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As filed with the Securities and Exchange Commission on June 10, 1994
Registration No. 33-_________________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
QUANEX CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 38-1872178
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1900 WEST LOOP SOUTH, SUITE 1500 77027
HOUSTON, TEXAS (Zip Code)
(Address of Principal Executive Offices)
NICHOLS-HOMESHIELD
401(K) SAVINGS PLAN FOR DAVENPORT HOURLY EMPLOYEES
(Full title of the plan)
WAYNE M. ROSE
QUANEX CORPORATION
1900 WEST LOOP SOUTH, SUITE 1500
HOUSTON, TEXAS 77027
(Name and address of agent for service)
(713) 961-4600
(Telephone number, including area code, of agent for service)
Copies to:
HARVA R. DOCKERY, ESQ.
FULBRIGHT & JAWORSKI L.L.P.
1301 MCKINNEY, SUITE 5100
HOUSTON, TEXAS 77010-3095
CALCULATION OF REGISTRATION FEE
=============================================================================================================
Proposed
maximum Proposed maximum Amount of
Amount to be offering price aggregate registration
Title of securities to be registered registered per share offering price fee
- -------------------------------------------------------------------------------------------------------------
Common Stock, $.50 par value . . . . . 100,000(1) $20.125(2) $2,012,500 $694
Rights to purchase Series A Junior
Participating Preferred Stock . . . . . 100,000(1)
=============================================================================================================
(1) Estimated number of shares that could be purchased with the
participant contributions registered hereunder, based upon the price
of the Common Stock set forth herein.
(2) Pursuant to Rule 457(h), the proposed maximum offering price is
estimated, solely for the purpose of determining the registration fee,
on the basis of the average high and low prices of the Common Stock on
the New York Stock Exchange Composite Tape on June 7, 1994.
******************
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 401(k) savings plan described herein.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. Incorporation of Documents by Reference.
Quanex Corporation (the "Company" or "Registrant") and the
Nichols-Homeshield 401(k) Savings Plan for Davenport Hourly Employees (the
"Plan") incorporate by reference in this Registration Statement the following
documents:
(a) The Registrant's annual report on Form 10-K
for the year ended October 31, 1993, and the Plan's latest
annual report.
(b) The Registrant's quarterly reports on Form
10-Q for the quarters ended January 31, 1994, and April 30,
1994.
(c) 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, as amended (the "Exchange Act"), since
October 31, 1993.
(d) The description of the Registrant's common
stock, $.50 par value (the "Common Stock"), which is
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
(the "Commission") pursuant to Rule 424(b) of the Securities
Act of 1933, as amended (the "Securities Act").
(e) The description of the rights to purchase
Series A Junior Participating Preferred Stock (the "Rights")
is set forth in the Amended and Restated Certificate of
Designation, Preferences and Rights, filed as Exhibit 1 to
Amendment No. 1 to the Registrant's Form 8-A dated April 28,
1989.
All documents subsequently filed by the Registrant or the Plan
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, 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 the filing of such documents.
ITEM 4. Description of Securities.
Not applicable.
ITEM 5. Interests of Named Experts and Counsel.
Not applicable.
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ITEM 6. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of
Delaware provides that a corporation has the power to indemnify a director,
officer, employee or agent of the corporation and certain other persons serving
at the request of the corporation in related capacities against amounts paid
and expenses incurred in connection with an action or proceeding to which he
is, or is threatened to be made, a party by reason of such position, if such
person shall have acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the corporation, and, in any
criminal proceeding, if such person had no reasonable cause to believe his
conduct was unlawful; provided that, in the case of actions brought by or in
the right of the corporation, no indemnification shall be made with respect to
any matter as to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the adjudicating court
determines that such indemnification is proper under the circumstances.
The Registrant's Restated Certificate of Incorporation, as
amended, eliminates the personal monetary liability of a director to the
Registrant and its stockholders for breach of his fiduciary duty of care as a
director to the extent currently allowed under the Delaware General Corporation
Law. Article XVII of the Registrant's Restated Certificate of Incorporation
provides that a director of the Registrant shall not be personally liable to
the Registrant or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Registrant or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) based on the payment of an improper dividend or
an improper repurchase of the Registrant's stock under Section 174 of the
General Corporation Law of the State of Delaware, or (iv) for any transaction
from which the director derived an improper personal benefit.
The Bylaws of the Registrant provide that, under certain
circumstances, the Registrant is required to indemnify any person who was, is,
or is threatened to be made a party in any action, suit or proceeding because
such person is or was a director or officer of the Registrant. The
Registrant's Bylaws were amended in February 1987 to provide for
indemnification by the Registrant of its officers and directors to the fullest
extent authorized by the General Corporation Law of the State of Delaware.
This right to indemnification under the Registrant's Bylaws is a contract
right, and requires the Registrant to provide for the payment of expenses in
advance of the final disposition of any suit or proceeding brought against the
director or officer of the Registrant in his official capacity as such,
provided that such director or officer delivers to the Registrant an
undertaking to repay any amounts advanced if it is ultimately determined that
such director or officer is not entitled to indemnification. The Registrant
also maintains a directors' and officers' liability insurance policy.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been informed that in the opinion of the Commission, such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
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ITEM 7. Exemption from Registration Claimed.
Not applicable.
ITEM 8. Exhibits.
4.1 Certificate of Incorporation of the Registrant, as
amended, filed as Exhibit 3.1 to the Registrant's
Annual Report on Form 10-K for the fiscal year ended
October 31, 1987, and incorporated herein by
reference.
4.2 Amended and Restated Bylaws of the Registrant, as
amended through October 21, 1992, filed as Exhibit
3.2 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended October 31, 1992, 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 Certificate of Designations of the Registrant's 6.88%
Cumulative Convertible Exchangeable Preferred Stock,
liquidation preference $250 per share, filed as
Exhibit 19.1 to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended April 30, 1992, and
incorporated herein by reference.
4.7 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.
4.8 Form of Certificate of 6.88% Cumulative Convertible
Exchangeable Preferred Stock, liquidation preference
$250 per share, filed as Exhibit 19.3 to the
Registrant's Quarterly Report on Form 10-Q for the
quarter ended April 30, 1992, and incorporated herein
by reference.
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4.9 Deposit Agreement, relating to Depositary Convertible
Exchangeable Preferred Shares between the Registrant
and Chemical Bank, filed as Exhibit 19.4 to the
Registrant's Quarterly Report on Form 10-Q for the
quarter ended April 30, 1992, and incorporated herein
by reference.
4.10 Form of Depositary Receipt for Depositary Convertible
Exchangeable Preferred Shares, filed as Exhibit 19.6
to the Registrant's Quarterly Report on Form 10-Q for
the quarter ended April 30, 1992, and incorporated
herein by reference.
4.11 Note Agreement dated July 25, 1990, among the
Registrant and the Purchasers listed therein,
regarding the sale of $125,000,000 of the
Registrant's 10.77% Senior Notes due August 23, 2000,
filed as Exhibit 4.1 to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended July 31,
1990, and incorporated herein by reference.
4.12 Revolving Credit and Letter of Credit Agreement dated
as of December 4, 1990, among the Registrant and the
Banks listed therein relating to a $40,000,000
revolving credit, filed as Exhibit 4.7 to the
Registrant's Annual Report on Form 10-K for the year
ended October 31, 1991, and incorporated herein by
reference.
4.13 Second Amendment to the Revolving Credit and Letter
of Credit Agreement dated as of April 15, 1992, filed
as Exhibit 4.13 to the Registrant's Registration
Statement on Form S-3 (Registration No. 33-47282),
and incorporated herein by reference.
4.14 Third and Fourth Amendments to the Revolving Credit
and Letter of Credit Agreement dated as of February
12, 1993 and April 1, 1993, respectively, filed as
Exhibit 19 to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended April 30, 1993, and
incorporated herein by reference.
4.15 Form of Trust Agreement between the Registrant and
Fidelity Management Trust Company, amended as of
January 1, 1993, July 15, 1993, February 1, 1994,
April 1, 1994, and July 1, 1994.
4.16 Form of Nichols-Homeshield 401(k) Savings Plan for
Davenport Hourly Employees, as amended.
5.1 Copy of Internal Revenue Service determination letter
that the Plan is qualified under Section 401 of the
Internal Revenue Code of 1986, as amended.
23.1 Consent of Deloitte & Touche.
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25.1 Power of attorney (contained on page 7 hereof).
The Registrant hereby undertakes to submit any and all amendments to
the Plan to the Internal Revenue Service ("IRS") in a timely manner and will
make all changes required by the IRS in order to qualify the Plan.
ITEM 9. Undertakings.
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required
by Section 10(a)(3) of the Securities Act;
(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; and
(iii) To include any material information
with respect to the plan of distribution not
previously disclosed in this Registration Statement
or any material change to such information in this
Registration Statement;
Provided, however, that paragraphs (i) and (ii) do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section
13 or 15(d) of the Exchange Act that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any
liability under the Securities Act, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of the
offering.
B. The undersigned Registrant hereby undertakes that,
for the purposes of determining any liability under the Securities Act, each
filing of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Exchange Act (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Exchange Act)
that is incorporated by reference 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.
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C. Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Robert C. Snyder 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.
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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 the 31st day of
May, 1994.
QUANEX CORPORATION
By /s/ Robert C. Snyder
---------------------------------
Robert C. Snyder
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
President, Chief Executive
/s/ Robert C. Snyder Officer and Director May 31, 1994
------------------------------- (Principal Executive Officer)
Robert C. Snyder
Vice President and
/s/ Wayne M. Rose Chief Financial Officer May 31, 1994
------------------------------- (Principal Financial Officer)
Wayne M. Rose
Controller (Principal
/s/ Viren M. Parikh Accounting Officer) May 31, 1994
-------------------------------
Viren M. Parikh
/s/ Carl E. Pfeiffer Chairman of the Board May 31, 1994
-------------------------------
Carl E. Pfeiffer
/s/ Gerald B. Haeckel Director May 31, 1994
-------------------------------
Gerald B. Haeckel
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/s/ Donald J. Morfee Director May 31, 1994
-------------------------------
Donald J. Morfee
/s/ John D. O'Connell Director May 31, 1994
-------------------------------
John D. O'Connell
/s/ Michael J. Sebastian Director May 31, 1994
-------------------------------
Michael J. Sebastian
/s/ Robert L. Walker Director May 31, 1994
-------------------------------
Robert L. Walker
/s/ Fred J. Broad Director May 31, 1994
-------------------------------
Fred J. Broad
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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 May 31, 1994.
NICHOLS-HOMESHIELD 401(K) SAVINGS PLAN
FOR DAVENPORT HOURLY EMPLOYEES
By /s/ Robert C. Snyder
----------------------------------
Robert C. Snyder
By /s/ Vernon E. Oechsle
----------------------------------
Vernon E. Oechsle
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 Page Number
-------------- ----------- -----------
4.1 Certificate of Incorporation of the Registrant, as
amended, filed as Exhibit 3.1 to the Registrant's
Annual Report on Form 10-K for the fiscal year
ended October 31, 1987, and incorporated herein by
reference.
4.2 Amended and Restated Bylaws of the Registrant, as
amended through October 21, 1992, filed as Exhibit
3.2 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended October 31, 1992, 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 Certificate of Designations of the Registrant's
6.88% Cumulative Convertible Exchangeable
Preferred Stock, liquidation preference $250 per
share, filed as Exhibit 19.1 to the Registrant's
Quarterly Report on Form 10-Q for the quarter
ended April 30, 1992, and incorporated herein by
reference.
4.7 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.
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4.8 Form of Certificate of 6.88% Cumulative
Convertible Exchangeable Preferred Stock,
liquidation preference $250 per share, filed as
Exhibit 19.3 to the Registrant's Quarterly Report
on Form 10-Q for the quarter ended April 30,
1992, and incorporated herein by reference.
4.9 Deposit Agreement, relating to Depositary
Convertible Exchangeable Preferred Shares between
the Registrant and Chemical Bank, filed as Exhibit
19.4 to the Registrant's Quarterly Report on Form
10-Q for the quarter ended April 30, 1992, and
incorporated herein by reference.
4.10 Form of Depositary Receipt for Depositary
Convertible Exchangeable Preferred Shares, filed
as Exhibit 19.6 to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended April 30,
1992, and incorporated herein by reference.
4.11 Note Agreement dated July 25, 1990, among the
Registrant and the Purchasers listed therein,
regarding to the sale of $125,000,000 of the
Registrant's 10.77% Senior Notes due August 23,
2000, filed as Exhibit 4.1 to the Registrant's
Quarterly Report on Form 10-Q for the quarter
ended July 31, 1990, and incorporated herein
by reference.
4.12 Revolving Credit and Letter of Credit Agreement
dated as of December 4, 1990, among the Registrant
and the Banks listed therein relating to a
$40,000,000 revolving credit, filed as Exhibit 4.7
to the Registrant's Annual Report on Form 10-K
for the year ended October 31, 1991, and
incorporated herein by reference.
4.13 Second Amendment to the Revolving Credit and
Letter of Credit Agreement dated as of April 15,
1992, filed as Exhibit 4.13 to the Registrant's
Registration Statement on Form S-3
(Registration No. 33-47282), and incorporated herein
by reference.
4.14 Third and Fourth Amendments to the Revolving Credit
and Letter of Credit Agreement dated as of February
12, 1993, and April 1, 1993, respectively, filed
as Exhibit 19 to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended
April 30, 1993, and incorporated herein by
reference.
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4.15 Form of Trust Agreement between the Registrant
and Fidelity Management Trust Company, amended as
of January 1, 1993, July 15, 1993, February 1,
1994, April 1, 1994, and July 1, 1994.
4.16 Form of Nichols-Homeshield 401(k) Savings Plan for
Davenport Hourly Employees, as amended.
5.1 Copy of Internal Revenue Service determination
letter that the Plan is qualified under Section
401 of the Internal Revenue Code of 1986, as
amended.
23.1 Consent of Deloitte & Touche.
25.1 Power of attorney (contained on page 7 hereof).
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Exhibit 4.15
Trust Agreement
Between
Quanex Corporation
And
Fidelity Management Trust Company
--------------------------------------
NICHOLS-HOMESHIELD 401(K) SAVINGS PLAN
FOR DAVENPORT HOURLY EMPLOYEES
TRUST
--------------------------------------
Dated as of March 31, 1992
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TABLE OF CONTENTS
SECTION PAGE
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1 Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2 Exclusive Benefit and Reversion of
Sponsor Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3 Disbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(a) Directions from Named Fiduciary
(b) Limitations
4 Investment of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(a) Selection of Investment Options
(b) Available Investment Options
(c) Participant Direction
(d) Mutual Funds
(e) Notes
(f) Reliance of Trustee Directions
(g) Trustee Powers
5 Recordkeeping to Be Performed . . . . . . . . . . . . . . . . . . . . . . . . . 8
(a) General
(b) Accounts
(c) Inspection and Audit
(d) Effect of Plan Amendment
(e) Returns, Reports and Information
6 Compensation and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 10
7 Directions and Indemnification . . . . . . . . . . . . . . . . . . . . . . . . 10
(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 . . . . . . . . . . . . . . . . . . . . . . 12
(a) Resignation
(b) Removal
9 Successor Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(a) Appointment
(b) Acceptance
(c) Corporate Action
10 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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TABLE OF CONTENTS
(Continued)
SECTION PAGE
- ------- ----
11 Resignation, Removal, and Termination Notices . . . . . . . . . . . . . . . . 13
12 Duration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
13 Amendment or Modification . . . . . . . . . . . . . . . . . . . . . . . . . . 14
14 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(a) Massachusetts Law Controls
(b) Trust Agreement Controls
SCHEDULES
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A. Recordkeeping Services
B. Fee Schedule
C. Investment Options
D. Sponsor's Authorization Letter
E. Named Fiduciary's Authorization Letter
F. IRS Determination Letter or Opinion of Counsel
G. Telephone Exchange Procedures
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TRUST AGREEMENT, dated as of the thirty-first day of March, 1992,
between 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 Nichols-Homeshield
401(k) Savings Plan for Davenport Hourly Employees (the "Plan") for the
exclusive benefit of its employees who qualify and their beneficiaries; and
WHEREAS, the Board of Directors of Quanex Corporation has resolved to
amend, restate and continue the Nichols-Homeshield 401(k) Savings Plan Trust in
the form of the trust agreement between Fidelity Management Trust Company (the
"Trust"); and
WHEREAS, the Administrative Committee of the Sponsor (the "Named
Fiduciary") 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 ho!d and invest the aforesaid plan
assets in trust among several investment options selected by the Named
Fiduciary; and
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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 Nichols-Homeshield
401(k) Savings Plan for Davenport Hourly Employees Trust (the "Trust"), with
the Trustee. The Trust shall consist of an initial contribution of money or
other property acceptable to the Trustee in its sole discretion, made by the
Sponsor or transferred from a previous trustee under the Plan, 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.
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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, Quanex
Corporation 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.
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.
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(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 which are
publicly-traded and which are "qualifying employer securities" within the
meaning of section 407(d)(5) of ERISA ("Sponsor Stock"), (iii) notes evidencing
loans to Plan participants in accordance with the terms of the Plan, and (iv)
guaranteed annuity contracts heretofore entered into by the Sponsor or
predecessor trustee and specifically identified on a Schedule attached hereto
("Existing GICs"), and (v) collective investment funds maintained by the
Trustee for qualified plans; provided, however, that the Named Fiduciary hereby
directs the Trustee to continue to hold such Existing GICs until the Named
Fiduciary directs otherwise, it being expressly understood that such direction
is given in accordance with Section 403(a) of ERISA; and provided, further,
that the Trustee shall be considered a fiduciary with investment discretion
only with respect to Plan assets that are invested in guaranteed investment
contracts chosen by the Trustee or 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 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
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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
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
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directions are received, the directions of the Named Fiduciary. The Trustee
shall have no duty to solicit directions from participants.
(e) 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, (iv) advise the Trustee of the date, amount and payee of
the checks to be drawn representing loans, and (v) cancel and surrender the
notes and other loan documentation when a loan has been paid in full.
(f) 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 Named Fiduciary'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 Named Fiduciary's directions were prohibited by
the fiduciary duty rules of section 404(a) of ERISA or were contrary to the
terms of the Plan or this Agreement.
(g) 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 at public auction. No person dealing with
the Trustee shall be bound to see to the application of the purchase money or
other property delivered to the
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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.
(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.
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(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 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
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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 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.
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(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 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
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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 Named Fiduciary in the
form attached hereto as Schedule "E" and (ii) if the Trustee reasonably
believes the signature of the individual to be genuine, unless it is clear on
the direction's face that the actions to be taken under the direction would be
prohibited by the fiduciary duty rules of section 404(a) of ERISA or would be
contrary to the terms of the Plan or this Agreement.
(d) Co-Fiduciary Liability. In any other case, the Trustee shall not
be liable for any loss, or by reason of any breach, arising from any act or
omission of another fiduciary under the Plan except as provided in section
405(a) of ERISA.
(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 proceedings 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.
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(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.
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.
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(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. 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.
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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 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
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provision to persons or circumstances other than those as to which it is held
invalid or unenforceable, shall not be affected thereby, and each term and
provision of this Agreement shall be valid and enforceable to the fullest
extent permitted by law.
(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(l) of the Internal Revenue Code of 1986, as amended, with
respect to Quanex Corporation and any other employer that adopts the Trust with
the consent of Quanex Corporation 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
Quanex Corporation 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.
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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 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.
(i) Definition of Named Fiduciary. The Sponsor is the Named Fiduciary
of the Plan within the meaning of ERISA Section 402(a)(2). The Plan
participants are Named Fiduciaries within the meaning of ERISA Section
402(a)(2) solely with regard to their exercise of such pass through voting and
tender offer rights.
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
superceded under section 514 of ERISA.
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(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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
QUANEX CORPORATION
Attest: /s/ JOSEPH K. PERRY By /s/ WAYNE M. ROSE
Assistant Secretary Vice President
FIDELITY MANAGEMENT TRUST
COMPANY
Attest: /s/ DOUGLAS O. KENT By /s/ JOHN P. O'RILEY JR.
Assistant Clerk Senior Vice President
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Schedule "A"
RECORDKEEPING SERVICES
ADMINISTRATION
* Establishment and maintenance of participant account and election
percentages.
* Maintenance of six plan investment options:
- Fidelity Money Market Trust: Retirement Money Market Portfolio
- Fidelity U.S. Bond Index Portfolio
- Fidelity Balanced Fund
- Fidelity Growth & Income Portfolio
- Fidelity Magellan Fund
- Fidelity Contrafund
* Maintenance of four money classifications:
- Salary Deferral Contribution Account
- Supplemental Employer Contribution Account
- Rollover Account
- Qualified Non-elective Employer Contribution Account
* Processing of mutual fund trades.
. The Trustee will provide only the recordkeeping services set forth on
this Schedule "A" and no others.
PROCESSING
* Monthly processing of contribution data.
* Daily processing of transfers and changes of future allocations.
* Monthly processing of withdrawals.
OTHER
* Monthly trial balance
* Quarterly administrative reports
* Quarterly participant statements
* 1099-Rs
* Participant Loans
* Performance of section 401(k) 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.
QUANEX CORPORATION FIDELITY MANAGEMENT TRUST COMPANY
By /s/ WAYNE M. ROSE 3/3/92 By /s/ JOHN P. O'RILEY JR. 3/13/92
Date Senior Vice President Date
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SCHEDULE "B"
FEE SCHEDULE
RECORDKEEPING FEES
. Annual Participant Fee $20.00 per participant, subject to a
$7,500 per year minimum, billed and
payable quarterly.
. Loan Fees Establishment fee of $10.00 per loan
account; annual fee of $15.00 per
loan account.
. Other Fees: extraordinary expenses resulting from large numbers of
simultaneous manual transactions or from errors not caused by Fidelity.
* 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.
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.
QUANEX CORPORATION FIDELITY MANAGEMENT TRUST COMPANY
By /s/ WAYNE M. ROSE 3/3/92 By /s/ JOHN P. O'RILEY JR. 3/13/92
Date Senior 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 Money Market Trust: Retirement Money Market Portfolio
- Fidelity U.S. Bond Index Portfolio
- Fidelity Balanced Fund
- Fidelity Growth & Income Portfolio
- Fidelity Magellan Fund
- Fidelity Contrafund
The mutual fund advised by Fidelity Management & Research Company
referred to in Section 4(c) shall be Fidelity Money Market Trust: Retirement
Money Market Portfolio.
QUANEX CORPORATION
By /s/ WAYNE M. ROSE 3/3/92
Date
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Quanex Corporation
1900 West Loop, South QUANEX
Suite 1500 (Logo)
Houston, TX 77027
(713) 961-4600
February 17, 1992
Ms. Jacqueline W. McCarthy
Fidelity Investments Institutional Operations Company
82 Devonshire Street
Boston, MA 02109
RE: Nichols-Homeshield 401(k) Savings Plan
for Davenport Hourly Employees Trust
Dear Ms. McCarthy:
This letter is sent to you in accordance with Section 7(b) of the Trust
Agreement, dated as of March 31, 1992, between Quanex Corporation and
Fidelity Management Trust Company. We hereby designate Carl E. Pfeiffer,
Robert C. Snyder, Wayne M. Rose, and Joseph K. Peery, 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 we deliver to you written notice of the termination of
authority of a designated individual.
Very truly yours,
QUANEX CORPORATION
By: /s/ WAYNE M. ROSE
/s/ CARL E. PFEIFFER
Carl E. Pfeiffer
/s/ ROBERT C. SNYDER
Robert C. Snyder
/s/ WAYNE M. ROSE
Wayne M. Rose
/s/ JOSEPH K. PEERY
Joseph K. Peery
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Quanex Corporation
1900 West Loop, South QUANEX
Suite 1500 (Logo)
Houston, TX 77027
(713) 961-4600
February 17, 1992
Ms. Jacqueline W. McCarthy
Fidelity Investments Institutional Operations Company
82 Devonshire Street
Boston, MA 02109
RE: Nichols-Homeshield 401(k) Savings Plan
for Davenport Hourly Employees Trust
Dear Ms. McCarthy:
This letter is sent to you in accordance with Section 7(c) of the Trust
Agreement, dated as of March 31, 1992, between Quanex Corporation and
Fidelity Management Trust Company. We hereby designate Carl E. Pfeiffer,
Robert C. Snyder, Wayne M. Rose, and Joseph K. Peery, 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 we deliver to you written notice of the termination of
authority of a designated individual.
Very truly yours,
QUANEX CORPORATION
By: /s/ WAYNE M. ROSE
/s/ CARL E. PFEIFFER
Carl E. Pfeiffer
/s/ ROBERT C. SNYDER
Robert C. Snyder
/s/ WAYNE M. ROSE
Wayne M. Rose
/s/ JOSEPH K. PEERY
Joseph K. Peery
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Schedule "G"
TELEPHONE EXCHANGE PROCEDURES
The following telephone exchange procedures arc currently employed by Fidelity
Investments Retirement Services Company (FIRSCO).
Telephone exchange hours are 8:30 a.m. (EST) to 8:00 p.m. (EST) on each
business day. A "business day" is any day on which the New York Stock Exchange
is open.
FIRSCO reserves the right to change these telephone exchange procedures at its
discretion.
MUTUAL FUNDS
EXCHANGES BETWEEN MUTUAL FUNDS
Participants may call on any business day to exchange between the mutual
funds. If the request is received before 4:00 p.m. (EST), it will
receive that day's trade date. Calls received after 4:00 p.m. (EST) will
be processed on a next day basis.
QUANEX CORPORATION
By /s/ WAYNE M. ROSE 3/3/92
Date
24
27
FIRST AMENDMENT TO TRUST AGREEMENT BETWEEN
FIDELITY MANAGEMENT TRUST COMPANY AND
QUANEX CORPORATION
THIS FIRST AMENDMENT, dated as of the first day of January, 1993, by and
between Fidelity Management Trust Company (the "Trustee") and Quanex Corporation
(the "Sponsor");
WITNESSETH:
WHEREAS, the Trustee and the Sponsor heretofore entered into a trust
agreement dated March 31, 1992, with regard to the Nichols-Homeshield 401(k)
Savings Plan for Davenport Hourly Employees (the "Plan"); and
WHEREAS, the Trustee and the Sponsor now desire to amend said trust
agreement as provided for in Section 13 thereof;
NOW THEREFORE, in consideration of the above premises the Trustee and the
Sponsor hereby amend the trust agreement by:
(1) Amending and restating the "investment options" portion of
Schedule "A" and Schedule "C" to read as follows:
- Fidelity Money Market Trust:Retirement Government Money
Market Portfolio
- Fidelity Balanced Fund
- Fidelity Growth & Income Portfolio
- Fidelity Magellan Fund
- Fidelity Contrafund
- Fidelity Short Intermediate Government Portfolio
IN WITNESS WHEREOF, the Trustee and the Sponsor have caused this First
Amendment to be executed by their duly authorized officers effective as of the
day and year first above written.
QUANEX CORPORATION FIDELITY MANAGEMENT TRUST COMPANY
By /s/ WAYNE M. ROSE 12/15/92 By /s/ JOHN P. O'RILEY JR. 12/22/92
Date Senior Vice President Date
28
SECOND AMENDMENT TO TRUST AGREEMENT BETWEEN
FIDELITY MANAGEMENT TRUST COMPANY AND
QUANEX CORPORATION
THIS SECOND AMENDMENT, dated as of the 15th day of July, 1993, by and
between Fidelity Management Trust Company (the "Trustee") and Quanex Corporation
(the "Sponsor"):
WITNESSETH:
WHEREAS, the Trustee and the Sponsor heretofore entered into a trust
agreement dated March 31, 1992, with regard to the Nichols-Homeshield 401(k)
Savings Plan for Davenport Hourly Employees (the "Plan"); and
WHEREAS, the Trustee and the Sponsor now desire to amend said trust
agreement as provided for in Section 13 thereof;
NOW THEREFORE, in consideration of the above premises the Trustee and
the Sponsor hereby amend the trust agreement by:
(1) Amending and restating the "investment options" portion of
Schedule "A" and Schedule "C" to read as follows:
- Fidelity Money Market Trust:Retirement Government Money
Market Portfolio
- Fidelity Balanced Fund
- Fidelity Growth & Income Portfolio
- Fidelity Magellan Fund
- Fidelity Contrafund
- Fidelity Short Intermediate Government Portfolio
- Fidelity Overseas Fund
IN WITNESS WHEREOF, the Trustee and the Sponsor have caused this Second
Amendment to be executed by their duly authorized officers effective as of the
day and year first above written.
QUANEX CORPORATION FIDELITY MANAGEMENT TRUST COMPANY
By /s/ JOSEPH K. PEERY By /s/ JOHN P. O'RILEY JR. 6/30/93
Date Senior Vice President Date
29
REVISED
THIRD AMENDMENT TO TRUST AGREEMENT BETWEEN
FIDELITY MANAGEMENT TRUST COMPANY AND
QUANEX CORPORATION
THIS THIRD AMENDMENT, dated as of the February 1, 1994, by and between
Fidelity Management Trust Company (the "Trustee") and Quanex Corporation (the
"Sponsor"): and
WITNESSETH:
WHEREAS, the Trustee and the Sponsor heretofore entered into a trust
agreement dated March 31, 1992, with regard to the Nichols-Homeshield 401(k)
Savings Plan for Davenport Hourly Employees (the "Plan"); and
WHEREAS, the Trustee and the Sponsor now desire to amend said trust
agreement as provided for in Section 13 thereof;
NOW THEREFORE, in consideration of the above premises the Trustee and
the Sponsor hereby amend the trust agreement by:
- Amending Section 4 by replacing Section 4(e), in its entirety,
with the following:
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. 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 via
remote access. The Trustee shall send the loan proceeds to the
Administrator or to the Plan participant in accordance with the
directions from 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).
- Amending Schedule "B" to reflect the Loan Fee as follows:
Loan Fees Establishment fee of $35.00 per loan
account; annual fee of $15.00 per loan
account.
IN WITNESS WHEREOF, the Trustee and the Sponsor have caused this Third
Amendment to be executed by their duly authorized officers effective as of the
day and year first above written.
QUANEX CORPORATION FIDELITY MANAGEMENT TRUST COMPANY
By /s/ JOSEPH K. PEERY 1/29/94 By /s/ JOHN P. O'RILEY JR. 2/9/94
Date Senior Vice President Date
30
FOURTH AMENDMENT TO TRUST AGREEMENT BETWEEN
FIDELITY MANAGEMENT TRUST COMPANY AND
QUANEX CORPORATION
THIS FOURTH AMENDMENT, dated as of the 1st day of April, 1994, by and
between Fidelity Management Trust Company (the "Trustee") and Quanex
Corporation (the "Sponsor"); and
WITNESSETH:
WHEREAS, the Trustee and the Sponsor heretofore entered into a trust
agreement dated March 31, 1992, with regard to the Nichols-Homeshield 401(k)
Savings Plan for Davenport Hourly Employees (the "Plan"); and
WHEREAS, the Trustee and the Sponsor now desire to amend said trust
agreement as provided for in Section 13 thereof;
NOW THEREFORE, in consideration of the above premises the Trustee and
the Sponsor hereby amend the trust agreement by:
(1) Amending and restating the "investment options" portion of
Schedules "A" and "C", to read as follows:
- Fidelity Magellan Fund
- Fidelity Overseas Fund
- Fidelity Puritan Fund
- Fidelity Money Market Trust: Retirement Government Money
Market Portfolio
- Fidelity Growth & Income Portfolio
- Fidelity Short Intermediate Government Portfolio
- Fidelity Contrafund
- Fidelity Balanced Fund
(2) Amending and restating Schedules "D" and "E", as attached.
IN WITNESS WHEREOF, the Trustee and the Sponsor have caused this
Fourth Amendment to be executed by their duly authorized officers effective as
of the day and year first above written.
QUANEX CORPORATION FIDELITY MANAGEMENT TRUST COMPANY
By /s/ ROBERT C. SNYDER 3/30/94 By /s/ JOHN P. O'RILEY JR. 9/5/94
Date Senior Vice President Date
31
SCHEDULE D
QUANEX CORPORATION
1900 West Loop South, Suite 1500
Houston, Tx 77027
(713) 961-4600
March 31, 1994
Re: Nichols-Homeshield 401(k) Savings Plan
for Davenport Hourly Employees Trust
================================================================================
Ms. Jacqueline W. McCarthy
Fidelity Investments Institutional Operations Company
82 Devonshire Street
Boston, Massachusetts 02109
Dear Ms. McCarthy:
This letter is sent to you in accordance with Section 7(b) of the Trust
Agreement, dated as of March 31, 1992, between Quanex Corporation and Fidelity
Management Trust Company. We hereby designate Robert C. Snyder, Vernon E.
Oechsle, Wayne M. Rose, and Joseph K. Peery, 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 we deliver to you written notice of the termination of authority
of a designated individual.
Very truly yours,
QUANEX CORPORATION
By: /s/ JOSEPH K. PEERY
Assistant Secretary
/s/ ROBERT C. SNYDER
Robert C. Snyder
/s/ VERNON E. OECHSLE
Vernon E. Oechsle
/s/ WAYNE M. ROSE
Wayne M. Rose
/s/ JOSEPH K. PEERY
Joseph K. Peery
32
SCHEDULE E
QUANEX CORPORATION
1900 West Loop South, Suite 1500
Houston, Tx 77027
(713) 961-4600
March 31, 1994
Re: Nichols-Homeshield 401(k) Savings Plan
for Davenport Hourly Employees Trust
================================================================================
Ms. Jacqueline W. McCarthy
Fidelity Investments Institutional Operations Company
82 Devonshire Street
Boston, Massachusetts 02109
Dear Ms. McCarthy:
This letter is sent to you in accordance with Section 7(c) of the Trust
Agreement, dated as of March 31, 1992, between Quanex Corporation and Fidelity
Management Trust Company. We hereby designate Robert C. Snyder, Vernon E.
Oechsle, Wayne M. Rose, and Joseph K. Peery, 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 we deliver to you written notice of the termination of authority
of a designated individual.
Very truly yours,
QUANEX CORPORATION
By: /s/ JOSEPH K. PEERY
Assistant Secretary
/s/ ROBERT C. SNYDER
Robert C. Snyder
/s/ VERNON E. OECHSLE
Vernon E. Oechsle
/s/ WAYNE M. ROSE
Wayne M. Rose
/s/ JOSEPH K. PEERY
Joseph K. Peery
33
FIFTH AMENDMENT TO TRUST AGREEMENT BETWEEN
FIDELITY MANAGEMENT TRUST COMPANY AND
QUANEX CORPORATION
THIS FIFTH AMENDMENT, dated as of the first day of July, 1994,
by and between Fidelity Management Trust Company (the "Trustee") and Quanex
Corporation (the "Sponsor");
WITNESSETH:
WHEREAS, the Trustee and the Sponsor heretofore entered into a
trust agreement dated March 31, 1992, with regard to the Nichols-Homeshield
401(k) Savings Plan for Davenport Hourly Employees (the "Plan"); and
WHEREAS, the Trustee and the Sponsor now desire to amend said
trust agreement as provided for in Section 13 thereof;
WHEREAS, the Sponsor now desires, and hereby directs the
Trustee, in accordance with Section 7(c), to liquidate all participant balances
held in the Fidelity Short Intermediate Government Portfolio on July 1, 1994
and to invest the proceeds in the Fidelity Money Market Trust:Retirement
Government Money Market Portfolio. The parties hereto agree that the Trustee
shall have no discretionary authority with respect to this sale and transfer
directed by the Sponsor. Any variation from the procedure described herein may
be instituted only at the express written directions of the Sponsor; and
NOW THEREFORE, in consideration of the above premises the
Trustee and the Sponsor hereby amend the trust agreement by:
(1) Amending Section 4 by adding two new subsections,
Section 4(h) and 4(i), respectively, to read as
follows:
(h) 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 Section 4(c) of this Agreement. Up
to 100 percent (100%) of the Trust assets may be so
invested in Sponsor Stock.
(ii) Fiduciary Duty of Named Fiduciary.
The Named Fiduciary shall continually monitor the
suitability under the fiduciary duty rules of section
404(a)(1) of ERISA (as modified by section 404(a)(2)
of ERISA) of acquiring and holding Sponsor Stock. The
Trustee shall not be liable for any loss, or by
reason of any breach, which arises from the
directions of the Named Fiduciary with respect to the
acquisition and holding of Sponsor Stock, unless it
is clear on their face that the actions to be taken
under those directions would be prohibited by the
foregoing fiduciary duty rules or would be contrary
to the terms of the Plan or this Agreement.
(iii) Execution of Purchases and Sales.
(A) Purchases and sales of Sponsor Stock (other than
for exchanges) shall be made on the open market on
34
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 purchases,
the subsequent date on which the Trustee has received
a wire transfer of the funds necessary to make such
purchases). Exchanges of Sponsor Stock shall be made
in accordance with the Telephone Exchange Guidelines
attached hereto as Schedule "G". Such general rules
shall not apply in the following circumstances:
(1) If the Trustee is unable to
determine the number of shares required to be
purchased or sold on such day; or
(2) If the Trustee is unable to
purchase or sell the total number of shares required
to be purchased or sold on such day as a result of
market conditions; or
(3) If the Trustee is prohibited by
the Securities and Exchange Commission, the New York
Stock Exchange, or any other regulatory body from
purchasing or selling any or all of the shares
required to be purchased or sold on such day.
In the event of the occurrence of the circumstances
described in (1), (2), or (3) above, the Trustee
shall purchase or sell such shares as soon as
possible thereafter and shall determine the price of
such purchases or sales to be the average purchase or
sales price of all such shares purchased or sold,
respectively. The Trustee may follow directions from
the Named Fiduciary to deviate from the above
purchase and sale procedures provided that such
direction is made in writing by the Named Fiduciary.
(B) Use of an Affiliated Broker. The
Sponsor hereby authorizes 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:
(i) 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.
(ii) Following the procedures set
forth in Department of Labor Prohibited Transaction
Class Exemption 86-128, the Trustee has provided 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.
35
(iii) Any successor organization of
FBSI, through reorganization, consolidation, merger
or similar transactions, shall, upon consummation of
such transaction, become the successor broker in
accordance with the terms of this authorization
provision.
(iv) 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 sixty (60)
days written notice to FBSI (or its successor) and
the Trustee, in accordance with Section 11 of this
Agreement.
(iv) Securities Law Reports. The Named
Fiduciary shall be responsible for filing all
reports required under Federal or state securities
laws with respect to the Trust's ownership of Sponsor
Stock, including, without limitation, any reports
required under section 13 or 16 of the Securities
Exchange Act of 1934, and shall immediately notify
the Trustee in writing of any requirement to stop
purchases or sales of Sponsor Stock pending the
filing of any report. The Trustee shall provide to the
Named Fiduciary such information on the Trust's
ownership of Sponsor Stock as the Named Fiduciary may
reasonably request in order to comply with Federal or
state securities laws.
(v) Voting and Tender Offers.
Notwithstanding any other provision of this Agreement
the provisions of this Section shall govern the
voting and tendering of Sponsor Stock. The Sponsor,
after consultation with the Trustee, shall provide
and pay for all printing, mailing, tabulation and
other costs associated with the voting and tendering
of Sponsor Stock.
(A) Voting.
(1) When the issuer of the Sponsor
Stock prepares for any annual meeting, the Sponsor
shall notify the Trustee thirty (30) days in advance
of the intended record date and shall cause a copy of
all proxy solicitation materials to be sent to the
Trustee. Based on these materials the Trustee shall
prepare a voting instruction form. At the time of
mailing of notice of each annual or special
stockholders' meeting of the issuer of the Sponsor
Stock, the Sponsor shall cause a copy of the notice
and all proxy solicitation materials to be sent to
each Plan participant, 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. The Sponsor shall
provide the Trustee with a copy of any materials
provided to the participants and shall certify to the
Trustee that the materials have been mailed or
otherwise sent to participants.
(2) Each participant shall have
the right to direct the Trustee 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. 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. 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 a participant's accounts for which it has received
no
36
directions from the participant in the same
proportion on each issue as it votes those shares for
which it received voting instructions from
participants.
(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 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 received voting directions from participants
and of which the denominator is the total number of
shares of Sponsor Stock credited to participants'
accounts. The Trustee shall vote those shares of
Sponsor Stock not credited to participants' 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 participants' accounts.
(B) Tender Offers.
(1) Upon commencement of a tender
offer for any securities held in the Trust that are
Sponsor Stock, the Sponsor shall notify each Plan
participant of the tender offer and utilize its best
efforts to timely distribute or cause to be
distributed to the participant the same information
that is distributed to shareholders of the issuer of
Sponsor Stock in connection with the tender offer,
and, after consulting with the Trustee, shall provide
and pay for a means by which the participant may
direct the Trustee whether or not to tender the
Sponsor Stock credited to the participant's accounts
(both vested and unvested). The Sponsor shall provide
the Trustee with a copy of any material provided to
the participants and shall certify to the Trustee
that the materials have been mailed or otherwise sent
to participants.
(2) Each participant shall have
the right to direct the Trustee to tender or not to
tender some or all of the shares of Sponsor Stock
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 under the preceding paragraph. These
directions shall be held in confidence by the Trustee
and shall not be divulged to the Sponsor, or any
officer or employee thereof, or any other person
except to the extent that the consequences of such
directions are reflected in reports regularly
communicated to any such persons in the ordinary
course of the performance of the Trustee's services
hereunder. The Trustee shall tender or not tender
shares of Sponsor Stock as directed by the
participant. To the extent that Plan participants
fail to affirmatively direct the Trustee to tender
shares of Sponsor Stock credited to their accounts,
those Plan participants will be deemed to have
instructed the Trustee not to tender those shares.
Accordingly, 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
37
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 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 Mutual Fund
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 last preceding
valuation date. The trade date is the date the
transaction is valued, provided, however, that in the
case of a reallocation from mutual funds to Sponsor
Stock, the date on which the Sponsor Stock is traded
is the valuation date immediately following the date
the mutual funds being reallocated are valued.
(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(h) shall also apply to any securities
received as a result of a conversion of Sponsor
Stock.
38
(i) Commingled Pool Investments. To the extent that
the Named Fiduciary selects as an investment option
the Managed Income Portfolio of the Fidelity Group
Trust for Employee Benefit Plans (the "Group Trust"),
the Sponsor hereby (A) agrees to the terms of the
Group Trust and adopts said terms as a part of this
Agreement and (B) acknowledges that it has received
from the Trustee a copy of the Group Trust, the
Declaration of Separate Fund for the Managed Income
Portfolio of the Group Trust, and the Circular for
the Managed Income Portfolio.
(2) Amending and restating the "investment options"
portion of Schedule "A", to read as follows:
-Fidelity Magellan Fund
-Fidelity Overseas Fund
-Fidelity Puritan Fund
-Fidelity Money Market Trust: Retirement
Government Money Market Portfolio
-Fidelity Growth & Income Portfolio
-Fidelity Contrafund
-Fidelity Balanced Fund
-Managed Income Portfolio
-Sponsor Stock
(3) Amending and restating Schedules "B", "C", and "G" as
attached.
IN WITNESS WHEREOF, the Trustee and the Sponsor have caused
this Fifth Amendment to be executed by their duly authorized officers effective
as of the day and year first above written.
QUANEX CORPORATION FIDELITY MANAGEMENT TRUST
COMPANY
By By
-------------------------- -----------------------------
Date Senior Vice President Date
39
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.
- Remote Acess (optional) $1,000 per year, plus a
monthly charge for TYMNET
usage.
- Other Fees: extraordinary expenses resulting from large numbers of
simultaneous manual transactions or from errors not caused by Fidelity.
- This fee will be imposed pro rata for each calendar quarter, or any
part thereof, that it remains necessary to maintain 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 pro rata quarterly on the basis of such
assets as of the calendar quarter's last valuation date.
- The minimum total Trustee fee is $10,000.
QUANEX CORPORATION FIDELITY MANAGEMENT TRUST
COMPANY
By:
----------------------- -------------------------------
Date Senior Vice President Date
40
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 Magellan Fund
-Fidelity Overseas Fund
-Fidelity Puritan Fund
-Fidelity Money Market Trust:Retirement Government
Money Market Portfolio
-Fidelity Growth & Income Portfolio
-Fidelity Contrafund
-Fidelity Balanced Fund
-Managed Income Portfolio
-Sponsor Stock
The mutual fund advised by Fidelity Management & Research Company
referred to in Section 4(c) and 4(h)(v)(B)(5) shall be Fidelity Money Market
Trust: Retirement Government Money Market Portfolio.
QUANEX CORPORATION
By
-----------------------
Date
41
SCHEDULE "G"
TELEPHONE EXCHANGE PROCEDURES
The following telephone exchange procedures are currently employed by Fidelity
Institutional Retirement Services Company (FIRSCO).
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.
FIRSCO reserves the right to change these telephone exchange procedures at its
discretion.
MUTUAL FUNDS
EXCHANGES BETWEEN MUTUAL FUNDS
Participants may call on any business day to exchange between the
mutual funds. If the request is received before 4:00 p.m. (ET), it
will receive that day's trade date. Calls received after 4:00 p.m.
(ET) will be processed on a next day basis.
COMPANY STOCK
EXCHANGES FROM MUTUAL FUNDS TO COMPANY STOCK
Company Stock exchanges are processed on a monthly cycle. Participants
who wish to exchange out of a mutual fund into Company 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 day) and the Company Stock
is purchased within two (2) business days after the date on which the
mutual fund shares are sold.
EXCHANGES FROM COMPANY STOCK TO MUTUAL FUNDS
Participants who wish to exchange out of Company Stock into mutual
funds 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 Company Stock is sold on the 16th (or the 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 Company Stock must be share
specific.
MANAGED INCOME PORTFOLIO
EXCHANGES BETWEEN MUTUAL FUNDS AND MANAGED INCOME PORTFOLIO
Participants who wish to exchange out of a mutual fund into the
Managed Income Portfolio of the Fidelity Group Trust for Employee
Benefit Plans (the "Group Trust") 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.
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EXCHANGES FROM MANAGED INCOME PORTFOLIO TO COMPANY STOCK
Participants who wish to exchange out of the Managed Income Portfolio
into Company 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
Company Stock is purchased within two (2) business days after the date
on which the Managed Income Portfolio shares are sold.
EXCHANGES FROM COMPANY STOCK TO MANAGED INCOME PORTFOLIO
Participants who wish to exchange out of Company 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 Company Stock is sold on the 16th (or the 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 Company Stock
must be share specific.
EXCHANGE RESTRICTIONS
Participants will not be permitted to make direct transfers out of the
Managed Income Portfolio into a competing fund. Participants who wish
to exchange out of the Managed Income Portfolio into a competing fund,
must first exchange into a non-competing fund for a period of 90 days.
QUANEX CORPORATION
By
---------------------------
Date
43
SCHEDULE E
QUANEX CORPORATION
1900 WEST LOOP SOUTH, SUITE 1500
HOUSTON, TEXAS 77027
(713) 961-4600
March 31, 1994
Re: Nichols-Homeshield 401(k) Savings Plan
for Davenport Hourly Employees Trust
Ms. Jacqueline W. McCarthy
Fidelity Investments Institutional Operations Company
82 Devonshire Street
Boston, Massachusetts 02109
Dear Ms. McCarthy:
This letter is sent to you in accordance with Section 7(c) of the
Trust Agreement, dated as of March 31, 1992, between Quanex Corporation and
Fidelity Management Trust Company. We hereby designate Robert C. Snyder, Vernon
E. Oechsle, Wayne M. Rose, and Joseph K. Peery, 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 we deliver to you written notice of the termination of authority
of a designated individual.
Very truly yours,
QUANEX CORPORATION
By: /s/ JOSEPH K. PEERY
Assistant Secretary
/s/ ROBERT C. SNYDER
Robert C. Snyder
/s/ VERNON E. OECHSLE
Vernon E. Oechsle
/s/ WAYNE M. ROSE
Wayne M. Rose
/s/ JOSEPH K. PEERY
Joseph K. Peery
1
Exhibit 4.16
NICHOLS-HOMESHIELD
401(K) SAVINGS PLAN
FOR DAVENPORT HOURLY EMPLOYEES
2
TABLE OF CONTENTS
Section
ARTICLE I - DEFINITIONS
Account . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1
Active Service . . . . . . . . . . . . . . . . . . . . . . . 1.2
Actual Deferral Percentage . . . . . . . . . . . . . . . . . 1.3
Actual Deferral Ratio . . . . . . . . . . . . . . . . . . . 1.4
Affiliated Employer . . . . . . . . . . . . . . . . . . . . 1.5
Allocation Period . . . . . . . . . . . . . . . . . . . . . 1.6
Annual Additions . . . . . . . . . . . . . . . . . . . . . . 1.7
Annual Compensation . . . . . . . . . . . . . . . . . . . . 1.8
Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . 1.9
Board of Directors . . . . . . . . . . . . . . . . . . . . . 1.10
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.11
Collective Bargaining Agreement . . . . . . . . . . . . . . 1.12
Committee . . . . . . . . . . . . . . . . . . . . . . . . . 1.13
Computation Period . . . . . . . . . . . . . . . . . . . . . 1.14
Contribution . . . . . . . . . . . . . . . . . . . . . . . . 1.15
Disability . . . . . . . . . . . . . . . . . . . . . . . . . 1.16
Employee . . . . . . . . . . . . . . . . . . . . . . . . . . 1.17
Employer . . . . . . . . . . . . . . . . . . . . . . . . . . 1.18
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.19
Excess 401(k) Contributions . . . . . . . . . . . . . . . . 1.20
Family Member . . . . . . . . . . . . . . . . . . . . . . . 1.21
Highly Compensated Employee . . . . . . . . . . . . . . . . 1.22
Hour of Employment . . . . . . . . . . . . . . . . . . . . . 1.23
Member . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.24
Non-Highly Compensated Employee . . . . . . . . . . . . . . 1.25
Period of Service . . . . . . . . . . . . . . . . . . . . . 1.26
Period of Severance . . . . . . . . . . . . . . . . . . . . 1.27
Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.28
Plan Year . . . . . . . . . . . . . . . . . . . . . . . . . 1.29
Regulation . . . . . . . . . . . . . . . . . . . . . . . . . 1.30
Retired Member . . . . . . . . . . . . . . . . . . . . . . . 1.31
Retirement Age . . . . . . . . . . . . . . . . . . . . . . . 1.32
Rollover Contribution . . . . . . . . . . . . . . . . . . . 1.33
Section 401(k) Contributions . . . . . . . . . . . . . . . . 1.34
Service . . . . . . . . . . . . . . . . . . . . . . . . . . 1.35
Sponsor . . . . . . . . . . . . . . . . . . . . . . . . . . 1.36
Transferred . . . . . . . . . . . . . . . . . . . . . . . . 1.37
Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.38
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 1.39
Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . 1.40
Valuation Date . . . . . . . . . . . . . . . . . . . . . . . 1.41
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ARTICLE II - ACTIVE SERVICE
When Active Service Begins . . . . . . . . . . . . . . . . . 2.1
Eligibility and Vesting Computation Period . . . . . . . . . 2.2
When an Employee Severs Service . . . . . . . . . . . . . . 2.3
Periods of Severance . . . . . . . . . . . . . . . . . . . 2.4
Transfers . . . . . . . . . . . . . . . . . . . . . . . . . 2.5
Employment Records Conclusive . . . . . . . . . . . . . . . 2.6
Military Service . . . . . . . . . . . . . . . . . . . . . . 2.7
ARTICLE III - ELIGIBILITY RULES
Eligibility Requirements . . . . . . . . . . . . . . . . . . 3.1
Special Rule for Salary Deferral Contributions . . . . . . . 3.2
Eligibility Upon Reemployment . . . . . . . . . . . . . . . 3.3
Frozen Participation . . . . . . . . . . . . . . . . . . . . 3.4
ARTICLE IV - CONTRIBUTIONS
Rollover Contributions and Plan to Plan Transfers . . . . . 4.1
Employer Contributions . . . . . . . . . . . . . . . . . . . 4.2
$7,000 Limit on Salary Deferral
Contributions . . . . . . . . . . . . . . . . . . . . . . 4.3
Actual Deferral Percentage for Highly
Compensated Employees . . . . . . . . . . . . . . . . . . 4.4
Special Actual Deferral Percentage Rules for
Family Members . . . . . . . . . . . . . . . . . . . . . 4.5
Distributions of Income Allocable to Excess
401(k) Contributions . . . . . . . . . . . . . . . . . . 4.6
Payment of Employer Contributions . . . . . . . . . . . . . 4.7
Return of Contributions for Mistake, Disqualification
or Disallowance of Deduction . . . . . . . . . . . . . . 4.8
ARTICLE V - PARTICIPATION
Allocation of Rollover Contributions . . . . . . . . . . . . 5.1
Allocation of Employer Contributions . . . . . . . . . . . . 5.2
Forfeiture on Termination of Participation . . . . . . . . . 5.3
Limitation on Allocation . . . . . . . . . . . . . . . . . . 5.4
Valuation of Trust Fund . . . . . . . . . . . . . . . . . . 5.5
Interim Valuation of Trust Fund . . . . . . . . . . . . . . 5.6
Maintenance of Investment Funds . . . . . . . . . . . . . . 5.7
Rights of Members in Trust Fund . . . . . . . . . . . . . . 5.8
ARTICLE VI - BENEFITS
Valuation of Accounts for Withdrawals and Distributions . . 6.1
Death Benefit . . . . . . . . . . . . . . . . . . . . . . . 6.2
Retirement Benefit . . . . . . . . . . . . . . . . . . . . . 6.3
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Disability Benefit . . . . . . . . . . . . . . . . . . . . . 6.4
Severance Benefit . . . . . . . . . . . . . . . . . . . . . 6.5
Distributions to Divorced Spouse . . . . . . . . . . . . . . 6.6
Withdrawals . . . . . . . . . . . . . . . . . . . . . . . . 6.7
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.8
Forfeiture by Lost Members or Beneficiaries; Escheat . . . . 6.9
Claims Procedure . . . . . . . . . . . . . . . . . . . . . . 6.10
Timing and Form of All Distributions . . . . . . . . . . . . 6.11
Mandatory Rules Applicable to All Distributions . . . . . . 6.12
No Duplication of Benefits . . . . . . . . . . . . . . . . . 6.13
Designation of Beneficiary . . . . . . . . . . . . . . . . . 6.14
Distributions to Disabled . . . . . . . . . . . . . . . . . 6.15
ARTICLE VII - ADMINISTRATION OF THE PLAN
Appointment, Term of Service & Removal . . . . . . . . . . . 7.1
Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2
Organization . . . . . . . . . . . . . . . . . . . . . . . . 7.3
Quorum and Majority Action . . . . . . . . . . . . . . . . . 7.4
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . 7.5
Disqualification of Committee Member . . . . . . . . . . . . 7.6
Disclosure to Members . . . . . . . . . . . . . . . . . . . 7.7
Standard of Performance . . . . . . . . . . . . . . . . . . 7.7
Liability of Committee and Liability Insurance . . . . . . . 7.9
Exemption from Bond . . . . . . . . . . . . . . . . . . . . 7.10
Compensation . . . . . . . . . . . . . . . . . . . . . . . . 7.11
Persons Serving in Dual Fiduciary Roles . . . . . . . . . . 7.12
Administrator . . . . . . . . . . . . . . . . . . . . . . . 7.13
ARTICLE VIII - TRUST FUND AND CONTRIBUTIONS
Funding of Plan . . . . . . . . . . . . . . . . . . . . . . 8.1
Incorporation of Trust . . . . . . . . . . . . . . . . . . . 8.2
Authority of Trustee . . . . . . . . . . . . . . . . . . . . 8.3
Allocation of Responsibility . . . . . . . . . . . . . . . . 8.4
ARTICLE IX - ADOPTION OF PLAN BY OTHER EMPLOYERS
Adoption Procedure . . . . . . . . . . . . . . . . . . . . . 9.1
No Joint Venture Implied . . . . . . . . . . . . . . . . . . 9.2
All Trust Assets Available to Pay All Benefits . . . . . . . 9.3
Qualification a Condition Precedent to Adoption and
Continued Participation . . . . . . . . . . . . . . . . 9.4
ARTICLE X - AMENDMENT AND TERMINATION
Right to Amend and Limitations Thereon . . . . . . . . . . . 10.1
Mandatory Amendments . . . . . . . . . . . . . . . . . . . . 10.2
Withdrawal of Employer . . . . . . . . . . . . . . . . . . . 10.3
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First Amendment
Termination of Plan . . . . . . . . . . . . . . . . . . . . 10.4
Partial or Complete Termination or Complete
Discontinuance of Contributions . . . . . . . . . . . . 10.5
Continuance Permitted Upon Sale or Transfer of Assets . . . 10.6
Distributions Upon Termination of the Plan . . . . . . . . . 10.7
Modes of Distribution Upon Termination . . . . . . . . . . . 10.8
Distributions to Highly Compensated Employees and
Former Employees Must Not Discriminate . . . . . . . . . 10.9
ARTICLE XI - MISCELLANEOUS
Plan Not An Employment Contract . . . . . . . . . . . . . . 11.1
Benefits Provided Solely From Trust . . . . . . . . . . . . 11.2
Anti-Alienation Provisions . . . . . . . . . . . . . . . . . 11.3
Requirements Upon Merger or Consolidation of Plans . . . . . 11.4
Gender of Words Used . . . . . . . . . . . . . . . . . . . . 11.5
Severability . . . . . . . . . . . . . . . . . . . . . . . . 11.6
Governing Law; Parties to Legal Actions . . . . . . . . . . 11.7
ARTICLE XII - IRS MODEL LANGUAGE/PLAN DISTRIBUTIONS
Distributions Made On or After January 1, 1993 . . . . . . . 12.1
Definitions . . . . . . . . . . . . . . . . . . . . . . . . 12.2
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NICHOLS-HOMESHIELD
401(K) SAVINGS PLAN
FOR DAVENPORT HOURLY EMPLOYEES
Quanex Corporation has entered into the following Agreement:
W I T N E S S E T H:
WHEREAS, Nichols-Homeshield, Inc. established the
Nichols-Homeshield, Inc. 401(k) Savings Plan for Davenport Hourly Employees
effective October 1, 1987; and
WHEREAS, effective January 1, 1992, Quanex Corporation assumed
the liabilities of this Plan and the responsibilities as Sponsor of this Plan;
and
WHEREAS, effective January 1, 1992, Quanex Corporation changed
the name of this Plan to "Nichols-Homeshield 401(k) Savings Plan for Davenport
Hourly Employees";
WHEREAS, Quanex Corporation has determined to completely
amend, restate and continue the Nichols-Homeshield, Inc. 401(k) Savings Plan
for Davenport Hourly Employees without a gap or lapse in coverage, time or
effect which would cause any Member to become fully vested or entitled to a
distribution, in order to ensure the Plan's qualifications under the applicable
provisions of the Internal Revenue Code of 1986, as amended, and the Employee
Retirement Income Security Act of 1974, as amended; and
WHEREAS, it is intended that other business organizations may
adopt this Plan and its related trust for the exclusive benefit of their
employees and their employees' beneficiaries;
NOW, THEREFORE, this Agreement is entered into in order to set
forth the terms of the Plan which are as follows:
7
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) Supplemental Employer Contribution Account -- The
Employer's profit sharing 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 IRA 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 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.
1.4 "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.
1.5 "AFFILIATED EMPLOYER" means an 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
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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.
1.6 "ALLOCATION PERIOD" means the period beginning on the
day following a Valuation Date or Special Valuation Date and ending on the
immediately succeeding Valuation Date or Special Valuation Date.
1.7 "ANNUAL ADDITIONS" means (a) Supplemental Employer
Contributions, (b) Qualified Nonelective Employer Contributions, (c) Salary
Deferral Contributions, (d) forfeitures and (e) amounts described in Sections
415(l)(1) and 419A(d)(2) of the Code having to do with individual medical
accounts (but these amounts shall be subject to only the dollar limitation and
not to the 25% Annual Compensation limitation). 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 4.3 will not be treated as Annual
Additions.
1.8 "ANNUAL COMPENSATION" for purposes of Section 5.4 of
the Plan means, as to each Member, wages as defined in Section 3401(a) of the
Code for purposes of 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.
Annual Compensation means, for purposes of determining the
amount of and allocating Supplemental Employer Contributions and Salary
Deferral Contributions, when used in determining an Employee's Actual Deferral
Ratio and when used to determine if a person is a Highly Compensated Employee
the same as it does for purposes of applying Section 5.4 of the Plan as
modified by including elective contributions under a cafeteria plan governed by
Section 125 of the Code and contributions to any plan qualified under Section
401(k), 408(k) or 403(b) of the Code. However, for purposes of determining an
Employee's Actual Deferral Ratio, Annual Compensation shall include only
compensation earned during the portion of the Plan Year that the Employee was
eligible to participate in the Plan.
All Annual Compensation, without regard to its definition, in
excess of $200,000 (as adjusted by the Secretary of the Treasury) shall be
disregarded. In determining the Annual Compensation of a Member for purposes
of this limitation, the rules of Section 414(q)(6) of the Code shall apply to
an Employee who is related to an Employee or owner of an Employer, except that
the term Family Member shall include only the spouse of the Member and any
lineal descendants of the Member who have not attained age 19 before the close
of the Plan Year. If as a result of the application of this rule, the adjusted
$200,000 limitation is exceeded, the limitation shall be prorated among the
affected Members in proportion to each Member's Annual Compensation as
determined under this Section prior to the application of this limitation.
1.9 "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
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9
or retired Member's estate, designated by the Member or retired Member to
receive the benefits payable under this Plan upon his death.
1.10 "BOARD OF DIRECTORS" means the board of directors,
the executive committee or other body given management responsibility for the
Sponsor.
1.11 "CODE" means the Internal Revenue Code of 1986, as
amended from time to time.
1.12 "COLLECTIVE BARGAINING AGREEMENT" means the
collective bargaining agreement between the Employer and the Chauffeurs,
Teamsters and Helpers Union, Local No. 371.
1.13 "COMMITTEE" means the committee appointed by the
Sponsor to administer the Plan.
1.14 "COMPUTATION PERIOD" means a period of 12 consecutive
months used to determine an Employee's eligibility or vesting.
1.15 "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) Supplemental Employer Contribution -- Profit sharing
contributions made by the Employer out of Net Earnings.
(c) Qualified Nonelective Employer Contribution --
Contributions made by the Employer as a means of passing the Actual
Deferral Percentage test.
(d) Rollover Contribution - Contributions made by a
Member which are transfers from a prior qualified plan or IRA account.
1.16 "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 the Employer or 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.
1.17 "EMPLOYEE" means, except as otherwise specified in
this Section, all common law employees of the Sponsor who are working at the
Davenport, Illinois,
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plant(s) and are included in a unit of employees covered by the Collective
Bargaining Agreement.
1.18 "EMPLOYER" or "EMPLOYERS" means the Sponsor and any
other business organization which has adopted this Plan.
1.19 "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended from time to time.
1.20 "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 4.4 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.
1.21 "FAMILY MEMBER" means the spouse and lineal
ascendants or descendants and the spouses of those lineal ascendants or
descendants of a 5% owner or of a Highly Compensated Employee who is one of the
10 employees receiving the greatest Annual Compensation from the Employers
during the Plan Year.
1.22 "HIGHLY COMPENSATED EMPLOYEE" means an Employee who,
during the Plan Year or the preceding Plan Year, (a) was at any time a 5%
owner, (b) received Annual Compensation from the Employers in excess of $75,000
(as adjusted from time to time by the Secretary of the Treasury), (c) received
Annual Compensation from the Employers in excess of $50,000 (as adjusted from
time to time by the Secretary of the Treasury) and was within the 20% of
employees of the Employer and Affiliated Employers who were the highest paid
for the Plan Year, or (d) was at any time an officer and received Annual
Compensation in excess of 50% of the annual addition limitation of Section
415(b)(1)(A) of the Code. 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, excluding those Employees who may be excluded in determining the
top paid group. If no officer has Annual Compensation in excess of 50% of the
annual limitation of Section 415(b)(1)(A) of the Code, the highest paid officer
for the year shall be treated as a Highly Compensated Employee. If a Member
did not fall within (b), (c) or (d), without regard to this sentence, for the
Plan Year preceding the Plan Year of the determination, he will not be treated
as falling within (b), (c) or (d) for the Plan Year of the determination unless
he is a member of the group consisting of the 100 employees paid the greatest
Annual Compensation during that Plan Year. For this purpose the determination
of the top paid 100 employees will be made using Section 414(q) of the Code and
its Regulations. A former Member will be treated as a Highly Compensated
Employee if he was a Highly Compensated Employee when he severed Service or he
was a Highly Compensated Employee at any time after attaining age 55.
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If an Employee is, during the Plan Year or the preceding Plan
Year, a Family Member of a Highly Compensated Employee who is one of the 10
most highly compensated Employees ranked on the basis of Annual Compensation
paid by the Employer during such year, then the Family Member and the top-ten
highly compensated Employee shall be aggregated. In such case, the Family
Member and top-ten highly compensated Employee will be treated as a single
Employee receiving Annual Compensation and Plan Contributions equal to the sum
of such Annual Compensation and Contributions of the Family Member and top-ten
highly compensated Employee.
1.23 "HOUR OF EMPLOYMENT" means each hour (a) that an
Employee is either directly or indirectly paid or entitled to payment by the
Employer or Affiliated Employer for the performance of duties; (b) that an
Employee is either directly or indirectly paid or entitled to payment by the
Employer or Affiliated Employer for a period of time during which no duties are
performed (whether or not the employment relationship has terminated) due to
vacation, holiday, illness, incapacity (including disability), layoff, jury
duty, military duty, leave of absence; or (c) that an Employee is paid or
entitled to payment of back pay, irrespective of mitigation of damages, which
is awarded or agreed to by the Employer or Affiliated Employer. The same Hours
of Employment shall not be credited both under (a) or (b) and (c). Solely for
purposes of (a) no more than 501 Hours of Employment shall be credited to an
Employee due to any single continuous period during which he performs no duties
(whether or not the period occurs in a single Computation Period). Hours of
Employment shall not be credited if they are paid for under a plan maintained
solely to comply with workmen's compensation, unemployment compensation or
disability insurance laws. Hours of Employment shall not be credited if they
are paid for solely to reimburse an Employee for medical or medically related
expenses incurred by him. The number of Hours of Employment credited as Active
Service shall be the number of regularly scheduled hours included in the units
of time when units are used to compute pay. The number of Hours of Employment
credited as Active Service shall be the Employee's pay divided by the
Employee's most recent hourly rate of pay when units of time are not used to
compute pay. If an Employee's pay is a fixed rate for specified periods other
than hours, such as days, weeks or months, the Employee's hourly rate shall be
the most recent rate for the period of time divided by the number of hours
regularly scheduled for work during the period. If an Employee's pay is not a
fixed rate for specified periods of time, the Employee's hourly rate shall be
the lowest hourly rate paid to Employees in the same job classification as that
of the Employee or, if there are no Employees in the same job classification,
the minimum wage as established from time to time under Section 6(a)(1) of the
Fair Labor Standards Act of 1938, as amended. However, in no event can an
Employee receive credit for a greater number of Hours of Employment than the
number of hours regularly scheduled for work during the period. An Employee
without a regular work schedule shall be presumed to regularly work a 40 hour
week, an eight hour day, or any other representative period as reflects the
average hours worked in the job classification. But, the method used to
calculate the average number of hours worked must be consistently applied.
1.24 "MEMBER" means the person or persons employed by an
Employer during the Plan Year and eligible to participate in this Plan.
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1.25 "NON-HIGHLY COMPENSATED EMPLOYEE" means an Employee
of the Employer who is neither a Highly Compensated Employee nor a Family
Member of a Highly Compensated Employee.
1.26 "PERIOD OF SERVICE" means a period of employment
with an Employer which commences on the day on which an Employee performs his
initial Hour of Employment or performs his initial Hour of Employment upon
returning to the employ of the Employer, whichever is applicable, and ending on
the date the Employee severs Service.
1.27 "PERIOD OF SEVERANCE" means the period of time
commencing on the date an Employee severs Service and ends on the date the
Employee again performs an Hour of Employment.
1.28 "PLAN" means this Plan, including all subsequent
amendments.
1.29 "PLAN YEAR" means the calendar year. The Plan Year
shall be the fiscal year of this Plan.
1.30 "REGULATION" means the Internal Revenue Service
regulation specified, as it may be changed from time to time.
1.31 "RETIRED MEMBER" means a person who was at one time
a Member who received allocations of Contributions and who has now retired
under the terms of this Plan but still has an Account.
1.32 "RETIREMENT AGE" means 65 years of age. Once a
Member has attained his Retirement Age he shall be 100% vested at all times.
1.33 "ROLLOVER CONTRIBUTION" means the amount contributed
by a Member of this Plan which consists of: (a) any part of a distribution the
Member received from an individual retirement account which consists entirely
of property that was initially contributed to the individual retirement account
from a distribution received out of a qualified total distribution from a
qualified employee trust described in Section 401(a) or 403(a) of the Code
together with the earnings on that property or (b) any part of a distribution
or proceeds from the sale of any part of the property that the Member received
in excess of his own Contributions and in excess of any amounts previously
distributed to the Member and not includable in gross income from any
distribution out of a qualified employee trust described in Section 401(a) or
403(a) of the Code.
1.34 "SECTION 401(K) CONTRIBUTIONS" means the sum of
Salary Deferral Contributions made on behalf of the Member during the Plan Year
and other amounts 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.
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1.35 "SERVICE" means the period or periods that a person
is paid or is entitled to payment for performance of duties with the Employer
or an Affiliated Employer.
1.36 "SPONSOR" means, effective January 1, 1992, Quanex
Corporation or any other business organization which assumes the primary
responsibility for maintaining this Plan with the consent of the last preceding
Sponsor.
1.37 "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.
1.38 "TRUST" means the one or more trust estates created
to fund this Plan.
1.39 "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.
1.40 "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.
1.41 "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.
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ARTICLE II
ACTIVE SERVICE
2.1 WHEN ACTIVE SERVICE BEGINS. An Employee shall
receive one year of Active Service credit for eligibility and vesting purposes
each Computation Period described below in which he has 1,000 or more Hours of
Employment with the Employer and all Affiliated Employers or a predecessor
employer if the Employer maintains one or more of the predecessor's plans or
that treatment is required under the Regulations.
2.2 ELIGIBILITY AND VESTING COMPUTATION PERIOD. The
Computation Period for eligibility and vesting is the 12-consecutive-month
period starting with the Employee's first day of employment (or reemployment)
and each future year shall begin on the anniversary of that date.
2.3 WHEN AN EMPLOYEE SEVERS SERVICE. An Employee shall
sever Service if he is not credited with at least 501 Hours of Employment with
the Employer and all Affiliated Employers during a Computation Period unless he
is credited with less than 501 Hours of Employment because: (a) he is
transferred; (b) he is on an approved leave of absence which does not exceed 18
months and he returns to employment immediately following the leave of absence;
(c) he is temporarily laid off, and he returns to employment immediately
following the temporary layoff or (d) he is in the service in the armed forces
of the United States, and he returns to employment within 90 days after
termination of military service without being employed somewhere else. Solely
for the purpose of determining whether an Employee has severed Service, if the
Employee is absent from Service because of her pregnancy, the birth of her
child, his or her receipt of a child through adoption, or his or her caring for
the child immediately after birth or adoption, he or she shall be entitled to
the Hours of Employment that he or she would have received but for that absence
for one year after the absence began. Eight hours of Service shall be credited
for each day of absence. But, no more than a total of 501 hours can be
credited. The 501 hours shall be credited to the Computation Period in which
the absence first begins if they shall prevent a severance from Service in that
period; otherwise, the 501 hours shall be credited to the next Computation
Period.
2.4 PERIODS OF SEVERANCE. If an Employee incurs a
Period of Severance of one year or longer, any prior Period of Service shall
not count as Active Service for vesting until he has completed one year of
Service during which he has completed 1,000 Hours of Employment after he
returns to employment. If an Employee severs Service at a time when: (a) he
has no vested interest in his Supplemental Employer Contribution Account, (b)
the Period of Severance is continuous for five years or more, and (c) the
Period of Severance is equal to or longer than the prior Period of Service,
then any prior Period of Service shall not count as Active Service for
eligibility or vesting.
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2.5 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 shall not have Severed 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.
2.6 EMPLOYMENT RECORDS CONCLUSIVE. The employment
records of the Employer shall be conclusive for all determinations of Active
Service.
2.7 MILITARY SERVICE. A Member who leaves the employ of
an Employer to enter the armed services of the United States shall not be
deemed to have broken his continuous employment if he returns to employment
with an Employer within 90 days after his separation from military service
without employment elsewhere. The Member, however, shall be awarded Active
Service for eligibility and vesting purposes but only such Active Service as is
required by law for an allocation of Contributions and/or forfeitures.
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ARTICLE III
ELIGIBILITY RULES
3.1 ELIGIBILITY REQUIREMENTS. 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 1000 Hours of
Employment during a Computation Period. The Plan's entry dates will be January
1, April 1, July 1 and October 1 of each Plan Year.
3.2 SPECIAL RULE FOR SALARY DEFERRAL CONTRIBUTIONS. An
Employee will be eligible to participate in the cash or deferred arrangement
portion of the Plan for all purposes relating to Salary Deferral Contributions
on the entry date next following the date that he completes an Hour of Service.
3.3 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.
3.4 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 is transferred from an Employer to an Affiliated Employer which has
not adopted this Plan 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.
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ARTICLE IV
CONTRIBUTIONS
4.1 ROLLOVER CONTRIBUTIONS AND PLAN TO PLAN TRANSFERS.
The 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 must
be made available to all Members on a nondiscriminatory basis. For this
purpose, all Employees of an Employer 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 contribute to the Plan, share in Employer
Contributions or share in forfeitures unless and until they have met the
requirements for eligibility, Contributions and allocations.
A Rollover Contribution shall not be accepted unless it is
made on or before the 60th day after the Member received the distribution and
it met one of the following requirements: (a) the distribution, when made from
a qualified employee plan, must have met the requirements of a lump sum
distribution, or (b) it was part or all of a distribution which was made within
one taxable year of the Member because of the termination of a qualified plan
or a complete discontinuance of contributions. A complete discontinuance of
contributions occurs, for this purpose, on the day the Internal Revenue Service
is notified that all contributions to the plan have been completely
discontinued. A direct transfer of assets from another qualified plan 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 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) which would require a distribution or withdrawal in a form not
permitted under this Plan.
Rollover Contributions shall have no effect upon the amount
permitted to be allocated to a Member's Account under Section 415 of the Code.
4.2 EMPLOYER CONTRIBUTIONS. Each Employer shall
contribute for each Plan Year the following amounts:
(a) an amount, which when added to previously unapplied
and unallocated forfeitures, shall equal the amounts which have been
forfeited by Members who have become entitled to have their forfeited
amounts restored;
(b) an amount equal to the value of all forfeited
benefits for Members who formerly could not be located, upon receipt
of claims by those Members;
(c) the amount by which the Member's Annual Compensation
is reduced as a result of a salary deferral agreement for the Plan
Year;
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(d) the amount, if any, which is designated by the Board
of Directors to be the Qualified Nonelective Employer Contribution for
the Plan Year; and
(e) the amount of any Supplemental Employer Contribution
required under the provisions of the Collective Bargaining Agreement.
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
from time to time by the Committee.
The amount of the Employer's Contributions described above
cannot exceed the lesser of: (i) a sum equal to 15% of the total Annual
Compensation paid during its taxable year ending with or within the Plan Year
to all Members plus the maximum amount deductible under the "carryover"
provisions of the Code which relate to contributions in previous years of less
than the maximum amount deductible or (ii) the sum which may be allocated to
the Members' Accounts without violating the limitations of Section 415 of the
Code.
4.3 $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 Section 4.4,
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 4.4.
4.4 ACTUAL DEFERRAL PERCENTAGE FOR HIGHLY COMPENSATED
EMPLOYEES. The Actual Deferral Percentage for Highly Compensated Employees for
any Plan Year
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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 4.6) 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. 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.
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.
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4.5 SPECIAL ACTUAL DEFERRAL PERCENTAGE RULES FOR FAMILY
MEMBERS. If a Member is a Highly Compensated Employee and a Family Member, the
combined Actual Deferral Ratio for the family group (which is treated as one
Highly Compensated Employee) must be determined by combining the Section 401(k)
Contributions and Annual Compensation of all the eligible Family Members. If
an Employee is required to be aggregated as a member of more than one family
group in the Plan, all eligible Employees who are members of those family
groups that include that Employee are aggregated as one family group. The
correction of Excess 401(k) Contributions of a Highly Compensated Employee
whose Actual Deferral Ratio is determined under the family aggregation rules is
accomplished by reducing the Actual Deferral Ratio and allocating the Excess
401(k) Contributions for the family group among the Family Members in
proportion to the Section 401(k) Contributions of each Family Member that is
combined to determine the Actual Deferral Ratio. These family aggregation
rules do not apply to Non-Highly Compensated Employees.
4.6 DISTRIBUTIONS OF INCOME ALLOCABLE TO EXCESS 401(K)
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 Salary Deferral Contributions by a fraction. The numerator of the
fraction is the amount of Excess 401(k) Contributions made on behalf of the
Member for the Plan Year. The denominator of the fraction is 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.
4.7 PAYMENT OF EMPLOYER CONTRIBUTIONS. The Salary
Deferral Contributions are to be paid to the Trustee in installments. The
installment for each payroll period is to be paid within 30 days after the end
of the payroll period and shall be in an amount equal to the amount by which
all Members' Annual Compensation was reduced for the period. The Supplemental
Employer Contribution and the Qualified Nonelective Employer Contribution for a
Plan Year must be paid into the Trust Fund in one or more installments not
later than the time prescribed by law for filing the Employer's federal income
tax return (including extensions) for its taxable year for which it is to take
the deduction. If the Contribution is paid after the last day of the
Employer's taxable year but prior to the date it files its tax return
(including extensions), it shall be treated as being received by the Trustee on
the last day of the taxable year if (a) the Employer notifies the Trustee in
writing that the payment is being made for that taxable year or (b) the
Employer claims the Contribution as a deduction on its federal income tax
return for the taxable year.
4.8 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;
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(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.
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.
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ARTICLE V
PARTICIPATION
5.1 ALLOCATION OF ROLLOVER CONTRIBUTIONS. If Rollover
Contributions are permitted, the Committee shall allocate each Member's
Rollover Contribution to his Rollover Account as of the date it is contributed.
5.2 ALLOCATION OF EMPLOYER CONTRIBUTIONS. As of the end
of each Plan Year, the Committee shall:
(a) allocate the Employer Contribution, if any, which is
required to restore the nonvested portion of the Employer Accounts of
Members who had previously forfeited that nonvested portion on the
date they terminated employment but who qualified for the restoration
of that amount during the Plan Year;
(b) allocate the Employer Contribution, if any, which is
required to restore the Accounts of those Members whose distributions
were forfeited because of the Committee's inability to contact the
Members previously but who have filed a claim for their Accounts
during the Plan Year; and
(c) allocate the Qualified Nonelective Employer
Contribution for the Plan Year, if any, among the Non-Highly
Compensated Employees who are Members on the last day of the Plan Year
based upon each such a Member's Annual Compensation as compared to the
Annual Compensation of all such Members.
As of the end of each Allocation Period, the Committee shall
allocate the Supplemental Employer Contribution for the Allocation Period, if
any, among the Members who are eligible to participate and who are employed by
one of the Employers or Affiliated Employers during the Allocation Period based
upon each Member's Annual Compensation paid by the Employer for the Allocation
Period as compared to the Annual Compensation for the Allocation Period of all
Members employed by the Employer or Affiliated Employer and eligible for the
allocation.
If a Member has been Transferred during the Plan Year, the
Member shall be entitled to have allocated to him a portion of the Supplemental
Employer Contribution based upon his Annual Compensation for the Plan Year
earned from all of the Employers for which a Supplemental Employer Contribution
was made.
5.3 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 Accounts, the nonvested
amount in his Accounts is immediately forfeited. However, if the Member is
reemployed, all of his Accounts containing Employer Contributions (unadjusted
for subsequent gains or losses) shall
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be restored if he repays to the Trustee within five years of the date of
distribution that portion of the distribution which was derived from Employer
Contributions.
If a former Member who has a vested interest in his Accounts
containing Employer Contributions received no distribution or a distribution of
less than the full amount of the Member's entire vested interest as a result of
his termination of participation in the Plan, the nonvested amount in his
Accounts is immediately forfeited. However, his Accounts containing Employer
Contributions (unadjusted for subsequent gains or losses) shall be restored if
he resumes employment with the Employer prior to incurring five consecutive one
year Periods of Severance. A Member who received no distribution of Employer
Contributions because he had no vested interest shall be treated as if he
received a distribution of his entire vested interest and as if his entire
vested interest was less than $3,500. 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 Member's termination occurs.
At the time a forfeiture occurs, the amount forfeited shall
first be used to reinstate any Account required to be reinstated under this
Section and any remaining amount shall be used to reduce future Employer
Contributions.
5.4 LIMITATION ON ALLOCATION. Under no circumstances
shall the Annual Additions to an individual Member's Account in any Plan Year
exceed the lesser of (a) $30,000 or, if greater, 25% of the dollar limitation
in effect under Section 415(b)(1)(A) of the Code, or (b) 25% of the Annual
Compensation paid or made available to the Member.
If the Employer maintains a defined benefit plan in which the
Member participates, the sum of the following described defined benefit
fraction and defined contribution fraction for the Plan Year cannot exceed one.
The defined benefit fraction to be used is a fraction, in which the numerator
is the Member's projected annual benefit under the plan computed as of the end
of the Plan Year and in which the denominator is the lesser of: (a) the
product of 1.25 multiplied by the dollar limitation then in effect under
Section 415(b)(1)(A) of the Code for that Plan Year or (b) the product of 1.40
multiplied by the amount which may be taken into account under Section
415(b)(1)(B) of the Code with respect to the Member for the Plan Year. The
defined contribution fraction to be used is a fraction in which the numerator
is the sum of the Annual Additions to the Member's Account determined for the
Plan Year and for each prior Plan Year and in which the denominator is the sum
of the lesser of the following amounts determined for the Plan Year and for
each prior Plan Year that the Member was employed by the Employer: (a) the
product of 1.25 multiplied by the dollar limitation then in effect under
Section 415(c)(1)(A) of the Code for that Plan Year, determined without regard
to subsection (c)(6), and (b) the product of 1.40 multiplied by the amount
which can be taken into account under Section 415(c)(1)(B) of the Code with
respect to the Member for the Plan Year. If the sum of the two fractions
exceeds one, the Member's projected annual benefit under the defined benefit
plan shall be reduced until the sum equals one.
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The limitation year for Section 415 shall be the Plan Year
unless the Employer affirmatively, by resolution, designates another limitation
year. In that event, the different limitation year shall be used instead of
the Plan Year in applying the tests.
In order to compute the defined benefit fraction and the
defined contribution fraction, all defined contribution plans (whether
terminated or not) of the Employer shall be treated as one defined contribution
plan and all defined benefit plans (whether terminated or not) of the Employer
shall be treated as one defined benefit plan.
If the Employer has Affiliated Employers, the Employer and all
Affiliated Employers shall be considered a single employer in applying the
limitations described in this Section.
No Employee or Employer Contributions shall be made to this
Plan which cannot be allocated to the Accounts of Members without exceeding the
limits of Section 415 of the Code.
If despite this prohibition, an amount in excess of the limits
of Section 415 of the Code 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 with respect to a Member under Section 415 of the
Code or because of other facts and circumstances which the Commissioner of
Internal Revenue finds to be justified, the excess shall be reduced as follows:
(a) first, Salary Deferral Contributions in excess of the
limits of Section 415 of the Code shall be returned to the Member;
(b) second, 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;
and
(c) third, 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.
If the Plan terminates prior to the exhaustion of the suspense
account, the remaining amount shall revert to the Employer.
5.5 VALUATION OF TRUST FUND. The Trustee shall value the
Trust Fund on its Valuation Date at its then fair market value, but without
regard to any
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Contributions made to the Plan after the preceding Valuation Date, shall
determine the amount of income earned or losses suffered by the Trust Fund and
shall determine the appreciation or depreciation of the Trust Fund since the
preceding Valuation Date. The Committee shall separate the Trust Fund into the
various investment funds or accounts in which it is held, if more than one, and
shall then allocate as of the Valuation Date the income earned and losses
suffered and the appreciation or depreciation in the assets of the Trust Fund
for the period since the last preceding Valuation Date. The allocation shall
be among the Members and former Members who have undistributed Account balances
based upon a Member's Account balance in each of the various investment funds
or accounts, if more than one, as of the last Valuation Date reduced, as
appropriate, by amounts used from the investment fund or account or Trust to
make a withdrawal or distribution or any other transaction which is properly
chargeable to the Member's Account during the period since the last Valuation
Date. In lieu of the allocation method described above the Committee may by
resolution elect to use a unit allocation method, a separate account method or
any other equitable method if it announces the method of allocation to the
Members prior to the beginning of the period during which it is first used.
5.6 INTERIM VALUATION OF TRUST FUND. If at any time in
the interval between Valuation Dates, one or more withdrawals or one or more
distributions are to be made and the Committee determines that an interim
allocation is necessary to prevent discrimination against those Members and
former Members who are not receiving funds, the Trustee is to perform a
valuation of a portion or all of the Trust Fund as of a date selected by the
Committee which is administratively practical and near the date of withdrawals
or distributions in the same manner as it would if it were a scheduled
Valuation Date. That date may be before or after any particular distribution
or withdrawal. The Committee shall then allocate as of that date any income or
loss and any appreciation or depreciation to the various Accounts of each of
the Members in the same manner as it would if it were a scheduled Valuation
Date. Then, without regard to the language in Section 6.1, all withdrawals or
distributions made after that date and prior to the next Valuation Date, even
though the event causing it occurred earlier, shall be based upon the Accounts
as adjusted by the interim valuation.
5.7 MAINTENANCE OF INVESTMENT FUNDS. The Committee may:
(a) maintain commingled and/or separate Trusts for some or all Members, (b)
establish separate investment funds which may be elected by some or all
Members, (c) permit some or all individual Members to elect their own
investments, or (d) permit a combination of (a), (b) and (c), from time to
time. Once the Committee has selected or changed the mode of investments, it
shall establish rules pertaining to its administration, including but not
limited to: selection of forms, rules for making selections effective,
establishing the frequency of permitted changes, the minimum percentage in any
investment, and all other necessary or appropriate regulations.
The Committee may direct the Trustee to hold funds in cash or
near money awaiting investment or to sell assets and hold the proceeds in cash
or near money awaiting reinvestment when establishing, using or changing
investment modes. For this purpose the funds may be held in cash or invested
in short-term investments
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such as certificates of deposit, U.S. Treasury bills, savings accounts,
commercial paper, demand notes, money market funds, any common, pooled or
collective funds which the Trustee or any other corporation may now have or in
the future may adopt for short-term investments and any other similar assets
which may be offered by the federal government, national or state banks
(whether or not serving as Trustee) or any savings and loan association.
5.8 RIGHTS OF MEMBERS IN TRUST FUND. No allocation,
adjustment, credit or transfer shall ever vest in any Member any right, title
or interest in the Trust Fund except at the times and upon the terms and
conditions specified in this Plan. The Trust Fund shall, as to all Accounts of
all Members, be a commingled fund.
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ARTICLE VI
BENEFITS
6.1 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.
6.2 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.
6.3 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.
6.4 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.
6.5 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 Supplemental Employer Contribution Account, and (b) that
percentage of his Supplemental 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 one year . . . . . . . . . . . . . . . . . . . 0%
One year but less than two years . . . . . . . . . . . . 20%
Two years but less than three years . . . . . . . . . . . 40%
Three years but less than four years . . . . . . . . . . 60%
Four years but less than five years . . . . . . . . . . . 80%
Five years or more . . . . . . . . . . . . . . . . . . . 100%
6.6 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
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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.
6.7 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
Supplemental 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.
Effective for withdrawal requests made after July 1, 1992, 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 principal residence, or
(v) any other event added to this list by the Commissioner of Internal
Revenue.
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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.
Effective for withdrawal requests made on or after July 1,
1992, the Member's hardship distribution shall terminate his or her
right to make any Employee After-Tax Contributions or to have the
Employer make any Salary Deferral Contributions on his or her behalf
until the next time Employee After-Tax Contributions and 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 or her Employee After-Tax Contributions
or Salary Deferral Contributions. Even then, if the Member resumes
Contributions in his next taxable year 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 Supplemental
Employer Contribution Account, then from his Rollover 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 not allocable or
credited to the Member's Salary Deferral Contribution Account as of
December 31, 1988.
(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.
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6.8 LOANS. The Committee may direct the Trustees to make
loans to Members and Beneficiaries 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, and to all Members who have participated in the
Plan for at least one year.
(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, or (B) one-half of the present value of the
person's vested Account balance under the Plan.
(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.
(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.
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(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. No distribution under the Plan will be made to a
person until all loans to him by the Trustee are fully paid. If the
person is otherwise entitled to a distribution while he still has an
unpaid loan balance, then the Loan Committee will direct the Trustee
to foreclose on the person's Account to the extent necessary to pay
off the person's unpaid loan balance. If after the Trustee forecloses
on the person's Account and the person still has an unpaid loan
balance, the person will continue to be liable for and continue to
make payments on the balance still due from him.
(k) No Plan loan will be made to anyone who has an unpaid
Plan loan balance.
(l) 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.
(n) 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.
6.9 FORFEITURE BY LOST MEMBERS OR BENEFICIARIES; ESCHEAT.
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. If the Plan is joined as a party to any escheat proceeding
involving a forfeited amount, the Plan shall comply with the final judgment and
shall treat the judgment as if it were a claim filed by the former Member or
Beneficiary and shall pay in accordance with that judgment.
6.10 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
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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 claimant
within the review period, the claim is treated as if it were denied on the last
day of the review period.
6.11 TIMING AND FORM OF ALL 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. Distribution
shall be made in a lump sum payment.
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 plus all prior Plan payments
to the Member is $3,500 or less, the benefit shall be distributed in the form
of a lump sum distribution within one year after the Member becomes entitled to
the benefit. If the benefit plus all prior Plan payments to the Member is
greater than $3,500 and the Member consents to the distribution, the benefit
must be paid or begin to be paid within one year after the Member becomes
entitled to the benefit. If the benefit plus all prior Plan payments to the
Member is greater than $3,500 and the Member fails to consent to the
distribution, the distribution shall not be made without the Member's consent
until he attains normal Retirement Age or age 62, whichever is later. In any
event, if the Member dies, the surviving spouse may require payments to begin
within a reasonable time.
If a portion of the Member's Account is payable to a
designated Beneficiary the payment must be made not later than one year after
the Member's death. If the surviving spouse is the Beneficiary, the payment
may be delayed so as to be made on the date on which the Member would have
attained age 70 1/2. If payment
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is postponed and the surviving spouse dies before payment is made, the
surviving spouse shall be treated as the Member for purposes of this paragraph.
6.12 MANDATORY RULES APPLICABLE TO ALL DISTRIBUTIONS. All
distributions must comply with Section 401(a)(9) and (14) of the Code.
Therefore, unless the distribution fits within one of the exceptions below the
distribution must be made NO LATER than the earlier of (a) or (b): (a) the
60th day after the latest of the end of the Plan Year in which: (i) the Member
attains his Retirement Age, (ii) occurs the 10th anniversary of the year in
which the Member began participation, or (iii) the Member terminates employment
with the Employer and all Affiliated Employers unless the Member consents to a
later time, OR (b) April 1st of the calendar year following the calendar year
in which the Member attains age 70 1/2. If a Member attains age 70 1/2, the
Member must receive the required distribution within that time limit in one
lump sum. The following are exceptions to the general mandatory distribution
rule: (a) if a Member was 70-1/2 before January 1, 1988, and neither is nor
has been a 5% owner at any time during the Plan Year ending with or within the
calendar year in which the Member became 66-1/2 or any subsequent Plan Year,
the distribution does not have to be made until the April 1 following the
calendar year in which the Member retires; (b) if a Member was 70-1/2 before
January 1, 1988, and was then or later becomes a 5% owner, the distribution
does not have to be made until the April 1 following the earlier of the
calendar year with or within which ends the Plan Year in which the Member
becomes a 5% owner or the calendar year in which the Member retires; and (c) if
a Member made a designation before January 1, 1984 which complied with Section
401(a)(9) of the Code before its amendment by the Tax Reform Act of 1984, the
distribution does not have to be made until the time described in the
designation.
6.13 NO DUPLICATION OF BENEFITS. There shall be no
duplication of benefits under this Plan. Without regard to any other language
in this Plan, all distributions and withdrawals are to be subtracted from a
Member's Account as of the date of the distribution or withdrawal. Thus, if
the Member has received one distribution or withdrawal and is ever entitled to
another distribution or withdrawal, the prior distribution or withdrawal is to
be taken into account.
6.14 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
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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.
6.15 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 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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ARTICLE VII
ADMINISTRATION OF THE PLAN
7.1 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.
7.2 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
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(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.
7.3 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.
7.4 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.
7.5 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.
7.6 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.
7.7 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.
7.8 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.
7.9 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
VII-2
37
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.
7.10 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.
7.11 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.
7.12 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.
7.13 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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38
ARTICLE VIII
TRUST FUND AND CONTRIBUTIONS
8.1 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.
8.2 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.
8.3 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.
8.4 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.
VIII-1
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ARTICLE IX
ADOPTION OF PLAN BY OTHER EMPLOYERS
9.1 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.
9.2 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.
9.3 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.
9.4 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
IX-1
40
the Plan as adopted by that business organization qualified, for the benefit of
the Members covered by that adoption.
IX-2
41
ARTICLE X
AMENDMENT AND TERMINATION
10.1 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
X-1
42
a withdrawal from this Plan by that Employer unless the Sponsor acquiesces in
the rejection.
10.2 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.
10.3 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.
10.4 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
X-2
43
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.
10.5 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.
10.6 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.
10.7 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
X-3
44
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.
10.8 MODES OF DISTRIBUTION UPON TERMINATION. All modes of
distribution permitted by this Plan must be available for all distributions to
Members upon termination of this Plan.
10.9 DISTRIBUTIONS TO HIGHLY COMPENSATED EMPLOYEES AND
FORMER EMPLOYEES MUST NOT DISCRIMINATE. Upon termination of the Plan, the
benefit payable to each Highly Compensated Employee or former Employee is
limited to a benefit that is nondiscriminatory under Section 401(a)(4) of the
Code.
X-4
45
ARTICLE XI
MISCELLANEOUS
11.1 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.
11.2 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.
11.3 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.
11.4 REQUIREMENTS UPON MERGER OR CONSOLIDATION 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).
11.5 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.
11.6 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.
XI-1
46
11.7 GOVERNING LAW; PARTIES TO LEGAL ACTIONS. The
provisions of this Plan shall be construed, administered, and governed under
the laws of the State of Illinois 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.
IN WITNESS WHEREOF, Quanex Corporation has caused this
Agreement to be executed this _______ day of __________________, 1993, in
multiple counterparts, each of which shall be deemed to be an original, to be
effective the 1st day of January, 1989, except for those provisions which have
an earlier effective date provided by law, or as otherwise provided under
applicable provisions of this Plan.
QUANEX CORPORATION
By_________________________________
___________________________________
Title
XI-2
47
First Amendment
ARTICLE XII
IRS MODEL LANGUAGE/PLAN DISTRIBUTIONS
12.1 DISTRIBUTIONS MADE ON OR AFTER JANUARY 1, 1993. This
Article applies to distributions made on or after January 1, 1993.
Notwithstanding any provision of the plan to the contrary that would otherwise
limit a distributee's election under this Article, a distributee may elect, at
the time and in the manner prescribed by the plan administrator, to have any
portion of an eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct rollover.
12.2 DEFINITIONS.
(a) ELIGIBLE ROLLOVER DISTRIBUTION: An eligible
rollover distribution is any distribution of all or any portion of the balance
to the credit of the distributee, except that an eligible rollover distribution
does not include: any distribution that is one of a series of substantially
equal periodic payments (not less frequently than annually) made for the life
(or life expectancy) of the distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's designated beneficiary,
or for a specified period of ten years or more; any distribution to the extent
such distribution is required under Section 401(a)(9) of the Code; and the
portion of any distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation with respect to
employer securities).
(b) ELIGIBLE RETIREMENT PLAN: An eligible
retirement plan is an individual retirement account described in Section 408(a)
of the Code, an individual retirement annuity described in Section 408(b) of
the Code, an annuity plan described in Section 403(a) of the Code, or a
qualified trust described in Section 401(a) of the Code, that accepts the
distributee's eligible rollover distribution. However, in the case of an
eligible rollover distribution to the surviving spouse, an eligible retirement
plan is an individual retirement account or individual retirement annuity.
(c) DISTRIBUTEE: A distributee includes 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.
(d) DIRECT ROLLOVER: A direct rollover is a
payment by the plan to the eligible retirement plan specified by the
distributee.
XII-1
48
FIRST AMENDMENT TO THE
NICHOLS-HOMESHIELD 401(K) SAVINGS PLAN
FOR DAVENPORT HOURLY EMPLOYEES
THIS AGREEMENT by Quanex Corporation (the "Sponsor"),
W I T N E S S E T H:
WHEREAS, the Sponsor has executed and maintains a qualified
plan entitled "Nichols-Homeshield 401(k) Savings Plan for Davenport Hourly
Employees" (the "Plan"); and
WHEREAS, the Sponsor retained the right to amend the Plan from
time to time;
WHEREAS, the Internal Revenue Service has authorized a model
amendment to comply with the new legislation affecting distributions from
qualified plans; and
WHEREAS, the Board of Directors of the Sponsor, in order to
adopt the model amendment so as to comply with the new law, approved
resolutions to amend the Plan;
NOW, THEREFORE, the Sponsor declares that the Plan is hereby
amended, effective as of January 1, 1993, as follows:
A new Article XII is added to the Plan to provide as set forth
in the substitute pages attached hereto which shall be inserted into
the Plan.
IN WITNESS WHEREOF, the Sponsor has executed this Agreement
this _____ day of September 1993.
QUANEX CORPORATION
By____________________________
49
Termination of Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.4
Partial or Complete Termination or Complete
Discontinuance of Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.5
Continuance Permitted Upon Sale or Transfer of Assets . . . . . . . . . . . . . . . . . . 10.6
Limitation on Distribution Upon Termination . . . . . . . . . . . . . . . . . . . . . . . 10.7
Modes of Distribution Upon Termination . . . . . . . . . . . . . . . . . . . . . . . . . . 10.8
Distributions to Highly Compensated Employees and
Former Employees Must Not Discriminate . . . . . . . . . . . . . . . . . . . . . . . . 10.9
ARTICLE XI - MISCELLANEOUS
Plan Not An Employment Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.1
Benefits Provided Solely From Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2
Anti-Alienation Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.3
Requirements Upon Merger or Consolidation of Plans . . . . . . . . . . . . . . . . . . . . 11.4
Gender of Words Used . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.5
Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.6
Governing Law; Parties to Legal Actions . . . . . . . . . . . . . . . . . . . . . . . . . 11.7
ARTICLE XII - DIRECT ROLLOVERS
Distributions Made On or After January 1, 1993 . . . . . . . . . . . . . . . . . . . . . . 12.1
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.2
50
ARTICLE XII
DIRECT ROLLOVERS
12.1 DISTRIBUTIONS MADE ON OR AFTER JANUARY 1, 1993. This
Article applies to distributions made on or after January 1, 1993.
Notwithstanding any provision of the plan to the contrary that would otherwise
limit a distributee's election under this Article, a distributee may elect, at
the time and in the manner prescribed by the plan administrator, to have any
portion of an eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct rollover.
12.2 DEFINITIONS.
(a) ELIGIBLE ROLLOVER DISTRIBUTION: An eligible
rollover distribution is any distribution of all or any portion of the balance
to the credit of the distributee, except that an eligible rollover distribution
does not include: any distribution that is one of a series of substantially
equal periodic payments (not less frequently than annually) made for the life
(or life expectancy) of the distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's designated beneficiary,
or for a specified period of ten years or more; any distribution to the extent
such distribution is required under Section 401(a)(9) of the Code; and the
portion of any distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation with respect to
employer securities).
(b) ELIGIBLE RETIREMENT PLAN: An eligible
retirement plan is an individual retirement account described in Section 408(a)
of the Code, an individual retirement annuity described in Section 408(b) of
the Code, an annuity plan described in Section 403(a) of the Code, or a
qualified trust described in Section 401(a) of the Code, that accepts the
distributee's eligible rollover distribution. However, in the case of an
eligible rollover distribution to the surviving spouse, an eligible retirement
plan is an individual retirement account or individual retirement annuity.
(c) DISTRIBUTEE: A distributee includes 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.
(d) DIRECT ROLLOVER: A direct rollover is a
payment by the plan to the eligible retirement plan specified by the
distributee.
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51
SECOND AMENDMENT TO
NICHOLS-HOMESHIELD 401(K) SAVINGS PLAN
FOR DAVENPORT HOURLY EMPLOYEES
THIS AGREEMENT by Quanex Corporation, a corporation (the "Sponsor"),
W I T N E S S E T H:
WHEREAS, on January 11, 1993, the Sponsor executed the Agreement known
as "Nichols-Homeshield 401(k) Savings Plan for Davenport Hourly Employees" (the
"Plan"); and
WHEREAS, the Sponsor retained the right in Section 10.1 of the Plan to
amend the Plan from time to time; and
WHEREAS, the Board of Directors of the Sponsor has approved
resolutions to amend the Plan;
NOW, THEREFORE, the Sponsor agrees that the Plan is hereby amended as
follows:
(1) Effective January 1, 1993, Section 1.33 of the Plan is
completely amended to provide as follows:
1.33 "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.
(2) Effective January 1, 1993, Section 4.1 of the Plan is
completely amended to provide as follows:
4.1 ROLLOVER CONTRIBUTIONS AND PLAN TO PLAN TRANSFERS.
The 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, all Employees of an Employer shall be considered to be
Members of the Plan even though they
52
may not have met the eligibility requirements. However, they shall
not be entitled to contribute to the Plan, share in Employer
Contributions or share in forfeitures unless and until they have met
the requirements for eligibility, contributions and allocations. A
Rollover Contribution shall not be accepted unless it is made on or
before the 60th day after the Member received the distribution or 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 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.
(3) Effective with respect to loans made on or after June 1, 1994,
Section 6.8 of the Plan is hereby completely amended to provide as follows:
6.8 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
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53
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.
(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.
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54
(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.
(4) Effective January 1, 1994, by adding thereto the following new
Article XIII:
ARTICLE XIII
LIMITATION ON COMPENSATION
COMPENSATION LIMITATION. In addition to other applicable
limitations set forth in the Plan, and notwithstanding any other
provision of the Plan to the contrary, for Plan years beginning on or
after January 1, 1994, the annual compensation of each employee taken
into account under the Plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is
$150,000, as adjusted by the Commissioner for increases in the cost of
living in accordance with section 401(a)(17)(B) of the Internal
Revenue Code. The cost-of-living adjustment in effect for a calendar
year applies to any period, not exceeding 12 months, over which
compensation is determined (determination period) beginning in such
calendar year. If a determination period consists of fewer than 12
months, the OBRA '93 annual compensation limit will be multiplied by a
fraction, the numerator or which is the number of months in the
determination period, and the denominator of which is 12.
For Plan years beginning on or after January 1, 1994, any
reference in this Plan to the limitation under section 401(a)(17) of
the Code shall mean the OBRA '93 annual compensation limit set forth
in this provision.
If compensation for any prior determination period is taken
into account in determining an employee's benefits accruing in the
current
-4-
55
Plan year, the compensation for that prior determination period is
subject to the OBRA '93 annual compensation limit in effect for that
prior determination period. For this purpose, for determination
periods beginning before the first day of the first Plan year
beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
-5-
56
IN WITNESS WHEREOF, the Sponsor has caused this Agreement to be
executed this _____ day of _______________________ 1994.
QUANEX CORPORATION
By_____________________________
Title__________________________
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1
Exhibit 5.1
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
DISTRICT DIRECTOR
1100 COMMERCE STREET
DALLAS, TX 75242
Employer Identification Number:
Date June 18, 1993 38-1872178
File Folder Number:
QUANEX CORPORATION 760010379
C/O RICHARD P BOGATTO Person to Contact:
FULBRIGHT & JAWORSKI JILL RUTHERFORD
1301 MCKINNEY SUITE 5100 Contact Telephone Number:
HOUSTON, TX 77010-3095 (214) 767-1204
Plan Name:
NICHOLS-HOMESHIELD 401K SAVINGS
PLAN FOR DAVENPORT HOURLY EMPLOYEE
Plan Number: 016
Dear Applicant:
We have made a favorable determination on your plan, identified above,
based on the information supplied. Please keep this letter in your permanent
records.
Continued qualification of the plan under its present form will depend on
its effect in operation. (See section 1.401-1(b)(3) of the Income Tax
Regulations.) We will review the status of the plan in operation periodically.
The enclosed document explains the significance of this favorable
determination letter, points out some features that may affect the qualified
status of your retirement plan, and provides information on the reporting
requirements for your plan. It also describes some events that automatically
nullify it. It is very important that you read the publication.
This letter relates only to the status of your plan under the Internal
Revenue Code. It is not a determination regarding the effect of other
federal or local statutes.
This determination letter is applicable for the amendment(s) adopted on
January 11, 1993.
This letter is based upon the certification and demonstrations you
submitted pursuant to Revenue Procedure 91-66. Therefore, the certification and
demonstrations are considered an integral part of this letter.
Accordingly, YOU MUST KEEP A COPY OF THESE DOCUMENTS AS A PERMANENT RECORD OR
YOU WILL NOT BE ABLE TO RELY ON THE ISSUES DESCRIBED IN REVENUE PROCEDURE
91-66.
The information on the enclosed addendum is an integral part of this
determination. Please be sure to read and keep it with this letter.
We have sent a copy of this letter to your representative as indicated in
the power of attorney.
2
-2-
QUANEX CORPORATION
If you have questions concerning this matter, please contact the person
whose name and telephone number are shown above.
Sincerely yours,
/s/ GARY O. BOOTH
------------------------
Gary 0. Booth
District Director
Enclosures:
Publication 794
PWBA 515
Addendum
3
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QUANEX CORPORATION
Effective January 1, 1993, all qualified plans must comply with Code
section 401(a)(31). In general, section 401(a)(31) requires plans to permit
participants to elect to have an eligible retirement distribution paid directly
to an eligible retirement plan in a direct rollover. This requirement applies
to distributions made on or after January 1, 1993, even if the plan is not
amended to comply with the provisions until the last date allowed for making
such amendments. Because you did not specifically ask that this issue be
considered, the Service did not review this plan for compliance with section
401(a)(31). Accordingly, the scope of this determination letter does not extend
to the plan's compliance with section 401(a)(31), and this determination letter
may not be relied upon with respect to that issue. For more details, see
Revenue Procedure 93-12, 1993-3 I.R.B. 14.
1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Registration Statement of
Quanex Corporation on Form S-8 of our report dated Novemeber 24, 1993,
incorporated by reference in the Annual Report on Form 10-K of Quanex
Corporation for the year ended October 31, 1993.
/s/ Deloitte & Touche
DELOITTE & TOUCHE
Houston, Texas
June 9, 1994
