Exhibit 10.4
FLUOROWARE, INC.
EMPLOYEE STOCK OWNERSHIP PLAN TRUST AGREEMENT
(1995 Restatement)
First Effective September 1, 1984
As Amended and Restated Effective September 1, 1995
FLUOROWARE, INC.
EMPLOYEE STOCK OWNERSHIP PLAN TRUST AGREEMENT
(1995 Restatement)
TABLE OF CONTENTS
Page
PREAMBLES ........................................................ 1
SECTION 1. INTRODUCTION ........................................ 2
1.1. Definitions
1.1.1. Account
1.1.2. Affiliate
1.1.3. Annual Valuation Date
1.1.4. Beneficiary
1.1.5. Code
1.1.6. Committee
1.1.7. Disability
1.1.8. Effective Date
1.1.9. Eligibility Service
1.1.10. Employer
1.1.11. Employment Commencement Date
1.1.12. ERISA
1.1.13. Event of Maturity
1.1.14. Exempt Loan
1.1.15. Fund
1.1.16. Hours of Service
1.1.17. Investment Manager
1.1.18. Normal Retirement Age
1.1.19. Participant
1.1.20. Period of Service
1.1.21. Period of Severance
1.1.22. Plan
1.1.23. Plan Statement
1.1.24. Plan Year
1.1.25. Principal Sponsor
1.1.26. Prior Plan Statement
1.1.27. Qualifying Employer Securities
1.1.28. Recognized Compensation
1.1.29. Recognized Employment
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1.1.30. Reemployment Commencement Date
1.1.31. Severance from Service Date
1.1.32. Trustee
1.1.33. Unallocated Reserve
1.1.34. Valuation Date
1.1.35. Vested
1.1.36. Vesting Service
1.2. Rules of Interpretation
1.3. Transitional Rules
SECTION 2. ELIGIBILITY AND PARTICIPATION ....................... 13
2.1. General Eligibility Rule
2.2. Special Rule for Former Participants
2.3. Special Rule Where Nonrecognition of Gain Elected
for Qualifying Employer Securities
SECTION 3. CONTRIBUTIONS AND ALLOCATION THEREOF ................ 14
3.1. Employer Contributions
3.1.1. Source of Employer Contributions
3.1.2. Employer Annual Contribution
3.1.3. Limitation
3.1.4. Form of Payment
3.1.5. Leveraged Acquisitions
3.1.6. Application of Contribution to Debt
3.1.7. Disposition of Shares
3.1.8. Advance Contributions
3.2. Allocating Employer Contributions
3.3. Eligible Participants
3.4. Adjustments
3.4.1. Make-Up Contributions for Omitted Participants
3.4.2. Mistaken Contributions
3.5. Limitation on Annual Additions
3.6. Effect of Disallowance of Deduction or Mistake of Fact
3.7. Use of Dividends
3.7.1. Unallocated Reserve Dividends
3.7.2. Dividends on Allocated Securities
SECTION 4. INVESTMENT AND ADJUSTMENT OF ACCOUNTS ............... 17
4.1. Valuation and Adjustment of Accounts
4.2. Management and Investment of Fund
4.3. Investment of Fund
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4.4. Authority With Respect to Qualifying Employer
Securities
SECTION 5. VESTING ............................................. 19
5.1. Progressive Vesting
5.2. Full Vesting
5.3. Forfeiture Event
5.4. Special Rule for Partial Distributions
5.5. Effect of Break on Vesting
SECTION 6. MATURITY ............................................ 21
6.1. Events of Maturity
6.2. Disposition of Nonvested Account
6.2.1. Rehire Before Forfeiture
6.2.2. Rehire After Forfeiture
6.2.3. Forfeitures
6.2.4. Restorations
SECTION 7. DISTRIBUTION ........................................ 23
7.1. Application for Distribution
7.1.1. Application Required
7.1.2. Exception for Small Amounts
7.1.3. Exception for Required Distributions
7.1.4. Notices
7.1.5. Direct Rollover
7.2. Time and Form of Distribution
7.2.1. Earliest Beginning Date
7.2.2. Required Beginning Date
7.3. Effect of Reemployment
7.4. Designation of Beneficiaries
7.4.1. Right To Designate
7.4.2. Spousal Consent
7.4.3. Failure of Designation
7.4.4. Disclaimers by Beneficiaries
7.4.5. Definitions
7.4.6. Special Rules
7.5. Distribution in Kind
7.6. Death Prior to Full Distribution
7.7. Facility of Payment
7.8. Puts and Rights of First Refusal
7.8.1. Right of First Refusal
7.8.2. Put Option
7.8.3. Other Restrictions on Qualifying Employer
Securities
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7.9. Diversification Distribution
7.9.1. Election
7.9.2. Definitions
7.9.3. Other Elections Permitted
SECTION 8. SPENDTHRIFT PROVISIONS .............................. 31
SECTION 9. AMENDMENT AND TERMINATION ........................... 32
9.1. Amendment
9.2. Discontinuance of Contributions and Termination of Plan
9.3. Merger or Spinoff of Plans
9.3.1. In General
9.3.2. Limitations
9.3.3. Beneficiary Designations
9.4. Adoption by Affiliates
9.4.1. Adoption by Consent
9.4.2. Procedure for Adoption
9.4.3. Effect of Adoption
SECTION 10. CONCERNING THE TRUSTEE ............................. 34
10.1. Dealings with Trustee
10.1.1. No Duty to Inquire
10.1.2. Assumed Authority
10.2. Compensation of Trustee
10.3. Resignation and Removal of Trustee
10.3.1. Resignation, Removal and Appointment
10.3.2. Automatic Removal
10.3.3. Surviving Trustees
10.3.4. Successor Organizations
10.3.5. Co-Trustee Responsibility
10.3.6. Allocation of Responsibility
10.3.7. Majority Decisions
10.4. Accountings by Trustee
10.4.1. Periodic Reports
10.4.2. Special Reports
10.5. Trustee's Power to Protect Itself on Account of Taxes
10.6. Other Trust Powers
10.7. Voting of Qualifying Employer Securities
10.7.1. Registration-Type Securities
10.7.2. Non-Registration-Type Securities
10.7.3. Other Securities
10.8. No Investment in Employer Real Property
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10.9. Investment in Employer Securities
10.10. Fiduciary Principles
10.11. Prohibited Transactions
10.12. Indemnity
10.13. Investment Managers
10.13.1. Appointment and Qualifications
10.13.2. Removal
10.13.3. Relation to Other Fiduciaries
SECTION 11. DETERMINATIONS -- RULES AND REGULATIONS ............ 42
11.1. Determinations
11.2. Rules and Regulations
11.3. Method of Executing Instruments
11.3.1. Employer or Committee
11.3.2. Trustee
11.4. Claims Procedure
11.4.1. Original Claim
11.4.2. Claims Review Procedure
11.4.3. General Rules
11.5. Information Furnished by Participants
SECTION 12. PLAN ADMINISTRATION ................................ 44
12.1. Principal Sponsor
12.1.1. Officers
12.1.2. Chief Executive Officer
12.1.3. Board of Directors
12.2. Administrative Committee
12.2.1. Appointment and Removal
12.2.2. Automatic Removal
12.2.3. Authority
12.2.4. Majority Decisions
12.3. Limitation on Authority
12.3.1. Fiduciaries Generally
12.3.2. Trustee
12.4. Conflict of Interest
12.5. Dual Capacity
12.6. Administrator
12.7. Named Fiduciaries
12.8. Service of Process
12.9. Administrative Expenses
12.10. IRS Qualification
SECTION 13. IN GENERAL ......................................... 47
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13.1. Disclaimers
13.1.1. Effect on Employment
13.1.2. Sole Source of Benefits
13.1.3. Co-Fiduciary Matters
13.2. Reversion of Fund Prohibited
13.3. Contingent Top Heavy Plan Rules
13.4. Continuity
13.5. Execution in Counterparts
SIGNATURES ....................................................... 47
APPENDIX A -- LIMITATION ON ANNUAL ADDITIONS AND ANNUAL BENEFITS . X-0
XXXXXXXX X -- CONTINGENT TOP HEAVY PLAN RULES .................... B-1
APPENDIX C -- QUALIFIED DOMESTIC RELATION ORDERS ................. C-1
APPENDIX D -- HIGHLY COMPENSATED EMPLOYEE ........................ X-0
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XXXXXXXXXX, INC.
EMPLOYEE STOCK OWNERSHIP PLAN TRUST AGREEMENT
(1995 Restatement)
THIS AGREEMENT, Made and entered into as of _______________, 1995, by
and between FLUOROWARE, INC., a Minnesota corporation (the "Principal Sponsor"),
and XXXXXX XXXXXXXXXX, XXXX XXXXX and XXXXXXX X. XXXXXX, as trustees
(collectively, together with their successors, the "Trustee");
WITNESSETH: That
WHEREAS, The Principal Sponsor has heretofore established and
maintained an employee stock ownership plan (the "Plan") which, in its most
recent form, is embodied in documents dated September 1, 1984 and entitled
"Fluoroware, Inc. Employee Stock Ownership Plan Trust Agreement (1984
Statement)" (as amended by various documents); and
WHEREAS, The Principal Sponsor has reserved to itself the power to
amend further the Plan documents; and
WHEREAS, It is desired to amend and restate the Plan documents in a
single instrument in the manner hereinafter set forth;
NOW THEREFORE, The Plan documents are hereby amended and restated,
effective as of September 1, 1995, to read in full as follows:
SECTION 1
INTRODUCTION
1.1. Definitions. When the following terms are used herein with initial capital
letters, they shall have the following meanings:
1.1.1. Account -- the account maintained for each Participant to which
is credited the Participant's allocable share of the Employer contributions and
the Participant's allocable share of forfeitures under the Plan, together with
any increase or decrease thereon.
1.1.2. Affiliate -- a business entity which is under "common control"
with the Employer or which is a member of an "affiliated service group" that
includes the Employer, as those terms are defined in section 414(b), (c) and (m)
of the Code. A business entity which is a predecessor to the Employer shall be
treated as an Affiliate if the Employer maintains a plan of such predecessor
business entity or if, and to the extent that, such treatment is otherwise
required by regulations under section 414(a) of the Code. A business entity
shall also be treated as an Affiliate if, and to the extent that, such treatment
is required by regulations under section 414(o) of the Code. In addition to said
required treatment, the Principal Sponsor may, in its discretion, designate as
an Affiliate any business entity which is not such a "common control,"
"affiliated service group" or "predecessor" business entity but which is
otherwise affiliated with the Employer, subject to such limitations as the
Principal Sponsor may impose.
1.1.3. Annual Valuation Date -- each August 31.
1.1.4. Beneficiary -- a person designated by a Participant (or
automatically by operation of this Plan Statement) to receive all or a part of
the Participant's Account in the event of the Participant's death prior to full
distribution thereof. A person so designated shall not be considered a
Beneficiary until the death of the Participant.
1.1.5. Code -- the Internal Revenue Code of 1986, including applicable
regulations for the specified section of the Code. Any reference in this Plan
Statement to a section of the Code, including the applicable regulation, shall
be considered also to mean and refer to any subsequent amendment or replacement
of that section or regulation.
1.1.6. Committee -- the committee established in accordance with the
provisions of Section 12.2, known as the Administrative Committee.
1.1.7. Disability -- a medically determinable physical or mental
impairment which: (i) renders the individual incapable of performing any
substantial gainful employment, (ii) can be expected to be of long-continued and
indefinite duration or result in death, and (iii) is evidenced by a
certification to this effect by a doctor of medicine approved by the
Administrative Committee. In lieu of such a certification, the Administrative
Committee may accept, as proof of Disability, the official written determination
that the individual will be eligible for disability benefits under the federal
Social Security Act as now enacted or hereinafter amended (when any waiting
period expires). The Administrative
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Committee shall determine the date on which the Disability shall have occurred
if such determination is necessary.
1.1.8. Effective Date -- September 1, 1995, subject to Section 1.3.
1.1.9. Eligibility Service -- a measure of an employee's service with
the Employer and all Affiliates (stated as a number of years) which is equal to
the number of computation periods for which the employee is credited with one
thousand (1,000) or more Hours of Service; subject, however, to the following
rules:
(a) Computation Periods. The computation periods for determining
Eligibility Service shall be the twelve (12) consecutive month
period beginning with the date the employee first performs an
Hour of Service and all Plan Years beginning after such date
(irrespective of any termination of employment and subsequent
reemployment).
(b) Completion. A year of Eligibility Service shall be deemed
completed only as of the last day of the computation period
(irrespective of the date in such period that the employee
completed one thousand Hours of Service). (Fractional years of
Eligibility Service shall not be credited.)
(c) Pre-Effective Date Service. Eligibility Service shall be
credited for Hours of Service earned and computation periods
completed before September 1, 1995 under the Prior Plan
Statement.
(d) Pre-Effective Date Breaks in Service. Eligibility Service
cancelled before September 1, 1995 by operation of the Plan's
break in service rules as they existed before September 1,
1995 shall continue to be cancelled on and after September 1,
1995.
1.1.10. Employer -- the Principal Sponsor, any business entity that
adopts the Plan pursuant to Section 9.4, and any successor thereof that adopts
the Plan.
1.1.11. Employment Commencement Date -- the date upon which an employee
first performs one (1) hour of Service for the Employer or an Affiliate (without
regard to whether such Hour of Service is performed in Recognized Employment or
otherwise).
1.1.12. ERISA -- the Employee Retirement Income Security Act of 1974,
including applicable regulations for the specified section of ERISA. Any
reference in this Plan Statement to a section of ERISA, including the applicable
regulation, shall be considered also to mean and refer to any subsequent
amendment or replacement of that section or regulation.
1.1.13. Event of Maturity -- any of the occurrences described in
Section 6 by reason of which a Participant or Beneficiary may become entitled to
a distribution from the Plan.
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1.1.14. Exempt Loan -- a direct or indirect extension of credit to the
Plan that is made or is guaranteed by either a party in interest (as defined in
section 3(14) of ERISA) or a disqualified person (as defined in section 4975 of
the Code), and which satisfies the following requirements:
(a) The proceeds of the Exempt Loan must be used solely to acquire
Qualifying Employer Securities for the Unallocated Reserve, or
to repay such Exempt Loan, or to repay a prior Exempt Loan, or
for any combination of the foregoing purposes.
(b) The Exempt Loan must be without recourse against the Fund
except that:
(i) The Qualifying Employer Securities acquired with the
proceeds of the Exempt Loan may be pledged or
otherwise used to secure repayment of the Exempt Loan
(and certificates evidencing Qualifying Employer
Securities so pledged may be delivered to and held by
the lender, including who is the Employer or
otherwise is such a party in interest or disqualified
person, solely for the purpose of perfecting such
pledge), and
(ii) Any Qualifying Employer Securities which were
acquired with the proceeds of a prior Exempt Loan
which was repaid with the proceedsof the Exempt Loan
may be pledged or otherwise used to secure repayment
of the Exempt Loan, and
(iii) Any Employer contributions made to the Plan in cash
that are made for the purpose of satisfying the
Plan's obligations under the Exempt Loan may be
pledged or otherwise used to secure repayment of the
Exempt Loan, and
(iv) The earnings of the Qualifying Employer Securities
acquired with the proceeds of an Exempt Loan and
which continue to be pledged or otherwise used as
security for the Exempt Loan may be pledged or
otherwise used as security for an Exempt Loan.
(c) Shares of Qualifying Employer Securities held to secure
repayment of an Exempt Loan shall be released from encumbrance
(and from the Unallocated Reserve) as of the last day of each
Plan Year as the Exempt Loan is paid. The number of shares
which shall be so released from encumbrance (and from the
Unallocated Reserve) is equal to the number of encumbered
Qualifying Employer Securities held in the Unallocated Reserve
immediately before release for the current Plan Year
multiplied by a fraction. The numerator of the fraction shall
equal interest and the principal payments made on the Exempt
Loan from the Employer contribution made for the Plan Year.
The denominator of the fraction shall equal the sum of the
numerator plus the principal and interest to be paid for all
future years (disregarding any possible extensions or renewal
periods). If the interest rate on the Exempt Loan is
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variable, the interest to be paid in the future shall be
computed by using the interest rate in effect as of the last
day of the current Plan Year.
(d) For the purpose of the foregoing, the amount of principal and
interest in any payment shall be determined in accordance with
standard loan amortization tables.
(e) The rate of interest (which may be fixed or variable) on the
Exempt Loan must not be in excess of a reasonable rate of
interest, considering all relevant factors including (but not
limited to) the amount and duration of the loan, the security
given, the guarantees involved, and the credit standing of the
Plan and the guarantors and the generally prevailing rates of
interest.
(f) In the event of default upon an Exempt Loan, the fair market
value of Qualifying Employer Securities and other assets which
can be transferred in satisfaction of the loan must not exceed
the amount of the loan. If the lender is a party in interest
or disqualified person, the loan must provide for a transfer
of Plan assets upon default only upon and to the extent of the
failure of the Plan to satisfy the payment schedule of the
Exempt Loan.
1.1.15. Fund -- the assets of the Plan held by the Trustee from time to
time, including all contributions and the investments and reinvestments,
earnings and profits thereon.
1.1.16. Hours of Service -- a measure of an employee's service with the
Employer and all Affiliates, determined for a given computation period and equal
to the number of hours credited to the employee according to the following
rules:
(a) Paid Duty. An Hour of Service shall be credited for each hour
for which the employee is paid, or entitled to payment, for
the performance of duties for the Employer or an Affiliate.
These hours shall be credited to the employee for the
computation period or periods in which the duties are
performed or, if different, to the computation period or
periods in which the employee ispaid for such hours; provided,
however, that no hours will be credited to the computation
period or periods in which the employee is paid for such hours
unless the Hours of Service to be credited are in connection
with a period of no more than thirty-one (31) days that
extends beyond the computation period or periods in which the
duties are performed.
(b) Paid Nonduty. An Hour of Service shall be credited for each
hour for which the employee is paid, or entitled to payment,
by the Employer or an Affiliate on account of a period of time
during which no duties are performed (irrespective of whether
the employment relationship has terminated) due to paid time
off ("PTO"), vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of
absence; provided, however, that:
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(i) no more than five hundred one (501) Hours of Service
shall be credited on account of a single continuous
period during which the employee performs no duties
(whether or not such period occurs in a single
computation period),
(ii) no Hours of Service shall be credited on account of
payments made under a plan maintained solely for the
purpose of complying with applicable workers'
compensation, unemployment compensation or disability
insurance laws,
(iii) no Hours of Service shall be credited on account of
payments which solely reimburse the employee for
medical or medically related expenses incurred by the
employee, and
(iv) payments shall be deemed made by or due from the
Employer or an Affiliate whether made directly or
indirectly from a trust fund or an insurer to which
the Employer or an Affiliate contributes or pays
premiums.
These hours shall be credited to the employee for the
computation period for which payment is made or, if the
payment is not computed by reference to units of time, the
hours shall be credited to the first computation period in
which the event, for which any part of the payment is made,
occurred.
(c) Back Pay. An Hour of Service shall be credited for each hour
for which back pay, irrespective of mitigation of damages, has
been either awarded or agreed to by the Employer or an
Affiliate. The same Hours of Service credited under paragraph
(a) or (b) shall not be credited under this paragraph (c). The
crediting of Hours of Service under this paragraph (c) for
periods and payments described in paragraph (b) shall be
subject to all the limitations of that paragraph. These hours
shall be credited to the employee for the computation period
or periods to which the award or agreement pertains rather
than the computation period in which the award, agreement or
payment is made.
(d) Unpaid Absences.
(i) Military Leaves. During service in the Armed Forces
of the United States, if the employee both entered
such service and returned to employment with the
Employer or an Affiliate from such service under
circumstances entitling the employee to reemployment
rights granted veterans under federal law, the
employee shall be credited with the number of Hours
of Service which otherwise would normally have been
credited to such employee but for such absence;
provided, however,that if the employee does not
return to employment for any reason other than death,
Disability or attainment of Normal Retirement Age
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within the time prescribed by law for the retention
of veteran's reemployment rights, such Hours of
Service shall not be credited.
(ii) Leaves of Absence. If (and to the extent that) the
Administrative Committee so provides in rules, during
each unpaid leave of absence authorized by the
Employer or an Affiliate for Plan purposes under such
rules, the employee shall be credited with the number
of Hours of Service which otherwise would normally
have been credited to such employee but for such
absence; provided, however, that if the employee does
not return to employment for any reason other than
death, Disability or attainment of Normal Retirement
Age at the expiration of the leave of absence, such
Hours of Service shall not be credited.
(iii) Parenting Leaves. To the extent not otherwise
credited, Hours of Service shall be credited to an
employee for any period of absence from work
beginning in Plan Years commencing after August 31,
1985, due to pregnancy of the employee, the birth of
a child of the employee, the placement of a child
with the employee in connection with the adoption of
such child by the employee or for the purpose of
caring for such child for a period beginning
immediately following such birth or placement. The
employee shall be credited with the number of Hours
of Service which otherwise would normally have been
credited to such employee but for such absence. If it
is impossible to determine the number of Hours of
Service which would otherwise normally have been so
credited, the employee shall be credited with eight
(8) Hours of Service for each day of such absence. In
no event, however, shall the number of Hours of
Service credited for any such absence exceed five
hundred one (501) Hours of Service. Such Hours of
Service shall be credited to the computation period
in which such absence from work begins if crediting
all or any portion of such Hours of Service is
necessary to prevent the employee from incurring a
One-Year Break in Service in such computation period.
If the crediting of such Hours of Service is not
necessary to prevent the occurrence of a One-Year
Break in Service in that computation period, such
Hours of Service shall be credited in the immediately
following computation period (even though no part of
such absence may have occurred in such subsequent
computation period). These Hours of Service shall not
be credited until the employee furnishes timely
information which may be reasonably required by the
Administrative Committee to establish that the
absence from work is for a reason for which these
Hours of Service may be credited.
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(e) Special Rules. To the extent not inconsistent with other
provisions hereof, Department of Labor regulations 29 C.F.R.
(S) 2530.200b-2(b) and (c) are hereby incorporated by
reference herein. To the extent required under section 414 of
the Code, services of leased employees, leased owners, leased
managers, shared employees, shared leased employees and other
similar classifications by the Employer or an Affiliate shall
be taken into account as if such services were performed as a
common law employee of the Employer for the purposes of
determining Eligibility Service and One-Year Breaks in Service
as applied to Eligibility Service.
(f) Equivalency for Exempt Employees. Notwithstanding anything to
the contrary in the foregoing, the Hours of Service for any
employee for whom the Employer or an Affiliate is not
otherwise required by state or federal"wage and hour" or other
law to count hours worked shall be credited on the basis that,
without regard to the employee's actual hours, such employee
shall be credited with one hundred ninety (190) Hours of
Service for a calendar month if, under the provisions of this
Section (other than this paragraph), such employee would be
credited with at least one (1) Hour of Service during that
calendar month.
1.1.17. Investment Manager -- the person or persons, other than the
Trustee, appointed pursuant to Section 10.13 to manage all or a portion of the
Fund or any Subfund.
1.1.18. Normal Retirement Age -- the date a Participant attains age
sixty-five (65) years.
1.1.19. Participant -- an employee of the Employer who becomes a
Participant in the Plan in accordance with the provisions of Section 2. An
employee who has become a Participant shall be considered to continue as a
Participant in the Plan until the date of the Participant's death or, if
earlier, the date when the Participant is no longer employed in Recognized
Employment and upon which the Participant no longer has any Account under the
Plan (that is, the Participant has both received a distribution of all of the
Participant's Vested Account, if any, and the Participant's suspense account, if
any, has been forfeited and disposed of as provided in Section 6.2).
1.1.20. Period of Service -- a measure of an employee's employment with
the Employer and all Affiliates which is equal to the period commencing on the
employee's Employment Commencement Date or Reemployment Commencement Date,
whichever is applicable, and ending on the next following Severance from Service
Date; provided, however:
(a) Aggregation. Unless some or all of an employee's service may
be disregarded pursuant to other rules of this Plan Statement,
all discontinuous Periods of Service shall be aggregated in
determining the total of an employee's Period of Service. A
Period of Service shall be stated in years and days and when
aggregating discontinuous periods on less than one (1) year,
three hundred sixty-five (365) days shall equal one (1) year.
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(b) Service Spanning No. 1. If an employee quits, is discharged or
retires from service with an Employer and all Affiliates and
performs an Hour of Service within the twelve (12) months
following the Severance from Service Date, that Period of
Severance shall be deemed to be a Period of Service.
(c) Service Spanning No. 2. If an employee xxxxxx from service by
reason of a quit, a discharge or retirement during the first
twelve (12) months of an absence from service for any reason
other than a quit, a discharge, retirement or death, and then
performs an Hour of Service within the twelve (12) months
following the date on which the employee was first absent from
service, the Period of Severance shall be deemed to be a
Period of Service.
(d) Leased Employees. To the extent required under section 414 of
the Code, services of leased employees, leased owners, leased
managers, shared employees, shared leased employees and other
similar classifications by the Employer or an Affiliate shall
be taken into account as if such services were performed as a
common law employee of the Employer for the purpose of
determining Vesting Service and Periods of Severance as
applied to Vesting Service.
1.1.21. Period of Severance -- the period of time commencing on an
employee's Severance from Service Date and ending on the date on which that
employee next again performs an Hour of Service for the Employer or for an
Affiliate (without regard to whethersuch Hour of Service is performed in
Recognized Employment or otherwise). A Period of Severance shall be stated in
years and days.
Notwithstanding the foregoing, for the limited purpose of determining
the length of a Period of Severance, the Severance from Service Date for an
employee shall be advanced during any period of an absence from work (which
began after December 31, 1984) due to the pregnancy of the employee, the birth
of a child of the employee, the placement of a child with the employee in
connection with the adoption of such child by the employee, or for the purpose
of caring for such child for a period beginning immediately following such birth
or placement. In no event, however, shall the Severance from Service Date be
advanced under the foregoing sentence to a date that is later than the last day
of the calendar month which is two (2) years after the first of such absence.
This adjustment in the Severance from Service Date shall not be made until the
employee furnishes timely information which may be reasonably required by the
Committee to establish that the absence from work is for a reason for which this
adjustment will be made.
1.1.22. Plan -- the tax-qualified stock bonus and leveraged employee
stock ownership plan of the Employer established for the benefit of employees
eligible to participate therein, as first set forth in this Plan Statement. (As
used herein, "Plan" refers to the legal entity established by the Employer and
not to the document pursuant to which the Plan is maintained. That document is
referred to herein as the "Plan Statement.") The Plan shall be referred to as
the "FLUOROWARE, INC. EMPLOYEE STOCK OWNERSHIP PLAN."
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1.1.23. Plan Statement -- this document entitled "FLUOROWARE, INC.
EMPLOYEE STOCK OWNERSHIP PLAN TRUST AGREEMENT (1995 Restatement)" as adopted by
the Principal Sponsor effective as of September 1, 1995, as the same may be
amended from time to time.
1.1.24. Plan Year -- the twelve (12) consecutive month period ending on
any Annual Valuation Date.
1.1.25. Principal Sponsor -- Fluoroware, Inc., a Minnesota corporation.
1.1.26. Prior Plan Statement -- the document pursuant to which the Plan
was established effective as of September 1, 1984, and operated thereafter until
September 1, 1995.
1.1.27. Qualifying Employer Securities -- common stock of Fluoroware,
Inc. or of any other corporation which is an affiliate and a member of a
controlled group of corporations including Fluoroware, Inc. within the meaning
of section 407(d)(7) of ERISA. If at any time there is more than one class of
such common stock, Qualifying Employer Securities shall mean only that class of
common stock having a combination of voting power and dividend rights equal to
or in excess of:
(a) that class of common stock having the greatest voting power,
and
(b) that class of common stock having the greatest dividend
rights.
1.1.28. Recognized Compensation -- wages within the meaning of section
3401(a) of the Code for purposes of federal income tax withholding at the source
but determined without regard to any rules that limit the remuneration included
in wages based on the nature or location of the employment or the services
performed (such as the exception for agricultural labor in section 3401(a)(2) of
the Code) and paid to the Participant by the Employer for the applicable period;
subject, however, to the following:
(a) Included Items. In determining a Participant's Recognized
Compensation there shall be included elective contributions
made by the Employer on behalf of the Participant that are not
includible in gross income undersections 125, 402(e)(3),
402(h), 403(b), 414(h)(2) and 457 of the Code including
elective contributions authorized by the Participant under a
Retirement Savings Agreement, a cafeteria plan or any other
qualified cash or deferred arrangement under section 401(k) of
the Code.
(b) Excluded Items. In determining a Participant's Recognized
Compensation there shall be excluded all of the following: (i)
reimbursements or other expense allowances (including all
living and other expenses paid on account of the Participant
being on foreign assignment), (ii) welfare and fringe benefits
(both cash and noncash) including third-party sick pay (i.e.,
short-term and long- term disability insurance benefits),
income imputed from insurance coverages and premiums, employee
discounts and other similar amounts, payments for vacation or
sick leave accrued but not taken, final payments on account of
termination of employment (i.e., severance payments), except
that final
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payments on account of settlement for accrued but unused paid
time off shall be taken into account in determining a
Participant's Recognized Compensation, (iii) moving expenses,
(iv) deferred compensation (both when deferred and when
received), (v) all bonuses except the Twelve-Hour Equalization
Bonus, (vi) all commissions, (vii) all overtime, and (viii)
the value of a qualified or a non-qualified stock option
granted to a Participant by the Employer to the extent such
value is includable in the Participant's taxable income.
(c) Pre-Participation Employment. Remuneration paid by the
Employer attributable to periods prior to the date the
Participant became a Participant in the Plan shall not be
taken into account in determining the Participant's Recognized
Compensation.
(d) Non-Recognized Employment. Remuneration paid by the Employer
for employment that is not Recognized Employment shall not be
taken into account in determining a Participant's Recognized
Compensation.
(e) Attribution to Periods. A Participant's Recognized
Compensation shall be considered attributable to the period in
which it is actually paid and not when earned or accrued;
provided, however, amounts earned but not paid in a Plan Year
because of the timing of pay periods and pay days may be
included in the Plan Year when earned if these amounts are
paid during the first few weeks of the next Plan Year, the
amounts are included on a uniform and consistent basis with
respect to all similarly situated Participants and no amount
is included in more than one Plan Year.
(f) Excluded Periods. Amounts received after the Participant's
termination of employment shall not be taken into account in
determining a Participant's Recognized Compensation.
(g) Multiple Employers. If a Participant is employed by more than
one Employer in a Plan Year, a separate amount of Recognized
Compensation shall be determined for each Employer.
(h) Annual Maximum. A Participant's Recognized Compensation for a
Plan Year shall not exceed the annual compensation limit under
section 401(a)(17) of the Code. In determining a Participant's
Recognized Compensation, the rules of section 414(q)(6) of the
Code apply, except that in applying such rules, the term
"family" shall include only the spouse of the Participant and
lineal descendants of the Participant who have not attained
age nineteen (19) years before the close of the Plan Year. If
Participants are aggregated as such family members (and do not
otherwise agree in writing), the Recognized Compensation of
each family member shall equal the annualcompensation limit
under section 401(a)(17) of the Code multiplied by a fraction,
the numerator of which is such family member's Recognized
Compensation (before application of such annual compensation
limit) and the denominator of which
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is the total Recognized Compensation (before application of
such annual compensation limit) of all such family members.
For purposes of the foregoing, the annual compensation limit
under section 401(a)(17) of the Code shall be Two Hundred
Thousand Dollars ($200,000) (as adjusted under the Code for
cost of living increases) for Plan Years beginning before
January 1, 1994, and shall be One Hundred and Fifty Thousand
Dollars ($150,000) (as so adjusted) for Plan Years beginning
on or after January 1, 1994.
1.1.29. Recognized Employment -- all employment with the Employer,
excluding, however, employment classified by the Employer as:
(a) employment in a unit of employees whose terms and conditions
of employment are subject to a collective bargaining agreement
between the Employer and a union representing that unit of
employees, unless (and to the extent) such collective
bargaining agreement provides for the inclusion of those
employees in the Plan,
(b) employment of a nonresident alien who is not receiving any
earned income from the Employer which constitutes income from
sources within the United States,
(c) employment in a division or facility of the Employer which was
not in existence on September 1, 1984 (that is, was acquired,
established, founded or produced by the liquidation or similar
discontinuation of a separate subsidiary after September 1,
1984) unless and until the Committee shall declare such
employment to be Recognized Employment,
(d) employment of a United States citizen or a United States
resident alien outside the United States unless and until the
Committee shall declare such employment to be Recognized
Employment,
(e) employment as a temporary employee,
(f) services of a person who is not a common law employee of the
Employer including, without limiting the generality of the
foregoing, services of a leased employee, leased owner, leased
manager, shared employee, shared leased employee or other
similar classification, and
(g) employment of a highly compensated employee (as defined in
Section 414 of the Code) to the extent agreed to in writing by
the employee.
1.1.30. Reemployment Commencement Date -- the date upon which an
Employee first performs an Hour of Service for the Employer or for an Affiliate
following a Period of Severance that is not deemed to be a Period of Service
(without regard to whether such Hour of Service is performed in Recognized
Employment or otherwise).
1.1.31. Severance from Service Date -- the earlier of:
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(a) the date upon which an employee quits, is discharged or
retires from service with the Employer and all Affiliates, or
dies; or
(b) the date which is the first anniversary of the first day of a
period in which an employee remains continuously absent from
service (with or without pay) with the Employer and all
Affiliates for any reason other than a quit, adischarge,
retirement or death, such as vacation, holiday, sickness,
disability, leave of absence or layoff.
1.1.32. Trustee -- the Trustees originally named hereunder and their
successors or successor in trust. Where the context requires, Trustee shall also
mean and refer to any one or more co-trustees serving hereunder.
1.1.33. Unallocated Reserve -- the portion of the assets of the Fund
which consist of shares of Qualifying Employer Securities (and the dividends
thereon) which are acquired with the proceeds of an Exempt Loan (pursuant to
Section 3.1) and which are held pending allocation to the Accounts of
Participants (as provided in Section 3.2).
1.1.34. Valuation Date -- the Annual Valuation Date and such additional
dates, if any, as the Committee, in its discretion, may determine under rules.
1.1.35. Vested -- nonforfeitable, i.e., a claim obtained by a
Participant or the Participant's Beneficiary to that part of an immediate or
deferred benefit hereunder which arises from the Participant's service, which is
unconditional and which is legally enforceable against the Plan.
1.1.36. Vesting Service -- a measure of an employee's service with the
Employer and all Affiliates; subject, however, to the following rules:
(a) Period of Service. Except as provided below, an employee's
Vesting Service as of any date shall be equal to the
employee's Period of Service determined as of that same date.
(b) Vesting in Pre-Five Year Severance Accounts. If an employee
has a five (5) year (or longer) Period of Severance, the
employee's Account shall be divided into the portion
attributable to Employer contributions allocated with respect
to employment before such Period of Severance and the portion
attributable to Employer contributions allocated with respect
to employment after such Period of Severance and employment
after such five (5) year (or longer) Period of Severance shall
not be taken into account in computing the Vested percentage
in the employee's Account attributable to Employer
contributions allocated with respect to employment before such
five (5) year (or longer) Period of Severance.
(c) Vesting in Post-Five Year Severance Accounts. Except as
provided in the following sentences of this paragraph, if an
employee has a Period of Severance and returns thereafter to
employment with the Employer or an Affiliate, both
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employment before and employment after such Period of
Severance shall be taken into account in computing the Vested
percentage in the employee's Account attributable to Employer
contributions allocated with respect to employment after such
Period of Severance. If, however, the employee does not have
any Vested interest in an Account upon the occurrence of a
Period of Severance which equals or exceeds in length the
greater of five (5) years or the employee's prior Vesting
Service, such prior Vesting Service shall be disregarded. Any
Vesting Service disregarded by a prior application of this
paragraph need not thereafter be taken into account.
1.2. Rules of Interpretation. An individual shall be considered to have attained
a given age on the individual's birthday for that age (and not on the day
before). The birthday of any individual born on a February 29 shall be deemed to
be February 28 in any year that is not a leap year. Notwithstanding any other
provision of this Plan Statement or any election or designation made under the
Plan, any individual who feloniously and intentionally kills a Participant or
Beneficiary shall be deemed for all purposes of this Plan and all elections
anddesignations made under this Plan to have died before such Participant or
Beneficiary. A final judgment of conviction of felonious and intentional killing
is conclusive for the purposes of this Section. In the absence of a conviction
of felonious and intentional killing, the Administrative Committee shall
determine whether the killing was felonious and intentional for the purposes of
this Section. Whenever appropriate, words used herein in the singular may be
read in the plural, or words used herein in the plural may be read in the
singular; the masculine may include the feminine and the feminine may include
the masculine; and the words "hereof," "herein" or "hereunder" or other similar
compounds of the word "here" shall mean and refer to this entire Plan Statement
and not to any particular paragraph or Section of this Plan Statement unless the
context clearly indicates to the contrary. The titles given to the various
Sections of this Plan Statement are inserted for convenience of reference only
and are not part of this Plan Statement, and they shall not be considered in
determining the purpose, meaning or intent of any provision hereof. Any
reference in this Plan Statement to a statute or regulation shall be considered
also to mean and refer to any subsequent amendment or replacement of that
statute or regulation. This document has been executed and delivered in the
State of Minnesota and has been drawn in conformity to the laws of that State
and shall, except to the extent that federal law is controlling, be construed
and enforced in accordance with the laws of the State of Minnesota.
1.3. Transitional Rules. Notwithstanding the general effective date of Section
1.1.8, the following Sections of the Plan Statement are effective for Plan Years
beginning on or after September 1, 1989: Section 1.1.16(e), Section 1.1.29,
Section 5.3, Section 9.4, Section 11.1, Section 12.10. Notwithstanding the
general effective date of Section 1.1.8, Section 1.1.28(h) of the Plan Statement
is effective for Plan Years beginning on or after September 1, 1994.
Notwithstanding the general effective date of Section 1.1.8, the following
Sections of the Plan Statement are effective for Plan Years beginning on or
after September 1, 1987: Section 3.6, Appendix A, Appendix B and Appendix D.
Notwithstanding the general effective date of Section 1.1.8, the following
Sections of the Plan Statement are effective on or after January 1, 1993:
Section 7.1.4, Section 7.1.5 and Appendix C. Notwithstanding the general
effective date of Section 1.1.8, Section 10.6(b) shall be effective beginning
August 1, 1992.
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SECTION 2
ELIGIBILITY AND PARTICIPATION
2.1. General Eligibility Rule. Each employee shall become a Participant on the
first day (commencing with the Effective Date) next following the date as of
which the employee has completed one (1) year of Eligibility Service, if the
employee is then employed in Recognized Employment. If the employee is not then
employed in Recognized Employment, the employee shall become a Participant on
the first date thereafter upon which the employee enters Recognized Employment.
2.2. Special Rule for Former Participants. A Participant whose employment with
the Employer terminates and who subsequently is reemployed by the Employer shall
immediately reenter the Plan as a Participant upon the Participant's return to
Recognized Employment.
2.3. Special Rule Where Nonrecognition of Gain Elected for Qualifying Employer
Securities. Notwithstanding the foregoing, if the Plan acquires Qualifying
Employer Securities and the seller thereof elects nonrecognition of gain thereon
under Section 1042 of the Code (or any successor provision), then the following
persons shall not thereafter be eligible to share in any Employer contribution
(unless such contribution is specifically designated by the Employer for
investment in assets other than Qualifying Employer Securities):
(a) such seller, and
(b) any person who is related (within the meaning if section
267(b) of the Code) to such seller (except for lineal
descendants described in section 409(n)(3) of the Code), and
(c) any other person who owns (after application of section 318(a)
of the Code) more than twenty-five percent (25%) in number of
shares or in value of any class of outstanding Employer
securities.
For purposes of this section, section 318(a) of the Code (or any successor
provision) shall be applied without regard to the employee trust exception in
paragraph 2(B)(i) of such section.
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SECTION 3
CONTRIBUTIONS AND ALLOCATION THEREOF
3.1. Employer Contributions.
3.1.1. Source of Employer Contributions. All Employer contributions to
the Plan may be made without regard to profits.
3.1.2. Employer Annual Contribution. The Employer shall contribute
annually such amount as the Employer, in its sole discretion, shall from time to
time determine.
3.1.3. Limitation. The contribution of the Employer to the Plan for any
year, when considered in light of its contribution for that year to all other
tax-qualified plans it maintains, shall, in no event, exceed the maximum amount
deductible by it for federal income tax purposes as a contribution to a tax-
qualified profit sharing plan under section 404 of the Code. Each such
contribution to the Plan is conditioned upon its deductibility for such purpose.
3.1.4. Form of Payment. The appropriate contribution of the Employer to
the Plan, determined as herein provided, shall be paid to the Trustee and may be
paid either in cash or in Qualifying Employer Securities of a value equal to the
amount of the contribution or in any combination of the foregoing ways.
3.1.5. Leveraged Acquisitions. The Trustee, with the prior concurrence
of the Board of Directors of Principal Sponsor, shall be authorized to enter
into an Exempt Loan and shall invest the proceeds of the Exempt Loan as provided
in Section 1.1.14. All Qualifying Employer Securities acquired with the proceeds
of an Exempt Loan and held to secure repayment of an Exempt Loan shall be
credited to the Unallocated Reserve until such time as they are released from
such encumbrance.
3.1.6. Application of Contribution to Debt. If, at the time of any
Employer contribution, principal or interest is unpaid on an Exempt Loan and is
then due, so much of the Employer contribution (which is made in any form other
than Qualifying Employer Securities) as is required shall be applied to the
payment of interest or principal on the Exempt Loan which is then due. The
Qualifying Employer Securities which are released from encumbrance on account of
such payment of interest or principal shall be allocated as of the Annual
Valuation Date of the Plan Year for which the Employer contribution was made to
the Accounts of Participants entitled to share therein in the manner set forth
in Section 3.2 hereof.
If there is no Exempt Loan (or to the extent the amount of the Employer
contribution required or designated to pay the interest and principal on the
Exempt Loan is less than the total amount of the Employer contribution), then
the contribution (or the portion thereof not required or designated to pay such
principal and interest) shall be allocated as of the Annual Valuation Date of
the Plan Year for which the Employer contribution was made to the Accounts of
Participants entitled to share therein in the manner set forth in Section 3.2
hereof.
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3.1.7. Disposition of Shares. If shares of Qualifying Employer
Securities which are acquired with the proceeds of an Exempt Loan are sold
before being released from the Unallocated Reserve, the proceeds of the sale
shall be applied to the payment of principal and interest on the Exempt Loan
secured by the shares which are sold and any remaining sale proceeds shall be
treated as a general investment gain of the Fund and allocated to the Accounts
of Participants as of the next Valuation Date as provided in Section 4 hereof.
The remaining sale proceeds so allocated shall not be considered an addition to
the Accounts of Participants for the purposes of Section 3.5 and Appendix A
hereof.
3.1.8. Advance Contributions. Notwithstanding the foregoing, if the
Employer shall make a contribution as of an Annual Valuation Date which is
subsequent to the actual date ofcontribution and designate such contribution for
allocation as of such subsequent Annual Valuation Date, then:
(i) such contribution shall be segregated for investment
purposes by the Trustee from other assets of the Fund
until such subsequent Annual Valuation Date, and
(ii) the amount of such segregated contribution (adjusted
for gains or losses) shall be allocated as of such
Annual Valuation Date as if it were an Employer
contribution made in fact on that Annual Valuation
Date.
3.2. Allocating Employer Contributions. The Employer contribution for a Plan
Year, including forfeited Suspense accounts, if any, to be included with that
contribution or reallocated as of the Annual Valuation of such Plan Year shall
be allocated to the Accounts of eligible Participants under Section 3.3. The
contribution shall be allocated to the Accounts of eligible Participants in the
ratio which the Recognized Compensation of each such eligible Participant for
the Plan Year bears to the Recognized Compensation for such Plan Year of all
such eligible Participants. The amount so allocated to an eligible Participant
shall be credited to such Participant's Account as of the Annual Valuation Date
in the Plan Year for which such contribution is made.
3.3. Eligible Participants. For purposes of this Section 3, a Participant shall
be an eligible Participant for a Plan Year only if:
(a) the Participant is credited with at least one thousand (1,000)
Hours of Service for such Plan Year, or
(b) the Participant terminates employment with the Employer within
the Plan Year by reason of death, retirement at or after the
Participant's Normal Retirement Age or Disability.
No other Participant shall be an eligible Participant.
3.4. Adjustments.
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3.4.1. Make-Up Contributions for Omitted Participants. If, after the
Employer's annual contribution for a Plan Year has been made and allocated, it
should appear that, through oversight or a mistake of fact or law, a Participant
(or an employee who should have been considered a Participant) who should have
been entitled to share in such contribution received no allocation or received
an allocation which was less than the Participant should have received, the
Committee may, at its election, and in lieu of reallocating such contribution,
direct the Employer to make a special make-up contribution for the Account of
such Participant in an amount adequate to provide the same addition to the
Participant's Account for such Plan Year as the Participant should have
received.
3.4.2. Mistaken Contributions. If, after the Employer's annual
contribution for a Plan Year has been made and allocated, it should appear that,
through oversight or a mistake of fact or law, a Participant (or an individual
who was not a Participant) received an allocation which was more than the
Participant should have received, the Committee may direct that the mistaken
contribution, adjusted for its pro rata share of any net loss or net gain in the
value of the Fund which accrued while such mistaken contribution was held
therein, shall be withdrawn from the Account of such individual and retained in
the Fund and used to reduce the amount of the next succeeding contribution of
the Employer to the Fund due after the determination that such mistaken
contribution had occurred.
3.5. Limitation on Annual Additions. In no event shall amounts be allocated to
the Account of any Participant if, or to the extent, such amounts would exceed
the limitations set forth in Appendix A to this Plan Statement.
3.6. Effect of Disallowance of Deduction or Mistake of Fact. All Employer
contributions to the Plan are conditioned on their qualification for deduction
for federal income tax purposes under section 404 of the Code. If any such
deduction should be disallowed, in whole or in part, for any Employer
contribution to the Plan for any year, or if any Employer contribution to the
Plan is made by reason of a mistake of fact, then there shall be calculated the
excess of the amount contributed over the amount that would have been
contributed had there not occurred a mistake in determining the deduction or a
mistake of fact. The Principal Sponsor shall direct the Trustee to return such
excess, adjusted for its pro rata share of any net loss (but not any net gain)
in the value of the Fund which accrued while such excess was held therein, to
the Employer within one (1) year of the disallowance of the deduction or the
mistaken payment of the contribution, as the case may be. If the return of such
amount would cause the balance of any Account of any Participant to be reduced
to less than the balance which would have been in such Account had the mistaken
amount not been contributed, however, the amount to be returned to the Employer
shall be limited so as to avoid such reduction.
3.7. Use of Dividends.
3.7.1. Unallocated Reserve Dividends. If, at the time dividends are
received on Qualifying Employer Securities held in the Unallocated Reserve,
principal or interest is unpaid on an Exempt Loan, so much of the dividend as is
required to pay or prepay such principal or interest shall be applied to the
payment of interest or principal on the Exempt Loan. Subject to 3.7.2(iii), the
Qualifying Employer Securities that are released from encumbrance on account of
a payment of principal shall be allocated as of the Annual Valuation Date of the
Plan Year in which the dividend is received to the Accounts of Participants
entitled to share therein as if such dividend were an Employer contribution in
the manner set forth in Section 3.2.
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To the extent that the amount of the dividend required to pay or prepay
the interest and principal on the Exempt Loan is less than the total amount of
the dividend received, then the dividend (or the portion thereof not required or
designated to pay such principal and interest) shall be allocated as of the
Annual Valuation Date of the Plan Year in which the dividend is received to the
Accounts of Participants entitled to share therein as if such dividend were an
Employer contribution in the manner set forth in Section 3.2.
3.7.2. Dividends on Allocated Securities. If dividends are received on
Qualifying Employer Securities allocated to Participants' Accounts, the Trustee
shall, at the direction of the Administrative Committee and in its sole
discretion, either (i) allocate the dividend to Participants' Accounts and
retain such dividend in Participants' Accounts, (ii) distribute dividends on
Qualifying Employer Securities allocated to Accounts (whether or not Vested) to
Participants and Beneficiaries in cash not later than ninety (90) days after the
close of the Plan Year in which the dividends are paid on such Qualifying
Employer Securities, or (iii) apply such dividends to pay or prepay principal on
an Exempt Loan (but only if Qualifying Employer Securities with a fair market
value of not less than the amount of such dividend are allocated to such
Participants and Beneficiaries for such Plan Year). The issuer of the Qualifying
Employer Securities may elect to pay any cash dividend directly to the
Participants or Beneficiaries. Any such payments of cash dividend on shares of
Qualifying Employer Securities shall be accounted for as if the Participant or
Beneficiary receiving such dividends was the direct owner of such shares of
Qualifying Employer Securities and such payment shall not be treated as a
distribution under the Plan.
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SECTION 4
INVESTMENT AND ADJUSTMENT OF ACCOUNTS
4.1. Valuation and Adjustment of Accounts. Subject to Section 4.4, the Trustee
shall value the Fund as of each Valuation Date, which valuation shall reflect,
as nearly as possible, the then fair market value of the assets comprising the
Fund (including income accumulations therein). The Trustee shall then adjust
each Account (including undistributed Vested Accounts) for distributions made
from the Account and then adjust each Account for its proportionate share of any
increase or decrease in the value of the Fund as so determined. The Employer
contributions and forfeited suspense accounts, if any, for the Plan Year shall
then be posted to the Accounts of Participants entitled thereto.
4.2. Management and Investment of Fund. The Fund in the hands of the Trustee,
together with all additional contributions made thereto and together with all
net income thereof, shall be controlled, managed, invested, reinvested and
ultimately paid and distributed to Participants and Beneficiaries by the Trustee
with all the powers, rights and discretions generally possessed by trustees, and
with all the additional powers, rights and discretions conferred upon the
Trustee under this Plan Statement. The Trustee shall have the exclusive
authority to manage and control the assets of the Fund and their custody and
shall not be subject to the direction of any person in the discharge of its
duties except the directions of the Investment Manager with respect to assets
other than Qualifying Employer Securities or the directions of the
Administrative Committee to pay benefits hereunder, nor shall its authority be
subject to delegation or modification except by formal amendment of this Plan
Statement.
4.3. Investment of Fund.
4.3.1. General Rule. This Plan is a stock bonus and leveraged employee
stock ownership plan. This Plan is designed to invest primarily in Qualifying
Employer Securities. The primary purpose of this Plan is to benefit Participants
who are active employees by obtaining and retaining for them, individually and
collectively, a position of equity ownership in Fluoroware, Inc. or other
Qualifying Employer Securities while they are active employees and not by
producing retirement income or investment gains. To the extent that Qualifying
Employer Securities are available and subject to Section 4.4, the Trustee shall
generally invest the Fund entirely in Qualifying Employer Securities; provided,
however, that the Trustee is specifically authorized to hold cash or cash
equivalents sufficient to meet anticipated cash distributions to Participants
and Beneficiaries and to invest in assets other than Qualifying Employer
Securities for certain mature accounts under Section 4.3.2.
4.3.2. Special Rule for Mature Accounts. Notwithstanding anything
herein to the contrary, however, the Trustee shall not invest the Accounts of
Participants who have had an Event of Maturity, and who do not take a
distribution of their Account on the Earliest Beginning Date (or whose
Beneficiaries do not take a distribution of the Account on the Earliest
Beginning Date), as defined in Section 7.2.1, in Qualifying Employer Securities.
To the extent such Accounts were previously invested in Qualifying Employer
Securities, the Trustee shall reinvest the Account in other investments, chosen
by the Trustee, as soon as administratively feasible after the Participant's or
Beneficiary's Earliest Beginning Date. The costs related to these investments
shall be charged to the Account of the Participant or
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Beneficiary whose account is so invested. This paragraph shall apply only to
Participants who have an Event of Maturity on or after September 1, 1995.
4.4. Authority With Respect to Qualifying Employer Securities. Except as
otherwise provided in this Section 4.4, the Trustee shall have the exclusive
power, authority and responsibility in all actions or decisions with respect to
Qualifying Employer Securities, including authority (i) to determine whether to
sell, purchase or hold Qualifying Employer Securities and (ii) to determine
whether to exercise any discretion or option under or contained in any
instrument or document evidencing or otherwise related to an Exempt Loan. The
Trustee shall have the authority to decide how Qualifying Employer Securities
shall be voted (except to the extent Participants and Beneficiaries have
properly exercised pass-through voting rights under Section 10.7) and how to
respond to any tender offer for Qualifying Employer Securities. The fair market
value of Qualifying Employer Securities for all purposes of this Plan shall be
determined by a qualified, independent appraiser selected by the Trustee.
-21-
SECTION 5
VESTING
5.1. Progressive Vesting. Except as hereinafter provided, the Account of each
Participant who was hired on or after March 1, 1994, shall become Vested in
accordance with the following schedule:
When the Participant Has
Completed the Following The Vested Portion of
Periods of Vesting Service: Participant's Account Will Be:
--------------------------- ------------------------------
Less than 5 years 0%
5 years or more 100%
Except as hereinafter provided, the Account of each Participant who was hired
before March 1, 1994, shall become Vested in accordance with the following
schedule:
When the Participant Has
Completed the Following The Vested Portion of
Years of Vesting Service: Participant's Account Will Be:
--------------------------- ------------------------------
Less than 2 years 0%
2 years but less than 3 years 25%
3 years but less than 4 years 50%
4 years but less than 5 years 75%
5 years or more 100%
provided, however, that the Vested percentage of any employee hired before
September 1, 1989, shall be one hundred percent (100%); provided further that
the Vested percentage of that portion of a Participant's Account derived from
Employer contributions accrued as of September 1, 1995 (or the date of adoption
of this Plan Statement, if later) shall not be less than such Vested percentage
computed under the Prior Plan Statement.
-22-
5.2. Full Vesting. Notwithstanding any of the foregoing provisions for
progressive vesting of Accounts of Participants, the entire Account of each
Participant shall be fully Vested upon the earliest occurrence of any of the
following events while in the employment of the Employer or an Affiliate:
(a) the Participant's death,
(b) the Participant's attainment of his Normal Retirement Age,
(c) the Participant's Disability,
(d) a partial termination of the Plan which is effective as to the
Participant, or
(e) a complete termination of the Plan or a complete
discontinuance of Employer contributions hereto.
In addition, a Participant who is not in the employment of the Employer or an
Affiliate upon a complete termination of the Plan or a complete discontinuance
of Employer contributions hereto, shall be fully Vested if, on the date of such
termination or discontinuance, such Participant has not had an Event of
Maturity.
5.3. Forfeiture Event. A Participant who is not in the employment of the
Employer or an Affiliate upon a complete termination of the Plan or a complete
discontinuance of Employercontributions hereto, shall be fully Vested if, on the
date of such termination or discontinuance, such Participant has not had a
"forfeiture event" as described below:
(a) the occurrence after an Event of Maturity of a Period of
Severance of five (5) consecutive years,
(b) the Event of Maturity of a Participant who has no Vested
interest in the Participant's Account,
(c) the distribution after an Event of Maturity, to (or with
respect to) a Participant of the entire Vested portion of the
Account of the Participant, or
(d) the death of the Participant at a time and under circumstances
that do not entitle the Participant to be fully (100%) Vested
in the Participant's Account.
5.4. Special Rule for Partial Distributions. If a distribution is made of less
than the entire Account of a Participant who is not then fully (100%) Vested,
then until the Participant becomes fully (100%) Vested in the Participant's
Account or until the Participant incurs a Period of Severance of five (5) or
more years, whichever first occurs, (i) a separate account shall be established
for the portion of the Account not so distributed and (ii) his Vested interest
in such account at any relevant time shall not be less than an amount ("X")
determined by the formula: X = P[B + (R x D)] - (R x D). For the purpose of
applying the formula, "P" is the Vested percentage at the relevant time
(determined pursuant to Section 5); "B" is the separate account balance at the
relevant time; "D" is the amount of the distribution; and "R"
-23-
is the ratio of the separate account balance at the relevant time to the Account
balance immediately after distribution.
5.5. Effect of Break on Vesting. If a Participant who is not fully (100%) Vested
incurs a Period of Severance of five (5) or more years, returns to Recognized
Employment and is thereafter eligible for any additional allocation of Employer
contributions, the Participant's undistributed Account, if any, attributable to
Employer contributions allocated as of a date before such five (5) year Period
of Severance and his new Account attributable to Employer contributions
allocated as of a date after such five (5) year Period of Severance shall be
separately maintained for vesting purposes until the Participant is fully (100%)
Vested.
-24-
SECTION 6
MATURITY
6.1. Events of Maturity. A Participant's Account shall mature and the Vested
portion shall become distributable in accordance with Section 7 upon the
earliest occurrence of any of the following events while in the employment of
the Employer or an Affiliate:
(a) the Participant's death,
(b) the Participant's separation from service, whether voluntary
or involuntary,
(c) the Participant's attainment of age seventy and one-half
(70-1/2) years,
(d) the crediting of any amounts to the Participant's Account
after the Participant's attainment of age seventy and one-half
(70-1/2) years,
(e) the Participant's Disability, or
(f) termination of the Plan or a partial termination of the Plan
effective as to the Participant;
provided, however, that a transfer from Recognized Employment to employment with
the Employer that is other than Recognized Employment or a transfer from the
employment of one Employer participating in the Plan to another such Employer or
to any Affiliate shall not constitute an Event of Maturity.
6.2. Disposition of Nonvested Account. Upon the occurrence of a Participant's
Event of Maturity, if any portion of the Participant's Account is not Vested,
the portion of the Participant's Account that is not Vested shall be transferred
to the Participant's suspense account as of the Valuation Date coincident with
or next following such Event of Maturity.
6.2.1. Rehire Before Forfeiture. If such Participant is reemployed by
the Employer or an Affiliate before the earlier of a five (5) year Period of
Severance or distribution of the portion of Participant's Account that is vested
following the Participant's Event of Maturity, the Participant's suspense
account shall be transferred back to and held in the Participant's Account under
the Plan as of the Valuation Date coincident with or next following the
reemployment date and it shall be held there pending the occurrence of another
Event of Maturity effective as to the Participant, during which period of
subsequent employment the Participant may become Vested in accordance with the
provisions of Section 5.
6.2.2. Rehire After Forfeiture. If such Participant is not reemployed
by the Employer or an Affiliate before the earlier of a five (5) year Period of
Severance or distribution of the portion of Participant's Account that is vested
following the Participant's Event of Maturity, the portion of the Participant's
Account which was not Vested upon such Event of Maturity (and therefore became
the Participant's suspense account):
-25-
(a) shall be forfeited as of the Annual Valuation Date coincident
with or next following the five (5) year Period of Severance
or the distribution as provided in Section 6.2.3, and
(b) if the Participant returns to employment with the Employer or
an Affiliate before the Participant has a five (5) year Period
of Severance, shall be restored to the Participant's Account
(without adjustment for gains or losses after such Annual
Valuation Date) as provided in Section 6.2.4 if the
Participant returns to Recognized Employment and repays to the
Trustee for deposit in the Fund and crediting to the
Participant's Account the entireamount distributed to (or with
respect to) the Participant from such Account after the Event
of Maturity. Such repayment cannot be "rolled over" from an
individual retirement arrangement.
If the distribution was on account of separation from service, such
repayment must be made, however, before the earlier of (i) five (5) years after
the first day on which the Participant is subsequently reemployed by the
Employer or Affiliate, or (ii) the close of the first Period of Severance of
five (5) consecutive years commencing after distribution. If the distribution
was on account of any other reason, such repayment must be made within five (5)
years after the date of distribution. In either case, such repayment must be
made before the occurrence of a Period of Severance of five (5) consecutive
years after the Event of Maturity and before the termination of this Plan or the
permanent discontinuance of Employer contributions to this Plan.
6.2.3. Forfeitures. If the Participant's Account consists of both
Qualifying Employer Securities which were acquired with the proceeds of an
Exempt Loan and other assets, forfeitures shall be taken first from such other
assets and then from such Qualifying Employer Securities. Forfeited suspense
accounts shall be used first to restore any forfeited suspense accounts for
rehired Participants of the same Employer as required in Section 6.2.2; any
remaining portion shall then be added to the Employer contribution, if any, to
be allocated as of such Annual Valuation Date, to the Accounts of all
Participants during the Plan Year, as provided in Section 3.2. Any suspense
accounts remaining at the termination of the Plan shall be considered to be an
Employer contribution and shall be allocated pursuant to this Section 6 as if
the Plan termination date were an Annual Valuation Date.
6.2.4. Restorations. The amount necessary to make the restoration
required under Section 6.2.2(b) shall come first from suspense accounts of
Participants of the rehiring Employer that are to be forfeited on the Annual
Valuation Date on which the restoration is to occur. If such suspense accounts
are not adequate for this purpose, the rehiring Employer shall make a
contribution adequate to make the restoration as of that Annual Valuation Date
(in addition to any contributions made under Section 3). If the Participant is
rehired by an Affiliate that is not an Employer, the amount necessary to make
the restoration shall come first from suspense accounts of Participants of the
Principal Sponsor that are to be forfeited on the Annual Valuation Date on which
the restoration is to occur and, if such suspense accounts are not adequate for
this purpose, then the Principal Sponsor shall make a contribution adequate to
make the restoration as of that Annual Valuation Date (in addition to any
contributions made under Section 3).
-26-
SECTION 7
DISTRIBUTION
7.1. Application for Distribution.
7.1.1. Application Required. No distribution shall be made from the
Plan until the Committee has received a written application for distribution
from the Participant or the Beneficiary entitled to receive distribution (the
"Distributee"). The Committee may prescribe rules regarding the form of such
application, the manner of filing such application and the information required
to be furnished in connection with such application.
7.1.2. Exception for Small Amounts. A Vested Account which does not
exceed (and has never exceeded) Three Thousand Five Hundred Dollars ($3,500) as
of the Second Annual Valuation Date next following the occurrence of an Event of
Maturity effective as to a Participant, shall be distributed automatically in a
single lump sum as of that date without a written application for distribution.
If, however, the distribution is made on account of the Participant's death or
Disability while in the employment of the Employer or the Participant's
separation from service on or after attaining Normal Retirement Age, a Vested
Account which does not exceed (and has never exceeded) Three Thousand Five
Hundred Dollars ($3,500) on the first Annual Valuation Date next following the
occurrence of Participant's Event of Maturity shall be automatically distributed
in a single lump sum as of such First Annual Valuation Date without a written
application for distribution. A Participant who has no Vested interest in the
Participant's Account as of the Participant's Event of Maturity shall be deemed
to have received an immediate distribution of the Participant's entire interest
in the Plan as of such Event of Maturity.
7.1.3. Exception for Required Distributions. Any Vested Account for
which no application has been received on the required beginning date effective
as to a Distributee under Section 7.2.2, shall be distributed automatically in a
single lump sum as of that date without a written application for distribution.
7.1.4. Notices. The Administrative Committee will issue such notices as
may be required under sections 402(f), 411(a)(11) and other sections of the Code
in connection with distributions from the Plan. No distribution will be made
unless it is consistent with such notice requirements. Distribution may commence
less than thirty (30) days after the notice required under section
1.411(a)-11(c) of the Income Tax Regulations or the notice required under
section 1.402(f)-2T of the Income Tax Regulations is given, provided that:
(a) the Administrative Committee clearly informs the Distributee
that the Distributee has a right to a period of at least
thirty (30) days after receiving the notice to consider the
decision of whether or not to elect distribution and, if
applicable, a particular distribution option); and
(b) the Distributee, after receiving the notice, affirmatively
elects a distribution.
-27-
7.1.5. Direct Rollover. A Distributee who is eligible to elect a direct
rollover may elect, at the time and in the manner prescribed by the Committee,
to have all or any portion of an eligible rollover distribution paid directly to
an eligible retirement plan specified by the Distributee in a direct rollover. A
Distributee who is eligible to elect a direct rollover includes only a
Participant, a Beneficiary who is the surviving spouse of a Participant and a
Participant's spouse or former spouse who is the alternate payee under a
qualified domestic relations order, as defined in Appendix C.
(a) Eligible rollover distribution means any distribution of all
or any portion of a Total Account to a Distributee who is
eligible to elect a direct rollover except (i) any
distribution that is one of a series of substantially
equalinstallments payable not less frequently than annually
over the life expectancy of such Distributee or the joint and
last survivor life expectancy of such Distributee and such
Distributee's designated Beneficiary, and (ii) any
distribution that is one of a series of substantially equal
installments payable not less frequently than annually over a
specified period of ten (10) years or more, and (iii) any
distribution to the extent such distribution is required under
section 401(a)(9) of the Code, and (iv) the portion of any
distribution that is not includible in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
(b) Eligible retirement plan means (i) an individual retirement
account described in section 408(a) of the Code, or (ii) an
individual retirement annuity described in section 408(b) of
the Code, or (iii) an annuity plan described in section 403(a)
of the Code, or (iv) a qualified trust described in section
401(a) of the Code that accepts the eligible rollover
distribution. However, in the case of an eligible rollover
distribution to a Beneficiary who is the surviving spouse of a
Participant, an eligible retirement plan is only an individual
retirement account or individual retirement annuity as
described in section 408 of the Code.
(c) Direct rollover means the payment of an eligible rollover
distribution by the Plan to the eligible retirement plan
specified by the Distributee who is eligible to elect a direct
rollover.
7.2. Time and Form of Distribution. Upon the receipt of a proper application for
distribution from the Distributee after the occurrence of an Event of Maturity
effective as to a Participant, and after the Participant's Vested Account has
been determined and the right of the Distributee to receive a distribution has
been established, the Committee shall cause the Trustee to make distribution of
such Vested Account in a single lump sum as of (and as soon as administratively
feasible after) an Annual Valuation Date specified by the Distributee which is
not earlier than nor later than the dates specified below.
7.2.1. Earliest Beginning Date. Distribution shall not be made as of an
Annual Valuation Date which is earlier than the earliest beginning date.
(a) Participant. If the Distributee is a Participant, the earliest
beginning date is the Second Annual Valuation Date coincident
with or next following the date
-28-
of the Participant's Event of Maturity. However, if the
distribution is being made on account of the Participant's
Disability or separation from service on or after attainment
of Normal Retirement Age, the earliest beginning date is the
First Annual Valuation Date coincident with or next following
the Participant's Event of Maturity.
(b) Beneficiary. If the Distributee is a Beneficiary of a
Participant, the earliest beginning date is the First Annual
Valuation Date coincident with or next following the date of
such Participant's death.
Distribution shall not be made, however, as of an Annual Valuation Date which is
earlier than the date the Administrative Committee receives any required
application for distribution.
Notwithstanding the foregoing, no distribution shall be made if it
would result in the imposition of an excise tax under Section 4978 of the Code.
7.2.2. Required Beginning Date. Distribution shall be made as of the
Annual Valuation Date occurring in the calendar year immediately preceding the
calendar year in which the required beginning date effective as to the
Distributee occurs. Actual distributionshall be made as soon thereafter as is
administratively feasible. In all events distribution shall be made not later
than the following required beginning date:
(a) Participant. If the Distributee is a Participant, the required
beginning date is the April 1 following the calendar year in
which the Participant attains age seventy and one-half
(70-1/2) years.
(b) Beneficiary. If the Distributee is a Beneficiary of a
Participant, the required beginning date is the December 31 of
the calendar year in which occurs the fifth (5th) anniversary
of the Participant's death.
7.3. Effect of Reemployment. If a Participant is reemployed by the Employer or
an Affiliate after distribution has been scheduled to be made but before the
Participant attains Normal Retirement Age and before actual distribution,
distribution of the Participant's Vested Account shall be suspended and the
Vested Account shall continue to be held in the Fund until another Event of
Maturity effective as to the Participant shall occur after the Participant's
reemployment. It is the general intent of this Plan that no distributions shall
be made before the Normal Retirement Age of a Participant while the Participant
is employed by the Employer or an Affiliate.
7.4. Designation of Beneficiaries.
7.4.1. Right To Designate. Each Participant may designate, upon forms
to be furnished by and filed with the Committee, one or more primary
Beneficiaries or alternative Beneficiaries to receive all or a specified part of
the Participant's Vested Account in the event of the Participant's death. The
Participant may change or revoke any such designation from time to time without
notice to or consent from any Beneficiary or spouse. No such designation, change
or revocation shall be effective unless executed by the Participant and received
by the Committee during the Participant's lifetime.
-29-
7.4.2. Spousal Consent. Notwithstanding the foregoing, a designation
will not be valid for the purpose of paying benefits from the Plan to anyone
other than a surviving spouse of the Participant (if there is a surviving
spouse) unless that surviving spouse consents in writing to the designation of
another person as Beneficiary. To be valid, the consent of such spouse must be
in writing, must acknowledge the effect of the designation of the Beneficiary
and must be witnessed by a notary public. The consent of the spouse must be to
the designation of a specific named Beneficiary which may not be changed without
further spousal consent, or alternatively, the consent of the spouse must
expressly permit the Participant to make and to change the designation of
Beneficiaries without any requirement of further spousal consent. The consent of
the spouse to a Beneficiary is a waiver of the spouse's rights to death benefits
under the Plan. The consent of the surviving spouse need not be given at the
time the designation is made. The consent of the surviving spouse need not be
given before the death of the Participant. The consent of the surviving spouse
will be required, however, before benefits can be paid to any person other than
the surviving spouse. The consent of a spouse shall be irrevocable and shall be
effective only with respect to that spouse.
7.4.3. Failure of Designation. If a Participant:
(a) fails to designate a Beneficiary,
(b) designates a Beneficiary and thereafter such designation is
revoked without another Beneficiary being named, or
(c) designates one or more Beneficiaries and all such
Beneficiaries so designated fail to survive the Participant,
such Participant's Vested Account, or the part thereof as to which such
Participant's designation fails, as the case may be, shall be payable to the
first class of the following classesof automatic Beneficiaries with a member
surviving the Participant and (except in the case of the Participant's surviving
issue) in equal shares if there is more than one member in such class surviving
the Participant:
Participant's surviving spouse
Participant's surviving issue per stirpes and not per capita
Participant's surviving parents
Participant's surviving brothers and sisters
Representative of Participant's estate.
7.4.4. Disclaimers by Beneficiaries. A Beneficiary entitled to a
distribution of all or a portion of a deceased Participant's Vested Account may
disclaim his or her interest therein subject to the following requirements. To
be eligible to disclaim, a Beneficiary must be a natural person, must not have
received a distribution of all or any portion of a Vested Account at the time
such disclaimer is executed and delivered, and must have attained at least age
twenty-one (21) years as of the date of the Participant's death. Any disclaimer
must be in writing and must be executed personally by the Beneficiary before a
notary public. A disclaimer shall state that the Beneficiary's entire interest
in the undistributed Vested Account is disclaimed or shall specify what portion
thereof is disclaimed. To be effective, duplicate original executed copies of
the disclaimer must be both executed and actually delivered to both the
Administrative Committee and to the Trustee after the date of the Participant's
death but not later
-30-
than one hundred eighty (180) days after the date of the Participant's death. A
disclaimer shall be irrevocable when delivered to both the Administrative
Committee and the Trustee. A disclaimer shall be considered to be delivered to
the Administrative Committee or the Trustee only when actually received by the
Administrative Committee or the Trustee (and in the case of a corporate Trustee,
shall be considered to be delivered only when actually received by a trust
officer familiar with the affairs of the Plan). The Administrative Committee
(and not the Trustee) shall be the sole judge of the content, interpretation and
validity of a purported disclaimer. Upon the filing of a valid disclaimer, the
Beneficiary shall be considered not to have survived the Participant as to the
interest disclaimed. A disclaimer by a Beneficiary shall not be considered to be
a transfer of an interest in violation of the provisions of Section 8 and shall
not be considered to be an assignment or alienation of benefits in violation of
federal law prohibiting the assignment or alienation of benefits under this
Plan. No other form of attempted disclaimer shall be recognized by either the
Administrative Committee or the Trustee.
7.4.5. Definitions. When used herein and, unless the Participant has
otherwise specified in the Participant's Beneficiary designation, when used in a
Beneficiary designation, "issue" means all persons who are lineal descendants of
the person whose issue are referred to, including legally adopted descendants
and their descendants but not including illegitimate descendants and their
descendants; "child" means an issue of the first generation; "per stirpes" means
in equal shares among living children of the person whose issue are referred to
and the issue (taken collectively) of each deceased child of such person, with
such issue taking by right of representation of such deceased child; and
"survive" and "surviving" mean living after the death of the Participant.
7.4.6. Special Rules. Unless the Participant has otherwise specified in
the Participant's Beneficiary designation, the following rules shall apply:
(a) If there is not sufficient evidence that a Beneficiary was
living at the time of the death of the Participant, it shall
be deemed that the Beneficiary was not living at the time of
the death of the Participant.
(b) The automatic Beneficiaries specified in Section 7.5.3 and the
Beneficiaries designated by the Participant shall become fixed
at the time of the Participant's death so that, if a
Beneficiary survives the Participant but dies before the
receipt of all payments due such Beneficiary hereunder,
suchremaining payments shall be payable to the representative
of such Beneficiary's estate.
(c) If the Participant designates as a Beneficiary the person who
is the Participant's spouse on the date of the designation,
either by name or by relationship, or both, the dissolution,
annulment or other legal termination of the marriage between
the Participant and such person shall automatically revoke
such designation. (The foregoing shall not prevent the
Participant from designating a former spouse as a Beneficiary
on a form executed by the Participant and received by the
Committee after the date of the legal termination of the
marriage between the Participant and such former spouse, and
during the Participant's lifetime.)
-31-
(d) Any designation of a nonspouse Beneficiary by name that is
accompanied by a description of relationship to the
Participant shall be given effect without regard to whether
the relationship to the Participant exists either then or at
the Participant's death.
(e) Any designation of a Beneficiary only by statement of
relationship to the Participant shall be effective only to
designate the person or persons standing in such relationship
to the Participant at the Participant's death.
A Beneficiary designation is permanently void if it either is executed or is
filed by a Participant who, at the time of such execution or filing, is then a
minor under the law of the state of the Participant's legal residence. The
Committee (and not the Trustee) shall be the sole judge of the content,
interpretation and validity of a purported Beneficiary designation.
7.5. Distribution in Kind. All distributions from this Plan shall be made in
cash, unless and to the extent that the Distributee requests that distribution
be made in Qualifying Employer Securities. If the Distributee requests that
distribution be made in Qualifying Employer Securities, distribution shall be
made in whole shares of Qualifying Employer Securities and the cash equivalent
of any fractional shares of Qualifying Employer Securities. Notwithstanding the
foregoing, if the Fund then holds Qualifying Employer Securities that are
restricted by the bylaws of the Employer so that 80% or more of all such
outstanding Qualifying Employer Securities must be owned by employees of the
Employer, by former employees of the Employer, by trusts for the benefit of such
employees or former employees, or by the Fund, then any distribution allocable
to such Qualifying Employer Securities shall be made in cash (and not in
Qualifying Employer Securities).
7.6. Death Prior to Full Distribution. If a Participant dies after the
Participant's Event of Maturity but before distribution of the Participant's
Vested Account has been made, the undistributed Vested Account shall be
distributed in the same manner as hereinbefore provided in the Event of Maturity
by reason of death. If, at the death of the Participant, any payment to the
Participant was due or otherwise pending but not actually paid, the amount of
such payment shall be included in the Vested Account which is payable to the
Beneficiary (and shall not be paid to the Participant's estate).
7.7. Facility of Payment. In case of the legal disability, including minority,
of a Participant or Beneficiary entitled to receive any distribution under the
Plan, payment shall be made, if the Administrative Committee shall be advised of
the existence of such condition:
(a) to the duly appointed guardian, conservator or other legal
representative of such Participant or Beneficiary, or
(b) to a person or institution entrusted with the care or
maintenance of the incompetent or disabled Participant or
Beneficiary, provided such person or institution has satisfied
the Committee that the payment will be used for the best
interest and to assist in the care of such Participant or
Beneficiary, andprovided further, that no prior claim for said
payment has been made by a duly appointed guardian,
conservator or other legal representative of such Participant
or Beneficiary.
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Any payment made in accordance with the foregoing provisions of this Section
shall constitute a complete discharge of any liability or obligation of the
Employer, the Committee, the Trustee and the Fund therefor.
7.8. Puts and Rights of First Refusal.
7.8.1. Right of First Refusal. Qualifying Employer Securities which
have been distributed hereunder shall be subject to a right of first refusal in
favor of the Trustee or the Principal Sponsor at the death of the Distributee
(whether a Beneficiary or the Participant) or upon their sale or gift by the
Distributee.
(a) The Distributee shall, in the case of an intended sale or
gift, notify the Committee in writing of such Distributee's
intention to sell or make a gift of all or a part of such
Qualifying Employer Securities. The Trustee (upon direction of
the Administrative Committee pursuant to Section 4.4) or the
Principal Sponsor shall exercise the right to purchase such
Qualifying Employer Securities by tendering full payment
therefor to the Distributee within thirty (30) days of receipt
of such notice and whereupon the Distributee shall immediately
deliver the certificates or other instruments representing
such Qualifying Employer Securities endorsed in blank or
accompanied by a duly executed stock power.
(b) In the event of the death of the Distributee, the
representative of such Distributee's estate shall notify the
Committee in writing of the death of such Distributee. The
Trustee (upon direction of the Administrative Committee
pursuant to Section 4.4) or the Principal Sponsor shall
exercise the right to purchase such Qualifying Employer
Securities by tendering full payment therefor to said
representative at any time after the death of the Distributee
but no later than thirty (30) days after the receipt of such
notice and whereupon the personal representative shall
immediately deliver the certificates or other instrument
representing such Qualifying Employer Securities endorsed in
blank or accompanied by a duly executed stock power.
(c) Full payment shall, in the case of a Distributee's intention
to sell, be the greater of the price at which such Distributee
notifies the Committee such Distributee has received a bona
fide, arm's- length offer to purchase or fair market value.
When a Distributee gives notice to the Principal Sponsor of
such Distributee's intention to dispose of such Qualifying
Employer Securities by gift, or in event of the death of the
Distributee, full payment shall be fair market value. Fair
market value shall be determined as provided in Section 4.4.
(d) At the election of the Administrative Committee, all
certificates or other instruments representing Qualifying
Employer Securities distributed hereunder may be required to
bear a legend setting forth the essential terms of this right
of first refusal.
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If the Qualifying Employer Securities subject to the "right of first refusal"
heretofore described shall have been transferred without compliance with the
above provisions, then such shares in the hands of the transferee or any
subsequent transferee shall be subject to purchase by the Trustee or the
Principal Sponsor at the lesser of fair market value at the date of the
Distributee's death or transfer by the Distributee or the fair market value at
the date the transferee is notified of the intention of the Trustee or the
Principal Sponsor to purchase;provided, however, that this right to purchase
from the transferee shall be inapplicable to any transferee of Qualifying
Employer Securities which did not bear the legend heretofore described.
7.8.2. Put Option. If they are not publicly traded when distributed or
are subject to a trading limitation when distributed, Qualifying Employer
Securities distributed hereunder which were acquired with the proceeds of an
Exempt Guaranteed Loan shall be subject to a "put option" as follows:
(a) The put option shall be exercised by the Distributee (whether
the Participant or a Beneficiary), any person to whom the
Qualifying Employer Securities have passed by gift from the
Distributee and by any person (including an estate or a
recipient of the estate) to whom the Qualifying Employer
Securities passed upon the death of the Distributee
(hereinafter the "Holder").
(b) The put option must be exercised during the sixty (60) day
period beginning on the date the Qualifying Employer
Securities are first distributed by the Plan or during the
sixty (60) day period that begins one (1) year after such
date. The period during which the put option is exercisable
shall not include any time when a Holder is unable to exercise
the put option because the Employer is prohibited from
honoring the put option by federal or state law.
(c) To exercise the put option, the Holder shall notify the
Principal Sponsor in writing that the put option is being
exercised.
(d) Upon receipt of such notice, the Principal Sponsor shall
tender to the Holder within thirty (30) days of exercise the
fair market value either in cash or in a combination of cash
equal to at least sixteen and two-thirds percent (16 2/3%) of
the fair market value and a promissory note providing payment
of the balance in not more than five (5) equal annual
installments of principal (that is, 16 2/3% of total fair
market value each), with the first installment due one (1)
year after exercise and the last annual installment due five
(5) years after exercise. The note shall provide for full
right of prepayment without penalty. The interest rate on such
promissory note shall be equal to the prime rate (the base
rate on corporate loans at large United States money center
commercial banks) as published for the last business day of
the calendar month preceding the calendar month in which the
loan is granted by The Wall Street Journal in its Money Rates
column or any comparable successor rate so published plus one
percent (1%). If the prime rate is published as a range of
rates, the highest prime rate in the range shall be used. The
note shall be secured by (and only by) a pledge (or its
equivalent) of the shares sold.
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(e) The Administrative Committee shall have the option to cause
the Plan to assume the Employer's rights and obligations to
acquire Qualifying Employer Securities under the put option.
If the Plan issues a promissory note for payment, such note
shall be guaranteed by the Employer and shall meet the
requirements of an Exempt Loan.
(f) For the purposes of Section 7.9.2(d) and Section 7.9.1(c), in
the case of a transaction between the Plan and a disqualified
person, fair market value must be determined as of the date of
the transaction. In all other cases, fair market value shall
be determined as of the most recent Annual Valuation Date.
(g) For the purposes of Section 7.9.2, a "trading limitation" on a
security is a restriction under any federal or state
securities law, any regulation thereunder, or an agreement
affecting the security which would make the security not as
freely tradable as one not subject to such restrictions;
provided, however, that the right of first refusal provided
under Section 7.8.2 shall not be considered to be a trading
limitation.
(h) If the Qualifying Employer Securities were publicly traded and
were not subject to a trading limitation when distributed but
cease to be so traded during the period described in paragraph
(b) above, the Employer must notify each Holder in writing
within ten (10) days after the Qualifying Employer Securities
cease to be so traded that for the remainder of such period
the Qualifying Employer Securities are subject to the put
option described in this Section 7.9.2.
7.8.3. Other Restrictions on Qualifying Employer Securities. Except as
provided in Section 7.9.1 and Section 7.9.2, no options, buy-sell arrangements,
puts, calls, rights of first refusal or other restrictions on alienability shall
attach to any Qualifying Employer Securities acquired with the proceeds of an
Exempt Loan and distributed hereunder or held by the Trustee, whether or not
this Plan continues to be an employee stock ownership plan. The put option
extended under Section 7.9.2 shall continue in force notwithstanding that an
Exempt Loan is repaid or that this Plan ceases to be an employee stock ownership
plan.
7.9. Diversification Distribution.
7.9.1. Election. Each "qualified Participant" (as defined below) in the
Plan may elect within ninety (90) days after the close of each Plan Year in the
"qualified election period" (as defined below) to direct the Plan to transfer to
the Participant's accounts in the Fluoroware, Inc. Profit Sharing and Retirement
Savings Plan twenty-five percent (25%) of the Participant's Account in this Plan
(to the extent such portion exceeds the amount to which a prior distribution
election under this Section 7.9 applied). In the case of the election year in
which the Participant can make his or her last election, the preceding sentence
shall be applied by substituting fifty percent (50%) for twenty-five percent
(25%).
7.9.2. Definitions. When used in this Section 7.9, the following terms
have the following meaning:
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(a) qualified Participant means any employee who has completed at
least 10 years of participation under the Plan and has
attained age fifty- five (55) years;
(b) qualified election period means the six (6) Plan-Year period
beginning with the first Plan Year in which the Participant
first became a qualified Participant.
7.9.3. Other Elections Permitted. Under uniform rules of
nondiscriminatory application, the Administrative Committee may permit transfers
described in Section 7.9.1 above under circumstances in addition to those
required in this Section 7.9.
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SECTION 8
SPENDTHRIFT PROVISIONS
No Participant or Beneficiary shall have any transmissible interest in any
Account nor shall any Participant or Beneficiary have any power to anticipate,
alienate, dispose of, pledge or encumber the same while in the possession or
control of the Trustee, nor shall the Trustee, the Employer or the Committee
recognize any assignment thereof, either in whole or in part, nor shall any
Account be subject to attachment, garnishment, execution following judgment or
other legal process while in the possession or control of the Trustee.
The power to designate Beneficiaries to receive the Vested Account of a
Participant in the event of death shall not permit or be construed to permit
such power or right to be exercised by the Participant so as thereby to
anticipate, pledge, mortgage or encumber the Participant's Account or any part
thereof, and any attempt of a Participant so to exercise said power in violation
of this provision shall be of no force and effect and shall be disregarded by
the Employer, the Committee and the Trustee.
This Section shall not prevent the Employer, the Committee or the Trustee from
exercising, in their discretion, any of the applicable powers and options
granted to them upon the occurrence of an Event of Maturity, as such powers may
be conferred upon them by any applicable provision hereof. This Section shall
not prevent the Employer, the Committee or the Trustee from observing the terms
of a qualified domestic relations order as provided in Appendix C to this Plan
Statement.
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SECTION 9
AMENDMENT AND TERMINATION
9.1. Amendment. The Principal Sponsor reserves the power to amend this Plan
Statement in any respect and either prospectively or retroactively or both:
(a) in any respect by resolution of its Board of Directors; and
(b) in any respect that does not materially increase the cost of
the Plan by action of the Committee (with the written
concurrence of the Chief Executive Officer of the Principal
Sponsor);
provided that no amendment shall be effective to reduce or divest the Account of
any Participant unless the same shall have been adopted with the consent of the
Secretary of Labor pursuant to the provisions of ERISA, or in order to comply
with the provisions of the Code and the regulations and rulings thereunder
affecting the tax-qualified status of the Plan and the deductibility of Employer
contributions thereto; provided further that the allocation formula in Section
3.2 shall not be amended more than once every six (6) months other than to
comport with changes in ERISA or the Code and the regulations and rulings
thereunder. Notwithstanding the foregoing, no amendment shall be effective to
increase the duties of the Trustee without its consent.
9.2. Discontinuance of Contributions and Termination of Plan. The Principal
Sponsor reserves the right to reduce, suspend or discontinue its contributions
to the Plan and to terminate the Plan herein embodied in its entirety.
9.3. Merger or Spinoff of Plans.
9.3.1. In General. The Principal Sponsor may cause all or a part of
this Plan to be merged with all or a part of any other plan and may cause all or
a part of the assets and liabilities to be transferred from this Plan to another
plan. In the case of merger or consolidation of this Plan with, or transfer of
assets and liabilities of this Plan to, any other plan, each Participant shall
(if such other plan were then terminated) receive a benefit immediately after
the merger, consolidation or transfer which is not less than the benefit the
Participant would have been entitled to receive immediately before the merger,
consolidation or transfer (if this Plan had then terminated). If the Principal
Sponsor agrees to a transfer of assets and liabilities to or from another plan,
the agreement under which such transfer is concluded (or an amendment of or
appendix to this Plan Statement) shall specify the Accounts to which the
transferred amounts are to be credited.
9.3.2. Limitations. Notwithstanding the foregoing, no transfer shall be
made to this Plan of assets that are subject to the joint and survivor annuity
and preretirement survivor annuity rules of section 401(a)(11) of the Code. In
no event shall assets be transferred from any other plan to this Plan unless
this Plan complies (or has been amended to comply) with the optional form of
benefit requirements of section 411(d)(6)(B)(ii) of the Internal Revenue Code
(or, where applicable, the distribution rules of section 401(k) of the Internal
Revenue Code) with respect to such transferred assets.
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In no event shall assets be transferred from this Plan to any other plan unless
such other plan complies (or has been amended to comply) with the optional form
of benefit requirements of section 411(d)(6)(B)(ii) of the Internal Revenue Code
with respect to such transferred assets.
9.3.3. Beneficiary Designations. If assets and liabilities are
transferred from another plan to this Plan, Beneficiary designations made under
that plan shall become void with respect to deaths occurring on or after the
date as of which such transfer is made and the Beneficiary designation rules of
this Plan Statement shall apply beginning on such date.
9.4. Adoption by Affiliates.
9.4.1. Adoption by Consent. The Principal Sponsor may consent to the
adoption of the Plan by any business entity affiliated in ownership with the
Principal Sponsor subject to such conditions as the Principal Sponsor may
impose.
9.4.2. Procedure for Adoption. Any such adopting business entity shall
initiate its adoption of the Plan by delivery of a certified copy of the
resolutions of its board of directors (or other authorized body or individual)
adopting this Plan Statement to the Principal Sponsor. Upon the consent by the
Principal Sponsor to the adoption by the adopting business entity, and the
delivery to the Trustee of written evidence of the Principal Sponsor's consent,
the adoption of the Plan by the adopting business entity shall be effective as
of the date specified by the Principal Sponsor. If such adopting business entity
is not a corporation, any reference in the Plan Statement to its board of
directors shall be deemed to refer to such entity's governing body or other
authorized individual.
9.4.3. Effect of Adoption. Upon the adoption of the Plan by an adopting
business entity as heretofore provided, the adopting business entity shall be an
Employer hereunder in all respects. Each adopting business entity, as a
condition of continued participation in the Plan, delegates to the Principal
Sponsor the sole power and authority over all Plan matters except that the board
of directors of each adopting business entity shall have the power to amend this
Plan Statement as applied to it by establishing a successor plan to which assets
and liabilities may be transferred as provided in Section 9.3 and to terminate
the Plan as applied to it. Each reference herein to the Employer shall include
the Principal Sponsor and all adopting business entities unless the context
clearly requires otherwise.
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SECTION 10
CONCERNING THE TRUSTEE
10.1. Dealings with Trustee.
10.1.1. No Duty to Inquire. No person, firm or corporation dealing with
the Trustee shall be required to take cognizance of the provisions of this Plan
Statement or be required to make inquiry as to the authority of the Trustee to
do any act which the Trustee shall do hereunder. No person, firm or corporation
dealing with the Trustee shall be required to see either to the administration
of the Plan or the Fund or to the faithful performance by the Trustee of its
duties hereunder (except to the extent otherwise provided by ERISA). Any such
person, firm or corporation shall be entitled to assume conclusively that the
Trustee is properly authorized to do any act which it shall do hereunder. Any
such person, firm or corporation shall be under no liability to anyone
whomsoever for any act done hereunder pursuant to the written direction of the
Trustee.
10.1.2. Assumed Authority. Any such person, firm or corporation may
conclusively assume that the Trustee has full power and authority to receive and
receipt for any money or property becoming due and payable to the Trustee. No
such person shall be bound to inquire as to the disposition or application of
any money or property paid to the Trustee or paid in accordance with the written
directions of the Trustee.
10.2. Compensation of Trustee. If a corporate Trustee shall be acting hereunder,
the corporate Trustee shall be entitled to receive compensation for its services
as Trustee hereunder as may be agreed upon from time to time by the Principal
Sponsor and the Trustee. Any individual Trustee who already receives full-time
pay from the Employer shall receive no compensation for services hereunder.
Other individual Trustees shall likewise serve without compensation unless they
shall otherwise specifically agree with the Principal Sponsor to the contrary.
In any event, however, the Trustee (whether corporate or individual Trustees be
acting) shall be entitled to receive reimbursement for reasonable expenses,
fees, costs and other charges incurred by it or payable by it on account of the
administration of the Plan and the Fund to the extent approved by the Principal
Sponsor. Such items of expense and compensation shall be payable out of the Fund
in a fair and equitable manner as determined by the Trustee, except to the
extent that the Employer, in its discretion, directly pays the Trustee.
10.3. Resignation and Removal of Trustee.
10.3.1. Resignation, Removal and Appointment. The Trustee (or in the
event two or more co-trustees are acting, any such co-trustee) may resign by
giving thirty (30) days' notice of intention so to do to the Principal Sponsor
or such shorter notice as the Principal Sponsor may approve. The Principal
Sponsor may remove any Trustee or successor Trustee hereunder by giving such
Trustee (or any co-trustee) thirty (30) days' written notice of removal by
certified mail. The Principal Sponsor shall have the power to appoint one or
more individual or corporate Trustees, or both, as additional or successor
Trustees.
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10.3.2. Automatic Removal. If any individual who is a Trustee is a
director, officer or employee when appointed as a Trustee, then such individual
shall be automatically removed as a Trustee at the earliest time such individual
ceases to be a director, officer or employee. This removal shall occur
automatically and without any requirement for action by the Principal Sponsor or
any notice to the individual so removed.
10.3.3. Surviving Trustees. When any person appointed, qualified and
serving as a Trustee hereunder shall cease to be a Trustee of the Fund, the
remaining Trustee or Trustees then serving hereunder, or the successor Trustee
or Trustees appointed hereunder, as the case may be, shall thereupon be and
become vested with full title and right to possession of allassets and records
of the Plan and the Fund in the possession or control of such prior Trustee, and
the prior Trustee shall forthwith account for and deliver the same to such
remaining or successor Trustee or Trustees.
10.3.4. Successor Organizations. By designating a corporate Trustee,
original or successor, hereunder, there is included in such designation and as a
part thereof any other corporation possessing trust powers and authorized by law
to accept the Plan and the Fund into which or with which the designated
corporate Trustee, original or successor, shall be converted, consolidated or
merged, and the corporation into which or with which any corporate Trustee
hereunder shall be so converted, consolidated or merged shall continue to be the
corporate Trustee of the Plan and the Fund.
10.3.5. Co-Trustee Responsibility. No Trustee shall be or become liable
for any act or omission of a co-trustee serving hereunder with the Trustee
(except to the extent that liability is imposed under ERISA) or of a prior
Trustee hereunder, it being the purpose and intent that each Trustee shall be
liable only for the Trustee's own acts or omissions during the Trustee's term of
service as Trustee hereunder.
10.3.6. Allocation of Responsibility. If there shall at any time be two
(2) or more co-trustees serving hereunder, such Trustees, in addition to all
other powers and authorities vested in them by law or conferred upon them by any
provision of this Plan Statement, shall have power to allocate and reallocate
from time to time to any one or more of their number specific responsibilities,
obligations or duties and may delegate and redelegate from time to time to any
one or more of their number the exercise of any right, power or discretion
vested in the Trustees by law or conferred upon them by any provision of this
Plan Statement, and any person, firm or corporation dealing with the co-trustees
with respect to the Plan or the Fund may assume conclusively that any action
taken or instrument executed by any one of such co-trustees is the action of all
the co-trustees serving hereunder, and that authority for the doing of such act
or the execution of such instrument has been conferred upon and delegated to the
Trustee doing such act or executing such instrument. If any responsibility,
obligation, duty, right, power or discretion vested in the Trustee is allocated
or delegated to one or more co-trustees, the remaining co-trustees shall not be
or become liable for an act or omission by the co-trustees to whom a right,
power or discretion was delegated while such co-trustees were acting pursuant to
such delegation.
10.3.7. Majority Decisions. If there shall at any time be three (3) or
more co-trustees serving hereunder who are qualified to perform a particular
act, the same may be performed, on behalf of all, by a majority of those
qualified, with or without the concurrence of the minority. No person who failed
to join or concur in such act shall be held liable for the consequences thereof,
except to the extent that liability is imposed under ERISA.
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10.4. Accountings by Trustee.
10.4.1. Periodic Reports. The Trustee shall render to the Principal
Sponsor and to the Committee an account and report as soon as practicable after
each Annual Valuation Date (and as soon as may be practicable after each other
Valuation Date) showing all transactions affecting the administration of the
Plan and the Fund, including, but not necessarily limited to, such information
concerning the Plan and the Fund and the administration thereof by the Trustee
as shall be requested in writing by the Principal Sponsor or the Committee.
10.4.2. Special Reports. The Trustee shall also render such further
reports from time to time as may be requested by the Principal Sponsor and shall
submit its final report and account to the Principal Sponsor when it shall cease
to be Trustee hereunder, whether by resignation or other cause.
10.5. Trustee's Power to Protect Itself on Account of Taxes. As a condition to
making the distribution of a Participant's Vested Account during the
Participant's lifetime, the Trustee may require the Participant (or the person
or persons entitled to receive the Participant'sVested Account in the event of
the Participant's death) to furnish the Trustee with proof of payment of all
income, inheritance, estate, transfer, legacy and succession taxes and all other
taxes of any different type or kind that may be imposed under or by virtue of
any state or federal statute or law upon the payment, transfer, descent or
distribution of such Vested Account and for the payment of which the Trustee
may, in its judgment, be directly or indirectly liable. In lieu of the
foregoing, the Trustee may deduct, withhold and transmit to the proper taxing
authorities any such tax which it may be permitted or required to deduct and
withhold and the Vested Account to be distributed in such case shall be
correspondingly reduced. Unless the Principal Sponsor and the Trustee agree
otherwise in writing, the Trustee shall be responsible for withholding federal
income taxes and for providing all required notices and elections concerning
such withholding to all Participants and Beneficiaries.
10.6. Other Trust Powers. Except to the extent that the Trustee is subject to
the authorized and properly given investment directions of a Participant,
Beneficiary or Investment Manager (and in extension, but not in limitation, of
the rights, powers and discretions conferred upon the Trustee herein), the
Trustee shall have and may exercise from time to time in the administration of
the Plan and the Fund, for the purpose of distribution after the termination
thereof, and for the purpose of distribution of Vested Accounts, without order
or license of any court, any one or more or all of the following rights, powers
and discretions:
(a) To invest and reinvest the Fund in Qualifying Employer
Securities and to invest in cash or cash equivalent
investments as provided in Section 4.3. Prior to distribution
of the Vested Account of Participants, the Trustee shall
commingle the Accounts of Participants and control and manage
the same as a common trust fund.
(b) To sell, exchange or otherwise dispose of any asset of
whatsoever character at any time held by the Trustee in trust
hereunder.
(c) To hold uninvested reasonable amounts of cash whenever it is
deemed advisable to do so to facilitate disbursements or for
other operational reasons,
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and to deposit the same, with or without interest, in the
commercial or savings departments of the Trustee serving
hereunder or of any other bank, trust company or other
financial institution including those affiliated with the
Trustee.
(d) To register any investment held in the Fund in the name of the
Trustee, without trust designation, or in the name of a
nominee or nominees, and to hold any investment in bearer
form, but the records of the Trustee shall at all times show
that all such investments are part of the Fund, and the
Trustee shall be as responsible for any act or default of any
such nominee as for its own.
(e) Subject to the prior approval of the Committee, to retain and
employ such attorneys, agents and servants as may be necessary
or desirable, in the opinion of the Trustee, in the
administration of the Fund, and to pay them such reasonable
compensation for their services as may be agreed upon as an
expense of administration of the Fund, including power to
employ and retain counsel upon any matter of doubt as to the
meaning of or interpretation to be placed upon this Plan
Statement or any provisions thereof with reference to any
question arising in the administration of the Fund or
pertaining to the distribution thereof or pertaining to the
rights and liabilities of the Trustee hereunder or to the
rights and claims of Participants and Beneficiaries. The
Trustee, in any such event, may act in reliance upon the
advice, opinions, records, statements and computations of any
attorneys and agents and on the records, statements and
computations of any servants so selected by it in good faith
and shall be released and exonerated of and from all liability
toanyone in so doing (except to the extent that liability is
imposed under ERISA).
(f) Subject to the prior approval of the Committee, to institute,
prosecute and maintain, or to defend, any proceeding at law or
in equity concerning the Plan or the Fund or the assets
thereof or any claims thereto, or the interests of
Participants and Beneficiaries hereunder at the sole cost and
expense of the Fund or at the sole cost and expense of the
Total Account of the Participant who may be concerned therein
or who may be affected thereby as, in the Trustee's opinion,
shall be fair and equitable in each case, and to compromise,
settle and adjust all claims and liabilities asserted by or
against the Plan or the Fund or asserted by or against the
Trustee, on such terms as the Trustee, in each such case,
shall deem reasonable and proper. The Trustee shall be under
no duty or obligation to institute, prosecute, maintain or
defend any suit, action or other legal proceeding unless it
shall be indemnified to its satisfaction against all expenses
and liabilities which it may sustain or anticipate by reason
thereof.
(g) To institute, participate and join in any plan of
reorganization, readjustment, merger or consolidation with
respect to the issuer of any securities held by the Trustee
hereunder, and to use any other means of protecting and
dealing with any of the assets of the Fund which it believes
reasonably necessary or proper
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and, in general, to exercise each and every other power or
right with respect to each asset or investment held by it
hereunder as individuals generally have and enjoy with respect
to their own assets and investment, including (subject to
10.7) power to vote upon any securities or other assets having
voting power which it may hold from time to time, and to give
proxies with respect thereto, with or without power of
substitution or revocation, and to deposit assets or
investments with any protective committee, or with trustees or
depositaries designated by any such committee or by any such
trustees or any court. Notwithstanding the foregoing, an
Investment Manager shall have any or all of such powers and
rights with respect to Plan assets for which it has investment
responsibility but only if (and only to the extent that) such
powers and rights are expressly given to such Investment
Manager in a written agreement signed by it and acknowledged
in writing by the Trustee. In all other cases, such powers and
rights shall be exercised solely by the Trustee.
(h) In any matter of doubt affecting the meaning, purpose or
intent of any provision of this Plan Statement which directly
affects its duties, to determine such meaning, purpose or
intent.
(i) To require, as a condition to distribution of any Vested
Account, proof of identity or of authority of the person
entitled to receive the same, including power to require
reasonable indemnification on that account as a condition
precedent to its obligation to make distribution hereunder.
(j) To collect, receive, receipt and give quittance for all
payments that may be or become due and payable on account of
any asset in trust hereunder which has not, by act of the
Trustee taken pursuant thereto, been made payable to others;
and payment thereof by the company issuing the same, or by the
party obligated thereon, as the case may be, when made to the
Trustee hereunder or to any person or persons designated by
the Trustee, shall acquit, release and discharge such company
or obligated party from any and all liability on account
thereof.
(k) To determine from time to time, as required for the purpose of
distribution or for the purpose of allocating trust income or
for any other purpose of thePlan, the then value of the Fund
and the Accounts in the Fund, the Trustee, in each such case,
using and employing for that purpose the fair market value of
each of the assets constituting the Fund. All valuations with
respect to activities carried on by the Plan of Qualifying
Employer Securities which are not readily tradable on an
established securities market shall be made by an independent
appraiser meeting requirements similar to the requirements of
regulations prescribed under Code section 170(a)(1). Each such
determination so made by the Trustee in good faith shall be
binding and conclusive upon all persons interested or becoming
interested in the Plan or the Fund.
(l) Subject to Section 4.3, to receive and retain contributions
made in a form other than cash in the form in which the same
are received until such time as the
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Trustee, in its sole discretion, deems it advisable to sell or
otherwise dispose of such assets.
(m) To commingle, for investment purposes, the assets of the Fund
with the assets of any other qualified retirement plan trust
fund of the Employer, provided that the records of the Trustee
shall reflect the relative interests of the separate trusts in
such commingled fund.
(n) To have and to exercise such other and additional powers as
may be advisable or proper in its opinion for the effective
and economical administration of the Fund.
(o) To deposit any part or all of the assets in any collective
trust fund which is now or hereafter maintained by the
Trustee, an agent of the Trustee or an Investment Manager as a
medium for the collective investment of funds of pension,
profit sharing or other employee benefit plans, and which is
qualified under section 401(a) of the Code and exempt from
taxation under section 501(a) of the Code, and to withdraw any
part or all of the assets so deposited and any assets
deposited with the trustee of a collective trust fund shall be
held and invested by the trustee thereunder pursuant to all
the terms and conditions of the trust agreement or declaration
of trust establishing the fund, which are hereby incorporated
herein by reference and shall prevail over any contrary
provisions of this Plan Statement.
(p) To deposit any part or all of the assets with the trustee of
any master investment trust maintained by the Principal
Sponsor for the investment of assets of qualified pension,
profit sharing or stock bonus plans it or its subsidiaries
maintain and to withdraw any part or all of the assets so
deposited, and any assets deposited with the trustee of a
master investment trust shall be held and invested by that
trustee pursuant to the terms and conditions of the master
investment trust document, which is hereby incorporated herein
by reference and shall prevail over any contrary provision of
this Plan Statement.
10.7. Voting of Qualifying Employer Securities.
10.7.1. Registration-Type Securities. If the Employer (or any issuer of
Qualifying Employer Securities) has a "registration-type class of securities,"
the Trustee shall not vote any Qualifying Employer Securities which were
acquired with the proceeds of an Exempt Loan except as directed by Participants
and Beneficiaries. As soon as practicable after notice of any shareholders'
meeting is received by the Trustee from the issuer of such Qualifying Employer
Securities which were acquired with the proceeds of an Exempt Loan, the
Committee shall cause the Trustee to prepare and deliver to each Participant
under this Plan a form of proxy (and related materials, all of which shall be
the same in form and context as are issued to shareholders in general) directing
the Trustee as to how it shall vote at such meeting, or anyadjournment thereof,
that number of shares of Qualifying Employer Securities which were acquired with
the proceeds of an Exempt Loan actually held by the Plan, as of the most recent
Annual Valuation Date for which a valuation has been completed, which equals, as
nearly as may be, but does not
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exceed, the total of such shares held in the Participant's or Beneficiary's
Account. The Trustee shall vote all shares of Qualifying Employer Securities
which were acquired with the proceeds of an Exempt Loan for which it has
received instructions, as instructed. The combined fractional shares of
Participants shall be voted to the extent possible to reflect the instructions
of the Participant or Beneficiary to whose Accounts the fractional shares are
allocated. The Trustee shall vote all shares of Qualifying Employer Securities
which were acquired with the proceeds of an Exempt Guaranteed Loan held in
Unallocated Reserve in the same proportions as it is instructed by Participants
and Beneficiaries to vote shares held in their Accounts. The Trustee shall vote
all unvoted, allocated shares of Qualifying Employer Securities in the same
proportions as it is instructed by Participants and Beneficiaries to vote shares
held in their Accounts. The Trustee shall not honor or recognize any proxy given
by any Participant or Beneficiary to any person other than the Trustee. The
Trustee shall not vote any shares of Qualifying Employer Securities which were
acquired with the proceeds of an Exempt Loan held by the Plan in Accounts for
which it has not received instructions from Participants ten (10) days prior to
such meeting. "Registration-type class of securities" means (i) a class of
securities required to be registered under Section 12 of the Securities Exchange
Act of 1934, or (ii) a class of securities which would be required to be so
registered except for the exemption from registration provided in subsection
(g)(2)(H) of such Section 12.
10.7.2. Non-Registration-Type Securities. If the Employer (or any
issuer of Qualifying Employer Securities) does not have a "registration-type
class of securities" as defined in Section 10.7.1 above, the Trustee shall pass
through to Participants voting on any Qualifying Employer Securities which were
acquired with the proceeds of an Exempt Loan in a manner similar to that
provided in Section 10.7.1 above; provided, however, that such pass-through
voting shall apply only with respect to any corporate matter which involves the
voting of such shares with respect to the approval or disapproval of any
corporate merger or consolidation, recapitalization, reclassification,
liquidation, dissolution, sale of substantially all assets of a trade or
business, or such similar transaction as the Secretary of Treasury may prescribe
in regulations. The Trustee shall vote as directed by the Administrative
Committee all shares of Qualifying Employer Securities which were acquired with
the proceeds of an Exempt Loan held in the Unallocated Reserve and shall vote
all shares of Qualifying Employer Securities which were acquired with the
proceeds of an Exempt Loan held in Participants' and Beneficiaries' Accounts on
corporate matters not listed in the preceding sentence.
10.7.3. Other Securities. The Trustee shall vote as directed by the
Administrative Committee all shares of Qualifying Employer Securities that were
not acquired with the proceeds of an Exempt Loan.
10.8. No Investment in Employer Real Property. Notwithstanding any other
provision of this Plan Statement, the Plan may not acquire or hold any "employer
real property" as that term is defined in section 407(d) of ERISA.
10.9. Investment in Employer Securities. Notwithstanding any other provision of
this Plan Statement, the Plan may not acquire or hold any "Employer security"
which is not a "qualifying employer security" (within the meaning of section
407(d)(5) of ERISA).
10.10. Fiduciary Principles. The Trustee and each other fiduciary hereunder, in
the exercise of each and every power or discretion vested in them by the
provisions of this Plan Statement, shall
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(subject to the provisions of ERISA) discharge their duties with respect to the
Plan solely in the interest of the Participants and Beneficiaries:
(a) for the exclusive purpose of:
(i) providing benefits to Participants and Beneficiaries,
and
(ii) defraying reasonable expenses of administering the
Plan,
(b) with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent person acting in
a like capacity and familiar with such matters would use in
the conduct of an enterprise of a like character and with like
aims, and
(c) in accordance with the documents and instruments governing the
Plan, insofar as they are consistent with the provisions of
ERISA.
Notwithstanding anything in this Plan Statement to the contrary, any provision
hereof which purports to relieve a fiduciary from responsibility or liability
for any responsibility, obligation or duty under Part 4 of Subtitle B of Title I
of ERISA shall, to the extent the same is inconsistent with said Part 4, be
deemed void.
10.11. Prohibited Transactions. Except as may be permitted by law, no Trustee or
other fiduciary hereunder shall permit the Plan to engage, directly or
indirectly, in any of the following transactions with a person who is a
"disqualified person" (as defined in section 4975 of the Code) or a "party in
interest" (as defined in section 3(14) of ERISA):
(a) sale, exchange or leasing of any property between the Plan and
such person,
(b) lending of money or other extension of credit between the Plan
and such person,
(c) furnishing of goods, services or facilities between the Plan
and such person,
(d) transfer to, or use by or for the benefit of, such person of
the income or assets of the Plan,
(e) act by such person who is a fiduciary hereunder whereby the
fiduciary deals with the income or assets of the Plan in the
fiduciary's own interest or for the fiduciary's own account,
or
(f) receipt of any consideration for the fiduciary's own personal
account by such person who is a fiduciary from any party
dealing with the Plan in connection with a transaction
involving the income or assets of the Plan.
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10.12. Indemnity. Each individual (as distinguished from corporate) trustee of
the Plan or officer, director or employee of the Employer shall, except as
prohibited by law, be indemnified and held harmless by the Employer from any and
all liabilities, costs and expenses (including legal fees), to the extent not
covered by liability insurance, arising out of any action taken by such
individual with respect to the Plan, whether imposed under ERISA or otherwise,
unless the liability, cost or expense arises from the individual's claim for his
or her own benefit, the proven gross negligence, the bad faith or, if the
individual had reasonable cause to believe his or her conduct was unlawful, the
criminal misconduct of such individual. This indemnification shall continue as
to an individual who has ceased to be a trustee of the Plan or officer, director
or employee of the Employer and shall inure to the benefit of the heirs,
executors and administrators of such an individual.
10.13. Investment Managers.
10.13.1. Appointment and Qualifications. The Principal Sponsor shall
have the power to appoint from time to time one or more Investment Managers to
direct the Trustee in the investment of, or to assume complete investment
responsibility over, all or any portion of the Fund. An Investment Manager may
be any person or firm (a) which is either (1) registered as an investment
adviser under the Investment Advisers Act of 1940, (2) a bank, or (3)
aninsurance company which is qualified to perform the services of an Investment
Manager under the laws of more than one state; and (b) which acknowledges in
writing that it is a fiduciary with respect to the Plan. The conditions
prescribed in the preceding sentence shall apply to the issuer of any group
annuity contract hereunder only if, and to the extent that, such issuer would
otherwise be considered a "fiduciary" with respect to the Plan, within the
meaning of ERISA.
10.13.2. Removal. The Principal Sponsor may remove any such Investment
Manager and shall have the power to appoint a successor or successors from time
to time in succession to any Investment Manager who shall be removed, shall
resign or shall otherwise cease to serve hereunder.
10.13.3. Relation to Other Fiduciaries. The Trustee shall comply with
all investment directions given to the Trustee with respect to the designated
portion of the Fund, and the Trustee shall be released and exonerated of and
from all liability for or on account of any action taken or not taken by it
pursuant to the directions of such Investment Manager, except to the extent that
liability is imposed under ERISA. Neither the Employer or any of its officers,
directors or employees nor any member of the Committee shall be liable for the
acts or omissions of the Trustee or of any Investment Manager appointed
hereunder. The fees and expenses of any Investment Manager, as agreed upon from
time to time between the Investment Manager and the Employer, shall be charged
to and paid from the Fund in a fair and equitable manner, except to the extent
that the Employer, in its discretion, may pay such directly to the Investment
Manager.
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SECTION 11
DETERMINATIONS -- RULES AND REGULATIONS
11.1. Determinations. The Committee shall make such determinations as may be
required from time to time in the administration of the Plan. The Administrative
Committee shall have the sole discretion, authority and responsibility to
interpret and construe the Plan Statement and to determine all factual and legal
questions under the Plan, including but not limited to the entitlement of
employees, Participants and Beneficiaries and the amounts of their respective
interests. The Trustee and other interested parties may act and rely upon all
information reported to them hereunder and need not inquire into the accuracy
thereof, nor be charged with any notice to the contrary.
11.2. Rules and Regulations. Any rule not in conflict or at variance with the
provisions hereof may be adopted by the Committee.
11.3. Method of Executing Instruments.
11.3.1. Employer or Committee. Information to be supplied or written
notices to be made or consents to be given by the Principal Sponsor, the
Employer or the Committee pursuant to any provision of this Plan Statement may
be signed in the name of the Principal Sponsor or Employer by any officer or by
any employee who has been authorized to make such certification or to give such
notices or consents or by any Committee member.
11.3.2. Trustee. Any instrument or written notice required, necessary
or advisable to be made or given by the Trustee may be signed by any Trustee, if
all Trustees serving hereunder are individuals, or by any authorized officer or
employee of the Trustee, if a corporate Trustee shall be acting hereunder as
sole Trustee, or by any such officer or employee of the corporate Trustee or by
an individual Trustee acting hereunder, if corporate and individual Trustees
shall be serving as co-trustees hereunder.
11.4. Claims Procedure. Until modified by the Committee, the claims procedure
set forth in this Section 11.4 shall be the claims procedure for the resolution
of disputes and disposition of claims arising under the Plan. An application for
a distribution under Section 7 shall be considered as a claim for the purposes
of this Section.
11.4.1. Original Claim. Any employee, former employee, or Beneficiary
of such employee or former employee may, if the employee, former employee or
Beneficiary so desires, file with the Committee a written claim for benefits
under the Plan. Within ninety (90) days after the filing of such a claim, the
Committee shall notify the claimant in writing whether the claim is upheld or
denied in whole or in part or shall furnish the claimant a written notice
describing specific special circumstances requiring a specified amount of
additional time (but not more than one hundred eighty days from the date the
claim was filed) to reach a decision on the claim. If the claim is denied in
whole or in part, the Committee shall state in writing:
(a) the specific reasons for the denial,
-49-
(b) the specific references to the pertinent provisions of this
Plan Statement 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) an explanation of the claims review procedure set forth in
this Section.
11.4.2. Claims Review Procedure. Within sixty (60) days after receipt
of notice that the claim has been denied in whole or in part, the claimant may
file with the Committee a written request for a review and may, in conjunction
therewith, submit written issues and comments. Within sixty (60) days after the
filing of such a request for review, the Committee shall notify the claimant in
writing whether, upon review, the claim was upheld or denied in whole or in part
or shall furnish the claimant a written notice describing specific special
circumstances requiring a specified amount of additional time (but not more than
one hundred twenty days from the date the request for review was filed) to reach
a decision on the request for review.
11.4.3. General Rules.
(a) No inquiry or question shall be deemed to be a claim or a
request for a review of a denied claim unless made in
accordance with the claims procedure. The Committee may
require that any claim for benefits and any request for a
review of a denied claim be filed on forms to be furnished by
the Committee upon request.
(b) All decisions on claims and on requests for a review of denied
claims shall be made by the Committee unless delegated as
provided in Section 12.2.
(c) The Committee may, in its discretion, hold one or more
hearings on a claim or a request for a review of a denied
claim.
(d) Claimants may be represented by a lawyer or other
representative at their own expense, but the Committee
reserves the right to require the claimant to furnish written
authorization. A claimant's representative shall be entitled
to copies of all notices given to the claimant.
(e) The decision of the Committee on a claim and on a request for
a review of a denied claim shall be served on the claimant in
writing. If a decision or notice is not received by a claimant
within the time specified, the claim or request for a review
of a denied claim shall be deemed to have been denied.
(f) Prior to filing a claim or a request for a review of a denied
claim, the claimant or the claimant's representative shall
have a reasonable opportunity to review a copy of this Plan
Statement and all other pertinent documents in the possession
of the Employer, the Committee and the Trustee.
-50-
11.5. Information Furnished by Participants. Neither the Employer nor the
Committee nor the Trustee shall be liable or responsible for any error in the
computation of the Account of a Participant resulting from any misstatement of
fact made by the Participant, directly or indirectly, to the Employer, the
Committee or the Trustee and used by them in determining the Participant's
Account. Neither the Employer nor the Committee nor the Trustee shall be
obligated or required to increase the Account of such Participant which, on
discovery of the misstatement, is found to be understated as a result of such
misstatement of the Participant. However, the Account of any Participant which
is overstated by reason of any such misstatement shall be reduced to the amount
appropriate for the Participant in view of the truth. Any refund received upon
reduction of an Account so made shall be used to reduce the next succeeding
contribution of the Employer to the Plan.
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SECTION 12
PLAN ADMINISTRATION
12.1. Principal Sponsor.
12.1.1. Officers. Except as hereinafter provided, functions generally
assigned to the Principal Sponsor shall be discharged by its officers or
delegated and allocated as provided herein.
12.1.2. Chief Executive Officer. Except as hereinafter provided, the
Chief Executive Officer of the Principal Sponsor may delegate or redelegate and
allocate and reallocate to one or more persons or to a committee of persons
jointly or severally, and whether or not such persons are directors, officers or
employees, such functions assigned to the Principal Sponsor hereunder as the
Chief Executive Officer may from time to time deem advisable.
12.1.3. Board of Directors. Notwithstanding the foregoing, the Board of
Directors of the Principal Sponsor shall have the exclusive authority, which may
not be delegated, to act for the Principal Sponsor:
(a) to terminate the Plan,
(b) to appoint or remove a Trustee or accept the resignation of a
Trustee; to appoint or remove an Investment Manager,
(c) to determine the Employer contribution under Section 3; to
reduce, suspend or discontinue contributions to the Plan,
(d) to consent to the adoption of the Plan by other affiliated
business entities; to establish conditions and limitations
upon such adoption of the Plan by other affiliated business
entities; to designate Affiliates, and
(e) to cause the Plan to be merged with another plan and to
transfer assets and liabilities between the Plan and another.
12.2. Administrative Committee.
12.2.1. Appointment and Removal. The Committee shall consist of such
members as may be determined and appointed from time to time by the Principal
Sponsor and they shall serve at the pleasure of such Principal Sponsor. Members
of the Committee shall serve without compensation, but their reasonable expenses
shall be an expense of the administration of the Fund and shall be paid by the
Trustee from and out of the Fund except to the extent the Employer, in its
discretion, directly pays such expenses.
12.2.2. Automatic Removal. If any individual who is a member of the
Committee is a director, officer or employee when appointed as a member of the
Committee, then such individual
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shall be automatically removed as a member of the Committee at the earliest time
such individual ceases to be a director, officer or employee. This removal shall
occur automatically and without any requirement for action by the Principal
Sponsor or any notice to the individual so removed.
12.2.3. Authority. The Committee may elect such officers as the
Committee may decide upon. The Committee shall:
(a) establish rules for the functioning of the Committee,
including the times and places for holding meetings, the
notices to be given in respect of suchmeetings and the number
of members who shall constitute a quorum for the transaction
of business,
(b) organize and delegate to such of its members as it shall
select authority to execute or authenticate rules, advisory
opinions or instructions, and other instruments adopted or
authorized by the Committee; adopt such bylaws or regulations
as it deems desirable for the conduct of its affairs; appoint
a secretary, who need not be a member of the Committee, to
keep its records and otherwise assist the Committee in the
performance of its duties; keep a record of all its
proceedings and acts and keep all books of account, records
and other data as may be necessary for the proper
administration of the Plan; notify the Employer and the
Trustee of any action taken by the Committee and, when
required, notify any other interested person or persons,
(c) determine from the records of the Employer the compensation,
service records, status and other facts regarding Participants
and other employees,
(d) cause to be compiled at least annually, from the records of
the Committee and the reports and accountings of the Trustee,
a report or accounting of the status of the Plan and the
Accounts of the Participants, and make it available to each
Participant who shall have the right to examine that part of
such report or accounting (or a true and correct copy of such
part) which sets forth the Participant's benefits and ratable
interest in the Fund,
(e) prescribe forms to be used for applications for participation,
benefits, notifications, etc., as may be required in the
administration of the Plan,
(f) set up such rules as are deemed necessary to carry out the
terms of this Plan Statement,
(g) resolve all questions of administration of the Plan not
specifically referred to in this Section,
(h) delegate or redelegate to one or more persons, jointly or
severally, and whether or not such persons are members of the
Committee or employees of the Employer, such functions
assigned to the Committee hereunder as it may from time to
time deem advisable, and
-53-
(i) perform all other acts reasonably necessary for administering
the Plan and carrying out the provisions of this Plan
Statement and performing the duties imposed on it.
12.2.4. Majority Decisions. If there shall at any time be three (3) or
more members of the Committee serving hereunder who are qualified to perform a
particular act, the same may be performed, on behalf of all, by a majority of
those qualified, with or without the concurrence of the minority. No person who
failed to join or concur in such act shall be held liable for the consequences
thereof, except to the extent that liability is imposed under ERISA.
12.3. Limitation on Authority.
12.3.1. Fiduciaries Generally. No action taken by any fiduciary, if
authority to take such action has been delegated or redelegated to it, shall be
the responsibility of any other fiduciary except as may be required by the
provisions of ERISA. Except to the extent imposed by ERISA, no fiduciary shall
have the duty to question whether any other fiduciary is fulfilling all of the
responsibility imposed upon such other fiduciary by the Plan Statement or by
ERISA.
12.3.2. Trustee. The responsibilities and obligations of the Trustee
shall be strictly limited to those set forth in this Plan Statement. The Trustee
shall have no authority or duty to determine or enforce payment of any Employer
contribution under the Plan or to determine the existence, nature or extent of
any individual's rights in the Fund or under the Plan or question any
determination made by the Principal Sponsor or the Committee regarding the same.
Nor shall the Trustee be responsible in any way for the manner in which the
Principal Sponsor, the Employer or the Committee carries out its
responsibilities under this Plan Statement or, more generally, under the Plan.
The Trustee shall give the Principal Sponsor notice of (and tender to the
Principal Sponsor) the prosecution or defense of any litigation involving the
Plan, the Fund or other fiduciaries of the Plan.
12.4. Conflict of Interest. If any officer or employee of the Employer, any
member of the board of directors of the Employer, any member of the Committee or
any Trustee to whom authority has been delegated or redelegated hereunder shall
also be a Participant or Beneficiary in the Plan, the individual shall have no
authority as such officer, employee, member or Trustee with respect to any
matter specially affecting his or her individual interest hereunder (as
distinguished from the interests of all Participants and Beneficiaries or a
broad class of Participants and Beneficiaries), all such authority being
reserved exclusively to the other officers, employees, members or Trustees as
the case may be, to the exclusion of such Participant or Beneficiary, and such
Participant or Beneficiary shall act only in his or her individual capacity in
connection with any such matter.
12.5. Dual Capacity. Individuals, firms, corporations or partnerships identified
herein or delegated or allocated authority or responsibility hereunder may serve
in more than one fiduciary capacity.
12.6. Administrator. The Principal Sponsor shall be the administrator for
purposes of section 3(16)(A) of ERISA.
12.7. Named Fiduciaries. The Employer, the officers and Board of Directors of
the Principal Sponsor, the Committee, each Participant or Beneficiary exercising
pass through voting rights under
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Sections 10.7 and 10.13 and the Trustee shall be named fiduciaries for the
purpose of section 402(a) of ERISA.
12.8. Service of Process. In the absence of any designation to the contrary by
the Principal Sponsor, the President of the Principal Sponsor is designated as
the appropriate and exclusive agent for the receipt of service of process
directed to the Plan in any legal proceeding, including arbitration, involving
the Plan.
12.9. Administrative Expenses. The reasonable expenses of administering the Plan
shall be payable out of the Fund except to the extent that the Employer, in its
discretion, directly pays the expenses.
12.10. IRS Qualification. This Plan is intended to qualify under section 401(a)
of the Code as a defined contribution stock bonus and employee stock ownership
plan (and not as a defined contribution profit sharing plan or money purchase
pension plan or a defined benefit pension plan). The Plan is intended to qualify
as an employee stock ownership plan under section 4975(e)(7) of the Code.
-55-
SECTION 13
IN GENERAL
13.1. Disclaimers.
13.1.1. Effect on Employment. Neither the terms of this Plan Statement
nor the benefits hereunder nor the continuance thereof shall be a term of the
employment of any employee, and the Employer shall not be obligated to continue
the Plan. The terms of this Plan Statement shall not give any employee the right
to be retained in the employment of the Employer.
13.1.2. Sole Source of Benefits. Neither the Employer nor any of its
officers nor any member of its board of directors nor any member of the
Committee nor the Trustee in any way guarantee the Fund against loss or
depreciation, nor do they guarantee the payment of any benefit or amount which
may become due and payable hereunder to any Participant, Beneficiary or other
person. Each Participant, Beneficiary or other person entitled at any time to
payments hereunder shall look solely to the assets of the Fund for such
payments. If a Vested Account shall have been distributed to a former
Participant, Beneficiary or any other person entitled jointly to the receipt
thereof (or shall have been transferred to the Trustee of another tax-qualified
deferred compensation plan), such former Participant, Beneficiary or other
person, as the case may be, shall have no further right or interest in the other
assets of the Fund.
13.1.3. Co-Fiduciary Matters. Neither the Employer nor any of its
officers nor any member of its board of directors nor any member of the
Committee shall in any manner be liable to any Participant, Beneficiary or other
person for any act or omission of the Trustee (except to the extent that
liability is imposed under ERISA). Neither the Employer nor any of its officers
nor any member of its board of directors nor any member of the Committee nor the
Trustee shall be under any liability or responsibility (except to the extent
that liability is imposed under ERISA) for failure to effect any of the
objectives or purposes of the Plan by reason of loss or fluctuation in the value
of Fund or for the form, genuineness, validity, sufficiency or effect of any
Fund asset at any time held hereunder, or for the failure of any person, firm or
corporation indebted to the Fund to pay such indebtedness as and when the same
shall become due or for any delay occasioned by reason of any applicable law,
order or regulation or by reason of any restriction or provision contained in
any security or other asset held by the Fund. Except as is otherwise provided in
ERISA, the Employer and its officers, the members of its board of directors, the
members of the Committee, the Trustee and other fiduciaries shall not be liable
for an act or omission of another person with regard to a fiduciary
responsibility that has been allocated to or delegated in whole or in part to
such other person pursuant to the terms of this Plan Statement or pursuant to
procedures set forth in this Plan Statement.
13.2. Reversion of Fund Prohibited. The Fund from time to time hereunder shall
at all times be a trust fund separate and apart from the assets of the Employer,
and no part thereof shall be or become available to the Employer or to creditors
of the Employer under any circumstances other than those specified in Section
3.6 and Appendix A to this Plan Statement. It shall be impossible for any part
of the corpus or income of the Fund to be used for, or diverted to, purposes
other than for the exclusive benefit of Participants and Beneficiaries (except
as hereinbefore provided).
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13.3. Contingent Top Heavy Plan Rules. The rules set forth in Appendix B to this
Plan Statement (concerning additional provisions that apply if the Plan becomes
top heavy) are incorporated herein.
13.4. Continuity. The tenure and membership of any Committee previously
appointed, the rules of administration adopted and the Beneficiary designations
in effect under the Prior PlanStatement shall, to the extent not inconsistent
with this Plan Statement, continue in full force and effect until altered as
provided herein.
13.5. Execution in Counterparts. This Plan Statement may be executed in any
number of counterparts, each of which, without production of the others, shall
be deemed to be an original.
IN WITNESS WHEREOF, Each of the parties hereto has caused these
presents to be executed, all as of the day and year first above written.
TRUSTEES FLUOROWARE, INC.
By
-------------------------------- --------------------------------
Its
-----------------------------
--------------------------------
And
-------------------------------
Its
-------------------------------- ----------------------------
-00-
XXXXXXXX X
XXXXXXXXXX XX ANNUAL ADDITIONS
AND ANNUAL BENEFITS
SECTION 1
INTRODUCTION
Terms defined in the Plan Statement shall have the same meanings when used in
this Appendix. In addition, when used in this Appendix, the following terms
shall have the following meanings:
1.1. Annual Addition. Annual addition means, with respect to any Participant for
a limitation year, the sum of:
(i) all employer contributions (including employer
contributions of the Participant's earnings
reductions under section 401(k), section 403(b) and
section 408(k) of the Code) allocable as of a date
during such limitation year to the Participant under
all defined contribution plans;
(ii) all forfeitures allocable as of a date during such
limitation year to the Participant under all defined
contribution plans; and
(iii) all Participant contributions made as of a date
during such limitation year to all defined
contribution plans.
1.1.1. Specific Inclusions. With regard to a plan which contains a
qualified cash or deferred arrangement or matching contributions or employee
contributions, excess contributions and excess aggregate contributions (whether
or not distributed during or after the limitation year) shall be considered
annual additions in the year contributed. Excess deferrals that are not
distributed in accordance with the regulations under section 402(g) of the Code
are annual additions.
1.1.2. Specific Exclusions. The annual addition shall not, however,
include any portion of a Participant's rollover contributions or any additions
to accounts attributable to a plan merger or a transfer of plan assets or
liabilities or any other amounts excludable under law. Excess deferrals that are
distributed in accordance with the regulations under section 402(g) of the Code
are not annual additions.
1.1.3. ESOP Rules. In the case of an employee stock ownership plan
within the meaning of section 4975(e)(7) of the Code, annual additions shall not
include any dividends or gains on sale of
A-1
employer securities held by the employee stock ownership plan (regardless of
whether such dividends or gains are (i) on securities which are allocated to
Participants' accounts or (ii) on securities which are not allocated to
Participants' accounts which, in the case of dividends used to pay principal on
an employee stock ownership plan loan, result in employer securities being
allocated to Participants' accounts or, in the case of a sale, result in sale
proceeds being allocated to Participants' accounts). In the case of an employee
stock ownership plan within the meaning of section 4975(e)(7) of the Code under
which no more than one-third (1/3rd) of the employer contributions for a
limitation year which are deductible under section 404(a)(9) of the Code are
allocated to highly compensated employees (as defined in section 414(q) of the
Code), annual additions shall not include forfeitures of employer securities
under the employee stock ownership plan if such securities were acquired with
the proceeds of an exempt loan or, if the Employer is not an S corporation as
defined in section 1361(a)(1) of the Code, employer contributions to the
employee stock ownership plan which are deductible by the employer under section
404(a)(9)(B) of the Code and charged against the Participant's account (i.e.,
interest payments).
1.2. Annual Benefit. Annual benefit means a retirement benefit under a defined
benefit plan which is payable annually in the form of a straight life annuity.
1.2.1. Straight Life Annuity. Except as provided below, a benefit
payable in a form other than a straight life annuity will be adjusted to the
actuarial equivalent straight life annuity before applying the limitations of
this Appendix. This actuarial equivalent straight life annuity shall be the
greater of (A) the equivalent straight life annuity computed using the interest
rate and mortality table (or tabular factor) specified in the defined benefit
plan for determining the amount of the particular form of benefit that is
payable under the plan, or (B) in the case of a form of benefit subject to
section 417(e)(3) of the Code, the equivalent straight life annuity computed
using the applicable interest rate and applicable mortality table prescribed by
the Secretary of the Treasury under section 417(e)(3) of the Code for this
purpose, or (C) in the case of a form of benefit not subject to section
417(e)(3)of the Code, the equivalent straight life annuity computed using a five
percent (5%) interest and the applicable mortality table prescribed by the
Secretary of the Treasury under section 417(e)(3) of the Code for this purpose.
1.2.2. Excluded Contributions. The annual benefit does not include any
benefits attributable to employee contributions, rollover contributions or the
assets transferred from a qualified plan that was not maintained by a controlled
group member.
1.2.3. Ancillary Benefits. No actuarial adjustment to the annual
benefit is required for: (i) the value of a qualified joint and survivor annuity
(to the extent such value exceeds the sum of the value of a straight life
annuity beginning on the same date and the value of post-retirement death
benefits that would be paid even if the annuity were not in the form of a joint
and survivor annuity), or (ii) the value of benefits that are not directly
related to retirement benefits (such as a pre-retirement disability benefit, a
pre-retirement death benefit or a post-retirement medical benefit), or (iii) the
value of post-retirement cost of living increases made in accordance with
regulations under the Code.
A-2
1.3. Controlled Group Member. Controlled group member means the Employer and
each member of a controlled group of corporations (as defined in section 414(b)
of the Code and as modified by section 415(h) of the Code), all commonly
controlled trades or businesses (as defined in section 414(c) of the Code and as
modified by section 415(h) of the Code), affiliated service groups (as defined
in section 414(m) of the Code) of which the Employer is a part and other
organizations required to be aggregated for this purpose under section 414(o) of
the Code.
1.4. Defined Benefit and Defined Contribution Plans. Defined benefit plan and
defined contribution plan have the meanings assigned to those terms by section
415(k)(1) of the Code. Whenever reference is made to defined benefit plans and
defined contribution plans in this Appendix, it shall include all such plans
maintained by the Employer and all controlled group members.
1.5. Defined Benefit Fraction.
1.5.1. General Rule. Defined benefit fraction means a fraction the
numerator of which is the sum of the Participant's projected annual benefits
under all defined benefit plans determined as of the close of the limitation
year, and the denominator of which is the lesser of:
(i) one hundred twenty-five percent (125%) of the dollar
limitation in effect under section 415(b)(l)(A) of
the Code as of the close of such limitation year
(i.e., 125% of $90,000 as adjusted for cost of
living, commencement dates, length of service and
other factors), or
(ii) one hundred forty percent (140%) of the dollar amount
which may be taken into account under section
415(b)(l)(B) of the Code with respect to such
Participant as of the close of such limitation year
(i.e., 140% of the Participant's highest average
compensation as adjusted for cost of living, length
of service and other factors).
1.5.2. Transition Rule. Notwithstanding the above, if the Participant
was a participant as of the first day of the first limitation year beginning
after December 31, 1986, in one or more defined benefit plans which were in
existence on May 6, 1986, the denominator of this fraction will not be less than
one hundred twenty-five percent (125%) of the sum of the annual benefits under
such plans which the Participant had accrued as of the close of the last
limitation year beginning before January 1, 1987, disregarding any changes in
the terms and conditions of the defined benefit plans after May 5, 1986. The
preceding sentence applies only if the defined benefit plans individually and in
the aggregate satisfied the requirements of section 415 of the Code for all
limitation years beginning before January 1, 1987.
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1.6. Defined Contribution Fraction.
1.6.1. General Rule. Defined contribution fraction means a fraction the
numerator of which is the sum of the Participant's annual additions (including
employer contributions which are allocated to a separate account established for
the purpose of providing medical benefits or life insurance benefits with
respect to a key employee as defined in section 416 of the Code under a welfare
benefit fund or individual medical account) as of the close of the limitation
year and for all prior limitation years, and the denominator of which is the sum
of the amounts determined under paragraph (i) or (ii) below, whichever is the
lesser, for such limitation year and for each prior limitation year in which the
Participant had any service with the Employer (regardless of whether that or any
other defined contribution plan was in existence during those years or continues
in existence):
(i) one hundred twenty-five percent (125%) of the dollar
limitation in effect under section 415(c)(l)(A) of
the Code for such limitation year determined without
regard to section 415(c)(6) of the Code (i.e., 125%
of $30,000 as adjusted for cost of living), or
(ii) one hundred forty percent (140%) of the dollar amount
which may be taken into account under section
415(c)(l)(B) of the Code with respect to such
individual under the defined contribution plan for
such limitation year (i.e., 140% of 25% of the
Participant's ss. 415 compensation for such
limitation year).
1.6.2. TEFRA Transition Rule. The Employer may elect that the amount
taken into account for each Participant for all limitation years ending before
January 1, 1983, under Section 1.6.1(i) and Section 1.6.1(ii) shall be
determined pursuant to the special transition rule provided in section 415(e)(6)
of the Code.
1.6.3. Employee Contributions. Notwithstanding the definition of
"annual additions," for the purpose of determining the defined contribution
fraction in limitation years beginning before January 1, 1987, employee
contributions shall not be taken into account to the extent that they were not
required to be taken into account under section 415 of the Code prior to the Tax
Reform Act of 1986.
1.6.4. Annual Denominator. The amounts to be determined under Section
1.6.1(i) and Section 1.6.1(ii) for the limitation year and for all prior
limitation years in which the Participant had any service with the Employer
shall be determined separately for each such limitation year on the basis of
which amount is the lesser for each such limitation year.
1.6.5. Historical Amounts. For all limitation years ending before
January 1, 1976, the dollar limitation under section 415(c)(1)(A) of the Code is
Twenty-five Thousand Dollars ($25,000). For limitation years ending after
December 31, 1975, and before January 1, 1999, the amount shall be:
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For limitation years The ss. 415(c)(1)(A)
ending during: dollar amount is:
---------------- ------------------
1976 $26,825
1977 $28,175
1978 $30,050
1979 $32,700
1980 $36,875
1981 $41,500
1982 $45,475
1983 - 2000 $30,000
1.6.6. Relief Rule. If the Participant was a participant as of the end
of the first day of the first limitation year beginning after December 31, 1986,
in one or more defined contribution plans which were in existence on May 6,
1986, the numerator of this fraction will be adjusted if the sum of this
fraction and the defined benefit fraction would otherwise exceed one (1.0).
Under the adjustment, an amount equal to the product of the excess of the sum of
the fractions over one (1.0), times the denominator of this fraction, will be
permanently subtracted from the numerator of this fraction. The adjustment is
calculated using the fractions as they would be computed as of the end of the
last limitation year beginning before January 1, 1987, and disregarding any
changes in the terms and conditions of the plan made after May 6, 1986, but
using the section 415 limitations applicable to the first limitation year
beginning on or after January 1, 1987.
1.7. Highest Average Compensation. Highest average compensation means the
averagess. 415 compensation for the three (3) consecutive calendar years during
which the Participant was both an active participant in the defined benefit plan
and had the greatest aggregate compensation from the Employer.
1.8. Individual Medical Account. Individual medical account means an account, as
defined in section 415(1)(2) of the Code maintained by the Employer or a
controlled group member which provides an annual addition.
1.9. Limitation Year. Limitation year means the Plan Year.
1.10. Maximum Permissible Addition.
1.10.1. General Rule. Maximum permissible addition (a term that is
relevant only with respect to defined contribution plans) means, for any one (1)
limitation year, the lesser of:
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(i) Thirty Thousand Dollars ($30,000), as adjusted
automatically for increases in the cost of living by
the Secretary of the Treasury, or
(ii) twenty-five percent (25%) of the Participant'sss. 415
compensation for such limitation year.
1.10.2. Medical Benefits. The dollar limitation in Section 1.10.1(i),
but not the amount determined in Section 1.10.1(ii), shall be reduced by the
amount of employer contributions which are allocated to a separate account
established for the purpose of providing medical benefits or life insurance
benefits with respect to a key employee (as defined in section 416 of the Code)
under a welfare benefit fund or an individual medical account.
1.11. Maximum Permissible Benefit. Maximum permissible benefit (a term that is
relevant only with respect to defined benefit plans) means, for any one (1)
limitation year, an amount determined as follows:
1.11.1. SSRA Commencement. If the annual benefit commences at the
social security retirement age, the maximum permissible benefit is the lesser
of:
(i) Ninety Thousand Dollars ($90,000), or
(ii) the Participant's highest average compensation.
1.11.2. Early Commencement. If the annual benefit commences before the
social security retirement age, the maximum permissible benefit may not exceed
the lesser of the actuarial equivalent of a Ninety Thousand Dollar ($90,000)
annual benefit beginning at the social security retirement age or the
Participant's highest average compensation. If the annual benefit commences
before the social security retirement age but after age sixty-two (62) years,
this actuarial equivalent shall be the Ninety Thousand Dollar ($90,000) annual
benefit reduced in accordance with reductions in social security benefits (i.e.,
5/9% for each of the first 36 months and 5/12% for each additional month by
which the commencement date precedes the social security retirement age). If the
annual benefit commences before age sixty-two (62) years, this actuarial
equivalent shall be the actuarial equivalent of the maximum permissible benefit
as reduced under the prior sentence to age sixty-two (62) years. This actuarial
equivalent (i.e., the pre-age 62 years actuarial equivalent) shall be the lesser
of (A) the equivalent amount computed using the interest rate and mortality
table (or tabular factor) specified in the defined benefit plan for determining
the amount of the early retirement benefit that is payable under the plan, or
(B) the equivalent amount computed using five percent (5%) interest and the
applicable mortality table as prescribed by the Secretary of the Treasury for
these purposes.
1.11.3. Late Commencement. If the annual benefit commences after the
social security retirement age, the benefit may not exceed the lesser of the
actuarial equivalent of a Ninety Thousand Dollar ($90,000) annual benefit
beginning at the social security retirement age or the Participant's highest
average
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compensation. This actuarial equivalent (i.e., the post-social security
retirement age actuarial equivalent) shall be the lesser of (A) the equivalent
amount computed using the interest rate and mortality table (or tabular factor)
specified in the defined benefit plan for determining the amount of the late
retirement benefit that is payable under the plan, or (B) the equivalent amount
computed using five percent (5%) interest and the applicable mortality table as
prescribed by the Secretary of the Treasury for these purposes.
1.11.4. Cost of Living Adjustments. Effective on January 1, 1988 and
each January 1 thereafter, the Ninety Thousand Dollar ($90,000) limit and the
highest average compensation limit (for Participants who have separated from
service) shall be adjusted automatically for increases in the cost of living by
the Secretary of the Treasury. The new amounts will apply to limitation years
ending within such calendar year.
1.11.5. Participation Reduction. If a Participant has less than ten
(10) years of participation in the plan, the Ninety Thousand Dollar ($90,000)
limit otherwise defined and adjusted above (but not the highest average
compensation limit) shall be reduced to an amount equal to ninety thousand
dollars ($90,000) as otherwise defined and adjusted above multiplied by a
fraction:
(i) the numerator of which is the number of years (and
part thereof) of participation, and
(ii) the denominator of which is ten (10).
1.11.6. Service Reduction. If a Participant has less than ten (10)
years of service with the controlled group members, the highest average
compensation limit otherwise defined and adjusted above (but not the Ninety
Thousand Dollar limit) shall be reduced to an amount equal to the highest
average compensation limit as otherwise defined and adjusted above multiplied by
a fraction:
(i) the numerator of which is the number of years (and
part thereof) of service, and
(ii) the denominator of which is ten (10).
1.12. Projected Annual Benefit. Projected annual benefit means the annual
benefit payable to the Participant at his or her normal retirement age (as
defined in the defined benefit plan) adjusted to an actuarially equivalent
straight life annuity form (or, if it would be a lesser amount, to any
actuarially equivalent qualified joint and survivor annuity form that is
available under the defined benefit plan) assuming that:
(i) the Participant continues employment and
participation under the defined benefit plan until
his or her normal retirement age (as defined in the
defined benefit plan) or, if later, until his or her
current age, and
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(ii) the Participant's ss. 415 compensation and all other
factors used to determine annual benefits under the
defined benefit plan remain unchanged for all future
limitation years.
1.13. Section 415 Compensation. Section 415 compensation (sometimes, "ss. 415
compensation") shall mean, with respect to any limitation year, the total wages,
salaries, fees for professional services and other amounts received for personal
services actually rendered in the course of employment with the Employer to the
extent that such amounts are includible in gross income but determined without
regard to any rules that limit the remuneration included in wages based on the
nature or location of the employment or the services performed (such as the
exception for agricultural labor in section 3401(a)(2) of the Code). Without
regard to whether it is or is not includible in gross income, subject to other
limitations and rules of this Section, (i) ss. 415 compensation shall include
foreign earned income as defined in section 911(b) of the Code whether or not
excludable from gross income under section 911 of the Code, and (ii) ss. 415
compensation shall be determined without regard to the exclusions from gross
income in section 931 and section 933 of the Code. For limitation years
beginning after December 31, 1991, ss. 415 compensation shall be determined on a
cash basis. For limitation years beginning after December 31, 1997, ss. 415
compensation shall also include any elective deferral as defined in section
402(g)(3) of the Code and any amount which is contributed or deferred by an
Employer at the election of the employee and which is not includible in the
gross income of the employee by reason of section 125, section 132(f) or section
457 of the Code.
1.14. Social Security Retirement Age. Social security retirement age means the
age used as retirement age under section 216(l) of the Social Security Act
except that such section shall be applied (i) without regard to the age increase
factor, and (ii) as if the early retirement age under section 216(1)(2) of the
Social Security Act were age sixty-two (62) years.
1.15. Welfare Benefit Fund. Welfare benefit fund means a fund as defined in
section 419(e) of the Code which provides post-retirement medical benefits
allocated to separate accounts for key employees as defined in section
419A(d)(3).
SECTION 2
DEFINED CONTRIBUTION LIMITATION
Notwithstanding anything to the contrary contained in the Plan Statement, there
shall not be allocated to the account of any Participant under a defined
contribution plan for any limitation year an amount which would cause the annual
addition for such Participant to exceed the maximum permissible addition.
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SECTION 3
DEFINED BENEFIT LIMITATION
Notwithstanding anything to the contrary contained in the Plan Statement, there
shall not be accrued for the benefit of any Participant under a defined benefit
plan an amount which would cause the annual benefit for any limitation year for
such Participant to exceed the maximum permissible benefit.
SECTION 4
COMBINED PLANS LIMITATION
Notwithstanding anything to the contrary contained in the Plan Statement, during
limitation years beginning before January 1, 2000, there shall not be allocated
to the account of any Participant under a defined contribution plan or accrued
for the benefit of any Participant under a defined benefit plan any amount which
would cause the sum of such Participant's defined benefit fraction and defined
contribution fraction to exceed one (1.0) at the close of any limitation year.
SECTION 5
REMEDIAL ACTION
5.1. Defined Contribution Plans Only. If a Participant's annual additions for a
limitation year would exceed the maximum permissible addition, to the extent
necessary to eliminate the excess the following shall occur in the following
sequence.
5.1.1. Employee After Tax Contributions and Elective Deferrals. The
defined contribution plan shall:
(i) return any unmatched employee contributions made by
the Participant for the limitation year to the
Participant (adjusted for their proportionate share
of gains but not losses while held in the defined
contribution plan), and
(ii) distribute unmatched elective deferrals (within the
meaning of section 402(g)(3) of the Code) made for
the limitation year to the Participant (adjusted for
their proportionate share of gains but not losses
while held in the defined contribution plan), and
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(iii) return any matched employee contributions made by the
Participant for the limitation year to the
Participant (adjusted for their proportionate share
of gains but not losses while held in the defined
contribution plan), and
(iv) distribute matched elective deferrals (within the
meaning of section 402(g)(3) of the Code) made for
the limitation year to the Participant (adjusted for
their proportionate share of gains but not losses
while held in the defined contribution plan).
To the extent matched employee contributions are returned or any matched
elective deferrals are distributed, any matching contribution made with respect
thereto shall be forfeited and reallocated to Participants as provided in the
defined contribution plan.
5.1.2. Employer Contributions. If, after taking all the actions
contemplated by Section 5.1.1, an excess still exists, the defined contribution
plan shall dispose of the excess as follows.
(a) Covered. If that Participant is covered by the defined
contribution plan at the end of the limitation year, the
Employer shall cause such excess to be used to reduce employer
contributions for the next limitation year ("second limitation
year") and succeeding limitation years, as necessary, for that
Participant.
(b) Not Covered. If the Participant is not covered by the defined
contribution plan at the end of the limitation year, however,
then the excess amounts must be held unallocated in an "excess
account" for the second limitation year (or succeeding
limitation years) and allocated and reallocated in the second
limitation year (or succeeding limitation year) to all the
remaining Participants in the defined contribution plan as if
an employer contribution for the second limitation year (or
succeeding limitation year). However, if the allocation or
reallocation of the excess amounts pursuant to the provisions
of the defined contribution plan causes the limitations of
this Appendix to be exceeded with respect to each Participant
for the second limitation year (or succeeding limitation
years), then these amounts must be held unallocated in an
excess account. If an excess account is in existence at any
time during the second limitation year (or any succeeding
limitation year), all amounts in the excess account must be
allocated and reallocated to Participants' accounts (subject
to the limitations of this Appendix) as if they were
additional employer contributions before any employer
contribution and any Participant contributions which would
constitute annual additions may be made to the defined
contribution plan for that limitation year. Furthermore, the
excess amounts must be used to reduce employer contributions
for the second limitation year (and succeeding limitation
years, as necessary) for all of the remaining Participants.
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(c) No Distributions. Excess amounts may not be distributed from
the defined contribution plan to Participants or former
Participants.
If an excess account is in existence at any time during a limitation
year, the gains and losses and other income attributable to the excess account
shall be allocated to such excess account. To the extent that investment gains
or other income or investment losses are allocated to the excess account, the
entire amount allocated to Participants from the excess account, including any
such gains or other income or less any losses, shall be considered as an annual
addition. If the defined contribution plan should be terminated prior to the
date any such temporarily held, unallocated excess can be allocated to the
Accounts of Participants, the date of termination shall be deemed to be an
Annual Valuation Date for the purpose of allocating such excess and, if any
portion of such excess cannot be allocated as of such deemed Annual Valuation
Date by reason of the limitations of this Appendix, such remaining excess shall
be returned to the Employer.
5.1.3. Sequence of Plans. Each step of remedial action under Section
5.1.1 and Section 5.1.2 as may be necessary to correct an excess allocation
shall be made in all defined contribution plans before the next step of remedial
action is made. Each such step shall be made in the defined contribution plans
in the following sequence:
(i) all profit sharing and stock bonus plans containing
cash or deferred arrangements,
(ii) all money purchase pension plans other than money
purchase pension plans that are part of employee
stock ownership plans,
(iii) all profit sharing and stock bonus plans other than
profit sharing and stock bonus plans containing cash
or deferred arrangements and employee stock ownership
plans,
(iv) all employee stock ownership plans.
If an excess allocation occurs in two (2) or more plans in the same category,
correction of the excess allocation shall be made in chronological order as
determined by the effective date of each plan (using the original effective date
of the plan) beginning with the most recently established plan.
5.2. Defined Benefit Plans Only.
5.2.1. General Rule. If a Participant's annual benefit for any
limitation year would exceed the maximum permissible benefit, to the extent
necessary to eliminate the excess the defined benefit plan shall cease the
accrual of benefits or reduce benefits previously accrued.
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5.2.2. Sequence of Plans. Such remedial action as may be necessary to
prevent an annual benefit from exceeding the maximum permissible benefit in a
limitation year shall be made in defined benefit plans as follows.
(a) Single Plan. If the Participant is accruing benefits in only
one defined benefit plan during such limitation year, all such
cessations and reductions shall be made in that plan; and
(b) Other Plans In Earlier Years. To the extent that such
cessations and reductions are not adequate and the Participant
has accrued benefits in one or more other defined benefit
plans in earlier limitation years, such cessations and
reduction of accrued benefits under other plans shall be made
in chronological order as determined by the effective date of
each plan (using the original effective date of the plan)
beginning with the most recently established plan; and
(c) Multiple Plans. If the Participant is concurrently accruing
benefits in more than one defined benefit plan during such
limitation year, such cessations and reductions of accrued
benefits under such defined benefit plans shall be made in
chronological order as determined by the effective date of
each plan (using the original effective date of the plan)
beginning with the most recently established plan.
5.3. Combined Defined Benefit and Defined Contribution Plans. If the sum of a
Participant's defined benefit fraction and the defined contribution fraction
would exceed one (1.0) at the end of any limitation year beginning before
January 1, 2000, to the extent necessary to eliminate the excess the following
shall occur in the following sequence.
(a) Defined Benefit. The cessation and reduction of accruals
described in Section 5.2 shall be made.
(b) Defined Contribution. The actions described in Section 5.1
shall be taken.
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APPENDIX B
CONTINGENT TOP HEAVY PLAN RULES
Notwithstanding any of the foregoing provisions of the Plan Statement,
if, after applying the special definitions set forth in Section 1 of this
Appendix, this Plan is determined under Section 2 of this Appendix to be a top
heavy plan for a Plan Year, then the special rules set forth in Section 3 of
this Appendix shall apply. For so long as this Plan is not determined to be a
top heavy plan, the special rules in Section 3 of this Appendix shall be
inapplicable to this Plan.
SECTION 1
SPECIAL DEFINITIONS
Terms defined in the Plan Statement shall have the same meanings when used in
this Appendix. In addition, when used in this Appendix, the following terms
shall have the following meanings:
1.1. Aggregated Employers. Aggregated employers means the Employer and each
other corporation, partnership or proprietorship which is a "predecessor" to the
Employer, or is under "common control" with the Employer, or is a member of an
"affiliated service group" that includes the Employer, as those terms are
defined in section 414(b), (c), (m) or (o) of the Code.
1.2. Aggregation Group. Aggregation group means a grouping of this Plan and:
(a) if any Participant in the Plan is a key employee, each other
qualified pension, profit sharing or stock bonus plan of the
aggregated employers in which a key employee is a Participant
(and for this purpose, a key employee shall be considered a
Participant only during periods when he is actually accruing
benefits and not during periods when he has preserved accrued
benefits attributable to periods of participation when he was
not a key employee), and
(b) each other qualified pension, profit sharing or stock bonus
plan of the aggregated employers which is required to be taken
into account for this Plan or any plan described in paragraph
(a) above to satisfy the qualification requirements under
section 410 or section 401(a)(4) of the Code, and
(c) each other qualified pension, profit sharing or stock bonus
plan of the aggregated employers which is not included in
paragraph (a) or (b) above, but which the
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Employer elects to include in the aggregation group and which,
when included, would not cause the aggregation group to fail
to satisfy the qualification requirements under section 410 or
section 401(a)(4) of the Code.
1.3. Compensation. Unless the context clearly requires otherwise, compensation
means the wages, tips and other compensation paid to the Participant by the
Employer and reportable in the box designated "wages, tips, other compensation"
on Treasury Form W-2 (or any comparable successor box or form) for the
applicable period but determined without regard to any rules that limit the
remuneration included in wages based on the nature or location of the employment
or the services performed (such as the exception for agricultural labor in
section 3401(a)(2) of the Code). In determining compensation there shall be
included elective contributions made by the Employer on behalf of the
Participant that are not includible in gross income under sections 125,
402(e)(3), 402(h), 403(b), 414(h)(2) and 457 of the Code including elective
contributions authorized by the Participant under a cafeteria plan or any
qualified cash or deferred arrangement under section 401(k) of the Code. For the
purposes of this Appendix (excluding Section 1.6 of this Appendix), compensation
shall be limited to Two Hundred Thousand Dollars ($200,000) (as adjusted under
the Code for cost of living increases) for Plan Years beginning before January
1, 1994, and One Hundred and Fifty Thousand Dollars ($150,000) (as so adjusted)
for Plan Years beginning after December 31, 1993.
1.4. Determination Date. Determination date means, for the first (1st) Plan Year
of a plan, the last day of such first (1st) Plan Year, and for each subsequent
Plan Year, the last day of the immediately preceding Plan Year.
1.5. Five Percent Owner. Five percent owner means for each aggregated employer
that is a corporation, any person who owns (or is considered to own within the
meaning of the shareholder attribution rules) more than five percent (5%) of the
value of the outstanding stock of the corporation or stock possessing more than
five percent (5%) of the total combined voting power of the corporation, and,
for each aggregated employer that is not a corporation, any person who owns more
than five percent (5%) of the capital interest or the profits interest in such
aggregated employer. For the purposes of determining ownership percentages, each
corporation, partnership and proprietorship otherwise required to be aggregated
shall be viewed as a separate entity.
1.6. Key Employee. Key employee means each Participant (whether or not then an
employee) who at any time during a Plan Year (or any of the four preceding Plan
Years) is:
(a) an officer of any aggregated employer (excluding persons who
have the title of an officer but not the authority and
including persons who have the authority of an officer but not
the title) having an annual compensation from all aggregated
employers for any such Plan Year in excess of fifty percent
(50%) of the amount in effect under section 415(b)(1)(A) of
the Code for any such Plan Year, or
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(b) one (1) of the ten (10) employees (not necessarily
Participants) owning (or considered to own within the meaning
of the shareholder attribution rules) both more than one-half
of one percent (1/2%) ownership interest in value and the
largest percentage ownership interests in value of any of the
aggregated employers (which are owned by employees) and who
has an annual compensation from all the aggregated employers
in excess of the limitation in effect under section
415(c)(1)(A) of the Code for any such Plan Year, or
(c) a five percent owner, or
(d) a one percent owner having an annual compensation from the
aggregated employers of more than One Hundred Fifty Thousand
Dollars ($150,000);
provided, however, that no more than fifty (50) employees (or, if lesser, the
greater of three of all the aggregated employers' employees or ten percent of
all the aggregated employers' employees) shall be treated as officers. For the
purposes of determining ownership percentages, each corporation, partnership and
proprietorship otherwise required to be aggregated shall be viewed as a separate
entity. For purposes of paragraph (b) above, if two (2) employees have the same
interest in any of the aggregated employers, the employee having the greatest
annual compensation from that aggregated employer shall be treated as having a
larger interest. For the purpose of determining compensation, however, all
compensation received from all aggregated employers shall be taken into account.
The term "key employee" shall include the beneficiaries of a deceased key
employee.
1.7. One Percent Owner. One percent owner means, for each aggregated employer
that is a corporation, any person who owns (or is considered to own within the
meaning of the shareholder attribution rules) more than one percent (1%) of the
value of the outstanding stock of the corporation or stock possessing more than
one percent (1%) of the total combined voting power of the corporation, and, for
each aggregated employer that is not a corporation, any person who owns more
than one percent (1%) of the capital or the profits interest in such aggregated
employer. For the purposes of determining ownership percentages, each
corporation, partnership and proprietorship otherwise required to be aggregated
shall be viewed as a separate entity.
1.8. Shareholder Attribution Rules. Shareholder attribution rules means the
rules of section 318 of the Code, (except that subparagraph (C) of section
318(a)(2) of the Code shall be applied by substituting "5 percent" for "50
percent") or, if the Employer is not a corporation, the rules determining
ownership in such Employer which shall be set forth in regulations prescribed by
the Secretary of the Treasury.
1.9. Top Heavy Aggregation Group. Top heavy aggregation group means any
aggregation group for which, as of the determination date, the sum of:
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(i) the present value of the cumulative accrued benefits
for key employees under all defined benefit plans
included in such aggregation group, and
(ii) the aggregate of the accounts of key employees under
all defined contribution plans included in such
aggregation group,
exceed sixty percent (60%) of a similar sum determined for all employees. In
applying the foregoing, the following rules shall be observed:
(a) For the purpose of determining the present value of the
cumulative accrued benefit for any employee under a defined
benefit plan, or the amount of the account of any employee
under a defined contribution plan, such present value or
amount shall be increased by the aggregate distributions made
with respect to such employee under the plan during the five
(5) year period ending on the determination date.
(b) Any rollover contribution (or similar transfer) initiated by
the employee, made from a plan maintained by one employer to a
plan maintained by another employer and made after December
31, 1983, to a plan shall not be taken into account with
respect to the transferee plan for the purpose of determining
whether such transferee plan is a top heavy plan (or whether
any aggregation group which includes such plan is a top heavy
aggregation group). Any rollover contribution (or similar
transfer) not described in the preceding sentence shall be
taken into account with respect to the transferee plan for the
purpose of determining whether such transferee plan is a top
heavy plan (or whether any aggregation group which includes
such plan is a top heavy aggregation group).
(c) If any individual is not a key employee with respect to a plan
for any Plan Year, but such individual was a key employee with
respect to a plan for any prior Plan Year, the cumulative
accrued benefit of such employee and the account of such
employee shall not be taken into account.
(d) The determination of whether a plan is a top heavy plan shall
be made once for each Plan Year of the plan as of the
determination date for that Plan Year.
(e) In determining the present value of the cumulative accrued
benefits of employees under a defined benefit plan, the
determination shall be made as of the actuarial valuation date
last occurring during the twelve (12) months preceding the
determination date and shall be determined on the assumption
that the employees terminated employment on the valuation date
except as provided in section 416 of the Code and the
regulations thereunder for the first and second Plan Years of
a defined benefit plan. The accrued benefit of any employee
(other than a key
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employee) shall be determined under the method which is used
for accrual purposes for all plans of the employer or if there
is no method which is used for accrual purposes under all
plans of the employer, as if such benefit accrued not more
rapidly than the slowest accrual rate permitted under section
411(b)(1)(C) of the Code. In determining this present value,
the mortality and interest assumptions shall be those which
would be used by the Pension Benefit Guaranty Corporation in
valuing the defined benefit plan if it terminated on such
valuation date. The accrued benefit to be valued shall be the
benefit expressed as a single life annuity.
(f) In determining the accounts of employees under a defined
contribution plan, the account values determined as of the
most recent asset valuation occurring within the twelve (12)
month period ending on the determination date shall be used.
In addition, amounts required to be contributed under either
the minimum funding standards or the plan's contribution
formula shall be included in determining the account. In the
first year of the plan, contributions made or to be made as of
the determination date shall be included even if such
contributions are not required.
(g) If any individual has not performed any services for any
employer maintaining the plan at any time during the five (5)
year period ending on the determination date, any accrued
benefit of the individual under a defined benefit plan and the
account of the individual under a defined contribution plan
shall not be taken into account.
(h) For this purpose, a terminated plan shall be treated like any
other plan and must be aggregated with other plans of the
employer if it was maintained within the last five (5) years
ending on the determination date for the Plan Year in question
and would, but for the fact that it terminated, be part of the
aggregation group for such Plan Year.
1.10. Top Heavy Plan. Top heavy plan means a qualified plan under which (as of
the determination date):
(i) if the plan is a defined benefit plan, the present
value of the cumulative accrued benefits for key
employees exceeds sixty percent (60%) of the present
value of the cumulative accrued benefits for all
employees, and
(ii) if the plan is a defined contribution plan, the
aggregate of the accounts of key employees exceeds
sixty percent (60%) of the aggregate of all of the
accounts of all employees.
In applying the foregoing, the following rules shall be observed:
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(a) Each plan of an Employer required to be included in an
aggregation group shall be a top heavy plan if such
aggregation group is a top heavy aggregation group.
(b) For the purpose of determining the present value of the
cumulative accrued benefit for any employee under a defined
benefit plan, or the amount of the account of any employee
under a defined contribution plan, such present value or
amount shall be increased by the aggregate distributions made
with respect to such employee under the plan during the five
(5) year period ending on the determination date.
(c) Any rollover contribution (or similar transfer) initiated by
the employee, made from a plan maintained by one employer to a
plan maintained by another employer and made after December
31, 1983, to a plan shall not be taken into account with
respect to the transferee plan for the purpose of determining
whether such transferee plan is a top heavy plan (or whether
any aggregation group which includes such plan is a top heavy
aggregation group). Any rollover contribution (or similar
transfer) not described in the preceding sentence shall be
taken into account with respect to the transferee plan for the
purpose of determining whether such transferee plan is a top
heavy plan (or whether any aggregation group which includes
such plan is a top heavy aggregation group).
(d) If any individual is not a key employee with respect to a plan
for any Plan Year, but such individual was a key employee with
respect to the plan for any prior Plan Year, the cumulative
accrued benefit of such employee and the account of such
employee shall not be taken into account.
(e) The determination of whether a plan is a top heavy plan shall
be made once for each Plan Year of the plan as of the
determination date for that Plan Year.
(f) In determining the present value of the cumulative accrued
benefits of employees under a defined benefit plan, the
determination shall be made as of the actuarial valuation date
last occurring during the twelve (12) months preceding the
determination date and shall be determined on the assumption
that the employees terminated employment on the valuation date
except as provided in section 416 of the Code and the
regulations thereunder for the first and second Plan Years of
a defined benefit plan. The accrued benefit of any employee
(other than a key employee) shall be determined under the
method which is used for accrual purposes for all plans of the
employer or if there is no method which is used for accrual
purposes under all plans of the employer, as if such benefit
accrued not more rapidly than the slowest accrual rate
permitted under section 411(b)(1)(C) of the Code. In
determining this present value, the mortality and interest
assumptions shall be those which would be used by the Pension
Benefit Guaranty
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Corporation in valuing the defined benefit plan if it
terminated on such valuation date. The accrued benefit to be
valued shall be the benefit expressed as a single life
annuity.
(g) In determining the accounts of employees under a defined
contribution plan, the account values determined as of the
most recent asset valuation occurring within the twelve (12)
month period ending on the determination date shall be used.
In addition, amounts required to be contributed under either
the minimum funding standards or the plan's contribution
formula shall be included in determining the account. In the
first year of the plan, contributions made or to be made as of
the determination date shall be included even if such
contributions are not required.
(h) If any individual has not performed any services for any
employer maintaining the plan at any time during the five (5)
year period ending on the determination date, any accrued
benefit of the individual under a defined benefit plan and the
account of the individual under a defined contribution plan
shall not be taken into account.
(i) For this purpose, a terminated plan shall be treated like any
other plan and must be aggregated with other plans of the
employer if it was maintained within the last five (5) years
ending on the determination date for the Plan Year in question
and would, but for the fact that it terminated, be part of the
aggregation group for such Plan Year.
SECTION 2
DETERMINATION OF TOP HEAVINESS
Once each Plan Year, as of the determination date for that Plan Year, the
administrator of this Plan shall determine if this Plan is a top heavy plan.
SECTION 3
CONTINGENT PROVISIONS
3.1. When Applicable. If this Plan is determined to be a top heavy plan for any
Plan Year, the following provisions shall apply for that Plan Year (and, to the
extent hereinafter specified, for subsequent Plan Years), notwithstanding any
provisions to the contrary in the Plan.
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3.2. Vesting Requirement.
3.2.1. General Rule. During any Plan Year that the Plan is determined
to be a Top Heavy Plan, then all accounts of all Participants in a defined
contribution plan that is a top heavy plan and the accrued benefits of all
Participants in a defined benefit plan that is a top heavy plan shall be vested
and nonforfeitable in accordance with the following schedule if, and to the
extent, that it is more favorable than other provisions of the Plan:
If the Participant Has His Vested
Completed the Following Percentage
Years of Vesting Service: Shall Be:
-------------------------- -----------
Less than 2 years 0%
2 years but less than 3 years 20%
3 years but less than 4 years 40%
4 years but less than 5 years 60%
5 years but less than 6 years 80%
6 years or more 100%
3.2.2. Subsequent Year. In each subsequent Plan Year that the Plan is
determined not to be a top heavy plan, the other nonforfeitability provisions of
the Plan Statement (and not this section) shall apply in determining the vested
and nonforfeitable rights of Participants who do not have five (5) or more years
of Vesting Service (three or more years of Vesting Service for Participants who
have one or more Hours of Service in any Plan Year beginning after December 31,
1988) as of the beginning of such subsequent Plan Year; provided, however, that
they shall not be applied in a manner which would reduce the vested and
nonforfeitable percentage of any Participant.
3.2.3. Cancellation of Benefit Service. If this Plan is a defined
benefit plan and if the Participant's vested percentage is determined under this
Appendix and if a Participant receives a lump sum distribution of the present
value of the vested portion of his accrued benefit, the Plan shall:
(a) thereafter disregard the Participant's service with respect to
which he received such distribution in determining his accrued
benefit, and
(b) permit the Participant who receives a distribution of less
than the present value of his entire accrued benefit to
restore this service by repaying (after returning to
employment covered under the Plan) to the trustee the amount
of such distribution together with interest at the interest
rate of five percent (5%) per annum compounded annually (or
such other interest rate as is provided by law for such
repayment). If the distribution was on account of separation
from service such repayment must be made before the earlier
of,
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(i) five (5) years after the first date on which the
Participant is subsequently reemployed by the
employer, or
(ii) the close of the first period of five (5) consecutive
one-year breaks in service commencing after the
distribution.
If the distribution was on account of any other reason, such repayment must be
made within five (5) years after the date of the distribution.
3.3. Defined Contribution Plan Minimum Benefit Requirement.
3.3.1. General Rule. If this Plan is a defined contribution plan, then
for any Plan Year that this Plan is determined to be a top heavy plan, the
Employer shall make a contribution for allocation to the account of each
employee who is a Participant for that Plan Year and who is not a key employee
in an amount (when combined with other Employer contributions and forfeited
accounts allocated to his account) which is at least equal to three percent (3%)
of such Participant's compensation. (This minimum contribution amount shall be
further reduced by all other Employer contributions to this Plan or any other
defined contribution plans.) This contribution shall be made for each
Participant who has not separated from service with the Employer at the end of
the Plan Year (including for this purpose any Participant who is then on
temporary layoff or authorized leave of absence or who, during such Plan Year,
was inducted into the Armed Forces of the United States from employment with the
Employer) including, for this purpose, each employee of the Employer who would
have been a Participant if he had: (i) completed one thousand (1,000) Hours of
Service (or the equivalent) during the Plan Year, and (ii) made any mandatory
contributions to the Plan, and (iii) earned compensation in excess of the stated
amount required for participation in the Plan.
3.3.2. Special Rule. Subject to the following rules, the percentage
referred to in Section 3.3.1 of this Appendix shall not exceed the percentage at
which contributions are made (or required to be made) under this Plan for the
Plan Year for that key employee for whom that percentage is the highest for the
Plan Year.
(a) The percentage referred to above shall be determined by
dividing the Employer contributions for such key employee for
such Plan Year by his compensation for such Plan Year.
(b) For the purposes of this Section 3.3, all defined contribution
plans required to be included in an aggregation group shall be
treated as one (l) plan.
(c) The exception contained in this Section 3.3.2 shall not apply
to (be available to) this Plan if this Plan is required to be
included in an aggregation group if including
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this Plan in an aggregation group enables a defined benefit
plan to satisfy the qualification requirements of section 410
or section 401(a)(4) of the Code.
3.3.3. Salary Reduction and Matching Contributions. For the purpose of
this Section 3.3, all Employer contributions attributable to a salary reduction
or similar arrangement shall be taken into account for the purpose of
determining the minimum percentage contribution required to be made for a
particular Plan Year for a Participant who is not a key employee but not for the
purpose of determining whether that minimum contribution requirement has been
satisfied. For the purpose of this Section 3.3 during all Plan Years beginning
after December 31, 1988, all Employer matching contributions shall be taken into
account for the purposes of determining the minimum percentage contribution
required to be made for a particular Plan Year for a Participant who was not a
key employee but not for the purpose of determining whether that minimum
contribution requirement has been satisfied.
3.4. Defined Benefit Plan Minimum Benefit Requirement.
3.4.1. General Rule. If this Plan is a defined benefit plan, then for
any Plan Year that the Plan is determined to be a top heavy plan, the accrued
benefit for each Participant who is not a key employee shall not be less than
one-twelfth (l/12th) of the applicable percentage of the Participant's average
compensation for years in the testing period.
3.4.2. Special Rules and Definitions. In applying the general rule of
Section 3.4.1 of this Appendix, the following special rules and definitions
shall apply:
(a) The term "applicable percentage" means the lesser of:
(i) two percent (2%) multiplied by the number of years of
service with the Employer, or
(ii) twenty percent (20%).
(b) For the purpose of this Section 3.4, a Participant's years of
service with the Employer shall be equal to the Participant's
Vesting Service except that a year of Vesting Service shall
not be taken into account if:
(i) the Plan was not a top heavy plan for any Plan Year
ending during such year of Vesting Service, or
(ii) such year of Vesting Service was completed in a Plan
Year beginning before January l, 1984.
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(c) A Participant's "testing period" shall be the period of five
(5) consecutive years during which the Participant had the
greatest compensation from the Employer; provided, however,
that:
(i) the years taken into account shall be properly
adjusted for years not included in a year of service,
and
(ii) a year shall not be taken into account if such year
ends in a Plan Year beginning before January l, 1984,
or such year begins after the close of the last year
in which the Plan was a top heavy plan.
(d) An individual shall be considered a Participant for the
purpose of accruing the minimum benefit only if such
individual has at least one thousand (1,000) Hours of Service
during a benefit accrual computation period (or equivalent
service determined under Department of Labor regulations).
Furthermore, such individual shall accrue a minimum benefit
only for a benefit accrual computation period in which such
individual has one thousand (1,000) Hours of Service (or
equivalent service). An individual shall not fail to accrue
the minimum benefit merely because the individual: (i) was not
employed on a specified date, or (ii) was excluded from
participation (or otherwise failed to accrue a benefit)
because the individual's compensation was less than a stated
amount, or (iii) because the individual failed to make any
mandatory contributions.
3.4.3. Accruals Preserved. In years subsequent to the last Plan Year in
which this Plan is a top heavy plan, the other benefit accrual rules of the Plan
Statement shall be applied to determine the accrued benefit of each Participant,
except that the application of such other rules shall not serve to reduce a
Participant's accrued benefit as determined under this Section 3.4.
3.5. Priorities Among Plans. In applying the minimum benefit provisions of this
Appendix in any Plan Year that this Plan is determined to be a top heavy plan,
the following rules shall apply:
(a) If an employee participates only in this Plan, the employee
shall receive the minimum benefit applicable to this Plan.
(b) If an employee participates in both a defined benefit plan and
a defined contribution plan and only one (1) of such plans is
a top heavy plan for the Plan Year, the employee shall receive
the minimum benefit applicable to the plan which is a top
heavy plan.
(c) If an employee participates in both a defined contribution
plan and a defined benefit plan and both are top heavy plans,
then the employee, for that Plan Year,
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shall receive the defined benefit plan minimum benefit unless
for that Plan Year the employee has received employer
contributions and forfeitures allocated to his account in the
defined contribution plan in an amount which is at least equal
to five percent (5%) of his compensation.
(d) If an employee participates in two (2) or more defined
contribution plans which are top heavy plans, then the
employee, for that Plan Year, shall receive the defined
contribution plan minimum benefit in that defined contribution
plan which has the earliest original effective date.
3.6. Annual Contribution Limits.
3.6.1. General Rule. Notwithstanding anything apparently to the
contrary in the Appendix A to the Plan Statement, for any Plan Year that this
Plan is a top heavy plan, the defined benefit fraction and defined contribution
fraction of the Appendix to the Plan Statement pertaining to limits under
section 415 of the Code shall be one hundred percent (100%) and not one hundred
twenty-five percent (125%).
3.6.2. Special Rule. Section 3.6.1 of this Appendix shall not apply to
any top heavy plan if such top heavy plan satisfies the following requirements:
(a) Minimum Benefit Requirement. The top heavy plan (and any plan
required to be included in an aggregation group with such
plan) satisfies the requirements of Section 3.4 of this
Appendix when Section 3.4.2(a)(1) of this Appendix is applied
by substituting three percent (3%) for two percent (2%) and by
increasing (but by no more than ten percentage points) twenty
percent (20%) by one percentage point for each year for which
the plan was taken into account under this Section 3.7.
Section 3.3.1 of this Appendix shall be applied by
substituting "four percent (4%)" for "three percent (3%)."
Section 3.5(c) of this Appendix shall be applied by
substituting "seven and one-half percent (7-1/2%)" for "five
percent (5%)."
(b) Ninety Percent Rule. A top heavy plan would not be a top heavy
plan if "ninety percent (90%)" were substituted for "sixty
percent (60%)" each place that it appears in the definitions
of top heavy plan and top heavy aggregation group.
3.6.3. Transition Rule. If, but for this Section 3.6.3, Section 3.6.1
of this Appendix would begin to apply with respect to this Plan because it is a
top heavy plan, the application of Section 3.6.1 of this Appendix shall be
suspended with respect to any individual so long as there are no:
B-12
(a) employer contributions, forfeitures or voluntary nondeductible
contributions allocated to such individual (if this Plan is a
defined contribution plan), or
(b) accruals for such individual (if this Plan is a defined
benefit plan).
3.6.4. Coordinating Change. If this Plan is a top heavy plan for any
Plan Year, then for purposes of the Appendix A to the Plan Statement, section
415(e)(6)(i) of the Code shall be applied by substituting "Forty-one Thousand
Five Hundred Dollars ($41,500)" for "Fifty-one Thousand Eight Hundred
Seventy-five Dollars ($51,875)."
3.7. Bargaining Units. The requirements of Section 3.2 through Section 3.6 of
this Appendix shall not apply with respect to any employee included in a unit of
employees covered by an agreement which the Secretary of Labor finds to be a
collective bargaining agreement between employee representatives and one (1) or
more employers if there is evidence that retirement benefits are the subject of
good faith bargaining between such employee representatives and such employer or
employers.
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APPENDIX C
QUALIFIED DOMESTIC RELATIONS ORDERS
SECTION 1
GENERAL MATTERS
Terms defined in the Plan Statement shall have the same meanings when used in
this Appendix.
1.1. General Rule. The Plan shall not honor the creation, assignment or
recognition of any right to any benefit payable with respect to a Participant
pursuant to a domestic relations order unless that domestic relations order is a
qualified domestic relations order.
1.2. Alternate Payee Defined. The only persons eligible to be considered
alternate payees with respect to a Participant shall be that Participant's
spouse, former spouse, child or other dependent.
1.3. DRO Defined. A domestic relations order is any judgment, decree or order
(including an approval of a property settlement agreement) which relates to the
provision of child support, alimony payments, or marital property rights to a
spouse, former spouse, child or other dependent of a Participant and which is
made pursuant to a state domestic relations law (including a community property
law).
1.4. QDRO Defined. A qualified domestic relations order is a domestic relations
order which creates or recognizes the existence of an alternate payee's right to
(or assigns to an alternate payee the right to) receive all or a portion of the
Account of a Participant under the Plan and which satisfies all of the following
requirements.
1.4.1. Names and Addresses. The order must clearly specify the name and
the last known mailing address, if any, of the Participant and the name and
mailing address of each alternate payee covered by the order.
1.4.2. Amount. The order must clearly specify the amount or percentage
of the Participant's Account to be paid by the Plan to each such alternate payee
or the manner in which such amount or percentage is to be determined.
1.4.3. Payment Method. The order must clearly specify the number of
payments or period to which the order applies.
1.4.4. Plan Identity. The order must clearly specify that it applies to
this Plan.
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1.4.5. Settlement Options. Except as provided in Section 1.4.8 of this
Appendix, the order may not require the Plan to provide any type or form of
benefits or any option not otherwise provided under the Plan.
1.4.6. Increased Benefits. The order may not require the Plan to
provide increased benefits.
1.4.7. Prior Awards. The order may not require the payment of benefits
to an alternate payee which are required to be paid to another alternate payee
under another order previously determined to be a qualified domestic relations
order.
1.4.8. Exceptions. The order will not fail to meet the requirements of
Section 1.4.5 of this Appendix if:
(a) The order requires payment of benefits be made to an alternate
payee before the Participant has separated from service but as
of a date that is on or after the date on which the
Participant attains (or would have attained) the earliest
payment date described in Section 1.4.10 of this Appendix; and
(b) The order requires that payment of benefits be made to an
alternate payee as if the Participant had retired on the date
on which payment is to begin under such order (but taking into
account only the present value of benefits actually accrued);
and
(c) The order requires payment of benefits to be made to an
alternate payee in any form in which benefits may be paid
under the Plan to the Participant (other than in the form of a
joint and survivor annuity with respect to the alternate payee
and his or her subsequent spouse).
In lieu of the foregoing, the order will not fail to meet the requirements of
Section 1.4.5 of this Appendix if the order: (1) requires that payment of
benefits be made to an alternate payee in a single lump sum as soon as is
administratively feasible after the order is determined to be a qualified
domestic relations order, and (2) does not contain any of the provisions
described in Section 1.4.9 of this Appendix, and (3) provides that the payment
of such single lump sum fully and permanently discharges all obligations of the
Plan to the alternate payee.
1.4.9. Deemed Spouse. Notwithstanding the foregoing:
(a) The order may provide that the former spouse of a Participant
shall be treated as a surviving spouse of such Participant for
the purposes of Section 7 of the Plan Statement (and that any
subsequent or prior spouse of the Participant shall not be
treated as a spouse of the Participant for such purposes), and
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(b) The order may provide that, if the former spouse has been
married to the Participant for at least one (1) year at any
time, the surviving former spouse shall be deemed to have been
married to the Participant for the one (1) year period ending
on the date of the Participant's death.
1.4.10. Payment Date Defined. For the purpose of Section 1.4.8 of this
Appendix, the earliest payment date means the earlier of:
(a) The date on which the Participant is entitled to a
distribution under the Plan; or
(b) The later of (i) the date the Participant attains age fifty
(50) years, or (ii) the earliest date on which the Participant
could begin receiving benefits under the Plan if the
Participant separated from service.
SECTION 2
PROCEDURES
2.1. Actions Pending Review. During any period when the issue of whether a
domestic relations order is a qualified domestic relations order is being
determined by the Committee, the Committee shall cause the Plan to separately
account for the amounts which would be payable to the alternate payee during
such period if the order were determined to be a qualified domestic relations
order.
2.2. Reviewing DROs. Upon the receipt of a domestic relations order, the
Committee shall determine whether such order is a qualified domestic relations
order.
2.2.1. Receipt. A domestic relations order shall be considered to have
been received only when the Committee shall have received a copy of a domestic
relations order which is complete in all respects and is originally signed,
certified or otherwise officially authenticated.
2.2.2. Notice to Parties. Upon receipt of a domestic relations order,
the Committee shall notify the Participant and all persons claiming to be
alternate payees and all prior alternate payees with respect to the Participant
that such domestic relations order has been received. The Committee shall
include with such notice a copy of this Appendix.
2.2.3. Comment Period. The Participant and all persons claiming to be
alternate payees and all prior alternate payees with respect to the Participant
shall be afforded a comment period of thirty (30) days from the date such notice
is mailed by the Committee in which to make comments or objections to the
Committee concerning whether the domestic relations order is a qualified
domestic relations order.
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By the unanimous written consent of the Participant and all persons claiming to
be alternate payees and all prior alternate payees with respect to the
Participant, the thirty (30) day comment period may be shortened.
2.2.4. Initial Determination. Within a reasonable period of time after
the termination of the comment period, the Committee shall give written notice
to the Participant and all persons claiming to be alternate payees and all prior
alternate payees with respect to the Participant of its decision that the
domestic relations order is or is not a qualified domestic relations order. If
the Committee determines that the order is not a qualified domestic relations
order or if the Committee determines that the written objections of any party to
the order being found a qualified domestic relations order are not valid, the
Committee shall include in its written notice:
(i) the specific reasons for its decision;
(ii) the specific reference to the pertinent provisions of
this Plan Statement upon which its decision is based;
(iii) a description of additional material or information,
if any, which would cause the Committee to reach a
different conclusion; and
(iv) an explanation of the procedures for reviewing the
initial determination of the Committee.
2.2.5. Appeal Period. The Participant and all persons claiming to be
alternate payees and all prior alternate payees with respect to the Participant
shall be afforded an appeal period of sixty (60) days from the date such an
initial determination and explanation is mailed in which to make comments or
objections concerning whether the original determination of the Committee is
correct. By the unanimous written consent of the Participant and all persons
claiming to be alternate payees and all prior alternate payees with respect to
the Participant, the sixty (60) day appeal period may be shortened.
2.2.6. Final Determination. In all events, the final determination of
the Committee shall be made not later than eighteen (18) months after the date
on which first payment would be required to be made under the domestic relations
order if it were a qualified domestic relations order. The final determination
shall be communicated in writing to the Participant and all persons claiming to
be alternate payees and all prior alternate payees with respect to the
Participant.
2.3. Final Disposition. If the domestic relations order is finally determined to
be a qualified domestic relations order and all comment and appeal periods have
expired, the Plan shall pay all amounts required to be paid pursuant to the
domestic relations order to the alternate payee entitled thereto. If the
domestic relations order is finally determined not to be a qualified domestic
relations order and all comment and appeal periods have expired, benefits under
the Plan shall be paid to the person or persons who would have been entitled to
such amounts if there had been no domestic relations order.
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2.4. Orders Being Sought. If the Committee has notice that a domestic relations
order is being or may be sought but has not received the order, the Committee
shall not (in the absence of a written request from the Participant) delay
payment of benefits to a Participant or Beneficiary which otherwise would be
due. If the Committee has determined that a domestic relations order is not a
qualified domestic relations order and all comment and appeal periods have
expired, the Committee shall not (in the absence of a written request from the
Participant) delay payment of benefits to a Participant or Beneficiary which
otherwise would be due even if the Committee has notice that the party claiming
to be an alternate payee or the Participant or both are attempting to rectify
any deficiencies in the domestic relations order. Notwithstanding the above,
after the commencement of a divorce action, the Committee shall comply with a
restraining order, duly issued by the court handling the divorce, reasonably
prohibiting the disposition of a Participant's benefits pending the submission
to the Committee of a domestic relations order or prohibiting the disposition of
a Participant's benefits pending resolution of a dispute with respect to a
domestic relations order.
SECTION 3
PROCESSING OF AWARD
3.1. General Rules. If a benefit is awarded to an alternate payee pursuant to an
order which has been finally determined to be a qualified domestic relations
order, the following rules shall apply.
3.1.1. Source of Award. If a Participant shall have a Vested interest
in more than one Account under the Plan, the benefit awarded to an alternate
payee shall be withdrawn from the Participant's Accounts in proportion to his
Vested interest in each of them.
3.1.2. Effect on Account. For all purposes of the Plan, the
Participant's Account (and all benefits payable under the Plan which are derived
in whole or in part by reference to the Participant's Account) shall be
permanently diminished by the portion of the Participant's Account which is
awarded to the alternate payee. The benefit awarded to an alternate payee shall
be considered to have been a distribution from the Participant's Account for the
limited purpose of applying any rules of the Plan Statement relating to
distributions from an Account that is only partially Vested.
3.1.3. After Death. After the death of an alternate payee, all amounts
awarded to the alternate payee which have not been distributed to the alternate
payee and which continue to be payable shall be paid in a single lump sum
distribution to the personal representative of the alternate payee's estate as
soon as administratively feasible, unless the qualified domestic relations order
clearly provides otherwise. The Participant's Beneficiary designation shall not
be effective to dispose of any portion of the benefit awarded to an alternate
payee, unless the qualified domestic relations order clearly provides otherwise.
C-5
3.1.4. In-Service Benefits. Any in-service distribution provisions of
the Plan Statement shall not be applicable to the benefit awarded to an
alternate payee.
3.2. Segregated Account. If the Committee determines that it would facilitate
the administration or the distribution of the benefit awarded to the alternate
payee or if the qualified domestic relations order so requires, the benefit
awarded to the alternate payee shall be established on the books and records of
the Plan as a separate account belonging to the alternate payee.
3.3. Former Alternate Payees. If an alternate payee has received all benefits to
which the alternate payee is entitled under a qualified domestic relations
order, the alternate payee will not at any time thereafter be deemed to be an
alternate payee or prior alternate payee for any substantive or procedural
purpose of this Plan.
C-6
FIRST AMENDMENT
OF
FLUOROWARE, INC.
EMPLOYEE STOCK OWNERSHIP PLAN TRUST AGREEMENT
(1995 Restatement)
THIS AGREEMENT, Made and entered into as of _______________, 1995, by
and between FLUOROWARE, INC., a Minnesota corporation, and XXXXXX XXXXXXXXXX,
XXXX XXXXX and XXXXXXX X. XXXXXX, as trustees;
WITNESSETH: That
WHEREAS, FLUOROWARE, INC. has heretofore, by agreement dated February
8, 1985, established an employee stock ownership plan and trust in a single
document entitled "FLUOROWARE, INC. EMPLOYEE STOCK OWNERSHIP PLAN TRUST
AGREEMENT (1984 Statement)," effective as of September 1, 1985; and
WHEREAS, FLUOROWARE, INC. has reserved to itself the power to amend
said Trust Agreement; and
WHEREAS, Said Trust Agreement was restated effective September 1, 1995
(which Trust Agreement is hereinafter referred to as the "Plan Statement"); and
WHEREAS, FLUOROWARE, INC. desires to amend the Plan Statement in the
manner hereinafter set forth and the making of this Agreement has been duly
authorized by its Board of Directors;
NOW, THEREFORE, In consideration of the premises and pursuant to said
power of amendment, the Plan Statement is hereby amended in the following
respects:
1. CORRECTION. Effective September 1, 1995, Section 7.9.1 of the Plan Statement
is amended to read in full as follows:
7.9.1. Election. With respect to Qualifying Employer Securities
acquired by the Plan after December 31, 1986, each "qualified Participant" (as
defined below) in the Plan may elect within ninety (90) days after the close of
each Plan Year in the "qualified election period" (as defined below) to direct
the Plan to distribute to the Participant twenty-five percent (25%) of the
Participant's Account in the Plan (to the extent such portion exceeds the amount
to which a prior distribution election under this Section 7.9 applied). In the
case of the election year in which the Participant can make his or her last
election, the preceding sentence shall be applied by substituting fifty percent
(50%) for twenty-five percent (25%).
2. SAVINGS CLAUSE. Save and except as hereinabove expressly amended, the Plan
Statement shall continue in full force and effect.
IN WITNESS WHEREOF, Each of the Parties hereto has caused these
presents to be executed, all as of the day and year first above written.
TRUSTEES: FLUOROWARE, INC.
By
-------------------------------- -------------------------------------
Xxxxxx Xxxxxxxxxx Its
By
-------------------------------- -------------------------------------
Xxxx Xxxxx Its
By
-------------------------------- -------------------------------------
Xxxxxxx X. Xxxxxx Its
-2-
SECOND AMENDMENT
OF
FLUOROWARE, INC.
EMPLOYEE STOCK OWNERSHIP PLAN TRUST AGREEMENT
(1995 Restatement)
THIS AGREEMENT, Made and entered into as of _______________, _____, by
and between FLUOROWARE, INC., a Minnesota corporation, Entegris, Inc., a
Minnesota corporation, and ________________, _________________ and
_________________, as trustees;
WITNESSETH: That
WHEREAS, FLUOROWARE, INC. has heretofore established and maintains a
stock bonus plan which, in most recent amended and restated form, is embodied in
a document entitled "FLUOROWARE, INC. EMPLOYEE STOCK OWNERSHIP PLAN TRUST
AGREEMENT (1995 Statement)" as amended by one amendment (collectively the "Plan
Statement");
WHEREAS, pursuant to Section 9.2 of the Plan Statement, FLUOROWARE,
INC. ceased making contributions to the Plan effective April 25, 1997, and all
active Participants as of that date were fully (100%) vested in their Accounts;
WHEREAS, FLUOROWARE, INC. froze participation in the Plan effective
June 1, 1997; and
WHEREAS, FLUOROWARE, INC. has reserved to itself the power to amend the
Plan Statement;
NOW, THEREFORE, The Plan Statement is hereby amended in the following
respects:
1. DISABILITY. Effective for Disability determinations made for Plan Years
beginning on or after September 1, 1999, Section 1.1.7 of the Plan Statement
shall be amended to read in full as follows:
1.1.7. Disability -- a medically determinable physical or mental
impairment which: (i) renders the individual incapable of performing any
substantial gainful employment, (ii) can be expected to be of long-continued and
indefinite duration or result in death, and (iii) is evidenced by a
certification to this effect by a doctor of medicine approved by the
Administrative Committee. In lieu of such a certification, the Administrative
Committee may accept, as proof of Disability, the official written determination
that the individual will be eligible for disability benefits under the federal
Social Security Act as now enacted or hereinafter amended (when any waiting
period expires). Notwithstanding the foregoing,
no Participant will be considered to have a Disability unless such doctor's
determination or official Social Security determination is received by the
Administrative Committee within twelve (12) months after the Participant's last
day of active work with the Employer or an Affiliate. The Administrative
Committee shall determine the date on which the Disability shall have occurred
if such determination is necessary.
2. HIGHLY COMPENSATED EMPLOYEE. Effective for determining who is a Highly
Compensated Employee for Plan Years beginning on or after September 1, 1997, the
Plan Statement shall be amended by the addition of the following new Section
1.1.16 and all subsequent sections (and cross references thereto) shall be
renumbered:
1.1.16. Highly Compensated Employee -- any employee who (a) is a five
percent (5%) owner (as defined in Appendix B) at any time during the current
Plan Year or the preceding Plan Year; or (b) receives compensation from the
Employer and all Affiliates during the preceding Plan Year in excess of Eighty
Thousand Dollars ($80,000) (as adjusted under the Code for cost-of-living
increases). For this purpose, "compensation" means compensation within the
meaning of section 415(c)(3) of the Code; provided, however, that compensation
for the Plan Year ending August 31, 1998 shall include amounts contributed by
the Employer and all Affiliates pursuant to a salary reduction agreement which
are excludable from the employee's gross income under sections 125, 402(e)(3),
402(h)(1)(B) or 403(b) of the Code (for later years, such amounts are included
in compensation as defined in section 415(c)(3) of the Code). Compensation for
any employee who performed services for only part of a year is not annualized
for this purpose.
3. HIGHLY COMPENSATED EMPLOYEES. Effective for determining who is a Highly
Compensated Employee for Plan Years beginning on or after September 1, 1997, the
phrase "highly compensated employee (as defined in section 414 of the Code)"
shall be replaced with "Highly Compensated Employee" each time it appears in the
Plan Statement.
4. MILITARY LEAVES. Effective for each Participant who is credited with one or
more Hours of Service on account of the performance of duties, for the Employer
on or after December 12, 1994, Section 1.1.17(d)(i) (formerly Section
1.1.16(d)(i)) shall be deleted and all subsequent sections shall be renumbered.
5. LEASED EMPLOYEES CLARIFICATION. Effective for each Participant who is
credited with one or more Hours of Service on account of the performance of
duties for the Employer on or after September 1, 1997, Section 1.1.17(e)
(formerly Section 1.1.16(e)) of the Plan Statement shall be amended to read in
full as follows:
(e) Special Rules. For periods prior to September 1, 1984, Hours
of Service may be determined using whatever records are
reasonably accessible and by making whatever calculations are
necessary to determine the approximate number of Hours of
Service completed during such prior period. To the extent not
-2-
inconsistent with other provisions hereof, Department of Labor
regulations 29 X.X.X.xx. 2530.200b-2(b) and (c) are hereby
incorporated by reference herein. To the extent required under
section 414 of the Code, services of leased owners, leased
managers, shared employees, shared leased employees and other
similar classifications (excluding Leased Employees) for the
Employer or an Affiliate shall be taken into account as if
such services were performed as a common law employee of the
Employer for the purposes of determining Eligibility Service,
Vesting Service and One-Year Breaks in Service as applied to
Vesting Service and Eligibility Service. For purposes of the
Plan, application of the leased employee rules under section
414(n) of the Code shall be subject to the following: (i)
"contingent services" shall mean services performed by a
person for the Employer or an Affiliate during the period the
person has not performed the services on a substantially full
time basis for a period of at least twelve (12) consecutive
months, (ii) except as provided in (iii), contingent services
shall not be taken into account for purposes of determining
Eligibility Service, Vesting Service and One Year Breaks in
Service as applied to Vesting Service and Eligibility Service,
(iii) contingent services performed by a person who has become
a Leased Employee shall be taken into account for purposes of
determining Eligibility Service, Vesting Service, and One-Year
Breaks in Service as applied to Vesting Service and
Eligibility Service, and (iv) all service performed as a
Leased Employee (i.e., all service following the date an
individual has satisfied all three requirements for becoming a
Leased Employee) shall be taken into account for purposes of
determining Eligibility Service, Vesting Service and One-Year
Breaks in Service as applied to Vesting Service and
Eligibility Service.
6. LEASED EMPLOYEE. Effective for Plan Years beginning on or after September 1,
1997, the Plan Statement shall be amended by the addition of the following new
Section 1.1.19 and all subsequent sections (and all cross references thereto)
shall be renumbered:
1.1.19. Leased Employee -- any individual (other than an employee of
the Employer or an Affiliate) who performs services for the Employer or an
Affiliate if (i) services are performed under an agreement between the Employer
or an Affiliate and an individual or company, (ii) the individual performs
services for the Employer or an Affiliate on a substantially full time basis for
a period of at least twelve (12) consecutive months, and (iii) the individual's
services are performed under the primary direction or control of the Employer or
an Affiliate. In determining whether an individual is a Leased Employee of the
Employer or an Affiliate, all prior service with the Employer or an Affiliate
(including employment as a common law employee) shall be used for purposes of
satisfying (ii) above. No individual shall be considered a Leased Employee
unless and until all conditions have been satisfied.
7. PLAN NAME. Effective September 1, 1999, Sections 1.1.24 and 1.1.25 (formerly
Sections 1.1.22 and 1.1.23) shall be amended to read in full as follows:
-3-
1.1.24. Plan -- the tax-qualified stock bonus plan of the Employer
established for the benefit of employees eligible to participate therein, as
first set forth in this Plan Statement. (As used herein, "Plan" refers to the
legal entity established by the Employer and not to the document pursuant to
which the Plan is maintained. That document is referred to herein as the "Plan
Statement.") The Plan shall be referred to as the "ENTEGRIS, INC. EMPLOYEE STOCK
OWNERSHIP PLAN."
1.1.25. Plan Statement -- this document entitled "ENTEGRIS, INC.
EMPLOYEE STOCK OWNERSHIP PLAN TRUST AGREEMENT (1995 Restatement)" as adopted by
the Principal Sponsor effective as of September 1, 1995, as the same may be
amended from time to time.
8. PRINCIPAL SPONSOR. Effective September 1, 1999, Section 1.1.27 (formerly
Section 1.1.25) of the Plan Statement shall be amended to read in full as
follows:
1.1.27. Principal Sponsor-- Entegris, Inc., a Minnesota corporation.
9. EMPLOYER STOCK. Effective September 1, 1999, the introductory paragraph to
Section 1.1.29 (formerly Section 1.1.27) of the Plan Statement shall be amended
to read in full as follows:
1.1.29. Qualifying Employer Securities -- common stock of Entegris,
Inc. or of any other corporation which is an affiliate and a member of a
controlled group of corporations including Entegris, Inc. within the meaning of
section 407(d)(7) of ERISA. If at any time there is more than one class of such
common stock, Qualifying Employer Securities shall mean only that class of
common stock having a combination of voting power and dividend rights equal to
or in excess of:
10. FAMILY AGGREGATION. Effective for compensation paid to employees for Plan
Years beginning on or after September 1, 1997, Section 1.1.30(h) (formerly
Section 1.1.28(h)) of the Plan Statement shall be amended to read in full as
follows:
(h) Annual Maximum. A Participant's Recognized Compensation for a
Plan Year shall not exceed the annual compensation limit under
section 401(a)(17) of the Code, which is One Hundred Sixty
Thousand Dollars ($160,000) (as adjusted under the Code for
cost-of-living increases).
11. EMPLOYMENT CLASSIFICATION CLARIFICATION. Effective for determining which
persons are employed in Recognized Employment during Plan Years beginning on or
after September 1, 1997, Section 1.1.31 (formerly Section 1.1.29) of the Plan
Statement shall be amended to read in full as follows:
-4-
1.1.31. Recognized Employment -- all service with the Employer by
persons classified by the Employer as common law employees, excluding, however,
employment classified by the Employer as:
(a) employment in a unit of employees whose terms and conditions
of employment are subject to a collective bargaining agreement
between the Employer and a union representing that unit of
employees, unless (and to the extent) such collective
bargaining agreement provides for the inclusion of those
employees in the Plan,
(b) employment of a nonresident alien who is not receiving any
earned income from the Employer which constitutes income from
sources within the United States,
(c) employment in a division or facility of the Employer which is
not in existence on September 1, 1984 (that is, was acquired,
established, founded or produced by the liquidation or similar
discontinuation of a separate subsidiary after September 1,
1984) unless and until the Administrative Committee shall
declare such employment to be Recognized Employment,
(d) employment of a United States citizen or a United States
resident alien outside the United States unless and until the
Administrative Committee shall declare such employment to be
Recognized Employment,
(e) services of a person who is not a common law employee of the
Employer including, without limiting the generality of the
foregoing, services of a Leased Employee, leased owner, leased
manager, shared employee, shared Leased Employee, temporary
worker, independent contractor, contract worker, agency
worker, freelance worker or other similar classification,
(f) employment of a Highly Compensated Employee to the extent
agreed to in writing by the employee, and
(g) employment as a temporary employee.
The Employer's classification of a person at the time of inclusion or exclusion
in Recognized Employment shall be conclusive for the purpose of the foregoing
rules. No reclassification of a person's status with the Employer, for any
reason, without regard to whether it is initiated by a court, governmental
agency or otherwise and without regard to whether or not the Employer agrees to
such reclassification, shall result in the person being included in Recognized
Employment, either retroactively or prospectively. Notwithstanding anything to
the contrary in this provision, however, the Administrative Committee may
declare that a reclassified person will be included in Recognized Employment,
either retroactively or
-5-
prospectively. Any uncertainty concerning a person's classification shall be
resolved by excluding the person from Recognized Employment.
12. USERRA COMPLIANCE. Effective December 12, 1994, Section 1 of the Plan
Statement shall be amended by the addition of the following new Section 1.2 and
all subsequent sections shall be renumbered.
1.2. Compliance With Uniformed Services Employment and Reemployment Rights Act
of 1994. Effective for veterans rehired on or after December 12, 1994, and
notwithstanding any provision of the Plan Statement to the contrary,
contributions, benefits or service credits, if any, will be provided in
accordance with section 414(u) of the Code.
13. EXEMPT LOANS. Effective September 1, 1999, the Trustee shall no longer be
authorized to enter into an Exempt Loan and the Plan shall no longer be
leverageable and Section 3.1.5 shall be deleted in its entirety with all
subsequent sections (and cross references thereto) renumbered.
14. INVESTMENT OF FUND. Effective September 1, 1999, Section 4.3.1 of the Plan
Statement shall be amended to read in full as follows:
4.3.1. General Rule. This Plan is a stock bonus plan. To the extent
that Qualifying Employer Securities are available and subject to Section 4.4,
the Trustee may generally invest the Fund in Qualifying Employer Securities;
provided, however, that the Plan need not be primarily invested in Qualifying
Employer Securities.
15. EVENTS OF MATURITY. Effective for all Events of Maturity occurring on or
after January 1, 2000, Section 6.1 of the Plan Statement shall be amended to
read in full as follows:
6.1. Events of Maturity. A Participant's Account shall mature and the Vested
portion shall become distributable in accordance with Section 7 upon the
earliest occurrence of any of the following events while in the employment of
the Employer or an Affiliate:
(a) the Participant's death;
(b) the Participant's termination of employment, whether voluntary
or involuntary;
(c) the attainment of age seventy and one-half (70-1/2) years by a
Participant who is a five percent (5%) owner (as defined in
Appendix B) at any time during the year in which the
Participant attained age seventy and one-half (70-1/2) years
and the crediting of any amounts to such a Participant's
Account after such time; or
-6-
(d) the Participant's Disability;
provided, however, that a transfer from Recognized Employment to employment with
the Employer that is other than Recognized Employment or a transfer from the
employment of one Employer participating in the Plan to another such Employer or
to any Affiliate shall not constitute an Event of Maturity.
16. EXCEPTION FOR SMALL AMOUNTS. Effective for Plan Years beginning on or after
September 1, 1997, Section 7.1.2 of the Plan Statement shall be amended to read
in full as follows:
7.1.2. Exception for Small Amounts. A Vested Account which does not
exceed Five Thousand Dollars ($5,000) as of the second Annual Valuation Date
coincident with or next following the occurrence of an Event of Maturity
effective as to a Participant, shall be distributed automatically in a single
lump sum as of that date without an application for distribution. If, however,
the distribution is made on account of the Participant's death or Disability
while in the employment of the Employer or the Participant's separation from
service on or after attaining Normal Retirement Age, a Vested Account which does
not exceed Five Thousand Dollars ($5,000) on the first Annual Valuation Date
next following the occurrence of the Participant's Event of Maturity shall be
distributed automatically in a single lump sum as of that date without an
application for distribution. A Participant who has no Vested interest in the
Participant's Account as of the Participant's Event of Maturity shall be deemed
to have received an immediate distribution of the Participant's entire interest
in the Plan as of such Event of Maturity.
17. REQUIRED NOTICES. Effective for providing required notices for distributions
payable on or after September 1, 1999, Section 7.1.4 of the Plan Statement shall
be amended to read in full as follows:
7.1.4. Notices. The Administrative Committee will issue such notices as
may be required under sections 402(f), 411(a)(11) and other sections of the Code
in connection with distributions from the Plan, and no distribution will be made
unless it is consistent with such notice requirements. Generally, distributions
may not commence as of a Valuation Date that is more than ninety (90) days or
less than thirty (30) days after such notices are given to the Participant.
Distribution may commence less than thirty (30) days after the notice required
under section 1.411(a)-11(c) of the Income Tax Regulations or the notice
required under section 1.402(f)-1 of the Income Tax Regulations is given,
provided however, that:
(a) the Administrative Committee clearly informs the Distributee
that the Distributee has a right to a period of at least
thirty (30) days after receiving such notices to consider
whether or not to elect distribution and, if applicable, to
elect a particular distribution option;
(b) the Distributee, after receiving the notice, affirmatively
elects a distribution; and
-7-
(c) the Distributee may revoke an affirmative distribution
election by notifying the Administrative Committee of such
revocation prior to the date as of which such distribution is
to be made.
18. ELIGIBLE ROLLOVER DISTRIBUTION. Effective for all distributions payable on
or after January 1, 2000, Section 7.1.5(a) of the Plan Statement shall be
amended to read in full as follows:
(a) Eligible rollover distribution means any distribution of all
or any portion of an Account to a Distributee who is eligible
to elect a direct rollover except (i) any distribution that is
one of a series of substantially equal installments payable
not less frequently than annually over the life expectancy of
such Distributee and such Distributee's designated
Beneficiary, and (ii) any distribution that is one of a series
of substantially equal installments payable not less
frequently than annually over a specified period of ten (10)
years or more, and (iii) any distribution to the extent of
such distribution is required under section 401(a)(9) of the
Code, and (iv) any hardship distribution described under
401(k)(2)(B)(i)(IV) of the Code that is made after December
31, 1999, and (v) the portion of any distribution that is not
includible in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to
employer securities).
19. TIME OF DISTRIBUTION. Effective for distributions occurring on or after Plan
Years beginning on or after September 1, 1999, the last paragraph in Section
7.2.1 shall be amended to read in full as follows:
Distribution shall not be made, however, as of an Annual Valuation Date which is
earlier than the date the Administrative Committee receives any required
application for distribution and any required notice period has expired.
20. TIME OF DISTRIBUTION. Effective for distributions occurring on or after Plan
Years beginning on or after January 1, 2000, Section 7.2.2 of the Plan Statement
shall be amended to read in full as follows:
7.2.2. Required Beginning Date. Distribution shall be made as of the
Annual Valuation Date occurring in the calendar year immediately preceding the
calendar year in which the required beginning date effective as to the
Distributee occurs. In all events, distribution shall be made not later than the
required beginning date applicable to the Distributee.
(a) Participant. If the Distributee is a Participant who is not a
five percent (5%) owner (as defined in Appendix B), then the
Participant's required beginning date is the later of (i) the
April 1 following the calendar year in which the Participant
-8-
attains age seventy and one-half (70-1/2) years, or (ii) the
April 1 following the calendar year in which the Participant
terminates employment.
(b) Special Rule for Participant who is a Five Percent (5%) Owner.
If the Distributee is a Participant who is a five percent (5%)
owner (as defined in Appendix B) at any time during the Plan
Year ending with or within the calendar year in which such
Participant attains age seventy and one-half (70-1/2) years,
then the Participant's required beginning date is the April 1
following the calendar year in which the Participant attains
age seventy and one-half (70-1/2) years.
(c) Beneficiary. If the Distributee is the Beneficiary of a
Participant, then the Beneficiary's required beginning date is
the December 31 of the calendar year in which occurs the fifth
(5th) anniversary of the Participant's death.
21. DISCLAIMERS BY AND DEFINITIONS OF BENEFICIARIES. Effective with respect to
Participants who die on or after September 1, 1999, Sections 7.5.4 and 7.5.5 of
the Plan Statement shall be amended to read in full as follows:
7.5.4. Disclaimers by Beneficiaries. A Beneficiary entitled to a
distribution of all or a portion of a deceased Participant's Vested Account may
disclaim his or her interest therein subject to the following requirements. To
be eligible to disclaim, a Beneficiary must not have received a distribution of
all or any portion of a Vested Account at the time such disclaimer is executed
and delivered, and, if a natural person, must have attained legal age as of the
date of the disclaimer. Any disclaimer must be in writing and must be executed
by the Beneficiary before a notary public. A disclaimer shall state that the
Beneficiary's entire interest in the undistributed Vested Account is disclaimed
or shall specify what portion thereof is disclaimed. To be effective, duplicate
original executed copies of the disclaimer must be both executed and actually
delivered to both the Administrative Committee and to the Trustee after the date
of the Participant's death but not later than nine (9) months after the date of
the Participant's death. A disclaimer shall be irrevocable when delivered to
both the Administrative Committee and the Trustee. A disclaimer shall be
considered to be delivered to the Administrative Committee or the Trustee only
when actually received by the Administrative Committee or the Trustee (and in
the case of a corporate Trustee, shall be considered to be delivered only when
actually received by a trust officer familiar with the affairs of the Plan). The
Administrative Committee (and not the Trustee) shall be the sole judge of the
content, interpretation and validity of a purported disclaimer. Upon the filing
of a disclaimer that complies with the foregoing requirements, the Beneficiary
shall be considered not to have survived the Participant as to the interest
disclaimed. A disclaimer by a Beneficiary shall not be considered to be a
transfer of an interest in violation of the provisions of Section 8 and shall
not be considered to be an assignment or alienation of benefits in violation of
federal law prohibiting the assignment or alienation of benefits under this
Plan. No other form of attempted disclaimer shall be recognized by either the
Administrative Committee or the Trustee. The foregoing requirements are solely
for the purpose of disclaiming benefits under the Plan, and compliance with
these requirements does not assure that the disclaimer will be valid for tax
purposes or any
-9-
other purposes. It is the exclusive responsibility of the disclaimant to
assure compliance with any and all necessary requirements to assure proper tax
treatment of the disclaimer if that is one of its intended purposes.
7.5.5. Definitions. When used herein and, unless the Participant has
otherwise specified in the Participant's Beneficiary designation, when used in a
Beneficiary designation, "issue" means all persons who are lineal descendants of
the person whose issue are referred to, subject to the following:
(a) a legally adopted child and the adopted child's lineal
descendants always shall be lineal descendants of each
adoptive parent (and of each adoptive parent's lineal
ancestors);
(b) a legally adopted child and the adopted child's lineal
descendants never shall be lineal descendants of any former
parent whose parental rights were terminated by the adoption
(or of that former parent's lineal ancestors); except that if,
after a child's parent has died, the child is legally adopted
by a stepparent who is the spouse of the child's surviving
parent, the child and the child's lineal descendants shall
remain lineal descendants of the deceased parent (and the
deceased parent's lineal ancestors);
(c) if the person (or a lineal descendant of the person) whose
issue are referred to is the parent of a child (or is treated
as such under applicable law) but never received the child
into that parent's home and never openly held out the child as
that parent's child (unless doing so was precluded solely by
death), then neither the child nor the child's lineal
descendants shall be issue of the person.
"Child" means an issue of the first generation; "per stirpes" means in equal
shares among living children of the person whose issue are referred to and the
issue (taken collectively) of each deceased child of such person, with such
issue taking by right of representation of such deceased child; and "survive"
and "surviving" mean living after the death of the Participant.
22. FACILITY OF PAYMENT. Effective for distributions occurring on or after
September 1, 1999, Section 7.7 of the Plan Statement shall be amended to read in
full as follows:
7.7. Facility of Payment. In case of the legal disability, including minority,
of a Participant, Beneficiary or alternate payee entitled to receive any
distribution under the Plan, payment shall be made, if the Administrative
Committee shall be advised of the existence of such condition:
(a) to the duly appointed guardian or conservator of such
Participant, Beneficiary or alternate payee, or
-10-
(b) to the duly appointed attorney-in-fact or other legal
representative of such Participant, Beneficiary or alternate
payee, but only if the appointment has been made in a manner
approved by the Trustee, or
(c) to a person or institution entrusted with the care or
maintenance of the incompetent or disabled Participant,
Beneficiary or alternate payee, provided, however, such person
or institution has satisfied the Administrative Committee that
the payment will be used for the best interest and assist in
the care of such Participant, Beneficiary or alternate payee,
and provided further, that no prior claim for said payment has
been made by a duly appointed guardian, conservator,
attorney-in-fact or other legal representative of such
Participant, Beneficiary or alternate payee as provided above.
Any payment made in accordance with the foregoing provisions of this Section
shall constitute a complete discharge of any liability or obligation of the
Employer, the Administrative Committee, the Trustee and the Fund therefor.
23. AMENDMENT. Effective September 1, 1999, Section 9.1 of the Plan Statement
shall be amended by the addition of the following two sentences at the end of
the section:
No oral or written statement shall be effective to amend the Plan Statement
unless it is duly authorized by the Board of Directors or the Administrative
Committee. The power to amend the Plan Statement may not be delegated.
24. DISCONTINUANCE OF CONTRIBUTIONS AND TERMINATION OF PLAN. Effective Plan
Years beginning September 1, 1999, Section 9.2 of the Plan Statement shall be
amended to read in full as follows:
9.2. Discontinuance of Contributions and Termination of Plan. The Principal
Sponsor reserves the right to reduce, suspend or discontinue its contributions
to the Plan and to terminate the Plan herein embodied in its entirety.
Notwithstanding anything in this Plan Statement to the contrary, if the
Principal Sponsor applies to the Internal Revenue Service for a ruling that the
termination of the Plan does not adversely affect its qualified status, then all
distributions (other than required distributions under Section 7.1.3) shall be
suspended upon termination of the Plan pending the receipt of a favorable
determination.
25. PASS-THROUGH OF VOTING. Effective for Plan Years beginning on or after
September 1, 1999, Section 10.7 of the Plan Statement shall be amended to read
in full as follows:
10.7. Pass-Through of Voting for Employer Securities. Notwithstanding any other
provision of this Plan Statement, each Participant and Beneficiary shall be
entitled to direct the Trustee as to the manner
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in which all Employer securities which are entitled to vote and are
held in such Participant's or Beneficiary's Account are to be voted as set forth
in this Section 10.7.
10.7.1. Registration-Type Class of Securities. If the Employer has a
registration-type class of securities, each Participant and Beneficiary shall be
entitled to direct the Trustee as to the manner in which the Employer securities
which are entitled to vote and are held in such Participant's or Beneficiary's
Account are to be voted.
10.7.2. Requirement for Other Employers. If the Employer does not have
a registration-type class of securities, each Participant shall be entitled to
direct the Trustee as to the manner in which the Employer securities which are
entitled to vote and are held in such Participant's or Beneficiary's Account are
to be voted for any corporate matter which involves the approval or disapproval
of any corporate merger or consolidation, recapitalization, reclassification,
liquidation, dissolution, sale of substantially all assets of a trade or
business, or such similar transaction as the Secretary may prescribe in
regulations. On all other matters, the Trustee shall vote such Employer
securities as directed by the Administrative Committee. The Trustee shall have
no discretion in such matter.
10.7.3. Procedures. Unless changed by the Administrative Committee, the
procedures for the pass-through of voting rights on Employer securities are as
follows: The Trustee (as transfer agent for the Employer) shall forward to each
Participant and Beneficiary no later than five business days after the date the
Trustee receives proxy and other proxy soliciting material and/or annual reports
to security holders, (1) a copy of the proxy soliciting material and/or the
annual report to security holders, and (2) a proxy card to vote the shares held
in the Participant's or Beneficiary's Account. Participants and Beneficiaries
shall return the proxy cards directly to the Trustee no later than ten (10) days
prior to the date upon which the issue is to be voted. The Trustee shall not
honor or recognize any proxy which is not timely received by the Trustee. Shares
for which Participants and Beneficiaries do not timely return proxy cards shall
not be voted; provided, however, that the Trustee shall give notice, to each
Participant and Beneficiary receiving a proxy, stating that shares for which no
instructions are received shall not be voted. The Trustee shall vote all shares
for which they have received timely instructions, as instructed. The combined
fractional shares of Participants and Beneficiaries shall be voted to the extent
possible to reflect the instructions of the Participant or Beneficiary to whose
Account the fractional shares are allocated.
26. EXHAUSTION OF ADMINISTRATIVE REMEDIES. Effective for all claims filed on or
after September 1, 1999, Section 11.4 of the Plan Statement shall be amended by
adding thereto the following new Sections 11.4.4, 11.4.5, 11.4.6 and 11.4.7:
11.4.4. Deadline to File Claim. To be considered timely under the
Plan's claim and review procedure, a claim must be filed with the Administrative
Committee within one (1) year after the claimant knew or reasonably should have
known of the principal facts upon which the claim is based.
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11.4.5. Exhaustion of Administrative Remedies. The exhaustion of the
claim and review procedure is mandatory for resolving every claim and dispute
arising under this Plan. As to such claims and disputes:
(a) no claimant shall be permitted to commence any legal action to
recover Plan benefits or to enforce or clarify rights under
the Plan under section 502 or section 510 of ERISA or under
any other provision of law, whether or not statutory, until
the claim and review procedure set forth herein have been
exhausted in their entirety; and
(b) in any such legal action all explicit and all implicit
determinations by the Administrative Committee (including, but
not limited to, determinations as to whether the claim, or a
request for a review of a denied claim, was timely filed)
shall be afforded the maximum deference permitted by law.
11.4.6. Deadline to File Legal Action. No legal action to recover Plan
benefits or to enforce or clarify rights under the Plan under section 502 or
section 510 of ERISA or under any other provision of law, whether or not
statutory, may be brought by any claimant on any matter pertaining to this Plan
unless the legal action is commenced in the proper forum before the earlier of:
(a) thirty (30) months after the claimant knew or reasonably
should have known of the principal facts on which the claim is
based, or
(b) six (6) months after the claimant has exhausted the claim and
review procedure.
11.4.7. Knowledge of Fact by Participant Imputed to Beneficiary.
Knowledge of all facts that a Participant knew or reasonably should have known
shall be imputed to every claimant who is or claims to be a Beneficiary of the
Participant or otherwise claims to derive an entitlement by reference to the
Participant for the purpose of applying the previously specified periods.
27. NAMED FIDUCIARIES. Effective for Plan Years beginning on or after September
1, 1999, Section 12.7 of the Plan Statement shall be amended to read in full as
follows:
12.7. Named Fiduciaries. The Principal Sponsor, the Administrative Committee,
the Trustee and each Participant or Beneficiary exercising pass through voting
rights under Sections 10.7 and 10.13 shall be named fiduciaries for the purpose
of section 402(a) of ERISA.
28. SERVICE OF PROCESS. Effective September 1, 1999, Section 12.8 of the Plan
Statement shall be amended to read in full as follows:
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12.8. Service of Process. In the absence of any designation to the contrary by
the Principal Sponsor, the general counsel of the Principal Sponsor is
designated as the appropriate and exclusive agent for the receipt of service of
process directed to the Plan in any legal proceeding, including arbitration,
involving the Plan.
29. SECTION 415 APPENDIX. Effective for Plan Years beginning on or after
September 1, 1995, Appendix A to the Plan Statement shall be amended by
substituting therefore the Appendix A attached to this amendment.
30. QUALIFIED DOMESTIC RELATIONS ORDER APPENDIX. Effective for Plan Years
beginning on or after September 1, 1999, Appendix C to the Plan Statement shall
be amended by substituting therefore the Appendix C attached to this amendment.
31. HIGHLY COMPENSATED EMPLOYEE APPENDIX. Effective for Plan Years beginning on
or after September 1, 1997, Appendix D to the Statement (and all references to
Appendix D in the Plan Statement) shall be deleted.
32. SAVINGS CLAUSE. Save and except as hereinabove expressly amended, the Plan
Statement shall continue in full force and effect.
IN WITNESS WHEREOF, Each of the parties hereto has caused these
presents to be executed, all as of the day and year first above written.
TRUSTEES FLUOROWARE, INC.
By
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Its
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And
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Its
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ENTEGRIS, INC.
By
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Its
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And
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Its
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XXXXX XXXXXXXXX
OF
ENTEGRIS, INC.
EMPLOYEE STOCK OWNERSHIP PLAN TRUST AGREEMENT
(1995 Restatement)
THIS AGREEMENT, Made and entered into as of _______________, 2000, by
and between ENTEGRIS, INC., a Minnesota corporation, and HSBC Bank U.S.A. as
trustee;
WITNESSETH: That
WHEREAS, ENTEGRIS, INC. maintains a stock bonus plan which, in most
recent amended and restated form, is embodied in a document entitled "ENTEGRIS,
INC. EMPLOYEE STOCK OWNERSHIP PLAN TRUST AGREEMENT (1995 Statement)" as amended
by two amendments (collectively the "Plan Statement"); and
WHEREAS, ENTEGRIS, INC. has reserved to itself the power to amend the
Plan Statement;
NOW, THEREFORE, The Plan Statement is hereby amended in the following
respects:
1. IN-SERVICE DISTRIBUTIONS. Effective May 15, 2000, Section 7 of the Plan
Statement shall be amended by the addition of the following new Section 7.10 to
read in full as follows:
7.10. In-Service Distributions.
7.10.1. Distribution upon Offering. Each Participant in the Plan may
elect to direct the Plan to sell Qualified Employer Securities from the
Participant's Account as part of an initial public or secondary offering of
stock of the Principal Sponsor and to distribute the cash proceeds from such
sale to the Participant in the form of a lump-sum payment. The Committee shall
prescribe additional rules regarding the manner of election and the timing and
form of distribution.
7.10.2. Annual In-Service Distribution. Each Participant in the Plan
may elect to direct the Plan to distribute to the Participant up to ten percent
(10%) of the value of the Qualified Employer Securities in the Participant's
Account in the form of a lump-sum cash payment. The earliest date upon which an
election under this Section 7.10.2 may be made effective is May 15, 2001. The
Committee shall prescribe additional rules regarding the manner of election and
the timing and form of distribution.
7.10.3. Option to Transfer Amounts to 401(k) Plan. A Participant who
elects to distribute amounts under Section 7.10.1 or Section 7.10.2 may elect,
in lieu of a distribution to such Participant, to transfer such amounts to the
Entegris, Inc. 401(k) Savings and Profit Sharing Plan.
7.10.4. Spousal Consent Not Required. Spousal consent shall not be
required to make an in-service distribution to a married Participant.
2. PASS-THROUGH OF VOTING. Effective for Plan Years beginning on or after
September 1, 1999, Section 10 of the Plan Statement shall be amended by the
addition of the following new Section 10.14:
10.14. Pass-Through of Tender Offer for Employer Securities.
10.14.1. Pass-Through. Notwithstanding any other provision of this Plan
Statement, each Participant and Beneficiary shall have the right to tender
Employer securities held in such Participant's or Beneficiary's Account as set
forth in this Section 10.14.
10.14.2. Procedures. Upon receipt of a tender offer filed with the
Securities and Exchange Commission, the Trustee shall forward to each
Participant and Beneficiary as of the Valuation Date immediately prior to such
receipt, no later than five business days after such receipt, a copy of the
offer accompanied by the procedures by which a Participant or Beneficiary may
elect to tender the number of shares held for such Participant or Beneficiary as
of the Valuation Date immediately prior to such receipt, which may contemplate
that any such election may be made at a later time. Not later than ten business
days prior to the expiration of the offer (the "Expiration Date"), the Trustee
shall furnish to each Participant and Beneficiary a form providing binding
instructions to the Trustee to tender such number of shares and an envelope
addressed to the Trustee to return such instructions. All such instructions
shall be received by the Trustee no later than five business days prior to the
Expiration Date (unless a shorter time period is acceptable to the Trustee). Any
Participant or Beneficiary may revoke such instructions by writing addressed to
the Trustee received no later than one business day prior to the Expiration
Date. On the Expiration Date the Trustee shall tender that number of shares for
which it has timely received instructions that have not been revoked. Shares for
which Participants and Beneficiaries do not timely return proxy instructions
shall not be tendered; provided, however, that the Trustee shall give notice, to
each Participant and Beneficiary receiving instructions, stating that shares for
which no instructions are received shall not be tendered.
10.14.3. Confidentiality. Participants and Beneficiaries shall have the
right to determine confidentially whether Employer securities will be tendered
in a tender or exchange offer.
10.14.4. Proration. If less than all shares tendered by the Trustee are
accepted, the shares sold for each Participant or Beneficiary shall be in the
same ratio to the number of shares in the Account as the total number of shares
accepted bears to the total number of shares tendered.
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10.14.5. Future Investments. Notwithstanding any provision in this Plan
Statement to the contrary, the proceeds from the sale of Employer securities
pursuant to this Section 10.14 shall be transferred to the Account of a
Participant or Beneficiary and shall be invested in accordance with uniform
rules of the Administrative Committee and shall not be invested in Employer
securities. All future contributions of the Employer to the Participant's
Account shall be credited to the Participant's Account and shall be invested in
accordance with uniform rules of the Committee and shall not be invested in
Employer securities.
3. SAVINGS CLAUSE. Save and except as hereinabove expressly amended, the Plan
Statement shall continue in full force and effect.
IN WITNESS WHEREOF, Each of the parties hereto has caused these
presents to be executed, all as of the day and year first above written.
HSBC BANK U.S.A. ENTEGRIS, INC.
By By
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Its Its
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And
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Its
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