Exhibit 10.15
BARNES GROUP INC
RETIREMENT SAVINGS PLAN
[As Amended and Restated Effective January 1, 1997, April 1, 2001, and
January 1, 2002]
TABLE OF CONTENTS
ARTICLE 1 - DEFINITIONS.......................................................2
ARTICLE 2 - PARTICIPATION.....................................................7
2.1 PARTICIPATION.........................................................7
2.2 TRANSFERRED PARTICIPANTS..............................................7
2.3 PARTICIPATION IN PAYSOP...............................................7
ARTICLE 3 - LIMITS ON CONTRIBUTIONS...........................................8
3.1 BEFORE-TAX CONTRIBUTIONS..............................................8
3.2 AFTER-TAX CONTRIBUTIONS...............................................9
3.3 MATCHING ALLOCATIONS; COMPANY CONTRIBUTIONS...........................9
3.4 LIMITATION AFFECTING HIGHLY COMPENSATED EMPLOYEES.....................9
3.5 MAXIMUM ANNUAL ADDITIONS..............................................9
3.6 MISTAKEN CONTRIBUTIONS...............................................12
3.7 CHANGE OF CONTRIBUTION ELECTION......................................12
3.8 LIMITATIONS ON AFTER-TAX CONTRIBUTIONS, MATCHING ALLOCATIONS AND
SUPPLEMENTAL CONTRIBUTIONS.................................................12
3.9 NONDISCRIMINATION TESTS..............................................12
3.10 ROLLOVER CONTRIBUTIONS ..............................................18
ARTICLE 4 - COMPANY STOCK FUND AND GUARANTEE ACCOUNT.........................18
4.1 CONTRIBUTIONS........................................................18
4.2 ELECTION TO TRANSFER PRIOR CONTRIBUTIONS.............................19
4.3 GUARANTEE ACCOUNT....................................................19
4.4 VALUE................................................................19
ARTICLE 4A - MERGER OF PAYSOP................................................21
4A.1 MERGER AND TRANSFER.................................................21
4A.2 SEPARATE ACCOUNTS...................................................21
4A.3 RIGHTS..............................................................21
ARTICLE 5 - INVESTMENT OF CONTRIBUTIONS......................................22
5.1 DIRECTED INVESTMENT ACCOUNT..........................................22
5.2 INVESTMENT ELECTION..................................................23
5.3 RESPONSIBILITY FOR INVESTMENTS.......................................23
5.4 CHANGES IN INVESTMENTS...............................................24
5.5 ACCOUNTS.............................................................24
5.6 DIVERSIFICATION OF COMPANY STOCK ACCOUNT ............................24
ARTICLE 6 - VESTED PORTION OF ACCOUNTS.......................................25
6.1 BEFORE-TAX, AFTER-TAX ACCOUNTS, ROLLOVER ACCOUNTS, AND PAYSOP
ACCOUNTS...................................................................25
6.2 MATCHING ACCOUNT.....................................................25
6.3 VESTING SERVICE......................................................26
6.4 AMENDMENT OF VESTING SCHEDULE........................................27
ARTICLE 7 - WITHDRAWALS WHILE STILL EMPLOYED.................................28
7.1 WITHDRAWAL OF AFTER-TAX CONTRIBUTIONS................................28
7.2 WITHDRAWAL OF BEFORE-TAX CONTRIBUTIONS AND ROLLOVER CONTRIBUTIONS ...28
7.3 MATCHING ACCOUNT.....................................................29
7.4 PAYSOP ACCOUNT.......................................................29
7.5 PROCEDURES AND RESTRICTIONS..........................................30
7.6 GUARANTEE ACCOUNT....................................................30
ARTICLE 8 - DISTRIBUTION OF ACCOUNTS UPON TERMINATION OF EMPLOYMENT..........31
8.1 AMOUNT OF PAYMENT; PAYMENT IN COMPANY STOCK..........................31
8.2 METHODS OF DISTRIBUTION..............................................31
8.3 BENEFICIARY..........................................................32
8.4 FORFEITURES..........................................................32
8.5 DISTRIBUTION OF PAYSOP ACCOUNTS......................................33
8.6 DIRECT ROLLOVER DISTRIBUTIONS........................................33
ARTICLE 9 - ADMINISTRATION OF PLAN...........................................35
9.1 APPOINTMENT OF BENEFITS COMMITTEE....................................35
9.2 OPERATION OF BENEFITS COMMITTEE......................................35
9.3 GENERAL DUTIES OF THE BENEFITS COMMITTEE.............................35
9.4 CLAIMS PROCEDURE.....................................................36
9.5 INDEMNITY............................................................36
9.6 PLAN EXPENSES........................................................37
ARTICLE 10 - LOANS...........................................................38
10.1 LOAN LIMITS.........................................................38
10.2 INTEREST............................................................38
10.3 TERM................................................................38
10.4 SECURITY ...........................................................38
10.5 FREQUENCY/MINIMUM AMOUNTS ..........................................39
10.6 FEES ...............................................................39
10.7 PARTICIPANT LOAN PROGRAM ...........................................39
ARTICLE 11 - TRUSTEE ........................................................40
11.1 TRUST ..............................................................40
11.2 APPOINTMENT OF TRUSTEE .............................................40
11.3 DUTIES OF TRUSTEE ..................................................40
11.4 TRANSFER AND DISBURSEMENT OF FUNDS .................................40
11.5 INVESTMENT PERFORMANCE .............................................40
11.6 GENERAL POWERS OF TRUSTEE ..........................................41
11.7 PROHIBITED TRANSACTIONS ............................................42
11.8 TITLE TO ASSETS ....................................................43
11.9 EXPERTS ............................................................43
11.10 RECORDS ............................................................43
11.11 LIABILITY ..........................................................43
11.12 STANDARD OF CARE ...................................................44
11.13 ASSETS FOR EXCLUSIVE BENEFIT OF PARTICIPANTS .......................45
11.14 TERMINATION ........................................................45
ARTICLE 11A - ACQUISITION OF SHARES WITH ESOP LOANS; CERTAIN ALLOCATION RULES46
11A.l TERMS OF ESOP LOAN .................................................46
11A.2 ACQUISITION OF SHARES WITH PROCEEDS OF ESOP LOAN ...................47
11A.3 SHARES TO BE UNRESTRICTED ..........................................47
11A.4 ESOP LOAN AMORTIZATION PAYMENTS ....................................47
11A.5 ESOP LOAN PAYMENTS .................................................48
11A.6 RELEASE FROM ESOP LOAN SUSPENSE ACCOUNT ............................48
11A.7 USE OF DIVIDENDS ...................................................49
ARTICLE 12 - GENERAL PROVISIONS .............................................50
12.1 EXCLUSIVE BENEFIT RULE ..............................................50
12.2 NONALIENATION .......................................................50
12.3 CONDITIONS OF EMPLOYMENT NOT AFFECTED BY PLAN .......................50
12.4 FACILITY OF PAYMENT .................................................50
12.5 INFORMATION .........................................................50
12.6 CONSTRUCTION ........................................................51
12.7 INABILITY TO LOCATE DISTRIBUTEE .....................................51
12.8 NAMED FIDUCIARIES ...................................................51
ARTICLE 13 - AMENDMENT, MERGER AND TERMINATION ..............................52
13.1 AMENDMENT OF PLAN ...................................................52
13.2 MERGER OR CONSOLIDATION .............................................52
13.3 ADDITIONAL PARTICIPATING EMPLOYERS ..................................52
13.4 TERMINATION OF PLAN .................................................53
ARTICLE 14 - TOP-HEAVY PROVISIONS ...........................................54
14.1 APPLICATION OF ARTICLE ..............................................54
14.2 DEFINITIONS .........................................................54
14.3 DETERMINATION OF TOP-HEAVY STATUS ...................................54
14.4 MINIMUM COMPANY CONTRIBUTION ........................................55
14.5 EFFECT ON SECTION 415 LIMITATIONS ...................................55
ARTICLE 15 - MILITARY VETERANS' MAKE-UP CONTRIBUTIONS .......................57
15.1 QUALIFIED MILITARY SERVICE ..........................................57
15.2 SERVICE CREDIT ......................................................57
15.3 MAKE-UP CONTRIBUTIONS ...............................................57
15.4 MAXIMUM TIME LIMIT ..................................................57
15.5 MATCHING ALLOCATIONS ................................................57
15.6 NO RETRO ACTIVE INVESTMENT RETURN ...................................57
15.7 LOAN REPAYMENTS .....................................................58
15.8 TESTING .............................................................58
15.9 COMPLIANCE ..........................................................58
PREAMBLE
The purpose of the Barnes Group Inc. Retirement Savings Plan (formerly known as
the Barnes Group, Inc. Guaranteed Stock Plan and herein referred to as the
"Plan") is to assist Employees in achieving financial independence at retirement
and to encourage savings, as well as to enable Employees to share in the
ownership of Barnes Group Inc. (the "Company"). Effective July 28, 1989, the
Plan was amended and restated to constitute an employee stock ownership plan
("ESOP") which is intended to qualify as a stock bonus plan under Section
401(a) and as an employee stock ownership plan under Section 4975(e)(7) of the
Internal Revenue Code of 1986, as amended (the "Code"). The ESOP is designed to
invest primarily in "qualifing employer securities," as defined in Sections
4975(e)(8) and 409(1) of the Code and 407(d)(5) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"). With respect to periods
commencing on and after October 1, 1989, the Plan is authorized to allocate
Shares of Common Stock of the Company acquired (whether before or after such
date) with the proceeds of an exempt loan to the ESOP under Section 4975(d)(3)
of the Code.
The Company is hereby amending and restating the Plan, as hereinafter set
forth, effective January 1, 1997, unless specifically stated otherwise, to
comply with the Small Business Job Protection Act of 1996, the Taxpayer Relief
Act of 1997, the Uniformed Services Employment and Reemployment Rights Act and
the IRS Restructuring and Reform Act of 1998. It is the intention of the
Company that the Plan as herein amended and restated shall continue to be
recognized as a stock bonus plan under Section 401(a) and as an employee stock
ownership plan under Section 4975(e)(7) of the Code.
Effective April 1,2001, the Curtis Industries, Inc. 401(k) Retirement Savings
Plan is hereby merged into the Plan in accordance with the provisions of
Section 13.2 hereof. Participants in the Curtis Industries, Inc. 401(k)
Retirement Savings Plan on March 31, 2001 shall, if actively employed on and
after April 1,2001 be subject in all respects to the terms of the Plan except
with regard to such benefits, rights and features which are required to be
preserved under section 411(d)(6) of the Internal Revenue Code.
Effective January 1, 2002, the Plan is further amended in response to enactment
of the Economic Growth Tax Relief Reconciliation Act of 2001.
ARTICLE 1 - DEFINITIONS
As used herein, the terms set forth below shall have the following meanings.
Some of the words and phrases used in the Plan are not defined in this Article
1, but for convenience are defined as they are introduced into the text.
1.1 "Accounts" means the Before-Tax Account, the After-Tax Account, the
Matching Account, the Guarantee Account, the Prior Contributions Account,
the PAYSOP Account, the ESOP Loan Suspense Account, the Rollover Account,
the Merged Asset Account and any other account to be established by the
Benefits Committee pursuant to the terms of the Plan.
1.2 "Affiliated Employer" means any company not participating in the Plan
which is a member of a controlled group of corporations (determined under
Section 1563(a) of the Internal Revenue Code without regard to Section
1563(a)(4) and (e)(3)(C)), except that with respect to Section 3.5 "more
than 50 percent" shall be substituted for "at least 80 percent" where it
appears in Section 1563(a)(4) of the Code. The term "Affiliated Employer"
shall also include any trade or business under common control (as defined
in Section 414(c) of the Code) with the Company, a member of an
affiliated service group (as defined in Section 414(m) of the Code),
which includes the Company, and any other entity required to be
aggregated with the Company under regulations issued pursuant to Code
Section 414(o).
1.3 "After-Tax Contributions" means all amounts contributed pursuant to
Section 3.2 of the Plan.
1.4 "Before-Tax Contributions" means all amounts contributed pursuant to
Section 3.1 of the Plan.
1.5 "Board of Directors" means the Board of Directors of Barnes Group Inc.
1.6 "Break-in-Service" means a period or event affecting the determination of
a Participant's Vested Portion as provided in Article 6.
1.7 "Code" or "Internal Revenue Code" means the Internal Revenue Code of
1986, as amended from time to time.
1.8 "Company Contributions" means contributions to the Plan required to be
made by the Company or an Employer pursuant to Section 3.3.
1.9 "Company Stock" means any "qualifying employer security" of the Company
within the meaning of Sections 4975(e)(8) and 409(1) of the Code,
including Common Stock of the Company.
1.10 "Compensation" means regular base pay, commissions, shift differential
and overtime pay, determined prior to any reduction pursuant to Section
3.1, or by reason of the application of
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Sections 125 and 132(f) of the Code, but excluding bonuses, severance
pay, reimbursed expenses, payment of deferred compensation, and any other
special payments. The annual Compensation of each Participant taken into
account in determining allocations for any Plan Year shall not exceed
$200,000, as adjusted for cost-of-living increases in accordance with
Section 401(a)(17)(B) of the Code. The dollar increase in effect on
January 1 of any calendar year is effective for years beginning in such
calendar year. If a Plan Year consists of fewer than 12 months the annual
compensation limit is an amount equal to the otherwise applicable annual
compensation limit multiplied by a fraction, the numerator of which is
the number of months in the short Plan Year period, and the denominator
of which is 12.
1.11 "Disability" means a disability on account of which the Participant is
unable to work at any gainful occupation for which the Participant is or
may become qualified by education, training or experience. Determination
as to the existence of a Disability shall be made by the Benefits
Committee or its designee on a non-discriminatory basis applicable to all
Participants in similar circumstances.
1.12 "Effective Date" means January 1, 1997 for this restated Plan except as
otherwise provided herein. The original effective date of the Plan was
April 1, 1984.
1.13 "Employee" means a person employed by an Employer in the United States as
a salaried or nonunion hourly employee or any other employer required to
be aggregated with such Employer under Sections 414(b), (c), (m) or (o)
of the Code and who is regularly scheduled to work at least 30 hours per
week. Notwithstanding the foregoing, Employee shall also mean a person
who is regularly scheduled to work less than 30 hours per week, but who
completes at least 1,000 hours of service during his initial twelve-month
period of employment or during any subsequent Plan Year.
The term Employee shall also include any leased employee deemed to be an
employee of any employer described in the previous paragraph as provided
in Section 414(n) or (i) of the Code.
The term "leased employee" means any person (other than an Employee of
the recipient) who pursuant to an agreement between the recipient and any
other person ("leasing organization") has performed services for the
recipient (or for the recipient and related persons determined in
accordance with Section 414(n)(6) of the code) on a substantially
full-time basis for a period of at least one year, and such services are
performed under primary direction or control by the Employer or
Affiliated Employer. Contributions or benefits provided to a leased
employee by the leasing organization which are attributable to services
performed for the recipient employer shall be treated as provided by the
recipient employer.
A leased employee shall not be considered an Employee of the recipient
if: (i) such employee is covered by a money purchase pension plan
providing: (1) a nonintegrated employer contribution rate of at least 10
percent of compensation, as defined in Section
3
415(c)(3) of the Code but including amounts contributed by the employer
pursuant to a salary reduction agreement which are excludable from the
employee's gross income under Section 125, 402(a)(8), 402(h) or 403(b) of
the Code, (2) immediate participation, and (3) full and immediate
vesting; and (ii) leased employees do not constitute more than 20 percent
of the recipient's nonhighly compensated workforce.
1.14 "Employer" or "Company" means Barnes Group Inc. or any successor by
merger, purchase or otherwise, with respect to its employees; or any
other company participating in the Plan as provided in Section 13.3, with
respect to its employees.
1.15 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
1.16 "ESOP Effective Date" means July 28, 1989.
1.17 "Guarantee Account" means the bookkeeping account maintained for a
Participant reflecting the notional value of the guaranteed benefit
determined under Paragraph 4.3 hereof. Effective on and after April 1,
2001 no further contributions shall be made to the Guarantee Account of
any Participant.
1.18 "Highly Compensated Employee" means, with respect to a Plan Year, any
Employee who performs services for the Employer or an Affiliated Employer
during the year being tested (the "Determination Year") and who was a 5%
owner (or the spouse of a 5% owner), within the meaning of Section
416(i)(l)(B)(i) of the Code, at any time during the Determination Year or
the preceding year (the "Look-Back Year"), or who received compensation
from the Employer or an Affiliated Employer in excess of $80,000
(adjusted pursuant to Section 415(d) of the Code, except that the base
period is the calendar quarter ending September 30, 1996) during the
Look-Back Year. The Benefits Committee may elect that the Look-Back Year
shall be the calendar year ending with or within the Determination Year.
For purposes of determining an Employee's compensation, compensation
shall mean the Employee's total compensation reportable on Form W-2, plus
all contributions made on behalf of the Employee by the Employer or an
Affiliated Employer pursuant to a salary reduction agreements under
Sections 401(k), 408, 125, or 132(f) of the Code.
A highly compensated former employee is based on the rules applicable to
determining highly compensated employee status as in effect for that
determination year, in accordance with section 1.414(q)-1T, A-4 of the
temporary Income Tax Regulations and Notice 97-45.
In determining whether an employee is a highly compensated employee for
years beginning in 1997, the amendments to section 414(q) stated above
are treated as having been in effect for years beginning in 1996.
4
The number of Highly Compensated Employees shall not exceed 20% of
Employees when ranked on the basis of compensation paid during the
Look-Back Year, excluding however, Employees who:
(i) have less than six months of eligibility service;
(ii) are under age 21;
(iii) ordinarily work not more than six months per year;
(iv) ordinarily work less than 17-1/2 hours per week; or
(v) are included in a unit of Employees covered by a collective
bargaining agreement if 90% or more of the Employer's Employees
are covered by collective bargaining agreements and the Plan
covers only those Employees who are not covered by such
agreements; or
Any Employee who is not a Highly Compensated Employee is a Nonhighly
Compensated Employee.
1.19 "Matching Allocations" shall have the meaning set forth in Section 3.3 of
the Plan.
1.20 "Merged Asset Account" shall mean such amounts transferred into the Plan
which are attributable to the Curtis Industries, Inc. 401(k) Retirement
Savings Plan. Salary deferral and employer matching contributions
previously held under the Curtis Industries, Inc. 401(k) Retirement
Savings Plan shall be separately accounted for under the Plan.
1.21 "Participant" means any person included in the membership of the Plan as
provided in Article 2.
1.22 "PAYSOP" means the Barnes Group Inc. Employee Stock Ownership Plan.
1.23 "Plan" means the Barnes Group Inc. Retirement Savings Plan as set forth
in this document or as amended from time to time.
1.24 "Plan Year" means the period beginning with the original Effective Date
of the Plan through December 31, 1984, and thereafter the calendar year
through December 31, 1998. Effective January 1, 1999, the Plan Year shall
mean the short plan year beginning January 1, 1999 and ending December
30, 1999, and thereafter the period beginning each December 31 and ending
the following December 30.
1.25 "Prior Contributions" means the Before-Tax, After-Tax and Matching
Accounts of a Participant that remain invested in the Fixed Income
Investment Fund or the Common Stock Investment Fund attributable to
contributions prior to April 30, 1988.
5
1.26 "Benefits Committee" means the Benefits Committee appointed by the
Company's Board of Directors as provided in Article 9.
1.27 "Rollover Contributions" means all amounts contributed pursuant to Section
3.10 of the Plan.
1.28 "Share" means a share of Common Stock of the Company.
1.29 "Trustees" means the trustees by whom the funds of the Plan are held as
provided in Article 11.
1.30 "Valuation Date" means the last business day of March, June, September and
December, and such other dates as may be determined by the Benefits
Committee.
1.31 "Value" means the fair market value of a Share of Common Stock, as
provided in Section 4.4 of the Plan.
1.32 "Vested Accounts" means the Before-Tax Account, the After-Tax Account, the
PAYSOP Account, the Rollover Account and the Vested Portion of the
Matching Account and, if applicable, the Vested Portion of the Merged
Asset Account.
1.33 "Vested Portion" means the portion of the Accounts in which the
Participant has a nonforfeitable interest as provided in Article 6.
Whenever appropriate, words and terms defined in the singular may be read as
the plural, and the plural may be read as the singular. Unless otherwise
required by the context, masculine pronouns also shall include the feminine,
and the feminine shall include the masculine.
The headings of the Articles and Sections herein are included solely for
convenience, and if there is any conflict between such headings and the
text of the Plan, the text shall control.
6
ARTICLE 2 - PARTICIPATION
2.1 PARTICIPATION
An Employee, other than a leased employee as defined in Section 1.13, shall
become a Participant on the first day of the calendar month which is at least
30 days (or some lesser period of time designated by the Benefits Committee)
after the date on which he files with the Employer a form or forms prescribed
by the Benefits Committee on which he: (a) makes the election described in
Section 3.1; and (b) names a Beneficiary; provided, however, that former
Employees are eligible to become Participants as soon as administratively
feasible upon rehire.
Any Employee who was an actively employed participant in the Curtis Industries,
Inc. 401(k) Retirement Savings Plan on March 31, 2001 shall become a
Participant on April 1, 2001, provided he remains actively employed by the
Employer.
2.2 TRANSFERRED PARTICIPANTS
A Participant who becomes an employee of an Affiliated Employer but ceases to
be an Employee shall continue to be a Participant of the Plan but shall not be
eligible to make contributions.
2.3 PARTICIPATION IN PAYSOP
If an individual is or was a participant in the PAYSOP, and his PAYSOP Account
Balance is transferred to this Plan, such individual shall be a Participant in
this Plan; provided, that such Participant shall not at any time be entitled to
any Company Contributions, Matching Allocations or credit to the Guarantee
Account with respect to amounts in his PAYSOP Account.
7
ARTICLE 3 - LIMITS ON CONTRIBUTIONS
3.1 BEFORE-TAX CONTRIBUTIONS
(a) A Participant may have his Compensation reduced on a Before-Tax
basis in multiples of 1% under the procedures and maximum amounts
specified by the Benefits Committee and have that amount contributed
to the Plan by the Employer; provided, however, that in no event may
the reduction in Compensation exceed 10% of Compensation, and provided
further that prior to April 1, 2001, a Participant may not make
Before-Tax Contributions for any period for which he has elected to
make After-Tax Contributions. On and after April 1, 2001, if a
Participant elects to contribute to the Plan both on a Before-Tax and
an After-Tax basis, in no event shall his aggregate Before-Tax and
After-Tax Contributions exceed 10% of his Compensation.
(b) No participant shall be permitted to reduce his Compensation under
the foregoing provision, or any other qualified plan maintained by the
Employer or any Affiliated Employer during any calendar year, in
excess of the dollar limitation contained in section 402(g) of the
Code in effect for such calendar year.
(c) A Participant may assign to this Plan any excess elective deferrals
made during a taxable year of the Participant under the plan of
another employer by notifying the Benefits Committee of the amount of
the excess elective deferrals to be assigned to the Plan. A Participant
is deemed to notify the Benefits Committee of any excess elective
deferrals that arise by taking into account only those Before-Tax
Contributions made to this Plan and any other plans of the Employer.
(d) Before-Tax Contributions in excess of the maximum elective deferral,
plus any income and minus any loss allocable thereto, shall be
distributed to the Participant no later than April 15 following the
calendar year for which such excess deferral was made.
(e) In the event that Before-Tax Contributions are used to repay an ESOP
Loan, and the Value of Shares released from the ESOP Loan Suspense
Account and allocated to the Participant's Before-Tax Account by reason
of the use of such Contributions is less than the amount of such
Contributions so used, the Company shall make an additional contribution
(a "Supplemental Contribution") to the Plan in an amount sufficient to
purchase Shares on the open market, or release additional shares from the
ESOP Loan Suspense Account, equal in Value to such difference, and such
Shares shall be allocated to the Participant's Before-Tax Account.
(f) Before-Tax Contributions accumulated through payroll deductions
shall be paid to the Trustee as of the earliest date on which such
contributions can reasonably be segregated from the Employer general
assets, but in any event not later than the fifteenth (15th) business
day of the month following the month during which such amounts would
otherwise have been payable to the Participant in cash. The provisions of
Department of Labor regulations 2510.3-102 are incorporated herein by
reference. Furthermore, any additional Employer contributions which are
allocable to the Participant's Before-Tax Account for a Plan Year
8
shall be paid to the Plan no later than the 12-month period immediately
following the close of such Plan Year.
3.2 AFTER-TAX CONTRIBUTIONS
A Participant may make After-Tax Contributions to the Plan and have such
contributions made through payroll deductions in multiples of 1% of
Compensation to a maximum of 10% of Compensation under the procedures specified
by the Benefits Committee, provided, however, that prior to April 1, 2001 a
Participant may not make After-Tax Contributions for any period for which he
has elected to make Before-Tax Contributions. On and after April 1, 2001,
After-Tax Contributions shall be subject to the aggregate limitation set forth
in Section 3.1(a) hereof.
3.3 MATCHING ALLOCATIONS; COMPANY CONTRIBUTIONS
(a) Under procedures established by the Benefits Committee, the Employer
shall make Matching Allocations to the Matching Account of each
Participant. The Employer's obligation to make Matching Allocations shall
be satisfied (in accordance with the provisions of this Section 3.3 and,
if applicable, Article 11A) by crediting a Participant's Matching Account
with Shares having a Value equal to 50% of the first 6% of the
Participant's Before-Tax Contributions; provided, however, that such
Value shall not exceed 3% of the Participant's Compensation. If the Plan
does not have an outstanding ESOP Loan, the Matching Allocation will be
satisfied by Company Contributions, less the Value of Shares forfeited
pursuant to Section 8.4.
(b) If the Plan has an outstanding ESOP Loan under Article 11A, Matching
Allocations shall be satisfied by the following in the priority
indicated: (1) the Value of Shares released from the ESOP Loan Suspense
Account by reason of the use of dividends on Shares in the ESOP Loan
Suspense Account to repay the ESOP Loan; (2) Shares released from the
ESOP Loan Suspense Account (by reason of the use of Before-Tax
Contributions to repay the ESOP Loan) having an aggregate value in excess
of the amount of such Before-Tax Contributions; (3) the Value of Shares
forfeited pursuant to Section 8.4; (4) the Value of Shares released from
the ESOP Loan Suspense Account by reason of the use of Company
Contributions to repay the ESOP Loan; and (5) the Value of Shares
purchased on the open market with Company Contributions. Thus, if the
Plan has an outstanding ESOP Loan, the Matching Allocations to be
satisfied by Company Contributions will be that amount necessary, after
giving effect to items (1) through (3) above, to cause the crediting to
Participants' Matching Accounts of the aggregate Value set forth in the
second sentence of Section 3.3(a) hereof.
3.4 LIMITATION AFFECTING HIGHLY COMPENSATED EMPLOYEES
Notwithstanding any other provision of this Plan, the Actual Deferral
Percentage for eligible Employees who are Highly Compensated Employees must
satisfy the test described in Section 3.9.
3.5 MAXIMUM ANNUAL ADDITIONS
9
(a) The amount of annual additions which may be credited to a
Participant's Accounts for any limitation year may not exceed the
lesser of:
(i) $40,000 (as adjusted pursuant to Section 415(d) of the
Code) reduced by the amount, if any, allocated to all
individual medical accounts (as defined in Section 415(l)(2) of
the Code) which are part of a defined benefit plan and further
reduced by the amount, if any, contributed to a separate
account for post-retirement medical benefits of key employees
(as defined in Section 419A(d)(3) of the Code) under a welfare
benefit fund (as defined in Section 419(e) of the Code) for the
limitation year; or
(ii) 100% of the Participant's compensation as defined in
Section 415(c)(3) of the Code and Section 1.415-2(d) of the
Department of the Treasury Regulations for limitation years
before 1998 and as defined in Section 3.9(a)(iv) for limitation
years after 1997.
(iii) If no more than one-third of all Before-Tax and After-Tax
Contributions and Matching Allocations for the limitation year
are allocated to the Accounts of Highly Compensated Employees,
for purposes of determining whether annual additions made to a
Participant's Before-Tax, Matching and After-Tax Accounts would
cause the above limitations to be exceeded, the limitations set
forth in 3.5(a)(i) shall be applied to the annual addition
described in Section 3.5(b) below, after excluding from such
annual addition an amount equal to (x) forfeitures of Company
Stock which were acquired with the proceeds of a loan described
in Section 404(a)(9)(A) of the Code, and (y) Employer
contributions which are deductible under Section 404(a)(9)(B)
of the Code and charged against the Participant's Account. The
Benefits Committee may adjust in a nondiscriminatory manner the
allocation of Before-Tax and After-Tax Contributions and
Matching Allocations to prevent the allocation of more than one
third of the Before-Tax and After-Tax Contributions and
Matching Allocations for the limitation year to the Accounts of
Highly Compensated Employees.
(iv) The compensation limit referred to in (ii) shall not apply
to any contribution for medical benefits after separation from
service (within the meaning of Section 401(h) or Section
419(A)(F)(2) of the Code) which is otherwise treated as an
annual addition.
(b) Limitation Year. Prior to December 31, 1999, limitation year
shall mean the calendar year. Effective December 31, 1999,
limitation year shall mean the Plan Year.
(c) Annual Additions. Annual additions shall mean the sum of the
following amounts credited to a Participant's Accounts for the
limitation year under all defined contribution plans maintained by
the Company:
(i) Company contributions, including Before-Tax Contributions;
(ii) Employee contributions, including After-Tax Contributions;
10
(iii) Forfeitures used to reduce Company Contributions; and
(iv) amounts described in Sections 415(1)(2) and 419(A)(d)(2)
of the Code.
If, due to a reasonable error in estimating a Participant's annual
compensation, or due to the allocation of forfeitures, an excess
annual addition exists, such excess will be eliminated as follows:
(1) After-Tax Contributions, plus any income allocable thereto,
will be returned to the Participant to the extent necessary.
(2) Before-Tax Contributions, plus any income allocable
thereto, will be returned to the Participant to the extent
necessary.
(3) Matching Allocations attributable thereto for such
limitation year, plus any income and minus any loss allocable
thereto, will be placed in a suspense account and allocated in
succeeding Plan Years in accordance with procedures adopted by
the Benefits Committee.
(d) For Plan Years beginning prior to January 1, 2000, if the
Participant is, or was, covered under a defined benefit plan and
defined contribution plan maintained by the Company or any
Affiliated Employer, the sum of the Participant's defined benefit
plan fraction and defined contribution plan fraction may not exceed
1.0 in any limitation year.
The defined benefit plan fraction is a fraction, the numerator of
which is the sum of the Participant's projected annual benefits
under all defined benefit plans (whether or not terminated)
maintained by the Company or any Affiliated Employer, and the
denominator of which is the lesser of (i) 1.25 times the dollar
limitation of Section 415(b)(l)(A) of the Internal Revenue Code in
effect for the limitation year, reduced pro rata as provided in
Section 415(b)(5)(A) of the Code for less than 10 years of
participation by the Participant in a defined benefit plan
maintained by the Company or any Affiliated Employer; or (ii) 1.4
times the Participant's average compensation for the three
consecutive years that produce the highest average, reduced pro rata
as provided in Section 415(b)(5)(B) of the Code for less than 10
years of service as defined in Section 411(a)(5) of the Code by the
Participant with the Company or any Affiliated Employer. Projected
annual benefit means the annual benefit to which the Participant
would be entitled under the terms of the plan, if the Participant
continued employment until normal retirement age (or current age, if
later) and the Participant's compensation for the limitation year
and all other relevant factors used to determine such benefit
remained constant until normal retirement age (or current age, if
later).
The defined contribution plan fraction is a fraction, the numerator
of which is the sum of the annual additions to the Participant's
Accounts under all defined contribution plans maintained by the
Company or any Affiliated Employer (whether or not terminated) for
the current and all prior limitation years, and the denominator of
which is the sum of the lesser of the following amounts determined
for such year and for each prior year of service with
11
the Company or any Affiliated Employer: (i) 1.25 times the dollar
limitation in effect under Section 415(c)(l)(A) of the Code for such
year, or (ii) 1.4 times the amount which may be taken into account under
Section 415(c)(l)(B) of the Code.
If, in any applicable limitation year beginning prior to January 1,
2000, the sum of the defined benefit plan fraction and the defined
contribution plan fraction will exceed 1.0, the excess annual additions
will be eliminated, in the order set forth in this Section 3.5, so that
the sum of the fractions equals 1.0.
3.6 MISTAKEN CONTRIBUTIONS
The Employer may recover without interest the amount of its contributions to
the Plan made on account of a mistake in fact, reduced by any investment loss
attributable to those contributions, if recovery is made within one year after
the date of those contributions.
3.7 CHANGE OF CONTRIBUTION ELECTION
(a) A Participant may suspend his contributions to be effective on the
first day of the calendar month which is at least 30 days (or some lesser
period of time designated by the Benefits Committee) after the date he
files with the Employer a form prescribed by the Benefits Committee for
such purpose. A Participant who suspends contributions hereunder shall
not be eligible to elect to make contributions under Section 3.1 or
Section 3.2 for a period of six months commencing with the date of such
suspension of contributions.
(b) A Participant may increase or decrease the amount of his
contributions, subject to the maximum contribution permitted under
Section 3.1 or Section 3.2, as applicable, to be effective on the first day
of the calendar month which is at least 30 days (or some lesser period of
time designated by the Benefits Committee) after he files a form
prescribed by the Benefits Committee for such purpose.
3.8 LIMITATIONS ON AFTER-TAX CONTRIBUTIONS, MATCHING
ALLOCATIONS AND SUPPLEMENTAL CONTRIBUTIONS
Notwithstanding any other provision of the Plan, the Actual Contribution
Percentage (as defined in section 3.9) for eligible Employees who are Highly
Compensated must satisfy the test described in Section 3.9.
3.9 NONDISCRIMINATION TESTS
(a) For purposes of this section, the following terms shall have the meaning
indicated below:
(i) "Actual Deferral Percentage" means the average (expressed as a
percentage) of the deferral percentages of Eligible Employees in a
group. An Eligible Employee's deferral percentage is equal to the
ratio (expressed as a percentage) of the Employee's Before-Tax
Contributions (including excess Before-Tax Contributions returned to
a Highly Compensated Employee pursuant to Section 3.1, but excluding
Before-Tax Contributions which exceeded the limit in Section 415(c)
of the Code
12
and which have been or will be returned to any Employee
pursuant to Section 3.5(a)) contributed to the Trust Fund for the
Plan Year to the Eligible Employee's Compensation for the Plan Year.
The individual ratios shall be calculated to the nearest
one-hundredth of one percent (.01%).
(ii) "Actual Contribution Percentage" means the average (expressed as a
percentage) of the contribution percentages of Eligible Employees in
a group. An Eligible Employee's contribution percentage is equal to
the ratio (expressed as a percentage) of the Employee's After-Tax
Contributions, if any, Matching Allocations and Before-Tax
Contributions not used in the final Actual Deferral Percentage
(excluding Matching allocations which exceeded the limit in Section
415(c) of the Code) contributed to the Trust Fund for the Plan Year
to the Eligible Employee's Compensation for the Plan Year. The
individual ratios shall be calculated to the nearest one-hundredth
of one percent (.01%).
(iii) "Eligible Employee" means any Employee of the Employer who, during
the Plan Year, is eligible to make Before-Tax Contributions in
accordance with the provisions of Section 2.1, or is eligible to
receive Matching Allocations in accordance with Section 3.3. An
individual shall be treated as an Eligible Employee for a Plan Year
if he or she so qualifies for any part of the Plan Year, and whether
or not his or her right to make Before-Tax Contributions has been
exercised or suspended under Section 7.2(c). The Actual Deferral
Percentage and Actual Contribution Percentage defined above may be
calculated by dividing the Eligible Employees into two separate
groups-one for Eligible Employees who are under age 21 and/or who
have less than a year of service and one for the remaining Eligible
Employees. After 1998, Eligible Employees who are Nonhighly
Compensated Employees, who are under age 21 and/or who have less
than a year of service may be excluded from the calculations and
from the ADP and ACP tests provided the requirements of Code section
401(k)(3)(F) are satisfied.
(iv) "Compensation" means the Employee's 415 Compensation (as defined
below), but not in excess of the limit under Section 401(a)(17) of
the Code, or any other definition of compensation which satisfies
Section 414(s) of the Code for testing purposes. The term "415
Compensation" means wages, salaries and fees for professional
services and other amounts received from the Employer and all
Affiliated Employers during the Limitation Year (without regard to
whether or not an amount is paid in cash) for personal services
actually rendered in the course of employment with the Employer, to
the extent such amounts are includable in gross income, including,
but not limited to, overtime pay, bonuses, commissions to paid
salesmen, compensation for services on the basis of a percentage of
profits, commissions on insurance premiums, fringe benefits,
reimbursements, expense allowances, and amounts contributed by the
Employer or Affiliated Employer on behalf of the Employee pursuant to
a salary deferral agreement under any cash or deferred arrangement
described in Section 401(k) of the Code or pursuant to a salary
reduction agreement under any cafeteria plan described in Section 125
of the Code, and excluding the following:
13
(A) Amounts contributed by the employer or Affiliated Employer
on behalf of the Employee to any other plan of deferred
compensation and which are not includable in the Employee's
gross income for the taxable year in which contributed or any
distributions from a plan of deferred compensation;
(B) Amounts realized from the exercise of a nonqualified stock
option, or when restricted stock (or property) held by the
Employee either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture;
(C) Amounts realized with respect to the sale, exchange, or other
disposition of stock acquired under a qualified stock option; and
(D) Other amounts which receive special tax benefits, such as
premiums for group term life insurance (but only to the extent
that that premiums are not includable in the gross income of the
Employee).
Notwithstanding the foregoing, in determining the amount of Compensation
to be taken into account for purposes of this Section, the Benefits
Committee may limit the period used to determine an Employee's
Compensation for the Plan Year to the portion of the Plan Year in which
the Employee was an Eligible Employee (as defined in subparagraph (iii)
above), provided that this limit is applied uniformly and separately to
all Eligible Employees with respect to subparagraphs (i) and (ii) above
for such Plan Year.
(v) "Testing Method" means either the "prior year method" or the
"current year method." Under the prior year method, the Actual
Deferral Percentage and Actual Contribution Percentage for the group
of Eligible Employees who are Nonhighly Compensated Employees is
determined based on data from the preceding plan year. Under the
current year method, the Actual Deferral Percentage and Actual
Contribution Percentage for the group of Eligible Employees who are
Nonhighly Compensated Employees is determined based on data from the
current plan year. Under both methods, the Actual Deferral
Percentage and Actual Contribution Percentage for the group of
Eligible Employees who are Highly Compensated Employees is
determined based on data from the current plan year.
(b) If more than one plan providing for a cash or deferred arrangement, or for
matching contributions, or employee contributions (within the meaning of
Sections 401(k) and 401(m) of the Code) is maintained by the Employer or
an Affiliated Employer, then the individual ratios of any Highly
Compensated Employee who participates in more than one such plan or
arrangement shall, for purposes of determining the individual's Actual
Deferral Percentage and Actual Contribution Percentage, be determined as
if all such arrangements were a single plan or arrangement. If a Highly
Compensated Employee participates in two or more cash or deferred
arrangements that have different plan years, all cash or deferred
arrangements ending with or within the same calendar year shall be
treated as a single arrangement. Notwithstanding the foregoing, plans
that are subject to mandatory disaggregation pursuant to regulations
under Section 401(k) of the Code shall not be aggregated for purposes of
this paragraph but will be treated as separate plans.
14
(c) In the event that this Plan satisfies the requirements of Sections 401(a)
(4)and 410(b) of the Code only if aggregated with one or more other plans,
and all such plans have the same Plan Year, then this Section shall be
applied by determining the Actual Deferral Percentage and Actual
Contribution Percentage of Eligible Employees as if all such plans were a
single plan. For Plan Years beginning in 1997, such plans may be
aggregated only if they use a consistent Testing Method.
(d) In accordance with the nondiscrimination requirements of Section
401(k) of the Code, the Benefits Committee may establish a Compensation
Deferral Limit with respect to Before-Tax Contributions credited to a
participant's Total Account during a Plan Year and may adjust such
deferral limit (in accordance with paragraph (f)(i) below) from time to
time during the Plan Year in order to satisfy one of the following limits
which are referred to as the ADP test:
(i) The Actual Deferral Percentage of the group of Eligible Employees
who are Highly Compensated Employees for the Plan Year shall not
exceed the Actual Deferral percentage of the group of Eligible
Employees who are Nonhighly Compensated Employees for the Plan Year
multiplied by 1.25.
(ii) The Actual Deferral Percentage of the group of Eligible
Employees who are Highly Compensated Employees for the Plan Year
shall not exceed the Actual Deferral Percentage of the group of
Eligible Employees who are Nonhighly Compensated Employees for the
Plan Year multiplied by two, provided that such Actual Deferral
percentage for Highly Compensated Employees is not more than two
percentage points higher than such Actual Deferral Percentage for
Nonhighly Compensated Employees.
(e) In accordance with the nondiscrimination requirements of Section
401(m) of the Code, the Benefits Committee may establish a Contribution
Percentage Limit with respect to After-Tax Contributions, if any,
credited to a Participant's account during a Plan Year and may adjust
such percentage limit (in accordance) with paragraph (f)(i) below from
time to time during the Plan Year in order to satisfy one of the
following limits which are referred to as the ACP test:
(i) The Actual Contribution Percentage of the group of Eligible
Employees who are Highly Compensated Employees for the Plan Year
shall not exceed the Actual Contribution Percentage of the group of
Eligible Employees who are Nonhighly Compensated Employees for the
Plan Year multiplied by 1.25.
(ii) The Actual Contribution Percentage of the group of Eligible
Employees who are Highly Compensated Employees for the Plan Year
shall not exceed the Actual Contribution Percentage of the group of
Eligible Employees who are Nonhighly Compensated Employees for the
Plan Year multiplied by two, provided that the Actual Contribution
Percentage for Highly Compensated Employees is not more than two
percentage points higher than such Actual Contribution Percentage
for Nonhighly Compensated Employees.
15
(f) The Benefits Committee may take the following actions to assure
compliance with the nondiscrimination limitations of Section 401(k)
and/or Section 401(m) of the Code.
(i) If, during the Plan Year, the average percentages described in
paragraphs (d) and/or (e) above applicable to the group of Eligible
Employees who are Highly Compensated Employees are expected to
exceed the maximum average percentage necessary to comply with the
limits described in said paragraphs, the Benefits Committee may
direct that the Actual Deferral Percentage and/or the Actual
Contribution Percentage, as the case may be, for one or more members
of such group of Highly Compensated Employees be reduced
prospectively to the extent necessary to comply with the applicable
limit by limiting the percentage of Before-Tax Contributions and/or
After-tax Contributions of such Employees.
(ii) If, after the Plan Year ends, the average percentages describe
in paragraphs (d) and/or (e) above applicable to the group of
Eligible Employees who are Highly Compensated Employees exceed the
maximum average percentage necessary to comply with the limits
described in said paragraphs, the Benefits Committee may direct that
the Before-Tax Contribution and/or the After-Tax Contribution and
Matching Allocation, as the case may be, for one or more members of
such group of Highly Compensated Employees be reduced to the extent
necessary to comply with the applicable limit. Such reduction shall
follow the procedures described in paragraph (g) below.
(g) The total amount of Before-Tax Contribution to be refunded is
calculated by first successively reducing the Actual Deferral Percentage
of one or more members of such group of Highly Compensated Employees by
reducing the Actual Deferral Percentage of the Highly Compensated
Employee with the highest Actual Deferral Percentage until it equals the
Actual Deferral Percentage of the Highly Compensated Employee with the
second highest Actual Deferral Percentage, then reducing their Actual
Deferral Percentages until they equal the Actual Deferral Percentage of
the Highly Compensated Employee with the third highest Actual Deferral
Percentage, and so on until the average percentage for the group does not
exceed the applicable limit. Second, the excess of each Employee's Actual
Deferral Percentage over such reduced Actual Deferral Percentage
multiplied by the Employee's Compensation used in the test is calculated
as a hypothetical refund. Third, such excess hypothetical refunds are
aggregated to determine the total Before-Tax Contributions to be
refunded. The ADP test described in paragraph (d) above shall use the
data that reflects this hypothetical refund.
The actual Before-Tax Contribution refunds are then calculated by
successively reducing the amount of the Before-Tax Contribution of one or
more members of such group of Highly Compensated Employees beginning with
the Highly Compensated Employee(s) with the highest dollar amounts of
Before-Tax Contribution using the method described in the preceding
paragraph until the total of such actual refunds equals the total amount
of Before-Tax Contribution to be refunded. The ADP test described in
paragraph (d) above shall not use the data that reflects this actual
refund.
16
The amount by which the Before-Tax Contribution exceeded the dollar limit
in Section 3.1 for a Highly Compensated Employee as described in (a)(i)
above shall also then be refunded and such refund shall be made in
accordance with Section 3.1.
The total amount of After-Tax Contribution to be refunded and/or Matching
allocation to be refunded and/or forfeited is calculated by first
successively reducing the Actual Contribution percentage of one or more
members of such group of Highly Compensated Employees beginning with the
Highly Compensated Employee with the highest Actual Contribution
Percentage in the same manner as the ADP test until the average
percentage for the group does not exceed the applicable limit. Second,
the excess of each Employee's Actual Contribution percentage over such
reduced Actual Contribution Percentage multiplied by the Employee's
Compensation used in the test is calculated as a hypothetical refund.
Third, such excess hypothetical refunds are aggregated to determine the
total After-Tax Contributions and Matching Allocations to be refunded
and/or forfeited. The ACP test in paragraph (e) above shall use the data
that reflects this hypothetical refund or forfeiture.
The actual After-Tax Contribution refunds and the actual Matching
Allocation refunds and/or forfeitures are then calculated by successively
reducing the After-Tax Contribution and then the Matching Allocation of
one or more members of such group of Highly Compensated Employees
beginning with the Highly Compensated Employee with the highest dollar
amount of combined After-Tax Contribution and Matching Allocation using
the method for refunding Before-Tax Contributions described above until
the total of such deemed refunds equals the total amount of After-Tax
Contribution and Matching Allocation to be refunded and/or forfeited.
Matching Allocations shall be refunded if vested and the ACP test failed,
or forfeited if the ACP test passed, or forfeited if the ACP test failed
and such contributions are nonvested. If the actual refund of Before-Tax
Contributions and/or After-Tax Contributions for any Employee includes an
amount of Before-Tax Contributions and/or After-Tax Contributions that
were matched, the Matching Allocation attributable thereto shall be
forfeited. The ACP test in paragraph (e) above shall not use the data
that reflects this actual refund or forfeiture.
(h) Contributions that are refunded or forfeited under paragraph (g)
above shall be adjusted for allocable gains or losses for the Plan Year
with respect to which the contributions were made. The amount of the
allocable gain or loss is the product of (i) multiplied by (ii), where
(i) is a ratio, the numerator of which is the Plan Year-to-date gain or
loss on the money type being refunded or forfeited and the denominator of
such money type at the beginning of the Plan Year, plus contributions of
that money type credited for such Plan Year, and (ii) is the amount of
the refund or forfeiture of that money type.
Money type for purposes of this paragraph mean Before-Tax Contributions,
After-Tax Contributions and Matching Allocations, whichever applies. A
refund of Before-Tax Contributions in excess of the limit in Section 3.1
is referred to as an excess deferral. A refund of Before-Tax
Contributions due to a failure of the ADP test is referred to as an
excess contribution, a refund of After-Tax Contributions and/or Matching
Allocations due to a failure of the ACP test is referred to as an excess
aggregate contribution, and a forfeiture of Matching Allocations is
referred to as a forfeiture.
17
(i) Refunds or forfeitures needed to satisfy the above tests shall be
made before the end of the Plan Year following the Determination Year.
Refunds needed to satisfy the limit in Section 3.1 shall be made on or
before April 15 following the end of the calendar year. If the Employee
has made Before-Tax Contributions in excess of such limit to two or more
plans of unrelated employers, the Employee must notify the Benefits
Committee on or before March 1 following the end of the calendar year of
the amount to be refunded from this Plan in order to comply with such
limit for the year.
(j) Alternatively, within twelve (12) months after the end of the Plan
Year, the Employer, at its discretion may make a special qualified
non-elective contribution on behalf of Nonhighly Compensated Participants
in an amount sufficient to satisfy the ADP and/or ACP tests in lieu of
refunds or forfeitures. Such contribution, if any, shall be allocated to
the Accounts of certain Participants who are Nonhighly Compensated
Employees, in an amount not in excess of the limitations of Section 3.5
hereof, starting with the Participant with the lowest amount of
Compensation for the Plan Year for which the applicable test is
performed. If such contribution does not cause the Plan to pass the ADP
and/or ACP test, an additional contribution shall be made on behalf of
the Nonhighly Compensated Participant with the next lowest amount of
Compensation for the Plan Year for which such test is performed. Such
contribution process shall continue up to an amount necessary to pass the
ADP and/or ACP test. The amounts contributed pursuant to this Section on
behalf of such Nonhighly Compensated Participants shall be accounted for
separately.
(k) The Benefits Committee shall maintain sufficient records to
demonstrate that the Plan satisfies the nondiscrimination tests described
above. Changes in the Code or regulations affecting the ADP test and/or
the ACP test or the corrective methods may be used notwithstanding a
conflict with the above provisions.
3.10 ROLLOVER CONTRIBUTIONS
Effective on and after October 1, 2000, a Participant may make Rollover
Contributions to the Plan from other qualified plans, provided that such amount
qualifies as an "eligible rollover distribution" as defined in Code section
402(c) and provided further, that such transfer will not jeopardize the tax
exempt status of the Plan. The Benefits Committee may require such information
or documentation with respect to any such proposed Rollover Contributions as it
deems necessary or desirable in order to reasonably conclude that the
distributing plan, or in the case of a conduit Individual Retirement Account,
the originating plan, is qualified under Code section 401(a). Any Rollover
Contributions made by a Participant shall be allocated to the Participant's
Rollover Account.
ARTICLE 4 - COMPANY STOCK FUND AND GUARANTEE ACCOUNT
4.1 CONTRIBUTIONS
(a) All contributions made to the Plan on or after May 1, 1988, other than
Rollover Contributions, shall be invested in the Company Stock Fund. All
money contributed to this fund shall be invested in Company Stock;
provided, however, that amounts contributed to
18
this fund may also be invested in short term obligations of the United
States Government or other short term investments selected by the Trustee
pending investment in Company Stock.
(b) Notwithstanding the foregoing, on and after April 1, 2001, unless a
Participant elects otherwise pursuant to Article 5 hereof, only Employer
Matching Allocations shall be invested in the Company Stock Fund
4.2 ELECTION TO TRANSFER PRIOR CONTRIBUTIONS
All amounts in a Participant's Accounts as of June 30, 1988 shall be subject to
a one-time irrevocable election by the Participant to transfer the amounts in
such Accounts in multiples of 25% into the Company Stock Fund.
This election must be on forms prescribed by the Benefits Committee and made
prior to June 1, 1988. Amounts transferred to the Company Stock Fund pursuant
to this Section 4.2 shall be used to purchase Company Stock within 90 days
after June 30, 1988 in a manner selected by the Trustee. Shares of Company
Stock will be credited to each Participant's Accounts based on the average
purchase price of the stock during the period over which it is purchased.
4.3 GUARANTEE ACCOUNT
Amounts transferred to the Company Stock Fund pursuant to Section 4.2 and all
Before-Tax and After-Tax Contributions made on or after May 1, 1988 and prior
to April 1, 2001, pursuant to Section 3.1 and 3.2 shall be credited to a
bookkeeping account called the Guarantee Account. Any amounts transferred out
of the Company Stock Fund pursuant to the diversification election provided in
Section 5.6 of the Plan shall cease as of the date of transfer to be credited
to the Guarantee Account, and the notional value of the Guarantee Account shall
be reduced by the amount transferred. The notional value of a Participant's
Guarantee Account shall be determined as if the amounts transferred and the
contributions described in this Section 4.3 earned interest at an annual rate
set by the Benefits Committee; provided, however, that such interest rate shall
not be less than 5% nor more than 12%. The notional value of a Participant's
Guarantee Account shall be reduced by the amount of any loans, withdrawals or
distributions to the Participant, or amounts transferred from the Company Stock
Account and Matching Account pursuant to Section 5.6.
4.4 VALUE
Shares will be allocated to the Participants' Accounts at the end of each
calendar quarter (or at such other dates as may be determined by the Benefits
Committee) on the basis of the aggregate cost to the Plan of the acquisition of
such Shares during the period in question, including any cost attributable to
making distributions to Participants who elect to receive such distributions in
cash, rather than in shares of Company Common Stock, pursuant to Section 8.1.
19
For purposes of valuing a Participant's Accounts, the fair market value of a
Share of Common Stock on each Valuation Date (and other determination dates)
shall be the closing sales price of the Common Stock on the date of
determination on the New York Stock Exchange Composite Index (or on the
principal market on which the Common Stock is traded if the Common Stock is not
listed on that market on such date) or, if the Common Stock is not traded on
such date, the closing sales price of the Common Stock on the next preceding
trading day.
20
ARTICLE 4A - MERGER OF PAYSOP
4A.1 MERGER AND TRANSFER
Effective as of December 31, 1990, the PAYSOP is merged into the Plan, and all
assets and liabilities of the PAYSOP shall be transferred to the Plan as soon
thereafter as practicable.
4A.2 SEPARATE ACCOUNTS
The Benefits Committee shall establish a separate account, to be called the
PAYSOP Account, for each account transferred from the PAYSOP, and each such
PAYSOP Account shall be invested in the Company Stock Fund.
4A.3 RIGHTS
Except as otherwise provided in the Plan, the rights of each Participant or the
beneficiary thereof with respect to his PAYSOP Account shall be determined
under the terms of the PAYSOP as in effect on December 31, 1990, attached
hereto as Exhibit A.
21
ARTICLE 5 - INVESTMENT OF CONTRIBUTIONS
5.1 DIRECTED INVESTMENT ACCOUNT
(a) Participants may, subject to a procedure established by the Benefits
Committee and applied in a uniform nondiscriminatory manner, direct the
Trustee as to the investment of amounts contributed to the following
Accounts under the Plan on and after April 1, 2001:
(i) Before-Tax Account;
(ii) After-Tax Account;
(iii) Rollover Account; and
(iv) Merged Asset Account.
Upon attainment of age 55, a Participant may direct the Trustee as to the
investment of amounts contributed to the above-referenced Accounts (as
applicable) under the Plan prior to April 1, 2001 and, in addition, any
amounts attributable to pre-1988 contributions which were not previously
invested in Company Stock pursuant to Section 4.2 of Article 4 hereof.
In accordance with a Participant's investment elections, the Trustee
shall invest applicable accounts in specific assets, specific funds or
other investments permitted under the Plan. That portion of the interest
of any Participant so directing will thereupon be considered a
Participant's Directed Account.
(b) As of each Valuation Date, all Participant Directed Accounts shall be
charged or credited with the net earnings, gains, losses and expenses as
well as any appreciation or depreciation in the market value using
publicly listed fair market values when available or appropriate.
(c) The procedure established by the Benefits Committee shall provide an
explanation of the circumstances under which Participants and their
Beneficiaries may give investment instructions, including, but need not
be limited to, the following:
(i) the conveyance of instructions by the Participants and their
Beneficiaries to invest Participant Directed Accounts in directed
investments;
(ii) the name, address and phone number of the fiduciary (and, if
applicable, the person or persons designated by the fiduciary to
act on its behalf) responsible for providing information to the
Participant or a beneficiary upon request relating to the
investments in directed investments;
(iii) applicable restrictions on transfers to and from any specific
investment identified by name by a fiduciary as an available
investment under the Plan which may be acquired or disposed of by
the Trustee pursuant to the investment direction by a Participant.
(iv) any restrictions on the exercise of voting, tender and similar
rights related to a directed investment by the Participants or
their Beneficiaries;
22
(v) a description of any transaction fees and expenses which affect
the balances in Participant Directed Accounts in connection with
the purchase or sale of directed investments; and
(vi) general procedures for the dissemination of investment and
other information relating to the investment alternatives available
under the Plan as deemed necessary or appropriate, including but
not limited to a description of the following:
(A) specific information regarding the investment vehicles
available under the Plan including a general description of the
investment objectives and risk and return characteristics and
information regarding the type and diversification of assets in
the portfolio of each;
(B) any designated entity that (a) has the power to manage,
acquire, or dispose of Plan assets and (b) acknowledges
fiduciary responsibility to the Plan in writing. Such entity
must be a person, firm, or corporation registered as an
investment adviser under the Investment Advisers Act of 1940, a
bank, or an insurance company; and
(C) a description of the additional information which may be
obtained upon request from the fiduciary designated to provide
such information.
(d) Any information regarding investments available under the Plan may be
provided to the Participant in one or more written documents.
(e) The Benefits Committee may, at its discretion, establish such
instructions, guidelines or policies as it deems necessary or appropriate
to ensure proper administration of the Plan, and may interpret the same
accordingly.
5.2 INVESTMENT ELECTION
The investment election described in Section 5.1 shall be made in 5%
increments on such form as may be prescribed by the Benefits Committee.
5.3 RESPONSIBILITY FOR INVESTMENTS
Each Participant is solely responsible for the selection of his investment
options for the amounts not transferred to the Company Stock fund or as
result of the diversification election under Section 5.6 herein. The
Trustees, the Benefits Committee, the Employer, and the officers, supervisors
and other employees of the officers, supervisors and other Employers are not
empowered to advise a Participant as to the manner in which such amounts
shall be invested.The fact that an investment fund is available to
Participants for investment under the Plan shall not be construed as a
recommendation for investment in that fund.
23
5.4 CHANGES IN INVESTMENTS
Subject to rules and procedures established by the Benefits Committee, a
Participant may change his investment election under Section 5.2 and make
transfers between Investment Funds.
5.5 ACCOUNTS
The Benefits Committee shall establish and maintain Accounts which shall
account for the amounts contributed with respect to each Participant and for
the investment and disbursement thereof. At least once each year, each
participant shall be furnished with a statement setting forth the Value of his
Accounts and the vested portion thereof.
5.6 DIVERSIFICATION OF COMPANY STOCK ACCOUNT
(a) To the extent that a Participant's ability to direct the investment of
100% of his Accounts (excluding his Matching Account and PAYSOP Account)
upon attainment of age 55 fails to satisfy the requirements of Code
section 401(a)(28), any such Participant who has completed at least ten
(10) years of participation in the Plan may elect within 90 days after
the close of each Plan Year during the Election Period (as hereinafter
defined) to direct the Plan as to the investment of that portion of his
Matching Account sufficient to equal, when combined with amounts with
respect to which the Participant has investment direction capability,
not more than 25% of the shares which have ever been allocated to his
Company Stock Account (less the number of any such shares which have
been previously diversified pursuant to this Section 5.6). Provided,
that in the case of the last Plan Year during the Election Period, if
necessary to satisfy the requirements of Code section 401(a)(28), the
Participant may elect to diversify that portion of his Matching Account
sufficient to equal, when combined with amounts with respect to which
the Participant has investment direction capability, up to 50% of the
shares which have ever been allocated to his Company Stock Account
(less the number of any such shares which have been previously
diversified pursuant to this Section 5.6). For purposes of this Section,
"Election Period" means the period of six (6) consecutive Plan Years
beginning with the Plan Year in which the Participant has attained age
55 and completed ten (10) years of participation in the Plan.
(b) The diversification election shall be satisfied by permitting the
Participant to direct the transfer of that portion of his Matching
Account as to which diversification is required to any of the investment
funds available under the Plan.
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ARTICLE 6 - VESTED PORTION OF ACCOUNTS
6.1 BEFORE-TAX, AFTER-TAX ACCOUNTS, ROLLOVER ACCOUNTS, AND PAYSOP ACCOUNTS
A Participant shall at all times be 100% vested in, and have a nonforfeitable
right to, his Before-Tax Account, After-Tax Account, Rollover Account and
PAYSOP Account.
6.2 MATCHING ACCOUNT
(a) A Participant shall be vested in, and have a nonforfeitable right to, his
Matching Account in accordance with the following schedule:
Years of Vesting Service Vested Percentage
------------------------ -----------------
Less than 2 years 0%
2 years but less than 3 20%
3 years but less than 4 50%
4 years but less than 5 75%
5 or more years 100%
(b) Notwithstanding the foregoing, a Participant shall be 100% vested in,
and have a nonforfeitable right to, his Matching Account upon attaining
age 55 or upon Disability or death while actively employed by an Employer.
(c) Notwithstanding anything to the contrary herein, a Participant shall
at all times be 100% vested in the portion of his Accounts that are
attributable to Matching Contributions that were made to the Plan with
respect to such Participant prior to May 1, 1988 and which were
transferred to the Company Stock Fund by the Participant pursuant to the
irrevocable election described in Section 4.2 hereof.
(d) Notwithstanding anything to the contrary herein, a Participant who was
employed by the Pioneer Division of Barnes Group Inc. on December 31,
1992 shall at all times be 100% vested in his Matching Account.
(e) For purposes of vesting, service with Curtis Industries, Inc. shall be
recognized from the date of a Participant's employment with Curtis
Industries, Inc. Amounts in a former Curtis Industries, Inc. 401(k)
Retirement Savings Plan participant's Merged Asset Account which are
attributable to employer matching contributions under the Curtis
Industries, Inc. 401(k) Retirement Savings Plan will vest in accordance
with the above-referenced vesting schedule. Notwithstanding the
foregoing, a Participant who on March 31, 2001, was an active participant
in the Curtis Industries, Inc. 401(k) Retirement Savings Plan with at
least three years of service as of such date shall, if his termination of
employment occurs on or after April 1, 2001 receive credit for a Year of
Service for each Plan Year during which he completes at least 1,000 hours
of service.
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(f) The vested percentage of a former participant in the Curtis
Industries, Inc. 401(k) Retirement Savings Plan who terminated employment
prior to April 1, 2001 shall be determined according to the following
vesting schedule:
Years of Vesting Service Vested Percentage
------------------------ -----------------
Less than 5 years 0%
5 or more years 100%
6.3 VESTING SERVICE
(a) Vesting Service shall commence on the first day of the month during
which an Employee's date of employment occurs and shall end on the date
on the last day of the month during which such Employee severs from
service. The date an Employee severs from service is the earliest of:
(i) the date the Employee quits, is discharged, retires or dies; or
(ii) the first anniversary of the date the Employee is first absent
from service because of a leave of absence authorized by the
Employer, provided the Employee fails to return to work by the
second anniversary of such date; or
(iii) the first anniversary of the date the Employee is absent from
service for any other reason (e.g., sickness, vacation, layoff,
etc.), provided that the Employee fails to perform an hour of
service during the twelve months prior to such first anniversary
date.
Notwithstanding the foregoing, there shall be no severance from service,
and absence from employment shall be counted as Vesting Service in the
case of employment with an Affiliated Employer, or in the case of
military leave in accordance with Article 15. The Employer's leave policy
shall be applied in a uniform and nondiscriminatory manner to all
Employees under similar circumstances.
(b) For purposes of computing Vesting Service, the following rules apply in
cases of a termination of employment followed by a return to service:
(i) If an Employee severs from service as a result of quit, discharge or
retirement and then returns to service within twelve months, the
period of severance is included.
(ii) If an Employee is absent from service for any reason other than
quit, discharge or retirement and during the absence a quit,
discharge or retirement occurs, and the Employee subsequently
returns to service within twelve months of his original absence, the
period between the quit, discharge or retirement and the return to
service is included in the Employee's Vesting Service.
(iii) If an Employee severs from service, and fails to perform any hours
of service during the twelve months following the severance from
service date, then the Employee shall be deemed to have a one-year
Break in Service; provided, however, that if an
26
employee severs from service (i) by reason of the pregnancy of the
Employee, (ii) by reason of the birth of a child of the Employee,
(iii) by reason of the placement of a child with the Employee in
connection with the adoption of such child by the Employee, or (iv)
for purposes of caring for such child for a period beginning
immediately following such birth or placement, and provides
satisfactory evidence to the plan administrator that the severance
was for one of the reasons specified above, the Employee shall have
a one-year Break in Service only if the Employee fails to perform an
hour of service during the sixteen-month period following the
severance of service. If an Employee having such a Break in Service
is later reemployed by the Employer, Vesting Service earned prior
to his most recent severance from service date shall be counted
along with any Vesting Service earned after the Employee's
reemployment date if:
(A) the period of Vesting service prior to his most recent
severance from service date, whether or not continuous, exceeds
the latest period of severance during which he was not employed
by the Employer, or
(B) he is re-employed prior to five (5) consecutive one (1) year
Breaks in Service.
(c) For purposes of computing Vesting Service, service with any entity acquired
by the Employer shall be considered to be service with the Employer.
(d) Prior to October 1,2000 Vesting Service shall be computed in accordance
with the terms of the Plan as then constituted.
6.4 AMENDMENT OF VESTING SCHEDULE
If at any time this Plan's vesting schedule is amended, then each Participant
with at least three (3) years of service shall have his non-forfeitable
percentage computed under the Plan in accordance with the vesting schedule that
is most favorable to such Participant under either (a) the preamendment vesting
schedule or (b) the post amendment vesting schedule, provided that each
Participant's postamendment non-forfeitable percentage interest in and to his
Matching Account shall not be less than the preamendment percentage in Trust.
27
ARTICLE 7 - WITHDRAWALS WHILE STILL EMPLOYED
7.1 WITHDRAWAL OF AFTER-TAX CONTRIBUTIONS
A Participant may elect to withdraw all or part of h s After-Tax Account;
provided, however, that no more than two such withdrawals shall be made in any
Plan Year.
7.2 WITHDRAWAL OF BEFORE-TAX CONTRIBUTIONS AND ROLLOVER
CONTRIBUTIONS
(a) A Participant who has attained age 59-1/2 as of the effective date of any
withdrawal pursuant to this Section may elect to withdraw all or any part
of his Before-Tax Contributions or Rollover Contributions and the earnings
attributable thereto.
(b) A Participant who has not attained age 59-1/2 and who has withdrawn
the total amount available for withdrawal under Section 7.1 may elect to
make a withdrawal fkom his Before- Tax Account and earnings attributable
thereto through December 31, 1988, or Rollover Account, including all
earnings attributable thereto upon fkushing proof of financial hardship
satisfactory to the Benefits Committee or its designee. For purposes of
this paragraph, a distribution is on account of hardslup only if the
distribution is both made on account of an immediate and heavy financial
need of the Participant and is necessary to satisfy such financial need.
Such a withdrawal shall not exceed the amount required to meet the
immediate and heavy financial need created by the hardship and shall not
be reasonably available from other resources of the Participant. To the
extent a requested distribution is in excess of the amount required to
relieve the financial need or to the extent such need may be satisfied
from other resources that are reasonably available to the Participant,
the request for a hardship withdrawal distribution shall be denied.
A hardship withdrawal shall be deemed to be on account of an immediate and
heavy financial need of the Participant if the distribution is on account
of:
(i) medical expenses described in Section 213(d) of the Code
incurred by the Participant, his spouse, or any dependents of the
Participant (as defined in Section 152 of the Code); or funds
necessary for those persons to obtain medical care described in
Section 213(d) of the Code;
(ii) the purchase (excluding mortgage payments) of a principal
residence for the Participant;
(iii) payment of tuition, related educational expenses, and room and
board expenses for the next twelve months of post-secondary
education for the Participant, his or her spouse, children or
dependents and any other situation prescribed by the IRS pursuant to
Section 1.401(k)-1(d)(2)(iv)(C) of the Department of Treasury
Regulations;
28
(iv) payments necessary to prevent the eviction of the Participant
from a principal residence or foreclosure on the mortgage of the
Participant's principal residence.
(c) A request for a hardship withdrawal shall be deemed by the Benefits
Committee or its designee as necessary to satisfy an immediate and heavy
financial need of a Participant if the following requirements are
satisfied:
(i) the distribution is not in excess of the amount of the immediate
and heavy financial need of the Participant, including any amounts
necessary to pay any federal, state, or local income taxes or
penalties reasonably anticipated as a result of the withdrawal in
accordance with written procedures adopted by the Benefits
Committee; and
(ii) the Participant has obtained all distributions, other than
hardshp distributions, and all nontaxable loans currently available
under all plans maintained by the Company.
In addition to the foregoing criteria, the determination of whether a
Participant has an immediate and heavy financial need and whether the
distribution is necessary to satisfy such financial need shall be made by
the Benefits Committee or its designee in accordance with uniform and
nondiscriminatory standards on the basis of all relevant facts and
circumstances.
If a hardship withdrawal is made, the Participant may not make any
contributions pursuant to the Plan for a period of six months commencing
with the Valuation Date following the date of the hardship withdrawal.
(d) A Participant may not make more than two withdrawals in any Plan Year
under this Section 7.2.
7.3 MATCHING ACCOUNT
Amounts in the Matching Account may not be withdrawn while the Participant is an
Employee of the Employer or an Affiliated Employer. However, with respect to an
individual who was a participant in the Curtis Industries, Inc. 401(k)
Retirement Savings Plan, at such time as the Participant shall have attained
the age of 59-1/2 years, the Benefits Committee, at the election of the
Participant, shall direct the Trustee to distribute all or a portion of the
amount then credited to the Merged Asset Account attributable to Curtis
employer matching contributions made prior to April 1,2001. Any such withdrawal
shall be permitted once per Plan Year. In the event that the Benefits Committee
makes such a distribution, the Participant shall continue to be eligible to
participate in the Plan on the same basis as any other Employee. Any
distribution made pursuant to this Section shall be made in a manner consistent
with Article 8, including, but not limited to, all notice and consent
requirements of Section 41 1(a)(11) of the Code and the Regulations thereunder.
7.4 PAYSOP ACCOUNT
Amounts in the PAYSOP Account may not be withdrawn while the Participant is an
Employee of the Employer or an Affiliated Employer.
29
7.5 PROCEDURES AND RESTRICTIONS
To make a withdrawal, a Participant shall give written notice prior to the end
of a calendar quarter. A withdrawal shall be made as of the applicable
Valuation Date and the amount of such withdrawal shall be allocated among all
of his Funds in proportion to the value of the Participant's Accounts from
which the withdrawal is made as of the date of the withdrawal. With respect to
a withdrawal from the Company Stock Fund, the Participant shall indicate his
election to receive (i) shares of Common Stock, or (ii) cash, in an amount
equal to the market value of the shares of Common Stock to be withdrawn on the
last business day of the applicable calendar quarter. All payments of Common
Stock or cash to a Participant under this Article 7 shall be made within 60
days or as soon thereafter as administratively practicable following the last
day of the applicable calendar quarter. The account hierarchy for withdrawals
is as follows: first, the After-Tax Account attributable to employee After-Tax
Contributions; second, the After-Tax Account attributable to dividends on
shares purchased with the employee After-Tax Contributions; and third, the
Before-Tax Account.
7.6 GUARANTEE ACCOUNT
In the event that a Participant elects to make a withdrawal prior to
termination of employment pursuant to this Article 7 and the Benefits Committee
determines that such withdrawal is a final withdrawal of all Accounts by such
Participant, then the Participant shall be entitled to receive a distribution
of the excess, if any, in his Guarantee Account over the amount of his
withdrawal invested in the Company Stock Fund, determined in accordance with
Section 8.1(b) hereof, except that such determination shall be made only with
respect to that portion of his Guarantee Account attributable to the number of
shares of Common Stock that were withdrawn as his final withdrawal (or the
number of shares of Common Stock for which a cash equivalent final withdrawal
was made). No payment respecting a Participant's Guarantee Account shall be
made in connection with a withdrawal prior to a Participant's termination of
employment except in the situation where such withdrawal is deemed to be a
final withdrawal of all amounts in his Before-Tax Account by the Benefits
Committee.
30
ARTICLE 8 - DISTRIBUTION OF ACCOUNTS UPON TERMINATION OF EMPLOYMENT
8.1 AMOUNT OF PAYMENT; PAYMENT IN COMPANY STOCK
(a) Upon termination of employment for any reason, a Participant may
elect to have the vested portion of his Accounts, without regard to the
Participant's Guarantee Account, distributed in cash as set forth in
Section 8.2; provided that any Participant (or such Participant's
beneficiary) may also elect to take payment of the balance in his
Accounts in whole shares of Company Common Stock, with any fractional
shares being distributed in cash. The amounts in each Account shall be
determined as of the Valuation Date on or next succeeding the date of
his termination and completion of a distribution request form or in
accordance with such uniform and nondiscriminatory procedures
established by the Benefits Committee. Absent such an election a
Participant who is entitled to payment of benefits and whose total
vested account balance exceeds $5,000 ($3,500 for distributions made
prior to January 1, 1998) may receive his benefits as soon as practical
after the Valuation Date next following his 65th birthday or on any
earlier Valuation Date elected by the Participant. For purposes of the
foregoing sentence, the value of a Participant's vested account balance
shall be determined without regard to that portion of the account
balance that is attributable to rollover contributions (and earnings
allocable thereto) within the meaning of Sections 402(c), 403(a)(4),
403(b)(8), 408(d)(3)(A)(ii), and 457(e)(16) of the Code. If the value of
the Participant's vested account balance as so determined is $5,000 or
less, the Plan shall distribute the Participant's entire vested account
balances as of the Valuation Date on or next succeeding the date of his
termination.
(b) Notwithstanding the provisions of Section 8.1(a), if on the
applicable Valuation Date under Section 8.1(a), the aggregate Value of
the Participant's Company Stock Account attributable to (i) Before-Tax
Contributions and After-Tax Contributions made after May 1, 1988 and
prior to April 1, 2001 and (ii) to Prior Contributions transferred to
the Company Stock Fund pursuant to Section 4.2 is less than the value of
the Participant's Guarantee Account, then the difference shall be paid
to the Participant in cash; provided, that, to the extent such
difference is paid from the Plan, the Participant may elect to take
payment of such difference in whole shares of Common Stock, with any
fractional shares being distributed in cash. The amount described in the
immediately preceding sentence shall be paid either from the Plan, in
which case the Employer shall to the extent permitted by law, make a
special contribution to the Plan for such purpose, or directly to the
Participant by the Company.
8.2 METHODS OF DISTRIBUTION
(a) All distributions shall be made in one lump sum as soon after the
applicable Valuation Date as practical; provided, however, that upon
termination of employment on account of retirement on or after age 55 or
Disability, a Participant may, by written request to the Benefits
Committee, elect to receive in lieu of such lump sum a distribution in
the form of payments in 5, 10 or 15 annual installments; provided,
however, that the installment period selected must not exceed the life
expectancy of the Participant and any designated
31
beneficiary. Except with respect to the Merged Asset Account of a
former Curtis Industries, Inc. 401(k) Retirement Savings Plan
Participant, in no event shall any distribution under the Plan be made
in the form of a single life or a joint and survivor annuity.
Unless otherwise elected by the Participant, payment of a Participant's
benefits shall commence on or about 60 days after the Valuation Date
coincident with or next following the latest of (i) his termination of
employment with the Company (ii) the determination of his Disability, or
(iii) attaining age 65. The amount of each installment payment shall be
equal to the Participant's total vested Account balance divided by the
number of payments remaining in the installment period. In the case of
an election of an installment distribution, the Participant's Accounts
shall continue to be administered as part of the funds of the Plan,
participating in earnings and realized and unrealized gains, and subject
to losses and expenses. A Participant who has elected an installment
distribution may at any time elect to receive the remaining balance if
his Account in either (i) a lump sum or (ii) a payment which is larger
than the payment which would otherwise be made and which is in an amount
at least equal to 20% of the remaining balance in his Accounts. Upon the
death of a participant who elected an installment distribution the
remaining balance in his Accounts shall be payable to his beneficiary in
a lump sum.
(b) For Plan Years commencing prior to 1989 and for Plan Years
commencing after 1996 - In the case of a Participant who is a 5% owner
of the Company's stock (as defined in Section 416 of the Code), the
distribution of the balances in all his Accounts must commence not later
than April 1st of the year following the year in which he attains 70
1/2; and in the case of a Participant other than a 5% owner, the
distribution of the balances in all his Accounts must commence not later
than the first day of April following the later of (A) the calendar year
in which he attains 70 1/2, or (B) the calendar year in which he retires.
(c) For Plan Years commencing after 1988 and before 1997 - With respect
to each Participant, the distribution of the balances in all his
Accounts must commence not later than April 1st following the calendar
year in which a Participant attains age 70 1/2.
8.3 BENEFICIARY
In the event of a Participant's death, all amounts payable pursuant to Section
8.1 or any remaining funds in the Accounts of a Participant who has elected the
installment distribution method under Section 8.2 shall be paid in one lump sum
to the Participant's spouse, if any, or to such other person as may have been
designated as the beneficiary by the Participant; provided, however, that no
beneficiary designation other than a spouse shall be effective with respect to
a Participant who has been married for at least the full year immediately prior
to the date of death unless the spouse consents in writing to the selection of
another beneficiary, acknowledges the effect of such election, and said
election is witnessed by a notary public or a representative of the Benefits
Committee specifically designated by said Benefits Committee. In the absence of
a spouse or designated beneficiary the amounts payable shall be paid to the
Participant's estate.
8.4 FORFEITURES
32
If a Participant's employment is terminated prior to becoming 100% vested in
his Matching Account, such Participant's interest shall be forfeited
immediately and the value thereof shall be applied to reduce future Company
Contributions in accordance with applicable Treasury Regulations. If the
Participant is reemployed by an Employer prior to incurring five consecutive
one-year breaks in service, the value of such forfeiture, as of the date his
employment terminated, shall be restored as soon as administratively feasible
following his reemployment.
8.5 DISTRIBUTION OF PAYSOP ACCOUNTS
Notwithstanding anything provided to the contrary herein, no Shares allocated
to a Participant's PAYSOP Account may be distributed from that Account before
the end of the 84th month beginning after the month in which such Shares were
allocated to such Participant's account in the PAYSOP. The preceding sentence
shall not apply in the case of:
(a) death, Disability, separation from service, or termination of the Plan;
(b) a transfer of a Participant to the employment of an acquiring
employer from the employment of the Employer in the case of a sale to
the acquiring corporation of substantially all of the assets used by the
Employer in a trade or business conducted by the Employer; or
(c) a disposition of an Employer's interest in a subsidiary when the
Participant continues employment with such subsidiary;
(d) any distribution required under Section 401(a)(9) of the Code.
8.6 DIRECT ROLLOVER DISTRIBUTIONS
Notwithstanding any provision of the Plan to the contrary, if any distribution
to a Distributee (i) is made on or after January 1, 1993, (ii) totals $200 or
more, and (iii) constitutes an Eligible Rollover Distribution, the Distributee
may elect on a form provided by the Benefits Committee to have all or part of
such Eligible Rollover Distribution paid in a direct rollover to an Eligible
Retirement Plan selected by the Distributee. For this purpose, a Distributee,
an Eligible Rollover Distribution, and an Eligible Retirement Plan shall be
defined as follows:
(a) Distributee includes an Employee or former Employee. In addition,
the Employee's or former Employee's surviving Spouse and the Employee's
or former Employee's Spouse or former Spouse who is the alternate payee
under a qualified domestic relations order, as defined in Section 414(p)
of the Code, are Distributees with regard to the interest of the Spouse
or former Spouse.
(b) Eligible Rollover Distribution means any distribution of all or any
portion of the balance to the credit of a Distributee, except that an
Eligible Rollover Distribution does not include any distribution that is
one of a series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life expectancy) of the
Distributee or the joint lives (or joint life expectancies) of the
Distributee and the Distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent
such
33
distribution is required under Section 401(a)(9) of the Code; and the
portion of any distribution that is not includable in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities). A withdrawal from the
Before-Tax Account under Section 7.2(b) made after December 31, 1998 is
not an Eligible Rollover Distribution.
(c) Eligible Retirement Plan means a plan described below:
(i) an individual retirement account described in Section 408(a) of the
Code;
(ii) an individual retirement annuity (other than an endowment contract)
described in Section 408(b) of the Code;
(iii) a qualified defined contribution plan and exempt trust described in
Sections 401(a) and 501(a) of the Code respectively, the terms of
which permit the acceptance of rollover contributions;
(iv) an annuity plan described in Section 403(a) of the Code;
(v) an annuity contract described in Section 403(b) of the Code; or
(vi) an eligible plan under Section 457(b) of the Code which is
maintained by a state, political subdivision of a state, or any
agency or insrumentality of a state or political subdivision of a
state and which agrees to separately account for amounts
transferred into such plan from this Plan.
If an election is made to have only a part of an eligible rollover
distribution paid in a direct rollover, the amount of the direct rollover
must total $500 or more.
Direct rollovers shall be accomplished in accordance with procedures
established by the Committee, including, in the case of distributions not
subject to the consent requirements of Section 411(a)(11), procedures for
affirmatively waiving the minimum notice period described in Income Tax
Regulation 1.402(c)-2T.
The procedures established by the Committee shall be made in accordance
with the rules set forth in Income Tax Regulation 1.401(a)(31)-1T.
34
ARTICLE 9 - ADMINISTRATION OF PLAN
9.1 APPOINTMENT OF BENEFITS COMMITTEE
The general administration of the Plan and the responsibility for carrying out
the provisions of the Plan shall be placed in the Benefits Committee appointed
from time to time by the Board of Directors of the Company to serve at the
pleasure of the Board of Directors. Any person who is appointed a member of the
Benefits Committee shall signify his acceptance by filing written acceptance
with the Board of Directors and the Secretary of the Benefits Committee. Any
member of the Benefits Committee may resign by delivering his written
resignation to the Board of Directors and the Secretary of the Benefits
Committee. A member of the Benefits Committee may be a Participant in the Plan.
9.2 OPERATION OF BENEFITS COMMITTEE
(a) The members of the Benefits Committee shall elect a chairman from their
number and a secretary who may be but need not be one of the members
of the Benefits Committee; may appoint from their number such
subcommittees with such powers as they shall determine; may authorize
one or more of their number or any agent to execute or deliver any
instrument or make any payment on their behalf; may retain counsel,
employ agents and provide for such clerical, accounting, and consulting
services as they may require in carrying out the provisions of the Plan;
and may allocate among themselves or delegate to other persons all or
such portion of their duties under the Plan, as they, in their sole
discretion, shall decide.
(b) The Benefits Committee shall hold meetings upon such notice, at such
place or places, and at such time or times as it may from time to time
determine. Any act which the Plan authorizes or requires the Benefits
Committee to do may be done by a majority of its members. The action of
that majority expressed from time to time by vote at a meeting or in
writing without a meeting shall constitute the action of the Benefits
Committee and shall have the same effect for all purposes as if assented
to by all members of the Benefits Committee at the time in office. Any
member of the Benefits Committee who is a Participant shall not vote on
any question relating exclusively to himself.
(c) No member of the Benefits Committee shall receive any compensation from
the Plan for his services as such.
9.3 GENERAL DUTIES OF THE BENEFITS COMMITTEE
(a) Subject to the limitations of the Plan, the Benefits Committee from time
to time may establish rules for the administration of the Plan and the
transaction of its business.
(b) The Benefits Committee shall interpret the Plan and its determination of
all questions arising under the Plan shall be conclusive upon all
Participants and all other interested or affected parties.
35
(c) The Benefits Committee shall maintain, or cause to be maintained,
records showing the individual balances in each Participant's Accounts.
However, maintenance of those records and Accounts shall not require any
segregation of the funds of the Plan.
(d) The Benefits Committee shall act as the named fiduciary responsible for
communications with Participants as needed to maintain Plan compliance
with ERISA Section 404(c), including but not limited to the receipt and
transmitting of Participant's directions as to the investment of their
account(s) under the Plan and the formulation of policies, rules, and
procedures pursuant to which Participants may give investment
instructions with respect to the investment of their accounts.
9.4 CLAIMS PROCEDURE
A Participant or beneficiary may claim any benefits due under this Plan by
mailing or delivering to the Benefits Committee a written application for
benefits, outlining the nature, amount and form of benefits due. If a claim for
benefits by a Participant or beneficiary is wholly or partially denied, written
notice of the denial shall be furnished to the claimant within a reasonable
period of time by the Benefits Committee. The notice shall contain the specified
reason for denial, reference to the Plan provisions on which denial is based, a
description of any additional material or information necessary to perfect the
claim, including an explanation of why such information is necessary, and an
explanation of the claims review procedure under this Plan. Such notice shall
be written in nontechnical language calculated to be understood by the claimant.
If notice of denial is not furnished and the claim is not granted within a
reasonable period of time, the claim shall be deemed denied for the purpose of
proceeding to the review stage hereinafter described.
A claimant may appeal a denial of a claim to the Benefits Committee. In making
such appeal, the claimant or his duly authorized representative shall, within a
period of 60 days after receipt of denial, request a review by written
application to the Benefits Committee, and may review pertinent documents and
submit, in writing, issues and comments. The Benefits Committee shall make a
decision on the appeal with 60 days after the request for review, unless
special circumstances require an extension of time in which case a decision
shall be rendered no later than 120 days after the request for review. The
decision shall include specific reasons for the decision and specific
references to Plan provisions on which the decision is based, and it shall be
communicated in writing to the Participant or beneficiary whose claim has been
denied in whole or in part.
9.5 INDEMNITY
The Benefits Committee and the individual members thereof shall be indemnified
by the Company against any and all liabilities arising by reason of any act or
failure to act made in good faith pursuant to the provisions of the Plan,
including expenses reasonably incurred in the defense of any claim relating
thereto.
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9.6 PLAN EXPENSES
All expenses of administration shall be paid out of the Trust Fund unless paid
by the Employer. Such expenses shall include any expenses incident to the
functioning of the Benefits Committee, or any person or persons retained or
appointed by the Benefits Committee incident to the exercise of its duties
under the Plan, including, but not limited to, fees of accountants, counsel,
investment managers, agents (including nonfiduciary agents) appointed for the
purpose of assisting the Benefits Committee or the Trustee in carrying out the
instructions of Participants as to the directed investment of their accounts
and other specialists and their agents, and other reasonable costs of
administering the Plan. Until paid, the expenses shall constitute a liability
of the Plan.
37
ARTICLE 10 - LOANS
10.1 LOAN LIMITS
(a) After an Employee has been a Participant for two years, he may borrow
from the Plan an amount which, when added to all loans hereunder and to
all loans outstanding from any other plans of the Employer and all
Affiliated Employers which are qualified under Section 401(a) of the
Code, does not exceed the lesser of:
(i) $50,000 (less the highest outstanding loan balance in the 12
months preceding any loan) or
(ii) 50% of the present value of such Participant's vested interest
in his Accounts.
(b) Loans shall not be made available to Highly Compensated Employees (as
defined in Section 414(q) of the Code) in an amount greater than the
amount made available to other Employees. The amount in a Participant's
PAYSOP Account shall be taken into account in determining the amount of
any loan that may be permitted under this Section 10.1; provided,
however, that no portion of any loan to a Participant may be made from
amounts in such Participant's PAYSOP Account.
(c) For purposes of this Section 10.1, a Participant's service with an
entity acquired by Barnes Group, Inc. prior to April 1, 2001 shall be
considered as participation in the Plan.
10.2 INTEREST
All loans shall bear a reasonable rate of interest as established by the
Benefits Committee in a nondiscriminatory manner.
10.3 TERM
Any loan by its terms must require that repayment (principal and interest) be
amortized in level payments, not less frequently than quarterly, over a period
not extending beyond five years from the date of the loan, provided, however,
that any loan shall be repaid (or treated as a distribution) upon the
Participant's termination of employment for any reason.
10.4 SECURITY
Loans must be evidenced by written notes and must be adequately secured. In the
event of default, foreclosure on the note and attachment of security will not
occur until a distributable event occurs in the Plan.
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10.5 FREQUENCY/MINIMUM AMOUNTS
A loan may be taken out no more than once in any calendar year, and a
Participant may have no more than three loans outstanding at one time. Once a
loan has been repaid, at least six months must elapse before another loan can
be granted. The minimum loan is $1,000.
10.6 FEES
A Participant who borrows from the Plan, in accordance with this Article 10,
shall be charged a loan origination fee in an amount equal to the amount
charged by the Company's recordkeeper to administer such loan. Such fee shall
be calculated at the inception of each new loan under the Plan and shall be
included as part of the amount borrowed.
10.7 PARTICIPANT LOAN PROGRAM
The Benefits Committee shall establish a Participant Loan Program contained in
a separate written document which, when properly executed, shall be
incorporated by reference and made a part of the Plan. Such Participant Loan
program shall include, but need not be limited to the following:
(i) the identity of the person or position authorized to administer
the Participant Loan Program;
(ii) a procedure for applying for loans
(iii) the basis on which loans will be approved or denied;
(iv) limitations, if any, on the types and amounts of loans offered;
(v) the procedure for determining a reasonable rate of interest;
(vi) the types of collateral which may secure a Participant loan; and
(vii) events constituting default and the steps that will be taken to
preserve Plan assets.
The Participant loan program may be modified or amended in writing from time to
time without the necessity of amending the Plan.
39
ARTICLE 11 - TRUSTEE
11.1 TRUST
The assets of the Plan shall be held in trust by the Trustee or Trustees
appointed pursuant to the provisions of Article 11.
11.2 APPOINTMENT OF TRUSTEE
Prior to May 1, 2001, the Benefits Committee shall be the Trustee with respect
to assets derived from contributions to the Plan prior to May 1, 1988 which
were not transferred to the Company Stock Fund pursuant to Section 4.2 hereof,
and assets removed from the Company Stock Account pursuant to Section 5.6
hereof. With respect to all other Plan assets, the Benefits Committee by
majority vote shall appoint a trustee or trustees (hereinafter referred to as
the "ESOP Trustee"). Any trustee may be removed with or without cause by the
Benefits Committee or by the chief executive officer of the Company. Each
trustee appointed by the Benefits Committee shall execute an agreement in a
form prescribed by the Benefits Committee under which the Trustee shall accept
his appointment and agree to be bound by the provisions of this Plan. The
succeeding Sections 11.3 through 11.14 shall apply only to the Benefits
Committee as Trustee of the aforementioned assets prior to May 1, 2001.
11.3 DUTIES OF TRUSTEE
The Trustee shall receive contributions made pursuant to the Plan and shall
invest them along with the income therefrom and without distinction between
principal and income in Investment Funds as designated by the Benefits
Committee and the Participants pursuant to Article 5 hereof; provided however,
that the Trustee may also direct that such assets of the Plan may, pending
their long term investment or distribution, be held in cash or cash equivalents
or invested in short-term securities issued or guaranteed by the United States
of America or any agency or instrumentality thereof or any other investments
of a short-term nature including corporate obligations or participation
therein.
11.4 TRANSFER AND DISBURSEMENT OF FUNDS
The Trustee shall transfer funds between Investment Funds according to the
direction of the Participants as permitted by Article 5 hereof, and shall
disburse Funds in a manner consistent with the other provisions of this Plan.
11.5 INVESTMENT PERFORMANCE
The investment performance of the Funds described in Section 5.5 hereof shall
be evaluated and monitored by the Trustee. The Trustee may appoint one or more
independent investment managers to direct the Trustee in the management of all
or part of the investment and reinvestment of such Funds.
40
11.6 GENERAL POWERS OF TRUSTEE
Subject to the limitations of Article 5 and Section 11.2, the Trustee is
authorized and empowered in his discretion but not by way of limitation:
(a) to sell, exchange, convey, transfer, lease, or otherwise dispose of,
and also to grant options with respect to, any property whether real
or personal, at any time held by him, and any sale may be made by
private contract or by public auction, and for cash or upon credit, or
partly for cash and partly upon credit, as the Trustee may deem best,
and no persons dealing with the Trustee shall be bound to see to the
application of the purchase money or other proceeds or to inquire into
the validity, expediency or propriety of any such disposition;
(b) to acquire any real or personal property as the result of any
foreclosure, liquidation or other salvage of any investment previously
made by the Trustee;
(c) to compromise, compound or settle any debt or obligation due to or from
them as Trustee hereunder and to reduce the rate of interest on, to
extend or otherwise modify, or to foreclose upon default or otherwise
enforce any such obligation;
(d) to vote in person or by general or limited proxy on any stocks, bonds
or other securities held by the Trustee; to exercise any options
appurtenant to any stocks, bonds or other securities for the conversion
thereof into other stock, bonds or securities, or to exercise any
rights to subscribe for additional stocks, bonds or other securities
and to make any and all necessary payments therefor; to join in, or to
dissent from, or to oppose the reorganization, recapitalization,
consolidation, liquidation, sale or merger of corporations or
properties in which the Trustee may be interested as Trustee, upon such
terms and conditions as they may deem wise;
(e) to make, execute, acknowledge and deliver any and all deeds, leases,
assignments and other instruments;
(f) to borrow or raise monies for the purpose of the Trust to the extent
that the Trustee shall deem desirable or proper upon such terms and
conditions as the Trustee may deem desirable or proper, and for any
amounts so borrowed to issue their promissory notes as Trustee and to
secure the repayment thereof by mortgaging or pledging all or any part
of the Fund; and no person dealing with the Trustee shall be bound to
see to the application of the money lent or to inquire into the
validity, expediency or propriety of any such borrowing;
(g) to cause any investments from time to time held by the Trustee to be
registered in or transferred into, their name as Trustee or in the name
of their nominee or nominees, or in the name of the Trust hereby
created, or to retain them unregistered or in form permitting
transferability by delivery, but the books and records of the Trustee
shall at all times show that all such investments are part of the Fund;
any investments from time to time held by the Trustee may be
transferred by or from the Trustee, upon the assignment by any one of
the Trustees then appointed and qualified as a Trustee under this
Agreement;
41
(h) to use the services of such banking institution or institutions, or
any savings and loan associations regardless of whether the funds thereof
are fully insured, as the Trustee may deem advisable, for the deposit or
safekeeping of any funds or securities at any time in the Fund, including
the deposit of cash in a noninterest bearing account;
(i) to transfer at any time and from time to time, all or any part of an
Investment Fund to, or withdraw the same from, any pooled investment fund
or group or collective trust invested in similar types of securities,
maintained by a bank or trust company supervised by a state or federal
agency, which has been determined by the Internal Revenue Service to be a
qualified trust or fund exempt from federal income tax under Section
501(a) of the Code and which has been established to permit separate
pension and profit sharing trusts qualified under Section 401(a) of the
Code to pool some or all of their funds for investment purposes; to the
extent the Fund is invested in such a pooled fund or group or collective
trust, the terms of the instrument establishing such pooled fund or group
or collective trust are made a part of this Agreement as fully as if set
forth at length herein; the mingling of assets of this Trust with assets
of other qualified participating trusts in such pooled funds or group or
collective trusts is specifically authorized;
(j) to enter into a group annuity contract issued by an insurance company
under which all or any part of the Fund may be invested; and
(k) to do all acts whether or not expressly authorized herein which he
may deem necessary or proper for the protection of the property held
hereunder.
11.7 PROHIBITED TRANSACTIONS
Notwithstanding the foregoing Section 11.6, unless a statutory or
administrative exemption is available, the Trustee shall not engage in any
transaction which he knows or should know constitutes a direct or indirect:
(a) sale, exchange or leasing of any property between the Fund and a party
in interest;
(b) lending of money or other extension of credit between the Fund and a
party in interest, other than the loans permitted by Article 10;
(c) furnishing of goods, services or facilities between the Fund and a
party in interest;
(d) transfer to, or use by or for the benefit of, a party in interest
of any assets of the Fund; or
(e) acquisition of any security issued by the Employer or an affiliate of
the Employer or real property leased to the Employer or an affiliate
of the Employer (other than as specifically contemplated by this Plan).
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11.8 TITLE TO ASSETS
All right, title and interest in and to the assets held in trust hereunder
shall at all times be vested in the qualified and acting Trustee, subject to
their right to select a nominee or nominees to hold legal title hereto, and
neither the Employer nor any Participant shall have any right, title or
interest in said assets except to have the trust administered in accordance
with the Plan.
11.9 EXPERTS
The Trustee may consult with legal counsel (who may be counsel employed by the
Employer) concerning any question which may arise with reference to their
powers, rights, duties and obligations under this Agreement, and the opinion of
such counsel shall, to the extent permitted by applicable law, be full and
complete protection with respect to any action taken or suffered by the
Trustee(s) hereunder in good faith and in accordance with the opinion of such
counsel. The Trustee may employ such counsel, accountants and other agents as
they may deem advisable. The Trustee may charge the fees of such counsel,
accountants and other agents, and any other expenses against the Fund to the
extent that they are not paid by the Employer.
11.10 RECORDS
The Trustee shall keep accurate and detailed accounts of all their investments,
receipts, disbursements, and other transactions hereunder and all accounts,
books, and records related thereto shall be open to inspection and audit at all
reasonable times by the Employer or their authorized representatives.
Within ninety (90) days after the close of each fiscal year, or any termination
of the duties of the Trustee(s), the Trustee(s) shall render an account of
their acts and transactions as Trustee hereunder. In the absence of the filing
in writing with the Trustee by the Employer or exceptions or objections to any
such account within sixty (60) days, the Employer shall be deemed to have
approved such account; and in such case or upon the written approval of the
Employer of any such account, the Trustee(s) shall, to the maximum extent
permitted by ERISA, be released, relieved, and discharged with respect to all
matters set forth in such account as though such account had been settled by
the decree of a court of competent jurisdiction in an action or proceeding in
which the Employer or Benefits Committee, all other persons having fiduciary
responsibility with respect to the Trust and all persons having any beneficial
interest in the Trust Fund were parties.
11.11 LIABILITY
(a) To the extent permitted by applicable law, no Trustee shall be
personally liable by virtue of any contract, agreement, bond or other
instrument made or executed by him as Trustee or on his behalf as
Trustee. However, a Trustee shall be liable for his failure, if any,
to meet any of the standards of conduct set forth in this agreement
or as provided below in Subsection (b).
(b) Any Trustee shall not be liable for an act or omission of another
person in carrying out any fiduciary responsibility where such
fiduciary responsibility is allocated to such other person
43
by this Agreement or pursuant to a procedure established under this
Agreement except to the extent that:
(i) such Trustee participated knowingly in, or knowingly undertook
to conceal, an act or omission of such other person, knowing
such act or omission to be a breach of fiduciary
responsibility;
(ii) such Trustee, by his failure to comply with Section 404(a)(l)
of ERISA in the administration of his specific responsibility
which gives rise to his status as a fiduciary, has enabled such
other person to commit a breach of fiduciary responsibility;
(iii) such Trustee has knowledge of a breach of fiduciary
responsibility by such other person, unless he makes reasonable
efforts under the circumstances to remedy the breach; or
(iv) such Trustee has violated his duties under Section 404(a)(l)
of ERISA:
(A) with respect to the allocation of fiduciary responsibilities
among named fiduciaries or the designation of persons other
than named fiduciaries to carry out fiduciary responsibilities
under this Agreement;
(B) with respect to the establishment or implementation of
procedures for allocating fiduciary responsibilities
among named fiduciaries or for designating persons other
than named fiduciaries to carry out fiduciary
responsibilities under this Agreement; or
(C) in continuing the allocation of fiduciary
responsibilities among named fiduciaries or the
designation of persons other than named fiduciaries to
carry out fiduciary responsibilities under this
Agreement.
11.12 STANDARD OF CARE
The Trustee shall discharge its duties hereunder with the care, skill, prudence
and diligence under the circumstances then prevailing that a prudent person
acting in a like capacity and familiar with such matters would use in the
conduct of a like enterprise.
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11.13 ASSETS FOR EXCLUSIVE BENEFIT OF PARTICIPANTS
The assets of the Plan held in trust hereunder shall never inure to the benefit
of the Employer and shall be held for the exclusive purposes of providing
benefits to the Participants or their beneficiaries under the Plan and of
defraying reasonable expenses of administering the Plan.
11.14 TERMINATION
Any distribution of Trust Fund assets other than those held in the ESOP
Suspense Account after partial termination of the Plan, may be made at any time
and from time to time in whole or in part to the extent that no discrimination
in value results, in cash, in securities or other assets in kind, as the
Trustee may determine. Upon the termination of the Plan in its entirety the
ESOP Trustee shall:
(a) pay any and all expenses chargeable against the ESOP component of the
Plan;
(b) determine, in accordance with the provisions hereof, the balance in
each Participant's Accounts;
(c) repay the ESOP Loan(s), as the ESOP Trustee and the creditor(s)
shall agree and in the case of sale of Shares held in the ESOP
Suspense Account, allocate to each participant that portion of the
remaining balance of the proceeds which is determined by multiplying
such remaining balance by a fraction, the numerator of which is the
Participant's Account balance as the date of such termination, and the
denominator of which is the aggregate Account balances of all
Participants in the Plan as of such date; and
(d) pay over to each Participant, in accordance with the provisions of
section 403(d)(l) of ERISA and the provisions hereof, the balance in
his Accounts, and
(e) continue to maintain the Trust and Plan to pay benefits in accordance
with the provisions hereof except that no Employee shall become a
Participant of the Plan or its ESOP component, as the case may be,
on or after the effective date of such termination.
45
ARTICLE 11A - ACQUISITION OF SHARES WITH ESOP LOANS;
CERTAIN ALLOCATION RULES
11A.1 TERMS OF ESOP LOAN
Effective July 28, 1989 the ESOP Trustee is empowered in its sole discretion
(1) to borrow funds (including a borrowing from the Company or any other of the
Affiliated Employers) and (2) to use such funds in accordance with Section
11A.2 hereof to acquire Company Stock to fund Before-Tax Contributions and
Matching Allocations in respect of periods on and after October 1, 1989, or to
repay a prior ESOP Loan, subject to the following conditions:
(a) An ESOP Loan shall be primarily for the benefit of the
Participants and their Beneficiaries.
(b) The terms of each ESOP Loan must, at the time the loan is made,
be at least as favorable to the Trust as the terms of a comparable
loan resulting from arm's length negotiations between independent
parties.
(c) Each ESOP Loan shall be for a specific term, shall bear a
reasonable rate of interest, and shall be without recourse against
the Trust or the Participants' Accounts, except that an ESOP Loan
may be guaranteed by the Company and may be secured by a pledge of
the Shares acquired with the proceeds of the ESOP Loan (or acquired
with the proceeds of a prior ESOP Loan which is being refinanced).
(d) No other Trust assets may be pledged as collateral for an ESOP
Loan, and no lender shall have recourse against Trust assets other
than (i) collateral given for the ESOP Loan, (ii) amounts held under
the ESOP Loan Payment Accumulation Account and (iii) earnings
attributable to such collateral.
(e) An ESOP Loan shall not be payable on demand except in the event
of default. In the event of default, the value of Plan assets
transferred in satisfaction of the ESOP Loan shall not exceed the
amount of the default plus any applicable prepayment or similar
penalties or premiums.
(f) If the lender is a disqualified person within the meaning of
Section 4975(e)(2) of the Code, the ESOP Loan must provide for a
transfer of Trust assets on default only upon and to the extent of
the failure of the Trust to meet the payment schedule of the ESOP
Loan.
(g) Payments of principal and/or interest on any ESOP Loan shall be
made by the ESOP Trustee in accordance with Section 11A.5.
46
11A.2 ACQUISITION OF SHARES WITH PROCEEDS OF ESOP LOAN
The ESOP Loan proceeds shall be used by the ESOP Trustee within a reasonable
time after receipt to acquire Shares or to repay a prior ESOP Loan. In
acquiring Shares, the ESOP Trustee shall take all appropriate and necessary
measures to ensure that the Trust pays no more than "adequate consideration"
(within the meaning of Section 3(18) of ERISA) for such securities. All Shares
acquired with the proceeds of an ESOP Loan shall be placed in an ESOP Loan
Suspense Account established by the ESOP Trustee. To the extent required for
the purpose of pledging such Shares as collateral for the ESOP Loan, the Shares
held as collateral in the ESOP Loan Suspense Account may be physically
segregated from other Trust assets. Any pledge of Shares must provide for the
release of a portion of such Shares (in accordance with Section 11A.6 hereof)
not later than the end of the Plan Year with respect to which payments on the
ESOP Loan are made by the ESOP Trustee and for Shares so released to be
transferred as appropriate for allocation to Participants' Before-Tax and
Matching Accounts pursuant to the terms of the Plan.
11A.3 SHARES TO BE UNRESTRICTED
No Shares acquired with the proceeds of an ESOP Loan shall be subject to any
put, call or other option or any buy-sell or similar agreement while held by or
when distributed from the Trust, whether or not the Plan constitutes an
"employee stock ownership plan" within the meaning of Section 4975(e)(7) of the
Code at such time and whether or not the ESOP Loan has been repaid at such time.
11A.4 ESOP LOAN AMORTIZATION PAYMENTS
The Trustee shall transfer all dividends received on Shares acquired prior to
August 4, 1989 to the ESOP Loan Payment Accumulation Account to be used to
repay principal and interest on the ESOP Loan (including, to the extent
directed by the Benefits Committee, to make prepayments on such ESOP loan).
When dividends on shares allocated to a Participant's account are used to repay
principle and interest on the ESOP loan, Shares with a fair market value not
less than the amount of such dividend shall be allocated to the Participant's
account for the year in which such dividend would have been otherwise allocated
to the Participant's account. Dividends in excess of amounts used to make ESOP
Loan Amortization payments shall be used by the ESOP Trustee to purchase Shares
on the open market. To the extent directed by the Benefits Committee,
Before-Tax Contributions and Company Contributions shall either (i) be
transferred by the ESOP Trustee to the ESOP Loan Payment Accumulation Account
to be used to make ESOP Loan amortization payments, or (ii) be used by the ESOP
Trustee to purchase Shares on the open market. The Benefits Committee shall
ensure that sufficient amounts are transferred to the ESOP Loan Payment
Accumulation Account to make outstanding ESOP Loan amortization payments as
they become due.
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11A.5 ESOP LOAN PAYMENTS
To the extent necessary to make ESOP Loan amortization payments, funds in the
ESOP Loan Payment Accumulation Account shall be used in the following order of
priority:
(a) Dividends on Shares (allocated and unallocated) which were
acquired with the proceeds of an ESOP Loan and earnings thereon;
(b) Before-Tax Contributions that are allocated to the ESOP Loan
Payment Accumulation Account and earnings thereon;
(c) Company Contributions that are allocated to the ESOP Loan
Payment Accumulation Account and earnings thereon; and
(d) To the extent permitted by law, proceeds from the sale,
exchange, or disposition of Shares or other assets held in the ESOP
Loan Suspense Account and earnings thereon.
11A.6 RELEASE FROM ESOP LOAN SUSPENSE ACCOUNT
As of the beginning of each quarter, a number of Shares shall be released from
the ESOP Loan Suspense Account. Such number shall be determined as follows: the
number of Shares held in the ESOP Loan Suspense Account as of the end of the
preceding quarter shall be multiplied by a fraction, the numerator of which
shall be the amount of principal and interest paid for the current quarter, and
the denominator shall be the numerator plus the principal and interest to be
paid on all future amortization payments. The resulting number of Shares
divided by three shall be allocated as of the last day of each month during the
applicable quarter in satisfaction of the following obligations in the
following order of priority:
(a) In complete or partial satisfaction of the obligation to credit
Dividend Replacement Shares (as set forth in Section 11A.7(a)
hereof);
(b) In partial satisfaction of Matching Allocations (as described in
Section 3.3 hereof), but only to the extent the source of repayment
of the ESOP Loan consists of dividends described in Section 11A.7(b)
hereof;
(c) In complete or partial satisfaction of Before-Tax Contributions
(to the extent that the ESOP Loan amortization payment was made with
Before-Tax Contributions and Supplemental Contributions as described
in Section 3.1 hereof); and
(d) In complete or partial satisfaction of any remaining Matching
Allocations (as described in Section 3.3 hereof).
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11A.7 USE OF DIVIDENDS
(a) As of the end of any quarter in which a dividend is paid on
Shares which (i) were credited to Participants' Before-Tax and
Matching Accounts as of the record date for the payment of such
dividend and (ii) were acquired with the proceeds of an ESOP Loan,
the ESOP Trustee shall allocate to Participants' Before-Tax and
Matching Accounts, through Shares released from the ESOP Loan
Suspense Account or otherwise as described in Section 11A.4 hereof,
additional Shares ("Dividend Replacement Shares") having a Value
equal to the amount of such dividends and earnings thereon.
(b) Dividends on any Shares that were acquired with an ESOP Loan
(other than Shares described in paragraph (a) above) shall be used
to repay principal and interest on such ESOP Loan in partial
satisfaction of the Matching Allocation as provided in Section 3.3.
(c) Dividends on Shares not acquired with the proceeds of an ESOP
Loan shall be used to acquire additional Shares on the open market.
(d) Notwithstanding the foregoing, and in lieu thereof, Participants
may elect, in such manner as provided by the Benefits Committee, to
have any dividends paid for a Plan Year on Shares which were
credited to their Before-Tax and Matching Accounts as of the record
date(s) for the payment of such dividends be distributed to them
within 90 days of the end of such Plan Year.
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ARTICLE 12 - GENERAL PROVISIONS
12.1 EXCLUSIVE BENEFIT RULE
Except as otherwise provided in the Plan, no part of the corpus or income of
the funds of the Plan shall be used for, or diverted to, purposes other than
for the exclusive benefit of Participants and other persons entitled to
benefits under the Plan. No person shall have any interest in or right to any
part of the earnings of the Funds of the Plan, or any right in, or to, any part
of the assets held under the Plan, except as and to the extent expressly
provided in the Plan. Notwithstanding the foregoing, the Benefits Committee may
direct the Trustees to distribute benefits in accordance with the terms of any
qualified domestic relations order.
12.2 NONALIENATION
Except as required by an applicable law, no benefit under the Plan shall in any
manner be anticipated, assigned or alienated, and any attempt to do so shall be
void.
Notwithstanding any provision of this Section to the contrary, an offset to a
Participant's accrued benefit against an amount that the Participant is ordered
or required to pay the Plan with respect to a judgment, order or decree issued,
or a settlement entered into, on or after August 5, 1997, shall be permitted in
accordance with Code Sections 401(a)(13)(C) or (D).
12.3 CONDITIONS OF EMPLOYMENT NOT AFFECTED BY PLAN
The establishment of the Plan shall not confer any legal rights upon any
employee or other person for a continuation of employment nor shall it
interfere with the rights of the Employer to discharge any Employee and to
treat him without regard to the effect which that treatment might have upon him
as a Participant of the Plan.
12.4 FACILITY OF PAYMENT
If the Benefits Committee shall find that a Participant or other person
entitled to a benefit is unable to care for his affairs because of illness or
accident or is a minor, the Benefits Committee may direct that any benefit due
him, unless claim shall have been made for the benefit by a duly appointed
legal representative, be paid to his spouse, a child, a parent or other blood
relative, or to a person with whom he resides. Any payment so made shall be a
complete discharge of the liabilities of the Plan for that benefit.
12.5 INFORMATION
Each Participant or other person entitled to a benefit, before any benefit
shall be payable to him or on his account under the Plan, shall file with the
Benefits Committee the information that it shall require to establish his
rights and benefits under the Plan.
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12.6 CONSTRUCTION
The Plan shall be construed, regulated and administered under ERISA, as in
effect from time to time, and the laws of the State of Connecticut, except
where ERISA controls.
12.7 INABILITY TO LOCATE DISTRIBUTEE
Notwithstanding any other provisions of the Plan, in the event the Benefits
Committee cannot locate any person to whom a payment is due under the Plan, the
benefit in respect of which such payment is to be made shall be forfeited at
such time as the Benefits Committee shall determine in its sole discretion (but
in all events prior to the time such benefit would otherwise escheat under any
applicable state law); provided that such benefit shall be reinstated if such
person subsequently makes a valid claim for such benefit.
12.8 NAMED FIDUCIARIES
The named fiduciaries, who shall have authority to control and manage the
operation and administration of the Plan, are as follows:
(a) the Board, which shall have the sole right to appoint and remove
from office the members of the Benefits Committee, and the Trustee
and to amend or terminate the Plan:
(b) the Benefits Committee, which shall have the authority and
duties specified in Article 8 hereof; and
(c) the Trustee, who shall have the authority and duties specified
in the Plan and Trust Agreement.
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ARTICLE 13 - AMENDMENT, MERGER AND TERMINATION
13.1 AMENDMENT OF PLAN
The Board of Directors or, in the event the Board has so delegated its
authority, the Benefits Committee may amend the Plan in whole or in part at
anytime, and retroactively if deemed necessary or appropriate by a majority
vote of its members. However, no amendment shall make it possible for any part
of the Funds of the Plan to be used for, or diverted to, purposes other than
for the exclusive benefit of persons entitled to benefits under the Plan. No
amendment shall be made which has the effect of decreasing the balance of the
Accounts of any Participant or of reducing the nonforfeitable percentage of the
balance of the Accounts of a Participant below the nonforfeitable percentage
computed under the Plan as in effect on the date on which the amendment is
adopted or, if later, the date on which the amendment becomes effective.
13.2 MERGER OR CONSOLIDATION
The Plan may not be merged or consolidated with, and its assets or liabilities
may not be transferred to, any other plan unless each person entitled to
benefits under the Plan would, if the resulting plan were 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 been
terminated and such other plan and fund are qualified under Sections 401(a) and
501(a) of the Code.
13.3 ADDITIONAL PARTICIPATING EMPLOYERS
(a) If any company is or becomes a subsidiary of or associated with an
Employer, the Board of Directors may include the employees of that
subsidiary or associated company in the membership of the Plan upon
appropriate action by that company necessary to adopt the Plan. ln that
event, or if any persons become Employees of an Employer as the result of
acquisition of all or part of the assets or business of another company,
the Board of Directors shall determine to what extent, if any, previous
service with the subsidiary, associated or other company shall be
recognized under the Plan, but subject to the continued qualification of
the Trust for the Plan as tax-exempt under the Internal Revenue Code.
(b) Any subsidiary or associated company may terminate its participation
in the Plan upon appropriate action by it. In that event the funds of the
Plan held on account of Participants in the employ of that company, and
any unpaid balances of the Accounts of all Participants who have separated
from the employ of that company, shall be determined by the Benefits
Committee. Those funds shall be distributed as provided in Section 13.4 if
the Plan should be terminated, or shall be segregated by the trustees as a
separate trust, pursuant to certification to the trustees by the Benefits
Committee, continuing the Plan as a separate plan for the employees of
that company under which the Board of Directors of that company shall
succeed to all the powers and duties of the Board of Directors, including
the appointment of the members of the Benefits Committee.
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13.4 TERMINATION OF PLAN
The Board of Directors may terminate the Plan or completely discontinue
contributions under the Plan for any reason at any time. In case of termination
or partial termination of the Plan, or complete discontinuance of Employer
contributions to the Plan, the rights of affected Participants to their
Accounts under the Plan as of the date of the termination or discontinuance
shall be nonforfeitable. The total amount in each Participant's Accounts shall
be distributed, as the Benefits Committee shall direct, to him or for his
benefit or continued in trust for his benefit, except that in the case of
Before-Tax Contributions such Before-Tax Contributions shall be distributed
only in accordance with the provisions of Article 8.
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ARTICLE 14 - TOP-HEAVY PROVISIONS
14.1 APPLICATION OF ARTICLE
This Article 14 shall apply for Plan Years beginning after December 31, 1983.
14.2 DEFINITIONS
For purposes of this Article, the following definitions apply:
(a) Key Employee. The term "key employee" means any Employee or
former Employee (including any deceased Employee) who at any time
during the Plan Year that includes the determination date was an
officer of the Employer having Annual Compensation greater than
$130,000 (as adjusted under Section 416(i)(1) of the Code for Plan
Years beginning after December 31, 2002), a 5-percent owner of the
Employer, or a 1-percent owner of the Employer having "Annual
Compensation" of more than $150,000. For this purpose, "Annual
Compensation" means Annual Pay within the meaning of Section
415(c)(3) of the Code. The determination of who is a Key Employee
will be made in accordance with Section 416(i)(1) of the Code and
the applicable regulations and other guidance of general
applicability issued thereunder.
14.3 DETERMINATION OF TOP-HEAVY STATUS
As of each determination date, the Company shall compute the aggregate accrued
benefits of all Key Employees of the Company. If within the meaning of Section
416(g) of the Internal Revenue Code, the aggregate accrued benefits of all Key
Employees exceeds 60% of the aggregate accrued benefits of all Employees, then
the Plan will be deemed to be "top-heavy" for the Plan Year next following such
determination date (and in the case of the first Plan Year, for the Plan Year
ending with such determination date). In making this determination, there shall
be considered (i) all other qualified plans of the Company in which a Key
Employee is a Participant, and (ii) all other qualified plans of the Company
which enable this Plan or plans described in (i) above to meet the requirements
of Section 401(a)(4) or 410 of the Code, and (iii) at the option of the
Company, any other qualified plans of the Company which meet the requirements
of Section 401(a)(4) and 410 of the Code. If any other plans of the Company are
aggregated with this Plan as described in the preceding sentence, this Plan
shall be deemed to be top-heavy only if the aggregated plans are a "top-heavy
group," as defined in Section 416(g)(2)(B) of the Code. For purposes of
determining the present values of accrued benefits and the amounts of account
balances of Employees as of the determination date, the following rules shall
apply:
(a) The present values of accrued benefits and the amounts of
account balances of an Employee as of the determination date shall
be increased by the distributions made with respect to the Employee
under the Plan and any Plan aggregated with the Plan under Section
416(g)(2) of the Code during the 1-year period ending on the
determination date. The preceding sentence shall also apply to
distributions under a terminated plan which, had it not been
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terminated, would have been aggregated with the Plan under Section
416(g)(2)(A)(i) of the Code. In the case of a distribution made for
a reason other than separation from service, death, or disability,
this provision shall be applied by substituting "5-year period" for
"1-year period."
(b) The accrued benefits and accounts of any individual who has not
performed services for the Employer during the 1-year period ending
on the determination date shall not be taken into account.
14.4 MINIMUM COMPANY CONTRIBUTION
Notwithstanding any other provision of this Plan except the limitations set
forth in this Section 14.4, for any Plan Year in which this Plan is top-heavy,
there shall be allocated to the Before-Tax Contribution Account of each
Participant (and each Employee who would have become a Participant had he not
declined to execute a Before-Tax election) an amount of not less than 3% of
such individual's compensation as defined in Section 14.2(d); provided that (i)
this minimum contribution shall not be made to a Participant or Employee who is
a Key Employee for the Plan Year or who has separated from service prior to the
last day of the Plan Year, and (ii) this minimum contribution shall be provided
solely by Company contributions (which shall include Company contributions to
such individual's Before-Tax Contribution Account under Section 3.1 of this
Plan and Matching Allocations made to such individual's Matching Account under
Section 3.3 of this Plan). Notwithstanding the foregoing, if the largest
percentage of compensation contributed or required to be contributed by the
Company to any Key Employee for the Plan Year is less than 3% (considering only
the first $200,000 of compensation for Key Employees), then the amount
allocable to each eligible individual hereunder shall be that lesser
percentage. For purposes of this Section 14.4, all defined contribution plans
of the Company shall be aggregated to the end that the minimum contribution
requirement shall be satisfied if the aggregate contributions attributable to
Company contributions and forfeitures if any, made to all defined contribution
plans equal 3% (or applicable lesser percentage) of any such individual's
compensation.
If a Participant is covered under any qualified defined benefit plan of the
Company, then the minimum benefit or the minimum contribution requirement
applicable should this Plan or the other plan become top-heavy shall be
satisfied by the minimum benefit provisions of the defined benefit plan rather
than the minimum contribution provisions of this Plan.
14.5 EFFECT ON SECTION 415 LIMITATIONS
For purposes of computing the aggregate limitation on benefits and
contributions for a Key Employee who participates in both a defined
contribution plan and defined benefit plan maintained by the Company, in any
Plan Year in which this Plan is part of a top-heavy group, the dollar
limitation in the denominator of the fraction set forth in Section 415(e) of
the Code shall be multiplied by 1.0 rather than 1.25. However, the preceding
sentence is not applicable if:
(a) The Plan would not be top-heavy if 90% were substituted for 60%
in the second sentence of Section 14.3; and
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(b) The benefits and contributions under each plan satisfy the
minimum requirements of Section 416(h)(2) (A)(ii)(I) and (II) of the
Code by (i) substituting 4% for 3% wherever 3% appears in Section
14.4 and (ii) computing a Participant's minimum retirement benefit
provided under the defined benefit plan by substituting 3% for 2% of
the Participant's highest average compensation for the 5 consecutive
years for which he had the highest compensation and by increasing
(but not more than 10 percentage points) 20% of the Participant's
highest average compensation for such 5-year period by 1 percentage
point for each Plan Year the Plan is top-heavy, wherever such
references appear in the minimum benefits section of the top-heavy
provisions of such defined benefit plan.
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ARTICLE 15 - MILITARY VETERANS' MAKE-UP CONTRIBUTIONS
15.1 QUALIFIED MILITARY SERVICE
"Qualified Military Service" means any service in the Armed Forces (or other
Uniformed Service as provided in the Uniformed Services Employment and
Reemployment Rights Act (the 'USERRA') which is credited to an Employee upon
his or her return to employment with the Employer or Affiliated Employer on or
after December 12, 1994 and within the period during which his or her
employment rights are protected by USERRA.
15.2 SERVICE CREDIT
An employee who has Qualified Military Service shall receive credit under this
Plan for such service in the same manner and under the same rules as if the
service had been performed for the Employer or an Affiliated Employer.
15.3 MAKE-UP CONTRIBUTIONS
An Eligible Employee may elect to make up some or all of the Before-Tax
Contributions and/or After-Tax Contributions that could otherwise have been
made during the period of Qualified Military Service. The amount of such
contributions shall not exceed the amount that could have been made in
accordance with all Plan provisions and limits that would have applied during
such period. Compensation will be imputed for the period of Qualified Military
Service based on the rate of pay the Employee would have received during such
period. The election shall be made in a manner similar to that used for current
Before-Tax Contributions and/or After-Tax Contributions and the Employee may
elect to change, suspend or cease such contributions in accordance with the
provisions in effect at the time of such election.
15.4 MAXIMUM TIME LIMIT
The maximum time limit for making such contributions shall be the lesser
of three (3) times the duration of the Qualified Military Service or five (5)
years and is measured from the later of January 1, 1997 or the date the
Employee is reemployed following such absence.
15.5 MATCHING ALLOCATIONS
Matching Allocations shall be made in the same amount and at the same
relative time as would have applied had the make-up contributions by the
Employee been made during the period of Qualified Military service.
15.6 NO RETROACTIVE INVESTMENT RETURN
All make-up contributions and Matching Allocations shall be invested in
accordance with the Section 4.1 when the contributions are actually made. No
retroactive adjustment in the
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Participant's Accounts will be made for investment gains or losses for any
period prior to the date the contributions are actually made.
15.7 LOAN REPAYMENTS
The Benefits Committee may adopt rules of uniform application that will allow
loan repayments to be suspended for some or all of the period of Qualified
Military Service. Such suspension will not result in default and the period of
suspension will defer the date on which the loan is scheduled to be fully
repaid. Interest shall accrue on such loan balance during the period of
suspension and shall become payable upon the resumption of employment. Loan
repayments shall resume upon re-employment and will be increased to repay the
then outstanding balance, including interest that accrued during the Qualified
Military Service. A new loan agreement shall be issued at that time.
15.8 TESTING
Contributions made under this Article 15 shall be excluded from all testing in
Plan Years subsequent to the Plan Year to which the contributions relate and
Plan Years prior to the Plan Year in which they are actually made.
15.9 COMPLIANCE
The provisions of this Article 15 shall be administered to comply with Section
414(u) of the Code and applicable regulations.
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IN WITNESS WHEREOF, the Company has caused this Amended and Restated Plan
to be executed by its duly authorized officer and its corporate seal to be
hereunto affixed this_______ day of ___________________, 2002.
WITNESS BARNES GROUP INC.
________________________________ By:_________________________________
Title:______________________________
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