1
As filed with the Securities and Exchange Commission on October 15, 1999
Registration No. 33-46824
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
Post Effective Amendment No. 2
to
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
QUANEX CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 38-1872178
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1900 West Loop South, Suite 1500 77027
Houston, Texas (Zip Code)
(Address of Principal Executive Offices)
Quanex Corporation Hourly Bargaining
Unit Employee Savings Plan
(Full title of the plan)
Terry M. Murphy
QUANEX CORPORATION
1900 WEST LOOP SOUTH, SUITE 1500
HOUSTON, TEXAS 77027
(Name and address of agent for service)
(713) 961-4600
(Telephone number, including area code, of agent for service)
Copies to:
HARVA R. DOCKERY, ESQ.
FULBRIGHT & JAWORSKI L.L.P.
2200 ROSS AVENUE, SUITE 2800
DALLAS, TEXAS 75201-9975
(214) 855-8000
===============================================================================
2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. Incorporation of Documents by Reference.
Quanex Corporation, a Delaware corporation (the "Company" or
"Registrant"), and the Quanex Corporation Hourly Bargaining Unit Employee
Savings Plan (the "Plan") incorporate by reference, as applicable, in this
Registration Statement the following documents:
(a) The Registrant's original Registration Statement on Form S-8,
Reg. No. 33-46824, filed March 30, 1992, as amended by Post-Effective
Amendment No. 1 filed February 2, 1999;
(b) The Registrant's Annual Report on Form 10-K for the fiscal
year ended October 31, 1998;
(c) The Registrant's Quarterly Reports on Form 10-Q for the
quarters ended January 31, 1999, April 30, 1999 and July 31, 1999;
(d) The Plan's Annual Report on Form 11-K for the fiscal year
ended December 31, 1998;
(e) All other reports filed by the Registrant or the Plan
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), since October 31, 1998;
(f) The description of the Registrant's common stock, $.50 par
value (the "Common Stock"), contained in the Prospectus dated January
12, 1981, included in the Registrant's Registration Statement
(Registration No. 2-70313) and filed with the Securities and Exchange
Commission pursuant to Rule 424(b) of the Securities Act of 1933; and
(g) The description of the rights to purchase Series A Junior
Participating Preferred Stock (the "Rights") set forth in the Amended
and Restated Certificate of Designation, Preferences and Rights, filed
as Exhibit 1 to Amendment No. 1 to the Registrant's Form 8-A dated
April 28, 1989, as amended by that certain Second Amended and Restated
Rights Agreement between the Registrant and American Stock Transfer
Co., as Rights Agent, filed as Exhibit 4.1 to the Registrant's Report
on Form 8-K filed April 16, 1999.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of filing of this
Post Effective Amendment No. 2 to the Registration Statement on Form S-8 (this
"Amendment No. 2") and before the filing of a post-effective amendment which
indicates that all securities offered have been sold or which deregisters all
securities then remaining unsold, are incorporated by reference in, and
constitute a part of, the Registration Statement from the date such documents
are filed.
2
3
The language in this Amendment No. 2 modifies and supersedes the
language in any previously filed document that is incorporated by reference in
this Registration Statement. The language in any document that is filed after
the date of filing of this Amendment No. 2 that is incorporated by reference in
this Registration Statement modifies and supersedes the language in this
Registration Statement. However, such language constitutes a part of this
Registration Statement only to the extent that it modifies and supersedes this
Registration Statement.
ITEM 4. Description of Securities.
Not applicable.
ITEM 5. Interests of Named Experts and Counsel.
Not applicable.
ITEM 6. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of Delaware
provides that a corporation has the power to indemnify a director, officer,
employee or agent of the corporation and certain other persons serving at the
request of the corporation in related capacities against amounts paid and
expenses incurred in connection with an action or proceeding to which he is, or
is threatened to be made, a party by reason of such position, if such person
shall have acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation, and, in any criminal
proceeding, if such person had no reasonable cause to believe his conduct was
unlawful; provided that, in the case of actions brought by or in the right of
the corporation, no indemnification shall be made with respect to any matter as
to which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the adjudicating court determines that such
indemnification is proper under the circumstances.
The Registrant's Restated Certificate of Incorporation eliminates the
personal monetary liability of a director to the Registrant and its stockholders
for breach of his fiduciary duty of care as a director to the extent currently
allowed under the Delaware General Corporation Law. Article XVII of the
Registrant's Restated Certificate of Incorporation provides that a director of
the Registrant shall not be personally liable to the Registrant or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
Registrant or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) based
on the payment of an improper dividend or an improper repurchase of the
Registrant's stock under Section 174 of the General Corporation Law of the State
of Delaware, or (iv) for any transaction from which the director derived an
improper personal benefit.
3
4
The Amended and Restated Bylaws of the Registrant provide that, under
certain circumstances, the Registrant is required to indemnify any person who
was, is, or is threatened to be made a party in any action, suit or proceeding
because such person is or was a director or officer of the Registrant. The
Registrant's Amended and Restated Bylaws were amended in February 1987 to
provide for indemnification by the Registrant of its officers and directors to
the fullest extent authorized by the General Corporation Law of the State of
Delaware. This right to indemnification under the Registrant's Amended and
Restated Bylaws is a contract right, and requires the Registrant to provide for
the payment of expenses in advance of the final disposition of any suit or
proceeding brought against the director or officer of the Registrant in his
official capacity as such, provided that such director or officer delivers to
the Registrant an undertaking to repay any amounts advanced if it is ultimately
determined that such director or officer is not entitled to indemnification. The
Registrant also maintains a directors' and officers' liability insurance policy.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been informed that in the opinion of the Commission, such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable.
ITEM 7. Exemption from Registration Claimed.
Not applicable.
ITEM 8. Exhibits.
4.1 Restated Certificate of Incorporation of the Registrant, as amended on
February 27, 1997, filed as Exhibit 4.1 to the Registrant's
Registration Statement on Form S-8, Registration No. 333-22977, and
incorporated herein by reference.
4.2 Amended and Restated Bylaws of the Registrant, as amended through
August 26, 1999, filed as Exhibit 3 to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended July 31, 1999, 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 Second Amended and Restated Rights Agreement between the Registrant
and American Stock Transfer Co., as Rights Agent, filed as Exhibit 4.1
to the Registrant's Report on Form 8-K filed April 16, 1999, and
incorporated herein by reference.
4
5
4.5 Amended and Restated Certificate of Designation, Preferences and Rights
of the Registrant's Series A Junior Participating Preferred Stock,
filed as Exhibit 1 to Amendment No. 1 to the Registrant's Form 8-A
dated April 28, 1989, and incorporated herein by reference.
4.6 Quanex Corporation Hourly Bargaining Unit Employee Savings Plan, as
amended and restated effective April 1, 1996.
4.7 Master Trust Agreement between the Registrant and Fidelity
Management Trust Company dated as of February 1, 1999.
First Amendment to Trust Agreement between Fidelity Management
Trust Company and the Registrant, effective as of November 1,
1999.
4.8 First Amendment to Trust Agreement between Fidelity Management Trust
Company and the Registrant, effective as of November 1, 1999.
23.1 Consent of Deloitte & Touche LLP.
24.1 Powers of Attorney.
The Registrant hereby undertakes to submit the Plan, and any amendments
thereto, to the Internal Revenue Service ("IRS") in a timely manner and will
make all changes required by the IRS in order to qualify the Plan.
ITEM 9. Undertakings.
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1993, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement
(or the most recent post-effective amendment hereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in this Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar volume of
5
6
securities offered would not exceed that which was registered) and
any deviation from the high or low end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Securities and Exchange Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information
in this Registration Statement;
Provided, however, that paragraphs (i) and (ii) do not apply if
the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or 15(d) of the Exchange Act that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
herein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
B. The undersigned Registrant hereby undertakes that, for the
purposes of determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference into this Registration Statement shall be deemed to be
a new registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification
6
7
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.
7
8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this
Post-Effective Amendment No. 2 to Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Houston,
State of Texas, on the 15th day of October, 1999.
QUANEX CORPORATION
By /s/ Vernon E. Oechsle
----------------------------------------------
Vernon E. Oechsle
Director, President and Chief Executive Officer
(Principal Executive Officer)
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 2 to Registration Statement has been signed below
by the following persons in the capacities and on the dates indicated.
Signature Title Date
========================================= ======================================= ================================
Director, President and
/s/ Vernon E. Oechsle Chief Executive Officer October 15, 1999
- ----------------------------------------- (Principal Execute Officer)
Vernon E. Oechsle
Executive Vice President and
/s/ James H. Davis Chief Operating Officer October 15, 1999
- ----------------------------------------- (Principal Operating Officer)
James H. Davis
*
- ----------------------------------------- Director October 15, 1999
Donald G. Barger, Jr.
8
9
*
- ----------------------------------------- Director October 15, 1999
Susan F. Davis
*
- ----------------------------------------- Director October 15, 1999
Russell M. Flaum
* Director October 15, 1999
- -----------------------------------------
Carl E. Pfeiffer
* Director October 15, 1999
- -----------------------------------------
John D. O'Connell
*
- ----------------------------------------- Director October 15, 1999
Vincent R. Scorsone
* Director October 15, 1999
- -----------------------------------------
Michael J. Sebastian
President, Engineered
Products Group and
/s/ Terry M. Murphy Chief Financial Officer October 15, 1999
- ----------------------------------------- (Principal Financial Officer)
Terry M. Murphy
/s/ Viren M. Parikh Controller October 15, 1999
- ----------------------------------------- (Principal Accounting Officer)
Viren M. Parikh
* By /s/ Viren M. Parikh
------------------------------------
Viren M. Parikh
Attorney-in-Fact
9
10
The Plan. Pursuant to the requirements of the Securities Act of 1933,
the Administrative Committee of the Plan has duly caused this Post-Effective
Amendment No. 2 to Registration Statement on Form S-8 to be signed on its behalf
by the undersigned members of such committee, thereunto duly authorized, in the
City of Houston, State of Texas, on October 15, 1999.
QUANEX CORPORATION HOURLY
BARGAINING UNIT EMPLOYEE SAVINGS PLAN
By: /s/ Vernon E. Oechsle
------------------------------------
Vernon E. Oechsle
By: /s/ James H. Davis
------------------------------------
James H. Davis
By: /s/ Wayne M. Rose
------------------------------------
Wayne M. Rose
By: /s/ Terry M. Murphy
------------------------------------
Terry M. Murphy
By: /s/ Paul J. Giddens
------------------------------------
Paul J. Giddens
By: /s/ Viren M. Parikh
------------------------------------
Viren M. Parikh
10
11
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
4.1 Restated Certificate of Incorporation of the Registrant, as amended
on February 27, 1997, filed as Exhibit 4.1 to the Registrant's
Registration Statement on Form S-8, Registration No. 333-22977, and
incorporated herein by reference.
4.2 Amended and Restated Bylaws of the Registrant, as amended through
August 26, 1999, filed as Exhibit 3 to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended July 31, 1999, 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 Second Amended and Restated Rights Agreement between the Registrant
and American Stock Transfer Co., as Rights Agent, filed as Exhibit
4.1 to the Registrant's Report on Form 8-K filed April 16, 1999, and
incorporated herein by reference.
4.5 Amended and Restated Certificate of Designation, Preferences and
Rights of the Registrant's Series A Junior Participating Preferred
Stock, filed as Exhibit 1 to Amendment No. 1 to the Registrant's
Form 8-A dated April 28, 1989, and incorporated herein by reference.
4.6 Quanex Corporation Hourly Bargaining Unit Employee Savings Plan, as
amended and restated effective April 1, 1996.
4.7 Master Trust Agreement between the Registrant and Fidelity
Management Trust Company dated as of February 1, 1999. First
Amendment to Trust Agreement between Fidelity Management Trust
Company and the Registrant, effective as of November 1, 1999.
4.8 First Amendment to Trust Agreement between Fidelity Management
Trust Company and the Registrant, effective as of November 1, 1999.
23.1 Consent of Deloitte & Touche LLP.
24.1 Powers of Attorney.
1
EXHIBIT 4.6
QUANEX CORPORATION
HOURLY BARGAINING UNIT
EMPLOYEES SAVINGS PLAN
AMENDMENT AND RESTATEMENT
EFFECTIVE APRIL 1, 1996
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
Aggregate Accounts...............................................................................1.6
Annual Additions.................................................................................1.7
Annual Compensation..............................................................................1.8
Beneficiary......................................................................................1.9
Board of Directors...............................................................................1.10
Code.............................................................................................1.11
Committee........................................................................................1.12
Considered Compensation..........................................................................1.13
Contribution.....................................................................................1.14
Disability.......................................................................................1.15
Employee.........................................................................................1.16
Employer.........................................................................................1.17
Entry Date.......................................................................................1.18
ERISA............................................................................................1.19
Excess 401(k) Contributions......................................................................1.20
Family Member....................................................................................1.21
Highly Compensated Employee......................................................................1.22
Hour of Service..................................................................................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
Severs Service...................................................................................1.36
Sponsor..........................................................................................1.37
Transferred......................................................................................1.38
Trust............................................................................................1.39
-i-
3
Trustee..........................................................................................1.40
Trust Fund.......................................................................................1.41
Valuation Date...................................................................................1.42
ARTICLE II - ACTIVE SERVICE
When Active Service Begins.......................................................................2.1
Aggregation of Service...........................................................................2.2
Eligibility Computation Periods..................................................................2.3
Periods of Service of Less Than One Year.........................................................2.4
Service Prior to Severance.......................................................................2.5
Periods of Severance Due to Child Birth or Adoption..............................................2.6
Transfers........................................................................................2.7
Employment Records Conclusive....................................................................2.8
Military Service.................................................................................2.9
ARTICLE III - ELIGIBILITY RULES
Eligibility Requirements.........................................................................3.1
Eligibility Upon Reemployment....................................................................3.2
Frozen Participation.............................................................................3.3
ARTICLE IV - CONTRIBUTIONS
Employee After Tax Contributions.................................................................4.1
Rollover Contributions and Plan to Plan Transfers................................................4.2
Employer Contributions...........................................................................4.3
Limit on Salary Deferral Contributions...........................................................4.4
Actual Deferral Percentage for Highly
Compensated Employees.........................................................................4.5
Special Actual Deferral Percentage Rules
For Family Members............................................................................4.6
Distributions of Income Allocable to Excess
401(k) Contributions .........................................................................4.7
Employee After Tax Contributions and Salary
Deferral Contributions........................................................................4.8
Return of Contributions for Mistake, Disqualification
or Disallowance of Deduction..................................................................4.9
ARTICLE V - PARTICIPATION
Allocation of Employee Contributions.............................................................5.1
Allocation of Rollover Contributions.............................................................5.2
Allocation of Employer Contributions.............................................................5.3
-ii-
4
Forfeiture on Termination of Participation.......................................................5.4
Limitation on Allocation.........................................................................5.5
Valuation of Trust Fund..........................................................................5.6
Interim Valuation of Trust Fund..................................................................5.7
Maintenance of Investment Funds..................................................................5.8
Rights of Members in Trust Fund..................................................................5.9
ARTICLE VI - BENEFITS
Valuation of Accounts for Withdrawals and Distributions..........................................6.1
Death Benefit....................................................................................6.2
Retirement Benefit...............................................................................6.3
Disability Benefit...............................................................................6.4
Severance Benefit................................................................................6.5
Distributions to Divorced Spouse.................................................................6.6
Withdrawals......................................................................................6.7
Forfeiture by Lost Members or Beneficiaries; Escheat.............................................6.8
Claims Procedure.................................................................................6.9
Timing and Form of All Distributions.............................................................6.10
Mandatory Rules Applicable to All Distributions..................................................6.11
No Duplication of Benefits.......................................................................6.12
Designation of Beneficiary.......................................................................6.13
Distributions to Disabled or Minors..............................................................6.14
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..........................................................................7.8
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
-iii-
5
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
Termination of Plan..............................................................................10.4
Partial or Complete Termination or Complete
Discontinuance...............................................................................10.5
Continuance Permitted Upon Sale or Transfer of Assets............................................10.6
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 Provision........................................................................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
-iv-
6
QUANEX CORPORATION
HOURLY BARGAINING UNIT
EMPLOYEES SAVINGS PLAN
Quanex Corporation has entered into the following Agreement:
W I T N E S S E T H:
WHEREAS, effective January 1, 1989, Quanex Corporation has
heretofore adopted the Quanex Corporation Hourly Bargaining Unit Employees
Savings Plan (the "Plan") and the Quanex Corporation Hourly Bargaining Unit
Employees Savings Plan Trust (the "Trust") for the exclusive benefit of its
employees and their beneficiaries;
WHEREAS, effective December 29, 1992, Michigan Seamless Tube
Company adopted the Plan and the Trust for the exclusive benefit of its
employees and their beneficiaries;
WHEREAS, effective July 1, 1994, LaSalle Steel Company adopted
the Plan and the Trust for the exclusive benefit of certain of its employees
working in Hammond, Indiana and their beneficiaries; and
WHEREAS, LaSalle Steel Company desires to amend the Plan to
permit certain of its employees working in Griffith, Indiana to participate in
the Plan in accordance with the terms of the collective bargaining agreement
between LaSalle Steel Company and the United Steelworkers of America, Local
2281-2;
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) Employee After Tax Contribution Account - The Member's
after-tax contributions, if any.
(b) Salary Deferral Contribution Account - The Member's
before-tax contributions.
(c) Rollover Account - Funds transferred from another
qualified plan or IRA account for the benefit of a Member.
(d) Matching Contribution Account - The Employer's matching
contributions allocated to the Member, if any.
(e) Supplemental Employer Contribution Account - The
Employer's supplemental contributions allocated to the Member, if any.
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. Solely for this purpose
all Section 401(k)
I-1
8
Contributions and Annual Compensation of all eligible Family Members will be
attributed to each Highly Compensated Employee.
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 control (within the meaning of Section 414(c) of the Code)
or which is a member of an affiliated service group (within the meaning of
Section 414(m) of the Code) with the Employer.
1.6 "AGGREGATE ACCOUNTS" means the total of all Account
balances derived from Employer Contributions and Employee Contributions.
1.7 "ANNUAL ADDITIONS" means (a) Employer Contributions, (b)
Employee Contributions, (c) forfeitures and (d) 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 and
for a Plan Year are treated as Annual Additions for that Plan Year even if they
are corrected through distribution or recharacterization. Excess Deferrals that
are timely distributed as set forth in Section 4.4 shall not be treated as
Annual Additions.
1.8 "ANNUAL COMPENSATION" means for purposes of Section 5.4 of
the Plan, 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, 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 415 of the Code 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.
Annual Compensation means, when used for any other purpose,
compensation received by the Employee from the Employer, other than compensation
I-2
9
in the form of qualified or previously qualified deferred compensation that is
currently includable in gross income for federal income tax purposes.
Effective January 1, 1994, except for purposes of Section 415
of the Code and Section 5.4 of the Plan, all Annual Compensation, without regard
to its definition, in excess of $150,000.00 (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) shall
apply, 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 $150,000.00 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 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 of the
Sponsor.
1.11 "CODE" means the Internal Revenue Code of 1986, as amended
from time to time.
1.12 "COMMITTEE" means the committee appointed by the Sponsor
to administer the Plan.
1.13 "CONSIDERED COMPENSATION" means as to each Member who is
employed by Quanex Corporation or Michigan Seamless Tube Company: (a) the
earnings reported on Form W-2 by the Employer during the Plan Year, excluding
amounts includable on Form W-2 which are reimbursements or other expense
allowances, fringe benefits (cash and noncash), moving expenses, deferred
compensation and welfare benefits and (b) the amounts deferred under an eligible
cash or deferred arrangement under Section 401(k) of the Code or under a
cafeteria plan described in Section 125 of the Code. Considered Compensation
means as to each Member who is employed by LaSalle Steel Company the base pay
from LaSalle Steel Company for hours worked during the Plan Year. Accordingly,
for Employees of LaSalle Steel Company, Considered Compensation shall not
include vacation pay, sick pay, grievance pay, shift premium pay, or the premium
portion of overtime pay. Considered Compensation in excess of $150,000.00 (as
adjusted by the Secretary of the Treasury) shall be disregarded. In determining
the Considered Compensation of a Member for purposes of this limitation, the
rules of Section 414(q)(6) shall apply,
I-3
10
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 $150,000.00 limitation is exceeded, the limitation shall be prorated
among the affected Members in proportion to each Member's Considered
Compensation as determined under this Section prior to the application of this
limitation.
1.14 "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) Employee After Tax Contribution - After Tax Contributions
paid by the Employee.
(b) Salary Deferral Contribution - Contributions made by the
Employer under the Employee's salary deferral agreement.
(c) Rollover Contribution - Contributions made by a Member
that are distributions or transfers from a prior qualified plan or IRA
account.
(d) Matching Contributions - Matching Contributions made by
the Employer.
(e) Supplemental Employer Contributions - Contributions made
by an Employer in addition to other Contributions made by the Employer.
1.15 "DISABILITY" means a mental or physical disability which,
in the opinion of a physician selected by the Committee, shall prevent the
Member from performing his regular work during the first 24 months of disability
and after 24 months from performing any job for which he is educated, trained,
or experienced 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.
1.16 "EMPLOYEE" means all persons who are (1) common law
employees of the Sponsor who are employed at its Gulf States Tube Division or
MacSteel-Michigan Division, common law employees of LaSalle Steel Company
employed in Hammond, Indiana or Griffith, Indiana, or common law employees of
Michigan Seamless Tube Company or common law employees of any other Employer and
(2) are included in a unit of employees covered by a collective bargaining
agreement with an
I-4
11
Employer. Leased employees (as defined in Section 414(n) of the Code) will not
be considered Employees unless the Plan's qualified status is dependent upon
coverage of the leased employees.
1.17 "EMPLOYER" or "EMPLOYERS" means the Sponsor and any other
business organization which has adopted this Plan.
1.18 "ENTRY DATE" means the January 1, April 1, July 1, or
October 1 following the Employee's satisfaction of the Plan eligibility
requirements.
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 4.5 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 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 $75,000.00 (as
adjusted from time to time by the Secretary of the Treasury), (c) received
Annual Compensation from the Employers in excess of $50,000.00 (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
I-5
12
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.
1.23 "HOUR OF SERVICE" means an hour for which an Employee is
paid or is entitled to payment for performance of duties with the Employer or an
Affiliated Employer.
1.24 "MEMBER" means the person or persons employed by an
Employer during the Plan Year and eligible to participate in this Plan.
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 or Affiliated Employer which commences on the day on which an Employee
performs his initial Hour of Service or performs his initial Hour of Service
upon returning to the employ of the Employer or an Affiliated Employer,
whichever is applicable, and ends 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 ending on the date the Employee again
performs an Hour of Service.
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, or 55 years of age
in the case of Members who have completed 10 years of Active Service. Once a
Member has attained his Retirement Age he shall be 100% vested at all times.
I-6
13
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.
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).
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 "SEVERS SERVICE" means the earlier of the following
events: (a) the Employee's quitting, retiring, dying or being discharged, (b)
the completion of a period of 365 continuous days in which the Employee remains
absent from Service (with or without pay) for any reason other than quitting,
retiring, dying or being discharged, such as vacation, holiday, sickness,
disability, leave of absence, layoff or any other absence or (c) the second
anniversary of the commencement of a continuous period of absence occasioned by
the reason of the pregnancy of the Employee, the birth of a child of the
Employee, the placement of a child with the Employee in connection with the
adoption of the child by the Employee or the caring for the child for a period
commencing immediately after the child's birth or placement.
1.37 "SPONSOR" means Quanex Corporation or any other business
organization which assumes the primary responsibility for maintaining this Plan
with the consent of the last preceding Sponsor.
1.38 "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.
1.39 "TRUST" means the one or more trust estates created to
fund this Plan.
1.40 "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.
1.41 "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.
I-7
14
1.42 "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 annual. 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 Date shall be the last
day of each month.
I-8
15
ARTICLE II
ACTIVE SERVICE
2.1 WHEN ACTIVE SERVICE BEGINS. For purposes of eligibility and
vesting, Active Service begins when an Employee first performs an Hour of
Service for an Employer or an Affiliated Employer. Once an Employee has begun
Active Service for purposes of eligibility or vesting and Severs Service he
shall recommence Active Service for those purposes when he again performs an
Hour of Service for an Employer or an Affiliated Employer.
2.2 AGGREGATION OF SERVICE. When determining an Employee's
Active Service, all Periods of Service, whether or not completed consecutively,
shall be aggregated on a per day basis. For purposes of eligibility and vesting,
only full years of Active Service shall be counted. In aggregating Active
Service, 365 days shall be counted as one year of Active Service. No fractional
years shall be counted for purposes of eligibility or vesting.
2.3 ELIGIBILITY COMPUTATION PERIODS. For the purpose of
determining eligibility and vesting, the initial period shall begin on the day
the Employee first performs an Hour of Service simultaneously with Active
Service beginning and each future year shall begin on the anniversary of that
date.
2.4 PERIODS OF SERVICE OF LESS THAN ONE YEAR. If an Employee
performs an Hour of Service within 12 months after he Severs Service, the
intervening Period of Severance shall be counted as a Period of Service.
2.5 SERVICE PRIOR TO SEVERANCE. If an Employee incurs a Period
of Severance of one year or more, all Periods of Service prior to that Period of
Severance shall not count as Active Service until the Employee has completed a
Period of Service of one year or more after his return to Service.
2.6 PERIODS OF SEVERANCE DUE TO CHILD BIRTH OR ADOPTION. If the
period of time between the first anniversary of the first day of an absence from
Service by reason of the pregnancy of the Employee, the birth of a child of the
Employee, the placement of a child with the Employee in connection with the
adoption of the child by the Employee or for purposes for caring for the child
for a period beginning immediately following the birth or placement and the
second anniversary of the first day of the absence occurs during or after the
first Plan Year beginning after December 31, 1984, it shall neither be counted
as a Period of Service nor of Severance.
2.7 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
II-1
16
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.
2.8 EMPLOYMENT RECORDS CONCLUSIVE. The employment records of
the Employer shall be conclusive for all determinations of Active Service.
2.9 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.
II-2
17
ARTICLE III
ELIGIBILITY RULES
3.1 ELIGIBILITY REQUIREMENTS. Each Employee shall be eligible
to participate in this Plan beginning on the later of (a) the effective date of
the adoption of this Plan by the Employer or (b) the Entry Date which occurs
with or next follows the date on which the Employee completes three months of
Active Service.
3.2 ELIGIBILITY UPON REEMPLOYMENT. If an Employee Severs
Service with the Employer for any reason after fulfilling the eligibility
requirements but prior to the date he initially begins participating in the
Plan, the Employee shall be eligible to begin participation in this Plan on the
Entry Date which occurs with or next follows the date on which he first
completes an Hour of Service upon his return to employment with an Employer.
Once an Employee has become eligible to be a Member, his eligibility shall
continue until he Severs Service. A former Member shall be eligible to
recommence participation in this Plan on the first day he completes an Hour of
Service upon his return to employment with an Employer.
3.3 FROZEN PARTICIPATION. An Employee employed by an Affiliated
Employer, which has not adopted this Plan, cannot actively participate in this
Plan even though he accrues Active Service. Likewise, if an Employee: (a) is
transferred from an Employer to an Affiliated Employer which has not adopted
this Plan, (b) is a Member of this Plan when he is excluded under the provisions
of a collective bargaining agreement or (c) is a Member of the Plan when he is
employed outside the United States and is not designated by the Committee to
continue to be eligible to participate, his participation becomes inactive.
Under these circumstances, the Member's Account becomes frozen: 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, is excluded from covered employment under the provisions of a
collective bargaining agreement, or is employed outside the United States and
has not been designated by the Committee to continue to be eligible to
participate.
III-1
18
ARTICLE IV
CONTRIBUTIONS
4.1 EMPLOYEE AFTER TAX CONTRIBUTIONS. The Committee may permit
Employee After-Tax Contributions to be made by Members from time to time. If the
Committee permits Contributions by Members, the opportunity must be made
available to all Members on a nondiscriminatory basis. If the Committee decides
to stop all Contributions by Members, the Contributions to the effective date of
the announcement shall be retained in the Trust Fund subject to the right of
withdrawal described under this Plan.
Changes in the rate of Employee After-Tax Contributions and
suspension of those Contributions shall be permitted under any uniform method
determined from time to time by the Committee.
4.2 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 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.
IV-1
19
Rollover Contributions shall have no effect upon the amount
permitted to be allocated to a Member's Account under Section 415 of the Code or
the amount contributed to the Plan by a Member under Section 4.1.
4.3 EMPLOYER CONTRIBUTIONS. Each Employer shall contribute for
each Plan Year the amount by which the Member's Considered Compensation is
reduced as a result of a salary deferral agreement, not to exceed the amount of
the Member's Considered Compensation for the Plan Year, less the amount of the
Member's Employee After-Tax Contribution, if any, as set by the Committee from
time to time in a nondiscriminatory manner and announced to the Members;
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.
Each Plan Year LaSalle Steel Company will make a Supplemental
Employer Contribution of $100 on behalf of each individual who is first hired by
LaSalle Steel Company after May 15, 1994, is employed by LaSalle Steel Company
at Hammond, Indiana, and becomes a Member during the Plan Year.
During the 1996 Plan Year, LaSalle Steel Company shall make a
Supplemental Employer Contribution of $50 on behalf of each Member who was
employed by LaSalle Steel Company at Griffith, Indiana on February 19, 1996.
Each Plan Year LaSalle Steel Company will contribute for each
Member employed by it an amount which is equal to 25% of the Member's Salary
Deferral Contribution and/or Employee After Tax Contribution that does not
exceed 5% of the Member's Considered Compensation.
Each Employer shall contribute for each Plan Year 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.
LaSalle Steel Company shall contribute for each Plan Year an
amount, which when added to previously unapplied and unallocated forfeitures,
shall equal the amounts that have been forfeited by Members who have become
entitled to have their forfeited amounts restored pursuant to Section 5.4.
The amount of the Employer's Contributions described above
cannot exceed the lesser of: (a) 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
IV-2
20
to contributions in previous years of less than the maximum amount deductible or
(b) the sum which may be allocated to the Members' Accounts without violating
the limitations of Section 415 of the Code.
4.4 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 Sections 401(k), 408(k) and 403(b) of
the Code 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 Sections 401(k), 408(k) and 403(b) of the Code 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 taxable year.
For purposes of applying the requirements of Section 4.5 and
Article VII, Excess Deferrals shall 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 4.5.
4.5 ACTUAL DEFERRAL PERCENTAGE FOR HIGHLY COMPENSATED
EMPLOYEES. The Actual Deferral Percentage for Highly Compensated Employees for
any Plan Year must bear a relationship to the Actual Deferral Percentage for all
other eligible Employees for the Plan Year which meets either of the following
tests:
(a) The Actual Deferral Percentage of the Highly Compensated
Employees is not more than the Actual Deferral Percentage of all other
eligible Employees multiplied by 1.25; or
(b) The excess of the Actual Deferral Percentage of the Highly
Compensated Employees over that of all other eligible Employees is not
more than two percentage points, and the Actual Deferral Percentage of
the Highly Compensated
IV-3
21
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 directly or
indirectly eligible to make Salary Deferral Contributions for all or part of the
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 Actual Deferral Ratio that
shall 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 4.9) shall be distributed, or (b) to the extent provided in
regulations issued by the Secretary of the Treasury, and permitted by the
Committee, the Employee may elect to treat the amount of the Excess 401(k)
Contributions as an amount distributed to the Employee and then contributed by
the Employee to the Plan as an Employee After-Tax Contribution, provided the
recharacterized amounts shall remain subject to the same rules and restrictions
to which the Salary Deferral Contributions are subjected, or (c) the Employer
may make an Employer contribution which it elects to have treated as a Section
401(k) Contribution and allocated only to those Members who are Non-Highly
Compensated Employees. The Excess 401(k) Contributions of Highly Compensated
Employees will not be recharacterized to the extent that the recharacterized
amounts would exceed the Contribution Percentage as determined prior to applying
the Contribution Percentage limitations. Excess 401(k) Contributions may not be
recharacterized after 2 1/2 months after the close of the Plan Year to which the
recharacterization relates. The amount of recharacterized Excess 401(k)
Contributions, in combination with Employee After- Tax Contributions actually
made by the Member, may not exceed the maximum amount of Employee After-Tax
Contributions (determined without regard to Section 4.7) that the Member could
have made under the provisions of the Plan in effect on the first day of the
Plan Year in the absence of recharacterization. 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)
IV-4
22
Contributions to be distributed or recharacterized 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.
The Actual Deferral Percentages are to be calculated, and the
provisions of this section are to be applied, separately for each Employer which
constitutes a separated controlled group or affiliated service group.
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's cash or deferred arrangement to be disqualified for the Plan Year for
which the Excess 401(k) 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 401(k) Contributions unless they are corrected within 2
1/2 months after the close of the Plan Year for which they were made.
4.6 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.
4.7 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 Section 401(k) 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.
4.8 EMPLOYEE AFTER TAX CONTRIBUTIONS AND SALARY DEFERRAL
CONTRIBUTIONS. The Employee After-Tax Contributions and the Salary Deferral
Contributions are to be paid to the Trustee in installments. The installment for
each payroll period is to be paid as of the end of the payroll period and shall
be paid as soon
IV-5
23
as administratively feasible but in any event not later than the time prescribed
by law for filing the Employer's federal income tax return (including
extensions) for its taxable year which ends with or next follows the end of the
Plan Year for which the Contribution is to be made, and shall be in an amount
equal to the amount by which all Members' Considered Compensation was reduced
for the period. The Employer's 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.
4.9 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 shall
be repaid to the Employer within one year after the payment of the
Contribution;
(b) any Contribution conditioned upon the Plan's initial
qualification under Section 401 of the Code or the initial
qualification of an Employer's adoption of the Plan, if later, shall 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 shall 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
IV-6
24
cannot be repaid. Losses attributable to an excess contribution must reduce the
amount that may be repaid. All repayments of mistaken Contributions or
Contributions which are disallowed are limited so that the balance in a Member's
Account cannot be reduced to less than the balance that would have been in the
Member's Account had the mistaken amount or the amount disallowed never been
contributed.
IV-7
25
ARTICLE V
PARTICIPATION
5.1 ALLOCATION OF EMPLOYEE CONTRIBUTIONS. The Committee shall
allocate each Member's Employee After Tax Contributions made on his behalf to
his Employee After Tax Contribution Account as of the date they are contributed.
5.2 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.
5.3 ALLOCATION OF EMPLOYER CONTRIBUTIONS. The Committee shall
allocate the Salary Deferral Contributions made on behalf of each Member to his
Salary Deferral Contributions Account as of the date they are contributed.
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;
(c) allocate the Employer Matching Contribution made on behalf
of each Member who is employed by LaSalle Steel Company; and
(d) allocate the Supplemental Employer Contribution, if any,
among the Members who are eligible to receive such a contribution under
Section 4.3 of the Plan.
5.4 FORFEITURE ON TERMINATION OF PARTICIPATION. If as a result of
terminating his participation in the Plan a former Member receives a
distribution of his entire vested interest in his Account, the nonvested amount
in his Account is immediately forfeited. However, if the Member is reemployed,
all of his Accounts
V-1
26
containing Employer Contributions (unadjusted for subsequent gains or losses)
shall be restored if he repays to the Trustee that portion of the distribution
which was derived from Employer Contributions before the earlier of five years
after the first date on which the Member is subsequently reemployed by an
Employer or the close of the first period of five consecutive one-year Periods
of Severance commencing after the distribution.
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 following 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 that interest was less than
$3,500.00.
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.
5.5 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) $30,000.00 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
V-2
27
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.
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, reasonable error in estimating a Member's Annual Compensation,
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, all Employee After Tax Contributions and 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
V-3
28
(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.
5.6 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 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 their Account balances 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. The Committee, by resolution, may elect in lieu of the allocation method
described above 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.
5.7 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
V-4
29
causing it occurred earlier, shall be based upon the Accounts as adjusted by the
interim valuation.
5.8 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 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.
5.9 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.
V-5
30
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 preceding the event which caused the distribution or withdrawal,
adjusted only for Contributions, distributions and withdrawals, if any, made
between the Valuation Date and that event.
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
Employee After Tax Contribution Account, Salary Deferral Contribution Account
and Rollover Account, and (b) that percentage of his Matching Contribution
Account and his Supplemental Employer Contribution Account, if any, as shown in
the vesting schedule below, as of the day he severs employment.
Percentage of Amount Vested
In Accounts Containing
Completed Years of Active Service Employer Contributions
- --------------------------------- ----------------------
Less than one year.......................................... 0%
One years 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%
VI-1
31
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 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, upon giving 30 days written notice to the
Committee, is entitled to withdraw from his Employee After Tax
Contribution Account and his vested interest in his Matching
Contribution Account. The minimum withdrawal permitted under this
Section 6.7(a) is the lesser of $1,000 or the balances of his Employee
After Tax Contribution Account and his vested Matching Contribution
Account. Also, a Member may withdraw from his vested Matching
contribution Account only if the Member has been a Member of the Plan
for five years or more or the amounts withdrawn from the Matching
Contribution Account have been in such Account for at least two years.
A Member may not make another withdrawal request under this Section
6.7(a) until he has made After Tax Contributions for at least 12 months
after the withdrawal.
VI-2
32
(b) After giving 30 days written notice to the Committee, a
Member is entitled to receive a withdrawal from his Account (exclusive
of income earned on his Salary Deferral Contribution Account and
exclusive of any portion of his Supplemental Employer Contribution
Account) in the event of an immediate and heavy financial need incurred
by the Member and the Committee's determination that the withdrawal is
necessary to alleviate that hardship.
A distribution shall be made on account of financial hardship
only if the distribution is for: (i) Expenses for medical care
described in Section 213(d) of the Code previously incurred by the
Member, the Member's spouse, or any dependents of the Member (as
defined in Section 152 of the Code) or necessary for these persons to
obtain medical care described in Section 213(d) of the Code, (ii) costs
directly related to the purchase (excluding mortgage payments) of a
principal residence for the Member, (iii) payment of tuition and
related educational fees for the next 12 months of post-secondary
education for the Member, his or her spouse, children, or dependents
(as defined in Section 152 of the Code), (iv) payments necessary to
prevent the eviction of the Member from his principal residence or
foreclosure on the mortgage of the Member's principal residence, or (v)
any other event added to this list by the Commissioner of Internal
Revenue.
A distribution to satisfy an immediate and heavy financial
need shall not be made in excess of the amount of the immediate and
heavy financial need of the Member and the Member must have obtained
all distributions, other than hardship distributions, and all
nontaxable (at the time of the loan) loans currently available under
all plans maintained by the Employer. The amount of a Member's
immediate and heavy financial need includes any amounts necessary to
pay any federal, state or local income taxes or penalties reasonably
anticipated to result from the financial hardship distribution.
The Member's hardship distribution shall terminate his 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
VI-3
33
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.
Withdrawals made pursuant to this Section 6.7(b) shall be made
in the following order: First, withdrawals will be made from a Member's
Employee After Tax Contribution Account, then from his Rollover
Account, then from his Matching Contribution Account, and finally, from
his Salary Deferral Contribution Account.
(c) A Member who is at least age 70 1/2, upon giving 30 days
written notice to the Committee, is entitled to withdraw all or any
portion of the amounts credited to his Accounts.
6.8 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
VI-4
34
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.
6.9 CLAIMS PROCEDURE. When a benefit is due, the Member or
Beneficiary should submit his claim to the person or office designated by the
Committee to receive claims. Under normal circumstances, a final decision shall
be made as to a claim within 90 days after receipt of the claim. If the
Committee notifies the claimant in writing during the initial 90 day period, it
may extend the period up to 180 days after the initial receipt of the claim. The
written notice must contain the circumstances necessitating the extension and
the anticipated date for the final decision. If a claim is denied during the
claims period, the Committee must notify the claimant in writing. The denial
must include the specific reasons for it, the Plan provisions upon which the
denial is based, and the claims review procedure. If no action is taken during
the claims period, the claim is treated as if it were denied on the last day of
the claims period.
If a Member's or Beneficiary's claim is denied and he wants a
review, he must apply to the Committee in writing. That application may include
any comment or argument the claimant wants to make. The claimant may either
represent himself or appoint a representative, either of whom has the right to
inspect all documents pertaining to the claim and its denial. The Committee may
schedule any meeting with the claimant or his representative that it finds
necessary or appropriate to complete its review.
The request for review must be filed within 60 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.
6.10 TIMING AND FORM OF ALL DISTRIBUTIONS. Distributions shall
be made only in cash unless an asset held in the Trust cannot be sold by
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
VI-5
35
income earned or losses incurred by the Trust Fund until the last Valuation Date
which occurs with or next precedes the date distribution is made.
If the benefit to be distributed is $3,500.00 or less, and the
vested Account balance of the Member at the time of any prior distribution to
him was $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 to be distributed to the Member is greater than
$3,500.00, or the vested Account balance of the Member at the time of any prior
distribution to him was $3,500 or more, 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 to be distributed to
the Member is greater than $3,500.00, or the vested Account balance of the
Member at the time of any prior distribution to him was $3,500 or more, 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 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.
6.11 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 elect to receive the required distribution within that time limit. 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
VI-6
36
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.
6.12 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.
6.13 DESIGNATION OF BENEFICIARY. Each Member has the right to
designate and to revoke the designation of his Beneficiary or Beneficiaries.
Each designation or revocation must be evidenced by a written document in the
form required by the Committee, signed by the Member and filed with the
Committee. If no designation is on file at the time of a Member's death or if
the Committee determines that the designation is ineffective, the designated
Beneficiary shall be the Member's spouse, if living, or if not, the executor,
administrator or other personal representative of the Member's estate.
If a Member is considered to be married under local law, the
Member's designation of any Beneficiary, other than the Member's spouse, shall
not be valid unless the spouse acknowledges in writing that he or she
understands the effect of the Member's beneficiary designation and consents to
it. The consent must be to a specific Beneficiary. The written acknowledgement
and consent must be filed with the Committee, signed by the spouse and at least
two witnesses, one of whom must be a member of the Committee or a notary public.
However, if the spouse cannot be located or there exist other circumstances as
described in Sections 401(a)(11) and 417(a)(2) of the Code, the requirement of
the Member's spouse's acknowledgement and consent may be waived. If a
Beneficiary other than the Member's spouse is named, the designation shall
become invalid if the Member is later determined to be married under local law,
the Member's missing spouse is located or the circumstances which resulted in
the waiver of the requirement of obtaining the consent of the Member's spouse no
longer exist.
6.14 DISTRIBUTIONS TO DISABLED OR MINORS. If the Committee
determines that any person to whom a payment is due is a minor or is unable to
care for his affairs because of a physical or mental disability, it shall have
the authority to cause the payments to be made to an ancestor, descendant,
spouse, or other person the Committee determines to have incurred, or to be
expected to incur, expenses for that person or to the institution which is
maintaining or has custody of the 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
VI-7
37
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.
VI-8
38
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
VII-1
39
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
(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.
VII-2
40
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 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.
VII-3
41
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.
VII-4
42
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, 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
43
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
IX-1
44
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 the
Plan as adopted by that business organization qualified, for the benefit of the
Members covered by that adoption.
IX-2
45
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
X-1
46
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 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.
X-2
47
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 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, subject to the provisions of Section 11.7, 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.
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
X-3
48
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 distributions 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 shall 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 Sections 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.
X-4
49
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-5
50
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 PROVISION. 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.
XI-1
51
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.
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 Texas and, to the extent applicable, by the laws of the United States.
The Trustee or any Employer may at any time initiate a legal action or
proceeding for the settlement of the account of the Trustee, or for the
determination of any question or for instructions. The only necessary parties to
that action or proceeding are the Trustee and the Employer concerned. However,
any other person or persons may be included as parties defendant at the election
of the Trustee and the Employer.
XI-2
52
IN WITNESS WHEREOF, Quanex Corporation and LaSalle Steel
Company have caused this Agreement to be executed this day of 1996, in multiple
counterparts, each of which shall be deemed to be an original, to be effective
the 1st day of April 1, 1996, 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
LASALLE STEEL COMPANY
By
---------------------------------------
------------------------------------------
Title
1
EXHIBIT 4.7
MASTER TRUST AGREEMENT
BETWEEN
------------------------------------------------------------------------------
QUANEX CORPORATION
AND
FIDELITY MANAGEMENT TRUST COMPANY
------------------------------------------------------------------------------
QUANEX EMPLOYEE SAVINGS
MASTER TRUST
DATED AS OF FEBRUARY 1, 1999
2
TRUST AGREEMENT, dated as of the first day of February 1999, between
QUANEX CORPORATION a Delaware corporation, having an office at 1900 West Loop
South, Houston, Texas 77027 (the "Sponsor"), and FIDELITY MANAGEMENT TRUST
COMPANY, a Massachusetts trust company, having an office at 82 Devonshire
Street, Boston, Massachusetts 02109 (the "Trustee").
WITNESSETH:
WHEREAS, the Sponsor or one of its subsidiaries is the sponsor of the
Quanex Corporation Employee Savings Plan, the Quanex Corporation Hourly
Bargaining Unit Employees Savings Plan, the Piper Impact 401(k) Plan, the
Nichols-Homeshield 401(k) Savings Plan and the Nichols-Homeshield 401(k) Savings
Plan for Hourly Davenport Employees (collectively and individually, the "Plan");
and
WHEREAS, certain affiliates and subsidiaries of the Sponsor maintain,
or may in the future maintain, qualified defined contribution plans for the
benefit of their eligible employees; and
WHEREAS, the Sponsor desires to establish a single trust to hold all of
the assets of the Plan and or such other tax-qualified defined contribution
plans maintained by the Sponsor, or any of its subsidiaries or affiliates, as
are designated by the Sponsor as being eligible to participate therein; and
WHEREAS, the Trustee shall maintain a separate account reflecting the
equitable share of each Plan in the Trust and in all investments, receipts,
disbursements and other transactions hereunder, and shall report the value of
such equitable share at such times as may be mutually agreed upon by the Trustee
and the Sponsor. Such equitable share shall be used solely for the payments of
benefits, expenses and other charges properly allocable to each such Plan and
shall not be used for the payment of benefits, expenses or other charges
properly allocable to any other Plan; and
WHEREAS, the Trustee is willing to hold and invest the aforesaid plan
assets in trust pursuant to the provisions of this Trust Agreement, which trust
shall constitute a continuation, by means of an amendment and restatement, of
each of the prior trusts from which plan assets are transferred to the Trustee;
and
3
WHEREAS, the Trustee is willing to hold and invest the aforesaid plan
assets in trust among several investment options selected by the Named
Fiduciary; and
WHEREAS, the Trustee is willing to perform recordkeeping and
administrative services for the Plan if the services are purely ministerial in
nature and are provided within a framework of plan provisions, guidelines and
interpretations conveyed in writing to the Trustee by the Administrator.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements set forth below, the Sponsor and the Trustee
agree as follows:
SECTION 1. DEFINITIONS. The following terms as used in this Trust Agreement have
the meaning indicated unless the context clearly requires otherwise:
(a) "Administrator" shall mean, with respect to the Plan, the person or
entity which is the "administrator" of such Plan within the meaning of
section 3(16)(A) of ERISA.
(b) "Agreement" shall mean this Trust Agreement, as the same may be amended
and in effect from time to time.
(c) "Code" shall mean the Internal Revenue Code of 1986, as it has been or
may be amended from time to time.
(d) "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as it has been or may be amended from time to time.
(e) "Existing Investment Contracts" shall mean shall mean each annuity
contract heretofore entered into by the Sponsor, any other Employer or
any predecessor trustee and specifically identified on Schedule "G"
attached hereto.
(f) "Fidelity Mutual Fund" shall mean any investment company advised by
Fidelity Management & Research Company or any of its affiliates.
(g) "Mutual Fund" shall refer both to Fidelity Mutual Funds and Non-Fidelity
Mutual Funds.
(h) "Named Fiduciary" shall mean, with respect to the application of any
provision of this Agreement to any Plan, the person or entity which is
the relevant fiduciary under such Plan with respect to such matter
(within the meaning of section 402(a) of the Employee Retirement Income
Security Act of 1974, as amended); and
(i) "Non-Fidelity Mutual Fund" shall mean certain investment companies not
advised by Fidelity Management & Research Company or any of its
affiliates.
2
4
(j) "Participant" shall mean, with respect to the Plan, any employee (or
former employee) with an account under the Plan, which has not yet been
fully distributed and/or forfeited, and shall include the designated
beneficiary(ies) with respect to the account of any deceased employee (or
deceased former employee) until such account has been fully distributed
and/or forfeited.
(k) "Plan" shall mean the Quanex Corporation Employee Savings Plan, the
Quanex Corporation Hourly Bargaining Unit Employees Savings Plan, the
Piper Impact 401(k) Plan, the Nichols-Homeshield 401(k) Savings Plan, the
Nichols-Homeshield 401(k) Savings Plan for Hourly Davenport Employees and
such other tax-qualified, defined contribution plans which are maintained
by the Sponsor or any of its subsidiaries or affiliates for the benefit
of their eligible employees as may be designated by the Sponsor in
writing to the Trustee as a Plan hereunder, such writing to be in the
form of the Plan Designation Form attached hereto as Schedule "J". Each
reference to "a Plan" or "the Plan" in this Agreement shall mean and
include the Plan or Plans to which the particular provision of this
Agreement is being applied or all Plans, as the context may require.
(l) "Reporting Date" shall mean the last day of each calendar quarter, the
date as of which the Trustee resigns or is removed pursuant to Section 9
hereof and the date as of which this Agreement terminates pursuant to
Section 11 hereof.
(m) "Sponsor" shall mean Quanex Corporation, a Delaware corporation, or any
successor to all or substantially all of its businesses which, by
agreement, operation of law or otherwise, assumes the responsibility of
the Sponsor under this Agreement.
(n) "Sponsor Stock" shall mean the Common Stock of the Sponsor, or such other
publicly-traded stock of the Sponsor, or such other publicly-traded stock
of the Sponsor's affiliates as meets the requirements of section
407(d)(5) of ERISA with respect to the Plan.
(o) "Trust" shall mean the Quanex Employee Savings Master Trust, being the
trust established by the Sponsor and the Trustee pursuant to the
provisions of this Agreement.
(p) "Trustee" shall mean Fidelity Management Trust Company, a Massachusetts
trust company and any successor to all or substantially all of its trust
business as described in Section 10(c). The term Trustee shall also
include any successor trustee appointed pursuant to Section 10 to the
extent such successor agrees to serve as Trustee under this Agreement.
SECTION 2. TRUST. The Sponsor hereby establishes the Trust with the Trustee. The
Trust shall consist of the assets of the Plan that are transferred from the
previous trusts funding to the Plan, such additional sums of money and Sponsor
Stock as shall from time to time be delivered to the Trustee under a Plan, all
investments made therewith and proceeds thereof, and all earnings and profits
thereon, less the payments that are made by the Trustee as provided herein,
without distinction between principal and income. The Trustee hereby accepts the
Trust on the terms and conditions set forth in this Agreement. In accepting this
Trust, the Trustee shall be accountable for the assets received by it, subject
to the terms and conditions of this Agreement.
3
5
SECTION 3. EXCLUSIVE BENEFIT AND REVERSION OF SPONSOR CONTRIBUTIONS.
Except as provided under applicable law, no part of the Trust allocable to a
Plan may be used for, or diverted to, purposes other than the exclusive benefit
of the Participants in the Plan or their beneficiaries prior to the satisfaction
of all liabilities with respect to the Participants and their beneficiaries.
SECTION 4. DISBURSEMENTS.
(a) Directions from Administrator. The Trustee shall make disbursements
in the amounts and in the manner that the Administrator directs from time to
time in writing. The Trustee shall have no responsibility to ascertain any
direction's compliance with the terms of the Plan or of any applicable law or
the direction's effect for tax purposes or otherwise; nor shall the Trustee have
any responsibility to see to the application of any disbursement.
(b) Limitations. The Trustee shall not be required to make any
disbursement under a Plan in excess of the net realizable value of the assets of
the Trust allocable to such Plan at the time of the disbursement. The Trustee
shall not be required to make any disbursement in cash unless the Named
Fiduciary has provided a written direction as to the assets to be converted to
cash for the purpose of making the disbursement.
SECTION 5. INVESTMENT OF TRUST.
(a) Selection of Investment Options. The Trustee shall have no
responsibility for the selection of investment options under the Trust and shall
not render investment advice to any person in connection with the selection of
such options.
(b) Available Investment Options. The Named Fiduciary with respect to a
Plan shall direct the Trustee as to the investment options in which Plan
Participants may invest, subject to the following limitations. The Named
Fiduciary may determine to offer as investment options only (i) Mutual Funds,
(ii) Sponsor Stock, (iii) notes evidencing loans to Participants in accordance
with the terms of the Plan, (iv) Existing Investment Contracts, and (v)
collective investment funds maintained by the Trustee for qualified plans.
The Named Fiduciary hereby directs the Trustee to continue to hold such
Existing Investment Contracts until the Named Fiduciary directs otherwise, it
being expressly understood that such direction is given in accordance with
Section 403(a) of ERISA. The Trustee shall be considered a fiduciary with
4
6
investment discretion only with respect to Plan assets that are invested in
collective investment funds maintained by the Trustee for qualified plans.
The investment options initially selected by the Named Fiduciary are
identified on Schedules "A" and "C" attached hereto. The Named Fiduciary may add
additional investment options with the consent of the Trustee and upon mutual
amendment of this Trust Agreement and the Schedules thereto to reflect such
additions.
(c) Participant Direction. Each Participant shall direct the Trustee in
which investment option(s) to invest the assets in the Participant's individual
accounts. Such directions may be made by Participants by use of the telephone
exchange system maintained for such purposes by the Trustee or its agent, in
accordance with written Telephone Exchange Guidelines attached hereto as
Schedule "G". In the event that the Trustee fails to receive a proper direction,
the assets shall be invested in the securities of the Mutual Fund set forth for
such purpose on Schedule "C", until the Trustee receives a proper direction.
(d) Mutual Funds. The Sponsor hereby acknowledges that it has received
from the Trustee a copy of the prospectus for each Fidelity Mutual Fund selected
by the Named Fiduciary as a Plan investment option. All transactions involving
Non-Fidelity Mutual Funds shall be done in accordance with the Operational
Guidelines for Non-Fidelity Mutual Funds attached hereto as Schedule "H". Trust
investments in Mutual Funds shall be subject to the following limitations:
(i) Execution of Purchases and Sales. Purchases and sales of
Mutual Funds (other than for exchanges) shall be made on the date on which the
Trustee receives from the Sponsor in good order all information and
documentation necessary to accurately effect such purchases and sales (or in the
case of a purchase, the subsequent date on which the Trustee has received a wire
transfer of funds necessary to make such purchase). Exchanges of Mutual Funds
shall be made in accordance with the Telephone Exchange Guidelines attached
hereto as Schedule "G".
(ii) Voting. At the time of mailing of notice of each annual
or special stockholders' meeting of any Mutual Fund, the Trustee shall send a
copy of the notice and all proxy solicitation materials to each Participant who
has shares of the Mutual Fund credited to the Participant's accounts, together
with a voting direction form for return to the Trustee or its designee. The
Sponsor shall have the right to direct the Trustee as to the manner in which the
Trustee is to vote the mutual fund shares held in any short-term
5
7
investment fund or liquidity reserve. The Participant shall have the right to
direct the Trustee as to the manner in which the Trustee is to vote the shares
credited to the Participant's accounts (both vested and unvested). The Trustee
shall vote the shares as directed by the Participant. The Trustee shall not vote
shares for which it has received no directions from the Participant. With
respect to all rights other than the right to vote, the Trustee shall follow the
directions of the Participant and if no such directions are received, the
directions of the Named Fiduciary. The Trustee shall have no duty to solicit
directions from Participants or the Sponsor.
(e) Sponsor Stock. Trust investments in Sponsor Stock shall be made via
the Quanex Corporation Stock Fund (the "Stock Fund") which shall consist of
shares of Sponsor Stock and short-term liquid investments, including Fidelity
Institutional Cash Portfolios: Money Market Portfolio: Class I or such other
Mutual Fund or commingled money market pool as agreed to by the Sponsor and
Trustee, necessary to satisfy the Fund's cash needs for transfers and payments.
A cash target range shall be maintained in the Stock Fund. Such target range may
be changed as agreed to in writing by the Sponsor and the Trustee. The Trustee
is responsible for ensuring that the actual cash held in the Stock Fund falls
within the agreed upon range over time. Each Participant's proportional interest
in the Stock Fund shall be measured in units of participation, rather than
shares of Sponsor Stock. Such units shall represent a proportionate interest in
all of the assets of the Stock Fund, which includes shares of Sponsor Stock,
short-term investments and at times, receivables for dividends and/or Sponsor
Stock sold and payables for Sponsor Stock purchased. A Net Asset Value ("NAV")
per unit will be determined daily for each unit outstanding of the Stock Fund.
The return earned by the Stock Fund will represent a combination of the
dividends paid on the shares of Sponsor Stock held by the Stock Fund, gains or
losses realized on sales of Sponsor Stock, appreciation or depreciation in the
market price of those shares owned, and interest on the short-term investments
held by the Stock Fund. Dividends received by the Stock Fund are reinvested in
additional shares of Sponsor Stock. Investments in Sponsor Stock shall be
subject to the following limitations:
(i) Acquisition Limit. Pursuant to the Plan, the Trust may be
invested in Sponsor Stock to the extent necessary to comply with investment
directions under Section 5(c) of this Agreement.
(ii) Fiduciary Duty of Named Fiduciary. The Named Fiduciary
shall continually monitor the suitability under the fiduciary duty rules of
section 404(a)(1) of ERISA (as modified by
6
8
section 404(a)(2) of ERISA) of acquiring and holding Sponsor Stock. The Trustee
shall not be liable for any loss, or by reason of any breach, which arises from
the directions of the Named Fiduciary with respect to the acquisition and
holding of Sponsor Stock, unless it is clear on their face that the actions to
be taken under those directions would be prohibited by the foregoing fiduciary
duty rules or would be contrary to the terms of the Plan or this Agreement.
(iii) Execution of Purchases and Sales. (A) Purchases and
sales of Sponsor Stock (other than for exchanges) shall be made on the open
market on the date on which the Trustee receives from the Sponsor in good order
all information and documentation necessary to accurately affect such purchases
and sales (or, in the case of purchases, the subsequent date on which the
Trustee has received a wire transfer of the funds necessary to make such
purchases). Exchanges of Sponsor Stock shall be made in accordance with the
Telephone Exchange Guidelines attached hereto as Schedule "G". Such general
rules shall not apply in the following circumstances:
(1) If the Trustee is unable to determine the number
of shares required to be purchased or sold on such day; or
(2) If the Trustee is unable to purchase or sell the
total number of shares required to be purchased or sold on such day as a result
of market conditions; or
(3) If the Trustee is prohibited by the Securities
and Exchange Commission, the New York Stock Exchange, or any other regulatory
body from purchasing or selling any or all of the shares required to be
purchased or sold on such day.
In the event of the occurrence of the circumstances described in (1), (2), or
(3) above, the Trustee shall purchase or sell such shares as soon as possible
thereafter and shall determine the price of such purchases or sales to be the
average purchase or sales price of all such shares purchased or sold,
respectively. The Trustee may follow directions from the Named Fiduciary to
deviate from the above purchase and sale procedures provided that such direction
is made in writing by the Named Fiduciary.
(B) Purchases and Sales from or to Sponsor. If directed by the
Sponsor in writing prior to the trading date, the Trustee may purchase or sell
Sponsor Stock from or to the Sponsor if the
7
9
purchase or sale is for adequate consideration (within the meaning of section
3(18) of ERISA) and no commission is charged. If Sponsor contributions or
contributions made by the Sponsor on behalf of the Participants under the Plan
are to be invested in Sponsor Stock, the Sponsor may transfer Sponsor Stock in
lieu of cash to the Trust. In either case, the number of shares to be
transferred will be determined by dividing the total amount of Sponsor Stock to
be purchased or sold by the 4:00 p.m. closing price of the Sponsor Stock on the
New York Stock Exchange on the trading date.
(C) Use of an Affiliated Broker. The Sponsor hereby directs
the Trustee to use Fidelity Capital Markets and its affiliates ("Capital
Markets") to provide brokerage services in connection with any purchase or sale
of Sponsor Stock in accordance with directions from Plan Participants. Capital
Markets shall execute such directions directly or through its affiliate,
National Financial Services Company ("NFSC"). The provision of brokerage
services shall be subject to the following:
(1) As consideration for such brokerage services, the
Sponsor agrees that Capital Markets shall be entitled to remuneration under this
authorization provision in an amount of no greater than three and two-fifths
cents ($.032) commission on each share of Sponsor Stock. Any change in such
remuneration may be made only by a signed agreement between Sponsor and Trustee.
(2) The Trustee will provide the Sponsor with a
description of Capital Markets' brokerage placement practices and a form by
which the Sponsor may terminate this direction to use a broker affiliated with
the Trustee. The Trustee will provide the Sponsor with this termination form
annually, as well as quarterly and annual reports which summarize all securities
transaction-related charges incurred by the Plan.
(3) Any successor organization of Capital Markets,
through reorganization, consolidation, merger or similar transactions, may, upon
consumption of such transaction, become the successor broker in accordance with
the terms of this direction provision.
(4) The Trustee and Capital Markets shall continue to
rely on this direction provision until notified to the contrary. The Sponsor
reserves the right to terminate this direction upon sixty (60) days written
notice to Capital Markets (or its successor) and the Trustee, in accordance with
Section 11 of this Agreement.
8
10
(iv) Securities Law Reports. The Named Fiduciary shall be
responsible for filing all reports required under Federal or state securities
laws with respect to the Trust's ownership of Sponsor Stock, including, without
limitation, any reports required under section 13 or 16 of the Securities
Exchange Act of 1934, and shall immediately notify the Trustee in writing of any
requirement to stop purchases or sales of Sponsor Stock pending the filing of
any report. The Trustee shall provide to the Named Fiduciary such information on
the Trust's ownership of Sponsor Stock as the Named Fiduciary may reasonably
request in order to comply with Federal or state securities laws.
(v) Voting and Tender Offers. Notwithstanding any other
provision of this Agreement the provisions of this Section shall govern the
voting and tendering of Sponsor Stock. The Sponsor, after consultation with the
Trustee, shall provide and pay for all printing, mailing, tabulation and other
costs associated with the voting and tendering of Sponsor Stock.
(A) Voting.
(1) When the issuer of the Sponsor Stock
prepares for any annual or special meeting , the Sponsor shall notify the
Trustee at least thirty (30) days in advance of the intended record date and
shall cause a copy of all materials to be sent to the Trustee. Based on these
materials the Trustee shall prepare a voting instruction form. At the time of
mailing of notice of each annual or special stockholders' meeting of the issuer
of the Sponsor Stock, the Sponsor shall cause a copy of the notice and all proxy
solicitation materials to be sent to each Plan Participant with an interest in
Sponsor Stock held in the Trust, together with the foregoing voting instruction
form to be returned to the Trustee or its designee. The form shall show the
proportional interest in the number of full and fractional shares of Sponsor
Stock credited to the Participant's accounts held in the Stock Fund. The Sponsor
shall provide the Trustee with a copy of any materials provided to the
Participants pursuant to this Section 5(e)(v)(A) and shall certify to the
Trustee that the materials have been mailed or otherwise sent to Participants.
(2) Each Participant with an interest in the
Stock Fund shall have the right to direct the Trustee as to the manner in which
the Trustee is to vote (including not to vote) that number of shares of Sponsor
Stock reflecting such Participant's proportional interest in the Stock Fund
(both vested and unvested). Directions from a Participant to the Trustee
concerning the voting of Sponsor
9
11
Stock shall be communicated in writing, or by mailgram or similar means. These
directions shall be held in confidence by the Trustee and shall not be divulged
to the Sponsor, or any officer or employee thereof, or any other person except
to the extent that the aggregate consequences of such directions are reflected
in reports regularly communicated to any such person in the ordinary course of
the performance of the Trustee's services hereunder. Upon its receipt of the
directions, the Trustee shall vote the shares of Sponsor Stock reflecting the
Participant's proportional interest in the Stock Fund as directed by the
Participant. Except as otherwise required by law, the Trustee shall vote shares
of Sponsor Stock reflecting a Participant's proportional interest in the Stock
Fund for which it has received no direction from the Participant in the same
proportion on each issue as it votes shares for which it has received voting
instructions from Participants.
(3) Except as otherwise required by law, the
Trustee shall vote that number of shares of Sponsor Stock not credited to
Participants' accounts which is determined by multiplying the total number of
shares not credited to Participant's accounts by a fraction of which the
numerator is the number of shares of Sponsor Stock reflecting a Participant's
proportional interest in the Stock Fund that are credited to Participant's
accounts for which the Trustee received voting directions from Participants and
of which the denominator is the total number of shares of Sponsor Stock
reflecting a Participant's proportional interest in the Stock Fund that are
credited to participants' accounts. The Trustee shall vote those shares of
Sponsor Stock not credited to Participant's accounts which are to be voted by
the Trustee pursuant to the foregoing formula in the same proportion on each
issue as it votes those shares reflecting a Participant's proportional interest
in the Stock Fund that are credited to Participants' accounts for which it
received voting directions from Participants. The Trustee shall not vote the
remaining shares of Sponsor Stock not credited to Participant's accounts.
(B) Tender Offers.
(1) Upon commencement of a tender offer for
any securities held in the Trust that are Sponsor Stock, the Sponsor shall
notify each Plan Participant with an interest in such Sponsor Stock of the
tender offer and utilize its best efforts to timely distribute or cause to be
distributed to the Participant the same information that is distributed to
shareholders of the issuer of Sponsor Stock in connection with the tender offer,
and, after consulting with the Trustee, shall provide and pay for a means by
which the Participant may direct the Trustee whether or not to tender the
Sponsor Stock reflecting such
10
12
Participant's proportional interest in the Stock Fund (both vested and
unvested). The Sponsor shall provide the Trustee with a copy of any material
provided to the Participants pursuant to this Section 5(e)(v)(B) and shall
certify to the Trustee that the materials have been mailed or otherwise sent to
Participants.
(2) Each Participant shall have the right to
direct the Trustee to tender or not to tender some or all of the shares of
Sponsor Stock reflecting such Participant's proportional interest in the Stock
Fund (both vested and unvested). Directions from a Participant to the Trustee
concerning the tender of Sponsor Stock shall be communicated in writing, or by
mailgram or such similar means as is agreed upon by the Trustee and the Sponsor
under the preceding paragraph. These directions shall be held in confidence by
the Trustee and shall not be divulged to the Sponsor, or any officer or employee
thereof, or any other person except to the extent that the consequences of such
directions are reflected in reports regularly communicated to any such persons
in the ordinary course of the performance of the Trustee's services hereunder.
The Trustee shall tender or not tender shares of Sponsor Stock as directed by
the Participant. Except as otherwise required by law, the Trustee shall not
tender shares of Sponsor Stock reflecting a Participant's proportional interest
in the Stock Fund for which it has received no direction from the Participant.
(3) Except as otherwise required by law, the
Trustee shall tender that number of shares of Sponsor Stock not credited to
Participants' accounts which is determined by multiplying the total number of
shares of Sponsor Stock not credited to Participants' accounts by a fraction of
which the numerator is the number of shares of Sponsor Stock reflecting the
Participants' proportional interests in the Stock Fund that are credited to
Participants' accounts for which the Trustee has received directions from
Participants to tender and of which the denominator is the total number of
shares of Sponsor Stock reflecting the Participants' proportional interests in
the Stock Fund that are credited to Participants' accounts.
(4) A Participant who has directed the
Trustee to tender some or all of the shares of Sponsor Stock reflecting the
Participant's proportional interest in the Stock Fund may, at any time prior to
the tender offer withdrawal date, direct the Trustee to withdraw some or all of
the tendered shares reflecting the Participant's proportional interest, and the
Trustee shall withdraw the directed number of shares from the tender offer prior
to the tender offer withdrawal deadline. Prior to the withdrawal deadline, if
any shares of Sponsor Stock not credited to Participants' accounts have been
11
13
tendered, the Trustee shall redetermine the number of shares of Sponsor Stock
that would be tendered under Section 5(e)(v)(B)(3) if the date of the foregoing
withdrawal were the date of determination, and withdraw from the tender offer
the number of shares of Sponsor Stock not credited to Participants' accounts
necessary to reduce the amount of tendered Sponsor Stock not credited to
Participants' accounts to the amount so redetermined. A Participant shall not be
limited as to the number of directions to tender or withdraw that the
Participant may give to the Trustee.
(5) A direction by a Participant to the
Trustee to tender shares of Sponsor Stock reflecting the Participant's
proportional interest in the Stock Fund shall not be considered a written
election under the Plan by the Participant to withdraw, or have distributed, any
or all of his withdrawable shares. The Trustee shall credit to each proportional
interest of the Participant from which the tendered shares were taken the
proceeds received by the Trustee in exchange for the shares of Sponsor Stock
tendered from that interest. Pending receipt of directions (through the
Administrator) from the Participant or the Named Fiduciary, as provided in the
Plan, as to which of the remaining investment options the proceeds should be
invested in, the Trustee shall invest the proceeds in the Mutual Fund described
in Schedule "C".
(vi) Shares Credited. For all purposes of this Section, the
number of shares of Sponsor Stock deemed "credited" or "reflected" to a
Participant's proportional interest shall be determined as of the relevant date
(the record date or the date specified in the tender offer) shall be calculated
by reference to the number of shares reflected on the books of the transfer
agent as of the relevant date.
(vii) General. With respect to all rights other than the right
to vote, the right to tender, and the right to withdraw shares previously
tendered, in the case of Sponsor Stock credited to a Participant's proportional
interest in the Stock Fund, the Trustee shall follow the directions of the
Participant and if no such directions are received, the directions of the Named
Fiduciary. The Trustee shall have no duty to solicit directions from
Participants. With respect to all rights other than the right to vote and the
right to tender, in the case of Sponsor Stock not credited to Participants'
accounts, the Trustee shall follow the directions of the Named Fiduciary.
(viii) Conversion. All provisions in this Section 5(e) shall
also apply to any securities received as a result of a conversion of Sponsor
Stock.
12
14
(f) Participant Loans. The Administrator shall act as the Trustee's
agent for the purpose of holding all trust investments in participant loan notes
and related documentation and as such shall (i) hold physical custody of and
keep safe the notes and other loan documents, (ii) separately account for
repayments of such loans and clearly identify such assets as Plan assets, (iii)
collect and remit all principal and interest payments to the Trustee, and (iv)
cancel and surrender the notes and other loan documentation when a loan has been
paid in full. To originate a participant loan, the Plan participant shall direct
the Trustee as to the type of loan to be made from the participant's individual
account. Such directions shall be made by Plan participants by use of the
telephone exchange system maintained for such purpose by the Trustee or its
agent. The Trustee shall determine, based on the current value of the
participant's account, the amount available for the loan. Based on the interest
rate supplied by the Sponsor in accordance with the terms of the Plan, the
Trustee shall advise the participant of such interest rate, as well as the
installment payment amounts. The Trustee shall forward the loan document to the
participant for execution and submission for approval to the Administrator. The
Administrator shall have the responsibility for approving the loan and
instructing the Trustee to send the loan proceeds to the Administrator or to the
participant if so directed by the Administrator. In all cases, if the Trustee
does not receive approval or disapproval by the Administrator within thirty (30)
days of the participant's initial request (the origination date) the participant
will be required to reinitiate the loan request process.
(g) Commingled Pool Investments. To the extent that the Named Fiduciary
selects as an investment option the Managed Income Portfolio of the Fidelity
Group Trust for Employee Benefit Plans (the "Group Trust"), the Sponsor hereby
(i) agrees to the terms of the Group Trust and adopts said terms as a part of
this Agreement and (ii) acknowledges that it has received from the Trustee a
copy of the Group Trust, the Declaration of Separate Fund for the Managed Income
Portfolio of the Group Trust, and the Circular for the Managed Income Portfolio.
(h) Reliance of Trustee on Directions.
(i) The Trustee shall not be liable for any loss, or by reason
of any breach, which arises from any Participant's exercise or non-exercise of
rights under this Section 5 over the assets in the Participant's accounts.
13
15
(ii) The Trustee shall not be liable for any loss, or by
reason of any breach, which arises from the Named Fiduciary's exercise or
non-exercise of rights under this Section 5, unless it was clear on their face
that the actions to be taken under the Named Fiduciary's directions were
prohibited by the fiduciary duty rules of Section 404(a) of ERISA or were
contrary to the terms of the Plan or this Agreement.
(i) Trustee Powers. The Trustee shall have the following powers and
authority:
(i) Subject to paragraphs (b), (c) and (d) of this Section 5,
to sell, exchange, convey, transfer, or otherwise dispose of any property held
in the Trust, by private contract or at public auction. No person dealing with
the Trustee shall be bound to see to the application of the purchase money or
other property delivered to the Trustee or to inquire into the validity,
expediency, or propriety of any such sale or other disposition.
(ii) Subject to paragraphs (b) and (c) of this Section 5, to
invest in Investment Contracts and short term investments (including interest
bearing accounts with the Trustee or money market mutual funds advised by
affiliates of the Trustee) and in collective investment funds maintained by the
Trustee for qualified plans, in which case the provisions of each collective
investment fund in which the Trust is invested shall be deemed adopted by the
Sponsor and the provisions thereof incorporated as a part of this Trust as long
as the fund remains exempt from taxation under sections 401(a) and 501(a) of the
Code.
(iii) To cause any securities or other property held as part
of the Trust to be registered in the Trustee's own name, in the name of one or
more of its nominees, or in the Trustee's account with the Depository Trust
Company of New York and to hold any investments in bearer form, but the books
and records of the Trustee shall at all times show that all such investments are
part of the Trust.
(iv) To keep that portion of the Trust in cash or cash
balances as the Named Fiduciary or Sponsor may, from time to time, deem to be in
the best interest of the Trust.
(v) To make, execute, acknowledge, and deliver any and all
documents of transfer or conveyance and to carry out the powers herein granted.
(vi) To borrow funds from a bank not affiliated with the
Trustee in order to provide sufficient liquidity to process Plan transactions in
a timely fashion, provided that the cost of borrowing shall be allocated in a
reasonable fashion to the investment fund(s) in need of liquidity.
14
16
(vii) To settle, compromise, or submit to arbitration any
claims, debts, or damages due to or arising from the Trust; to commence or
defend suits or legal or administrative proceedings; to represent the Trust in
all suits and legal and administrative hearings; and to pay all reasonable
expenses arising from any such action, from the Trust if not paid by the
Sponsor.
(viii) To employ legal, accounting, clerical, and other
assistance as may be required in carrying out the provisions of this Agreement
and to pay their reasonable expenses and compensation from the Trust if not paid
by the Sponsor.
(ix) To invest all of any part of the assets of the Trust in
any collective investment trust or group trust which then provides for the
pooling of the assets of plans described in section 401(a) and exempt from tax
under section 501(a) of the Code, or any comparable provisions of any future
legislation that amends, supplements, or supersedes those sections, provided
that such collective investment trust or group trust is exempt from tax under
the Code or regulations or rulings issued by the Internal Revenue Service; the
provisions of the document governing such collective investment trusts or group
trusts, as it may be amended from time to time, shall govern any investment
therein and are hereby made a part of this Trust Agreement.
(x) To do all other acts that are in accordance with the
powers granted to the Trustee under common law, the applicable state trust law
and other applicable statutes.
SECTION 6. RECORDKEEPING AND ADMINISTRATIVE SERVICES TO BE PERFORMED.
(a) General. The Trustee shall perform those recordkeeping and
administrative functions described in Schedule "A" attached hereto. These
recordkeeping and administrative functions shall be performed within the
framework of the Named Fiduciary's written directions regarding the Plan's
provisions, guidelines and interpretations.
(b) Accounts. The Trustee shall keep accurate accounts of all
investments, receipts, disbursements, and other transactions hereunder, and
shall report the value of the assets held in the Trust as of each Reporting
Date. Within thirty (30) days following each Reporting Date or within sixty (60)
days in the case of a Reporting Date caused by the resignation or removal of the
Trustee, or the termination of this Agreement, the Trustee shall file with the
Sponsor a written account setting forth all investments, receipts,
disbursements, and other transactions affected by the Trustee between the
Reporting Date and the prior
15
17
Reporting Date, and setting forth the value of the Trust as of the Reporting
Date. Except as otherwise required under ERISA, upon the expiration of six (6)
months from the date of filing such account with the Sponsor, the Trustee shall
have no liability or further accountability to anyone with respect to the
propriety of its acts or transactions shown in such account, except with respect
to such acts or transactions as to which the Sponsor shall within such six (6)
month period file with the Trustee written objections.
(c) Inspection and Audit. All records generated by the Trustee in
accordance with paragraphs (a) and (b) shall be open to inspection and audit,
during the Trustee's regular business hours prior to the termination of this
Agreement, by the Sponsor or any person designated by the Sponsor. Upon the
resignation or removal of the Trustee or the termination of this Agreement, the
Trustee shall provide to the Sponsor, at no expense to the Sponsor, in the
format regularly provided to the Sponsor, a statement of each Participant's
accounts as of the resignation, removal, or termination, and the Trustee shall
provide to the Sponsor or the Plan's new recordkeeper such further records as
are reasonable, at the Sponsor's expense.
(d) Effect of Plan Amendment. A confirmation of the current qualified
status of each Plan is attached hereto as Schedule "F". The Trustee's provision
of the recordkeeping and administrative services set forth in this Section 6
shall be conditioned on the Sponsor delivering to the Trustee a copy of any
amendment to the Plan as soon as administratively feasible following the
amendment's adoption, with, if requested, an IRS determination letter or an
opinion of counsel substantially in the form of Schedule "F" covering such
amendment, and on the Sponsor providing the Trustee on a timely basis with all
the information the Sponsor deems necessary for the Trustee to perform the
recordkeeping and administrative services and such other information as the
Trustee may reasonably request.
(e) Returns, Reports and Information. The Sponsor shall be responsible
for the preparation and filing of all returns, reports, and information required
of the Trust or Plan by law. The Trustee shall provide the Sponsor with such
information as the Sponsor may reasonably request to make these filings. The
Sponsor shall also be responsible for making any disclosures to Participants
required by law including, without limitation, such disclosures as may be
required by law, except such disclosure as may be required under federal or
state truth-in-lending laws with regard to Participant loans, which shall be
provided by the Trustee.
16
18
(f) Allocation of Plan Interests. All transfers to, withdrawals from,
or other transactions regarding the Trust shall be conducted in such a way that
the proportionate interest in the Trust of each Plan and the fair market value
of that interest may be determined at any time. Whenever the assets of more than
one Plan are commingled in the Trust or in any investment option, the undivided
interest therein of each such Plan shall be debited or credited (as the case may
be) (i) for the entire amount of every contribution received on behalf of such
Plan, every benefit payment, or other expense attributable solely to such Plan,
and every other transaction relating only to such Plan; and (ii) for its
proportionate share of every item of collected or accrued income, gain or loss,
and general expense, and of any other transactions attributable to the Trust or
that investment option as a whole.
SECTION 7. COMPENSATION AND EXPENSES. Within thirty (30) days of receipt of the
Trustee's bill, which shall be computed and billed in accordance with Schedule
"B" attached hereto and made a part hereof, as amended from time to time, the
Sponsor shall send to the Trustee a payment in such amount or the Sponsor may
direct the Trustee to deduct such amount from Participants' account. All
expenses of the Trustee relating directly to the acquisition and disposition of
investments constituting part of the Trust, and all taxes of any kind whatsoever
that may be levied or assessed under existing or future laws upon or in respect
of the Trust or the income thereof, shall be a charge against and paid from the
appropriate Participants' accounts.
SECTION 8. DIRECTIONS AND INDEMNIFICATION.
(a) Identity of Sponsor and Named Fiduciaries. The Trustee shall be
fully protected in relying on the fact that the Sponsor and the Named
Fiduciaries under a Plan are the individuals or persons named as such on the
Authorization Letters in the form of Schedules "D" and "E" attached hereto or on
a Plan Designation Form in accordance with Schedule "J" attached hereto or such
other individuals or persons as the Sponsor may notify the Trustee in writing.
(b) Directions from Sponsor or Administrator. Whenever the Sponsor or
Administrator provides a direction to the Trustee, the Trustee shall not be
liable for any loss, or by reason of any breach, arising from the direction if
the direction is contained in a writing (or is oral and immediately confirmed in
a writing) signed by any individual whose name and signature have been submitted
(and not withdrawn) in writing to the Trustee by the Sponsor in the form
attached hereto as Schedule "D", provided the Trustee reasonably believes the
signature of the individual to be genuine. Such direction may also be made via
17
19
Electronic Data Transfer ("EDT") in accordance with procedures agreed to by the
Sponsor and the Trustee; provided, however, that the Trustee shall be fully
protected in relying on such direction as if it were a direction made in writing
by the Sponsor. The Trustee shall have no responsibility to ascertain any
direction's (i) accuracy, (ii) compliance with the terms of the Plan or any
applicable law, or (iii) effect for tax purposes or otherwise.
(c) Directions from Named Fiduciary. Whenever a Named Fiduciary
provides a direction to the Trustee, the Trustee shall not be liable for any
loss, or by reason of any breach, arising from the direction (i) if the
direction is contained in a writing (or is oral and immediately confirmed in a
writing) signed by any individual whose name and signature have been submitted
(and not withdrawn) in writing to the Trustee by the Named Fiduciary in the form
attached hereto as Schedule "E" and (ii) if the Trustee reasonably believes the
signature of the individual to be genuine, unless it is clear on the direction's
face that the actions to be taken under the direction would be prohibited by the
fiduciary duty rules of section 404(a) of ERISA or would be contrary to the
terms of the Plan or this Agreement.
(d) Co-Fiduciary Liability. In any other case, the Trustee shall not be
liable for any loss, or by reason of any breach, arising from any act or
omission of another fiduciary under the Plan except as provided in section
405(a) of ERISA. Without limiting the foregoing, the Trustee shall have no
liability for the acts or omissions of any predecessor or successor trustee.
(e) Indemnification. The Sponsor shall indemnify the Trustee against,
and hold the Trustee harmless from, any and all loss, damage, penalty,
liability, cost, and expense, including without limitation, reasonable
attorneys' fees and disbursements, that may be incurred by, imposed upon, or
asserted against the Trustee by reason of any claim, regulatory proceeding, or
litigation arising from any act done or omitted to be done by any individual or
person with respect to the Plan or Trust, excepting only any and all loss, etc.,
arising from the Trustee's breach of its fiduciary duties under ERISA.
(f) Survival. The provisions of this Section 8 shall survive the
termination of this Agreement.
SECTION 9. RESIGNATION OR REMOVAL OF TRUSTEE.
(a) Resignation. The Trustee may resign at any time upon sixty (60)
days' notice in writing to the Sponsor, unless a shorter period of notice is
agreed upon by the Sponsor.
18
20
(b) Removal. The Sponsor may remove the Trustee at any time upon sixty
(60) days' notice in writing to the Trustee, unless a shorter period of notice
is agreed upon by the Trustee.
SECTION 10. SUCCESSOR TRUSTEE.
(a) Appointment. If the office of Trustee becomes vacant for any
reason, the Sponsor may in writing appoint a successor trustee under this
Agreement. The successor trustee shall have all of the rights, powers,
privileges, obligations, duties, liabilities, and immunities granted to the
Trustee under this Agreement. The successor trustee and predecessor trustee
shall not be liable for the acts or omissions of the other with respect to the
Trust.
(b) Acceptance. When the successor trustee accepts its appointment
under this Agreement, title to and possession of the Trust assets shall
immediately vest in the successor trustee without any further action on the part
of the predecessor trustee. The predecessor trustee shall execute all
instruments and do all acts that reasonably may be necessary or reasonably may
be requested in writing by the Sponsor or the successor trustee to vest title to
all Trust assets in the successor trustee or to deliver all Trust assets to the
successor trustee.
(c) Corporate Action. Any successor of the Trustee or successor
trustee, through sale or transfer of the business or trust department of the
Trustee or successor trustee, or through reorganization, consolidation, or
merger, or any similar transaction, shall, upon consummation of the transaction,
become the successor trustee under this Agreement.
SECTION 11. TERMINATION. This Agreement may be terminated at any time by the
Sponsor upon sixty (60) days' notice in writing to the Trustee. On the date of
the termination of this Agreement, the Trustee shall forthwith transfer and
deliver to such individual or entity as the Sponsor shall designate, all cash
and assets then constituting the Trust. If, by the termination date, the Sponsor
has not notified the Trustee in writing as to whom the assets and cash are to be
transferred and delivered, the Trustee may bring an appropriate action or
proceeding for leave to deposit the assets and cash in a court of competent
jurisdiction. The Trustee shall be reimbursed by the Sponsor for all costs and
expenses of the action or proceeding including, without limitation, reasonable
attorneys' fees and disbursements.
19
21
SECTION 12. RESIGNATION, REMOVAL, AND TERMINATION NOTICES. All notices of
resignation, removal, or termination under this Agreement must be in writing and
mailed to the party to which the notice is being given by certified or
registered mail, return receipt requested, to the Sponsor c/o Chief Financial
Officer, Quanex Corporation, 1900 West Loop South, Suite 1500, Houston, TX 77027
and to the Trustee c/o John M. Kimpel, Fidelity Investments, 82 Devonshire
Street, Boston, Massachusetts 02109, or to such other addresses as the parties
have notified each other of in the foregoing manner.
SECTION 13. DURATION. This Trust shall continue in effect without limit as to
time, subject, however, to the provisions of this Agreement relating to
amendment, modification, and termination thereof.
SECTION 14. AMENDMENT OR MODIFICATION. This Agreement may be amended or modified
at any time and from time to time only by an instrument executed by both the
Sponsor and the Trustee. Notwithstanding the foregoing, to reflect increased
operating costs the Trustee may once each calendar year amend Schedule "B"
without the Sponsor's consent upon seventy-five (75) days written notice to the
Sponsor.
SECTION 15. ELECTRONIC SERVICES.
(a) The Trustee may provide communications and services via electronic
medium ("Electronic Services"), including, but not limited to, Fidelity Plan
Sponsor WebStation, Client Intranet, Client e-mail, interactive software
products or any other information provided in an electronic format. The Sponsor,
its agents and employees agree to keep confidential and not publish, copy,
broadcast, retransmit, reproduce, commercially exploit or otherwise
redisseminate the data, information, software or services without the Trustee's
written consent.
(b) The Sponsor shall be responsible for installing and maintaining all
Electronic Services on its computer network and/or Intranet upon receipt in a
manner so that the information provided via the Electronic Service will appear
in the same form and content as it appears on the form of delivery, and for any
programming required to accomplish the installation. Materials provided for Plan
Sponsor's intranet web sites shall be installed by the Sponsor and shall be
clearly identified as originating from Fidelity. The Sponsor shall promptly
remove Electronic Services from its computer network and/or Intranet, or replace
the Electronic Service with an updated service provided by the Trustee, upon
written notification (including written notification via facsimile) by the
Trustee.
20
22
(c) All Electronic Services shall be provided to the Sponsor without
any express or implied legal warranties or acceptance of legal liability by the
Trustee relative to the use of material or Electronic Services by the Sponsor.
No rights are conveyed to any property, intellectual or tangible, associated
with the contents of the Electronic Services and related material.
(d) To the extent that any Electronic Services utilize Internet
services to transport data or communications, the Trustee will take, and Plan
Sponsor agrees to follow, reasonable security precautions; however, the Trustee
disclaims any liability for interception of any such data or communications. The
Trustee shall not be responsible for, and makes no warranties regarding access,
speed or availability of Internet or network services. The Trustee shall not be
responsible for any loss or damage related to or resulting from any changes or
modifications to the electronic material after delivering it to the Plan
Sponsor.
SECTION 16. GENERAL.
(a) Performance by Trustee, its Agents or Affiliates. The Sponsor
acknowledges and authorizes that the services to be provided under this
Agreement shall be provided by the Trustee, its agents or affiliates, including
Fidelity Investments Institutional Operations Company or its successor, and that
certain of such services may be provided pursuant to one or more other
contractual agreements or relationships.
(b) Delegation by Employer. By authorizing the assets of any Plan as to
which it is an Employer to be deposited in the Trust, each Employer, other than
the Sponsor, hereby irrevocably delegates and grants to the Sponsor full and
exclusive power and authority to exercise all of the powers conferred upon the
Sponsor and each Employer by the terms of this Agreement, and to take or refrain
from taking any and all action which such Employer might otherwise take or
refrain from taking with respect to this Agreement, including the sole and
exclusive power to exercise, enforce or waive any rights whatsoever which such
Employer might otherwise have with respect to the Trust, and irrevocably
appoints the Sponsor as its agent for all purposes under this Agreement. The
Trustee shall have no obligation to account to any such Employer or to follow
the instructions of or otherwise deal with any such Employer, the intention
being that the Trustee shall deal solely with the Sponsor.
21
23
(c) Entire Agreement. This Agreement contains all of the terms agreed
upon between the parties with respect to the subject matter hereof.
(d) Waiver. No waiver by either party of any failure or refusal to
comply with an obligation hereunder shall be deemed a waiver of any other or
subsequent failure or refusal to so comply.
(e) Successors and Assigns. The stipulations in this Agreement shall
inure to the benefit of, and shall bind, the successors and assigns of the
respective parties.
(f) Partial Invalidity. If any term or provision of this Agreement or
the application thereof to any person or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement, or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and each
term and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
(g) Section Headings. The headings of the various sections and
subsections of this Agreement have been inserted only for the purposes of
convenience and are not part of this Agreement and shall not be deemed in any
manner to modify, explain, expand or restrict any of the provisions of this
Agreement.
SECTION 17. GOVERNING LAW.
(a) Massachusetts Law Controls. This Agreement is being made in the
Commonwealth of Massachusetts, and the Trust shall be administered as a
Massachusetts trust. The validity, construction, effect, and administration of
this Agreement shall be governed by and interpreted in accordance with the laws
of the Commonwealth of Massachusetts, except to the extent those laws are
superseded under section 514 of ERISA.
(b) Trust Agreement Controls. The Trustee is not a party to the Plan,
and in the event of any conflict between the provisions of the Plan and the
provisions of this Agreement, the provisions of this Agreement shall control.
SECTION 18. PLAN QUALIFICATION. The Sponsor shall be responsible for verifying
that while any assets of a particular Plan are held in the Trust, the Plan (i)
is qualified within the meaning of section 401(a) of the
22
24
Code; (ii) is permitted by existing or future rulings of the United States
Treasury Department to pool its funds in a group trust; and (iii) permits its
assets to be commingled for investment purposes with the assets of other such
plans by investing such assets in this Trust. If any Plan ceases to be qualified
within the meaning of section 401(a) of the Code, the Sponsor shall notify the
Trustee as promptly as is reasonable. Upon receipt of such notice, the Trustee
shall promptly segregate and withdraw from the Trust, the assets which are
allocable to such disqualified Plan, and shall dispose of such assets in the
manner directed by the Sponsor.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
QUANEX CORPORATION
Attest: ______________________ By: _______________________________
Secretary
Name: _______________________________
Title: _______________________________
Date: _______________________________
FIDELITY MANAGEMENT TRUST COMPANY
Attest: ______________________ By: ______________________________
Assistant Clerk
Name: ______________________________
Title: ______________________________
Date: ______________________________
23
25
SCHEDULE "A"
ADMINISTRATIVE SERVICES
Administration
* Establishment and maintenance of Participant account and election
percentages.
* Maintenance of the following investment options:
- Quanex Corporation Stock Fund
- Fidelity Balanced Fund
- Fidelity Contrafund
- Fidelity Growth & Income Portfolio
- Fidelity Low-Priced Stock Fund
- Fidelity Magellan Fund
- Fidelity Money Market Trust: Retirement Government Money Market
Portfolio
- Fidelity Overseas Fund
- Fidelity Puritan Fund
- Fidelity Asset Manager
- Managed Income Portfolio
- Neuberger & Berman Partners Trust
- Templeton Foreign Fund
- Fidelity Blue Chip Growth Fund
- Fidelity Retirement Growth Fund
* Maintenance of the following money classifications for the Quanex
Corporation Employee Savings Plan:
- Elective Deferrals
- Employee After-tax
- Company Match
- Rollover
- Qualified Non-elective Employer Contribution
* Maintenance of the following money classifications for the Quanex
Corporation Hourly Bargaining Unit Employees Savings Plan:
- Elective Deferrals
- Employee After-tax
- Company Match
- Rollover
- Supplemental Employer Contributions
* Maintenance of the following money classifications for the Piper Impact
401(k) Plan:
- Employee Deferral
26
- Employer Match
- Supplemental Employer Contribution
- Rollover
* Maintenance of the following money classifications for the
Nichols-Homeshield 401(k) Savings Plan:
- Salary Deferral Contribution Account
- Supplemental Employer Contribution Account
- Rollover Account
- Qualified Non-elective Employer Contribution Account
* Maintenance of the following money classifications for the
Nichols-Homeshield 401(k) Savings Plan for Hourly Davenport Employees:
- Salary Deferral Contribution Account
- Supplemental Employer Contribution Account
- Rollover Account
- Qualified Non-elective Employer Contribution Account
The Trustee will provide the recordkeeping and administrative services set
forth on this Schedule "A" and as detailed in the Plan Administrative
Manual and no others.
A) PROVIDE PARTICIPANT TELEPHONE SERVICES
1. Fidelity registered representatives are available from 8:30 a.m. -
12:00 midnight ET each business day to provide toll free telephone
service for Participant inquiries and transactions. Additionally,
Participants have 24 hour account balance and transaction inquiry
access utilizing our automated voice response system and the internet.
2. For security purposes, all calls are recorded. In addition, several
levels of security are available including the verification of a
Personal Identification Number (PIN) and/or any other indicative data
resident on the system.
3. Through our telephone services, Fidelity provides the following
services:
o Provide Plan investment option information.
o Maintain Plan specific provisions.
o Process exchanges (transfers) between investment options on a
daily basis.
o Maintain and process changes to Participants' contribution
allocations for all money sources.
o Allow Participants to change their deferral and after-tax
percentages and provide updates via EDT for customer to
apply to its payrolls accordingly.
o Consult with Participants in various loan scenarios and
generate all documentation.
o Process all Participant loan and withdrawal requests via
Fidelity's toll-free telephone service according to Plan
provisions on a daily basis.
o Process in-service withdrawals via telephone due to certain
circumstances previously approved by the Sponsor.
o Process hardship withdrawals via telephone as directed and
approved by the Sponsor.
ii
27
o Enroll new Participants via telephone; provide confirmation of
enrollment within five (5) days of the request.
B) PLAN ACCOUNTING
1. Process payroll contributions according to payroll frequency via
electronic data transfer (EDT), consolidated magnetic tape or diskette.
The data format will be provided by Fidelity.
2. Provide Plan and Participant level accounting for up to nine (9)
money classifications for the Plan.
3. Audit and reconcile the Plan and Participant accounts daily.
4. Provide daily Plan and Participant level accounting for the Plan
investment options.
5. Reconcile and process Participant withdrawal requests as approved
and directed by the Sponsor. All requests are paid based on the current
market values of Participants' accounts, not advanced or estimated
values. A distribution report will accompany each check.
6. Track individual Participant loans; process loan withdrawals;
re-invest loan repayments; and prepare and deliver comprehensive
reports to the Sponsor to assist in the administration of Participant
loans.
7. Fidelity's Guaranteed Investments Daily Equity System (GUIDE) is an
automatic Investment Contract daily portfolio accounting system. GUIDE
provides the Sponsor with daily valuation of its Plan assets whether
individually managed or in our Managed Income Portfolio.
8. Maintain and process changes to Participants' prospective and
existing investment mix elections via Fidelity's toll-free telephone
service.
C) PARTICIPANT REPORTING
1. Mail confirmation to Participants of all transactions initiated via
Fidelity Telephone Services within three (3) calendar days of the
transaction.
2. Prepare and mail via first class to each Plan Participant a
quarterly detailed Participant statement reflecting all activity for
the period. Statements will be mailed no later than twenty (20)
calendar days after each quarter end.
3. Mail required 402(f) notification for distribution from the Plan.
This notice advises Participants of the tax consequences of their Plan
distributions.
D) PLAN REPORTING
1. Prepare, reconcile and deliver a monthly Trial Balance Report
presenting all money classes and investments. This report is based on
the market value as of the last business day of the month. The report
will be delivered not later than twenty (20) days after the end of each
month in the absence of unusual circumstances.
iii
28
2. Prepare, reconcile and deliver a Quarterly Administrative Report
presenting both on a Participant and a total Plan basis all money
classes, investment positions and a summary of all activity of the
Participant and Plan as of the last business day of the quarter. The
report will be delivered not later than twenty (20) days after the end
of each quarter in the absence of unusual circumstances.
E) GOVERNMENT REPORTING
1. Process year-end tax reports for Participants - 1099R, as well as
financial reporting to assist in the preparation of Form 5500.
F) COMMUNICATION SERVICES
1. Employee communications describing available investment options,
including multimedia informational materials and group presentations.
G) OTHER
1. Performance of non-discrimination limitation testing upon request.
In order to obtain this service, the client shall be required to
provide the information identified in the Fidelity Discrimination
Testing Package Guidelines.
2. Monitor and process required minimum distribution amounts (MRD) as
follows: the Trustee will notify the MRD Participant and, upon
notification from the MRD Participant, will use the MRD Participant's
information to process their distributions. If the MRD Participant does
not respond to the Trustee's notification, the Sponsor directs the
Trustee to automatically begin the required distributions for the
Participant.
3. The Fidelity Recordkeeping System is available on-line to the
Sponsor via our Plan Sponsor Webstation ("PSW"). PSW is a graphical,
Windows-based application that provides current plan and
participant-level information, including indicative data, account
balances, activity and history. PSW also provides Sponsors with the
ability to instruct the Trustee to process particular transactions.
4. NetBenefits: Plan participants may access their accounts and conduct
transactions via the Internet's World Wide Web, including obtaining
current account balances, exchanges, contributions, dividend/capital
gains, new loans and repayments, new withdrawals, quotes on all plan
level investment options, fund performance on all plan level investment
options, and Plan literature ordering
QUANEX CORPORATION FIDELITY MANAGEMENT TRUST COMPANY
By: _______________________ By: ________________________________
Date Vice President Date
iv
29
SCHEDULE "B"
FEE SCHEDULE
Annual Participant Fee: $15.00 per Participant* per year, billed and
payable quarterly.
Loan Fee: Establishment fee of $35.00 per loan account;
annual fee of $15.00 per loan account.
Minimum Required Distribution: $25.00 per Participant per MRD withdrawal.
Plan Sponsor Webstation (PSW): Two (2) user IDs provided free of charge, each
additional user ID, $500 per year.
Return of Excess Contribution Fee: $25.00 per Participant, one-time charge per
calculation and check generation.
Non-Fidelity Mutual Funds: .35% annual administration fee on the following
Non-Fidelity Mutual Fund assets which are
equity/balanced funds: AMR Funds, Calvert Funds,
Franklin/Templeton Funds, Founders Funds, Pilgrim
Baxter Funds and Warburg Pincus Funds. .25% annual
administration fee on all other Non-Fidelity Mutual
Fund assets (to be paid by the Non-Fidelity Mutual
Fund vendor.)
o Other Fees: separate charges for optional non-discrimination testing,
extraordinary expenses resulting from large numbers of simultaneous manual
transactions, from errors not caused by Fidelity, reports not contemplated
in this Agreement, or extraordinary and/or duplicative expenses associated
with electronic services. The Administrator may withdraw reasonable
administrative fees from the Trust by written direction to the Trustee.
* This fee will be imposed pro rata for each calendar quarter, or any part
thereof, that it remains necessary to keep a Participant's account(s) as
part of the Plan's records, e.g., vested, deferred, forfeiture, top-heavy
and terminated Participants who must remain on file through calendar
year-end for 1099-R reporting purposes.
TRUSTEE FEE
o To the extent that assets are invested in Mutual Funds, 0.02% per year
payable pro rata quarterly on the basis of such assets in the Trust as of
the calendar quarter's last valuation date, but no less than $2,500.00 nor
more than $5,000.00 per year.
v
30
o To the extent that assets are invested in Sponsor Stock, 0.25% of such
assets in the Trust payable pro rata quarterly on the basis of such assets
as of the calendar quarter's last valuation date, but no less than $10,000
per year.
QUANEX CORPORATION FIDELITY MANAGEMENT TRUST COMPANY
By: __________________________ By: ____________________________
Date Vice President Date
vi
31
SCHEDULE "C"
INVESTMENT OPTIONS
In accordance with Section 5(b), the Named Fiduciary hereby directs the
Trustee that Participants' individual accounts may be invested in the following
investment options:
- Quanex Corporation Stock Fund
- Fidelity Balanced Fund
- Fidelity Contrafund
- Fidelity Growth & Income Portfolio
- Fidelity Low-Priced Stock Fund
- Fidelity Magellan Fund
- Fidelity Money Market Trust: Retirement Government Money Market
Portfolio
- Fidelity Overseas Fund
- Fidelity Puritan Fund
- Fidelity Asset Manager
- Managed Income Portfolio
- Neuberger & Berman Partners Trust
- Templeton Foreign Fund
- Fidelity Blue Chip Growth Fund
- Fidelity Retirement Growth Fund
The investment option referred to in Section 5(c) and Section
5(e)(v)(B)(5) shall be Fidelity Money Market Trust: Retirement Government Money
Market Portfolio.
QUANEX CORPORATION
By: ______________________
Date
vii
32
SCHEDULE "D"
[Administrator's Letterhead]
[DATE]
Mr. David Phillips
Fidelity Investments Institutional Operations Company, Inc.
82 Devonshire Street - MM3H
Boston, Massachusetts 02109
[Name of Plan]
*** NOTE: This schedule should contain names and
signatures for ALL individuals who will be providing
directions to Fidelity representatives in connection
with the Plan.
Fidelity representatives will be unable to accept
directions from any individual whose name does not
appear on this schedule.***
Dear Mr. Phillips:
This letter is sent to you in accordance with Section 8(b) of the Trust
Agreement, dated as of [date], between [name of Plan Sponsor] and Fidelity
Management Trust Company. [I or We] hereby designate [name of individual], [name
of individual], and [name of individual], as the individuals who may provide
directions, on behalf of the Administrator, upon which Fidelity Management Trust
Company shall be fully protected in relying. Only one such individual need
provide any direction. The signature of each designated individual is set forth
below and certified to be such.
You may rely upon each designation and certification set forth in this
letter until [I or we] deliver to you written notice of the termination of
authority of a designated individual.
Very truly yours,
[SPONSOR]
By
[signature of designated individual]
[name of designated individual]
[signature of designated individual]
[name of designated individual]
[signature of designated individual]
[name of designated individual]
viii
33
SCHEDULE "E"
[Named Fiduciary's Letterhead]
[DATE]
Mr. David Phillips
Fidelity Investments Institutional Operations Company, Inc.
82 Devonshire Street - MM3H
Boston, Massachusetts 02109
[Name of Plan]
Dear Mr. Phillips:
This letter is sent to you in accordance with Section 8(c) of the Trust
Agreement, dated as of [date], between [name of Plan Sponsor] and Fidelity
Management Trust Company. [I or We] hereby designate [name of individual], [name
of individual], and [name of individual], as the individuals who may provide
directions, on behalf of the Named Fiduciary, upon which Fidelity Management
Trust Company shall be fully protected in relying. Only one such individual need
provide any direction. The signature of each designated individual is set forth
below and certified to be such.
You may rely upon each designation and certification set forth in this
letter until [I or we] deliver to you written notice of the termination of
authority of a designated individual.
Very truly yours,
[NAMED FIDUCIARY]
By
[signature of designated individual]
[name of designated individual]
[signature of designated individual]
[name of designated individual]
[signature of designated individual]
[name of designated individual]
ix
34
SCHEDULE "G"
TELEPHONE EXCHANGE GUIDELINES
The following telephone exchange guidelines are currently employed by Fidelity
Investments Institutional Operations Company, Inc. (FIIOC).
Telephone exchange hours via a Fidelity Representative are 8:30 a.m. (ET) to
12:00 midnight (ET) on each business day. A "business day" is any day on which
the New York Stock Exchange ("NYSE") is open. Exchanges via the Internet and
Fidelity's voice response system are intended to be available virtually 24 hours
a day.
FIIOC reserves the right to change these telephone exchange guidelines at its
discretion.
Note: The NYSE's normal closing time is 4:00 p.m. (ET); in the event the NYSE
alters its closing time, all references below to 4:00 p.m. shall mean the NYSE
closing time as altered.
MUTUAL FUNDS
EXCHANGES BETWEEN MUTUAL FUNDS
Participants may call on any business day to exchange between the mutual
funds. If the request is received before 4:00 p.m. (ET), it will receive
that day's trade date. Calls received after 4:00 p.m.
(ET) will be processed on a next day basis.
MANAGED INCOME PORTFOLIO
I. EXCHANGES BETWEEN MUTUAL FUNDS AND MANAGED INCOME PORTFOLIO
Participants who wish to exchange between a mutual fund and the Managed
Income Portfolio may call on any business day. If the request is
received before 4:00 p.m. (ET), it will receive that day's trade date.
Calls received after 4:00 p.m. (EST) will be processed on a next day
basis.
II. EXCHANGE RESTRICTIONS
Participants will not be permitted to make direct transfers from the
Managed Income Portfolio into a competing fund. Participants who wish
to exchange from the Managed Income Portfolio into a competing fund
must first exchange into a non-competing fund for a period of 90 days.
QUANEX CORPORATION STOCK FUND
I. EXCHANGES BETWEEN MUTUAL FUNDS AND SPONSOR STOCK FUND
Participants may call on any business day to exchange between the
mutual funds and the Sponsor Stock Fund. If the request is received
before 4:00 p.m. (ET), it will receive that day's trade date. Calls
received after 4:00 p.m. (ET) will be processed on a next day basis.
x
35
II. EXCHANGES BETWEEN SPONSOR STOCK FUND AND MANAGED INCOME PORTFOLIO
Participants who wish to exchange between the Sponsor Stock Fund and
the Managed Income Portfolio may call on any business day. If the
request is received before 4:00 p.m. (ET), it will receive that day's
trade date. Calls received after 4:00 p.m. (ET) will be processed on a
next day basis.
III. EXCHANGE RESTRICTIONS
Investments in the Sponsor Stock Fund will consist primarily of shares
of Sponsor Stock. In order to satisfy daily Participant requests for
exchanges, loans and withdrawals, the Stock Fund will also hold cash or
other short-term liquid investments in an amount that has been agreed
to in writing by the Sponsor and the Trustee. The Trustee will be
responsible for ensuring that the percentage of these investments falls
within the agreed upon range over time. However, if there is
insufficient liquidity in the Sponsor Stock Fund to allow for such
activity, the Trustee will sell shares of Sponsor Stock in the open
market. Exchange and redemption transactions will be processed as soon
as proceeds from the sale of Sponsor Stock are received.
QUANEX CORPORATION
By: _____________________
Date
xi
36
SCHEDULE "H"
OPERATIONAL GUIDELINES FOR NON-FIDELITY MUTUAL FUNDS
PRICING
By 7:00 p.m. Eastern Time ("ET") each Business Day, the Non-Fidelity Mutual
Fund Vendor (Fund Vendor) will input the following information ("Price
Information") into the Fidelity Participant Recordkeeping System ("FPRS")
via the remote access price screen that Fidelity Investments Institutional
Operations Company, Inc. ("FIIOC"), an affiliate of the Trustee, has
provided to the Fund Vendor: (1) the net asset value for each Fund at the
Close of Trading, (2) the change in each Fund's net asset value from the
Close of Trading on the prior Business Day, and (3) in the case of an income
fund or funds, the daily accrual for interest rate factor ("mil rate").
FIIOC must receive Price Information each Business Day (a "Business Day" is
any day the New York Stock Exchange is open). If on any Business Day the
Fund Vendor does not provide such Price Information to FIIOC, FIIOC shall
pend all associated transaction activity in the Fidelity Participant
Recordkeeping System ("FPRS") until the relevant Price Information is made
available by Fund Vendor.
TRADE ACTIVITY AND WIRE TRANSFERS
By 7:00 a.m. ET each Business Day following Trade Date ("Trade Date plus
One"), FIIOC will provide, via facsimile, to the Fund Vendor a consolidated
report of net purchase or net redemption activity that occurred in each of
the Funds up to 4:00 p.m. ET on the prior Business Day. The report will
reflect the dollar amount of assets and shares to be invested or withdrawn
for each Fund. FIIOC will transmit this report to the Fund Vendor each
Business Day, regardless of processing activity. In the event that data
contained in the 7:00 a.m. ET facsimile transmission represents estimated
trade activity, FIIOC shall provide a final facsimile to the Fund Vendor by
no later than 9:00 a.m. ET. Any resulting adjustments shall be processed by
the Fund Vendor at the net asset value for the prior Business Day.
The Fund Vendor shall send via regular mail to FIIOC transaction confirms
for all daily activity in each of the Funds. The Fund Vendor shall also send
via regular mail to FIIOC, by no later than the fifth Business Day following
calendar month close, a monthly statement for each Fund. FIIOC agrees to
notify the Fund Vendor of any balance discrepancies within twenty (20)
Business Days of receipt of the monthly statement.
xii
37
For purposes of wire transfers, FIIOC shall transmit a daily wire for
aggregate purchase activity and the Fund Vendor shall transmit a daily wire
for aggregate redemption activity, in each case including all activity
across all Funds occurring on the same day.
PROSPECTUS DELIVERY
FIIOC shall be responsible for the timely delivery of Fund prospectuses and
periodic Fund reports ("Required Materials") to Plan participants, and shall
retain the services of a third-party vendor to handle such mailings. The
Fund Vendor shall be responsible for all materials and production costs, and
hereby agrees to provide the Required Materials to the third-party vendor
selected by FIIOC. The Fund Vendor shall bear the costs of mailing annual
Fund reports to Plan participants. FIIOC shall bear the costs of mailing
prospectuses to Plan participants.
PROXIES
The Fund Vendor shall be responsible for all costs associated with the
production of proxy materials. FIIOC shall retain the services of a
third-party vendor to handle proxy solicitation mailings and vote
tabulation. Expenses associated with such services shall be billed directly
to the Fund Vendor by the third-party vendor.
PARTICIPANT COMMUNICATIONS
The Fund Vendor shall provide internally-prepared fund descriptive
information approved by the Funds' legal counsel for use by FIIOC in its
written Participant communication materials. FIIOC shall utilize historical
performance data obtained from third-party vendors (currently Morningstar,
Inc., FACTSET Research Systems and Lipper Analytical Services) in telephone
conversations with plan Participants and in quarterly Participant
statements. The Sponsor hereby consents to FIIOC's use of such materials and
acknowledges that FIIOC is not responsible for the accuracy of such
third-party information. FIIOC shall seek the approval of the Fund Vendor
prior to retaining any other third-party vendor to render such data or
materials under this Agreement.
COMPENSATION
FIIOC shall be entitled to fees as set forth in a separate agreement with
the Fund Vendor.
xiii
38
SCHEDULE "I"
[Sponsor's Letterhead]
Mr. David Phillips
Fidelity Investments Institutional Operations Company, Inc.
82 Devonshire Street
Boston, Massachusetts 02109
[Name of Plan]
Dear Mr. Phillips:
This letter is sent to you in accordance with Section 8(a) of the Trust
Agreement dated as of the [ ] day of [ ], 199X, between [ ] and Fidelity
Management Trust Company.
Each of the plans identified below is a tax-qualified defined
contribution plan which meets the requirements of Section 18 of said Trust
Agreement and which is maintained by the undersigned, or one of its subsidiaries
or affiliates, for the benefit of their eligible employees. Each such plan is
hereby designated as a "Plan" for purposes of said Trust Agreement. The
following individuals or entities are the Administrator and Named Fiduciary
(ies) of said Plan(s).
Plans Administrator Named Fiduciary(ies)
----- ------------- ----- --------------
We hereby further certify that each Employer with respect to each of
the foregoing Plan(s) has authorized the assets of such Plan to be deposited in
the Trust and, as a result, is bound by Section 16(b) of said Trust Agreement.
You may rely upon the foregoing designations and certifications until
we deliver to you written notice of a change in any of the information set forth
therein.
Very truly yours,
[SPONSOR]
By
xiv
1
EXHIBIT 4.8
FIRST AMENDMENT TO TRUST AGREEMENT BETWEEN
FIDELITY MANAGEMENT TRUST COMPANY AND
QUANEX CORPORATION
THIS FIRST AMENDMENT, dated as of the first day of November, 1999, 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 February 1, 1999 with regard to the Quanex Corporation
Employee Savings Plan, the Quanex Corporation Hourly Bargaining Unit Employees
Savings Plan, the Piper Impact 401(k) Plan, the Nichols-Homeshield 401(k)
Savings Plan and the Nichols-Homeshield 401(k) Savings Plan for Hourly
Davenport Employees (the "Plan"); and
WHEREAS, the Trustee and the Sponsor now desire to amend said Trust
Agreement as provided for in Section 14 thereof;
NOW THEREFORE, in consideration of the above premises, the Trustee and
the Sponsor hereby amend the Trust Agreement by:
(1) Amending Schedule "G" by adding the following to the Exchange
Restrictions for the Quanex Corporation Stock Fund, as follows:
Participants who exchange into the Sponsor Stock Fund must
wait a minimum of forty-five (45) days prior to exchanging
out of the Sponsor Stock Fund.
Participants who exchange out of the Sponsor Stock Fund must
wait a minimum of forty-five (45) days prior to exchanging
back into the Sponsor Stock Fund.
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: By:
-------------------------------- --------------------------------
Date Vice President Date
1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Post-Effective Amendment
No. 2 to Registration Statement No. 33-46824 of Quanex Corporation on Form S-8
of our reports dated November 23, 1998 and June 1, 1999, appearing in the Annual
Report on Form 10-K of Quanex Corporation for the fiscal year ended October 31,
1998 and in the Annual Report on Form 11-K of Quanex Corporation Hourly
Bargaining Unit Employee Savings Plan for the year ended December 31, 1998,
respectively.
DELOITTE & TOUCHE LLP
Houston, Texas
October 15, 1999
1
EXHIBIT 24.1
MASTER POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Vernon E. Oeschsle , James H. Davis,
Wayne M. Rose, Viren M. Parikh and Thomas R. Royce, 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 the Registration Statements listed below, 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
to substitutes of any or all of them, may lawfully do or cause to be done by
virtue hereof.
Registration Statement No. 333-66777, filed November 4, 1998, relating
to the Quanex Corporation 1997 Key Employee Stock Option Plan and the
Quanex Corporation 1997 Non-Employee Director Sock Option Plan
Registration Statement No. 333-22977, filed March 7, 1997, as amended
by Post-Effective Amendment No. 1, filed February 2, 1999, relating to
the Piper Impact 401(k) Plan
Registration Statement No. 333-18267, filed December 19, 1996, relating
to the Quanex Corporation 1996 Employee Stock Option and Restricted
Stock Plan and the Quanex Corporation Deferred Compensation Plan
Registration Statement No. 33-57235, filed January 11, 1995, relating
to the Quanex Corporation Employee Stock Purchase Plan
Registration Statement No. 33-54081, filed June 10, 1994, as amended by
Post-Effective Amendment No. 1 filed February 2, 1999, relating to the
Nichols-Homeshield 401(k) Savings Plan
Registration Statement No. 33-54085, filed June 10, 1994, as amended by
Post-Effective Amendment No. 1 filed February 2, 1999, relating to the
Nichols-Homeshield 401(k) Savings Plan for Davenport Hourly Employees
Registration Statement No. 33-54087, filed June 10, 1994, relating to
the Quanex Corporation Employee Stock Option and Restricted Stock Plan
Registration Statement No. 33-46824, filed March 30, 1992, as amended
by Post-Effective Amendment No. 1 filed February 2, 1999, relating to
the Quanex Corporation Hourly Bargaining Unity Employee Savings Plan
2
Registration Statement No. 33-38702, filed January 25, 1991, as amended
by Post- Effective Amendment No. 1 filed February 2, 1999, relating to
the Quanex Corporation Employee Savings Plan
Registration Statement No. 33-35128, filed June 4, 1990, relating to
the Quanex Corporation 1989 Non-Employee Director Stock Option Plan
Registration Statement No. 33-29585, filed June 29, 1989, relating to
the Quanex Corporation 1988 Stock Option Plan
Registration Statement No. 33-22550, filed June 15, 1988, relating to
the Quanex Corporation 1987 Non-Employee Director Stock Option Plan
Registration Statement No. 33-23474, as amended by Post-Effective
Amendment No. 1 and Post-Effective Amendment No. 2 filed June 28, 1989,
relating to the Quanex Corporation 1978 Stock Option Plan
Registration Statement No. 333-36635, filed September 29, 1997,
relating to the Quanex Corporation Deferred Compensation Trust
Dated: February 25, 1999
/s/ Vernon E. Oechsle
-------------------------
Vernon E. Oechsle
/s/ Donald G. Barger, Jr.
-------------------------
Donald G. Barger, Jr.
/s/ Susan F. Davis
-------------------------
Susan F. Davis
/s/ Russell M. Flaum
-------------------------
Russell M. Flaum
/s/ John D. O'Connell
-------------------------
John D. O'Connell
3
/s/ Carl E. Pfeiffer
-------------------------
Carl E. Pfeiffer
/s/ Vincent R. Scorsone
-------------------------
Vincent R. Scorsone
/s/ Michael J. Sebastian
-------------------------
Michael J. Sebastian
