Exhibit (99b)
COOPER TIRE & RUBBER COMPANY
SPECTRUM INVESTMENT SAVINGS PLAN
(As Amended and Restated Effective January 1, 2002)
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS...............................................................................2
ARTICLE II ELIGIBILITY AND PARTICIPATION.............................................................11
ARTICLE III PARTICIPANTS' CONTRIBUTIONS...............................................................14
ARTICLE IV COMPANY CONTRIBUTIONS.....................................................................21
ARTICLE V INVESTMENT OF CONTRIBUTIONS.............................................................. 25
ARTICLE VI VESTING OF CONTRIBUTIONS..................................................................28
ARTICLE VII PARTICIPANT LOANS.........................................................................30
ARTICLE VIII APPLICATION OF COMPANY CONTRIBUTIONS FORFEITED............................................33
ARTICLE IX WITHDRAWAL OF CONTRIBUTIONS...............................................................34
ARTICLE X DESIGNATION OF BENEFICIARY................................................................38
ARTICLE XI DISTRIBUTION OF CONTRIBUTIONS.............................................................39
ARTICLE XII MAXIMUM CONTRIBUTION LIMITATION...........................................................48
ARTICLE XIII TOP-HEAVY PLAN REQUIREMENTS...............................................................50
ARTICLE XIV ADMINISTRATION OF THE PLAN................................................................55
ARTICLE XV SECURITIES TRANSACTIONS BY TRUSTEE........................................................65
ARTICLE XVI ASSIGNABILITY.............................................................................67
ARTICLE XVII AMENDMENT, MODIFICATION, SUSPENSION OR TERMINATION OF THE PLAN............................68
ARTICLE XVIII ESOP FEATURE..............................................................................69
-i-
COOPER TIRE & RUBBER COMPANY
SPECTRUM INVESTMENT SAVINGS PLAN
Cooper Tire & Rubber Company, effective January 1, 1965, established the Cooper
Tire & Rubber Company Thrift and Profit Sharing Plan.
The purpose of the Plan is to encourage and assist eligible Employees to engage
in a savings program with a view to meeting financial emergencies and as a means
of adding to their retirement income.
The Plan has been established as a means of assisting the Company in securing
and retaining competent personnel and to foster the enhancement of already
existing, excellent employee relations.
The Company desires to amend and restate the Plan, effective January 1, 2002, to
reflect the merger of the Standard Products Individual Retirement and Investment
Trust Plan, the Standard Products Company Money Purchase Pension Plan and Trust
for Hourly Employees, the Siebe Automotive Employees' Profit Sharing Plan, and
the Profit Sharing Plan of Oliver Rubber Company into the Plan, to reflect the
change of its name to the Cooper Tire & Rubber Company Spectrum Investment
Savings Plan, and to establish the ESOP Feature under the Plan.
The Plan is hereby amended and restated effective as of January 1, 2002 as
follows:
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ARTICLE I
DEFINITIONS
For the purposes of this Plan, the following words and phrases shall have the
following meanings unless a different meaning is clearly required by the
context:
(1) "Account" of a Participant or "Participant's Account" - the then total
current market value of the account in the Participant's name as
determined by the Trustee representing the entire interest of a
Participant in the Plan. Each account shall consist of the Non-ESOP
Account and the ESOP Account.
(2) "Active Participation" - the making of Participant contributions to the
Plan and the right to share in the allocation of Company Contributions
and ESOP Contributions, if any.
(3) "Adjusted Employment Date" - the date arrived at when the Employee's
prior Continuous Credited Service is subtracted, according to Section 2
of Article II, from the date on which the Employee first renders
service entitling him/her to credit for an Hour of Service subsequent
to a prior period of Continuous Credited Service.
(4) "Adjustment Factor" - the cost of living adjustment factor prescribed
by the Secretary of the Treasury under Section 415(d) of the Code for
years beginning after December 31, 1987, applied to such items and in
such manner as the Secretary shall prescribe.
(5) "After-Tax Dollar Contributions (ATD)" - the percentage of a
Participant's Compensation contributed to the Plan which the
Participant elects not to be subject to the provisions of Section
401(k) of the Code.
(6) "Code" - the Internal Revenue Code of 1986, as amended to date, and as
it may hereafter be amended, or any successor statute of similar
purpose.
(7) "Committee" - the Defined Contribution Plan Committee as established
and described pursuant to Article XIV of the Plan herein.
(8) "Common Stock" - common stock of Cooper Tire & Rubber Company, which is
intended to be "employer securities" within the meaning of Section
409(l) of the Code, and "qualifying employer securities" within the
meaning of Section 407(d)(5) of ERISA. The Plan shall be permitted to
acquire and hold Common Stock, and shall be an eligible individual
account plan, as that term is defined in Section 407(d)(3)(A) of ERISA.
(9) "Company" - Cooper Tire & Rubber Company and any of its subsidiary
corporations which adopt this Plan.
(10) "Company Contributions" - contributions made by the Company pursuant to
Article IV of the Plan, other than Company Salary Reduction
Contributions.
(11) "Company Salary Reduction Contributions" - amounts transferred to the
Plan by the Company pursuant to salary reduction arrangements between
the Company and Participants, also sometimes referred to herein as
Pre-Tax Dollar Qualifier Contributions.
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(12) "Compensation" - includes all payments of base salary, bonus,
commissions, Company Salary Reduction Contributions to this Plan and
any taxable payments paid to the Participant in a calendar year, except
that there shall be excluded from Compensation: Company payments of
deferred compensation to the Participant or to a plan of deferred
compensation (other than Company Salary Reduction Contributions to this
Plan), stock options (including any disqualifying dispositions
therefrom), director fees, sales awards, relocation bonuses, suggestion
system awards, tuition reimbursements, payments upon exercise of stock
appreciation rights or in lieu of exercise of stock options, imputed
income (such as, for example and not by way of limitation, the value of
group life insurance coverage reportable as income), benefits accruing
or payable under nonqualified retirement plans, Expatriate Income, and
other amounts which either are excludable or deductible from income in
whole or in part for federal income tax purposes or which represent
payments pursuant to a program of benefits or deferred compensation
(other than Company Salary Reduction Contributions), whether or not
qualified under the Code.
Notwithstanding the above, the maximum amount of Compensation taken
into account each year for all computations shall not exceed the amount
prescribed pursuant to Section 401(a)(17) of the Code, as amended, or
such amount as the Secretary of the Treasury shall prescribe from time
to time.
Any cost-of-living adjustment in effect for a calendar year applies to
any period, not exceeding 12 months, over which compensation is
determined (determination period) beginning in such calendar year. If a
determination period consists of fewer than 12 months, Code Section
401(a)(17) annual compensation limit will be multiplied by a fraction,
the numerator of which is the number of months in the determination
period, and the denominator of which is 12.
(13) "Continuous Credited Service" - the number of years aggregated under
the provisions of Article II, Section 2, except that Continuous
Credited Service prior to January 1, 1976, shall be calculated from the
most recent Employment Date.
(14) "Controlled Group" - means the Company and any and all other
corporations, trades and/or businesses, the employees of which together
with Employees of the Company are required, by the first sentence of
Subsection (b) or Subsection (c) of Section 414 of the Code to be
treated as if they were employed by a single employer. Each corporation
or unincorporated trade or business that is or was a member of the
Controlled Group shall be referred to herein as an "Controlled Group
Member" or a "Controlled Company", but only during such period as it is
or was such a member.
Controlled Group also includes any organization (whether or not
incorporated) which is 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 pursuant to
regulations under Section 414(o) of the Code.
(15) "Current Earnings" - net income before federal income taxes of the
Company for its current fiscal year and before deducting any Company
Contributions or ESOP
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Contributions to this Plan for such fiscal year determined on the basis
of generally accepted accounting principles.
(16) "Designated Beneficiary" - the beneficiary chosen by the Participant,
in accordance with the provisions of Article X herein, to receive, upon
the Participant's death, any benefit payable under this Plan by reason
of the Participant's death.
(17) "Employee" - any employee of the Company except, one whose terms and
conditions of employment are determined through collective bargaining
where the issue of retirement benefits has been a bona fide subject of
such collective bargaining and where such collective bargaining has not
resulted in an agreement to include such employee among those eligible
for participation in this Plan. To the extent required by Section
414(n) of the Code, the term "Employee" includes any person who is a
"leased employee" of the Company or any other Controlled Group Member.
For purposes of this Subsection, a "leased employee" means any person
who, pursuant to an agreement between the Company or a Controlled Group
Member and any other person ("leasing organization"), has performed
services for the Company or Controlled Group Member on a substantially
full-time basis for a period of at least one year, and such services
are performed under primary direction or control of the Company or
Controlled Group Member. Contribution or benefits provided to a leased
employee by the leasing organization that are attributable to services
performed for the Company or a Controlled Group Member will be treated
as provided by the Company or Controlled Group Member. A leased
employee will not be considered an Employee of the Company or a
Controlled Group Member, however, if (1) leased employees do not
constitute more that 20% of the Company's or Controlled Group Member's
non-highly compensated work force (within the meaning of Section
414(n)(5)(C)(ii) of the Code) and (2) such leased employee is covered
by a money purchase pension plan maintained by the leasing organization
that provides (i) a non-integrated employer contribution rate of at
lease 10% of compensation, (ii) immediate participation and (iii) full
and immediate vesting. All personal and relative pronouns, singular or
plural, and words "person", "participant", and "employee" shall refer
to both male and female employees equally. The term "Employee" shall
include any U.S. citizen employed by foreign affiliates, as defined in
Section 3121(l)(6) of the Code, for which the Company has entered into
a Code Section 3121(l) agreement with the Internal Revenue Service.
(18) "Employment Date" - the date on which the Employee first completes an
Hour of Service in the employ of the Company, whether or not that
service is performed as an Employee.
(19) "ESOP Account" - shall include all amounts in the Participant's Account
that are transferred to the ESOP Account pursuant to Section 3 and
Section 5 of Article V. The ESOP Account shall be established under the
ESOP Feature of the Plan. The ESOP Account shall consist of an
After-Tax Dollar Contributions subaccount which will reflect the amount
of After-Tax Dollar Contributions in the ESOP Account attributable to a
Participant and allocated earnings attributable thereto, a Pre-Tax
Dollar Qualifier Contributions subaccount which will reflect the amount
of Pre-Tax Dollar Qualifier Contributions in the ESOP Account
attributable to a Participant and allocated earnings attributable
thereto, a Transfer Contributions subaccount which will reflect the
amount of
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Transfer Contributions in the ESOP Account attributable to a
Participant and allocated earnings attributable thereto, a Company
Contributions subaccount which will reflect the amount of Company
Contributions in the ESOP Account made pursuant to Article IV herein
and allocated earnings attributable thereto, an ESOP Contributions
subaccount which will reflect the amount of ESOP Contributions in the
ESOP Account made pursuant to Article XVIII herein and allocated
earnings attributable thereto, and a Prior Plan Contributions
subaccount which will reflect the amount of Prior Plan Contributions in
the ESOP Account attributable to a Participant and allocated earnings
attributable thereto.
(20) "ESOP Contributions" - are the discretionary contributions made by the
Company pursuant to Section 3 of Article XVIII.
(21) "ESOP Feature" - is the portion of the Plan described in Article XVIII.
The ESOP Feature consists of the ESOP Account.
(22) "Expatriate Income" - includes all payments of foreign service
allowances, foreign housing allowances (net of amounts deducted from
pay) and foreign living expenses (net of amounts deducted from pay),
and any Employee income taxes paid by the Company (net of hypothetical
income taxes which may have been deducted from pay) paid to any
Employee included in this Plan by way of Section 3121(l).
(23) "Full-Time Employee" - an Employee whose position normally requires a
work week of at least forty (40) hours.
(24) "Highly Compensated Employee" - The term Highly Compensated Employee
includes highly compensated active employees and highly compensated
former employees. For a particular Plan Year, a highly compensated
active Employee means any Employee who: (i) was a 5-percent owner at
any time during the current or the preceding Plan Year or (ii) for the
preceding Plan Year received Compensation from the Company in excess of
the amount in effect for such Plan Year under Section 414(q)(1)(B) of
the Code and was in the top-paid group of Employees for such preceding
Plan Year.
A highly compensated former employee includes any employee who
separated from service (or was deemed to have separated) prior to the
determination year, performs no service for the employer during the
determination year, and was a highly compensated active employee for
either the separation year or any determination year ending on or after
the employee's 55th birthday.
The determination of who is a Highly Compensated Employee, including
the determination of the number and identity of employees in the
top-paid group, and the compensation that is considered, will be made
in accordance with Section 414(q) of the Code and the regulations
thereunder.
(25) "Hour of Service" - each hour for which an Employee is paid, or
entitled to payment, by the Company and/or any Controlled Group Member
for the performance of duties or on account of a period of time during
which no duties are performed due to vacation, holiday, jury duty,
military duty or funeral absence. An Hour of Service also includes
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each hour for which an Employee is not paid, or not entitled to
payment, on account of a period of time during which the Employee
continues to accrue Continuous Credited Service while under an approved
Leave of Absence for illness, incapacity or disability, military duty
or personal reasons.
Each hour for which an Employee is paid back pay, regardless of
mitigation of damages, except for hours previously credited for the
same period, or severance pay. Hours of Service shall not be credited
due to payments received by an Employee from a plan maintained for the
sole purpose of complying with applicable worker's or unemployment
compensation laws, complying with disability insurance laws, or
reimbursement of medical or medically related expenses.
Such hours shall be credited as specified in Title 29, Code of Federal
Regulations, ss.2530.200-2(b) and (c).
Hours of Service performed at premium rates (such as holiday pay
overtime or shift differential) shall be credited as single hours of
service, regardless of the rate of compensation in effect for such
service.
If an Employee is absent from work for any period which commences on or
after January 1, 1985
(a) by reason of the pregnancy of the Employee,
(b) by reason of the birth of a child of the Employee,
(c) by reason of the placement of a child with the Employee in
connection with the adoption of such child by the Employee, or
(d) for purposes of caring for any such child for a period
beginning immediately following such birth or placement, and,
(e) the Employee (if classified by the Company as a Part-Time
Employee) shall receive credit for Hours of Service (solely
for the purpose of determining whether he/she has incurred a
Severance Date for purposes of participation and determining
his/her Vested interest) equal to:
(i) the number of Hours of Service which otherwise would
normally have been credited to him/her but for the
absence, or
(ii) if the number of Hours of Service under clause (i) is
not determinable, eight (8) Hours of Service per
normal work day of the absence, except that no more
than 501 Hours of Service shall be credited under
this paragraph by reason of the absence. The Hours of
Service shall be credited:
(A) in the twelve (12) Consecutive Month Period
in which the absence from work begins, if
the Participant would be prevented from
incurring a Severance Date in such Period,
or
6
(B) in the immediately following twelve (12)
Consecutive Month Period.
(1) The Employee (if classified by the
Company as a Full-Time Employee)
shall not, solely by reason of such
absence, be considered to have
incurred a Severance Date for
purposes of participation and for
determining his/her Vested interest
until the expiration of the
consecutive twenty-four (24) month
period commencing on the first day
of the absence.
(2) No credit will be given pursuant to
this paragraph unless the Employee
furnishes information to establish
that the absence is for the reasons
referred to in paragraphs (a), (b),
(c) and (d) of this Section and the
number of days for which there was
such an absence.
(3) If an Employee is absent from work
for any period for any reasons
referred to in subparagraphs (a),
(b), (c) and (d) of this
subsection, and such period
includes the last day of the Plan
Year, the Employee shall be deemed
to be employed on such date for
purposes of Section 3, Article II.
(26) "Investment Option" - one of those forms of investments which are
available to a Participant to invest his/her contributions, Company
Salary Reduction Contributions, Vested Company Contributions, Transfer
Contributions, Prior Plan Contributions and related earnings under the
Plan.
(27) "Leave of Absence" - leave of absence granted by law, the Company due
to illness or injury, required U.S. Military Service, or other special
leave of absence set forth in the Company leave of absence policies,
under which all Employees in similar circumstances shall be treated
alike.
(28) "Non-ESOP Account" - shall include all Participant Contributions,
Company Contributions, and Transfer Contributions made to the Plan
pursuant to Articles III and IV of the Plan; EXCEPT THAT the Non-ESOP
Account shall not include any portion of such contributions transferred
to the Participant's ESOP Account pursuant to Section 3 and Section 5
of Article 5. The Non-ESOP Account shall be established under the
Non-ESOP Feature of the Plan. The Non-ESOP Account shall consist of an
After-Tax Dollar Contributions subaccount which will reflect the amount
of After-Tax Dollar Contributions in the Non-ESOP Account attributable
to a Participant and allocated earnings attributable thereto, a Pre-Tax
Dollar Qualifier Contributions subaccount which will reflect the amount
of Pre-Tax Dollar Qualifier Contributions in the Non-ESOP Account
attributable to a Participant and allocated earnings attributable
thereto, a Transfer Contributions subaccount which will reflect the
amount of Transfer Contributions in the Non-ESOP Account attributable
to a Participant and allocated earnings attributable thereto, a Company
Contributions subaccount which will reflect the
7
amount of Company Contributions in the Non-ESOP Account made pursuant
to Article IV herein and allocated earnings attributable thereto, and a
Prior Plan Contributions subaccount which will reflect the amount of
Prior Plan Contributions in the Non-ESOP Account attributable to a
Participant and allocated earnings attributable thereto.
(29) "Non-ESOP Feature" - is the portion of the Plan (a) which is not
included within the ESOP Feature, (b) which is intended to qualify as a
profit sharing plan under Code Section 401(a), and (c) which includes a
qualified cash or deferred arrangement within the meaning of Code
Section 401(k). The Non-ESOP Feature consists of the Non-ESOP Account.
(30) "Non-Highly Compensated Employee" - an Employee of the Employer who is
not a Highly Compensated Employee.
(31) "Normal Retirement Date" - the later of the day the Participant attains
age sixty-five (65) or the 5th anniversary of the time a Plan
Participant commenced participation in the Plan. However, the Normal
Retirement Date for Employees employed in the capacity of pilot, as
required by Corporate Policy C01-3 (Aircraft Usage, Flight Crew Member
Training and Development) shall be the later of the day such Employee
attains age sixty (60) or the completion of five years of Plan
participation.
(32) "Participant" - any person who has been admitted to participation in
this Plan pursuant to the provisions of Article II. The term
"Participant" shall include active Participants (those currently
eligible to share in Company Contributions and ESOP Contributions, if
any), inactive Participants (those individuals who are employed by the
Company and have been active Participants but are not now eligible to
share in Company Contributions or ESOP Contributions), and any former
Employee who has an Account under the Plan.
(33) "Participant Contributions" - the aggregate of all After-Tax Dollar
Contributions and Pre-Tax Dollar Qualifier Contributions.
(34) "Participant Loan" - the total amount outstanding of a loan provided
for in Article VII.
(35) "Part-Time Employee" - an Employee whose position normally requires a
work week of less than forty (40) hours.
(36) "Plan" - the Spectrum Investment Savings Plan as set forth herein, and
as it may be modified or amended from time to time. The Plan consists
of the ESOP Feature and the Non-ESOP Feature.
(37) "Plan Year" - except as otherwise provided herein, a Plan Year shall be
the calendar year beginning January 1 and ending December 31.
(38) "Pre-Tax Dollar Qualifier Contribution (PDQ)" - the percentage of a
Participant's Compensation which the Company contributes to the Plan
pursuant to a salary reduction agreement, under which a Participant
elects to forego a percentage of such Compensation and under which an
Employee agrees to have his/her Compensation reduced for purposes
8
of the Plan, also sometimes referred to herein as a Company Salary
Reduction Contribution.
(39) "Prior Plans" - the Profit-Sharing Plan of Oliver Rubber Company, The
Standard Products Company Individual Retirement and Investment Trust
Plan, The Standard Products Company Money Purchase Pension Plan and
Trust for Hourly Employees, and the Siebe Automotive Employees' Profit
Sharing Plan.
(40) "Prior Plan Contributions" - contributions made to a Prior Plan by or
with respect to a Participant.
(41) "Return on Invested Capital" or "ROIC" - earnings before interest and
income taxes (EBIT) of the Company for the most recently completed
calendar year, as reported in the Company's audited financial
statements for such year, divided by the average of the Company's
invested capital over the five consecutive calendar quarters ending
with the final calendar quarter of the calendar year in question. For
purposes of this Section, "invested capital" shall mean long-term debt
plus shareholder's equity as of the end of each such quarter.
(42) "Severance Date" - the earliest of (a) the date on which the Employee
retires, dies, quits, or is discharged or (b) the date on which the
Employee ceases to accrue Continuous Credited Service in accordance
with the Company's policies for Leave of Absence; but in no event shall
the Severance Date, as defined in (b), be earlier than the first
anniversary of the first day of a period throughout which the Employee
remains absent, with or without pay, from the service of the Company by
reason of the absence.
(43) "Severance Period" - (a) each twelve (12) consecutive month period
beginning on a Part-Time Employee's Employment Date or Adjusted
Employment Date or any anniversary thereof if less than five hundred
(500) Hours of Service are completed in that period, or (b) for a
Full-Time Employee, the period of time between the Employee's Severance
Date and the date on which he again performs an Hour of Service.
(44) "Spouse" - the person to whom the Participant is married to at the
relevant time.
(45) "Total and Permanent Disability" - a condition of a Participant as the
result of bodily injury or disease from an unavoidable cause which
prevents such Participant from being physically or mentally able to
meet his/her present job requirements as the same existed at the time
of the Participant's cessation of service due to such condition and
which disability will (in the opinion of a qualified physician
designated by the Committee) presumably be permanent and continuous
during the remainder of his/her life. Such condition shall be deemed to
have resulted from an unavoidable cause unless it:
(a) was contracted, suffered or incurred while the Participant was
engaged in, or resulted from having engaged in, a felonious
enterprise, or
(b) resulted from drunkenness or hallucinogenic and/or narcotic
drugs not prescribed by a qualified physician for treatment of
a condition, or
9
(c) resulted from an intentional self-inflicted injury or
self-induced sickness.
(46) "Transaction Period" - a period described in Article XV herein during
which certain rules and regulations, as established by the Committee
and the Trustee, shall govern all transactions relating to securities.
(47) "Transactions" - all purchases, sales, redemptions or other
dispositions of securities by the Trustee under the Plan.
(48) "Transfer Contributions" - those amounts transferred to the Plan on
behalf of an Employee from another plan qualified under Section 401(a)
of the Code as described in Article III, Section (9).
(49) "Trustee" - the Trustee or Trustees designated by the Company as
provided herein.
(50) "Unvested" - that portion of a Participant's Account balance which is
not Vested pursuant to Article VI herein.
(51) "Vested" - that portion of a Participant's Account balance to which
he/she has a nonforfeitable right pursuant to Article VI herein.
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ARTICLE II
ELIGIBILITY AND PARTICIPATION
SECTION 1. ELIGIBILITY
Any salaried Employee of the Company is eligible to participate in the Plan.
Notwithstanding the foregoing, no Employee who serves only as a leased employee
as defined in Section 414(n) of the Code shall be covered by the Plan or deemed
to be a Participant.
SECTION 2. CONTINUOUS CREDITED SERVICE
(a) Continuous Credited Service for purposes of computing
eligibility shall be determined as follows:
(i) Each person who is considered a Part-Time Employee
and each other person in the employ of the Company or
of a Controlled Group who is not considered a
Full-Time Employee shall be credited with one (1)
year of Continuous Credited Service upon completion
of 1,000 Hours of Service during any period of twelve
(12) consecutive months beginning with that person's
Employment Date or Adjusted Employment Date, or any
anniversary thereof.
(ii) Employees who are considered Full-Time Employees
shall have their Continuous Credited Service
determined as the period of time (as computed to
completed 1/12ths of a year) between the Employee's
Employment Date or Adjusted Employment Date and the
Employee's most recent Severance Date.
(iii) Years of Continuous Credited Service before any
Severance Period shall be disregarded for Nonvested
Participants, if the number of years within such
Severance Period equals or exceeds the greater of:
(A) five (5); or
(B) the aggregate number of years of Continuous
Credited Service before such Severance
Period.
(iv) For purposes of eligibility and vesting, Continuous
Credited Service shall include continuous credited
service, as that term is defined herein, of Employees
with corporations or other entities that have been
acquired by or merged into the Company, such that
they become a part of the Company or are subsidiaries
of the Company that are part of the Controlled Group,
provided that such Employees were employed by the
acquired or merged entity immediately prior to the
acquisition or merger, and are Employees of the
Company or an entity which is a part of the
Controlled Group immediately after the acquisition or
merger.
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(b) Continuous Credited Service prior to January 1, 1976, shall
not be subject to any adjustment under this Section 2.
(c) Any person who incurs a Severance Period after January 1,
1976, shall have Continuous Credited Service restored on the
following basis:
(i) A Participant who before the Severance Date was
Vested will for all purposes have pre-Severance
Period and post- Severance Period Continuous Credited
Service aggregated to create an Adjusted Employment
Date.
(ii) A Participant who before the Severance Date was
Unvested will have Continuous Credited Service
restored on the following basis to create an Adjusted
Employment Date:
(A) If the Severance Period is less than the
Continuous Credited Service prior to the
Severance Date, the Continuous Credited
Service prior to the Severance Date shall be
aggregated with any Continuous Credited
Service after the Severance Period to create
an Adjusted Employment Date for all
purposes. Such aggregation of Continuous
Credit Service shall not include any period
of time during the Severance Period.
(B) If the Severance Period equals or exceeds
the greater of five (5) years or the
Continuous Credited Service prior to the
Severance Date, the Continuous Credited
Service prior to the Severance Date shall
not be aggregated and the Employee shall
become a Participant as specified in Section
3 of this Article.
SECTION 3. PARTICIPATION
An Employee described in Section 1 will become a Participant in the Plan upon
satisfaction of all the following requirements:
(a) receipt by the Committee of a completed application,
(b) agreement to an appropriate payroll deduction from his/her
Compensation,
(c) agreement to accept a reduction of his/her Compensation equal
to the whole percentage of his/her compensation per payroll
period he/she elects to have contributed by the Company as a
Pre-Tax Dollar Qualifier Contribution, if any.
A Participant shall cease to be eligible to make contributions to the Plan and
to share in Company Contributions or ESOP Contributions under the Plan when
he/she is no longer an Employee due to: resignation, termination, retirement,
death, Total and Permanent Disability, or otherwise ceasing to be an Employee,
or Participant's voluntary election to suspend Participation pursuant to Article
VII hereof. Participation in the Plan will cease when the Employee or former
Employee no longer has an Account under the Plan. A Participant who voluntarily
ceases Active
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Participation from this Plan while still an Employee accumulating Continuous
Credited Service shall be ineligible to resume Active Participation for a period
of twelve (12) months from the date Active Participation last ceased.
Notwithstanding the above paragraph, a Participant who retires under the
Company's Salaried Employee's Retirement Plan may elect to continue to be a
Participant in the Plan and maintain an Account until the earlier of the date
he/she withdraws the balance in his/her Account or April 1 of the calendar year
following the calendar year in which he/she attains age 70-1/2. After the
effective date of such retirement, such a Participant shall not be entitled to
make contributions to the Plan or share in the allocation of Company
Contributions or ESOP Contributions. Participation in the Plan by eligible
Employees shall be voluntary.
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ARTICLE III
PARTICIPANTS' CONTRIBUTIONS
SECTION 1. AMOUNT OF PARTICIPANT PRE-TAX DOLLAR QUALIFIER CONTRIBUTION
AND AFTER-TAX DOLLAR CONTRIBUTION
An Active Participant may make either a Pre-Tax Dollar Qualifier Contribution or
an After-Tax Dollar Contribution, or both, in accordance with the following
amounts:
(a) An Active Participant may agree to have contributed on his
behalf as a Pre-Tax Dollar Qualifier Contribution for a Plan
Year an amount, at his election, not to exceed the lesser of
(i) 15% of his/her Compensation or (ii) the dollar limitation
in effect for such Plan Year under Section 402(g) of the Code.
To have a Pre-Tax Dollar Qualifier Contribution contributed on
his behalf, a Participant shall enter into a written salary
reduction agreement with the Company which shall provide a
reduction in the Participant's Compensation equal to any whole
percentage per pay period which he elects to have contributed
on his/her behalf as a Pre-Tax Dollar Qualifier Contribution.
Such reduction in Compensation must be made at the time the
Participant would normally receive his/her Compensation from
the Company.
The Company may amend or revoke its salary reduction agreement
with any Participant at any time, if the Company determines
that such revocation or amendment is necessary to insure that
contributions by or on behalf of a Participant for any Plan
Year will not exceed the limitations of Code Sections 415, and
402(g) or to insure that the discrimination tests of Section
401(k) of the Code are met for such Plan Year.
(b) An Active Participant may agree to contribute as an After-Tax
Dollar Contribution an amount, at his/her election, equal to
up to sixteen percent (16%) of his/her Compensation subject to
the limitations imposed by this Plan.
In no event, however, shall the aggregate of After-Tax Dollar Contributions and
Pre-Tax Dollar Qualifier Contributions, to which Company Contributions, if any,
are allocated, exceed six percent (6%) of a Participant's Compensation.
Pre-Tax Dollar Qualifier Contributions and After-Tax Dollar Contributions shall
be fully Vested and nonforfeitable at all times.
SECTION 2. MAXIMUM AGGREGATE CONTRIBUTION
(a) In no event shall the aggregate of contributions made by or on
behalf of a Participant exceed sixteen percent (16%) of
his/her Compensation. Contributions made by or on behalf of a
Participant are the total of Pre-Tax Dollar Qualifier
Contributions and After-Tax Dollar Contributions subject to
the following limitations,
14
(b) ACP Test
(i) The Average Contribution Percentage for Participants
who are Highly Compensated Employees for the Plan
Year shall not exceed the Average Contribution
Percentage for Participants who are Non-highly
Compensated Employees for the Plan Year multiplied by
1.25; or
(ii) The Average Contribution Percentage for Participants
who are Highly Compensated Employees for the Plan
Year shall not exceed the Average Contribution
Percentage for Participants who are Non-highly
Compensated Employees for the Plan Year multiplied by
two (2), provided that the Average Contribution
Percentage for Participants who are Highly
Compensated Employees does not exceed the Average
Contribution Percentage for Participants who are
Non-highly Compensated Employees by more than two (2)
percentage points or such lesser amount as the
Secretary of the Treasury shall prescribe to prevent
the multiple use of this alternative limitation with
respect to any Highly Compensated Employee.
(c) ADP Test
(i) The Actual Deferral Percentage for Participants who
are Highly Compensated Employees for the Plan Year
shall not exceed the Actual Deferral Percentage for
Participants who are Non-highly Compensated Employees
for the Plan Year multiplied by 1.25; or
(ii) The Actual Deferral Percentage for Participants who
are Highly Compensated Employees for the Plan Year
shall not exceed the Actual Deferral Percentage for
Participants who are Non-highly Compensated Employees
for the Plan Year multiplied by two (2), provided
that the Actual Deferral Percentage for Participants
who are Highly Compensated Employees does not exceed
the Actual Deferral Percentage for Participants who
are Non-highly Compensated Employees by more than two
(2) percentage points or such lesser amount as the
Secretary of the Treasury shall prescribe to prevent
the multiple use of this alternative limitation with
respect to any Highly Compensated Employee.
(d) Definitions. For purposes of this Section, the following
definitions shall apply:
(i) "Average Contribution Percentage" - shall mean the
average (expressed as a percentage) of the
Contribution Percentages of the Participants in a
group.
(ii) "Actual Deferral Percentage" - shall mean the average
(expressed as a percentage) of the Deferral
Percentages of the Participants in a group.
(iii) "Contribution Percentage" - shall mean, for a
specified group of Employees entitled to make
After-Tax Dollar Contributions for a Plan
15
Year, the average of the ratios (calculated
separately for each Employee in such group) of (A)
the sum of the After-Tax Dollar Contributions made to
the Plan by or on behalf of an Employee and the
Company Contributions made to the Plan on behalf of
the Employee for the Plan Year to (B) the Employee's
Compensation for the Plan Year.
(iv) "Deferral Percentage" - shall mean, for a specified
group of Employees entitled to make Pre-Tax Dollar
Qualifier Contributions for a Plan Year, the average
of the ratios (calculated separately for each
Employee in such group) of (A) the amount of Pre-Tax
Dollar Qualifier Contributions actually made to the
Plan for each such Employee for such Plan Year to (B)
the Employee's Compensation for such Plan Year.
(v) "Excess Aggregate Contributions" - shall mean, with
respect to any Plan year, the excess of --
(A) the aggregate amount of the matching
contributions and employee contributions
(and any qualified nonelective contribution
or elective contribution taken into account
in computing the contribution percentage)
actually made on behalf of Highly
Compensated Employees for such Plan Year,
over
(B) the maximum amount of such contributions
permitted under the limitations of
Subsection (b) of this Section (determined
by reducing contributions made on behalf of
highly compensated employees in order of
their Contribution Percentages beginning
with the highest of such percentages).
(vi) "Excess Deferrals" -- shall mean, with respect to any
Plan year, the excess of --
(A) the amount of Pre-Tax Dollar Qualifier
Contributions actually made on behalf of
Highly Compensated Employees for such Plan
year, over
(B) the maximum amount of such contributions
permitted under the limitations of
Subsection (c) of this Section (determined
by reducing contributions made on behalf of
highly compensated employees in order of
their Deferral Percentages beginning with
the highest of such percentages).
(vii) In the event that Excess Aggregate Contributions are
made to the Trust for any Plan Year, then, prior to
March 15 of the following Plan Year, such Excess
Aggregate Contributions (and any income allocable
thereto) shall be forfeited (if forfeitable) and
applied to reduce future Company Contributions or (if
not forfeitable) shall be distributed to the eligible
Highly Compensated Employees on the basis of the
respective portions of
16
the Excess Aggregate Contributions made by or on
behalf of such eligible Highly Compensated Employees.
(viii) In the event that Excess Deferrals are made to the
Trust for any Plan Year, then, prior to March 15 of
the following Plan Year, (A) such Excess Deferrals
(and any income allocable thereto) shall be
distributed to the eligible Highly Compensated
Employees on the basis of the amount of Pre-Tax
Dollar Qualifier Contributions made by or on behalf
of such eligible Highly Compensated Employees.
(e) To the extent required by the Code and Treasury Regulations,
the limitations set forth in Section 2 shall be applied
separately to each of the Non-ESOP Feature and the ESOP
Feature. Notwithstanding the foregoing, for purposes of
applying this Section 2 for any Plan Year in which
(i) the ESOP Feature is maintained, and
(ii) the requirements of Sections 401(k)(12) and
401(m)(11) of the Code are not satisfied,
a single Average Contribution Percentage and a single Actual
Deferral Percentage will be calculated for the group of
eligible Employees who are Highly Compensated Employees and a
single Average Contribution Percentage and a single Actual
Deferral Percentage will be calculated for the group of
eligible Employees who are Non-Highly Compensated Employees
for the Plan Year, notwithstanding the existence of the ESOP
portion of the Plan and the disaggregation rules of Treasury
Regulation Sections 1.401(k)-1(g)(11) and 1.410(b)-7(c)(2), by
reason of the fact that, notwithstanding the ESOP, all Pre-Tax
Dollar Qualifier Contributions made in such Plan Year are
allocated to the Pre-Tax Dollar Qualifier Contribution
subaccount of the Participant's Non-ESOP Account in such Plan
Year (including any Pre-Tax Dollar Qualifier Contributions
that are invested in Common Stock) and such account is not
part of the ESOP, all After-Tax Dollar Contributions made in
such Plan Year are allocated to the After-Tax Dollar
Contribution subaccount of the Participant's Non-ESOP Account
in such Plan Year (including any After-Tax Dollar
Contributions that are invested in Common Stock) and such
account is not part of the ESOP, and all Company Contributions
made in such Plan Year are allocated to the Company
Contribution subaccount of the Participant's Non-ESOP Account
in such Plan Year (including any Company Contributions that
are invested in Common Stock) and such account is not part of
the ESOP.
SECTION 3. LIMITATIONS ON PARTICIPANT CONTRIBUTIONS
All contributions made by or on behalf of a Participant are subject to the
limitations imposed by Section 401(k) and Section 415 of the Code, as further
set forth in Section 2 of this Article III and in Article XII hereof,
respectively, but including any and all testing procedures as may be permitted
by the Sections of the Code and the Treasury Regulations described in this
sentence
17
and in the following sentence. Contributions are also subject to the limitations
imposed by Sections 401(k)(3), 401(m) and 402(g) of the Code, and Reg. Section
1.401(m)-(2).
SECTION 4. CHANGING CONTRIBUTION PERCENTAGE
The contribution percentage(s) designated by a Participant shall continue in
effect, notwithstanding any change in his/her Compensation, until he/she changes
such contribution percentage(s).
A Participant may elect, at any time, but not less than thirty (30) days from
the last change in contribution percentages, to increase or decrease the
contribution percentage(s) within the applicable limits to be effective as soon
as practicable after receipt of notice of change.
SECTION 5. CONTRIBUTIONS TO BE EXPRESSED IN WHOLE MULTIPLES
Each Participant's payroll deduction must be made in whole multiples of one
percent (1%). Each Participant's Pre-Tax Dollar Qualifier Contributions, if any,
shall be in whole multiples of 1% of Compensation, subject to adjustment
pursuant to Section 6 hereof.
SECTION 6. METHOD OF PARTICIPANTS' CONTRIBUTIONS
(a) Participants' After-Tax Dollar Contributions shall be made by
a payroll deduction from Compensation for each pay period.
(b) (i) Each Pre-Tax Dollar Qualifier Contribution made by
the Company on behalf of a Participant shall be
transferred to the Plan pursuant to the terms of a
written salary reduction agreement between such
Participant and the Company. A Participant's salary
reduction agreement shall be modified automatically
to correspond to the change in the amount of the
Pre-Tax Dollar Qualifier Contributions made on
his/her behalf as set forth in Section 4 hereof.
(ii) The tentative salary reduction amount set forth in
any salary reduction agreement shall be in any amount
as the Participant shall elect, but shall be not less
than 1% and not more than 15% of Compensation of such
Participant. Tentative salary reductions shall become
final, and then shall constitute Pre-Tax Dollar
Qualifier Contributions, only after the Company or
the Committee has made such adjustments thereto as
they (or either of them) deem necessary to maintain
the qualified status of this Plan or to maintain the
status of any portion of this Plan as a qualified
cash or deferred arrangement under Section 401(k) of
the Code.
(iii) All amounts withheld pursuant to a salary reduction
agreement and thereafter contributed to the Plan as
Pre-Tax Dollar Qualifier Contributions shall be so
delivered only if the Company in good faith believes
that such amounts do not exceed the amounts
permissible pursuant to the limitations hereinabove
set forth. If any amount shall be withheld from the
Compensation of a Participant pursuant to a salary
18
reduction agreement which exceeds the maximum amount
permissible pursuant to Section 2(b), 2(c) and 3
hereof, and if such amount is contributed to the Plan
as a Pre-Tax Dollar Qualifier Contribution by way of
a mistake of fact, it shall be refunded, along with
any income or loss related thereto, to the Company
and shall thereafter be paid as promptly as
practicable (subject, however, to the withholding of
taxes and other amounts as though such amount were
current Compensation), but no later than 2 1/2 months
after the last day of the Plan Year in which such
excess amounts arose, by the Company to the Employee
from whose Compensation such amount was obtained
pursuant to a salary reduction agreement.
(iv) The maximum amount of such contributions is limited
under Section 401(k)(3) determined by reducing
contributions made on behalf of Highly Compensated
employees in order of their contribution percentages
beginning with the highest of such percentages.
SECTION 7. CREDITING OF CONTRIBUTION AMOUNTS
Participants' After-Tax Dollar Contributions shall be transferred by the Company
to the Trustee as soon as practicable, but not less frequently than each pay
date. All payments so made by the Company shall be reported to the Committee.
All such contributions shall be appropriately credited to the Account of each
Participant by the Trustee.
SECTION 8. VETERANS
Notwithstanding any provision of this Plan to the contrary, effective December
12, 1994, contributions, benefits and Continuous Credited Service with respect
to qualified military service will be provided in accordance with Section 414(u)
of the Code. "Qualified military service" means any service in the uniformed
services (as defined in chapter 43 of title 38 of the United States Code) by any
individual if such individual is entitled to reemployment rights under such
chapter with respect to such service.
SECTION 9. TRANSFER CONTRIBUTIONS
The Trustee is authorized to accept on behalf of a Participant, and hold as part
of a Participant's Account, assets from a trustee of another plan qualified
under Section 401(a) of the Code, provided that such other plan permits such a
transfer and provided that the Committee approves such transfer from such other
plan. All amounts so transferred to a Participant's Account shall be referred to
herein as "Transfer Contributions."
SECTION 10. CONTRIBUTIONS MADE TO THE NON-ESOP FEATURE
When transmitted to the Plan pursuant to this Article III, the Participant
Contributions shall be transmitted to and held under the Non-ESOP Feature of the
Plan. As provided in Section 3 and
19
Section 5 of Article V, such contributions may be transferred later from the
Non-ESOP Feature to the ESOP Feature.
20
ARTICLE IV
COMPANY CONTRIBUTIONS
SECTION 1. AMOUNT OF COMPANY CONTRIBUTIONS
The Company shall contribute to the Trustee out of Current Earnings for that
fiscal year or, at its discretion as set forth below out of its accumulated
earnings, in cash or in its treasury or authorized but unissued Common Stock the
value of which shall be computed at the applicable fair market value on the date
of contribution by the Company, an amount equal to
(a) the lesser of:
(i) fifty percent (50%) of all Participant Contributions
which represent up to six percent (6%) of each
Participant's Compensation during such year, less any
forfeitures (as defined in Article VIII, Section 1),
or
(ii) an amount equal to fifteen percent (15%) of the
Company's Current Earnings for such year in excess of
ten percent (10%) of the stockholder's equity of the
Company at the beginning of such year, and
(b) in addition, when (a)(i) above applies and Return On Invested
Capital (ROIC) equals or exceed 15%, an additional Company
Contribution which when aggregated with (a)(i) above equals
the Contribution Percentage determined under this paragraph
(b) of all Participant Contributions which represent up to six
percent (6%) of each Participant's Compensation during such
year, less any forfeitures (as defined in Article VIII,
Section 1). The "Contribution Percentage" under this paragraph
(b) shall be the percentage set forth in column B below that
corresponds to the ROIC for such fiscal year, equal to or in
excess of 15%, set forth in Column A below. For ROIC levels
that are not a whole percentage, the Contribution Percentage
shall be determined by linear interpolation between the
appropriate percentages in column B.
A B
---- -----
ROIC
----
15% 66.7%
16% 70.03%
17% 73.36%
18% 76.69%
19% 80.02%
20% 83.35%
21% 86.68%
22% 90.01%
23% 93.34%
24% 96.67%
25% or greater 100%
21
The Company's Board of Directors may, at its discretion, waive the limitations
in paragraph (b) above and contribute to the Trustee out of Current Earnings for
that fiscal year or its accumulated earnings an amount not to exceed the
limitations in paragraph (a) above.
The Company will not match, nor allocate its contributions to, any portion of
Participant Contributions, if any, which (i) represent an amount in excess of
six percent (6%) of a Participant's Compensation during each Plan Year or (ii)
are withdrawn by the Participant during the Plan Year in which the Participant
Contributions were made to the Plan.
Company Contributions, After-Tax Dollar Contributions and Pre-Tax Dollar
Qualifier Contributions will be subject to the nondiscrimination test pursuant
to Sections 401(m)(2) and 401(k)(3) of the Code and described in Section 2 of
Article III.
SECTION 2. COMPANY SALARY REDUCTION CONTRIBUTIONS
The Company shall contribute with respect to each Plan Year the aggregate of the
Company Salary Reduction Contributions for such Plan Year, as determined
pursuant to salary reduction agreements in force between the Company and
Participants in the Plan. Company Salary Reduction Contributions shall be fully
Vested and nonforfeitable at all times.
SECTION 3. ALLOCATION OF COMPANY CONTRIBUTIONS
The Company Contributions for each fiscal year shall be allocated by the Trustee
to each Participant's Account in proportion to each Participant's After-Tax
Dollar Contributions and the Pre-Tax Dollar Qualifier Contributions made on
his/her behalf up to an aggregate contribution thereof of six percent (6%) of a
Participant's Compensation for such year.
If a Participant or Designated Beneficiary becomes entitled to distribution of
his/her Account under the Plan as a result of the Participant either retiring
from the Company under one of its retirement programs (except a deferred Vested
pension), suffering a Total and Permanent Disability or dying and either such
Participant has made After-Tax Dollar Contributions or Pre-Tax Dollar Qualifier
Contributions have been made on his/her behalf to which Company Contributions,
if any, are allocated in the year in which such event (retirement, Total and
Permanent Disability, or death) occurred, such Participant shall be entitled to
share in the Company Contribution which it may make with respect to such year,
as herein provided, as if such event had not occurred.
There shall be directly and promptly allocated to the Pre-Tax Dollar Qualifier
Contributions subaccount of each Participant the Company Salary Reduction
Contributions, as set forth in Section 2 hereof. Company Contributions will be
allocated to the Participant only if the Participant is employed on the last day
of the Plan Year, except in the case of retirement, Total and Permanent
Disability or death.
SECTION 4. REPORTING THE CONTRIBUTIONS
The Company Contributions and Company Salary Reduction Contributions shall be
reported to the Committee by the Company.
22
SECTION 5. CONTINGENT NATURE OF CONTRIBUTIONS
To the extent that the deductibility thereof is subsequently denied, each
Company Contribution and each Company Salary Reduction Contribution made by the
Company pursuant to the provisions of Article IV hereof is hereby made expressly
contingent upon the deductibility thereof for Federal income tax purposes for
the year with respect to which such contribution is made. Each such contribution
is further contingent upon the maintenance of qualified status by the Plan for
the year with respect to which such contribution is made, to the extent that the
loss of qualified status would deprive the Company of the deduction taken for
such contribution.
SECTION 6. EXCLUSIVE BENEFIT; REFUND OF CONTRIBUTIONS
All contributions made by the Company are made for the exclusive benefit of the
Participants and their beneficiaries, and such contributions shall not be used
for nor diverted to purposes other than for the exclusive benefit of the
Participants and their beneficiaries, including the costs of maintaining and
administering the Plan and Trust. Notwithstanding the foregoing, refunds of
Company Contributions shall be made to the Company under the following
circumstances and subject to the following limitations, to the extent that such
refunds do not, in themselves, deprive the Plan of its qualified status:
(a) To the extent that a Federal income tax deduction is
disallowed for any Company Contribution, the Trustee shall
refund to the Company the amount so disallowed within one (1)
year of the date of such disallowance.
(b) In the case of a contribution, or for any Company Salary
Reduction Contribution, which is made in whole or in part by
reason of a mistake of fact, so much of the Company
Contribution as is attributable to the mistake of fact shall
be returnable to the Company upon demand, upon presentation of
evidence of the mistake of fact to the Trustee and of
calculations as to the impact of such mistake of fact. Demand
and repayment must be effected within one (1) year after the
last installment payment of the contribution to which the
mistake applies.
In the event that any refund of amounts contributed under Section 1 hereof is
paid to the Company, such refund shall be made without interest and shall be
deducted from among the Company Contributions subaccounts of Participants only
to the extent that the amount of the refund can be identified to specific
Participants (as in the case of certain mistakes of fact). Refunds of amounts
contributed pursuant to Section 2 hereof (relating to contributions attributable
to salary reduction) are treated at Section 6 of Article III.
Notwithstanding any other provision of this Section 6, no refund shall be made
to the Company which is specifically chargeable to the Account of any
Participant in excess of one hundred percent (100%) of the amount in such
Account, nor shall a refund be made by the Trustee of any funds, otherwise
subject to refund hereunder, which have been distributed to Participants and/or
beneficiaries. In the case that such distributions become refundable, the
Company shall have a claim directly against the distributees to the extent of
the refund to which it is entitled. All refunds pursuant to this Section 6 shall
be limited in amount, circumstance and timing to the provisions of Section
403(c) of the Employee Retirement Income Security Act of 1974, as
23
amended, and no such refund shall be made if, solely on account of such refund,
the Plan would cease to be a qualified Plan pursuant to Section 401(a) of the
Code.
SECTION 7. TRANSMITTING THE COMPANY CONTRIBUTIONS
Each Company Contribution shall be sent to the Trustee as promptly as
practicable following the determination of the amount thereof, and, in any
event, on or before the date established by law (including any extension
thereof) for the filing of the Company's federal income tax return for the
taxable year with respect to which such Company Contribution is made.
Contributions made pursuant to Section 2 hereof shall be made no later than the
date specified in the preceding sentence, and shall be made at such earlier
dates as may be practicable provided, however, that no salary reduction amount
shall be held by the Company without contributing same to the Plan for a period
longer than the longest period that is permissible under regulations published
under Section 401(k) of the Code, and, in any event, amounts contributed under
Section 2 hereof with respect to any Plan Year shall be deemed credited to the
Pre-Tax Dollar Qualifier Contributions subaccount of the Participant not later
than the last day of such Year.
SECTION 8. CONTRIBUTIONS MADE TO THE NON-ESOP FEATURE
When transmitted to the Plan pursuant to this Article IV, the Company
Contributions and Company Salary Reduction Contributions shall be transmitted to
and held under the Non-ESOP Feature of the Plan. As provided in Section 3 and
Section 5 of Article V, such contributions may be transferred later from the
Non-ESOP Feature to the ESOP Feature.
24
ARTICLE V
INVESTMENT OF CONTRIBUTIONS
SECTION 1. INVESTMENT OF FUNDS
Except for Unvested Company Contributions and, subject to Section 4 of Article
XVIII, ESOP Contributions attributable to a Participant's Contributions made
after June 30, 1984, the amounts in a Participant's Account may be invested on
behalf of such Participant in one or more of the following Investment Options,
at the Participant's discretion:
(a) Option A: Cash with Interest. - Cash will be invested in a
fixed income account with a bank, insurance company, or an
investment adviser registered under the Investment Advisers
Act of 1940.
(b) Option B: Mutual Fund(s). - Cash will be invested in one or
more mutual funds approved by the Committee and made available
to Participants.
(c) Option C: A fund comprising a pooled account of Common Stock
of the Company.
The amounts credited to a Participant's Account from, subject to Section 4 of
Article XVIII, ESOP Contributions and Unvested Company Contributions
attributable to contributions made by or on behalf of Participants after June
30, 1984, shall be invested in the Common Stock fund.
SECTION 2. INSTRUCTIONS TO THE TRUSTEE
A Participant will instruct the Trustee as to the manner in which his/her
contributions in his/her Account, other than Company Contributions and ESOP
Contributions, shall be invested in any one or more of the Investment Options in
such proportions as he/she sees fit, except that the amounts so specified shall
be in whole multiples of one percent (1%). A Participant may likewise instruct
the Trustee with respect to the retention or investment of the Vested portion of
the Company Contributions subaccount and, pursuant to Section 4 of Article
XVIII, the ESOP Contribution subaccount allocated to his/her Account, subject to
the same limitations as apply to the investment of the contributions in his/her
Account other than Company Contributions.
Investment instructions with respect to the contributions in his/her Account,
other than Company Contributions and ESOP Contributions, and with respect to the
Vested portion of the Company Contributions and, pursuant to Section 4 of
Article XVIII, the ESOP Contribution subaccount may be different, both as to the
kind of investment and as to the relative amounts to be invested in such
investments. Subject to Section 4 of Article XVIII, ESOP Contributions
subaccount and the Unvested portion of the Company Contributions subaccount
attributable to contributions made after June 30, 1984, shall remain invested in
the Common Stock fund.
SECTION 3. TRANSFER TO THE ESOP FEATURE
Any amount of the Participant's Non-ESOP Account invested in the Common Stock
fund shall transfer to the Participant's ESOP Account as of the first day of the
Plan Year immediately succeeding the Plan Year in which the contributions
comprising such amounts invested in the
25
Common Stock fund were made to the Plan. Notwithstanding the foregoing, any
amount in a Participant's Account that is attributable to contributions made to
the Plan or a Prior Plan prior to January 1, 2002 and that is invested in the
Common Stock fund on December 31, 2001 shall be transferred to the Participant's
ESOP Account on January 1, 2002.
SECTION 4. TRUSTEE OPTIONS
The Trustee is authorized to purchase treasury or authorized but unissued Common
Stock of and from the Company, if offered by it, at the applicable fair market
value.
SECTION 5. CHANGING OF INVESTMENTS
As to the investment of contributions with respect to which the Participant has
investment discretion, the Participant shall have the right, at any time, to
instruct the Trustee to change the amounts to be invested in any Investment
Option(s) for all his/her contributions. A Participant shall instruct the
Trustee with regard to the investment of any portion of the Participant's
Account attributable to Transfer Contributions or Prior Plan Contributions
pursuant to this Section 5.
Subject to Section 10 of Article III, Section 8 of Article IV and Section 3 of
this Article V, any amount that the Participant chooses to invest in the Common
Stock fund, pursuant to this Section 5, shall be held in the Participant's
Non-ESOP Account, subject to transfer to the Participant's ESOP Account. Any
such amount invested in the Common Stock fund shall transfer to the
Participant's ESOP Account as of the first day of the Plan Year immediately
succeeding the Plan Year in which the investments were changed into the Common
Stock fund. Any amount that the Participant chooses to invest in any Investment
Option(s) other than the Common Stock fund, pursuant to this Section 5, shall be
held in the Participant's Non-ESOP Account.
All such directions to sell or to redeem securities held in the Participant's
Account or to reinvest the proceeds and all changed investment directions shall
become effective during the Transaction Period, as such term is defined in
Section 1 of Article XV. All such directions received and completed prior to
4:00 p.m. Eastern Time on a day when both the Trustee and the New York Stock
Exchange are open for business shall be effective as of the close of the
business day of receipt of such directions. All such directions received and
completed after 4:00 p.m. Eastern Time on a day when both the Trustee and the
New York Stock Exchange are open for business shall be effective as of the
following day when both the Trustee and the New York Stock Exchange are open for
business.
SECTION 6. EARNINGS FROM INVESTMENTS
Except as provided in Section 6 of Article XVIII, earnings from the Investment
Options shall be reinvested in the Investment Option producing such earnings.
SECTION 7. UNINVESTED FUNDS UNDER INVESTMENT OPTIONS
Any funds in the hands of the Trustee as to which the Participant has instructed
the Trustee to invest in any given Investment Option but which temporarily
remains uninvested may be held by the Trustee in cash. Shares of Common Stock
purchased and held under Option C shall be in full
26
shares only, with no fractional shares being purchased or held. Amounts
creditable to the Accounts of Participants which cannot be invested in the
Option selected because such amounts are insufficient to purchase a full share
of Common Stock shall be temporarily held pursuant to this Section 7 as
uninvested funds for the benefit of the Account to which such amount is
allocable.
SECTION 8. SELECTION OF INVESTMENT OPTION
The selection of an Investment Option by a Participant will be entirely the
responsibility of such Participant. Neither the Trustee, the Committee, the
Company, nor any of its personnel shall be empowered to advise a Participant as
to the manner in which the amounts credited to any Account shall be invested.
The fact that a security is available to Participants for investment under this
Plan shall not be construed as a recommendation for the purchase of that
security, nor shall the designation of any Investment Option impose any
liability on the Trustee, the Committee, the Company, or any of its personnel.
27
ARTICLE VI
VESTING OF CONTRIBUTIONS
SECTION 1. VESTING OF PARTICIPANT CONTRIBUTIONS
A Participant shall have a nonforfeitable interest in his/her Account balance to
the extent that it is attributable to contributions made by him/her or on
his/her behalf including (but not limited to) After-Tax Dollar Contributions,
and Company Salary Reduction Contributions (but not including Company
Contributions), at all times (subject to the terms and conditions of ARTICLES IX
and XI), and in all assets in his/her Account attributable thereto.
SECTION 2. VESTING OF COMPANY CONTRIBUTIONS AND ESOP CONTRIBUTIONS
Effective January 1, 2000, Company Contributions and ESOP Contributions, if any,
shall become Vested to the Participant on the date such Participant completes
three (3) years of Continuous Credited Service (Article II, Section 2). For
Participants with three (3) or more years of Continuous Credited Service,
Company Contributions and ESOP Contributions will become Vested immediately upon
being placed in his/her Account. Notwithstanding the foregoing, a Participant
shall at all times be Vested in any earnings and dividends paid on the
investments of Unvested Company Contributions and ESOP Contributions held in the
Participant's Account. Full (100%) vesting shall also occur upon attainment of
the Participant's Normal Retirement Date.
Should a Participant terminate participation in the Plan by reason of any of the
following, all Company Contributions and ESOP Contributions will become 100%
Vested to the Participant:
(a) Total and Permanent Disability
(b) Death
(c) Termination of the Plan, (or partial termination of the Plan
if the Participant is affected thereby), or
(d) Complete and final discontinuance of Company Contributions.
If a Participant terminates employment at a time when his/her Company
Contributions and ESOP Contributions are Unvested, those Unvested contributions
shall be forfeited upon the earlier of (i) the distribution to the Participant
of the Vested portion of his/her Account or (ii) the close of five consecutive
Severance Periods after such termination of employment.
SECTION 3. VESTING OF RESTORED COMPANY CONTRIBUTIONS AND ESOP
CONTRIBUTIONS
A Participant who has restored previously forfeited ESOP Contributions or
Company Contributions (as described in Section 7 of Article XI) shall have these
restored ESOP Contributions and Company Contributions vest provided restoration
is made prior to the attainment of five (5) years' Continuous Credited Service
by the Participant.
28
SECTION 4. VESTING OF PRIOR PLAN CONTRIBUTIONS
Notwithstanding any provision of this Article to the contrary, a Participant
shall have a nonforfeitable interest in any portion of his or her Prior Plan
Contributions subaccount derived from The Standard Products Company Individual
Retirement and Investment Trust Plan or the Siebe Automotive Employees' Profit
Sharing Plan.
29
ARTICLE VII
PARTICIPANT LOANS
SECTION 1. LOAN LIMITATIONS
An Employee who is an active Participant in the Plan may request a loan from the
Trust. The amount of the loan, when aggregated with the total outstanding
balances of all other loans (including accrued interest thereon) taken by the
Participant under this or any other qualified retirement plan sponsored by the
Employer may not exceed the lesser of:
(a) fifty percent (50%) of the Participant's pre-tax Vested
account balance as determined as of the date the loan is
requested; or
(b) $50,000.00 reduced by the excess, if any, of the highest
outstanding balance of loans during the twelve month period
ending on the day before the date a new loan is made over the
outstanding balance of such loans on the date such loan was
made.
Participant loans shall be considered a directed investment under the
Participant's account in a manner consistent with Article V hereof.
SECTION 2. ESTABLISHMENT OF LOAN PROGRAM
The Plan Administrator shall establish uniform and non-discriminatory practices
and policies to be followed in the administration of the loan program. Included
in such policies and procedures shall be the following:
(a) Loans shall be requested through the completion of an
application in such form as shall be prescribed by the Plan
Administrator. Such application, if received prior to January
1, 2002, shall include procurement of spousal consent in
accordance with subsection (i) below.
(b) Loans shall be made available to all active Participants on a
reasonably equivalent basis.
(c) Loans shall not be made available to highly compensated
employees in a percentage amount greater than the percentage
amount made available to non-highly compensated employees.
(d) No loan shall be permitted in an amount less than five hundred
dollars ($500.00).
(e) The term of any loan shall not exceed five (5) years. Any loan
shall come immediately due and payable in full in the event of
default as described in Subsection (k) below.
(f) Only one outstanding loan is permitted at any time. Requests
for additional loans shall be denied until any outstanding
loan has been repaid in full.
30
(g) The interest rate for any loan shall be determined by the Plan
Administrator. The rate shall be based on the prime interest
rate charged by National City Bank to its largest and most
creditworthy corporate borrowers.
(h) Loans shall be amortized in substantially equal payments of
principal and interest over the term of the loan. Payments
shall be required not less frequently than quarterly.
Repayment of loans shall be by payroll deduction. A
Participant may repay the outstanding balance of a loan at any
time without penalty. Payments of principal and interest shall
be allocated directly to and in the same proportion as the
investment funds selected by the Participant for investment of
his Pre-Tax Dollar Qualifier Contributions to the Plan.
(i) If the Participant is married and the date a loan is made is
prior to January 1, 2002, the loan shall be conditioned on the
Participant first obtaining the written consent of his or her
spouse to the loan not less than thirty (30) days and not more
than ninety (90) days before the date of such loan. The
spouse's written consent shall acknowledge an understanding of
the effect such loan may have upon future benefits payable
under the Plan and be sworn and subscribed before a notary
public.
(j) Each loan shall be evidenced by the borrower's promissory note
for the amount of the principal and interest payable to the
order of the Trustee. Each loan shall be secured by adequate
collateral. Such collateral shall consist of the portion of
the Participant's interest in the Plan from which the loan was
made, reduced by repayments of principal as such repayments
are made (the "Loan Account").
(k) A loan shall be deemed to be in default upon a Participant's
termination of employment for any reason. In addition, a loan
shall be considered in default if a Participant fails to make
any payment of principal and interest when due.
(l) In the event a Participant defaults on a loan for a reason
other than termination of employment, such participant shall
be provided a sixty (60) day period to cure such default. The
sixty (60) day period shall begin as of the date of default.
In the event such default is not cured within the sixty (60)
day period the Plan Administrator shall report the amount of
unpaid principal and interest as a "deemed distribution" as
described in Internal Revenue Code Section 72(p) and
Regulations promulgated thereunder, and shall deduct the
unpaid loan amount from the Participant's Loan Account.
(m) Notwithstanding anything to the contrary above, a Participant
who is absent from active employment on an authorized leave of
absence may suspend scheduled loan repayments for a period of
twelve (12) consecutive months in a manner consistent with
Internal Revenue Code Section 72(p) and regulations
promulgated thereunder. Failure to make scheduled repayments
following expiration of the twelve (12) months suspension
period shall be deemed a default in accordance with subsection
(k) above. Nothing in the foregoing, however, shall be
construed
31
as to allow a Participant to extend the repayment term of any
loan beyond five (5) years.
(n) Participants performing service in the uniformed services (as
defined in chapter 43 of title 38 of the United States Code)
shall be permitted to suspend scheduled repayments for such
period of uniformed service in a manner consistent with
Internal Revenue Code Section 414(u) and Regulations
promulgated thereunder.
(o) The Plan Administrator may delegate to any person the
administration of the participant loan program. All expenses
related to the administration of the participant loan program
shall be born by those Participants with outstanding loan
balances.
32
ARTICLE VIII
APPLICATION OF COMPANY CONTRIBUTIONS FORFEITED
SECTION 1. APPLICATION OF FORFEITURES
All Company Contributions and ESOP Contributions forfeited in accordance with
Article VI, Section 2 and Article IX, Section 2, shall be used to reduce the
Company's subsequent contributions to the Plan. However, such forfeited Company
Contributions and ESOP Contributions will be restored to the Participant's
Account should the Participant exercise restoration rights as defined in Section
7 of Article XI.
In the event that the Plan is terminated, any forfeitures not previously applied
to reduce Company Contributions shall be credited (on the basis of each
individual Participant's current year Compensation as a ratio to the total
current year Compensation of all Participants) to the Accounts of all
Participants entitled to share in the allocation of Company Contributions at the
time of such termination.
SECTION 2. TREATMENT OF FORFEITED SECURITIES
Forfeited securities shall be converted to cash and may be invested by the
Trustee; such cash shall be applied to the reduction of the next contribution by
the Company.
Upon forfeiture of a portion of the Company Contributions or ESOP Contributions,
the Trustee shall sell such amount of the securities allocated to the
Participant's Account as may be necessary to effect the forfeiture.
33
ARTICLE IX
WITHDRAWAL OF CONTRIBUTIONS
SECTION 1. FREQUENCY OF PARTIAL WITHDRAWALS
Subject to the conditions in this Article, Participants may make up to two
partial withdrawals from the Plan in each calendar year.
SECTION 2. TOTAL WITHDRAWAL OF AFTER-TAX DOLLAR CONTRIBUTIONS, COMPANY
CONTRIBUTIONS, AND ESOP CONTRIBUTIONS
Except for the Unvested Company Contributions and Unvested ESOP Contributions, a
Participant may withdraw the total of After-Tax Dollar Contributions, Company
Contributions, ESOP Contributions and earnings attributable thereto allocated to
his/her account at any time. However, except for the occurrence of a withdraw
event as described in Section 5 of this Article, Company Contributions and ESOP
Contributions may not be so withdrawn unless the Participant has been a
Participant in the Plan for at least five years. Such total withdrawal will
cause a Participant to forfeit the Unvested portion of the Company Contributions
and ESOP Contributions to the Account attributable to such After-Tax Dollar
Contributions (as defined in Section 3 of Article XI) subject to rights of
restoration (as defined in Section 7 of Article XI).
SECTION 3. PARTIAL WITHDRAWALS OF AFTER-TAX DOLLAR CONTRIBUTIONS,
COMPANY CONTRIBUTIONS, AND ESOP CONTRIBUTIONS
Subject to the distribution rules under Article XI, Section 3, a Participant may
make partial withdrawals of After-Tax Dollar Contributions and/or corresponding
Company Contributions and ESOP Contributions and Account earnings attributable
to such contributions, allocated to his/her Account provided such amounts are
Vested and are not in excess of the then current market value of the portion of
the Account attributable to such contributions. However, except for the
occurrence of a withdrawal event as described in Section 5 of this Article,
Company Contributions and ESOP Contributions may not be so withdrawn unless the
Participant has been a Participant in the Plan for at least five years.
A Participant may make partial withdrawals of his/her After-Tax Dollar
Contributions. If the Company Contributions attributable to the withdrawn
After-Tax Dollar Contributions are Unvested, such withdrawal may be made in the
amount of the Participant's After-Tax Dollar Contributions plus all earnings
attributable to such After-Tax Dollar Contributions, but may not exceed the then
current market value of the Account (excluding amounts forfeited under Section 2
of this Article) including the then current market value of Unvested Company
Contributions and Unvested ESOP Contributions. If the Company Contributions
attributable to the amount withdrawn from the Participant's Account are
Unvested, the withdrawal will cause the Participant to forfeit a corresponding
percentage of Unvested Company Contributions credited to the Account subject to
rights of restoration (as defined in Section 7 of Article XI). Partial
withdrawals and forfeitures attributable to such withdrawals shall be charged
against amounts credited to the Participant's Account on a first-in, first-out
basis.
34
SECTION 4. PROCEDURE FOR PARTIAL WITHDRAWALS
All partial withdrawals of After-Tax Dollar Contributions shall be paid by the
Trustee, at the Participant's option, in cash or securities held for the Account
of such Participant.
A Participant shall notify the Trustee of an intention to make a partial
withdrawal of the amount credited to the Account, the manner of payment, and, if
necessary, directions as to the sale of the securities held in the Account.
SECTION 5. WITHDRAWAL OF COMPANY SALARY REDUCTION CONTRIBUTIONS,
COMPANY CONTRIBUTIONS AND ESOP CONTRIBUTIONS
(a) Withdrawal Events. No amount may be withdrawn by a Participant
from Company Salary Reduction Contributions, Company
Contributions or ESOP Contributions prior to five years of
participating in the Plan, except for the occurrence of
hardship (see subsection (b) below) or one of the following
events:
(i) the Participant's retirement, death, Total and
Permanent Disability, or other separation from
service;
(ii) termination of the Plan without establishment of a
successor Plan;
(iii) the Participant's attainment of age 59 1/2;
(iv) the sale or other disposition by the Company to an
unrelated corporation, which does not maintain the
Plan, of substantially all of the assets used in a
trade or business, but only with respect to Employees
who continue employment with the acquiring
corporation;
(v) the sale or other disposition by the Company of its
interest in a subsidiary to an unrelated entity which
does not maintain the Plan, but only with respect to
Employees who continue employment with the
subsidiary.
(vi) an Eligible Rollover Distribution by a Distributee to
an Eligible Retirement Plan in accordance with the
provisions of Article XI, Section 6.
(b) Hardship Withdrawals. If a Participant requests a hardship
withdrawal prior to the occurrence of an event in paragraph
(a) above, such request will be approved by the Committee, if,
and only if, the purpose of the withdrawal is to meet
immediate and heavy financial needs of the Participant,
(i) arising out of one (1) of the following
circumstances:
(A) Expenses for medical care described in
Section 213(d) of the Code previously
incurred by the Employee, the Employee's
Spouse, or any dependents of the Employee
(as defined in Section 152 of the
35
Code) or necessary for these persons to
obtain medical care described in code
Section 213(d);
(B) Costs directly related to the purchase of a
principal residence for the Employee
(excluding mortgage payments);
(C) Payment of tuition and related educational
fees for the next 12 months of
post-secondary education for the Employee,
or the Employee's Spouse, children, or
dependents (as defined in code Section 152);
or
(D) Payments necessary to prevent the eviction
of the Employee from the Employee's
principal residence or foreclosure on the
mortgage on that residence.
(ii) For purposes of this clause (ii), a distribution will
be considered as necessary to satisfy an immediate
and heavy financial need of the Participant only if:
(A) The distribution is not in excess of the
amount of the immediate and heavy financial
need of the Employee. The amount of an
immediate and heavy financial need may
include any amounts necessary to pay any
federal, state, or local taxes or penalties
reasonably anticipated to result from the
distribution;
(B) The Employee has obtained all distributions,
other than hardship distributions, currently
available under all plans maintained by the
employer (including the election of a cash
payment of dividends to the extent available
under any plan);
(C) The Plan and all other plans maintained by
the Company limit the Employee's elective
contributions for the next taxable year to
the applicable limit under Section 402(g) of
the Code for that year minus the Employee's
elective contributions for the year of the
hardship distribution; and,
(D) The Employee is prohibited, under the terms
of the Plan or an otherwise legally
enforceable agreement, from making elective
contributions and Employee contributions to
the Plan and all other plans maintained by
the Company for at least 12 months after
receipt of the hardship distribution.
(iii) A withdrawal made on account of hardship may be made
only from Company Salary Reduction Contributions of
the Participant, and not from earnings credited
thereto.
36
(iv) A withdrawal of Company Salary Reduction
Contributions will cause the Participant to forfeit
the Unvested portion of the Company Contributions
attributable to such Company Salary Reduction
Contributions.
SECTION 6. WITHDRAWALS OF PRIOR PLAN CONTRIBUTIONS
(a) Notwithstanding any other provision of this Article to the
contrary, a Participant whose Account includes a Prior Plan
Contributions subaccount attributable to Voluntary Participant
Contributions made and defined under The Standard Products
Company Individual Retirement and Investment Trust Plan may
elect to withdraw in cash an amount equal to all or part of
such Prior Plan Contributions subaccount. To make a withdrawal
under this Subsection (a), the Participant must provide the
Committee with written notice 30 days prior to the withdrawal
date. A Participant may not make more than one withdrawal
under this Subsection in any Plan Year, and in no event, shall
any such withdrawal be less than $1000 if the withdrawal is
less than the total amount of such Transfer Contributions.
37
ARTICLE X
DESIGNATION OF BENEFICIARY
Each Participant must file with the Committee a written designation of a
Designated Beneficiary or Beneficiaries in the form prescribed by the Committee
with respect to all or part of the securities and cash held for the Account of
such Participant. Such Designated Beneficiary shall be a Participant's Spouse
or, if he/she has no Spouse or his/her Spouse consents (in the manner
hereinafter described in this Article) to the designation hereinafter provided
for in this Article, such person or persons other than, or in addition to,
his/her Spouse as may be designated by a Participant as his/her death
beneficiary under the Plan. Such a designation may be made, revoked or changed
only by an instrument (in form acceptable to the Committee) which is signed by
the Participant, which includes his/her Spouse's written consent to the action
to be taken pursuant to such instrument (unless such action results in the
Spouse being named as the Participant's sole Beneficiary), and which is filed
with the Committee before the Participant's death. A Spouse's consent required
by this Article shall be signed by the Spouse, shall acknowledge the effect of
such consent, shall be witnessed by a member of the Committee or by a notary
public and shall be effective only with respect to such Spouse. At any time when
all the persons designated by the Participant as his/her Designated Beneficiary
have ceased to exist, his/her Designated Beneficiary shall be his/her Spouse or,
if he/she does not then have a Spouse, the Participant's estate. If a
Participant has no Spouse and he/she has not made an effective beneficiary
designation pursuant to this Article, his/her Designated Beneficiary shall be
his/her estate.
38
ARTICLE XI
DISTRIBUTION OF CONTRIBUTIONS
SECTION 1. DISTRIBUTION UPON OCCURRENCE OF EVENTS
Subject to the provisions of Sections 3 and 4 of this Article, distributions
will be made to a Participant or the Designated Beneficiary, as the case may be,
upon the occurrence of the following stated events:
(a) Termination of a Participant's participation in the Plan, or
cessation of the Participant's right to share in the
allocation of the Company Contributions or ESOP Contributions
made to the Plan (other than a temporary cessation on account
of a temporary suspension of Participant contributions), or
(b) Termination of the Plan without establishment of a successor
Plan, or
(c) The sale or other disposition by the Company to an unrelated
corporation, which does not maintain the Plan, of
substantially all of the assets used in a trade or business,
but only with respect to Employees who continue employment
with the acquiring corporation, or
(d) The sale or other disposition by the Company of its interest
in a subsidiary to an unrelated entity which does not maintain
the Plan, but only with respect to Employees who continue
employment with the subsidiary.
If the present value of any nonforfeitable accrued benefit, at the time of
distribution or at the time of any subsequent distribution, exceeds $5,000, such
benefit may not be immediately distributed without the consent of the
Participant.
SECTION 2. TERMINATION OF A PARTICIPANT'S PARTICIPATION IN THE PLAN
A Participant's Active Participation in the Plan will be terminated if he/she:
(a) Voluntarily elects to withdraw from the Plan,
(b) Terminates employment from the Company voluntarily or
involuntarily,
(c) Retires from the Company under one of its retirement programs,
(d) Suffers a Total and Permanent Disability,
(e) Dies,
(f) Becomes Vested in all Company Contributions and ESOP
Contributions in his/her Account and remains in a job whereby
he/she is ineligible to be an active Participant in the Plan.
39
SECTION 3. DISTRIBUTION PRIOR TO VESTING OF COMPANY CONTRIBUTIONS AND
ESOP CONTRIBUTIONS
If a Participant terminates employment with the Company, either voluntarily or
involuntarily, before the Company Contributions or ESOP Contributions are Vested
the Participant will receive the then current market value of the larger of:
(a) the Participant's After-Tax Dollar Contributions and Pre-Tax
Dollar Qualifier Contributions, plus all earnings (not to
exceed the current market value of the entire Account), or
(b) the current market value of the entire Account less the
Unvested Company Contributions and Unvested ESOP
Contributions.
If a Participant, who remains an Employee of the Company but is not at least age
59-1/2, voluntarily elects to withdraw from the Plan before any of the Company
Contributions or ESOP Contributions are Vested, he/she will receive the amount
described above in this Section 3, less the then current market value of his/her
Pre-Tax Dollar Qualifier Contributions subaccount. Such Participant shall, upon
attainment of age 59-1/2, receive the then current market value of his/her
Pre-Tax Dollar Qualifier Contributions subaccount.
SECTION 4. DISTRIBUTION AFTER VESTING OF COMPANY CONTRIBUTIONS AND ESOP
CONTRIBUTIONS
Subject to the provisions of Article XI, Section 1, if a Participant terminates
employment with the Company after Company Contributions and ESOP Contributions
are Vested, the Participant will receive the then current market value of the
entire Account when he/she elects to make a voluntary withdrawal.
If a Participant, who remains an Employee of the Company but is not at least age
59-1/2, voluntarily elects to withdraw from the Plan after Company Contributions
and ESOP Contributions are Vested, or remains in a job whereby he/she is
ineligible to be an active Participant in the Plan, he/she will receive the
amount described above in this Section 4, less the then current market value of
his/her Pre-Tax Dollar Qualifier Contributions subaccount. Such Participant
shall, upon attainment of age 59-1/2, receive the then current market value of
his/her Pre-Tax Dollar Qualifier Contributions subaccount. If a Participant who
remains employed by the Company and who has attained age 59-1/2, voluntarily
elects to withdraw from the Plan after he/she becomes Vested in Company
Contributions and ESOP Contributions credited to his/her Account, he/she will
receive the entire amount described in this Section 4 as if he/she had
terminated employment with the Company.
SECTION 5. DISTRIBUTION UPON RETIREMENT, DEATH OR DISABILITY
If a Participant dies, retires or suffers a Total and Permanent Disability, the
Participant or Designated Beneficiary will receive the then current market value
of his/her Account. Distribution will not occur upon retirement or Total and
Permanent Disability in the event a Participant elects to defer the commencement
of distribution in accordance with Section 6 of this Article.
40
SECTION 6. DISTRIBUTION OF ACCOUNTS
(a) Form of Distribution of Accounts to a Participant During
His/Her Lifetime
If a Participant terminates participation in the Plan
due to a separation from service or, if earlier, age
59 1/2, distribution shall be made, subject to other
limitations of this Plan, by one of the following
methods as he/she shall elect:
(i) Payment in cash, or
(ii) If the Participant has selected an Investment Options
that provides for investment in Common Stock:
(A) payment in cash,
(B) payment in Common Stock held for the
Participant's Account, or
(C) a combination of (1) and (2) above at the
option of the Participant.
(b) Distribution of Cash and/or Securities
Distribution of cash and/or Common Stock to a Participant who
retires from the Company under one of its retirement programs,
who suffers a Total and Permanent Disability, who dies, or who
becomes Vested in all Company Contributions and ESOP
Contributions in his/her Account and remains in a job whereby
he/she is ineligible to be an active Participant in the Plan,
shall be made in one of the following forms:
(i) A single distribution to be received within ninety
(90) days from the date the Participant terminated
participation in the Plan.
(ii) Until March 1, 2002, as provided in Appendix A, if
elected by the Participant.
(iii) For events described in Section 1(c) or 1(d) of this
Article, distribution will be made in a lump sum as
provided by Section 401(k)(10) of the Code.
(iv) Notwithstanding any provision of this Subsection (b)
to the contrary, any Participant whose Prior Plan
Contributions subaccount includes amounts
attributable to The Standard Products Company Money
Purchase Pension Plan and Trust For Hourly Employees
shall, unless elected otherwise by the Participant
(and his or her Spouse) in accordance with applicable
law, receive the distribution of the amount in such
Prior Plan Contributions subaccount in the form of an
immediate Joint and Survivor Annuity if the
Participant is married on the Annuity Starting Date
or an immediate single life annuity if the
Participant is not married on the Annuity starting
Date.
41
In the case of a Participant who dies before the
Annuity Starting Date, whose Prior Plan Contributions
subaccount includes amounts attributable to The
Standard Products Company Money Purchase Pension Plan
and Trust For Hourly Employees, who was married on
the date of the Participant's death, and whose
nonforfeitable accrued benefit in his Account has a
present value greater than $5,000, a Preretirement
Survivor Annuity will be payable to the Surviving
Spouse of such Participant with respect to the amount
in the Participant's Prior Plan Contributions
subaccount attributable to The Standard Products
Company Money Purchase Pension Plan and Trust For
Hourly Employees, unless the Participant (and his or
her Spouse) elects otherwise in accordance with
applicable law. The Surviving Spouse may elect to
have the Preretirement Survivor Annuity distributed
within a reasonable time after the Participant's
death and may elect to receive the value of the
Participant's Account attributable to the
Preretirement Survivor Annuity in any form described
in Subsection (a) of this Section.
(A) "Annuity Starting Date" means the first day
of the first period for which an amount is
received as an annuity (whether by reason of
normal retirement age or total disability),
or in the case of a benefit not payable in
the form of an annuity, the first day in
which all events have occurred which entitle
the Participant to a distribution under the
Plan.
(B) "Joint and Survivor Annuity" means an
immediate annuity for the life of the
Participant or, in the case of a married
Participant, an immediate annuity for the
life of the Participant with a survivor
annuity for the life of the Participant's
spouse that is not less than 50% nor more
than 100% of the amount of the annuity
payable during the joint lives of the
Participant and the spouse, and that is the
amount of benefit that can be purchased with
the Participant's Vested Account. For
purposes of Section 6(b)(iv) of this
Article, the percentage of the survivor
annuity will be 50%.
(C) "Preretirement Survivor Annuity" means an
annuity for the life of the surviving spouse
of the Participant, the actuarial equivalent
of which is not less than 50% of the Vested
Account of the Participant as of the
Participant's date of death, including the
proceeds of any life insurance contracts.
The Preretirement Survivor Annuity will
include the Participant's contributions in
the same ratio that the total Participant
contributions in the Participant's Account
bears to the total Account balance of the
Participant. The portion of the
Participant's Vested Account that is not
payable as a Preretirement Survivor Annuity
will be payable to the Participant's
designated Beneficiary. The actuarial
equivalent of the Preretirement Survivor
Annuity will be 50% of the Participant's
Vested Account.
42
(D) The payment of benefits, in a form described
in this clause (iv), to a Participant or
Designated Beneficiary shall be made or
shall commence, as the case may be, within a
reasonable period of time following the
Participant's termination of employment or,
in the case of a distribution to a
Designated Beneficiary, within one year
following the Participant's death. The
Participant (or his Designated Beneficiary)
may elect to postpone the distribution or
the commencement of a distribution described
in this Paragraph (iv) until not later than
the latest date permitted under the
following provisions of this sub-clause (D).
Unless a Participant elects to defer benefit
payments in accordance with the provisions
of this sub-clause (D), under no
circumstances shall any method of
distribution provide for the commencement of
benefit payments more than sixty (60) days
subsequent to the last day of the Plan Year
in which occurs the later of the
Participant's 65th birthday or his actual
termination of employment; provided,
however, that if the amount of the payment
required to commence by such date cannot be
ascertained by such date, or if it is not
possible to make such payment by such date
because the Committee has been unable to
locate the Participant after making
reasonable efforts to do so, a payment
retroactive to such date may be made no
later than sixty (60) days after the
earliest date on which the amount of such
payment can be ascertained under the Plan or
the date on which the Participant is
located, whichever is applicable. Any
Participant and any Designated Beneficiary
who is the surviving spouse of a deceased
Participant entitled to benefits hereunder
may elect to have the payment, or
commencement of payment, of such benefits
deferred, but in no event shall any such
benefit payment begin later than April 1 of
the calendar year following the calendar
year in which such Participant or
Beneficiary attained age 70 1/2. Such
deferral can be made by submitting to the
Committee a signed written statement
describing the benefit and the date on which
such payment is to be made or commence. The
failure of any Participant or Designated
Beneficiary to request such a deferral while
any benefit is immediately distributable
shall be deemed as an election to defer
commencement of the payment of any benefit
payment under this Plan.
Notwithstanding anything under this clause
(iv) to the contrary, no method of
distribution, and no deferral, shall provide
for a so-called "Interest Option" or extend
payments over, or permit a payment to be
made after the end of, a period of time
which exceeds whichever of the following is
applicable:
(1) In the case of benefits
distributable to a Participant
whose Designated Beneficiary is his
spouse, a specified period not
longer than the joint and last
survivor expectancy of the
43
Participant and his spouse at the
time benefit payments to the
Participant commence; or
(2) In the case of benefits
distributable to a Participant
whose Designated Beneficiary is
other than his spouse, a specified
period equal to the life expectancy
of the Participant and Designated
Beneficiary at the time benefit
payments to the Participant
commence; or
(3) In the case of benefits
distributable to the Designated
Beneficiary of a Participant who
died before payments to him
commenced, a specified period not
longer than the life expectancy of
the Beneficiary at the time benefit
payments commence,
Distribution of cash and/or Common Stock to a Participant who
voluntarily elects to withdraw from the Plan or terminates
employment from the Company, voluntarily or involuntarily,
shall be made in a single distribution to be received within
ninety (90) days from the date the Participant terminated
participation in the Plan.
Notwithstanding the foregoing, a Participant who retires from
the Company under one of its retirement programs (except a
deferred vested pension) may elect to defer the commencement
of distribution and remain a Participant in this Plan until no
later than April 1 of the calendar year following the calendar
year in which he/she attains age 70-1/2.
Should the Participant fail to select a form of distribution
as previously described, the final distribution will be made
in a single distribution as described in Section 6(b)(i) of
this Article, in the form of cash.
If a Participant should die before the distribution has been
made, such distribution shall be made to the Designated
Beneficiary in cash.
(c) Distribution in Case of the Death of a Participant While an
Employee
In the event of the death of a Participant while an Employee,
distribution shall be made in accordance with Article X. Each
Designated Beneficiary shall make an appropriate election as
provided in Section 6(b) of this Article.
If any Designated Beneficiary should die before the final
distribution has been made then such final distribution shall
be made to the legally appointed representative or
representatives of the Designated Beneficiary.
(d) Miscellaneous Provisions Relating to Distributions
Any distribution to which a Participant or the Designated
Beneficiary may be entitled shall have deducted therefrom all
incident expenses and/or taxes.
44
The Committee shall be notified upon forms prescribed by it as
to all actions which are to be taken under this Section by a
Participant or Designated Beneficiary.
Unless the Participant elects otherwise, in no event shall any
retirement, death, or disability benefit commence later than
the sixtieth (60th) day after the latest of the close of the
Plan Year in which (i) occurs the date on which the
Participant attains the earlier of age 65 or the Normal
Retirement Date specified hereunder (if other than 65)
(whether or not by reason of reference to the Company's
retirement programs), (ii) occurs the tenth (10th) anniversary
of the year in which the Participant commenced participation
in the Plan, or (iii) the Participant terminates service with
the Company.
No distribution shall be made to a Participant with an Account
balance in excess of $5,000 prior to the Participant's
attainment of age 65, unless the Participant consents to such
distribution.
(e) Provision Pursuant to Code Section 401(a)(9)
All distributions required under this Article XI shall be
determined and made in accordance with Code Section 401(a)(9)
and regulations pertaining thereto, as may be amended or
promulgated from time to time.
(f) Direct Rollover of Eligible Rollover Distributions
This subsection applies to distributions made on or after
January 1, 1993. Notwithstanding any provision of the Plan to
the contrary that would otherwise limit a Distributee's
election under this subsection, a Distributee, as defined
under paragraph (i)(C) of this subsection, may elect, at the
time and in the manner prescribed by the Plan administrator,
to have any portion of an Eligible Rollover Distribution as
defined under paragraph (i)(A) of this subsection, paid
directly to an Eligible Retirement Plan, as defined under
paragraph (i)(B) of this subsection, specified by the
Distributee in a Direct Rollover, as defined under paragraph
(i)(D) of this subsection.
(i) Definitions
(A) Eligible Rollover Distribution: An Eligible Rollover
Distribution is any distribution of all or any
portion of the balance to the credit of the
Distributee except that an Eligible Rollover
Distribution does not include any distribution to the
extent such distribution is required under Section
401(a)(9) of the Code; any distribution that is one
of a series of substantially equal periodic payments
(paid not less frequently than annually) over the
life (or life expectancy) of the distributee or the
joint lives (or life expectancies) of the distributee
and a designated beneficiary or for a specified
period of ten years or more; the portion of any
distribution that is not includible in gross income;
such other amounts specified in
45
Treasury regulations and rulings, notices or
announcements issued under Section 402(c) of the
Code; and, effective January 1, 1999, any "hardship"
distribution (as defined in Code Section 401(k)).
(B) Eligible Retirement Plan: An Eligible Retirement Plan
is an individual retirement account described in
Section 408(a) of the Code, an individual retirement
annuity described in Section 408(b) of the Code, an
annuity plan described in Section 403(a) of the Code,
or a qualified trust described in Section 401(a) of
the Code, that accepts the Distributee's Eligible
Rollover Distribution. However, in the case of an
Eligible Rollover Distribution to the surviving
Spouse, an Eligible Retirement Plan is an individual
retirement account or individual retirement annuity.
(C) Distributee: A Distributee includes a Participant or
the Participant's surviving Spouse or Participant's
former Spouse who is the alternate payee under a
qualified domestic relations order, as defined in
Section 414(p) of the Code.
(D) Direct Rollover: A Direct Rollover is a payment by
the Plan to the Eligible Retirement Plan specified by
the Distributee.
SECTION 7. RESTORATION OF FORFEITED COMPANY CONTRIBUTIONS AND ESOP
CONTRIBUTIONS
Each Participant who has forfeited any Company Contributions or ESOP
Contributions has the right to gain restoration of the forfeited Company
Contributions and ESOP Contributions as follows:
(a) A Participant who (i) terminates participation in this Plan
pursuant to Sections 2(a), (b) or (c) of this Article XI, (ii)
ceases to be an Employee of the Controlled Group, (iii)
forfeits his Unvested Company Contributions and ESOP
Contributions pursuant to clause (i) of the third paragraph of
Section 2 of Article VI, and (iv) subsequently becomes rehired
by the Company, will have the right within the earlier of (A)
five years after re-employment or (B) the close of five
consecutive Severance Periods commencing after the date of
distribution, to restore to the Account the dollar value of
the previously forfeited Company Contributions and ESOP
Contributions by contributing back to the Account the total
lump sum amount (dollar value as of the date of distribution)
of the distribution which caused the forfeiture, unless the
time period specified in paragraph (b) below has previously
expired.
(b) A Participant who voluntarily elects a complete withdrawal
from the Plan and as a result forfeits Unvested Company
Contributions, and who subsequently, without any intervening
cessation of employment with the Company re-enters the Plan as
a Participant, will have the right, within a period beginning
on the date he/she again becomes a Participant and ending on
the date that the Company Contributions (that were forfeited)
would have been Vested in the absence of such
46
withdrawal, to restore to the Account the dollar value of the
previously forfeited Company Contributions by contributing to
the Account the total lump sum amount (dollar value as of the
date of withdrawal) withdrawn which caused the forfeiture.
(c) A Participant who forfeits Company Contributions as a result
of making a partial withdrawal of After-Tax Dollar
Contributions will have the right, until the date that the
Company Contributions (that were forfeited) would have been
Vested in the absence of any withdrawals, to restore to the
Account the dollar value of the previously forfeited Company
Contributions by contributing to the Account the total lump
sum amount (dollar value as of the date of withdrawal)
withdrawn which caused the forfeiture.
(d) Notwithstanding anything above to the contrary,
(i) A Participant may not redeposit any portion of a
withdrawal of his/her current year's Participant
After-Tax Dollar and/or Pre-Tax Dollar Qualifier
Contribution since there will have been no forfeiture
of Company Contributions or ESOP Contributions
associated with such withdrawal,
(ii) A Participant may not redeposit any sum greater than
the amount of After-Tax Dollar Contributions and/or
Pre-Tax Dollar Qualifier Contributions required to
restore the forfeited Company Contributions and ESOP
Contributions, and
(iii) A Participant may not redeposit any portion of a
withdrawal into his/her Pre-Tax Dollar Qualifier
subaccount.
SECTION 8. DETERMINATION OF VALUE
Determinations of value hereunder shall be made pursuant to an annual valuation
by the Trustee at the fair market value as of the close of business on the
annual valuation date to be established by the Trustee. If no such date is
established, the annual valuation date shall be the last day of the Plan Year.
Interim valuations, or partial valuations of one or more of the investment
funds, may occur upon the direction of the Committee. The then current value of
a Participant's Account, or any part thereof, as of any date, shall be
determined by reference to the valuation (whether or not the annual valuation)
coincident with or last preceding the date as of which such Account is to be
valued.
47
ARTICLE XII
MAXIMUM CONTRIBUTION LIMITATION
SECTION 1. PROVISION PURSUANT TO CODE SECTION 415(c)
(a) Notwithstanding any other provision of the Plan, the maximum
annual addition (as defined in Subsection (b) of this Section)
to a Participant's Account (and to any Account for him/her
under any other defined contribution plan, whether or not
terminated, maintained by any Controlled Group Member) shall
in no event exceed the lesser of (1) $30,000 (as adjusted,
effective January 1, 1995, pursuant to Section 415(d) of the
Code), or (2) twenty-five percent (25%) of the Participant's
Compensation.
(b) For purposes of this Article XII, "Compensation" shall mean
compensation within the meaning of Section 415(c)(3) of the
Code and the regulations thereunder. For limitation years
beginning on and after January 1, 2001, for purposes of
applying the limitations described in this Section,
compensation paid or made available during such limitation
years shall include elective amounts that are not includible
in the gross income of the employee by reason of Section
132(f)(4) of the Code.
(c) For the purpose of this Section, the term "annual addition"
means the sum for any Plan Year (which shall be the limitation
year) of:
(i) all contributions made by the Controlled Group which
are allocated to the Participant's Account pursuant
to a defined contribution plan maintained by a
Controlled Group Member,
(ii) all contributions made by the Participant, and
(iii) all forfeitures allocated to the Participant's
Account pursuant to a defined contribution plan
maintained by an Controlled Group Member.
(iv) all amounts described in Sections 415(l)(1) and
419A(d)(2) of the Code.
The annual addition for any Plan Year beginning before January
1, 1987 shall not be recomputed to treat all Employee
contributions as an annual addition.
(d) For purposes of this Article, the definition of "Controlled
Group" set forth in paragraph (14) of Article I shall be
modified as provided by Code Section 415(h).
(e) If, except for the application of paragraph (a) of this
Section, a Participant's annual addition (as defined in
paragraph (c) of this Section, for a Plan Year would exceed
the limitations of such paragraph (a) as a result of (i) the
allocation of forfeitures, (ii) a reasonable error in
estimating the Participant's Compensation, (iii) a reasonable
error in determining the amount of Company Salary Reduction
Contributions that may be made with respect to the Participant
under the limitation of this Section, or (iv) other facts and
circumstances which the Commissioner of Internal Revenue finds
justify application of the following rules
48
of this paragraph, contributions (if any), made by the
Participant for such year which constitute part of the annual
addition (together with any gains attributable thereto), shall
be returned to him/her to the extent necessary to effectuate
such reduction and if the return of all such contributions is
not sufficient to effectuate such reduction, the Company
Contributions allocated to such Participant's Account for such
year shall, to the extent necessary to effectuate such
reduction, be held by the Trustee in a suspense Account and
shall be used to reduce Company Contributions for the next
year (and succeeding years, as necessary) for such Participant
as such Participant is covered by the Plan at the end of any
such year; and if he/she is not covered by the Plan at the end
of any such year, such Company Contributions held by the
Trustee in such suspense Account shall be allocated and
reallocated to the Accounts of other Participants, except that
no such allocation or reallocation shall cause the limitations
of paragraph (a) of this Section to be exceeded for any such
other Participant for such year. The provisions of the
immediately preceding sentence relating to Company
Contributions shall first be applied to Company Salary
Reduction Contributions under this Plan and thereafter, if and
to the extent necessary, to other Company Contributions.
Investment gains and losses shall not be allocated to the
suspense Account during the period such suspense Account is
required to be maintained pursuant to this paragraph (e). In
the event of termination of the Plan, any then remaining
balance of the suspense Account, to the extent it may not then
be allocated to Participants, shall revert to the Company.
49
ARTICLE XIII
TOP-HEAVY PLAN REQUIREMENTS
SECTION 1. DEFINITIONS
For the purposes of this Article, the following terms, when used with initial
capital letters, shall have the following respective meanings:
(a) Aggregation Group: Permissive Aggregation Group or Required
Aggregation Group, as the context shall require.
(b) Compensation: All remuneration of any Employee from the
Company, excluding, however, any amounts in excess of the
amount prescribed pursuant to Section 401(a)(17) of the Code,
as amended, or such amount as the Secretary of the Treasury
shall prescribe from time to time. For purposes of determining
the Top Heavy minimum contributions, pursuant to Section 5 of
this Article XIII, Compensation is defined pursuant to Article
XII, Section 1(b) of this Plan. For purposes of determining a
Key Employee, Compensation is defined pursuant to Article XII,
Section 1(b) of this Plan, plus amounts pursuant to Section
402(e)(3) of the Code.
(c) Defined Benefit Plan: A qualified Plan which is not a Defined
Contribution Plan.
(d) Defined Contribution Plan: A qualified Plan which provides for
an individual Account for each Participant, and for benefits
based solely on the amount contributed to the Participant's
Account, and any income, expenses, gains and losses, and any
forfeitures of accounts of other participants which may be
allocated to the Participant's Account.
(e) Determination Date: For any Plan Year, the last day of the
immediately preceding Plan Year.
(f) Former Key Employee: A Non-Key Employee with respect to a Plan
Year who was a Key Employee in a prior Plan Year. Such term
shall also include his/her Beneficiary in the event of his/her
death.
(g) Key Employee: An Employee or former Employee who is or was a
Participant and who, at any time during the current Plan Year
or any of the four preceding Plan Years, is (i) an officer of
a Company, (as the term "officer" is limited in Section
416(I)(l)(A) of the Code), having an annual Compensation
greater than fifty percent (50%) of the amount in effect under
Section 415(b)(1)(A) of the Code for any such Plan Year; (ii)
one of the ten (10) Employees having annual Compensation from
the Company of more than the limitation in effect under
Section 415(c)(1)(A) of the Code and owning (or considered as
owning within the meaning of Section 318 of the Code) the
largest interests in a Company, (iii) a five percent (5%)
owner (as such term is defined in Section 416(I)(1)(B)(I) of
the Code) or (iv) a one percent (1%) owner (as such term is
defined in Section 416(I)(1)(B)(ii) of the Code) having an
annual Compensation of more than
50
$150,000. For purposes of clause (ii) of this paragraph (g),
if two Employees have the same interest in a Company, the
Employee having greater annual Compensation from the Company
shall be treated as having a larger interest. The term "Key
Employee" shall also include such Employee's Beneficiary in
the event of his/her death.
(h) Non-Key Employee: An Employee or former Employee who is not a
Key Employee. Such term shall also include his/her Beneficiary
in the event of his/her death.
(i) Permissive Aggregation Group: The group of qualified plans of
the Company consisting of:
(i) the plans in the Required Aggregation Group; plus
(ii) one (1) or more plans designated from time to time by
the Defined Contribution Plan Committee that are not
part of the Required Aggregation Group but that
satisfy the requirements of Sections 401(a)(4) and
410 of the Code when considered with the Required
Aggregation Group.
(j) Required Aggregation Group: The group of qualified plans of
the Company consisting of,
(i) each other Plan in which a Key Employee participates;
plus
(ii) each Plan which enables a Plan in which a Key
Employee participates to meet the requirements of
Section 401(a)(4) or 410 of the Code.
(k) Top-Heavy Account Balance: A Participant's (including a
Participant who has received a total distribution from this
Plan) or a Beneficiary's aggregate balance standing to his/her
Account as of the valuation date coinciding or immediately
preceding the Determination Date as adjusted by the amount of
any Company Contributions or ESOP Contributions made or due to
be made after such valuation date but before the expiration of
the extended payment period in Section 412(c)(10) of the Code,
provided, however, that (I) such balance shall include the
aggregate distributions made during the five (5) consecutive
Plan Years ending with the Plan Year that includes the
Determination Date (including distributions under a terminated
Plan which if it had not been terminated would have been
included in a Required Aggregation Group) and (ii) with
respect to any Plan Year beginning after December 31, 1984, if
an Employee or former Employee has not performed any service
for any Company maintaining the Plan at any time during the
five (5) year period ending on the Determination Date, his/her
Account (and/or the Account of his/her Beneficiary) shall not
be taken into account.
(l) Top-Heavy Group: An Aggregation Group if, as of a
Determination Date, the aggregate present value of accrued
benefits for Key Employees in all plans in the Aggregation
Group (whether Defined Benefit Plans or Defined Contribution
51
Plans) is more than sixty percent (60%) of the aggregate
present value of accrued benefits for all Employees in such
plans.
(m) Top-Heavy Plan: See Section 2.
SECTION 2. DETERMINATION OF TOP-HEAVY STATUS
(a) Except as provided by paragraph (b) of this Section, the Plan
shall be a Top-Heavy Plan if, as of a Determination Date:
(i) the aggregate of Top-Heavy Account Balances for Key
Employees is more than sixty percent (60%) of the
aggregate of all Top-Heavy Account Balances,
excluding for this purpose the aggregate Top-Heavy
Account Balances of former Key Employees; or
(ii) if the Plan is included in a Required Aggregation
Group which is a Top-Heavy Group.
(b) If the Plan is included in a Permissive Aggregation Group
which is not a Top-Heavy Group, the Plan shall not be a
Top-Heavy Plan notwithstanding the fact that the Plan would
otherwise be a Top-Heavy Plan under paragraph (a) of this
Section.
(c) Solely for the purpose of determining if the Plan, or any
other Plan included in a required Aggregation Group of which
this Plan is a part, is top-heavy (within the meaning of
Section 416(g) of the Code) the accrued benefit of a Non-Key
Employee shall be determined under (I) the method, if any,
that uniformly applies for accrual purposes under all plans
maintained by the Controlled Employers, or (b) if there is no
such method, as if such benefit accrued not more rapidly than
the slowest accrual rate permitted under the fractional
accrual rule of Section 411(b)(1)(C) of the Code.
(d) If the Plan is included in a Required Aggregation Group which
is not a Top-Heavy Group, the Plan shall not be a Top-Heavy
Plan notwithstanding the fact that the Plan would otherwise be
a Top-Heavy Plan under Paragraph (a)(ii) of this Section.
SECTION 3. TOP-HEAVY PLAN REQUIREMENTS
Notwithstanding any other provisions of the Plan to the contrary, if the Plan is
a Top-Heavy Plan for any Plan Year beginning on or after January 1, 1984, the
Plan shall then satisfy the following requirements for such Plan Year:
(a) The minimum vesting requirement as set forth in Section 4.
(b) The minimum contribution requirement as set forth in Section
5.
(c) Section 1(b) of this Article shall apply for all purposes of
the Plan.
52
SECTION 4. MINIMUM VESTING REQUIREMENT
For purposes of this Article XIII, an Employee, who has completed at least three
(3) or more years of service, shall have a nonforfeitable right to 100 percent
(100%) of his/her accrued benefit derived from Company Contributions and ESOP
Contributions. The vesting schedule described in the immediately preceding
sentence (the "Top-Heavy Schedule") shall cease to be applicable when the Plan
ceases to be a Top-Heavy Plan, provided that
(a) the Company contributions and ESOP Contributions that become
nonforfeitable pursuant thereto before the Plan ceases to be a
Top-Heavy Plan shall remain nonforfeitable, and
(b) each Participant having at least three years of Continuous
Credited Service shall have the right to elect (within the
election period hereinafter described) to continue to have his
nonforfeitable percentage computed under the Top-Heavy
Schedule. The election period shall begin on the date the
Top-Heavy Schedule becomes inapplicable and shall end no later
than the later of
(i) the day which is 60 days after the day the Top-Heavy
Schedule becomes inapplicable, and
(ii) the date which is 60 days after the Participant is
issued written notice of the cessation by the Company
or Plan administrator.
SECTION 5. MINIMUM CONTRIBUTION REQUIREMENT
If the Plan is a Top-Heavy Plan for any Plan Year beginning on or after January
1, 1984:
(a) Each Non-Key Employee who is eligible to share in any Company
Contribution or ESOP Contributions for such Plan Year (or
would have been eligible to share in any such Company
Contribution or ESOP Contributions if a Salary Reduction
Contribution had been made for him/her during such Plan Year)
shall be entitled to receive an allocation of such
Contribution which is at least equal to three percent (3%) of
his/her Compensation for such Plan Year.
(b) The percentage minimum contribution requirement set forth in
paragraph (a) above with respect to a Plan Year shall not
exceed the percentage at which Company Contributions and ESOP
Contributions are made (or required to be made) under the Plan
for such Plan Year for the Key Employee for whom such
percentage is the highest for such Year. The determination
referred to in the immediately preceding sentence shall be
determined for each Key Employee by dividing the Company
Contribution and ESOP Contributions allocated to such Key
Employee in that Plan Year by such Key Employee's Compensation
for such Plan Year. However, in determining the percentage at
which contributions are made for the Key Employee with the
highest percentage, elective contributions on behalf of Key
Employees are taken into account.
53
(c) The percentage minimum contribution requirement set forth in
paragraph (a) above may also be reduced in accordance with
Section 6(b).
(d) For the purpose of paragraph (b) above, contributions taken
into account shall include like contributions under all other
Defined Contribution Plans in the Required Aggregation Group,
excluding any such Plan in the Required Aggregation Group if
that Plan enables a Defined Benefit Plan in such Required
Aggregation Group to meet the requirements of Section
401(a)(4) or Section 410 of the Code.
SECTION 6. COORDINATION WITH OTHER PLANS
(a) In applying this Article XIII, a Company and all Controlled
Group Members shall be treated as a single employer, and the
qualified plans maintained by such single employer shall be
taken into account.
(b) In the event that another Defined Contribution Plan or Defined
Benefit Plan maintained by the Company provides contributions
or benefits on behalf of Participants in this Plan, such other
Plan(s) shall be taken into account in determining whether
this Plan satisfied Section 3; and, the minimum contribution
required for a Non-Key Employee in this Plan under Section 5
of this Article will be eliminated if the Company maintains
another qualified Plan under which such minimums are required
to be provided.
(c) In the event a Defined Benefit Plan maintained by the Company
provides benefits on behalf of Participants in this Plan, the
provisions contained in subsection (d) of this Section shall
be applied in order to preclude either required duplication or
inappropriate omission of minimum benefits or contributions.
(d) Each Non-Key Employee for whom a minimum contribution is
required under Section 5 of this Article and for whom a
minimum benefit is required under a Defined Benefit Plan
maintained by the Company shall be provided with the minimum
benefit under the Defined Benefit Plan(s) and shall not be
provided with such minimum contribution under this Plan.
SECTION 7. ACTUARIAL ASSUMPTIONS
For purposes of this Article, the actuarial assumptions which shall be used are
attached to the Defined Benefit Plan of the Company called "Cooper Tire & Rubber
Company Salaried Employees' Retirement Plan" as Exhibit C.
SECTION 8. CONSTRUCTION
The term "present value of accrued benefits" as used in this Article shall in
all appropriate cases include Account balances of affected Employees.
54
ARTICLE XIV
ADMINISTRATION OF THE PLAN
SECTION 1. DEFINED CONTRIBUTION PLAN COMMITTEE
The Plan shall be administered by the Defined Contribution Plan Committee which
shall be appointed by the Board of Directors of the Company.
The Committee shall consist of at least three (3) members who shall be
designated from time to time by the Board of Directors of the Company, and shall
act by at least a majority of members.
The Committee, by a majority vote of its members, shall appoint a Plan
Administrator, Chairman and Secretary. The Plan Administrator as appointed by
the Committee shall be the "Named Fiduciary" of the Plan with respect to
administrative matters, and the Trustee shall be the "Named Fiduciary" with
respect to the handling of Plan assets.
The Board of Directors shall, from time to time, notify the Trustee of the
number and the identity of the members of the Committee and the Trustee shall be
entitled to rely upon such notices.
SECTION 2. ADMINISTRATION OF THE PLAN BY THE COMMITTEE
The Committee shall adopt such uniform and nondiscriminatory administrative
regulations under the Plan as it shall deem to be necessary or appropriate for
the efficient administration of the Plan.
The Committee shall have sole and absolute discretion to interpret the
provisions of the Plan or Trust Agreement (including, without limitation, by
supplying omissions from, correcting deficiencies in, or resolving
inconsistencies or ambiguities in, the language of the Plan or Trust Agreement),
to make factual findings with respect to any issue arising under the Plan, to
determine the rights and status under the Plan of Participants and other
persons, to decide disputes arising under the Plan and to make any
determinations and factual or other findings with respect to the benefits
payable thereunder and the persons entitled thereto as may be required for the
purposes of the Plan. In furtherance of, but without limiting, the foregoing,
the Committee is hereby granted the following specific authorities, which it
shall discharge in its sole and absolute discretion in accordance with the terms
of the Plan (as interpreted, to the extent necessary, by the Committee):
(a) to resolve all questions (including factual questions) arising
under the provisions of the Plan as to any individual's
entitlement to become a Participant;
(b) to determine the amount of benefits, if any, payable to any
person under the Plan (including, to the extent necessary,
making any factual findings with respect thereto); and
(c) to conduct the review procedure specified in Section 3 of this
Article.
All decisions of the Committee as to the facts of any case, as to the
interpretation of any provision of the Plan or its application to any case, and
as to any other interpretative matter or
55
other determination or question under the Plan shall be final and binding on all
parties affected thereby, subject to the provisions of Section 3 of this
Article.
SECTION 3. FIDUCIARY PROVISIONS
(a) Named Fiduciaries
Among the named fiduciaries under the Plan shall be the
Company, the Plan Administrator, the Committee, the Trustee
and the investment advisors or insurance companies, each of
which shall have such powers, duties, responsibilities and
authority as shall be specified in the Plan or trust agreement
entered into for the purpose of managing the trust fund,
subject to any delegation thereof as provided in the Plan or
such trust agreement. Any other person, entity, committee,
board, department, office, or identifiable part of any legal
entity may be designated by the Company as a named fiduciary
by an instrument signed by the Company, delivered to such
designated named fiduciary and to the Trustee and accepted in
writing by the designated named fiduciary. Any such
designation may be terminated at any time by the Company or by
such named fiduciary by written notice delivered to the other
of them and to the Trustee.
(b) Liability of Fiduciaries
To the extent permitted by law, (I) neither the Company nor
any director, officer, or Employee shall be personally liable
upon any contract or other instrument made or executed by
him/her or it or in his/her or its behalf in the
administration of the Plan or the trust fund; (ii) neither the
Company nor any director, officer, or Employee who is a
fiduciary shall be liable for the neglect, omission or
wrongdoing of any other fiduciary; (iii) the Company, person,
Committee or board and each member thereof to whom the Company
delegates (or the Plan or trust agreement assigns) any duty
with respect to the Plan or trust fund, may rely and shall be
fully entitled to act upon the advice of counsel, who may be
of counsel for the Company, and upon the opinion, certificate,
valuation, report, recommendation or determination of an
actuary appointed by the Company to assist in the operation of
the Plan; (iv) the Company and each director, officer, or
Employee who is a fiduciary shall be solely responsible for
his/her own acts or omissions; and (v) if any responsibility
of the Company or of a director, officer, or Employee who is a
fiduciary is allocated to any other person or if a person is
designated to carry out any responsibility in accordance with
the provisions of the Plan or trust agreement, then such
fiduciary shall not be responsible for any act or omission of
such person in carrying out such responsibility.
(c) Delegation of Fiduciary Duties
The Company may delegate to any person, entity, committee,
board, department, office, or identifiable part of any legal
entity any one or more powers, functions, duties or
responsibilities with respect to the Plan or the trust fund,
provided that no such power, function, duty or responsibility
which is assigned to a fiduciary
56
(other than the Company) pursuant to some other Section of the
Plan or the trust agreement shall be so delegated without the
written consent of such fiduciary.
Any delegation pursuant to the preceding provisions: (I) shall
be signed by the Company and be delivered to and accepted in
writing by the delegatee, (ii) shall contain such provisions
and conditions relating to such delegation as the Company
deems appropriate, (iii) may be amended from time to time by
written agreement signed on behalf of the Company and the
delegatee and (iv) may be revoked (in whole or in part) at any
time by written notice from the Company delivered to the
delegatee or from the delegatee to the Company.
(d) Personal Liability of Non-Fiduciaries
Except for gross neglect or malfeasance, no non-fiduciary
officers, directors or Employees of the Company shall be
personally liable for acts done hereunder or related hereto,
or for the making, retention or sale of any contract or
contracts made as herein provided, or for the failure to
invest or reinvest any funds or for any loss to or diminution
of the trust fund, nor shall any of them be personally liable
for or answerable to any Participant or any other person in
connection with any exercise of discretion under the terms of
this instrument relating to the payment or non-payment of
benefits.
(e) Defense of Fiduciaries and Non-Fiduciaries
The Company shall, at its expense, defend or provide for the
defense of any or all fiduciary or non-fiduciary officers,
directors or Employees of the Company against any such claims,
allegations, suits, or charges relating to or incidental to
this Plan, and shall continue to do so in any given cases,
unless and until it shall clearly appear that gross neglect or
malfeasance is involved in any such particular case.
(f) Claims for Benefits
Claims for benefits from this Plan shall be submitted to the
designated representative of the Defined Contribution Plan
Committee on such forms as may be designated by the Defined
Contribution Plan Committee.
(g) Appeals Procedure
(i) If a claim is wholly or partially denied, notice of
the decision, as provided in this Section, shall be
furnished to the claimant within ninety (90) days
after receipt of the claim by the Plan unless special
circumstances require an extension of time for
processing the claim. If such an extension of time
for processing is required, written notice of the
extension shall be furnished to the claimant prior to
the termination of the initial 90-day period. In no
event shall such extension exceed a period of ninety
(90) days.
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(ii) The Committee shall provide to every claimant who is denied a
claim for benefits written notice stating:
(A) The specific reason or reasons for the denial;
(B) Specific reference to pertinent Plan provisions on
which the denial is based;
(C) A description of any additional material or
information necessary for the claimant to perfect the
claim and an explanation of why such material or
information is necessary; and
(D) Appropriate information as to the steps to be taken
if the Participant or beneficiary wishes to submit
his or her claim for review.
(iii) The claimant may, within ninety (90) days after receipt of
written notification of denial of a claim, file with the Plan
Administrator an appeal in writing for review of denial of
benefits. A claimant or his or her duly authorized
representative may review all pertinent documents. In
considering any appeal pursuant to this Section 3(g), the Plan
Administrator shall have the same powers to interpret the Plan
and make factual findings with respect thereto as are granted
to the Committee under Section 2 hereof. The Plan
Administrator shall render its decision within 60 days after
receipt of a request for review unless special circumstances
require an extension of time for processing, in which case a
decision shall be rendered as soon as possible, but not later
than one hundred twenty (120) days after receipt of a request
for review. If such extension of time for review is required
because of special circumstances, written notice of the
extension shall be furnished to the claimant prior to the
commencement of the extension. The decision shall be in
writing and shall include specific reasons for the decision
including specific references to the pertinent Plan provisions
on which the decision is based.
(iv) If decisions are not furnished to the claimant within the time
limits provided in this Section, the claim shall be deemed to
have been denied.
(v) Exhaustion of the remedies provided in this Section shall be a
prerequisite to the bringing of any other action, formal or
informal for benefits under the Plan.
SECTION 4. DESIGNATION OF TRUSTEE
In order to implement the Plan, the Company will enter into a trust agreement
with the Trustee to the end that the contributions of the Participants and the
contributions of the Company shall be invested in accordance with the provisions
of this Plan and shall be held in Trust for the exclusive benefit of the
Participants or their Designated Beneficiaries.
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The Company may, without further reference to or action by any Participant, from
time to time, enter into such further agreements with the Trustee or other
parties and make such amendments to said trust agreements or said further
agreements as it may be necessary or desirable to carry out the Plan, may from
time to time designate a successor Trustee or successor Trustees, or may take
such other steps to execute such other instruments as it may deem necessary or
desirable to put the Plan into effect or to carry out the provisions thereof.
SECTION 5. ACTION BY THE COMPANY
Any action by the Company under this Plan shall be made pursuant to
authorization of its Board of Directors.
SECTION 6. DELEGATION OF TRUSTEE'S FUNCTIONS
The Trustee and the Committee may, by agreement in writing, arrange for the
delegation by the Trustee to the Company of any of the functions of the Trustee,
except the custody and distribution of assets, the voting of Common Stock held
by the Trustee, and the purchase and sale or redemption of securities.
SECTION 7. DUTIES OF THE TRUSTEE
The Trustee shall keep accurate and detailed accounts of all investments,
receipts and disbursements and other Transactions.
The Trustee shall annually, following the close of each Plan Year, revalue and
adjust each Participant's Account at its current market value at the end of the
Plan Year.
The Trustee shall furnish at least quarterly to each Participant a statement
showing the status of his/her Account under the Plan. This statement shall be
deemed to have been accepted as correct unless written notice to the contrary is
received by the Trustee within thirty (30) days after receipt of such statement
by the Participant.
SECTION 8. ACCOUNTS OF THE TRUSTEE
The annual financial statement of the Plan shall be audited annually by auditors
selected by the Company.
SECTION 9. RECORDS
The records of the Trustee, Committee and the Company shall be conclusive with
respect to all matters involved in the administration of this Plan.
SECTION 10. VOTING OF COMMON STOCK
(a) Each Participant shall have the right to direct the Trustee as
to the manner in which voting rights with respect to whole and
fractional shares of Common Stock held in the Participant's
Account shall be exercised.
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(b) In order to implement the voting rights granted in this
Section 10 of Article XIV, the Company shall furnish to the
Trustee such information as will be distributed to
shareholders of the Company in connection with each such vote
and a form for the use by Participants in directing the
Trustee as to the manner in which voting rights shall be
exercised (the "Documents"), in quantities approximately equal
to the number of Participants holding shares of Common Stock
in Accounts at the time of such distribution. The Trustee
shall use its best efforts to distribute or cause to be
distributed to each Participant the Documents as soon as
practicable following the furnishing of the Documents to the
Trustee. The Trustee will follow the written directions of
each Participant with respect to the voting of the whole and
fractional shares of Common Stock held in such Participant's
Account, provided that such written directions are received by
the Trustee by the close of business two (2) days prior to the
time such shares must be voted. Any such written direction by
a Participant to the Trustee shall be effective as of the date
such direction is received by the Trustee. Each Participant
shall be permitted to revoke or change such direction,
provided such revocation or change is received in writing by
the Trustee by the close of business two (2) days prior to the
time such shares of Common Stock must be voted.
(c) In the absence of written direction from a Participant in
accordance with this Section 10(b) of Article XIV, the Trustee
shall vote all whole and fractional shares of Common Stock
held in such Participant's Account in the same manner in which
the Trustee is directed by Participants, pursuant to Section
10(b) of this Article XIV, to vote the majority of the
aggregate shares of Common Stock held in such Participants'
Accounts.
(d) The right granted to each Participant pursuant to this Section
10 of Article XIV to direct the manner in which whole and
fractional shares of Common Stock allocated to such
Participant's Account are voted, and the provisions
instructing the Trustee regarding the manner in which voting
rights with respect to such whole and fractional shares shall
be exercised in the absence of written directions from a
Participant, shall include the manner in which the rights with
respect to corporate action by shareholder consent is
exercised.
(e) The Designated Beneficiary of each Participant shall be
entitled to receive all distributions of Documents and to
exercise all of the rights granted to each such Participant
pursuant to this Section 10 of Article XIV in the event of the
death of such Participant.
SECTION 11. NOTICES
All notices, reports and statements given, made, delivered or transmitted to a
Participant shall be duly given, made, delivered or transmitted as the Committee
may deem appropriate.
All directions, notices and other communications from Participants to the
Committee shall be in such form as may be prescribed by the Committee.
60
Such written directions, notices and other communications shall be mailed by
first class mail or delivered to the secretary of the Committee and shall be
deemed to have been given when received by the secretary or his/her duly
authorized representative.
SECTION 12. COSTS AND EXPENSES
Except as provided in Article XV Section 3 with respect to transaction expenses,
all costs and expenses incurred in the administration of the Plan shall be paid
by the Company; provided, however, that any taxes which may be imposed on the
income or the assets of the trust shall be paid out of the assets in the hands
of the Trustee and shall be charged ratably against the Accounts of the
Participants. Notwithstanding the foregoing, any taxes incurred by reason of
specific investments or Transactions shall be charged against those Accounts of
the Participants which were involved in such investments or Transactions on the
basis of the respective interests of such Accounts in the investments or
Transactions generating such tax liability.
SECTION 13. MISCELLANEOUS
The Plan shall be governed by and construed in accordance with the laws of the
State of Ohio, to the extent those laws have not been superseded by Federal law
(which shall otherwise apply).
Participation in the Plan by a Participant shall in no way affect any of the
Company's rights to assign such Participant to a different job or position; to
change his/her title, authority, duties or rate of Compensation, or to terminate
his/her employment.
The headings and captions contained in this document are for convenience of
reference only, and are not deemed to constitute a part of the Plan.
Should any provision (or part of any provision) of this Plan be determined by a
court of competent jurisdiction to be contrary to law or unenforceable as a
matter of public policy, such provision shall be considered severable, and this
Plan shall be considered not to include the provision in issue. The Plan shall
be construed by the Committee, by the Plan Administrator, and all other persons
relying on this document as though such provision (or part thereof) did not
exist, and the Plan shall be applied and enforced in the manner determined by
the Plan Administrator to be most nearly consistent with the deleted provision
as is permissible under law and public policy.
In the event that any benefit payable under this Plan is payable to or for the
benefit of a minor, an incompetent person, or other person incapable, of
receipting therefor, such benefit shall be deemed paid when paid to such
person's guardian or to the party providing or reasonably appearing to provide
for the care of such person, and such payment shall fully discharge the Trustee,
the Committee, the Plan Administrator, the Company and all other parties with
respect thereto.
In the event that any benefit payable under this Plan to any Participant,
Designated Beneficiary, or estate of the Participant cannot be paid because the
proper payee cannot be located or identified by the Trustee, such benefit shall
be deemed forfeited thirty-six (36) months from the date on which the Trustee or
Plan Administrator first attempted to locate such payee, provided,
61
however, that upon presentation by such proper payee of a subsequent claim for
such forfeited benefit, the full amount of the forfeited benefit shall be
restored.
In the event of the merger or consolidation of this Plan (or any part thereof)
into any other Plan, or the transfer to or from this Plan of any of the assets
held for the benefit of Participants and Designated Beneficiaries, each
Participant and Designated Beneficiary affected by such merger, consolidation or
transfer shall have an accrued benefit in the surviving or transferee Plan
(determined as if such Plan were then terminated immediately after such merger,
consolidation or transfer) that is equal to or greater than his/her accrued
benefit to which he/she would have been entitled, had the Plan been terminated
immediately prior to the occurrence of such merger, consolidation or transfer.
Notwithstanding any provision of the Plan to the contrary, including any
provision which requires the use of a written instrument, to the extent
permitted by applicable law, the Committee may establish procedures for the use
of electronic media in communications and transactions between the Plan or the
Committee and Participants and Beneficiaries. Electronic media may include, but
are not limited to, e-mail, the Internet, intranet systems and automated
telephonic response systems.
Notwithstanding any provision of the Plan to the contrary, during any conversion
period, in accordance with procedures established by the Committee, the
Committee may temporarily suspend, in whole or in part, certain provisions of
the Plan, which may include, but are not limited to, a Participant's right to
change his contribution election, a Participant's right to change his investment
election and a Participant's right to borrow or withdraw from his Account or
obtain a distribution for his Account.
SECTION 14. TENDER AND EXCHANGE OFFERS
Notwithstanding any other provision contained herein to the contrary (including,
without limitation, the provisions of Article XV), in the event the Trustee
receives (I) any tender offer which is subject to Section 14(d)(l) of the
Securities Exchange Act of 1934, as amended from time to time, and to
regulations promulgated thereunder, or (ii) any other offer or option to buy or
exchange more than thirty percent (30%) of the outstanding shares of Common
Stock, the provisions of this Section 14 of Article XIV shall apply.
(a) Each Participant shall have the right to direct the Trustee as
to whether to tender and sell or exchange pursuant to such
offer any whole and fractional shares of Common Stock held in
the Participant's Account.
(b) In order to implement the rights granted in this Section 14 of
Article XIV, the Company shall furnish to the Trustee such
information as may be distributed by it to shareholders of the
Company in connection with each such offer (the "Tender
Documents"), in quantities approximately equal to the number
of Participants holding shares of Common Stock in Accounts at
the time of such distribution. The Trustee shall use its best
efforts to distribute or cause to be distributed to each
Participant the Tender Documents together with all other
materials that the Trustee receives as a shareholder from any
other party with respect to such offer
62
(the "Additional Tender Documents") and a form prepared by the
Trustee for the use by Participants in directing the Trustee
as to whether or not shares of Common Stock in the
Participants' Accounts shall be tendered and sold or exchanged
as soon as practicable following the furnishing of the Tender
Documents and Additional Tender Documents to the Trustee. The
Trustee will follow the written directions of each Participant
with respect to the tender, and sale or exchange if the tender
is accepted, of the whole and fractional shares of Common
Stock held in such Participant's Account, provided that such
written directions are received by the Trustee by the close of
business two (2) days prior to the time such shares must be
tendered. Any such written direction by a Participant to the
Trustee shall be effective as of the date such direction is
received by the Trustee. Each Participant shall be permitted
to revoke or change such direction, provided such revocation
or change is received in writing by the Trustee by the close
of business two (2) days prior to the time such shares of
Common Stock must be tendered. The Trustee shall tender all
shares of Common Stock as to which valid and timely directions
to do so have been received by it and have not been
subsequently timely revoked prior to the expiration date of
the offer to which the directions relate, and, to the extent
the tender is accepted, the shares so tendered shall be sold
or exchanged as soon as practical thereafter. Each Participant
may direct the Trustee to withdraw any shares of Common Stock
in the Participant's Account which were previously tendered,
and the Trustee shall withdraw such shares of Common Stock
prior to the withdrawal date of the offer, provided such
direction is received in writing by the Trustee by the close
of business two (2) days prior to the withdrawal date of the
offer. Any and all directions given to the Trustee by any
Participant pursuant to this Section 14 of Article XIV shall
remain in the strict confidence of the Trustee.
(c) In the absence of written direction from a Participant in
accordance with Section 14(b) of Article XIV, the Trustee
shall tender, and sell or exchange in the event the tender is
accepted, at the times provided in Section 14(b) of Article
XIV, all whole and fractional shares of Common Stock held in
such Participant's Account only if the Trustee is directed by
Participants, pursuant to Section 14(b) of Article XIV, to
tender and sell or exchange the majority of the aggregate
shares of Common Stock held in such Participants' Accounts.
(d) The Designated Beneficiary of each Participant shall be
entitled to receive all distributions of Tender Documents and
Additional Tender Documents and to exercise all of the rights
granted to each such Participant pursuant to this Section 14
of Article XIV in the event of the death of such Participant.
(e) The price at which sales of the Company's Common Stock in
accordance with this Section 14 of Article XIV pursuant to a
tender or exchange offer described herein shall be credited to
the Participants' Accounts shall be the price paid in
connection with the tender or exchange offer. Shares of Common
Stock sold in accordance with this Section 14 of Article XIV
pursuant to a tender or exchange offer described herein shall
not be considered in computing weighted average price under
Section 2 of Article XV. The cash proceeds from the sale or
63
exchange of any shares of Common Stock tendered and sold or
exchanged pursuant to this Section 14 of Article XIV shall be
invested in accordance with the terms of the Plan. If, as a
result of a tender and sale or exchange, the Trustee receives
securities or other property, such securities or property
shall be held or reinvested in accordance with the terms of
the Plan. Any shares of Common Stock tendered or offered but
not purchased or exchanged shall be held or reinvested by the
Trustee in the trust created under this Plan in accordance
with the terms of the Plan.
(f) Transactions in the Company's Common Stock pursuant to a
tender or exchange offer in accordance with this Section 14 of
Article XIV need not be made through the facilities of the New
York Stock Exchange.
(g) The Account of each Participant for whom the Trustee has sold
or exchanged shares of Common Stock in connection with any
tender offer or exchange offer described in this Section 14 of
Article XIV shall be charged with a pro rata share of all
expenses incurred by the Trustee in all sales or exchanges
pursuant to such offer.
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ARTICLE XV
SECURITIES TRANSACTIONS BY TRUSTEE
SECTION 1. TRANSACTION PERIOD
For convenience in administration, the Committee and the Trustee shall establish
a period for (a) the purchase and sale of Mutual Fund shares or the Company's
Common Stock, or (b) the deposit and withdrawal of Cash with Interest, which
shall be known as a Transaction Period. The Transaction Period shall commence at
4:00 p.m. Eastern Standard Time or Eastern Daylight Time on a day when both the
Trustee and the New York Stock Exchange are open for business and shall end at
4:00 p.m. Eastern Standard Time or Eastern Daylight Time on the next succeeding
day when both the Trustee and the New York Stock Exchange are open for business.
All purchases and sales of the Company's Common Stock or Mutual Fund shares or
the deposit and withdrawal of Cash With Interest made by the Trustee during the
Transaction Period shall be in accordance with the instructions and directions
of the Participants (or of the Company as to purchases of the Company's Common
Stock with amounts to be credited to a Participant's Account from ESOP
Contributions and Company Contributions attributable to Participant's
Contributions made after June 30, 1984) which are received during a Transaction
Period. The Trustee shall not be required to respond to any subsequent
instruction or direction received during any Transaction Period until the next
succeeding Transaction Period.
SECTION 2. POOLED ACCOUNT FOR SECURITIES TRANSACTIONS
The transaction price for purchases and sales of Company Common Stock shall be
determined based upon the closing price of the Company's Common Stock on the New
York Stock Exchange on day when both the Trustee and the New York Stock Exchange
are open for business, times the total number of shares of the Company's Common
Stock in the Common Stock pooled account, plus uninvested cash and accrued
income, divided by the number of shares in the Common Stock pooled account.
The transaction price for purchases and sales in each of the Mutual Funds shall
be determined based upon the closing price of each such Mutual Funds on a day
when both the Trustee and the New York Stock Exchange are open for business,
times the total number of shares in each such Mutual Funds pooled account, plus
uninvested cash and accrued income; divided by the total number of shares of
each such Mutual Funds pooled account.
Purchases and sales of the Cash with Interest Investment Option shall be charged
or credited on the basis of actual purchase or sale prices for the particular
transaction.
SECTION 3. ALLOCATING TRANSACTION EXPENSE
Each Participant's Account for whom the Trustee has sold and/or purchased shares
in one or more of the Investment Options available in the Plan pursuant to the
Participant's specific investment directions shall be charged for the expenses
incurred by the Plan in the exercise of the Participant's specific investment
option direction.
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SECTION 4. REGISTRATION OF SECURITIES
Securities held by the Trustee may be registered in the name of the Trustee or
its nominee.
SECTION 5. MISCELLANEOUS
The Trustee shall invest in the Company's Common Stock Investment Option, the
Cash With Interest Investment Option, or Mutual Fund Investment Option as
promptly as practicable after the receipt of contributions. Contributions
temporarily held for investment in one of the Investment Options shall be
invested by the Trustee in a short term fund approved by the Committee. All
Transactions in the Company's Common Stock shall be made through the facilities
of the New York Stock Exchange except for the purchase of stock from the Company
as provided in Section 4 of Article V.
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ARTICLE XVI
ASSIGNABILITY
It is a condition of the Plan, and all rights of each Participant shall be
subject thereto, that, except as provided in a qualified domestic relations
order as defined in Section 414(p) of the Code, no right or interest of any
Participant in the Plan or in the Account shall be assignable or transferable in
whole or in part, either directly or by operation of law or otherwise,
including, but not by the way of limitation, execution, levy, garnishment,
attachment, pledge, bankruptcy or in any other manner, but excluding the
consequence of death, or mental incompetency, and no right of interest of any
Participant of the Plan or in the Account shall be liable for, or subject to,
any obligation or liability of such Participant. Notwithstanding any provision
of the Plan to the contrary, with respect to judgments, orders, decrees or
settlements issued after August 5, 1997, the Plan shall honor a judgment, order,
decree or settlement providing for the offset of all or a part of a
Participant's benefit under the Plan, to the extent permitted under Code Section
401(a)(13)(C); provided that the requirements of Code Section 401(a)(13)(C)(iii)
relating to the protection of the Participant's spouse (if any) are satisfied.
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ARTICLE XVII
AMENDMENT, MODIFICATION, SUSPENSION OR TERMINATION OF THE PLAN
SECTION 1. ACTION BY THE COMPANY
The Company reserves the right, by action by its Board of Directors, to amend,
modify, suspend or terminate the Plan in whole or in part at any time. Any such
amendment, modification, suspension or termination shall have neither any
retroactive effect to reduce or impair the interest of any Participant in assets
then held for his/her Account under the Plan, nor shall provide for or permit
any assets or funds then held by the Trustee to be used for or devoted to
purposes other than as provided herein.
Upon the termination or partial termination of the Plan or upon the complete
discontinuance of Company Contributions under the Plan, the rights of each
Participant to the assets then held for his/her Account under the Plan shall be
nonforfeitable.
SECTION 2. RETROACTIVE ACTION BY THE COMPANY
The Company may, at any time, and from time to time, modify any of the
provisions of the Plan retroactively, if and to the extent that such action in
the judgment of the Board of Directors is necessary or appropriate to qualify or
maintain the Plan and the trust established hereunder as a Plan and trust
meeting the requirements of the applicable provisions of the Code, as the same
may be amended from time to time or the corresponding provisions of the United
States Internal Revenue laws in force from time to time; or to qualify or
maintain the aforesaid Plan and trust under the Employee Retirement Income
Security Act of 1974 and any amendments thereto.
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ARTICLE XVIII
ESOP FEATURE
SECTION 1. ESTABLISHMENT OF ESOP
(a) Effective January 1, 2002, the Plan shall consist of two
components, the ESOP Feature and the Non-ESOP Feature. The
ESOP Feature shall consist of the ESOP Account. The ESOP
Feature is intended to qualify as a stock bonus plan under
Code Section 401(a) and as an employee stock ownership plan
under Code Section 4975(e)(7). The ESOP Feature is designed to
invest primarily in "qualifying employer securities," as
defined in Code Sections 4975(e)(8) and 409(l) and ERISA
Section 407(d)(5). The ESOP Feature is described in this
Article XVIII. The provisions of this Article XVIII shall
supercede any contrary provisions of the Plan.
SECTION 2. ESOP ACCOUNT
(a) The Committee shall establish an ESOP Account in the name of
each Participant and shall thereafter maintain a record
thereof.
(b) The ESOP Account of each Participant shall be credited and
debited periodically during each Plan year in which the ESOP
is maintained with any additions or reductions in the number
of shares of Common Stock held for such Participant in the
Plan due to the reallocation of the investment of the
participant's Non-ESOP Account and ESOP Account, and with any
stock and cash dividends paid on common Stock attributable to
units of the Common Stock fund.
(c) In the event that a Participant elects a partial liquidation
of the investment of his Account in Common Stock pursuant to
Section 5 of Article V, Common Stock shall be liquidated
pro-rata from the Participant's Non-ESOP Account and ESOP
Account.
SECTION 3. ESOP CONTRIBUTIONS
The Company, in its discretion, may make ESOP Contributions from time to time in
such amounts as are determined by the Company. All ESOP Contributions shall be
made in Common Stock. ESOP Contributions for a Plan Year shall be allocated
among active Participants for the Plan Year. The amount allocated to each active
Participant shall be determined by multiplying each active Participant's
Compensation for such Plan Year by a fraction, the numerator of which is the
ESOP Contribution for such Plan Year, and the denominator of which is the total
Compensation of all active Participants for such Plan Year. ESOP Contributions
shall be treated as Company Contributions for purposes of distributions and
withdrawals from the Plan. The ESOP Contribution subaccount of a Participant
shall be invested in Common Stock, subject to the diversification rules provided
in Section 4 of this Article.
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SECTION 4. DIVERSIFICATION OF INVESTMENT
Participants who are at least age 55 may diversify the investment of amounts,
including amounts not Vested, held in their ESOP Accounts by transferring
amounts out of the Common Stock fund to one of the other Investment Options in
accordance with the provisions of Section 5 of Article V. Any transfer of such
amounts out of the Common Stock fund to another Investment Option shall be
deemed to be a transfer from the ESOP Feature to the Non-ESOP Feature.
SECTION 5. PUT OPTION
(a) If shares of Common Stock distributable to a Participant or
his Beneficiary are at the time of the distribution not
readily tradable on an established market, the Participant or
Beneficiary will have an option (the "Put") to require the
Company to purchase all of the shares actually distributed to
him. The Put may be exercised at any time during the Option
Period (as defined below) by giving the Company written notice
of the election to exercise the Put. The Put may be exercised
by a former Participant or the Beneficiary only during the
Option Period in which the former Participant or Beneficiary
receives a distribution of shares of Common Stock.
(b) The "Option Period" is the 60-day period following the day on
which a Participant or his Beneficiary receives a
distribution. If the former Participant or Beneficiary does
not exercise the Put during that 60-day period, the Option
Period will also be the 60-day period beginning after the new
determination of the fair market value of Common Stock by the
Committee (and notice to the Participant) in the following
Plan Year. The Option Period will be extended by the amount of
time during which the Company is unable to honor the Put by
reason of applicable federal or state law.
(c) The "Option Price" will be the fair market value of each share
of Common Stock as of the valuation date immediately preceding
the date the Put is exercised, multiplied by the number of
shares to be sold under the Put, with appropriate adjustments
to reflect intervening stock dividends, stock splits, stock
redemptions, or similar changes to the number of outstanding
shares.
(d) The terms of payment for the sale of Common Stock pursuant to
Put shall be as provided in the Put and may be either paid in
a lump sum or in installments as provided by the Committee. An
agreement to pay through installments shall be permissible
only if the Common Stock subject to the put option is part of
a 'total distribution', as defined in Code Section 409(h)(5),
and--
(i) the agreement is adequately secured, as determined by
the Committee,
(ii) a reasonable rate of interest is charged, as
determined by the Committee,
(iii) annual payments are equal,
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(iv) installment payments must begin not later than 30
days after the date the Put option is exercised, and
(v) the term of the payment does not extend beyond five
years from the date the Put option is exercised.
(e) The Put will not be assignable, except that the former
Participant's donees or, in the event of a Participant's
death, his personal representative, will be entitled to
exercise the Put during the Option Period for which it is
applicable.
(f) The Trustee in its discretion may, with the Company's consent,
assume the Company's obligation under this Section at the time
a former Participant or Beneficiary exercises the Put. If the
Trustee does assume the Company's obligations, the provision
of this Section that apply to the Company will also apply to
the Trustee.
(g) The Put will also apply to shares of Common Stock that are
publicly traded without restriction when distributed but which
cease to be publicly traded or which become subject to a
trading limitation during the Option Period. In that event,
the Committee will notify in writing each former Participant
or Beneficiary to whom the Put becomes applicable that the
shares of Common Stock held by the former Participant or
Beneficiary are subject to the Put for the remainder of the
applicable Option Period and will inform the Participant or
Beneficiary of the terms of the Put. If the written notice is
given later than ten days after the shares of Common Stock
cease to be publicly traded or become subject to a trading
limitation, the period during which the Put may be exercised
will be extended by the number of days between the tenth day
and the date the notice is actually given.
(h) The Committee will notify each former Participant or
Beneficiary who is eligible to exercise the Put of the fair
market value of each share of Common Stock as soon as
practicable following its determination. The Committee and the
Company will send all notices required under this Subsection
to the last known address of a former Participant or
Beneficiary, and it will be the duty of those persons to
inform the Committee of any changes in address.
SECTION 6. PAYMENT OF DIVIDENDS
(a) The Committee, in its sole discretion, may provide that any
dividends paid in cash during the Plan Year on shares of
Common Stock in which Participants' ESOP Accounts are invested
shall be (i) paid in cash directly to the Participant, (ii)
paid to the Plan and subsequently distributed to the
Participant in cash no later than 90 days after the close of
the Plan Year in which the dividends are paid to the Plan, or
(iii) at the election of the Participant, either (A) paid to
the Participant as provided in Clause (i) or (ii) (as
determined by the Committee) or (B) paid to the Participant's
ESOP Account to be reinvested in the Common Stock. Such
dividends shall be paid in accordance with procedures
established by the Committee.
71
(b) If an election pursuant to Paragraph (a)(iii) is provided by
the Committee, each Participant may make the election, in the
manner and at the time specified by the Committee, with
respect to dividends received on shares of Common Stock
comprising the portion of the Common Stock fund allocated to
the Participant's ESOP Account. If an election pursuant to
Paragraph (a)(iii) is provided by the Committee and a
Participant does not make such an election, such dividends
shall be paid to the Participant's ESOP Account to be
reinvested in Common Stock.
(c) The Beneficiary of a deceased participant shall have the same
rights as a Participant has under this Section 6.
(d) The provisions of this Section 6 are intended to comply with
Section 404(k) of the Code, and shall be interpreted and
construed accordingly.
SECTION 7. INDEPENDENT APPRAISER
(a) Common Stock held in Participants' ESOP Accounts shall be
valued as of each valuation date, or at the discretion of the
Committee, more frequently. All valuations of Common Stock
held in Participants' ESOP Accounts which is not readily
tradable on an established securities market shall be made by
an independent appraiser meeting requirements similar to those
contained in Treasury Regulations under Code Section
170(a)(1).
SECTION 8. SHARE LEGEND
Shares of Common Stock in the ESOP Feature held or distributed by the Trustee
may include such legend restrictions on transferability as the Company may
reasonably require in order to assure compliance with applicable federal and
state securities laws.
SECTION 9. LIMITATION ON PERIOD OF DISTRIBUTION
If any Participant (and his or her Spouse, as applicable) who is entitled to
receive a distribution from his or her Prior Plan Contributions subaccount as an
annuity pursuant to Section 6(b)(iv) of Article XI and in fact receives his or
her distribution from such subaccount in such annuity form, such Participant
will be deemed to have elected not to receive the amount in his or her ESOP
Account in substantially equal periodic payments (not less frequently than
annually) over a period not longer than the greater of (i) five years, or (ii)
if the balance of the Participant's ESOP Account is greater than $500,000 (as
adjusted periodically by the Internal Revenue Service), five years plus 1 year
for each $100,000 (as adjusted periodically by the Internal Revenue Service) or
fraction thereof by which such balance is greater than $500,000 (but in no event
in excess ten years in the aggregate).
72
* * *
IN WITNESS WHEREOF, the Company has caused this Amended and Restated
Plan to be executed by their duly authorized officers and their corporate seals
to be hereunto affixed the day and date written below.
Attest: COOPER TIRE & RUBBER COMPANY
/s/ Richard N. Jacobson By /s/ Stephen O. Schroeder
- --------------------------------- ---------------------------
Richard N. Jacobson Stephen O. Schroeder
Assistant Secretary Treasurer
12/28/01 By /s/ Charles F. Nagy
- --------------------------------- ---------------------------
Date Charles F. Nagy
Assistant Treasurer
73
APPENDIX A
SECTION 1. DISTRIBUTION OPTIONS PRIOR TO MARCH 1, 2002
Until March 1, 2002, a distribution pursuant to Section 6(b) of Article XI, may
be made, as provided in Section 6(b)(ii) of Article XI, as follows:
(a) COOPER TIRE & RUBBER COMPANY THRIFT AND PROFIT SHARING PLAN.
For persons who were Participants in the Plan on December 31,
2001, a distribution may be made in two (2) installment
distributions, with the first installment to be at least fifty
percent (50%) of the Participant's Account balance (as
determined in Sections 3, 4 or 5 of Article XI) and to begin
within ninety (90) days from the date the Participant
terminated participation in this Plan, and the second and
final installment to include the remainder of the Account
balance and to be received within twenty-four (24) months
after the date the Participant terminated participation in
this Plan.
(b) THE STANDARD PRODUCTS COMPANY INDIVIDUAL RETIREMENT AND
INVESTMENT TRUST PLAN.
(i) For Participants with a Prior Plan Contributions
subaccount that includes amounts attributable to The
Standard Products Company Individual Retirement and
Investment Trust Plan, a distribution of such amount
in the Prior Plan Contributions subaccount may be
made in equal, or nearly equal, quarterly
installments over a fixed period which shall not
exceed the joint life expectancy of the Participant
and his spouse. The life expectancy of a Participant
and his spouse shall be determined in accordance with
a standard mortality table in general use. All
installment contributions shall be made on a pro-rata
basis from the total amount in the Participant's
Prior Plan Contribution subaccount attributable to
The Standard Products Company Individual Retirement
and Investment Trust Plan as held in the various
Investment Options. Such installments shall be paid
beginning with the first calendar quarter immediately
following the Participant's termination of employment
with appropriate adjustments at the end of each
calendar quarter for the income and changing values
of the distribution amount, provided, however, that
if a Participant should elect early retirement under
the provisions of a retirement plan of the Company in
which he is a participant, the Participant may
request that the Committee defer the commencement of
his benefits until not later than the first day of
the calendar quarter following his normal retirement
date as determined in the Company's retirement plan
(which in no event may be later than the
Participant's sixty-fifth (65th) birthday). Such a
request must be filed in writing with the Committee
at least thirty (30) days prior to the Participant's
early retirement date or at such other time as may be
acceptable to the Committee.
74
If a Participant dies prior to the distribution to
him or her of all amounts to be distributed under
this clause (i), the undistributed portion shall be
paid to the Participant's Designated Beneficiary in
accordance with clause (ii) below. Notwithstanding
the foregoing, the undistributed portion shall be
distributed at least as rapidly as the method of
distribution being used as of the date of the
Participant's death.
(ii) If a Participant described in clause (i) is entitled
to a distribution under Section 6(b) of Article XI by
reason of his or her death, the total amount in the
Participant's Prior Plan Contribution subaccount
attributable to The Standard Products Company
Individual Retirement and Investment Trust Plan may
distributed in equal or nearly equal quarterly
installments over a fixed period not exceeding:
(A) if the Designated Beneficiary is the
deceased Participant's surviving spouse, the
Designated Beneficiary's remaining life
expectancy at the time installment payments
begin,
(B) if the Designated Beneficiary is other than
the deceased Participant's surviving spouse,
five (5) years from the Participant's death,
or
(C) such shorter fixed period as the Designated
Beneficiary may request. Distributions under
this clause (ii) shall not commence later
than sixty (60) days after the end of the
Plan Year in which a Participant's death
occurs.
(c) THE STANDARD PRODUCTS COMPANY MONEY PURCHASE PENSION PLAN AND
TRUST FOR HOURLY EMPLOYEES.
(i) For Participants with a Prior Plan Contributions
subaccount that includes amounts attributable to The
Standard Products Company Money Purchase Pension Plan
and Trust for Hourly Employees, a distribution of
such amount in the Prior Plan Contributions
subaccount may be made, subject to the automatic
forms of benefit distributions described in Section
6(b)(iv) of Article XI, in equal monthly, quarterly,
semiannual or annual installment payments over a
specified period. Except as required in Section
6(b)(iv) of Article XI, in no event shall benefits be
distributed in the form of an annuity requiring the
survival of the Participant or his or her Designated
Beneficiary as a condition of payment.
(ii) The payment of benefits in an installments, pursuant
to this Subsection (c), to a Participant or
Designated Beneficiary shall be made or shall
commence, as the case may be, within a reasonable
period of time following the Participant's
termination of employment or, in the case of a
distribution to a Designated Beneficiary, within one
year following the Participant's death. The
Participant (or his Designated Beneficiary) may
75
elect to postpone the distribution or the
commencement of a distribution described in clause
(i) until not later than the latest date permitted
under the following provisions of this clause (ii).
Unless a Participant elects to defer benefit payments
in accordance with the provisions of this clause
(ii), under no circumstances shall any method of
distribution provide for the commencement of benefit
payments more than sixty (60) days subsequent to the
last day of the Plan Year in which occurs the later
of the Participant's 65th birthday or his actual
termination of employment; provided, however, that if
the amount of the payment required to commence by
such date cannot be ascertained by such date, or if
it is not possible to make such payment by such date
because the Committee has been unable to locate the
Participant after making reasonable efforts to do so,
a payment retroactive to such date may be made no
later than sixty (60) days after the earliest date on
which the amount of such payment can be ascertained
under the Plan or the date on which the Participant
is located, whichever is applicable. Any Participant
and any Designated Beneficiary who is the surviving
spouse of a deceased Participant entitled to benefits
hereunder may elect to have the payment, or
commencement of payment, of such benefits deferred,
but in no event shall any such benefit payment begin
later than April 1 of the calendar year following the
calendar year in which such Participant or
Beneficiary attained age 70 1/2. Such deferral can be
made by submitting to the Committee a signed written
statement describing the benefit and the date on
which such payment is to be made or commence. The
failure of any Participant or Designated Beneficiary
to request such a deferral while any benefit is
immediately distributable shall be deemed as an
election to defer commencement of the payment of any
benefit payment under this Plan.
Notwithstanding anything under this Subsection (c) to
the contrary, no method of distribution, and no
deferral, shall provide for a so-called "Interest
Option" or extend payments over, or permit a payment
to be made after the end of, a period of time which
exceeds whichever of the following is applicable:
(A) In the case of benefits distributable to a
Participant whose Designated Beneficiary is
his spouse, a specified period not longer
than the joint and last survivor expectancy
of the Participant and his spouse at the
time benefit payments to the Participant
commence; or
(B) In the case of benefits distributable to a
Participant whose Designated Beneficiary is
other than his spouse, a specified period
equal to the life expectancy of the
Participant and Designated Beneficiary at
the time benefit payments to the Participant
commence; or
76
(C) In the case of benefits distributable to the
Designated Beneficiary of a Participant who
died before payments to him commenced, a
specified period not longer than the life
expectancy of the Beneficiary at the time
benefit payments commence,
all in accordance with and subject to the
requirements of Proposed Treasury Regulations
Sections 1.401(a)(9)-1 and 1.401(a)(9)-2, and any
subsequently issued Regulations under Code Section
401(a)(9); provided, however, that the foregoing
shall not preclude distributions under a designation
(before January 1, 1984) by any employee in
accordance with the designation described in Section
242(b)(2) of the Tax Equity and Fiscal Responsibility
Act of 1982 (as in effect before the amendments made
by the Deficit Reduction Act of 1984). If
distribution is made in installments, the amount of
each installment shall be not less than the quotient
obtained by dividing the undistributed benefits by
the number of remaining installments. Moreover,
notwithstanding the proceeding provisions of this
Subsection (c), if a Participant dies before his
entire interest in the Plan has been paid to him,
then the remaining portion of such interest shall be
distributed at least as rapidly as the method of
distribution being used under sub-clauses (A) and (B)
as of the date of his death.
(d) PROFIT-SHARING PLAN OF OLIVER RUBBER GROUP.
(i) For Participants with a Prior Plan Contributions
subaccount that includes amounts attributable to the
Profit-Sharing Plan of Oliver Rubber Group, a
distribution of such amount in the Prior Plan
Contributions subaccount may be made in equal
monthly, quarterly, semiannual or annual installment
payments over a specified period, as determined by
the Committee, after consultation with the
Participant; provided, however, that the distribution
to any Beneficiary who is not a natural person shall
be made in a single lump sum payment. In no event
shall benefits be distributed in the form of an
annuity requiring the survival of the Participant or
his or her Designated Beneficiary as a condition of
payment; however, benefits may be distributed in the
form of an annuity under a Group Annuity Contract,
providing for a monthly guaranteed income for a
period certain, issued to the Trustee by a legal
reserve life insurance company authorized to do
business in the State of California.
(ii) The distribution provided for under this Subsection
(d) shall be made or shall commence, as the case may
be, within a reasonable period of time following the
Participant's termination of employment or, in the
case of a distribution to a Designated Beneficiary,
within one year following the Participant's death.
The Participant (or his or her Designated
Beneficiary) may elect to postpone the distribution
or the commencement of the distribution under this
Subsection (d) until not later than the latest date
permitted under the following provisions of this
clause (ii). Unless a
77
Participant elects to defer benefit payments in
accordance with the provisions of this clause (ii),
under no circumstances shall the distribution
provided for under clause (i) more than sixty (60)
days subsequent to the last day of the Plan Year in
which occurs the later of the Participant's 65th
birthday or his actual termination of employment;
provided, however, that if the amount of the payment
required to commence by such date cannot be
ascertained by such date, or if it is not possible to
make such payment by such date because the Committee
has been unable to locate the Participant after
taking reasonable efforts to do so, a payment
retroactive to such date may be made no later than
sixty (60) days after the earliest date on which the
amount of such payment can be ascertained under the
Plan or the date on which the Participant is located,
whichever is applicable. Any Participant and any
Designated Beneficiary who is the surviving spouse of
a deceased Participant entitled to benefits hereunder
may elect to have the payment, or commencement of
payment, of such benefits deferred, but, in no event
shall any such benefit payment begin later than April
1 of the calendar year following the calendar year in
which such Member or Beneficiary attained age 70 1/2.
Such deferral can be made by submitting to the
Committee a signed written statement describing the
benefit and the date on which such payment is to be
made or commence. The failure of any Member or
Beneficiary to request such a deferral while any
benefit is immediately distributable shall be deemed
as an election to defer commencement of the payment
of any benefit payment under this Plan.
Notwithstanding anything herein to the contrary, no
method of distribution, and no deferral, shall
provide for a so-called "Interest Option" or extend
payments over, or permit a payment to be made after
the end of, a period of time which exceeds whichever
of the following is applicable:
(A) In the case of benefits distributable to a
Participant whose Designated Beneficiary is
his spouse, a specified period not longer
than the joint and last survivor expectancy
of the Participant and his spouse at the
time benefit payments to the Participant
commence; or
(B) In the case of benefits distributable to a
Participant whose Designated Beneficiary is
other than his spouse, a specified period
equal to the life expectancy of the
Participant a the time benefit payments to
the Participant commence; or
(C) In the case of benefits distributable to the
Designated Beneficiary of a Participant who
died before payments to him commenced, a
specified period not longer than the life
expectancy of the Designated Beneficiary at
the time benefit payments commence,
78
all in accordance with and subject to the
requirements of Proposed Treasury Regulations Section
1.401(a)(9)-1 and 1.40(a)(9)-2, and any subsequently
issued Regulations under Code Section 401(a)(9);
provided, however, that the foregoing shall not
preclude distributions under a designation (before
January 1, 1984) by any Employee in accordance with
the designation described in section 242(b)(2) of the
Tax Equity and Fiscal Responsibility Act of 1982 (as
in effect before the amendments made by the Deficit
Reduction Act of 1984). If distribution is made in
installments, the amount of each installment shall be
not less than the quotient obtained by dividing the
undistributed benefits by the number of remaining
installments. Moreover, notwithstanding the
proceeding Subsection (d), if a Member dies before
his entire interest in the Plan has been paid to him,
then the remaining portion of such interest shall be
distributed at least as rapidly as the method of
distribution being used under subclauses (A) and (B)
as of the date of his death.
(e) SIEBE AUTOMOTIVE EMPLOYEES' PROFIT SHARING PLAN.
(i) For Participants with a Prior Plan Contributions
subaccount that includes amounts attributable to the
Siebe Automotive Employees' Profit Sharing Plan, a
distribution of such amount in the Prior Plan
Contributions subaccount
(A) shall, unless elected otherwise by the
Participant (and his or her Spouse) in
accordance with applicable law, be made in
the form of an immediate annuity for the
life of the Participant with 50% Joint and
Survivor Annuity (as defined in Section 6(b)
of Article XI of the Plan) if the
Participant is married on the Annuity
Starting Date (as defined in Section 6(b) of
Article XI of the Plan) or an immediate
single life annuity if the Participant is
not married on the Annuity starting Date;
(B) subject to the automatic forms of benefit
distributions described in sub-clause (A),
may be made in the form of a 75%, 66-2/3%,
or 100% Joint and Survivor Annuity (as
defined in Section 6(b) of Article XI of the
Plan) if the Participant is married on the
Annuity Starting Date (as defined in Section
6(b) of Article XI of the Plan); or
(C) may be made in equal, or nearly equal,
installments over a fixed period which shall
not exceed the life expectancy of the
Participant (or joint life expectancy of the
Participant and his or her spouse). The life
expectancy of a Participant and his spouse
shall be determined in accordance with a
standard mortality table in general use.
79
(ii) Unless the Participant elects otherwise, a
distribution under this Subsection (e) shall not
commence later than the 60 days after the close of
the Plan Year in which the latest of the following
events occurs:
(A) the date on which the Participant reaches
age 65;
(B) the date which is 10 years after the
Participant first became a Participant; or
(C) the date the Participant terminated his or
her employment.
80
AMENDMENT NO. 1 TO THE
COOPER TIRE & RUBBER COMPANY
SPECTRUM INVESTMENT SAVINGS PLAN
(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2002)
Cooper Tire & Rubber Company hereby adopts this Amendment No.
1 to the Cooper Tire & Rubber Company Spectrum Investment Savings Plan (as
amended and restated effective January 1, 2002) (the "Plan"), effective on the
date executed hereof.
SECTION 1
The first sentence of Section 2(k) of Article VII of the Plan
is hereby amended in its entirety to read as follows:
"A loan shall be deemed to be in default upon a Participant's
termination of employment for any reason if the loan is not
repaid in full within [60 DAYS] following the date of the
Participant's termination of employment."
SECTION 2
Section 2(l) of Article VII of the Plan is hereby amended in
its entirety to read as follows:
"(l) In the event a Participant defaults on a loan for a
reason other than termination of employment, such
participant shall be provided a cure period to
correct such default. Such cure period shall begin as
of the date of default and shall end on the last day
of the calendar quarter following the calendar
quarter of the date of default. In the event such
default is not cured within the foregoing cure
period, the Plan Administrator shall report the
amount of unpaid principal and interest as a "deemed
distribution" as described in Internal Revenue Code
Section 72(p) and Regulations promulgated thereunder,
and shall deduct the unpaid loan amount from the
Participant's Loan Account."
SECTION 3
The last sentence of Section 2(o) of Article VII of the Plan
is hereby amended in its entirety to read as follows:
"All expenses related to the administration of the participant
loan program (including origination and maintenance fees)
shall be borne by those Participants with outstanding loan
balances."
81
EXECUTED this 8th day of August 2002.
COOPER TIRE & RUBBER COMPANY
By /s/ Stephen O. Schroeder
-------------------------------
Stephen O. Schroeder
Treasurer
By /s/ Charles F. Nagy
-------------------------------
Charles F. Nagy
Assistant Treasurer
82
AMENDMENT NO. 2 TO THE
COOPER TIRE & RUBBER COMPANY
SPECTRUM INVESTMENT SAVINGS PLAN
(AS AMENDED AND RESTATED EFFECTIVE AS OF JANUARY 1, 2002)
The Cooper Tire & Rubber Company (the "Company") hereby adopts
this Amendment No. 2 to the Cooper Tire & Rubber Company Spectrum Investment
Savings Plan (As Amended and Restated Effective as of January 1, 2002) (the
"Plan"). The provisions of this Amendment shall be effective as of January 1,
2002, unless otherwise indicated. Words and phrases used herein with initial
capital letters which are defined in the Plan are used herein as so defined.
One of the purposes of this Amendment is to reflect the
adoption of various provisions of the Economic Growth and Tax Relief
Reconciliation Act of 2001 ("EGTRRA"). The Company intends for this Amendment to
satisfy the "good faith" compliance requirements of EGTRRA and to be construed
in accordance with EGTRRA and guidance issued thereunder.
SECTION 1
Section (38) of Article I of the Plan is hereby amended in its
entirety to read as follows:
"(35) 'Pre-Tax Dollar Qualifier Contributions (PDQ)' - the
contributions provided for under Sections 1(a) and 11 of
Article III. Pre-Tax Dollar Qualifier Contributions are also
sometimes referred to as a 'Company Salary Reduction
Contribution'."
SECTION 2
Section (45) of Article I of the Plan is hereby amended in its
entirety to read as follows:
"'Total and Permanent Disability' - a condition determined by
the Social Security Administration to entitle the Participant
to disability benefits under the Social Security Act, provided
that the Participant is receiving such benefits under the
Social Security Act."
SECTION 3
Section 1(a) of Article III of the Plan is hereby amended by
inserting the following sentence immediately after the first sentence thereof:
"The foregoing limits shall not apply to the Catch-Up Pre-Tax
Dollar Qualifier Contributions of Section 11 of Article III."
83
SECTION 4
Section 2(b)(ii) of Article III of the Plan is hereby amended
in its entirety to read as follows:
"(ii) The Average Contribution Percentage for Participants who
are Highly Compensated Employees for the Plan Year shall not
exceed the Average Contribution Percentage for Participants
who are Non-highly Compensated Employees for the Plan Year
multiplied by two (2)."
SECTION 5
Section 2(c)(ii) of Article III of the Plan is hereby amended
in its entirety to read as follows:
"(ii) The Actual Deferral Percentage for Participants who are
Highly Compensated Employees for the Plan Year shall not
exceed the Actual Deferral Percentage for Participants who are
Non-highly Compensated Employees for the Plan Year multiplied
by two (2)."
SECTION 6
Article III of the Plan is hereby amended by adding the
following new Section 11 to the end thereof:
"SECTION 11 CATCH-UP PRE-TAX DOLLAR QUALIFIER CONTRIBUTIONS
Effective January 1, 2003, all Participants who have
elected to make Pre-Tax Dollar Qualifier Contributions to this
Plan and who have attained age 50 before the end of a
particular Plan Year shall be eligible to make catch-up
contributions (the "Catch-Up Pre-Tax Dollar Qualifier
Contributions") in accordance with, and subject to the
limitations of, section 414(v) of the Code; provided, however,
that Catch-Up Pre-Tax Dollar Qualifier Contributions shall not
be eligible for Company Contributions under Section 1 of
Article IV of the Plan, and provided further that Catch-Up
Pre-Tax Dollar Qualifier Contributions shall not be taken into
account for purposes of the provisions of the Plan
implementing the required limitations of Sections 401(a)(30)
and 415(c) of the Code (I.E., Section 1(a) of Article III and
Section 1(a) of Article XII of the Plan, respectively). In
addition, notwithstanding any provision of the Plan to the
contrary, the Plan shall not be treated as failing to satisfy
the requirements of Sections 401(k)(3), 401(k)(11), 410(b), or
416 of the Code, as applicable, by reason of the making any
such Catch-Up Pre-Tax Dollar Qualifier Contributions."
84
SECTION 7
Section 1 of Article IV of the Plan is hereby amended by
inserting the following new paragraph at the end thereof:
"In addition, no Company Contributions shall be made with
respect to any Catch-Up Pre-Tax Dollar Qualifier
Contributions."
SECTION 8
Section 5(a)(i) of Article IX of the Plan is hereby amended in
its entirety to read as follows:
"the Participant's retirement, death, Total and Permanent
Disability, or severance from employment;"
SECTION 9
Section 5(a) of Article IX of the Plan is hereby amended by
(a) deleting subsections (iv) and (v) and (b) renumbering subsection (vi) as
subsection (iv).
SECTION 10
Section 5(b)(ii) of Article IX of the Plan is hereby amended
by (a) deleting subsection (C), (b) deleting the phrase "at least 12 months" and
substituting the phrase "6 months" in subsection (D) where it occurs therein,
and (c) renumbering subsection (D) as subsection (C).
SECTION 11
Section 1 of Article XI of the Plan is hereby amended by
deleting subsections (c) and (d), and by deleting the phrase ", or" at the end
of subsection (b) and substituting a period therefor.
SECTION 12
Section 6(f)(i)(A) of Article XI of the Plan is hereby amended
in its entirety to read as follows:
"(A) Eligible Rollover Distribution: An Eligible Rollover
Distribution is any distribution of all or any portion of the
balance to the credit of the Distributee except that an
Eligible Rollover Distribution does not include any
distribution to the extent such distribution is required under
section 401(a)(9) of the Code, any distribution that is one of
a series of substantially equal periodic payments (paid not
less frequently than annually) over the life (or life
expectancy) of the distributee or the joint lives (or life
expectancies) of the distributee and a
85
designated beneficiary or for a specified period of ten years
or more, the portion of any distribution that is not
includible in gross income (determined without regard to the
exclusion from gross income for net unrealized appreciation
under Section 402(e)(4) of the Code), such other amounts
specified in Treasury regulations and rulings, notices or
announcements issued under Section 402(c) of the Code, and any
distribution which is made upon hardship of the distributee.
Notwithstanding the foregoing, a portion of a distribution
shall not fail to be an Eligible Rollover Distribution merely
because the portion consists of after-tax employee
contributions which are not includible in gross income.
However, such portion may be transferred only to an individual
retirement account or annuity described in Section 408(a) or
(b) of the Code, or to a qualified defined contribution plan
described in Sections 401(a) or 403(a) of the Code that agrees
to separately account for amounts so transferred, including
separately accounting for the portion of such distribution
which is includible in gross income and the portion of such
distribution which is not so includible."
SECTION 13
Section 6(f)(i)(B) of Article XI of the Plan is hereby amended
in its entirety to read as follows:
"(ii) Eligible Retirement Plan: An Eligible Retirement Plan is
an individual retirement account described in Section 408(a)
of the Code, an individual retirement annuity described in
Section 408(b) of the Code, an annuity plan described in
Section 403(a) of the Code, a qualified trust described in
Section 401(a) of the Code, an annuity contract described in
Section 403(b) of the Code, or 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 instrumentality of a
state or political subdivision of a state that accepts the
Distributee's Eligible Rollover Distribution."
SECTION 14
Section 1(a) of Article XII of the Plan are hereby amended in
its entirety to read as follows:
"(a) MAXIMUM ANNUAL ADDITION: Except to the extent permitted
under Section 11 of Article III of the Plan and Code Section
414(v), the maximum annual addition (as defined in Subsection
(c) of this Section) to a Participant's Account (and to any
Account for him/her under any other defined contribution plan,
whether or not terminated, maintained by any Controlled Group
Member) shall in no event exceed the lesser of (1) $40,000 (as
adjusted pursuant to Section 415(d) of the Code), or (2) 100%
of the Participant's Compensation (as defined in Subsection
(b) below) for the Plan Year. The Compensation limit referred
to in (2) shall not apply to any contribution for medical
benefits after separation from
86
service (within the meaning of Section 401(h) or Section
419A(f)(2) of the Code) which is otherwise treated as an
annual addition."
SECTION 15
Section 1(g) of Article XIII of the Plan is hereby amended in
its entirety to read as follows:
"(g) Key Employee: An Employee or former Employee who at any
time during the Plan Year 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% owner of the Employer, or a 1%
owner of the Employer having annual Compensation of more than
$150,000. The term "Key Employee" shall also include such
Employee's Beneficiary in the event of Employee's death."
SECTION 16
Section 1(k) of Article XIII of the Plan is hereby amended in
its entirety to read as follows:
(k) Top-Heavy Account Balance: A Participant's (including a
Participant who has received a total distribution from this
Plan) or a Beneficiary's aggregate balance standing to his/her
Account as of the valuation date coinciding or immediately
preceding the Determination Date as adjusted by the amount of
any Company Contributions or ESOP Contributions made or due to
be made after such valuation date but before the expiration of
the extended payment period in Section 412(c)(10) of the Code,
provided, however, that (i) such balance shall include the
aggregate distributions made during the one (1)-year period
ending on the Determination Date (including distributions
under a terminated Plan which if it had not been terminated
would have been included in a Required Aggregation Group),
provided that if such aggregate distributions were made for a
reason other than separation from service, death or
disability, this clause (i) of Section 1(k) of Article XIII
shall be applied by substituting "five (5)-year period" for
"one (1)-year period" and (ii) if an Employee or former
Employee has not performed any service for any Company
maintaining the Plan at any time during the one (1) year
period ending on the Determination Date, his/her Account
(and/or the Account of his/her Beneficiary) shall not be taken
into account."
SECTION 17
Section 5 of Article XIII of the Plan is hereby amended by
inserting the following new subsection (e) at the end thereof:
"(e) Company Contributions shall be taken into account for
purposes of satisfying the minimum contribution requirements
of Section 416(c)(2) of the
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Code and the Plan. The preceding sentence shall apply with
respect to Company Contributions under the Plan or, if the
Plan provides that the minimum contribution requirement shall
be met in another plan, such other plan. Company Contributions
that are used to satisfy the minimum contribution requirements
shall be treated as Company Contributions for purposes of the
actual contribution percentage test and other requirements of
Section 401(m) of the Code."
SECTION 18
Subsections (i), (ii) and (iii) of Section 3(g) of Article XIV
of the Plan are hereby amended to read as follows:
"(i) Unless such claim is allowed in full by the
Committee, the Committee shall (within 90 days after
such claim was filed, plus an additional period of 90
days if required for processing and if notice of the
90-day extension of time indicating the specific
circumstances requiring the extension and the date by
which a decision shall be rendered is given to the
claimant within the first 90-day period) cause
written notice to be mailed to the claimant of the
total or partial denial of such claim.
(ii) Such notice shall be written in a manner
calculated to be understood by the claimant and shall
state
(A) the specific reason(s) for the denial of the
claim,
(B) specific reference(s) to pertinent
provisions of the Plan and/or Trust Fund on
which the denial of the claim was based,
(C) a description of any additional material or
information necessary for the claimant to
perfect the claim and an explanation of why
such material or information is necessary,
and
(D) an explanation of the review procedure
specified in Section 3(g)(iii) of this
Article XIV.
(iii) Within 90 days after the denial of his or her
claim, the claimant may appeal such denial by filing
with the Plan Administrator his or her written
request for a review of the claim. Such request for
review must be signed by the claimant or his or her
authorized representative and shall be deemed filed
when delivered to the Plan Administrator or its
designee. If the claimant does not file a request for
review of his or her claim within such 90-day period,
the claimant shall be conclusively presumed to have
accepted as final and binding the initial decision of
the Plan Administrator on his or her claim. In
considering any appeal pursuant to this Section 3(g),
the Plan Administrator shall have the same powers to
interpret the
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Plan and make factual findings with respect thereto
as are granted to the Committee under Section 2
hereof.
If such an appeal is so filed within such 90-day
period then the Plan Administrator, or a named
fiduciary designated by the Administrator, shall
conduct a full and fair review of such claim. During
such full review, the claimant shall be provided with
the opportunity to submit written comments,
documents, records, and other information relating to
the claim for benefits, and with reasonable access to
and copies of, upon request and free of charge, all
documents, records, and other information relevant to
the claimant's claim for benefits. In addition, such
full and fair review shall take into account all
comments, documents, records, and other information
submitted by the claimant relating to the claim,
without regard to whether such information was
submitted or considered in the initial benefit
determination.
After the completion of such full review, the
reviewer shall mail or deliver to the claimant a
written decision on the matter based on the facts and
pertinent provisions of the Plan and/or Trust Fund
and/or applicable law. Such decision shall be mailed
or delivered to the claimant within a period of 60
days after the Administrator's receipt of the request
for review unless special circumstances require an
extension of time, in which case such decision shall
be rendered not later than 120 days after receipt of
such request. (If an extension of time for review is
required, written notice of the extension shall be
furnished to the claimant prior to the commencement
of the extension.) Such decision (A) shall be written
in a manner calculated to be understood by the
claimant, (B) shall state the specific reason(s) for
the decision, (C) shall make specific reference(s) to
pertinent provisions of the Plan and/or Trust Fund on
which the decision is based and (D) shall, to the
extent permitted by applicable law, be final and
binding on all interested persons. The notice of the
adverse determination shall also include a statement
that the claimant is entitled to receive, upon
request, and free of charge, reasonable access to,
and copies of, all documents, records, and other
information relevant to the claimant's claim for
benefits, and contain a statement describing any
voluntary appeal procedures offered by the Plan and
the claimant's right to obtain information about such
procedures and a statement of the claimant's right to
bring an action under Section 502(a) of ERISA."
89
EXECUTED this 27th day of December 2002.
THE COOPER TIRE & RUBBER COMPANY
By /s/ Stephen O. Schroeder
--------------------------------
Stephen O. Schroeder
Treasurer
By /s/ Charles F. Nagy
--------------------------------
Charles F. Nagy
Assistant Treasurer
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