EXHIBIT 10.8
ARMATRON INTERNATIONAL, INC/DREYFUS 401(K) PROFIT
SHARING PLAN AND TRUST
SUMMARY PLAN DESCRIPTION
TABLE OF CONTENTS
SUMMARY PLAN DESCRIPTION
ARMATRON INTERNATIONAL, INC./DREYFUS 401(K) PROFIT
SHARING PLAN AND TRUST
TOPIC PAGE
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INTRODUCTION 1
I. ABOUT THE PLAN 2
1. General Plan Information 2
2. Plan Sponsor Information 2
3. Plan Administrator Information 3
4. Plan Trustee Information 3
5. Service of Legal Process 3
6. Investments 3
II. SERVICE 4
III. PARTICIPATION IN YOUR PLAN 5
1. Eligible Employees 5
2. Participation Requirements 5
IV. CONTRIBUTIONS 5
1. Employer Discretionary Contributions 6
2. Electric Deferrals 6
3. Matching Contributions 6
4. Qualified Non-Elective Contributions 6
5. Transfers and Rollovers 7
6. Forfeitures 7
V. COMPENSATION 7
VI. VESTING 7
VII. TOP-HEAVY PROVISIONS 9
VIII. LOANS 9
IX. IN-SERVICE WITHDRAWALS 10
1. Withdrawals at age 59 1/2 10
2. Hardship Withdrawals 10
3. Age 70 1/2 Distribution 11
X. BENEFITS UPON SEPARATION FROM SERVICE, RETIREMENT,
OR DEATH 11
1. Separation from Service 11
2. Forms of Benefit Payments 12
XI. ASSIGNMENT OF RIGHTS 12
XII. AMENDMENT AND TERMINATION 13
XIII. CLAIMS PROCEDURE 13
XIV. YOUR RIGHTS UNDER ERISA 13
INTRODUCTION
This Summary Plan Description (SPD) has been specifically prepared for
you, the employee participating in The Armatron International, Inc./Dreyfus
401(k) Profit Sharing Plan and Trust (the "Plan"). It offers you a general
outline of the major features of your Plan and your rights, obligations, and
benefits, under the Plan. We have attempted to answer the questions
participants most frequently ask.
Although every effort has been made to describe the essential provisions
of the Plan as accurately as possible, this SPD is not intended to detail
every plan provision and every situation that may arise. If there is any
conflict between the wording of this SPD and the Plan document, the terms and
conditions of the Plan document will control. The Plan and all documents
relating to it may be examined by you, your beneficiaries or your legal
representatives, during regular business hours.
Please read this SPD carefully so that you will better understand how
the Plan can work for you. In the following pages you will find a number of
important plan details including several names and addresses that you may
refer to should you have any questions about your plan and your benefits.
I. ABOUT THE PLAN
There is certain general information that is important for you to know
about your Plan. This information has been summarized for you in this Section.
1. General Plan Information
The official name of the Plan is The Armatron International,
Inc./Dreyfus 401(k) Profit Sharing Plan and Trust. It is a profit-sharing
and 401(k) plan intended to qualify under Section 401 of the Internal Revenue
Code. Your employer has assigned Plan Number 001 to your Plan.
The Plan was originally made effective as of July 1, 1989. Since that
time the plan has been amended to comply with changes in the law. Most
recently, the plan has been amended and restated effective November 1, 1994,
to comply with the Tax Reform Act of 1986 and subsequent legislation.
Your employer has appointed an administrative committee ("the
Committee") to administer the Plan on a day to day basis.
All Plan transactions, records and reports are maintained on a twelve-
month period of time known as the "Plan Year". The Plan Year coincides with
the calendar year.
Your accounts will be valued on a daily basis. You will receive a
detailed individual statement of your account(s) quarterly. The statement
will reflect all transactions and account valuations for the reporting
period. It will show you how much money has been allocated to your account(s)
and how your investments are performing.
Neither the establishment of this plan, nor your participation
constitutes an employment contract between Armatron International, Inc. and
yourself. It does not provide you with the right to continue as an employee
or in any way limit your employer's right to discharge any employee.
Since the Plan is a defined contribution plan, benefits under the Plan
are not insured by the Pension Benefit Guaranty Corporation (PBGC).
2. PLAN SPONSOR INFORMATION
The name, address, and Employer Identification Number of your Plan's
Sponsor is:
Name: Armatron International, Inc.
Address: 2 Main Street
Melrose, MA 02176
Employer ID Number: 04-1052250
3. Plan Administrator Information
The address and business telephone number of your Plan's Administrative
Committee are:
Address: 2 Main Street
Melrose, MA 02176
Telephone Number: (617) 321-23000
4. Plan Trustee Information
The assets of the plan are held in a trust fund. The trustee of the
Plan is:
The Dreyfus Trust Company
EAB Plaza
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0155
5. Service of Legal Process
Service of process may be made upon the Committee of any of its members
at the Committee's address indicated above. Service of process may also be
made upon the Plan's trustee.
6. Investments
You direct the investment of all amounts contributed into the Plan on
your behalf. You may choose to invest in one or more mutual funds or other
investment products offered by Dreyfus Service Corporation, an affiliate of
The Dreyfus Corporation, made available to you under the Plan. You choose
the investment option or options that are appropriate for you. You may
invest all of the assets in your account in one of the available options, or
you may invest your assets in two or more of the available options so long
as you invest a least 10% of your account in each option selected.
If and when your investment goals change, you may on a daily basis,
transfer part or all of your existing account balance in an investment option
to one or more of the other available options and/or change the way that you
invest future allocations to your account.
II. SERVICE
The concept of "years of service", "service break", and "hours of
service" are important for purposes of eligibility and vesting under the Plan.
For purposes of eligibility and vesting, you will be credited with a
year of service if you work at least 1,000 hours during the 12 consecutive
month period commencing on the date you begin working for the employer and
anniversaries thereof. You will incur a service break for eligibility
purposes if you work 500 hours or less during such a 12 month period.
You will be credited with an hour os service for the following:
-- each hour for which you are paid or entitled to be paid by your
employer for your services,
-- each hour for which you are paid or entitled to be paid by your
employer on accounts of a period of time in which you performed no
services due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of absence,
-- each hour for which back pay has been awarded or agreed to by your
employer.
Solely for purposes of determining whether you have incurred a service
break, you will receive credit for hours of service with which you would have
otherwise been credited in the event you are absent from work for maternity
or paternity reasons. You are considered absent from work for maternity or
paternity reasons if you are absent:
-- by reason of your pregnancy,
-- by reason of the birth of your child,
-- by reason of the placement of a child with you in connection with
your adoption of such child,
-- for purposes of caring for such child for a period beginning
immediately following such birth or placement
You will be credited with hours of service based on the actual hours
for which you are paid or entitled to payment.
III. PARTICIPATION IN YOUR PLAN
Before you become a member or a "participant" in the Plan, there are
certain eligibility and participation rules which you must meet. These rules
are described in this section.
1. Eligible Employees
All employees of Armatron International, Inc. are eligible to
participate in the Plan except non-resident aliens who receive no income from
Armatron International, Inc. which constitutes income from sources within the
United States.
A change in your eligibility status may affect your participation in
the Plan. The Plan document sets forth the rules to follow in such
situations. If and when such rules affect you, you will be notified.
2. Participation Requirements
If you are an eligible employee, you will become a participant in the
Plan as of the entry date coincident with or next following the date you
reach age 21 and, in the case of discretionary contributions complete one
year of Service, and in the case of all other contributions complete one
year of service.
The "entry date" is defined in the Plan as the first day of the Plan
Year and the first day of the fourth, seventh and tenth month of the Plan
Year.
IV. CONTRIBUTIONS
Your benefits under the Plan are provided by several types of
contributions that are or may be made to the Plan o your behalf each year.
The various types of contributions that may be made to your plan are
described in this section.
Due to certain limitations imposed by the Internal Revenue Code, the
sum of all contributions credited to your account(s) may not exceed the
lesser of $30,000 or 25% of your annual compensation. The law also limits
contributions made on behalf of highly compensated employees in relation to
contributions of non-highly compensated employees. Furthermore, if you
participate in this plan and another plan we sponsor, the contribution
credited to your accounts may be subject to further limitations. You will
be notified by the Committee in the event that any of these limitations
affect you.
1. Employer Discretionary Contributions
Each year, your employer will decide whether it wishes to make a
contribution to the Plan on behalf of you and your fellow participants. If
your employer decides to make a contribution to the Plan in a particular
year, it will contribute a percentage of your compensation to the Employer
Discretionary Contribution Account maintained for you under the Plan. The
percentage of compensation contributed on your behalf will be the same as the
percentage contributed on behalf of other participants in the Plan."
2. Elective Deferrals
Upon meeting the Plan's eligibility and participation requirements, you
may sign an agreement with us as of the first day of any month after you
have met the requirements. This agreement will allow you to have your salary
reduced by up to 20% (up to a maximum of $9,240 in 1994) on a pre-tax basis
contributed to the elective deferral account maintained for you under the
plan. The maximum contribution amount is adjusted annually for cost-of-living.
Your salary will continue to be deferred by this percentage until you decide
to change the amount or to stop making such elective deferrals. You may
modify the amount of your elective deferrals as of any January 1st, April 1st,
July 1st or October 1st. You may terminate your election to make elective
deferrals at any time. Forms for all of these purposes are available from
the Committee.
3. Matching Contributions
If you make: Elective Deferrals, your employer may make matching
contributions to the Plan on your behalf. The Matching contribution shall be
an amount or a percentage of the Elective Deferrals fixed by appropriate
action of your Employer. Your employer will not match Elective Deferrals in
excess of 6% of your Compensation.
Matching contributions are made monthly by your employer. All matching
contributions are made to a separate matching contribution account maintained
for you under the Plan.
4. Qualified Non-Elective Contributions
Your employer may, in its discretion, make qualified non-elective
contributions on your behalf. Qualified non-elective contributions will be
made on your behalf only if you are a non-highly compensated employee who
makes Elective Deferrals. The total amount of qualified non-elective
contributions will be determined each year by your employer and will be
allocated to participants' accounts on the basis of compensation.
Qualified non-elective contributions will be contributed to the
qualified non-elective contribution account maintained for you under the Plan.
5. Transfers and Rollovers
At the discretion of the Committee, you may be permitted to deposit into
your Plan distributions received from other qualified plans. Such deposits,
usually referred to as a "rollover", will be placed in a separate account.
You will always be 100% vested in your rollover account. The concept of
"vesting" is explained in the Section in this Summary entitled "Vesting."
6. Forfeitures
Forfeitures occur when any Plan participant terminates employment
before becoming entitled to his or her full benefits under the plan. Any
forfeitures will be used by the Plan to reduce Plan expenses.
V. COMPENSATION
Your "compensation" for purposes of the Plan refers to all of your wages
and other payments reported for you on Form W-2.
Compensation shall include contributions made by your employer pursuant
to a salary reduction agreement with you which are not included in your gross
income.
For Plan Years beginning on or after January 1, 1994, the annual
Compensation of each Participant taken into account for determining all
benefits provided under the Plan for any Plan Year shall not exceed $150,000,
as adjusted for increases in the cost-of-living in accordance with section
401(a)(17)(B) of the Code.
VI. VESTING
Vesting means having a non-forfeitable right to amounts in your
accounts. At all times, you are fully vested in your elective deferral
account, qualified non-elective contribution account and rollover account,
if any. You will become vested in your Employer Discretionary Account and
Matching Contribution Account in accordance with the following schedule:
Years of Service Vested Percentage
--------------------------------------
5 or more 100%
In addition, you will become fully vested in your Employer Discretionary
Account and Matching Contribution Account upon reaching normal retirement age,
65, or upon your death or total and permanent disability.
A Year of Service and service break have previously been discussed in
the Section titled "Participation In Your Plan."
It should also be noted that if you have five or more consecutive one
year service breaks, all years of service after the service breaks will be
disregarded for purposes of determining your vested interest in employer
contributions that accrue before such service breaks. Your years of service
before the service breaks will count for purposes of determining your vested
interest in employer contributions that accrue after such service breaks if:
-- you had any vested interest in employer contributions at the time
of the service breaks; or
-- at the time you return to service, the number of consecutive one
year service breaks is less than the number of your years of
service.
In no event, however, will your years of service before the service
break be taken into account until you complete a year of service after
returning to our employ. If you receive a distribution and later resume
employment with us, your account balance attributable to employer
contributions will be restored to the amount on the date of distribution if
you repay to the Plan the full amount of your distribution attributable to
employer contributions before the earlier of:
-- five years after you begin working for us again, or
-- the date you incur five consecutive one year service breaks
following the date of distribution.
VII. TOP-HEAVY PROVISIONS
A retirement plan that primarily benefits "key employees" is called a
top heavy plan. Key employees are certain owners or officers of your employer.
The Plan will be considered "top-heavy" for any year in which the sum of
the account balances of certain "key employees" exceeds 60% of the sum of the
account balances of all Plan participants.
Each year, the Plan Administrator is responsible for determining whether
your plan is top heavy. If the Plan is top-heavy in any year, your employer
may be required to contribute a minimum amount on your behalf if you are not a
key employee equal to an amount up to 3% of your compensation for that year.
However, if the highest amount contributed for a key employee is less than 3%
of compensation, the minimum contribution your employer will make will not be
greater than that amount.
If the Plan is top-heavy in any plan year, the following vesting
schedule will be substituted for the vesting schedule set forth in the section
entitled "Vesting" above for such year:
Years of Service Vested Percentage
------------------------------------------
2 20%
3 40%
4 60%
5 80%
6 100%
VIII. LOANS
You may apply to the Committee for a loan using a form that will be
supplied to you upon request. If you are married, your spouse must consent in
writing to the loan. In deciding whether to grant your request for a loan,
the Committee will consider only those factors which would be considered in a
normal commercial setting by an entity in the business of making similar types
of loans. Such factors may include your credit worthiness and financial need.
Such factors will be applied by the Committee in a uniform and non-
discriminatory manner.
The minimum amount you may borrow is $1,000. The maximum amount you may
borrow is the less of (i) $50,000 (subject to certain adjustments), or (ii)
one-half (1/2) of your vested account balance. The interest rate on your loan
is determined by the Committee and, because it is considered a plan
investment, will be commensurate with the interest rates charged by persons
in the business of lending money for loans which would be made under similar
circumstances. Your loan will be secured by an assignment of a portion (not
to exceed 50%) of your vested account balance.
When you borrow from the Plan, you generally must repay the loan within
five years with interest and principal payments at least quarterly. Interest
that you pay on the loan is not deductible for federal income tax purposes.
Your loan generally will be repaid through automatic payroll deductions. Both
the principal and interest portions of your repayments are allocated to your
accounts under the Plan from which the loan was made and are then allocated
according to your current investment elections.
In the event you default on your loan, the Committee will not attach
that portion of your vested account balance pledged as security for the loan
until your account is otherwise distributable under the terms of the Plan.
IX. IN-SERVICE WITHDRAWALS
In-service withdrawals, that is the withdrawal of some portion of your
vested account balances while you are employed, is possible under your plan as
described below. It should be noted that in-service withdrawals may only be
made at such times as the Committee may designate. No single withdrawal may
be for less than $500.
1. Withdrawals at age 59 1/2
You may make withdrawals of vested Employer Discretionary Contributions,
vested Employer Matching Contributions, Elective Deferrals, Qualified Non-
Elective Contributions, and Transfers allocated to your accounts for any
reason after reach age 59 1/2 even though you continue to work for your
employer.
2. Hardship Withdrawals
Withdrawals from your elective deferral account (only amounts
contributed; income is excluded) on account of financial hardship are
permitted if the distribution of your funds is necessary in light of your
immediate and heavy financial needs. A distribution on account of financial
hardship may not exceed the amount required to meet the immediate financial
need created by the hardship (including amounts needed to pay any federal,
state or local income tax or penalties reasonably anticipated to result from
the distribution). The Committee will be responsible for determining, in a
uniform and nondiscriminatory manner, whether a financial hardship exists and
the amount required to meet your immediate financial needs.
The Committee will consider the following to be immediate and heavy
financial needs:
-- certain medical care expenses incurred by you, your spouse or your
dependents, or necessary for these persons to obtain such care,
-- the purchase (excluding mortgage payments) of your principal
residence,
-- the payment of tuition and related educational fees for the next 12
months of post-secondary education for you, your spouse or your
dependents,
-- The need to prevent your eviction from your principal residence or
the foreclosure of the mortgage of your principal residence.
Before making a hardship withdrawal, you must obtain all distributions,
other than hardship distributions, and all loans available under all plans,
including this Plan, maintained by us. Once you make a hardship withdrawal,
your right to make contributions of any kind to this Plan or other plans
maintained by us will be suspended for 12 months. In addition, a hardship
withdrawal will reduce the amount of elective deferrals that you may make in
the tax year following the year in which you make such withdrawal.
You should note that in most cases you will be subject to a 10% early
withdrawal penalty tax in addition to regular income tax in the event that you
make a hardship withdrawal.
3. Age 70 1/2 Distribution
If you continue working after your normal retirement age, 65, you are
still eligible to participate. However, if you are still employed when you
reach age 70 1/2, you must begin to receive your benefits by April 1st of the
year following the year in which you attain age 70 1/2.
X. BENEFITS UPON SEPARATION FROM SERVICE,
RETIREMENT, OR DEATH
1. Separation from Service
If you terminate your employment with us for any reason, you will be
entitled to receive the value of the vested portion of your accounts as soon
as administratively feasible after the date of your termination of employment.
The value of the vested portion of your accounts will be determined as of the
valuation date coincident with or immediately subsequent to your termination
of employment. If the value of the vested portion of your accounts is greater
than $3,500, your accounts will not be distributed to you prior to age 65, the
Normal Retirement Age under the Plan, unless you consent to the distribution.
If the value of the vested portion of your accounts is not greater than
$3,500, you will receive a distribution of the value of the entire vested
portion of your accounts.
2. Forms of Benefit Payments
The vested portion of your accounts will be paid to you in the form of a
lump sum distribution. In lieu of a lump sum distribution, you or your
beneficiary may elect to receive installment payments payable monthly,
quarterly, semi-annually or annually.
When you die, your account balance will be paid to your designated
beneficiary. If you have not designated a beneficiary or your beneficiary
does not survive you, your account balance will be paid to your estate.
Your spouse, if any, will be deemed to be your designated beneficiary unless
your spouse consents in writing to the designation of another party as your
beneficiary. If you establish to the satisfaction of the Committee that you
are not married or that your spouse cannot be located, spousal consent to your
beneficiary designation will not be required. Spousal consent to your
beneficiary designation must meet several specific requirements. The
Committee will provide you with the necessary forms to ensure that these
requirements are satisfied. Death benefits may be paid in any form of benefit
provided for under the Plan (see above) as elected by you or your beneficiary.
You should be aware that effective January 1, 1993, a new law affecting
distributions from qualified plans requires 20% withholding on distributions
from plans which are eligible to be rolled over but are not paid directly to
another qualified plan or Individual Retirement Accounts (IRA). To avoid this
20% withholding, a "direct rollover" must be made on distributions received
after December 31, 1992 into another qualified plan or IRA.
When you request a distribution of the vested portion of your account
from this plan, your employer will provide you with a Tax Notice Regarding
Plan Payments which explains consequences of not choosing a direct rollover.
You should, of course, discuss this matter with your own tax advisors prior
to making a decision.
XI. ASSIGNMENT OF RIGHTS
You cannot assign your rights or interest in this Plan to anyone else.
In addition, you cannot pledge or assign your plan benefits as security for a
loan. An exception may be made to this non-assignment rule in the case of
certain divorced participants. If a court issues a "Qualified Domestic
Relations Order" (QDRO) regarding your plan benefits, the Plan is required by
law to follow that order. Accordingly, the judge or other arbitrator of your
divorce may assign a portion of your retirement benefits to your spouse as
part of your property settlement or to your children as payment of child
support. Payments made pursuant to a QDRO may be made prior to the time your
plan would normally make payments to you.
XII. AMENDMENT AND TERMINATION
We retain the right to amend or terminate the Plan at any time. In no
event will an amendment to the Plan reduce the amount that has been credited
to your accounts under the Plan. If the Plan is terminated, you will become
100% vested in all amounts held for your benefit under the Plan.
XIII. CLAIMS PROCEDURE
The Committee will endeavor to administer the Plan fairly and
consistently and to pay all benefits to which you are entitled.
You may file a written claim for benefits with the Committee. If you
claim is denied in whole or in part, the Committee will inform you in writing
of its decision and the reasons for such decision within 90 days of receiving
your claim. You or your representative will be permitted to review pertinent
documents and, within 60 days of receiving a notice denying your claim for
benefits, to request to appear before the Committee or to submit further
information or comments to the Committee. The Committee will issue its final
decision and the reasons for such decision within 60 days after receiving your
appeal, unless special circumstances require an extension of the 60-day
period. If a final decision is not issued within such period, your claim for
benefits will be considered denied.
XIV. YOUR RIGHTS UNDER ERISA
As a participant in the Plan, you are entitled to certain rights and
protection under the Employee Retirement Income Security Act of 1974 (ERISA).
ERISA provides that you shall be entitled to:
-- Examine, without charge, at the plan administrator's office all
plan documents filed by the plan with the U.S. Department of Labor,
such as detailed annual reports and plan descriptions
-- Obtain copies of all plan documents and other plan information upon
written request to the plan administrator. The administrator may
make a reasonable charge for the copies.
-- Receive a summary of the Plan's annual financial report. We are
required by law to furnish each participant with a copy of this
summary annual report.
-- Obtain a statement telling you whether you have a right to receive
a pension at normal retirement age (65) and if so, what your
benefits would be at normal retirement age if you stop working
under the plan now. If you do not have a right to a pension, the
statement will tell you how many more years you have to work to
get a right to a pension. This statement must be requested in
writing and is not required to be given more than once a year.
The plan must provide the statement free of charge.
ERISA imposes duties upon the people who are responsible for the
operation of the Plan. The people who operate your plan are called
"fiduciaries". They have a duty to act prudently and in the interest of you
and other plan participants and beneficiaries. No one may fire you or
otherwise discriminate against you in any way to prevent you from obtaining a
pension benefit or exercising your rights under ERISA. If your claim for a
pension benefit is denied in whole or in part you must receive a written
explanation of the reason for the denial. You have the right to have the plan
review and reconsider your claim. Under ERISA, there are steps you can take
to enforce the above rights. For instance, if you request materials from the
plan and do not receive them within 30 days, you may file suite in a federal
court. In such a case, the court may require the plan administrator to
provide the materials and pay you up to $100 a day until you receive the
materials, unless the materials were not sent because of reasons beyond the
control of the administrator. If you have a claim for benefits which is
denied or ignored, in whole or in part, you may file suit in a federal court.
If it should happen that plan fiduciaries misuse the plan's money, or if you
are discriminated against for asserting your rights, you may seek assistance
from the U.S. Department of Labor, or you may file suit in a federal court.
The court will decide who should pay court costs and legal fees. If you are
successful the court may order the person you have sued to pay these costs
and fees. If you lose, the court may order you to pay these costs and fees,
for example, if it finds your claim is frivolous. If you have any questions
about your plan, you should contact the plan administrator. If you have any
questions about this statement or about your rights under ERISA, you should
contact the nearest Area Office of the U.S. Labor-Management Services
Administration, Department of Labor.