and that event. The amount of a Plan benefit payable for any reason will be
reduced by the unpaid balance of a loan to a Member or Beneficiary.
7.2 DEATH BENEFIT. If a Member or retired Member dies, the death
benefit payable to the Member's spouse or designated Beneficiary or
Beneficiaries shall be 100% of the remaining amount in all of his Accounts as of
the day he dies.
7.3 RETIREMENT BENEFIT. A Member may retire on the first day of any
month after he attains his Retirement Age. If a Member retires, he is entitled
to receive 100% of all of his Accounts as of the day he retires.
7.4 DISABILITY BENEFIT. If a Member's employment with an Employer is
terminated and the Committee determines he is suffering from a Disability, he is
entitled to receive 100% of all of his Accounts as of the day he terminated
because of his Disability.
7.5 SEVERANCE BENEFIT. If a Member severs employment with the
Employer and all Affiliated Employers for any reason other than death,
retirement or disability, he is entitled to receive (a) 100% of all of his
Accounts, except his Matching Employer Contribution Account, and (b) that
percentage of his Matching Employer Contribution Account, if any, as shown in
the vesting schedule below, as of the day he severs employment.
Percentage of Amount Invested
In Accounts Containing
Completed Years of Active Service Employer Contributions
- --------------------------------- ----------------------
Less than two years.............................. 0%
Two years but less than three years.............. 20%
Three years but less than four years............. 40%
Four years but less than five years.............. 60%
Five years but less than six years............... 80%
Six years or more................................ 100%
Prior to a Member's termination of employment with the Employer and
all Affiliated Employers, he will have a nonforfeitable interest in the portion
of the Matching Employer Contributions specified in the above vesting schedule.
VII-1
32
7.6 DISTRIBUTIONS TO DIVORCED SPOUSE. If the Committee determines
that a judgment, decree or order relating to child support, alimony payments or
marital property rights of the spouse, former spouse, child or other dependent
of the Member is a qualified domestic relations order which complies with a
state's domestic relations law or community property law and Section 414(p) of
the Code or is a domestic relations order entered before January 1, 1985, the
Committee may direct the Trustee to distribute the awarded property to the
person named in the award but only in the manner permitted under this Plan. To
be a qualified domestic relations order, the order must clearly specify: (a) the
name and last known mailing address of the Member and each alternate payee under
the order, (b) the amount or percentage of the Member's benefits to be paid from
the Plan to each alternate payee or the manner in which the amount or percentage
can be determined, (c) the number of payments or periods for which the order
applies, (d) the plan to which the order applies, and (e) all other requirements
set forth in Section 414(p) of the Code. If a distribution is made at a time
when the Member is not fully vested, a separate subaccount shall be created for
the remaining portion of each Account which was not fully vested. That
subaccount shall then remain frozen: that is, no further contributions of any
form and no forfeitures shall be allocated to the subaccount; however, it shall
receive its proportionate share of trust appreciation or depreciation and income
earned on or losses incurred by the Trust Fund. To determine the Member's vested
interest in each subaccount at any future time, the Committee shall add back to
the subaccount at that time the amount that was previously distributed under the
qualified domestic relations order, shall multiply the reconstituted subaccount
by the vesting percentage, and shall then subtract the amount that was
previously distributed. The remaining amount is the Member's vested interest in
the subaccount at that time.
7.7 WITHDRAWALS. Only the following withdrawals may be made during
employment:
(a) A Member is entitled to receive a withdrawal from his Salary
Deferral Contribution Account, his vested interest in his Matching
Employer Contribution Account and his Rollover Account in the event of an
immediate and heavy financial need incurred by the Member and the
Committee's determination that the withdrawal is necessary to alleviate
that hardship.
A distribution shall be made on account of financial hardship only
if the distribution is for: (i) Expenses for medical care described in
Section 213(d) of the Code previously incurred by the Member, the Member's
spouse, or any dependents of the Member (as defined in Section 152 of the
Code) or necessary for these persons to obtain medical care described in
Section 213(d) of the Code, (ii) costs directly related to the purchase
(excluding mortgage payments) of a principal residence for the Member,
(iii) payment of tuition and related educational fees for the next 12
months of post-secondary education for the Member, his or her spouse,
children, or dependents (as defined in Section 152 of the Code), (iv)
payments necessary to prevent the eviction of the Member from his
principal residence or foreclosure on the mortgage of the Member's
VII-2
33
principal residence, or (v) any other event added to this list by the
Commissioner of Internal Revenue.
A distribution to satisfy an immediate and heavy financial need
shall not be made in excess of the amount of the immediate and heavy
financial need of the Member and the Member must have obtained all
distributions, other than hardship distributions, and all nontaxable (at
the time of the loan) loans currently available under all plans maintained
by the Employer. The amount of a Member's immediate and heavy financial
need includes any amounts necessary to pay any federal, state or local
income taxes or penalties reasonably anticipated to result from the
financial hardship distribution.
The Member's hardship distribution shall terminate his right to have
the Employer make any Salary Deferral Contributions on his or her behalf
until the next time Salary Deferral Contributions are permitted after the
lapse of 12 months following the hardship distribution and his or her
timely filing of a written request to resume his Salary Deferral
Contributions. When the Member resumes Salary Deferral Contributions, he
cannot have the Employer make any Salary Deferral Contributions in excess
of the limit in Section 402(g) of the Code for that taxable year reduced
by the amount of Salary Deferral Contributions made by the Employer on the
Member's behalf during the taxable year of the Member in which he received
the hardship distribution. In addition, for 12 months after he receives a
hardship distribution from this Plan the Member is prohibited from making
elective contributions and employee contributions to all other qualified
and nonqualified plans of deferred compensation maintained by the
Employer, including stock option plans, stock purchase plans and Code
Section 401(k) cash or deferred arrangements that are part of cafeteria
plans described in Section 125 of the Code. However, the Member is not
prohibited from making mandatory employee contributions to a defined
benefit plan, or contributions to a health or welfare benefit plan,
including one that is part of a cafeteria plan within the meaning of
Section 125 of the Code.
Financial hardship withdrawals will be made in the following order:
First withdrawals will be made from the Member's Rollover Account, then
from his Matching Employer Contribution Account, and finally, from his or
her Salary Deferral Contribution Account. A Member shall not be entitled
to make a financial hardship withdrawal of any amount credited to his
Qualified Nonelective Employer Contribution Account, or of any income that
is allocable or credited to his Member's Salary Deferral Contribution
Account.
(b) A Member may withdraw part or all of his vested Account balance
on or after the date that he attains age 59-1/2.
VII-3
34
7.8 LOANS. The Committee may direct the Trustees to make loans to
Members (and Beneficiaries who are "parties in interest" within the meaning of
ERISA) who have a vested interest in the Plan. The Loan Committee established by
the Committee will be responsible for administering the Plan loan program. All
loans will comply with the following requirements:
(a) All loans will be made solely from the Member's or Beneficiary's
Account.
(b) Loans will be available on a nondiscriminatory basis to all
Beneficiaries who are "parties in interest" within the meaning of ERISA,
and to all Members.
(c) Loans will not be made for less than $1,000.
(d) The maximum amount of a loan may not exceed the lesser of (A)
$50,000 reduced by the person's highest outstanding loan balance from the
Plan during the preceding one year period, or (B) one-half of the present
value of the person's vested Account balance under the Plan determined as
of the date on which the loan is approved by the Loan Committee.
(e) Any loan from the Plan will be evidenced by a note or notes
(signed by the person applying for the loan) having such maturity, bearing
such rate of interest, and containing such other terms as the Loan
Committee will require by uniform and nondiscriminatory rules consistent
with this Section and proper lending practices.
(f) All loans will bear a reasonable rate of interest which will be
established by the Loan Committee. In determining the proper rate of
interest to be charged, at the time any loan is made or renewed, the Loan
Committee will contact at least two of the largest banks in the geographic
location in which the Member or Beneficiary resides to determine what
interest rate the banks would charge for a similar loan taking into
account the collateral offered.
(g) Each loan will be fully secured by a pledge of the borrowing
person's vested Account balance. No more than fifty percent (50%) of the
person's vested Account balance (determined immediately after the
origination of the loan) will be considered as security for any loan.
(h) The term of the loan will not be less than 18 months. Generally,
the term of the loan will not be more than 5 years. The Loan Committee may
agree to a longer term (but not more than 7 years) only if such term is
otherwise reasonable and the proceeds of the loan are to be used to
acquire a dwelling which will be used within a reasonable time (determined
at the time the loan is made) as the principal residence of the borrowing
person.
VII-4
35
(i) The loan agreement will require level amortization over the term
of the loan. A Member's loan agreement will also require that loan
repayments be made through payroll deductions.
(j) If a person fails to make a required payment within 30 days of
the due date set forth in the loan agreement, the loan will be in default.
(k) If a Member has an outstanding loan from the Plan at the time he
terminates employment with the Employer and all Affiliated Employers, the
outstanding loan principal balance and any accrued but unpaid interest
will become immediately due in full. The Member will have the right to
immediately pay the Trustee that amount. If the Member fails to repay the
loan, the Trustee will foreclose on the loan and the Member will be deemed
to have received a Plan distribution of the amount foreclosed upon. The
Trustee will not foreclose upon a Member's Salary Deferral Contributions
Account or Qualified Nonelective Employer Contributions Account until the
Member has terminated employment with the Employer and all Affiliated
Employers.
(l) If a Beneficiary defaults on his loan, the Trustee will
foreclose on the loan and the Beneficiary will be deemed to have received
a Plan distribution of the amount foreclosed upon.
(m) No person shall be entitled to apply for a new Plan loan until
at least 90 days have transpired since he fully repaid his last loan from
the Plan.
(n) No amount that is pledged as collateral for a Plan loan to a
Participant will be available for withdrawal before he has fully repaid
his loan.
(o) All interest payments made pursuant to the terms of the loan
agreement will be credited to the borrowing person's Account and will not
be considered as general earnings of the Trust Fund to be allocated to
other Members.
7.9 FORFEITURE BY LOST MEMBERS OR BENEFICIARIES. If a person who is
entitled to a distribution cannot be located during a search period of 60 days
after the Trustee has initially attempted making payment, that person's Account
shall be forfeited. However, if at any time prior to the termination of this
Plan and the complete distribution of the Trust Fund, the former Member or
Beneficiary files a claim with the Committee for the forfeited benefit, that
benefit shall be reinstated (without adjustment for trust income or losses
during the forfeited period) effective as of the date of the receipt of the
claim. As soon as appropriate following the Employer's Contribution of the
reinstated amount, it shall be paid to the former Member or Beneficiary in a
single sum.
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36
7.10 FORFEITURE ON TERMINATION OF PARTICIPATION. If as a result of
terminating his participation in the Plan a former Member receives a
distribution of his entire vested interest in his Account, the nonvested amount
in his Account is immediately forfeited. A former Member who received no
distribution upon his termination of employment with all Affiliated Employers
because he had no vested interest shall be treated as if he received a
distribution of his entire vested interest and that interest was less than
$3,500.00.
If a former Member who has a vested interest in his Account received
no distribution or a distribution of less than the full amount of his entire
vested interest as a result of his termination of participation in the Plan, the
nonvested amount in his Account is immediately forfeited following five
consecutive one-year Periods of Severance.
A distribution shall be treated as if it were made as a result of
termination of participation in the Plan if it is made not later than the end of
the second Plan Year following the Plan Year in which the former Member's
termination occurs.
7.11 CLAIMS PROCEDURE. When a benefit is due, the Member or
Beneficiary should submit his claim to the person or office designated by the
Committee to receive claims. Under normal circumstances, a final decision shall
be made as to a claim within 90 days after receipt of the claim. If the
Committee notifies the claimant in writing during the initial 90 day period, it
may extend the period up to 180 days after the initial receipt of the claim. The
written notice must contain the circumstances necessitating the extension and
the anticipated date for the final decision. If a claim is denied during the
claims period, the Committee must notify the claimant in writing. The denial
must include the specific reasons for it, the Plan provisions upon which the
denial is based, and the claims review procedure. If no action is taken during
the claims period, the claim is treated as if it were denied on the last day of
the claims period.
If a Member's or Beneficiary's claim is denied and he wants a
review, he must apply to the Committee in writing. That application may include
any comment or argument the claimant wants to make. The claimant may either
represent himself or appoint a representative, either of whom has the right to
inspect all documents pertaining to the claim and its denial. The Committee may
schedule any meeting with the claimant or his representative that it finds
necessary or appropriate to complete its review.
The request for review must be filed within 90 days after the
denial. If it is not, the denial becomes final. If a timely request is made, the
Committee must make its decision, under normal circumstances, within 60 days of
the receipt of the request for review. However, if the Committee notifies the
claimant prior to the expiration of the initial review period, it may extend the
period of review up to 120 days following the initial receipt of the request for
a review. All decisions of the Committee must be in writing and must include the
specific reasons for their action and the Plan provisions on which their
decision is based. If a decision is not given to the
VII-6
37
claimant within the review period, the claim is treated as if it were denied on
the last day of the review period.
7.12 FORM OF DISTRIBUTIONS. Distributions shall be made only in cash
unless an asset held in the Trust cannot be sold by the distribution date or can
only be sold at less than its appraised value, in which event part or all of the
distribution may be made in kind. A distribution shall be made in a lump sum
payment or, as a Direct Rollover if the Distributee elects, at the time and in
the manner prescribed by the Committee, to have any portion or all of the
Eligible Rollover Distribution paid directly to an Eligible Retirement Plan
named by the Distributee.
Any benefit held for distribution past one or more Valuation Dates
shall continue to share in the appreciation or depreciation of the Trust Fund
and in the income earned or losses incurred by the Trust Fund until the last
Valuation Date which occurs with or next precedes the date distribution is made.
If the benefit to be distributed is greater than $3,500.00 and the
Member or former Member consents to the distribution, the benefit should be
distributed or begin to be distributed within one year after the Member or
former Member becomes entitled to the benefit. If the benefit is greater than
$3,500.00 and the Member or former Member fails to consent to the distribution,
the distribution shall not be made without the Member's or former Member's
consent until he attains his Retirement Age or age 62, whichever is later. If
the Member or former Member dies, the surviving spouse may require payments to
begin within a reasonable time.
7.13 TIME OF DISTRIBUTIONS. Notwithstanding any other provision of
the Plan, all benefits payable under the Plan shall be distributed, or commence
to be distributed, in compliance with the following provisions:
(a) DISTRIBUTION DEADLINES FOR MEMBERS OR FORMER MEMBERS WHO ARE 70
1/2 OR OLDER. If a Member or former Member attains 70 1/2, the Member or
former Member must elect to receive the distribution required under
section 401(a)(9) of the Code in one lump sum or in installments which
must commence by his Required Beginning Date. If installments are elected,
each installment paid must be equal to or greater than the minimum
required distribution under section 401(a)(9) of the Code.
(b) DISTRIBUTION DEADLINE FOR DEATH BENEFITS. If a Member or former
Member dies before the distribution of his Plan benefit has commenced, his
entire interest shall be distributed within five years after his death. If
a Member or former Member dies after the distribution of his Plan benefit
has commenced, the remaining portion of his interest in the Plan, if any,
will be distributed at least as rapidly as under the installment method of
distribution selected by him.
(c) LIMITATIONS ON DEATH BENEFITS. Benefits payable under the Plan
shall not be provided in any form that would cause a Member's death
benefit to be more than incidental. Any distribution required to
VII-7
38
satisfy the incidental benefit requirement shall be considered a required
distribution for purposes of section 401(a)(9) of the Code.
(d) COMPLIANCE WITH SECTION 401(a)(9). All distributions under the
Plan will be made in accordance with the requirements of section 401(a)(9)
of the Code and all Regulations promulgated thereunder. The provisions of
the Plan reflecting section 401(a)(9) of the Code override any
distribution options in the Plan inconsistent with such Section.
(e) COMPLIANCE WITH SECTION 401(a)(14). Unless the Member or former
Member otherwise elects, the payment of benefits under the Plan to the
Member or former Member will begin not later than the 60th day after the
close of the Plan Year in which occurs the latest of (a) the date on which
the Member or former Member attains the later of age 62 or the normal
retirement age under the Plan, age 65, (b) the 10th anniversary of the
year in which the Member or former Member commenced participation in the
Plan, or (c) the Member or former Member Severs Service.
7.14 DESIGNATION OF BENEFICIARY. Each Member has the right to
designate and to revoke the designation of his Beneficiary or Beneficiaries.
Each designation or revocation must be evidenced by a written document in the
form required by the Committee, signed by the Member and filed with the
Committee. If no designation is on file at the time of a Member's death or if
the Committee determines that the designation is ineffective, the designated
Beneficiary shall be the Member's spouse, if living, or if not, the executor,
administrator or other personal representative of the Member's estate.
If a Member is considered to be married under local law, the
Member's designation of any Beneficiary, other than the Member's spouse, shall
not be valid unless the spouse acknowledges in writing that he or she
understands the effect of the Member's beneficiary designation and consents to
it. The consent must be to a specific Beneficiary. The written acknowledgement
and consent must be filed with the Committee, signed by the spouse and at least
two witnesses, one of whom must be a member of the Committee or a notary public.
However, if the spouse cannot be located or there exist other circumstances as
described in Sections 401(a)(11) and 417(a)(2) of the Code, the requirement of
the Member's spouse's acknowledgement and consent may be waived. If a
Beneficiary other than the Member's spouse is named, the designation shall
become invalid if the Member is later determined to be married under local law,
the Member's missing spouse is located or the circumstances which resulted in
the waiver of the requirement of obtaining the consent of the Member's spouse no
longer exist.
7.15 DISTRIBUTIONS TO DISABLED. If the Committee determines that any
person to whom a payment is due is unable to care for his affairs because of
physical or mental disability, it shall have the authority to cause the payments
to be made to the spouse, brother, sister or other person the Committee
determines to have incurred, or
VII-8
39
to be expected to incur, expenses for that person unless a prior claim is made
by a qualified guardian or other legal representative. The Committee and the
Trustee shall not be responsible to oversee the application of those payments.
Payments made pursuant to this power shall be a complete discharge of all
liability under the Plan and Trust and the obligations of the Employer, the
Trustee, the Trust Fund and the Committee.
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40
ARTICLE VIII
TOP-HEAVY REQUIREMENTS
8.1 APPLICATION. The requirements described in this Article shall
apply to each Plan Year that this Plan is determined to be a Top-Heavy Plan
under the test set out in the following Section.
8.2 TOP-HEAVY TEST. If on the Determination Date the Aggregate
Accounts of Key Employees in the Plan exceeds 60% of the Aggregate Accounts of
all Employees in the Plan, this Plan shall be a Top-Heavy Plan for that Plan
Year. In addition, if this Plan is required to be included in an Aggregation
Group and that group is a top-heavy group, this Plan shall be treated as a
Top-Heavy Plan. An Aggregation Group is a top-heavy group if on the
Determination Date the sum of (a) the present value of the cumulative accrued
benefits for Key Employees under all defined benefit plans in the Aggregation
Group which contains this Plan, plus (b) the total of all of the accounts of Key
Employees under all defined contribution plans included in the Aggregation Group
(which contains this Plan) is more than 60% of a similar sum determined for all
employees covered in the Aggregation Group which contains this Plan.
In applying the above tests, the following rules shall apply:
(a) in determining the present value of the accumulated accrued
benefits for any Employee or the amount in the account of any Employee,
the value or amount shall be increased by all distributions made to or for
the benefit of the Employee under the Plan during the five-year period
ending on the Determination Date;
(b) all rollover contributions made after December 31, 1983 by the
Employee to the plan shall not be considered by the plan for either test;
(c) if an Employee is a Non-Key Employee under the plan for the Plan
Year but was a Key Employee under the plan for another prior Plan Year,
his account shall not be considered; and
(d) benefits shall not be taken into account in determining the
top-heavy ratio for any Employee who has not performed services for the
Employer during the last five-year period ending upon the Determination
Date.
8.3 VESTING RESTRICTIONS IF PLAN BECOMES TOP-HEAVY. If a Member has
at least one Hour of Service during a Plan Year when the Plan is a Top-Heavy
Plan, he shall either vest under each of the normal vesting provisions of the
Plan or under the following vesting schedule, whichever is more favorable:
VIII-1
41
Percentage of Amount Invested
In Accounts Containing
Completed Years of Active Service Employer Contributions
- --------------------------------- ----------------------
Less than two years............................... 0%
Two years but less than three years............... 20%
Three years but less than four years.............. 40%
Four years but less than five years............... 60%
Five years but less than six years................ 80%
Six years or more................................. 100%
If the Plan ceases to be a Top-Heavy Plan, this requirement shall no longer
apply. After that date, the normal vesting provisions of the Plan shall be
applicable to all subsequent Contributions by the Employer.
8.4 MINIMUM CONTRIBUTIONS IF PLAN BECOMES TOP-HEAVY. If this Plan is
a Top-Heavy Plan and the normal allocation of the Employer Contribution and
forfeitures is less than 3% of any Non-Key Employee Member's Annual
Compensation, the Committee, without regard to the normal allocation procedures,
shall allocate the Employer Contribution and the forfeitures among the Members
who are in the employ of the Employer at the end of the Plan Year in proportion
to each Member's Annual Compensation as compared to the total Annual
Compensation of all Members for that Plan Year until each Non-Key Employee
Member has had an amount equal to the lesser of (i) the highest rate of
Contribution applicable to any Key Employee, or (ii) 3% of his Annual
Compensation allocated to his Account. At that time, any more Employer
Contributions or forfeitures shall be allocated under the normal allocation
procedures described earlier in this Plan. Salary Deferral Contributions made on
behalf of Key Employees are included in determining the highest rate of Employer
Contributions. Salary Deferral Contributions made on behalf of Non-Key Employees
are not included for that purpose. Amounts that may be treated as Section 401(k)
Contributions made on behalf of Non-Key Employees may not be included in
determining the minimum contribution required under this Section to the extent
that they are treated as Section 401(k) Contributions for purposes of the Actual
Deferral Percentage test.
In applying this restriction, the following rules shall apply:
(a) Each Employee who is eligible for membership (without regard to
whether he has made mandatory contributions, if any are required, or
whether his compensation is less than a stated amount) shall be entitled
to receive an allocation under this Section; and
(b) All defined contribution plans required to be included in the
Aggregation Group shall be treated as one plan for purposes of meeting the
3% maximum; this required aggregation shall not apply if this Plan is also
required to be included in an Aggregation Group which includes a defined
benefit plan and this Plan enables that defined benefit plan to meet the
requirements of Sections 401(a)(4) or 410 of the Code.
VIII-2
42
8.5 COVERAGE UNDER MULTIPLE TOP-HEAVY PLANS. If this Plan is a
Top-Heavy Plan, it must meet the vesting and benefit requirements described in
this Article without taking into account contributions or benefits under Chapter
2 of the Code (relating to tax on self-employment income), Chapter 21 of the
Code (relating to Federal Insurance Contributions Act), Title II of the Social
Security Act or any other Federal or State law.
If a Non-Key Employee is covered by both a Top-Heavy defined
contribution plan and a defined benefit plan, he shall receive the defined
benefit minimum, offset by the benefits provided under the defined contribution
plan.
8.6 RESTRICTIONS IF PLAN BECOMES SUPER TOP-HEAVY. If the Plan is
determined to be a Top-Heavy Plan, the number "1.00" must be substituted for the
number "1.25" when applying the limitations of Section 415 of the Code to this
Plan, unless the Plan would not be a Top-Heavy Plan if "90%" were substituted
for "60%" and the Employer Contribution for the Plan Year for each Non-Key
Employee, who is a Member, is not less than 4% of the Member's Annual
Compensation.
VIII-3
43
ARTICLE IX
ADMINISTRATION OF THE PLAN
9.1 APPOINTMENT, TERM OF SERVICE & REMOVAL. The Board of Directors
shall appoint a Committee to administer this Plan. The members shall serve until
their resignation, death or removal. Any member may resign at any time by
mailing a written resignation to the Board of Directors. Any member may be
removed by the Board of Directors, with or without cause. Vacancies may be
filled by the Board of Directors from time to time.
9.2 POWERS. The Committee is a fiduciary. It has the exclusive
responsibility for the general administration of the Plan and Trust, and has all
powers necessary to accomplish that purpose, including but not limited to the
following rights, powers, and authorities:
(a) To make rules for administering the Plan and Trust so long as
they are not inconsistent with the terms of the Plan;
(b) To construe all provisions of the Plan and Trust;
(c) To correct any defect, supply any omission, or reconcile any
inconsistency which may appear in the Plan or Trust;
(d) To select, employ, and compensate at any time any consultants,
actuaries, accountants, attorneys, and other agents and employees the
Committee believes necessary or advisable for the proper administration of
the Plan and Trust; any firm or person selected may be a disqualified
person but only if the requirements of Section 4975(d) of the Code have
been met;
(e) To determine all questions relating to eligibility, Active
Service, Compensation, allocations and all other matters relating to
benefits or Members' entitlement to benefits;
(f) To determine all controversies relating to the administration of
the Plan and Trust, including but not limited to any differences of
opinion arising between an Employer and the Trustee or a Member, or any
combination of them and any questions it believes advisable for the proper
administration of the Plan and Trust;
(g) To direct or to appoint an investment manager or managers who
can direct the Trustee in all matters relating to the investment,
reinvestment and management of the Trust Fund;
(h) To direct the Trustee in all matters relating to the payment of
Plan benefits; and
IX-1
44
(i) To delegate any clerical or recordation duties of the Committee
as the Committee believes is advisable to properly administer the Plan and
Trust.
The actions of the Committee in exercising all of the rights, powers, and
authorities set out in this Section and all other Sections of this Plan, when
performed in good faith and in its sole judgment, shall be final, conclusive and
binding on all parties.
9.3 ORGANIZATION. The Committee may select, from among its members,
a chairman, and may select a secretary. The secretary need not be a member of
the Committee. The secretary shall keep all records, documents and data
pertaining to its administration of the Plan and Trust.
9.4 QUORUM AND MAJORITY ACTION. A majority of the Committee
constitutes a quorum for the transaction of business. The vote of a majority of
the members present at any meeting shall decide any question brought before that
meeting. In addition, the Committee may decide any question by a vote, taken
without a meeting, of a majority of its members.
9.5 SIGNATURES. The chairman, the secretary and any one or more of
the members of the Committee to which the Committee has delegated the power
shall each, severally, have the power to execute any document on behalf of the
Committee, and to execute any certificate or other written evidence of the
action of the Committee. The Trustee, after it is notified of any delegation of
power in writing, shall accept and may rely upon any document executed by the
appropriate member or members as representing the action of the Committee until
the Committee files a written revocation of that delegation of power with the
Trustee.
9.6 DISQUALIFICATION OF COMMITTEE MEMBER. A member of the Committee
who is also a Member of this Plan shall not vote or act upon any matter relating
solely to himself.
9.7 DISCLOSURE TO MEMBERS. The Committee shall make available to
each Member and Beneficiary for his examination those records, documents and
other data required under ERISA, but only at reasonable times during business
hours. No Member or Beneficiary has the right to examine any data or records
reflecting the compensation paid to any other Member or Beneficiary. The
Committee is not required to make any other data or records available other than
those required by ERISA.
9.8 STANDARD OF PERFORMANCE. The Committee and each of its members
shall use the care, skill, prudence and diligence under the circumstances then
prevailing that a prudent man, acting in a like capacity and familiar with such
matters, would use in conducting his business as the administrator of the Plan,
shall, when exercising its power to direct investments, diversify the
investments of the Plan so as to minimize the risk of large losses, unless under
the circumstances it is clearly prudent not to do so, and shall otherwise comply
with the provisions of this Plan and ERISA.
IX-2
45
9.9 LIABILITY OF COMMITTEE AND LIABILITY INSURANCE. No member of the
Committee shall be liable for any act or omission of any other member of the
Committee, the Trustee, any investment manager appointed by the Committee or any
other agent appointed by the Committee unless required by the terms of ERISA or
another applicable state or federal law under which liability cannot be waived.
No member of the Committee shall be liable for any act or omission of his own
unless required by ERISA or another applicable state or federal law under which
liability cannot be waived.
If the Committee directs the Trustee to do so, it may purchase out
of the Trust Fund insurance for the members of the Committee, for any other
fiduciaries appointed by the Committee and for the Trust Fund itself to cover
liability or losses occurring because of the act or omission of any one or more
of the members of the Committee or any other fiduciary appointed under this
Plan. But, that insurance must permit recourse by the insurer against the
members of the Committee or the other fiduciaries concerned if the loss is
caused by breach of a fiduciary obligation by one or more members of the
Committee or other fiduciary.
9.10 EXEMPTION FROM BOND. No member of the Committee is required to
give bond for the performance of his duties unless required by a law which
cannot be waived.
9.11 COMPENSATION. The Committee shall serve without compensation
but shall be reimbursed by the Employer for all expenses properly incurred in
the performance of their duties unless the Sponsor elects to have those expenses
paid from the Trust Fund. Each Employer shall pay that part of the expense as
determined by the Committee in its sole judgment.
9.12 PERSONS SERVING IN DUAL FIDUCIARY ROLES. Any person, group of
persons, corporations, firm or other entity, may serve in more than one
fiduciary capacity with respect to this Plan, including serving as both Trustee
and as a member of the Committee.
9.13 ADMINISTRATOR. For all purposes of ERISA, the administrator of
the Plan is the Sponsor. The administrator has the final responsibility for
compliance with all reporting and disclosure requirements imposed under all
applicable federal or state laws and regulations.
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46
ARTICLE X
TRUST FUND AND CONTRIBUTIONS
10.1 FUNDING OF PLAN. This Plan shall be funded by one or more
separate Trusts. If more than one Trust is used, each Trust shall be designated
by the name of the Plan followed by a number assigned by the Committee at the
time the Trust is established.
10.2 INCORPORATION OF TRUST. Each Trust is a part of this Plan. All
rights or benefits which accrue to a person under this Plan shall be subject
also to the terms of the agreements creating the Trust or Trusts and any
amendments to them which are not in direct conflict with this Plan.
10.3 AUTHORITY OF TRUSTEE. Each Trustee shall have full title and
legal ownership of the assets in the separate Trust which, from time to time, is
in his separate possession. No other Trustee shall have joint title to or joint
legal ownership of any asset in one of the other Trusts held by another Trustee.
Each Trustee shall be governed separately by the trust agreement entered into
between the Employer and that Trustee and the terms of this Plan without regard
to any other agreement entered into between any other Trustee and the Employer
as a part of this Plan.
10.4 ALLOCATION OF RESPONSIBILITY. To the fullest extent permitted
under Section 405 of ERISA, the agreements entered into between the Employer and
each of the Trustees shall be interpreted to allocate to each Trustee its
specific responsibilities, obligations and duties so as to relieve all other
Trustees from liability either through the agreement, this Plan or ERISA, for
any act of any other Trustee which results in a loss to the Plan because of his
act or failure to act.
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47
ARTICLE XI
ADOPTION OF PLAN BY OTHER EMPLOYERS
11.1 ADOPTION PROCEDURE. Any business organization may, with the
approval of the Board of Directors, adopt this Plan by:
(a) A certified resolution or consent of the board of directors of
the adopting Employer or an executed adoption instrument (approved by the
board of directors of the adopting Employer) agreeing to be bound as an
Employer by all the terms, conditions and limitations of this Plan except
those, if any, specifically described in the adoption instrument; and
(b) Providing all information required by the Committee and the
Trustee.
An adoption may be retroactive to the beginning of a Plan Year if
these conditions are complied with on or before the last day of that Plan Year.
11.2 NO JOINT VENTURE IMPLIED. The document which evidences the
adoption of the Plan by an Employer shall become a part of this Plan. However,
neither the adoption of this Plan and its related Trust Fund by an Employer nor
any act performed by it in relation to this Plan and its related Trust Fund
shall ever create a joint venture or partnership relation between it and any
other Employer.
11.3 ALL TRUST ASSETS AVAILABLE TO PAY ALL BENEFITS. The Accounts of
Members employed by the Employers which adopt this Plan shall be commingled for
investment purposes. All assets in the Trust Fund shall be available to pay
benefits to all Members employed by any Employer which is an Affiliated Employer
with the first Employer.
11.4 QUALIFICATION A CONDITION PRECEDENT TO ADOPTION AND CONTINUED
PARTICIPATION. The adoption of this Plan and the Trust or Trusts used to fund
this Plan by a business organization is contingent upon and subject to the
express condition precedent that the initial adoption meets all statutory and
regulatory requirements for qualification of the Plan and the exemption of the
Trust or Trusts and that the Plan and the Trust or Trusts that are applicable to
it continue in operation to maintain their qualified and exempt status. In the
event the adoption fails to initially qualify and be exempt, the adoption shall
fail retroactively for failure to meet the condition precedent and the portion
of the Trust Fund applicable to the adoption shall be immediately returned to
the adopting business organization and the adoption shall be void ab initio. In
the event the adoption as to a given business organization later becomes
disqualified and loses its exemption for any reason, the adoption shall fail
retroactively for failure to meet the condition precedent and the portion of the
Trust Fund allocable to the adoption by that business organization shall be
immediately spun off, retroactively as of the last date for which the Plan
qualified, to a separate Trust for its sole benefit and an identical but
separate Plan shall be created, retroactively effective as of the last date
XI-1
48
the Plan as adopted by that business organization qualified, for the benefit of
the Members covered by that adoption.
XI-2
49
ARTICLE XII
AMENDMENT AND TERMINATION
12.1 RIGHT TO AMEND AND LIMITATIONS THEREON. The Sponsor has the
sole right to amend this Plan. An amendment may be made by a certified
resolution or consent of the Board of Directors, or by an instrument in writing
executed by the appropriate officer of the Sponsor. The amendment must describe
the nature of the amendment and its effective date. No amendment shall:
(a) Vest in an Employer any interest in the Trust Fund;
(b) Cause or permit the Trust Fund to be diverted to any purpose
other than the exclusive benefit of the present or future Members and
their Beneficiaries except under the circumstances described in Section
4.8;
(c) Decrease the Account of any Member or eliminate an optional form
of payment;
(d) Increase substantially the duties or liabilities of the Trustee
without its written consent; or
(e) Change the vesting schedule to one which would result in the
nonforfeitable percentage of the Account derived from Employer
Contributions (determined as of the later of the date of the adoption of
the amendment or of the effective date of the amendment) of any Member
being less than the nonforfeitable percentage computed under the Plan
without regard to the amendment. If the Plan's vesting schedule is
amended, if the Plan is amended in any other way that affects the
computation of the Member's nonforfeitable percentage, or if the Plan is
deemed amended by an automatic change to or from a Top-Heavy vesting
schedule, each Member with at least three years of Service may elect,
within a reasonable period after the adoption of the amendment or the
change, to have the nonforfeitable percentage computed under the Plan
without regard to the amendment or the change. The election period shall
begin no later than the date the amendment is adopted or deemed to be made
and shall end no later than the latest of the following dates: (1) 60 days
after the date the amendment is adopted or deemed to be made, (2) 60 days
after the date the amendment becomes effective, or (3) 60 days after the
day the Member is issued written notice of the amendment.
Each Employer shall be deemed to have adopted any amendment made by
the Sponsor unless the Employer notifies the Committee of its rejection in
writing within 30 days after it receives a copy of the amendment. A rejection
shall constitute
XII-1
50
a withdrawal from this Plan by that Employer unless the Sponsor acquiesces in
the rejection.
12.2 MANDATORY AMENDMENTS. The Contributions of each Employer to
this Plan are intended to be:
(a) Deductible under the applicable provisions of the Code;
(b) Except as otherwise prescribed by applicable law, exempt from
the Federal Social Security Act;
(c) Except as otherwise prescribed by applicable law, exempt from
withholding under the Code; and
(d) Excludable from any Employee's regular rate of pay, as that term
is defined under the Fair Labor Standards Act of 1938, as amended.
The Sponsor shall make any amendment necessary to carry out this
intention, and it may be made retroactively.
12.3 WITHDRAWAL OF EMPLOYER. An Employer may withdraw from this Plan
and its related Trust Fund if the Sponsor does not acquiesce in its rejection of
an amendment or by giving written notice of its intent to withdraw to the
Committee. The Committee shall then determine the portion of the Trust Fund that
is attributable to the Members employed by the withdrawing Employer and shall
notify the Trustee to segregate and transfer those assets to the successor
Trustee or Trustees when it receives a designation of the successor from the
withdrawing Employer.
A withdrawal shall not terminate the Plan and its related Trust Fund
with respect to the withdrawing Employer, if the Employer either appoints a
successor Trustee or Trustees and reaffirms this Plan and its related Trust Fund
as its new and separate plan and trust intended to qualify under Section 401(a)
of the Code, or establishes another plan and trust intended to qualify under
Section 401(a) of the Code.
The determination of the Committee, in its sole discretion, of the
portion of the Trust Fund that is attributable to the Members employed by the
withdrawing Employer shall be final and binding upon all parties; and, the
Trustee's transfer of those assets to the designated successor Trustee shall
relieve the Trustee of any further obligation, liability or duty to the
withdrawing Employer, the Members employed by that Employer and their
Beneficiaries, and the successor Trustee or Trustees.
12.4 TERMINATION OF PLAN. The Sponsor may terminate this Plan and
its related Trust Fund with respect to all Employers by executing and delivering
to the Committee and the Trustee, a notice of termination, specifying the date
of termination. Any Employer may terminate this Plan and its related Trust Fund
with respect to itself by executing and delivering to the Trustee a notice of
termination, specifying the date of termination. Likewise, this Plan and its
related Trust Fund shall automatically terminate with respect to any Employer if
there is a general assignment by that
XII-2
51
Employer to or for the benefit of its creditors, or a liquidation or dissolution
of that Employer without a successor. Upon the termination of this Plan as to an
Employer, the Trustee shall distribute to each Member employed by the
terminating Employer the amount certified by the Committee to be due the Member.
The Employer should apply to the Internal Revenue Service for a
determination letter with respect to its termination, and the Trustee should not
distribute the Trust Funds until a determination is received. However, should it
decide that a distribution before receipt of the determination letter is
necessary or appropriate it should retain sufficient assets to cover any tax
that may become due upon that determination.
12.5 PARTIAL OR COMPLETE TERMINATION OR COMPLETE DISCONTINUANCE OF
CONTRIBUTIONS. Without regard to any other provision of this Plan, if there is a
partial or total termination of this Plan or there is a complete discontinuance
of the Employer's Contributions, each of the affected Members shall immediately
become 100% vested in his Account as of the end of the last Plan Year for which
a substantial Employer Contribution was made and in any amounts later allocated
to his Account. If the Employer then resumes making substantial Contributions at
any time, the appropriate vesting schedule shall again apply to all amounts
allocated to each affected Member's Account beginning with the Plan Year for
which they were resumed.
12.6 CONTINUANCE PERMITTED UPON SALE OR TRANSFER OF ASSETS. An
Employer's participation in this Plan and its related Trust Fund shall not
automatically terminate if it consolidates or merges and is not the surviving
corporation, sells substantially all of its assets, is a party to a
reorganization and its Employees and substantially all of its assets are
transferred to another entity, liquidates, or dissolves, if there is a successor
organization. Instead, the successor may assume and continue this Plan and its
related Trust Fund by executing a direction, entering into a contractual
commitment or adopting a resolution providing for the continuance of the Plan
and its related Trust Fund. Only upon the successor's rejection of this Plan and
its related Trust Fund or its failure to respond to the Employer's, the
Sponsor's or the Trustee's request that it affirm its assumption of this Plan
within 90 days of the request shall this Plan automatically terminate. In that
event the appropriate portion of the Trust Fund shall be distributed exclusively
to the Members or their Beneficiaries as soon as possible. If there is a
disposition to an unrelated entity of substantially all of the assets used by
the Employer in a trade or business or a disposition by the Employer of its
interest in a subsidiary, the Employer may make a lump sum distribution from the
Plan if it continues the Plan after the disposition; but the distribution can
only be made for those Members who continue employment with the acquiring
entity.
12.7 DISTRIBUTIONS UPON TERMINATION OF THE PLAN. A Member is
entitled to receive a lump sum distribution on account of the termination of the
Plan if the Employer and all Affiliated Employers do not establish or maintain a
successor plan within the period ending 12 months after all assets are
distributed from the Plan. A distribution on account of the termination of the
Plan may be made only in the form of a lump sum payment. Therefore, if a
Member's Account balance plus all prior Plan
XII-3
52
payments to the Member is more than $3,500 and the Member does not consent to
receive an immediate lump sum payment on account of the termination of the Plan
the Member will not receive a Plan distribution on account of the termination of
the Plan. His Plan benefit will be payable in the future on account of a
distribution event other than the termination of the Plan.
If the Plan is terminated and does not offer an annuity option
(purchased from a commercial provider) and the Employer or an Affiliated
Employer maintains another defined contribution plan the Member's Account
balance may be transferred to the other plan without his consent if he does not
consent to an immediate lump sum distribution from the Plan.
For purposes of this Section the term "successor plan" means a
defined contribution plan other than an employee stock ownership plan as defined
in section 4975(e) or 409 of the Code or a simplified employee pension plan as
defined in section 408(k) of the Code. However, the term successor plan does not
include any plan in which fewer than two percent of the Plan Members were
eligible to participate during the 24 month period beginning 12 months before
the time of Plan termination.
XII-4
53
ARTICLE XIII
MISCELLANEOUS
13.1 PLAN NOT AN EMPLOYMENT CONTRACT. The adoption and maintenance
of this Plan and its related Trust Fund is not a contract between any Employer
and its Employees which gives any Employee the right to be retained in its
employment. Likewise, it is not intended to interfere with the rights of any
Employer to discharge any Employee at any time or to interfere with the
Employee's right to terminate his employment at any time.
13.2 BENEFITS PROVIDED SOLELY FROM TRUST. All benefits payable under
this Plan shall be paid or provided for solely from the Trust Fund. No Employer
assumes any liability or responsibility to pay any benefit provided by the Plan.
13.3 ANTI-ALIENATION PROVISIONS. No principal or income payable or
to become payable from the Trust Fund shall be subject: to anticipation or
assignment by a Member or by a Beneficiary to attachment by, interference with,
or control of any creditor of a Member or Beneficiary, or to being taken or
reached by any legal or equitable process in satisfaction of any debt or
liability of a Member or Beneficiary prior to its actual receipt by the Member
or Beneficiary. An attempted conveyance, transfer, assignment, mortgage, pledge,
or encumbrance of the Trust Fund, any part of it, or any interest in it by a
Member or Beneficiary prior to distribution shall be void, whether that
conveyance, transfer, assignment, mortgage, pledge, or encumbrance is intended
to take place or become effective before or after any distribution of Trust
assets or the termination of this Trust Fund itself. The Trustee shall never
under any circumstances be required to recognize any conveyance, transfer,
assignment, mortgage, pledge or encumbrance by a Member or Beneficiary of the
Trust Fund, any part of it, or any interest in it, or to pay any money or thing
of value to any creditor or assignee of a Member or Beneficiary for any cause
whatsoever. These prohibitions against the alienation of a Member's Account
shall not apply to qualified domestic relations orders or domestic relations
orders entered prior to January 1, 1985.
13.4 REQUIREMENTS UPON MERGER OR CONSIDERATION OF PLANS. This Plan
shall not merge or consolidate with or transfer any assets or liabilities to any
other plan unless each Member would (if the Plan then terminated) receive a
benefit immediately after the merger, consolidation, or transfer which is equal
to or greater than the benefit he would have been entitled to receive
immediately before the merger, consolidation, or transfer (if the Plan had then
terminated).
13.5 GENDER OF WORDS USED. If the context requires it, words of one
gender when used in this Plan shall include the other genders, and words used in
the singular or plural shall include the other.
13.6 SEVERABILITY. Each provision of this Agreement may be severed.
If any provision is determined to be invalid or unenforceable, that
determination shall not affect the validity or enforceability of any other
provision.
XIII-1
54
13.7 REEMPLOYED VETERANS. The requirements of the Uniformed Services
Employment and Reemployment Rights Act of 1994 will be complied with in the
operation of the Plan in the manner permitted under section 414(u) of the Code.
13.8 GOVERNING LAW; PARTIES TO LEGAL ACTIONS. The provisions of this
Plan shall be construed, administered, and governed under the laws of the State
of Texas and, to the extent applicable, by the laws of the United States. The
Trustee or any Employer may at any time initiate a legal action or proceeding
for the settlement of the account of the Trustee, or for the determination of
any question or for instructions. The only necessary parties to that action or
proceeding are the Trustee and the Employer concerned. However, any other person
or persons may be included as parties defendant at the election of the Trustee
and the Employer.
XIII-2
55
IN WITNESS WHEREOF, Piper Impact, Inc. has caused this Agreement to
be executed this day of March 1997, in multiple counterparts, each of which
shall be deemed to be an original, to be effective the 1st day of January 1997,
except for those provisions which have an earlier effective date provided by
law, or as otherwise provided under applicable provisions of this Plan.
PIPER IMPACT, INC.
By____________________________________
______________________________________
Title
XIII-3
1
EXHIBIT 4.9
TRUST AGREEMENT
BETWEEN
PIPER IMPACT, INC.
AND
FIDELITY MANAGEMENT TRUST COMPANY
PIPER IMPACT 401(K) PLAN
TRUST
DATED AS OF MARCH 5, 1997
2
TABLE OF CONTENTS
SECTION PAGE
- --------- ----
1 TRUST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2 EXCLUSIVE BENEFIT AND REVERSION OF SPONSOR CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3 DISBURSEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(a) Directions from Administrator
(b) Limitations
4 INVESTMENT OF TRUST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(a) Selection of Investment Options
(b) Available Investment Options
(c) Participant Direction
(d) Mutual Funds
(e) Sponsor Stock
(f) Notes
(g) Commingled Pool Investments
(h) Reliance of Trustee on Directions
(i) Trustee Powers
5 RECORDKEEPING AND ADMINISTRATIVE SERVICES TO BE PERFORMED . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(a) General
(b) Accounts
(c) Inspection and Audit
(d) Effect of Plan Amendment
(e) Returns, Reports and Information
6 COMPENSATION AND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
7 DIRECTIONS AND INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(a) Identity of Administrator and Named Fiduciary
(b) Directions from Administrator
(c) Directions from Named Fiduciary
(d) Co-Fiduciary Liability
(e) Indemnification
(f) Survival
8 RESIGNATION OR REMOVAL OF TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(a) Resignation
(b) Removal
9 SUCCESSOR TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(a) Appointment
(b) Acceptance
(c) Corporate Action
-i-
3
TABLE OF CONTENTS
(CONTINUED)
SECTION PAGE
- --------- ----
10 TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11 RESIGNATION, REMOVAL, AND TERMINATION NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
12 DURATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
13 AMENDMENT OR MODIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
14 GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(a) Employment of Affiliates as Agents for Trustee
(b) Entire Agreement
(c) Waiver
(d) Successors and Assigns
(e) Partial Invalidity
(f) Section Headings
(g) Single Trust
(h) Withdrawal
(i) Definition of Named Fiduciary
15 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(a) Massachusetts Law Controls
(b) Trust Agreement Controls
SCHEDULES
- ---------
A. Administrative Services
B. Fee Schedule
C. Investment Options
D. Administrator's Authorization Letter
E. Named Fiduciary's Authorization Letter
F. IRS Determination Letter or Opinion of Counsel
G. Telephone Exchange Guidelines
-ii-
4
TRUST AGREEMENT, dated as of the first day of March, 1997, between PIPER
IMPACT, INC., a Delaware corporation, a wholly owned subsidiary of QUANEX
CORPORATION, a Delaware corporation, having an office at 1900 West Loop South,
Houston, TX 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 has previously sponsored the Piper Impact 401(k)
Plan (the "Plan") for the exclusive benefit of its employees who qualify and
their beneficiaries; and
WHEREAS, the Board of Directors of the Sponsor has resolved to amend,
restate and continue the Piper Impact 401(k) Plan Trust in the form of the
trust agreement between Fidelity Management Trust Company (the "Trust"); and
WHEREAS, the Administrative Committee of the Plan is the named
fiduciary of the Plan (within the meaning of section 402(a) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")); and
WHEREAS, the Trustee is willing to hold and invest the Plan assets in
trust among several investment options selected by the Administrative Committee
of the Plan; and
5
WHEREAS, the Sponsor wishes to have the Trustee perform certain
ministerial recordkeeping functions under the Plan; and
WHEREAS, the Sponsor (the "Administrator") is the administrator of the
Plan (within the meaning of section 3(16)(A) of ERISA); and
WHEREAS, the Trustee is willing to perform recordkeeping 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. TRUST. The Sponsor hereby establishes the amendment and restatement
of the Piper Impact 401(k) Plan Trust (the "Trust"), with the Trustee. The
Trust assets shall consist of the property held in the Trust on the date of
this Agreement , such additional sums of money and Sponsor Stock (hereinafter
defined) as shall from time to time be delivered to the Trustee under the 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.
2
6
SECTION 2. EXCLUSIVE BENEFIT AND REVERSION OF SPONSOR CONTRIBUTIONS.
Except as provided under applicable law, no part of the Trust 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. However, the Sponsor
retains the right provided in the Plan to have Trust assets revert to them upon
a mistake of fact or disallowance of a deduction based upon any contribution to
the Trust.
SECTION 3. 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 in excess of the net realizable value of the assets of the Trust
at the time of the disbursement. The Trustee shall not be required to make any
disbursement in cash unless the Administrator has provided a written direction
as to the assets to be converted to cash for the purpose of making the
disbursement.
3
7
SECTION 4. 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 shall direct
the Trustee as to what investment options Plan participants may invest in,
subject to the following limitations. The Named Fiduciary may determine to
offer as investment options only (i) securities issued by the investment
companies advised by Fidelity Management & Research Company ("Mutual Funds"),
(ii) equity securities issued by the Sponsor or an affiliate of the Sponsor
which are publicly-traded and which are "qualifying employer securities" within
the meaning of section 407(d)(5) of ERISA ("Sponsor Stock"), and (iii) notes
evidencing loans to Plan participants in accordance with the terms of the Plan,
, and (iv) collective investment funds maintained by the Trustee for qualified
plans.The Trustee shall be considered a fiduciary with investment discretion
only with respect to Plan assets that are invested in collective investment
funds maintained by the Trustee for qualified plans.
(c) Participant Direction. Each Plan participant shall direct the
Trustee in which investment option(s) to invest the assets in the participant's
individual accounts and the Trustee must comply with any such directions 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. Such
directions may be
4
8
made by Plan 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". If a Plan
participant makes an oral investment via the telephone exchange system, the
Trustee will return to that participant a written confirmation of that
direction. Any directions made by a Participant using the telephone exchange
system shall be treated as a direction made in writing by the Named Fiduciary
for purposes of Section 7 hereafter. 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. 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 Plan
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
5
9
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 arc received, the directions of the Named Fiduciary. The
Trustee shall have no duty to solicit directions from participants.
(e) Sponsor Stock. Trust 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 4(c) of this Agreement. Up to 100% of the Trust
assets may be so invested in Sponsor Stock.
(ii) Fiduciary Duty of the Administrative Committee. The
Administrative Committee shall continually monitor the suitability under the
fiduciary duty rules of section 404(a)(1) of ERISA (as modified by 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 Administrative Committee or Plan Participants 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.
6
10
(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 Administrator in good order all information,
documentation, and wire transfer of funds (if applicable), necessary to
accurately effect such transactions. 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 Administrative
Committee to deviate from the above purchase and sale procedures provided that
such direction is made in writing by the Administrative Committee.
7
11
(B) Use of an Affiliated Broker. The Sponsor
hereby directs the Trustee to use Fidelity Brokerage Services, Inc. ("FBSI") to
provide brokerage services in connection with any purchase or sale of Sponsor
Stock in accordance with directions from Plan participants. FBSI 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 FBSI shall be entitled to remuneration under
this authorization provision in the amount of five cents ($.05) commission on
each share of Sponsor Stock up to 10,000 shares in a singular transaction, four
cents ($.04) commission on each share of Sponsor Stock from 10,001 to 20,000
shares in a singular transaction, and three and one-half cents ($.035)
commission on each share of Sponsor Stock in excess of 20,000 shares in a
singular transaction. Any change in such remuneration may be made only by a
signed agreement between Sponsor and Trustee.
(2) Following the procedures set forth in
Department of Labor Prohibited Transaction Class Exemption 86-128 (PTCE
86-128), the Trustee will provide the Sponsor with the following documents: (1)
a description of FBSI's brokerage placement practices; (2) a copy of PTCE
86-128; and (3) a form by which the Sponsor may terminate this authorization to
use a broker affiliated with the Trustee. The Trustee will, within the time
periods specified in PTCE 86-128, provide the Sponsor with the confirmations
and reports required under PTCE 86-128.
(3) Any successor organization of FBSI,
through reorganization, consolidation, merger or similar transactions, shall,
upon consummation of such
8
12
transaction, become the successor broker in accordance with the terms of this
authorization provision.
(4) The Trustee and FBSI shall continue to
rely on this authorization provision until notified to the contrary. The
Sponsor reserves the right to terminate this authorization upon written notice
to FBSI (or its successor) and the Trustee, in accordance with Section 11 of
this Agreement.
(iv) Securities Law Reports. The
Administrator 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 Administrator such information on the Trust's ownership of Sponsor Stock as
the Administrator 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 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 Sponsor Stock
prepares for any annual or special meeting, the Sponsor shall notify the
Trustee at least thirty (30) days in advance of the
9
13
intended record date and shall cause a copy of all proxy solicitation materials
to be sent to the Trustee. If requested by the Trustee the Sponsor shall
certify to the Trustee that the aforementioned materials represents the same
information distributed to shareholders of Sponsor Stock. Based on these
materials the Trustee shall prepare a voting instruction form and shall provide
a copy of all proxy solicitation materials to be sent to each Plan
participant, together with the foregoing voting instruction form to be returned
to the Trustee or its designee. The form shall show the number of full and
fractional shares of Sponsor Stock credited to the participant's accounts.
(2) Each participant shall have the right to
direct the Trustee as to the manner in which the Trustee is to vote that number
of shares of Sponsor Stock credited to the participant's accounts (both vested
and unvested). Directions from a participant to the Trustee concerning the
voting of Sponsor Stock shall be communicated in writing, or by mailgram or
similar means as agreed upon by the Trustee and the Sponsor. 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 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 as directed by
the participant. The Trustee shall vote shares of Sponsor Stock credited to
participant's account for which it has received no directions from the
participant in the same proportion on each issue as it votes those shares for
which it received voting instructions from participants.
10
14
(3) 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 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 credited to
participant's 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 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
timely notify the Trustee in advance of the intended tender date and shall
cause a copy of all materials to be sent to the Trustee. The Sponsor shall
certify to the Trustee that the aforementioned materials represent the same
information distributed to shareholders of Sponsor Stock. Based on these
materials and after consultation with the Sponsor, the Trustee shall prepare a
tender instruction form and shall provide a copy of all tender materials to be
sent to each plan participant, together with the foregoing tender instruction
form, to be returned to the Trustee or its designee. The tender instruction
form shall show the number of full and fractional shares of Sponsor Stock
credited to the participants account (both vested and unvested).
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(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 credited to the participant's accounts (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. 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. The Trustee
shall not tender shares of Sponsor Stock credited to a participant's accounts
for which it has received no directions from the participant.
(3) 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 credited to participants' accounts for which
the Trustee has received directions from participants to tender (which
directions have not been withdrawn as of the date of this determination) and of
which the denominator is the total number of shares of Sponsor Stock credited
to participants' accounts.
(4) A participant who has directed the
Trustee to tender some or all of the shares of Sponsor Stock credited to the
participant's accounts may, at any time prior to the tender offer withdrawal
date, direct the Trustee to withdraw some or all of the tendered shares, and
the Trustee shall withdraw the directed number of shares from the tender offer
prior
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to the tender offer withdrawal deadline. Prior to the withdrawal deadline, if
any shares of Sponsor Stock not credited to participants' accounts have been
tendered, the Trustee shall redetermine the number of shares of Sponsor Stock
that would be tendered under Section 4(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 credited to the participant's
accounts 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 account 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 account. 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 investment option described in Schedule "C".
(vi) Shares Credited For all purposes of this
Section, the number of shares of Sponsor Stock deemed "credited" to a
participant's accounts 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
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date, In the case of a tender offer, the number of shares credited shall be
determined as of a date as close as administratively feasible to 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
accounts, 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 4(e)
shall also apply to any securities received as a result of a conversion of
Sponsor Stock.
(f) Notes 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) collect and remit all principal
and interest payments to the Trustee, (iii) keep the proceeds of such loans
separate from the other assets of the Administrator and clearly identify such
assets as Plan assets 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 notify the Trustee of the request by use of
the Telephone Exchange System. The trustee shall determine, based on the
current value of the Plan participant's account, the amount available for the
loan. The Plan participant shall then direct the Trustee regarding the amount
to be borrowed and the term or period for repayment.
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Based on the most recent interest rate supplied by the Sponsor in accordance
with the terms of the Plan, the Trustee shall advise the Plan participant of
such interest rate, as well as the installment payment amounts. The Trustee
shall forward the loan document to the Plan participant for execution and
submission for approval to the Administrator. The Administrator shall have the
responsibility for instructing the Trustee as to whether the Administrator has
approved the loan. The Trustee shall send the loan proceeds to the
Administrator or to the Plan participant in accordance with the directions form
the Administrator. In all cases, such approval by the Administrator shall be
made within 30 days of the Plan participant's initial request (the origination
date).
(g) Commingled Pool Investments To the extent that the
Administrative Committee of the Plan selects as an investment option the
Managed Income Portfolio of the Fidelity Group Trust for Employee Benefit Plans
(the "Group Trust"), the Sponsor hereby (A) agrees to the terms of the Group
Trust and adopts 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 4 over the
assets in the participant's accounts. (ii) The Trustee shall not be liable
for any loss, or by reason of any breach, which arises from the Administrative
Committee's exercise or non-exercise of rights under this Section 4, unless it
was clear on their face that the actions to be taken under the Administrative
Committee's directions were prohibited by the
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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
4, to sell, exchange, convey, transfer, or otherwise dispose of any property
held in the Trust, by private contract or public auction. No person dealing
with the Trustee shall be bound to see 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 4, to
invest in guaranteed 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 Internal Revenue Code of 1986, as amended.
(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.
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(iv) To keep that portion of the Trust in cash or cash
balances as the Named Fiduciary or Administrator 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 take any action, whether by legal proceeding,
compromise, or otherwise, as the Trustee in its sole discretion believes to be
in the best interest of the Trust if there is a default in the payment of any
principal or income of the Trust at any time.
(vii) 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.
(viii) 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.
(ix) The Trustee is not required to take any legal action
to collect, preserve or maintain any Trust property unless it has been
indemnified either by the Trust itself, with the approval of the administrative
committee of the Plan, or by the Sponsor. Any property acquired by the Trustee
through the enforcement or compromise of any claim or claims that has as
Trustee of this Trust will become a part of the Trust.
SECTION 5. RECORDKEEPING TO BE PERFORMED.
(a) General. The Trustee shall perform those recordkeeping
functions described in Schedule "A" attached hereto. These recordkeeping
functions shall be performed within the
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framework of the Administrator'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 the last day of
each fiscal quarter of the Plan and, if not on the last day of a fiscal
quarter, the date on which the Trustee resigns or is removed as provided in
Section 8 of this Agreement or is terminated as provided in Section 10 (the
"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 Administrator a written account setting forth,
all investments, receipts, disbursements, and other transactions effected by
the Trustee between the Reporting Date and the prior 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 Administrator, 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 Administrator or any person designated by the Administrator.
Upon the resignation or removal of the Trustee or the termination of this
Agreement, the Trustee shall provide to the Administrator, at no expense to the
Sponsor, in the
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format regularly provided to the Administrator, a statement of each
participant's accounts as of the resignation, removal, or termination, and the
Trustee shall provide to the Administrator or the Plan's new recordkeeper such
further records as are reasonable, at the Sponsor's expense.
(d) Effect of Plan Amendment. The Trustee's provision of the
recordkeeping services set forth in this Section 5 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 Administrator
providing the Trustee on a timely basis with all the information the
Administrator deems necessary for the Trustee to perform the recordkeeping
services and such other information as the Trustee may reasonably request.
(e) Returns, Reports and Information. The Administrator 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
Administrator with such information as the Administrator may reasonably request
to make these filings. The Administrator shall also be responsible for making
any disclosures to Participants required by law including, without limitation,
such disclosures as may be required under federal or state truth-in-lending
laws with regard to Participant loans.
SECTION 6. 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. 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
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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
Plan participants' accounts.
SECTION 7. DIRECTIONS AND INDEMNIFICATION.
(a) Identity of Administrator and Named Fiduciary. The Trustee shall
be fully protected in relying on the fact that the Named Fiduciary and the
Administrator under the Plan are the individuals or persons named as such above
or such other individuals or persons as the Sponsor may notify the Trustee in
writing.
(b) Directions from Administrator. Whenever the 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 Administrator in the form attached
hereto as Schedule "D", provided 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.
(c) Directions from Named Fiduciary. Whenever the Named Fiduciary or
Sponsor 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 Administrative Committee
in the
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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.
(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 7 shall survive the
termination of this Agreement.
SECTION 8. 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.
(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.
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SECTION 9. 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 10. 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.
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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.
SECTION 11. 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 Wayne M. Rose,
Vice President - 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 12. 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 13. 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
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calendar year amend Schedule "B" without the Sponsor's consent upon
seventy-five (75) days written notice to the Sponsor.
SECTION 14. GENERAL.
(a) Employment of Affiliates as Agents for Trustee. The Sponsor
acknowledges and authorizes that the Trustee may employ its affiliates to act
as its agent in the performance of its responsibilities under this Agreement.
In particular, the Sponsor specifically acknowledges and authorizes that the
Trustee may employ Fidelity Investments Institutional Operations Company or its
successor to perform recordkeeping functions under this Agreement. The expenses
and compensation of any such agent shall be paid by the Trustee out of its fees
described in Schedule "B" attached hereto.
(b) Entire Agreement. This Agreement contains all of the terms
agreed upon between the parties with respect to the subject matter hereof.
(c) 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.
(d) 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.
(e) 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
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thereby, and each term and provision of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.
(f) 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.
(g) Single Trust. The Trust will be a single trust within the
meaning of Section 414(1) of the Internal Revenue Code of 1986, as amended,
with respect to the Sponsor and any other employer that adopts the Trust with
the consent of the Sponsor and the Trustee. All Trust assets will be available
to pay the benefits of all such employers' eligible employees and their
beneficiaries.
(h) Withdrawal. The employers that adopt this Trust may withdraw
from the Trust by giving 60 days written notice of their intent to withdraw to
the Sponsor and the Trustee.
The administrative committee of the Plan will then determine, within
sixty (60) days following the receipt of the notice, the portion of the Trust
that is attributable to the members employed by the withdrawing employer and
shall forward a copy of the determination to the Trustee. Upon receipt of the
determination, the Trustee will segregate those assets attributable to the
members employed by the withdrawing employer and will transfer those assets to
the successor Trustee or Trustees when it receives a designation of such
successor from the withdrawing employer.
The withdrawal from the Trust will not terminate the Plan or Trust
with respect to the withdrawing employer. Instead, the employer shall, as soon
as practical, either appoint a
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successor Trustee or Trustees and reaffirm this Trust as a new and separate
trust intended to fund the Plan which is qualified under Section 401(a) of the
Code or establish another defined contribution plan and trust intended to
qualify under Section 401(a) of the Code.
The determination of the administrative committee of the Plan, in its
sole discretion, of the portion of the Trust that is attributable to the
members employed by the withdrawing employer will be final and binding upon all
parties at interest; and, the Trustee's transfer of those assets to the
designated successor Trustee shall relieve the Trustee of any further
obligation, liability or duty to the withdrawing employer, the members employed
by that employer and their beneficiaries, and the successor Trustee or
Trustees.
SECTION 15. 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.
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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.
PIPER IMPACT, INC.
Attest: By:
--------------------------- ------------------------
Secretary
FIDELITY MANAGEMENT TRUST
COMPANY
Attest: By:
--------------------------- ------------------------
Assistant Clerk Vice President
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SCHEDULE "A"
ADMINISTRATIVE SERVICES
Administration
* Establishment and maintenance of participant account and election
percentages.
* Maintenance of the following plan investment options:
-Fidelity Asset Manager
-Fidelity Contrafund
-Fidelity Blue Chip Growth Fund
-Fidelity Intermediate Bond Fund
-Fidelity Puritan Fund
-Fidelity Retirement Growth Fund
-Fidelity Money Market Trust: Retirement Money Market Portfolio
-Fidelity Managed Income Portfolio
-Sponsor Stock
* Maintenance of the following money classifications:
- Salary Deferral Contribution Account
- Matching Contribution Account
- Rollover Account
- Qualified Non-elective Employer Contribution Account
o The Trustee will provide only 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. - 8:00 p.m. ET to provide toll free telephone service for
participant inquiries and transactions. Additionally, participants
have 24 hour account balance inquiry access utilizing our automated
voice response system.
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:
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o Provide investment information.
o Maintain plan and GIC specific provisions.
o Process exchanges (transfers) between Fidelity's mutual funds
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.
Process all participant loan and withdrawal requests via Fidelity's
toll-free telephone service according to plan provisions on a
daily basis
B) PLAN ACCOUNTING
1. Process payroll contributions according to your payroll
frequency via electronic data transfer (EDT) or consolidated magnetic
tape. 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 up to
12 Fidelity managed investment funds.
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. 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.
D) PLAN REPORTING
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1. Prepare, reconcile and delivery a monthly Trial Balance Report
presenting all money classes and investments. This report is based on
the parket 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.
2. Prepare, reconcile and delivery 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
Prepare and furnish to participants and the Internal Revenue Service
forms 1099R., as well as financial reporting to assist in the
preparation of Form 5500.
F) OTHER
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.
PIPER IMPACT, INC. FIDELITY MANAGEMENT TRUST
COMPANY
By: By:
----------------------- ----------------------------
Date Vice President Date
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SCHEDULE "B"
FEE SCHEDULE
Annual Participant Fee $20.00 per participant*, subject to a
$7,500 per year minimum,
billed and payable quarterly.
Loan Fee Establishment fee of $35.00 per loan account; annual
fee of $15.00 per loan account.
Return of Excess Contribution Fee $25.00 per participant, one-time
charge per calculation and check
generation.
o Other Fees: separate charges for optional non-discrimination testing,
extraordinary expenses resulting from large numbers of simultaneous
manual transactions or from errors not caused by Fidelity, or for
reports not contemplated in this Agreement. 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 FEES
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.
To the extent that assets are invested in Sponsor Stock, 0.25% of such
assets in the Trust payable quarterly on the basis of such assets as
of the calendar quarter's last valuation date.
The minimum total Trustee fee is $10,000.
PIPER IMPACT, INC FIDELITY MANAGEMENT TRUST
COMPANY
By: By:
------------------------- ---------------------------------
Date Vice President Date
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SCHEDULE "C"
INVESTMENT OPTIONS
In accordance with Section 4(b), the Named Fiduciary hereby directs
the Trustee that participants' individual accounts may be invested in the
following investment options:
-Fidelity Asset Manager
-Fidelity Contrafund
-Fidelity Blue Chip Growth Fund
-Fidelity Intermediate Bond Fund
-Fidelity Puritan Fund
-Fidelity Retirement Growth Fund
-Fidelity Money Market Trust: Retirement Money Market Portfolio
-Fidelity Managed Income Portfolio
-Sponsor Stock
The investment option referred to in Section 4(c) and 4(h)(v)(B)(5)
shall be Fidelity Money Market Trust: Retirement Money Market Portfolio.
PIPER IMPACT, INC.
By:
-------------------------
Date
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SCHEDULE "D"
[ADMINISTRATOR'S LETTERHEAD]
Ms. Carolyn Redden
Fidelity Investments Institutional Operations Company, Inc.
82 Devonshire Street
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 Ms. Redden:
This letter is sent to you in accordance with Section 7(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 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,
[ADMINISTRATOR]
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]
33
37
SCHEDULE "E"
[NAMED FIDUCIARY'S LETTERHEAD]
Ms. Carolyn Redden
Fidelity Investments Institutional Operations Company, Inc.
82 Devonshire Street
Boston, Massachusetts 02109
[NAME OF PLAN]
Dear Ms. Redden:
This letter is sent to you in accordance with Section 7(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 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]
34
38
SCHEDULE "F"
[LAW FIRM LETTERHEAD]
**NOTE: MAY SUBMIT THE PLAN'S IRS DETERMINATION LETTER IF THE LETTER IS NO
MORE THAT TWO YEARS OLD.
Carolyn Redden
Fidelity Investments Institutional Operations Company, Inc.
82 Devonshire Street - MM3H
Boston, MA 02109
[NAME OF PLAN]
Dear Ms. Redden:
In accordance with your request, this letter sets forth our opinion
with respect to the qualified status under section 401(a) of the Internal
Revenue Code of 1986 (including amendments made by the Employee Retirement
Income Security Act of 1974) (the "Code"), of the [name of plan], as amended to
the date of this letter (the "Plan").
The material facts regarding the Plan as we understand them are as
follows. The most recent favorable determination letter as to the Plan's
qualified status under section 401(a) of the Code was issued by the [location
of Key District] District Director of the Internal Revenue Service and was
dated [date] (copy enclosed). The version of the Plan submitted by [name of
company] (the "Company") for the District Director's review in connection with
this determination letter did not contain amendments made effective as of
[date]. These amendments, among other matters, [brief description of
amendments]. [Subsequent amendments were made on [date] to amend the
provisions dealing with [brief description of amendments].]
The Company has informed us that it intends to submit the Plan to the
[location of Key District] District Director of the Internal Revenue Service
and to request from him a favorable determination letter as to the Plan's
qualified status under section 401(a) of the Code. The Company may have to
make some modifications to the Plan at the request of the Internal Revenue
Service in order to obtain this favorable determination letter, but we do not
expect any of these modifications to be material. The Company has informed us
that it will make these modifications.
Based on the foregoing statements of the Company and our review of the
provisions of the Plan, it is our opinion that the Internal Revenue Service
will issue a favorable determination letter as to the qualified status of the
Plan, as modified at the request of the Internal Revenue Service, under section
401(a) of the Code, subject to the customary condition that continued
qualification of the Plan, as modified, will depend on its effect in operation.
Sincerely,
[name of law firm]
By [signature]
-----------------
[name of partner]
35
39
SCHEDULE "G"
TELEPHONE EXCHANGE GUIDELINES
The following telephone exchange procedures are currently employed by Fidelity
Investments Institutional Operations Company, Inc. (FIIOC).
Telephone exchange hours are 8:30 a.m. (ET) to 8:00 p.m. (ET) on each business
day. A "business day" is any day on which the New York Stock Exchange is open.
FIIOC reserves the right to change these telephone exchange procedures at its
discretion.
EXCHANGES BETWEEN MUTUAL FUNDS
Participants may call on any business day to exchange between 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.
EXCHANGES FROM MUTUAL FUNDS TO SPONSOR STOCK
Sponsor Stock exchanges are processed on monthly cycle. Participants
who wish to exchange out of a mutual fund into Sponsor Stock may call
between the 1st and the 15th of the month. No calls will be accepted
after 4:00 p.m. (ET) on the 15th (or previous business day if the 15th
is not a business day).
Mutual fund shares are sold on the 15th of the month (or the previous
business day if the 15th is not a business) and the Sponsor Stock is
purchased within two (2) business days after the date on which the
mutual fund shares are sold.
EXCHANGES FROM SPONSOR STOCK TO MUTUAL FUNDS
Participants who wish to exchange out of Sponsor Stock into mutual
funds may call between the 1st and the 15th of the month. No calls
will be accepted after 4:00p.m. (ET) on the 15th (or previous business
day if the 15th is not a business day).
The Sponsor Stock is sold on the 16th (or next business day if the
16th is not a business day) and the subsequent purchase into mutual
funds will take place five (5) business days later. This allows for
settlement of the stock trade at the custodian and the corresponding
transfer to Fidelity. Orders for sales of Sponsor Stock must be share
specific.
EXCHANGES BETWEEN MUTUAL FUNDS AND MANAGED INCOME PORTFOLIO
36
40
Participants who wish to exchange out of a mutual fund into 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.
EXCHANGES FROM MANAGED INCOME PORTFOLIO TO SPONSOR STOCK
Participants who wish to exchange out of the Managed Income
Portfolio into Sponsor Stock may call between the 1st and the 15th of
the month. No calls will be accepted after 4:00 p.m. (ET) on the 15th
(or previous business day if the 15th is not a business day).
Managed Income Portfolio shares are sold on the 15th of the month (or
the previous business day if the 15th is not a business day) and the
Sponsor Stock is purchased within two (2) business days after the date
on which the Managed Income Portfolio shares are sold.
EXCHANGES FROM SPONSOR STOCK TO MANAGED INCOME PORTFOLIO
Participants who wish to exchange out of Sponsor Stock into the
Managed Income Portfolio may call between the 1st and the 15th of the
month. No calls will be accepted after 4:00 p.m. (ET) on the 15th (or
previous business day if the 15th is not a business day).
The Sponsor Stock is sold on the 16th (or next business day if the
16th is not a business day) and the subsequent purchase into the
Managed Income Portfolio will take place five (5) business days later.
This allows for settlement of the stock trade at the custodian and the
corresponding transfer to Fidelity. Orders for sales of Sponsor Stock
must be share specific.
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.
PIPER IMPACT, INC.
By:
-----------------------
37
1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Quanex Corporation on Form S-8 of our report dated November 22, 1996 appearing
in the Annual Report on Form 10-K of Quanex Corporation for the year ended
October 31, 1996.
DELOITTE & TOUCHE LLP
Houston, Texas
March 7, 1997
