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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0000912057-02-012175.txt : 20020415
<SEC-HEADER>0000912057-02-012175.hdr.sgml : 20020415
ACCESSION NUMBER: 0000912057-02-012175
CONFORMED SUBMISSION TYPE: 10-K
PUBLIC DOCUMENT COUNT: 14
CONFORMED PERIOD OF REPORT: 20011231
FILED AS OF DATE: 20020328
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: AMPHENOL CORP /DE/
CENTRAL INDEX KEY: 0000820313
STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC CONNECTORS [3678]
IRS NUMBER: 222785165
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 10-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-10879
FILM NUMBER: 02590684
BUSINESS ADDRESS:
STREET 1: 358 HALL AVE
CITY: WALLINGFORD
STATE: CT
ZIP: 06492
BUSINESS PHONE: 2032658900
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>a2073881z10-k.txt
<DESCRIPTION>FORM 10-K
<TEXT>
<Page>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the Fiscal Year Ended December 31, 2001
or
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _____________ to ______________
Commission file number 1-10879
AMPHENOL CORPORATION
(Exact name of Registrant as specified in its Charter)
DELAWARE 22-2785165
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
358 HALL AVENUE, WALLINGFORD, CONNECTICUT 06492
203-265-8900
(Address, including zip code, and telephone
number, including area code, of Registrant's
principal executive offices)
Securities registered pursuant to Section 12(b) of the Act:
CLASS A COMMON STOCK, $.001 PAR VALUE NEW YORK STOCK EXCHANGE, INC.
(Title of each Class) (Name of each Exchange
on which Registered)
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes /X/ No / /
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of Amphenol Corporation common stock, $.001 par
value, held by non-affiliates was approximately $896 million based on the
reported last sale price of such stock on the New York Stock Exchange on
February 28, 2002.
As of February 28, 2002 the total number of shares outstanding of registrant's
common stock was 42,300,068.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Definitive Proxy Statement which is expected to be
filed within 120 days following the end of the fiscal year covered by this
report, are incorporated by reference into Part III hereof.
<Page>
<Table>
<Caption>
INDEX PAGE
<S> <C>
PART I 3
ITEM 1. BUSINESS 3
General 3
Business Segments 5
International Operations 7
Customers 7
Manufacturing 7
Research and Development 8
Trademarks and Patents 8
Competition 8
Backlog 8
Employees 9
Cautionary Statements for Purposes of Forward Looking Information 10
ITEM 2. PROPERTIES 11
ITEM 3. LEGAL PROCEEDINGS 11
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS 13
ITEM 4.1 EXECUTIVE OFFICERS 13
PART II 14
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER 14
MATTERS
ITEM 6. SELECTED FINANCIAL DATA 15
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 16
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 19
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 20
Report of Management 20
Independent Auditors' Report 20
Consolidated Statement of Income 21
Consolidated Balance Sheet 22
Consolidated Statement of Changes in Shareholders' Equity 23
Consolidated Statement of Cash Flow 24
Notes to Consolidated Financial Statements 25
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH INDEPENDENT ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE 36
PART III 36
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT 36
ITEM 11. EXECUTIVE COMPENSATION 36
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 36
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 36
PART IV 37
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K 37
Signature of the Registrant 44
Signatures of the Directors 44
</Table>
2
<Page>
PART I
ITEM 1. BUSINESS
GENERAL
Amphenol Corporation ("Amphenol" or the "Company") is one of the world's
largest designers, manufacturers and marketers of electrical, electronic and
fiber optic connectors, interconnect systems and coaxial and flat-ribbon cable.
The primary end markets for the Company's products are:
- communication systems for the converging technologies of voice, video
and data communications;
- industrial factory automation equipment and automotive and mass
transportation applications; and
- commercial and military aerospace applications.
The Company focuses on optimizing its mix of higher margin, higher growth
application specific products in its product offerings and maintaining
continuing programs of productivity improvement. For 2001, the Company reported
net sales, operating profit and net income of $1,103.8 million, $197.0 million
and $83.7 million, respectively. The table below summarizes information
regarding the Company's primary markets and end applications for the Company's
products:
<Table>
<Caption>
Commercial and
Communications Industrial Military Aerospace
------------------------- ----------------------- ----------------------------
<S> <C> <C> <C>
Percentage
of Sales 54% 23% 23%
Primary Voice Factory automation Military and Commercial
End - wireless handsets and Instrumentation systems Aircraft
Applications personal communication Automobile safety -avionics
devices systems and other on -engine controls
- base stations and other board electronics -flight controls
wireless infrastructure Mass transportation -passenger related systems
Video Oil exploration Missile systems
- cable television Off-road construction Battlefield communications
networks and set top Satellite and Space Station
converters programs
Data
- cable modems
- servers and storage
systems
- computers, personal
computers and related
peripherals
- data networking
equipment
</Table>
3
<Page>
The Company designs and manufactures connectors and interconnect systems
which are used primarily to conduct electrical and optical signals for a wide
range of sophisticated electronic applications. The Company believes, based
primarily on published market research, that it is one of the largest connector
manufacturers in the world. The Company has developed a broad range of connector
and interconnect products to serve the rapidly growing and converging voice,
video and data communications markets. The Company is also one of the leaders in
developing interconnect products for factory automation, machine tools,
instrumentation systems, mass transportation applications and automotive
applications, including airbags, pretensioner seatbelts and other on board
electronics. In addition, the Company is the leading supplier of high
performance, military-specification, circular environmental connectors that
require superior performance and reliability under conditions of stress and in
hostile environments. These conditions are frequently encountered in commercial
and military aerospace applications and other demanding industrial applications
such as oil exploration, medical instrumentation and off-road construction.
The Company believes that the worldwide industry for interconnect products
and systems is highly fragmented with over 2,000 producers of connectors
worldwide, of which the 10 largest, including Amphenol, accounted for a combined
market share of approximately 46% in 2001. Industry analysts estimate that the
total sales for the industry were approximately $32 billion in 2001.
The Company's Times Fiber subsidiary is the world's second largest producer
of coaxial cable for the cable television market. The Company believes that its
Times Fiber unit is one of the lowest cost producers of coaxial cable for the
cable television market, and that it is one of the technological leaders in
increasing the bandwidth of coaxial cable products. The Company's coaxial cable
and connect or products are used in cable television systems including full
service cable television/telecommunication systems being installed by cable
operators and telecommunication companies offering video, voice and data
services. The Company is also a major supplier of coaxial cable to developing
international cable television markets.
The Company is a global manufacturer employing advanced manufacturing
processes. The Company manufactures and assembles its products at facilities in
North America, South America, Europe, Asia and Australia. The Company sells its
connector products through its own global sales force and independent
manufacturers' representatives to thousands of OEMs in approximately 60
countries throughout the world as well as through a global network of
electronics distributors. The Company sells its coaxial cable products primarily
to cable television operators and to telecommunication companies who have
entered the broadband communications market. For the year 2001, approximately
54% of the Company's net sales were in North America, 27% were in Europe and 19%
were in Asia and other countries.
The Company implements its product development strategy through product
design teams and collaboration arrangements with customers which result in the
Company obtaining approved vendor status for its customers' new products and
programs. The Company seeks to have its products become widely accepted within
the industry for similar applications and products manufactured by other
potential customers, which the Company believes will provide additional sources
of future revenue. By developing application specific products, the Company has
decreased its exposure to standard products which generally experience greater
pricing pressure. In addition to product design teams and customer collaboration
arrangements, the Company uses key account managers to manage customer
relationships on a global basis such that it can bring to bear its total
resources to meet the worldwide needs of its multinational customers. The
Company is also focused on making strategic acquisitions in certain markets to
further broaden and enhance its product offerings and expand its global
capabilities.
4
<Page>
BUSINESS SEGMENTS
The following table sets forth the dollar amounts of the Company's net
trade sales for its business segments. For a discussion of factors affecting
changes in sales by business segment, see "Management's Discussion and Analysis
of Financial Condition and Results of Operations."
<Table>
<Caption>
2001 2000 1999
------------- -------------- ---------------
(dollars in thousands)
<S> <C> <C> <C>
Net trade sales by business segment:
Interconnect products and
assemblies $ 906,799 $ 1,009,162 $ 769,967
Cable products 196,972 350,540 240,636
------------- -------------- ---------------
$ 1,103,771 $ 1,359,702 $ 1,010,603
============= ============== ===============
Net trade sales by geographic area:
United States operations $ 538,325 $ 690,743 $ 519,459
International operations(1) 565,446 668,959 491,144
------------- -------------- ---------------
$ 1,103,771 $ 1,359,702 $ 1,010,603
============= ============== ===============
</Table>
(1) Includes international coaxial cable sales, which are primarily export
sales.
INTERCONNECT PRODUCTS AND ASSEMBLIES. The Company produces a broad range of
interconnect products and assemblies primarily for voice, video and data
communication systems, commercial and military aerospace systems, automotive
and mass transportation applications, and industrial and factory automation
equipment. Interconnect products include connectors, which when attached to
an electronic or fiber optic cable, a printed circuit board or other device,
facilitate electronic or fiber optic transmission. Interconnect assemblies
generally consist of a system of cable and connectors for linking electronic
and fiber optic equipment. The Company designs and produces a broad range of
connector and cable assembly products used in communication applications,
such as: cable assemblies used in base stations for wireless communication
systems; smart card acceptor devices used in mobile GSM telephones, cable
modems and other applications to facilitate reading data from
smartcards;fiber optic couplers and connectors used in fiber optic signal
transmission; input/output connectors and assemblies used for servers and
data storage devices and linking personal computers and peripheral equipment;
and sculptured flexible circuits used for integrating printed circuit boards
in communication applications. The Company also designs and produces a broad
range of radio frequency connector products used in telecommunications,
computer and office equipment, instrumentation equipment and local area
networks. The Company's radio frequency connectors are also used in base
stations, handheld sets and other components of cellular and personal
communications networks.
The Company believes that it is the largest supplier of high performance,
military-specification, circular environmental connectors. Such connectors
require superior performance and reliability under conditions of stress and in
hostile environments. High performance environmental connectors are generally
used to interconnect electronic and fiber optic systems in sophisticated
aerospace, military, commercial and industrial equipment. These applications
present demanding technological requirements in that the connectors can be
subject to rapid and severe temperature changes, vibration, humidity and nuclear
radiation. Frequent applications of these connectors include aircraft, guided
missiles, radar, military vehicles, equipment for spacecraft, energy, medical
instrumentation and geophysical applications and off-road construction
equipment. The Company also designs
5
<Page>
and produces industrial interconnect products used in a variety of applications
such as factory automation equipment, mass transportation applications including
railroads and marine transportation; and automotive safety products including
interconnect devices and systems used in automotive air bags, pretensioner seat
belts and anti-lock braking systems. The Company also designs and produces
highly-engineered cable and backplane assemblies. Such assemblies are specially
designed by the Company in conjunction with OEM customers for specific
applications, primarily for computer, wired and wireless communication systems,
office equipment and aerospace applications. The cable assemblies utilize the
Company's connector and cable products as well as components purchased from
others.
CABLE PRODUCTS. The Company designs, manufactures and markets coaxial cable
primarily for use in the cable television industry. The Company manufactures two
primary types of coaxial cable: semi-flexible, which has an aluminum tubular
shield, and flexible, which has one or more braided metallic shields.
Semi-flexible coaxial cable is used in the trunk and feeder distribution portion
of cable television systems, and flexible cable (also known as drop cable) is
used primarily for hookups from the feeder cable to the cable television
subscriber's residence. Flexible cable is also used in other communication
applications. The Company has also developed a broadline of radio frequency
connectors for coaxial cable and fiber optic interconnect components for full
service cable television/telecommunication networks.
The rapid development in fiber optic technologies, digital compression
(which allows several channels to be transmitted within the same bandwidth that
a single analog channel currently requires) and other communication
technologies, including the Company's development of higher capacity coaxial
cable, have resulted in technologies which enable cable television systems to
provide channel capacity in excess of 500 channels. Such expanded channel
capacity, along with other component additions, permit cable operators to offer
full service networks with a variety of capabilities including near
video-on-demand, pay-per-view special events, home shopping networks,
interactive entertainment and education services, telephone services and
high-speed access to data resources such as the Internet. With respect to
expanded channel capacity systems, cable operators have generally adopted, and
the Company believes that for the foreseeable future will continue to adopt, a
cable system using both fiber optic cable and coaxial cable. Such systems
combine the advantages of fiber optic cable in transmitting clear signals over a
long distance without amplification, with the advantages of coaxial cable in
ease of installation, low cost and compatibility with the receiving components
of the customer's communication devices. The Company believes that while system
operators are likely to increase their use of fiber optic cable for the trunk
and feeder portions of the cable systems, there will be an ongoing need for high
capacity coaxial cable for the local distribution and street-to-the-home
portions of the cable system.
U.S. cable system designs are increasingly being employed in international
markets where cable television penetration is low. For example, it is estimated
that in 2001 only 31% of the television households in Europe subscribed to some
form of multichannel television service as compared to an estimated
subscription rate of 69% in the U.S. The estimated subscription rates in the
Asian and Latin American markets are even lower at approximately 30% and 23%,
respectively. In terms of television households, it is estimated that there are
232 million television households in Europe, 470 million in Asia and 83 million
in Latin America. This compares to an estimated 105 million television
households in the U.S. In 2001, the Company had sales of coaxial cable in
approximately 50 countries, and the Company believes the development of cable
television systems in international markets presents a significant opportunity
to increase sales of its coaxial cable products.
The Company is also a leading producer of flat-ribbon cable, a cable made
of wires assembled side by side such that the finished cable is flat.
Flat-ribbon cable is used to connect internal components in systems with space
and component configuration limitations. The product is used in computer and
office equipment components as well as in a variety of telecommunication
applications.
6
<Page>
INTERNATIONAL OPERATIONS
The Company believes that its global presence is an important competitive
advantage as it allows the Company to provide quality products on a timely and
worldwide basis to its multinational customers. Approximately 51% of the
Company's sales for the year ended December 31, 2001 were outside the United
States. Approximately 54% of such international sales were in Europe. The
Company has manufacturing and assembly facilities in the United Kingdom,
Germany, France, the Czech Republic, Estonia and sales offices in most European
markets. The Company's European operations generally have strong positions in
their respective local markets. The balance of the Company's international
activities are located in Asia, Canada, Mexico, Brazil and Australia. Asian
operations include manufacturing facilities in Japan, Taiwan, People's Republic
of China, Korea, India and Malaysia. The Company's international manufacturing
and assembly facilities generally serve the respective local markets, and local
operations coordinate product design and manufacturing responsibility with the
Company's other operations around the world. The Company has low cost
manufacturing and assembly facilities in Mexico, the People's Republic of China,
the Czech Republic and Estonia to serve regional and world markets.
CUSTOMERS
The Company's products are used in a wide variety of applications by
numerous customers, the largest of which accounted for approximately 5% of net
sales for the year ended December 31,2001. The Company sells its products to
over 10,000 customer locations worldwide. The Company's products are sold both
directly to OEMs, cable system operators, telecommunication companies and
through manufacturers' representatives and distributors. There has been a trend
on the part of OEM customers to consolidate their lists of qualified suppliers
to companies that have a global presence, can meet quality and delivery
standards, have a broad product portfolio and design capability, and have
competitive prices. The Company has focused its global resources to position
itself to compete effectively in this environment. The Company has concentrated
its efforts on service and productivity improvements including advanced computer
aided design and manufacturing systems, statistical process controls and
just-in-time inventory programs to increase product quality and shorten product
delivery schedules. The Company's strategy is to provide a broad selection of
products in the areas in which it competes. The Company has achieved a preferred
supplier designation from many of its OEM customers.
The Company's sales to distributors represented approximately 21% of the
Company's 2001 sales. The Company's recognized brand names, including
"Amphenol," "Times Fiber," "Tuchel," "Socapex," "Sine," "Spectra-Strip,"
"Pyle-National," "Matrix," "KaiJack" and others, together with the Company's
strong connector design-in position (products that are specified in customer
drawings), enhance its ability to reach the secondary market through its
network of distributors. The Company believes that its distributor network
represents a competitive advantage.
MANUFACTURING
The Company employs advanced manufacturing processes including molding,
stamping, plating, turning, extruding, die casting and assembly operations as
well as proprietary process technology for flat-ribbon and coaxial cable
production. The Company's manufacturing facilities are generally vertically
integrated operations from the initial design stage through final design and
manufacturing. Outsourcing of certain fabrication processes is used when
cost-effective. Substantially all of the Company's manufacturing facilities are
certified to the ISO9000 series of quality standards.
The Company employs a global manufacturing strategy to lower its production
costs and to improve service to customers. The Company sources its products on a
worldwide basis with manufacturing and assembly
7
<Page>
operations in North and South America, Europe, Asia and Australia. To better
serve high volume OEM customers, the Company has established just-in-time
facilities near major customers.
The Company's policy is to maintain strong cost controls in its
manufacturing and assembly operations. The Company has undertaken programs to
rationalize its production facilities, reduce expenses and maximize the return
on capital expenditures. The programs to improve productivity are ongoing.
The Company purchases a wide variety of raw materials for the manufacture
of its products, including precious metals such as gold and silver used in
plating; aluminum, brass, steel, copper and bimetallic products used for cable,
contacts and connector shells; and plastic materials used for cable and
connector bodies and inserts. Such raw materials are generally available
throughout the world and are purchased locally from a variety of suppliers. The
Company is not dependent upon any one source for raw materials, or if one source
is used the Company attempts to protect itself through long-term supply
agreements.
RESEARCH AND DEVELOPMENT
The Company's research, development and engineering expenditures for the
creation and application of new and improved products and processes were $22.6
million, $23.5 million and $18.5 million for 2001, 2000 and 1999, respectively.
The Company's research and development activities focus on selected product
areas and are performed by individual operating divisions. Generally, the
operating divisions work closely with OEM customers to develop highly-engineered
products that meet customer needs. The Company continues to focus its research
and development efforts primarily on those product areas that it believes have
the potential for broad market applications and significant sales within a
one-to-three year period.
TRADEMARKS AND PATENTS
The Company owns a number of active patents worldwide. While the Company
considers its patents to be valuable assets, the Company does not believe
that its competitive position is dependent on patent protection or that its
operations are dependent on any individual patent. The Company regards its
trademarks "Amphenol," "TimesFiber," "Tuchel," "Socapex," "Sine,"
"Spectra-Strip," "Pyle-National," "Matrix," "KaiJack" and others to be of
value in its businesses. The Company has exclusive rights in all its major
markets to use these registered trademarks.
COMPETITION
The Company encounters competition in substantially all areas of its
business. The Company competes primarily on the basis of engineering, product
quality, price, customer service and delivery time. Competitors include large,
diversified companies, some of which have substantially greater assets and
financial resources than the Company, as well as medium to small companies. In
the area of coaxial cable for cable television, the Company believes that it and
CommScope are the primary world providers of such cable; however, CommScope is
larger than the Company in this market. In addition, the Company faces
competition from other companies that have concentrated their efforts in one or
more areas of the coaxial cable market.
BACKLOG
The Company estimates that its backlog of unfilled orders was $229.0
million and $365.0 million at December 31, 2001 and December 31, 2000,
respectively. Orders typically fluctuate from quarter to quarter based on
customer demands and general business conditions. Unfilled orders may be
cancelled prior to shipment of goods. It is expected that all or a substantial
portion of the backlog will be filled within the next 12 months.
8
<Page>
Significant elements of the Company's business, such as sales to the cable
television industry, distributors, the computer industry, and other commercial
customers, generally have short lead times. Therefore, backlog may not be
indicative of future demand.
EMPLOYEES
As of December 31, 2001, the Company had approximately 10,300 full-time
employees worldwide. Of these employees, approximately 7,500 were hourly
employees and the remainder were salaried. The Company had a one week strike in
October 1995 at its Sidney, New York facility relating to the renewal of the
labor contract at that facility with the International Association of Machinists
and Aerospace Workers. The Company has not had any other significant work
stoppages in the past ten years. In 1997, the United States Steelworkers
International Union, AFL-CIO established a union, affecting approximately 500
employees, at the Company's plant in Chatham, Virginia, the Company's primary
plant for the production of coaxial cable. The Company believes that it has a
good relationship with its unionized and non-unionized employees.
9
<Page>
CAUTIONARY STATEMENTS FOR PURPOSES OF FORWARD LOOKING INFORMATION
Statements made by the Company in written or oral form to various persons,
including statements made in filings with the SEC, that are not strictly
historical facts are "forward looking" statements. Such statements should be
considered as subject to uncertainties that exist in the Company's operations
and business environment. The following includes some, but not all, of the
factors or uncertainties that could cause the Company to fail to conform with
expectations and predictions:
- A global economic slowdown in any one, or all, of the Company's market
segments.
- The effects of extreme changes in monetary and fiscal policies in the U.S.
and abroad including extreme currency fluctuations and unforeseen
inflationary pressures.
- Severe and unforeseen price pressure on the Company's products or
significant cost increases that cannot be recovered through price increases
or productivity improvements.
- Increased difficulties in obtaining a consistent supply of basic materials
like steel, aluminum, copper, bimetallic products, gold or plastic resins
at stable pricing levels.
- Unpredictable difficulties or delays in the development of new product
programs.
- Significant changes in interest rates or in the availability of financing
for the Company or certain of its customers.
- Rapid escalation of the cost of regulatory compliance and litigation.
- Unexpected government policies and regulations affecting the Company or its
significant customers.
- Unforeseen intergovernmental conflicts or actions, including but not
limited to armed conflict and trade wars.
- Difficulties and unanticipated expense of assimilating newly-acquired
businesses.
- Any difficulties in obtaining or retaining the management and other human
resource competencies that the Company needs to achieve its business
objectives.
- The risks associated with any technological shifts away from the Company's
technologies and core competencies. For example, a technological shift away
from the use of coaxial cable in cable television/telecommunication systems
could have a substantial impact on the Company's coaxial cable business.
- Unforeseen interruptions to the Company's business with its largest
customers, distributors and suppliers resulting from, but not limited to,
strikes, financial instabilities, computer malfunctions or inventory
excesses.
10
<Page>
ITEM 2. PROPERTIES
The Company's fixed assets include certain plants and warehouses and a
substantial quantity of machinery and equipment, most of which is general
purpose machinery and equipment using tools and fixtures and in many instances
having automatic control features and special adaptations. The Company's plants,
warehouses, machinery and equipment are in good operating condition, are well
maintained, and substantially all of its facilities are in regular use. The
Company considers the present level of fixed assets along with planned capital
expenditures as suitable and adequate for operations in the current business
environment. At December 31, 2001, the Company operated a total of 76 plants and
warehouses of which (a) the locations in the U.S. had approximately 1.9 million
square feet, of which .8 million square feet were leased; and (b) the locations
outside the U.S. had approximately 2.2 million square feet, of which 1.3 million
square feet were leased.
The Company believes that its facilities are suitable and adequate for the
business conducted therein and are being appropriately utilized for their
intended purposes. Utilization of the facilities varies based on demand for the
products. The Company continuously reviews its anticipated requirements for
facilities and, based on that review, may from time to time acquire or lease
additional facilities and/or dispose of existing facilities.
ITEM 3. LEGAL PROCEEDINGS
The Company and its subsidiaries have been named as defendants in several
legal actions in which various amounts are claimed arising from normal business
activities. Although the amount of any ultimate liability with respect to such
matters cannot be precisely determined, in the opinion of management, such
matters are not expected to have a material effect on the Company's financial
condition or results of operations.
Certain operations of the Company are subject to federal, state and local
environmental laws and regulations which govern the discharge of pollutants into
the air and water, as well as the handling and disposal of solid and hazardous
wastes. The Company believes that its operations are currently in substantial
compliance with all applicable environmental laws and regulations and that the
costs of continuing compliance will not have a material effect on the Company's
financial condition or results of operations.
Subsequent to the acquisition of Amphenol from Allied Signal Corporation in
1987(Allied Signal merged with Honeywell International Inc. in December 1999
("Honeywell")), Amphenol and Honeywell have been named jointly and severally
liable as potentially responsible parties in relation to several environmental
cleanup sites. Amphenol and Honeywell have jointly consented to perform certain
investigations and remedial and monitoring activities at two sites and they have
been jointly ordered to perform work at another site. The responsibility for
costs incurred relating to these three sites is apportioned between Amphenol and
Honeywell based on an agreement entered into in connection with the acquisition
in 1987. For sites covered by this agreement, to the extent that conditions or
circumstances occurred or existed at the time of or prior to the acquisition,
Honeywell is currently obligated to pay 80% of the costs up to $30 million and
100% of the costs in excess of $30 million. At December 31, 2001, approximately
$26 million of costs have been incurred applicable to this agreement. Honeywell
representatives work closely with the Company in addressing the most significant
environmental liabilities.
Owners and occupiers of sites containing hazardous substances, as well as
generators of hazardous substances, are subject to broad liability under various
federal and state environmental laws and regulations, including expenditures for
cleanup and monitoring costs and potential damages arising out of past disposal
activities. Such liability in many cases may be imposed regardless of fault or
the legality of the original disposal
11
<Page>
activity. The Company is currently performing monitoring activities at its
manufacturing site in Sidney, New York. The Company is also performing
monitoring, investigation, design and cleanup activities at three off-site
disposal sites previously utilized by the Company's Sidney facility and
others, the "Richardson Hill" landfill, the "Route 8" landfill and the
"Sidney Center" landfill. The Company and Honeywell have entered into an
administrative consent order with the United States Environmental Protection
Agency (the "EPA") and are presently determining necessary and appropriate
remedial measures for "Richardson Hill", which has been designated a
"Superfund" site on the National Priorities List under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980. With respect
to the second site, the "Route 8" landfill, the Company initiated a
remediation program pursuant to a Consent Order with the New York Department
of Environmental Protection and is continuing to monitor the results of those
remediation efforts. In December 1995, the Company and Honeywell received a
letter from the EPA demanding that the Company and Honeywell accept
responsibility for the investigation and cleanup of the third site, Sidney
Center landfill, another Superfund Site. The Sidney Center landfill was a
municipal landfill site utilized by the Company's Sidney facility and other
local towns and businesses. In 1996, the Company and Honeywell received a
unilateral order from the EPA directing the Company and Honeywell to perform
certain investigation, design and cleanup activities at the Sidney Center
landfill site. The Company and Honeywell responded to the unilateral order by
agreeing to undertake certain remedial design activities. In 1997, the EPA
filed a lawsuit against the Company and Honeywell seeking reimbursement of
past costs expended by the EPA in connection with activities at the Sidney
Center landfill site and seeking to affix liability upon the Company and
Honeywell for all additional costs to be incurred in connection with all
further investigations, design and cleanup activities at the Sidney Center
landfill site. The Company joined four local municipalities as co-defendants
in the lawsuit. In 2001 the Company and Honeywell were ordered by the Court
to pay the EPA approximately $3.5 million, net of contributions by the
municipalities who had been joined as co-defendants in the lawsuit. Pursuant
to that decision the Company and Honeywell will be responsible for completing
the remedial design work and for implementing any agreed remediation plan at
the Sidney Center landfill site. The municipalities who were joined in the
lawsuit have agreed to monitor and maintain any caps installed at the Sidney
Center landfill site as part of any remediation plan. The Company and
Honeywell will be responsible for continuing groundwater monitoring at the
site. The Company is also engaged in remediating or monitoring environmental
conditions at several of its other manufacturing facilities and has been
named as a potentially responsible party for cleanup costs at several other
off-site disposal sites. During 2001, the Company incurred costs of
approximately $.9 million, net of indemnification payments received from
Honeywell, in connection with investigating, remediating and monitoring
environmental conditions at all of these facilities and sites. In 2002
Amphenol expects such expenditures, net of expected indemnification payments
from Honeywell, to be less than $1.0 million.
Since 1987, the Company has not been identified nor has it been named as a
potentially responsible party with respect to any other significant on-site or
off-site hazardous waste matters. In addition, the Company believes that all of
its manufacturing activities and disposal practices since 1987 have been in
material compliance with all applicable environmental laws and regulations.
Nonetheless, it is possible that the Company will be named as a potentially
responsible party in the future with respect to additional Superfund or other
sites. Although the Company is unable to predict with any reasonable certainty
the extent of its ultimate liability with respect to any pending or future
environmental matters, the Company believes, based upon all information
currently known by management about the Company's manufacturing activities,
disposal practices and estimates of liability with respect to all known
environmental matters, that any such liability will not be material to its
financial condition or results of operations.
12
<Page>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
The Annual Meeting of Stockholders was held on May 23, 2001. The following
matters were submitted to and approved by the stockholders: (i) the election of
three directors, Andrew E. Lietz, Martin H. Loeffler and Michael W. Michelson,
each for a three year term expiring in the year 2004; (ii) ratification of
Deloitte & Touche LLP as independent accountants of the Company and (iii) the
approval of the 2000 Stock Purchase and Option Plan for Key Employees of the
Company and its Subsidiaries.
ITEM 4.1 EXECUTIVE OFFICERS
The following table sets forth the name, age and position with the Company
of each person who was an executive officer of Amphenol as of December 31, 2001.
Officers are elected to serve at the discretion of the Board of Directors in
accordance with the By-Laws of the Company. The By-Laws of the Company provide
that the Board of Directors shall elect the officers of the Company at its first
meeting held after the Annual Meeting of Stockholders of the Company. All
officers of the Company are elected to hold office until their successors are
chosen and qualified, or until their earlier resignation or removal.
<Table>
<Caption>
Name Age Position
------------------ --- --------------------------------------
<S> <C> <C>
Martin H. Loeffler 57 Chairman of the Board,
Chief Executive Officer and President
Edward G. Jepsen 58 Executive Vice President
and Chief Financial Officer
Timothy F. Cohane 49 Senior Vice President
Edward C. Wetmore 45 Secretary and General Counsel
Diana G. Reardon 42 Controller and Treasurer
</Table>
Martin H. Loeffler has been a Director of Amphenol since December 1987 and
Chairman of the Board since May 1997. He has been Chief Executive Officer since
May 1996 and President since July 1987.
Edward G. Jepsen has been Executive Vice President and Chief Financial
Officer of Amphenol since May 1989 and Senior Vice President and Director of
Finance since November 1988.
Timothy F. Cohane has been Senior Vice President of Amphenol since December
1994 and a Vice President since 1991.
Edward C. Wetmore has been Secretary and General Counsel of Amphenol since
1987.
Diana G. Reardon has been Treasurer of Amphenol since March 1992 and
Controller since July 1994 and Assistant Controller since June 1988.
13
<Page>
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS
The Company effected the initial public offering of its Class A Common
Stock in November 1991. The Company's common stock has been listed on the New
York Stock Exchange since that time under the symbol "APH." The following table
sets forth on a per share basis the high and low prices for the common stock for
both 2001 and 2000 as reported on the New York Stock Exchange.
<Table>
<Caption>
2001 2000
---------------- ----------------
High Low High Low
---- ----- ----- -----
<S> <C> <C> <C> <C>
First Quarter 50.75 28.30 52.13 30.31
Second Quarter 57.99 29.11 66.50 43.19
Third Quarter 45.95 32.00 70.38 48.38
Fourth Quarter 52.95 32.50 68.25 32.00
</Table>
As of February 28, 2002 there were 98 holders of record of the Company's
common stock. A significant number of outstanding shares of common stock are
registered in the name of only one holder, which is a nominee of The Depository
Trust Company, a securities depository for banks and brokerage firms. The
Company believes that there are a significant number of beneficial owners of its
common stock.
Since its initial public offering in 1991, the Company has not paid any
cash dividends on its common stock and it does not have any present intention to
commence payment of any cash dividends. The Company intends to retain earnings
to provide funds for the operation and expansion of the Company's business and
to repay outstanding indebtedness.
Currently the Company is restricted from declaring and paying any cash
dividends on, or repurchasing the Company's common stock under certain covenants
contained in the Company's debt agreements.
Partnerships affiliated with Kohlberg Kravis Roberts & Co. L.P. ("KKR")
owned 49.4% of the Company's Class A Common Stock as of December 31, 2001.
14
<Page>
ITEM 6. SELECTED FINANCIAL DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<Table>
<Caption>
YEAR ENDED DECEMBER 31,
- -------------------------------------------------------------------------------------------------------------------
2001 2000 1999 1998 1997
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
OPERATIONS
Net sales $ 1,103,771 $ 1,359,702 $ 1,010,603 $ 918,877 $ 884,348
Income before
extraordinary item 83,710 107,904 44,295 36,510 51,264
Extraordinary loss (8,674) (24,547)
Net income 83,710 107,904 35,621 36,510 26,717
Net income per common share-Diluted:
Income before extraordinary item 1.95 2.52 1.21 1.02 .92
Extraordinary loss (.24) (.44)
Net income 1.95 2.52 .97 1.02 .48
FINANCIAL POSITION
Working capital $ 166,857 $ 170,131 $ 189,252 $ 163,508 $ 137,526
Total assets 1,026,743 1,004,322 836,376 807,401 737,154
Current portion of long-term debt 59,705 28,130 16,829 1,655 212
Long-term debt 660,614 700,216 745,658 952,469 937,277
Shareholders' equity (deficit) 103,933 29,234 (81,166) (292,257) (343,125)
Weighted average shares
outstanding - diluted 42,997,121 42,878,922 36,664,016 35,884,794 56,005,954
</Table>
15
<Page>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of the results of operations for the
three fiscal years ended December 31, 2001 has been derived from and should be
read in conjunction with the consolidated financial statements contained herein.
RESULTS OF OPERATIONS
The following table sets forth the components of net income before
extraordinary item as a percentage of net sales for the periods indicated.
<Table>
<Caption>
YEAR ENDED DECEMBER 31,
- -------------------------------------------------------------------------------------
2001 2000 1999
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales 100.0% 100.0% 100.0%
Cost of sales, excluding depreciation and amortization 63.8 65.2 65.7
Depreciation and amortization expense 2.9 2.1 2.8
Selling, general and administrative expense 14.1 13.7 14.4
Amortization of goodwill 1.3 1.0 1.2
----- ----- -----
Operating income 17.9 18.0 15.9
Interest expense (5.1) (4.6) (7.9)
Other expenses, net (.5) (.7) (.5)
----- ----- -----
Income before income taxes and extraordinary item 12.3 12.7 7.5
Provision for income taxes (4.7) (4.8) (3.1)
----- ----- -----
Net income before extraordinary item 7.6% 7.9% 4.4%
===== ===== =====
</Table>
2001 COMPARED TO 2000
Net sales were $1,103.8 million for the year ended December 31, 2001
compared to $1,359.7 million for 2000. Sales of interconnect products and
assemblies decreased 10% compared to 2000 ($906.8 million in 2001 versus
$1,009.2 million in 2000). Such decrease is primarily attributable to
decreased sales of products and interconnect systems for telecom
infrastructure, datacom and industrial markets. Such declines were partially
offset by increased sales of products and interconnect systems for military
aerospace and automotive markets. Sales of cable products decreased 44%
compared to 2000 ($197.0 million in 2001 versus $350.5 million in 2000). Such
decrease is primarily attributable to a slowdown in capital spending by
certain U.S. and international cable television operators.
Geographically, sales in the U.S. in 2001 decreased approximately 22%
compared to 2000 ($538.3 million in 2001 versus $690.7 million in 2000);
international sales for 2001, including export sales, decreased approximately
15% in U.S. dollars ($565.5 million in 2001 versus $669.0 million in 2000) and
decreased approximately 12% in local currency compared to 2000. The
comparatively strong U.S. dollar in 2001 had the currency effect of decreasing
net sales by approximately $22.8 million when compared to foreign currency
translation rates in 2000.
The gross profit margin as a percentage of net sales (including
depreciation in cost of sales) remained relatively constant at approximately 33%
for both 2001 and 2000. Cost reduction activities in 2001 contributed to
offsetting the adverse effect of lower sales volume.
Selling, general and administrative expenses as a percentage of sales
remained relatively constant at approximately 14% for both 2001 and 2000.
Interest expense was $56.1 million for 2001 compared to $61.7 million for
2000. The decrease is primarily attributable to lower average debt levels and
lower interest rates.
Other expenses, net for 2001 and 2000 was $5.6 million and $9.5 million,
respectively. See Note 8 to the Company's Consolidated Financial Statements for
details of the components of other expenses, net.
The provision for income taxes was at an effective rate of 38% for both
2001 and 2000.
2000 COMPARED TO 1999
Net sales were $1,359.7 million for the year ended December 31, 2000
compared to $1,010.6 million for 1999. Sales of interconnect products and
assemblies increased 31% compared to 1999 ($1,009.2 million in 2000 versus
$770.0 million in 1999). Such increase is primarily attributable to increased
sales of products and interconnect systems for internet equipment and
16
<Page>
upgrades, wireless network infrastructures and mobile handsets. In addition,
sales of interconnect products for industrial and aerospace applications
experienced growth in 2000. Sales of cable products increased 46% compared to
1999 ($350.5 million in 2000 versus $240.6 million in 1999). Sales of coaxial
cable for cable television increased as cable operators continued to upgrade
and expand their systems to offer enhanced services.
Geographically, sales in the U.S. in 2000 increased approximately 33%
compared to 1999 ($690.7 million in 2000 versus $519.5 million in 1999);
international sales for 2000, including export sales, increased approximately
36% in U.S.dollars ($669.0 million in 2000 versus $491.1 million in 1999) and
increased approximately 44% in local currency compared to 1999. The
comparatively strong U.S. dollar in 2000 had the currency effect of
decreasing net sales by approximately $36.1 million when compared to foreign
currency translation rates in 1999.
The gross profit margin as a percentage of net sales (including
depreciation in cost of sales) increased approximately 1% for 2000 compared to
1999. The increase in gross profit margin is primarily attributable to changes
in product mix and the absorption of fixed costs over higher sales volume.
Selling, general and administrative expenses as a percentage of sales
remained relatively constant at approximately 14% in 2000 compared to 1999.
Interest expense was $61.7 million for 2000 compared to $79.3 million 1999.
The decrease is primarily attributable to lower average debt levels.
Other expenses, net for 2000 and 1999 was $9.5 million and $5.3 million,
respectively. See Note 8 to the Company's Consolidated Financial Statements for
details of the components of other expenses, net.
The provision for income taxes for 2000 was at an effective rate of 38%
compared to an effective rate of 42% in 1999. The decrease is generally
attributable to non-deductible expenses (goodwill amortization) being a lower
percentage of pretax income.
LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operating activities totaled $118.9 million, $154.2
million, and $64.1 million for 2001, 2000 and 1999, respectively. The decrease
in cash from operating activities in 2001 compared to 2000 is primarily
attributable to a decrease in net income adjusted for depreciation and
amortization charges and to a net increase in non-cash components of working
capital. In 2000, the increase in cash from operating activities is primarily
attributable to an increase in net income adjusted for depreciation and
amortization charges.
Cash from operating activities was used for capital expenditures ($38.6
million, $53.1 million and $23.5 million in 2001, 2000 and 1999, respectively),
and acquisitions ($60.5 million, $67.7 million, and $12.3 million in 2001, 2000
and 1999, respectively).
The Company has a bank loan agreement (Bank Agreement) which includes a
Term Loan, encompassing a Tranche A and B, and a $150 million revolving credit
facility. At December 31, 2001, the Tranche A had a balance of $242.7 million
and matures over the period 2002 to 2004,and the Tranche B had a balance of
$284.5 million and matures over the period 2005 and 2006. The revolving credit
facility expires in 2004; and, availability under the facility at December 31,
2001 was $127.6 million, after reduction of $7.3 million for outstanding letters
of credit. The Bank Agreement is secured by a first priority pledge of 100% of
the capital stock of the Company's direct domestic subsidiaries and 65% of the
capital stock of direct material foreign subsidiaries, as defined in the Bank
Agreement. The Bank Agreement also requires that the Company satisfy certain
financial covenants including interest coverage and leverage ratio tests, and
includes limitations with respect to, among other things, indebtedness and
restricted payments, including dividends on the Company's common stock.
The Company has entered into interest rate swap agreements that effectively
fixed the Company's interest cost on $450 million of borrowings under the Bank
Agreement. These agreements expire in 2002.
A subsidiary of the Company has an agreement with a financial institution
whereby the subsidiary can sell an undivided interest of up to $85.0 million in
a designated pool of qualified accounts receivable. The agreement expires in May
2004 with respect to $60.0 million of accounts receivable and expires in July
2002 with respect to an additional $25.0 million of accounts receivable. At
December 31, 2001 approximately $74.2 million of receivables were sold under the
agreement and are therefore not reflected in the accounts receivable balance in
the accompanying Consolidated Balance Sheet.
The Company's EBITDA, as defined in the Bank Agreement, was $253.1 million
and $298.9 million for 2001 and 2000, respectively. EBITDA is not a defined term
under Generally Accepted Accounting Principles (GAAP) and is not an alternative
to operating income or cash flow from operations as determined under GAAP. The
Company believes that EBITDA provides additional information for determining its
ability to meet future debt service requirements; however, EBITDA does not
reflect cash available to fund cash requirements.
The Company's primary ongoing cash requirements will be for operating and
capital expenditures, product development activities and debt service
requirements. The Company's debt service requirements consist primarily of
principal and interest on bank borrowings and interest on its 9 7/8% Senior
Subordinated Notes due 2007("Notes"). The Company's primary sources of liquidity
are internally generated cash
17
<Page>
flow, the Company's revolving credit facility and the sale of receivables under
the Company's current sale of accounts receivable agreement. The Company expects
that operating and capital expenditures, product development activities and debt
service requirements will be funded from these sources; however, the Company's
sources of liquidity could be adversely affected by a decrease in demand for the
Company's products, a deterioration in certain of the Company's financial ratios
or a deterioration in the quality of the Company's accounts receivable.
The Company has not paid, and does not have any present intention to
commence payment of, cash dividends on its common stock. The Company expects
that capital expenditures in 2002 will be approximately $40 million. The
Company's required debt amortization in 2002 is $60 million; the Company's
required cash interest payments for 2002, at current interest rates, are
estimated at approximately $50 million. The Company may also use cash to fund
part or all of the cost of future acquisitions.
In December 1999, the Company sold 2.75 million shares of common stock in a
public offering resulting in net proceeds of $181.8 million. $105.5 million of
such proceeds was used to redeem $96 million principal amount of Notes at a
price of 109.875% and the balance of the proceeds was used to pay down term debt
under the Bank Agreement. The redemption of Notes resulted in an extraordinary
loss for the early extinguishment of debt(consisting of a prepayment premium and
the write off of related deferred debt issuance costs) of $13.6 million, less
tax benefits of $4.9 million.
ENVIRONMENTAL MATTERS
Subsequent to the acquisition of Amphenol from Allied Signal Corporation in
1987 (Allied Signal merged with Honeywell International Inc. in December 1999
("Honeywell")), Amphenol and Honeywell have been named jointly and severally
liable as potentially responsible parties in relation to several environmental
cleanup sites. Amphenol and Honeywell have jointly consented to perform certain
investigations and remedial and monitoring activities at two sites and they have
been jointly ordered to perform work at another site. The responsibility for
costs incurred relating to these three sites is apportioned between Amphenol and
Honeywell based on an agreement entered into in connection with the acquisition
in 1987. For sites covered by this agreement, to the extent that conditions or
circumstances occurred or existed at the time of or prior to the acquisition,
Honeywell is currently obligated to pay 80% of the costs up to $30 million and
100% of the costs in excess of $30 million. At December 31, 2001, approximately
$26 million of costs have been incurred applicable to this agreement. Honeywell
representatives work closely with the Company in addressing the most
significant environmental liabilities. Management does not believe that the
costs associated with resolution of these or any other environmental matters
will have a material adverse effect on the Company's financial condition or
results of operations.
INFLATION AND COSTS
The cost of the Company's products is influenced by the cost of a wide
variety of raw materials, including precious metals such as gold and silver used
in plating; aluminum, copper, brass and steel used for contacts, shells and
cable; and plastic materials used in molding connector bodies, inserts and
cable. In general, increases in the cost of raw materials, labor and services
have been offset by price increases, productivity improvements and cost saving
programs.
RISK MANAGEMENT
The Company has to a significant degree mitigated its exposure to currency
risk in its business operations by manufacturing and procuring its products in
the same country or region in which the products are sold so that costs reflect
local economic conditions. In other cases involving U.S. export sales, raw
materials are a significant component of product costs for the majority of such
sales and raw material costs are generally dollar based on a worldwide scale,
such as basic metals and petroleum derived materials.
RECENT ACCOUNTING CHANGES
In June 2001, the Financial Accounting Standards Board, ("FASB") issued
FAS No. 141 "Business Combinations" and No. 142 "Goodwill and Other Intangible
Assets." Among other provisions, all future business combinations will be
accounted for using the purchase method of accounting and the use of the pooling
of interest method is prohibited. In addition, goodwill will no longer be
amortized but will be subject to impairment tests at least annually. The Company
adopted FAS No. 141 effective July 1, 2001 and will adopt FAS No. 142 effective
January 1, 2002, although certain provisions were applied to an acquisition that
closed subsequent to June 30, 2001. Such application had the effect of reducing
amortization of goodwill expense in 2001 by approximately $.4 million. While the
Company is in the process of evaluating the effect of this new standard, it
anticipates that discontinuing of the amortization of goodwill beginning in 2002
will have the effect of reducing expenses by approximately $14.5 million; and,
the Company does not anticipate that it will recognize an impairment loss of
goodwill on adoption of such standard.
In August 2001, the Financial Accounting Standards Board issued FAS
No. 143, "Accounting for Asset Retirement Obligations." This pronouncement
addresses the recognition and remeasurement of obligations associated with the
retirement of tangible long-lived assets. In October 2001, the
18
<Page>
FASB issued FAS No. 144, "Accounting for the Impairment or Disposal of Long-
Lived Assets," which addresses accounting and reporting for the impairment or
disposal of long-lived assets, including discontinued operations. The Company
will adopt FAS No. 143 and FAS No. 144 effective January 1, 2002. The Company
is in the process of evaluating the effect these new standards will have on
the Company's financial statements.
EURO CURRENCY CONVERSION
On January 1, 1999, certain member countries of the European Union
established fixed conversion rates between their existing currencies and the
European Union's common currency (the "euro"). The transition period for the
introduction of the euro began on January 1,1999. Beginning January 1, 2002, the
participating countries issued new euro-denominated bills and coins for use in
cash transactions. No later than July 1, 2002, the participating countries will
withdraw all bills and coins denominated in the legacy currencies, so that the
legacy currencies will no longer be legal tender for any transactions, making
the conversion to the euro complete.
Based on progress to date, the Company believes that the use of the euro
will not have a significant impact on the manner in which it conducts its
business. Accordingly, conversion to the euro is not expected to have a material
effect on the Company's consolidated financial position, consolidated results of
operations, or liquidity.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the consolidated financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates. The Company's significant accounting
policies are set forth below.
Revenue Recognition - Sales and related cost of sales are recognized upon
shipment of products. Allowances for estimated uncollectible accounts,
discounts, returns and allowances are provided based upon historical experience,
current trends and specific information which indicates that an allowance is
appropriate.
Inventories-Inventories are stated at the lower of standard cost, which
approximates average cost, or market. Provisions for slow moving and obsolete
inventory are provided based on historical experience and product demand.
Depreciable Assets - Property, plant and equipment are carried at cost less
accumulated depreciation. The appropriateness and the recoverablility of the
carrying value of such assets is periodically reviewed taking into consideration
current and expected business conditions.
The significant accounting policies are more fully described in Note 1 to
the Company's Consolidated Financial Statements.
ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company, in the normal course of doing business, is exposed to the
risks associated with foreign currency exchange rates and changes in interest
rates.
FOREIGN CURRENCY EXCHANGE RATE RISK
The Company conducts business in several major international currencies
through its worldwide operations, and as a result is subject to foreign exchange
exposures due to changes in exchange rates of the various currencies. Changes in
exchange rates can positively or negatively effect the Company's sales, gross
margins and retained earnings. The Company attempts to minimize currency
exposure risk by producing its products in the same country or region in which
the products are sold and thereby generating revenues and incurring expenses in
the same currency and by managing its working capital; although there can be no
assurance that this approach will be successful, especially in the event of a
significant and sudden decline in the value of any of the international
currencies of the Company's worldwide operations. The Company does not engage
in purchasing forward exchange contracts for speculative purposes.
INTEREST RATE RISK
The Company is subject to market risk from exposure to changes in interest
rates based on its financing activities. The Company utilizes interest rate swap
agreements to manage and mitigate its exposure to changes in interest rates. At
December 31, 2001, the Company had interest rate volatility protection in the
form of such swaps that effectively fixed the Company's LIBOR interest rate on
$450 million of floating rate bank debt at 5.76%. At December 31, 2001, the
three month LIBOR rate was 1.9%. These swap agreements expire in 2002. A 10%
change in the LIBOR interest rate at December 31, 2001 would have the effect of
increasing or decreasing interest expense by approximately $.5 million. The
Company does not expect changes in interest rates to have a material effect on
income or cash flows in 2002, although there can be no assurances that interest
rates will not significantly change.
19
<Page>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF MANAGEMENT
Management is responsible for the integrity and objectivity of the
financial statements and other information appearing in this annual report on
Form 10-K. The financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America and
include amounts based on management's best estimates and judgments. The Company
maintains a system of internal accounting controls and procedures intended to
provide reasonable assurance that assets are safeguarded and transactions are
properly recorded and accounted for in accordance with management's
authorization.
Deloitte & Touche LLP has been engaged to audit the financial statements in
accordance with auditing standards generally accepted in the United States of
America. They obtain an understanding of the Company's accounting policies and
controls, and conduct such tests and related procedures as they consider
necessary to arrive at their opinion. The Board of Directors has appointed an
Audit Committee composed of outside directors. The Audit Committee meets
periodically with representatives of management and Deloitte & Touche LLP to
discuss and review their activities with respect to internal accounting controls
and financial reporting and auditing.
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and
Shareholders of Amphenol Corporation
We have audited the accompanying consolidated balance sheets of Amphenol
Corporation and subsidiaries as of December 31, 2001 and 2000, and the related
consolidated statements of income, changes in shareholders' equity, and cash
flows for each of the three years in the period ended December 31, 2001. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of Amphenol Corporation and
subsidiaries as of December 31, 2001 and 2000, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 2001 in conformity with accounting principles generally accepted in
the United States of America.
/s/ Deloitte & Touche LLP
Hartford, Connecticut
January 15, 2002
20
<Page>
CONSOLIDATED STATEMENT OF INCOME
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<Table>
<Caption>
YEAR ENDED DECEMBER 31,
- ------------------------------------------------------------------------------------------------------------------
2001 2000 1999
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales $ 1,103,771 $ 1,359,702 $ 1,010,603
Costs and expenses:
Cost of sales, excluding depreciation and amortization 704,278 886,385 663,978
Depreciation and amortization expense 32,316 29,448 27,673
Selling, general and administrative expense 155,810 186,052 145,852
Amortization of goodwill 14,340 13,394 12,371
----------- ------------- -------------
Operating income 197,027 244,423 160,729
Interest expense (56,099) (61,710) (79,297)
Other expenses, net (5,573) (9,495) (5,262)
------------ ------------- -------------
Income before income taxes and extraordinary item 135,355 173,218 76,170
Provision for income taxes (51,645) (65,314) (31,875)
------------ ------------- -------------
Income before extraordinary item 83,710 107,904 44,295
Extraordinary item:
Loss on early extinguishment of debt, net of taxes (8,674)
------------ ------------- -------------
Net income $ 83,710 $ 107,904 $ 35,621
============ ============= =============
Net income per common share - Basic:
Income before extraordinary item $ 2.00 $ 2.59 $ 1.23
Extraordinary loss (.24)
------------ ------------- -------------
Net income $ 2.00 $ 2.59 $ .99
============= ============= =============
Average common shares outstanding 41,920,616 41,584,069 36,059,556
Net income per common share - Diluted:
Income before extraordinary item $ 1.95 $ 2.52 $ 1.21
Extraordinary loss (.24)
------------- ------------- -------------
Net income $ 1.95 $ 2.52 $ .97
============== ============= =============
Average common shares outstanding 42,997,121 42,878,922 36,664,016
</Table>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
21
<Page>
CONSOLIDATED BALANCE SHEET
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<Table>
<Caption>
DECEMBER 31,
- --------------------------------------------------------------------------------------------------------------
2001 2000
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and short-term cash investments $ 27,975 $ 24,585
Accounts receivable, less allowance for
doubtful accounts of $5,191 and $3,044 113,370 170,222
Inventories:
Raw materials and supplies 35,808 37,191
Work in process 119,627 118,961
Finished goods 52,881 41,474
------------- ------------
208,316 197,626
Prepaid expenses and other assets 20,596 20,237
------------- ------------
Total current assets 370,257 412,670
------------- ------------
Land and depreciable assets:
Land 11,430 11,053
Buildings 89,104 79,601
Machinery and equipment 315,554 299,330
------------- ------------
416,088 389,984
Less accumulated depreciation (251,201) (228,999)
------------- ------------
164,887 160,985
Deferred debt issuance costs 5,795 8,030
Excess of cost over fair value of net assets acquired - net 460,442 411,182
Other assets 25,362 11,455
------------- ------------
$ 1,026,743 $ 1,004,322
============= ============
LIABILITIES & SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 80,501 $ 122,010
Accrued interest 8,499 10,731
Accrued salaries, wages and employee benefits 24,700 32,585
Other accrued expenses 29,995 49,083
Current portion of long-term debt 59,705 28,130
------------- ------------
Total current liabilities 203,400 242,539
------------- ------------
Long-term debt 660,614 700,216
Deferred taxes and other liabilities 58,796 32,333
Commitments and contingent liabilities (Notes 2, 6 and 9)
Shareholders' Equity:
Class A Common Stock, $.001 par value; 100,000,000 shares authorized;
42,300,068 and 41,686,887 shares outstanding at December 31, 2001
and 2000, respectively 42 42
Additional paid-in deficit (280,224) (305,464)
Accumulated earnings 442,096 358,386
Accumulated other comprehensive loss (57,981) (23,730)
-------------- -------------
Total shareholders' equity 103,933 29,234
-------------- -------------
$ 1,026,743 $ 1,004,322
============== =============
</Table>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
22
<Page>
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<Table>
<Caption>
ADDITIONAL ACCUMULATED TOTAL
PAID-IN OTHER SHAREHOLDERS'
COMMON CAPITAL COMPREHENSIVE ACCUMULATED COMPREHENSIVE EQUITY
STOCK (DEFICIT) INCOME EARNINGS LOSS (DEFICIT)
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE DECEMBER 31, 1998 $ 36 $ (499,946) $ 214,861 $ (7,208) $ (292,257)
Comprehensive income:
Net income [$ 35,621] 35,621 35,621
------------
Other comprehensive loss,
net of tax:
Translation adjustments (5,820) (5,820) (5,820)
------------
Comprehensive income [$ 29,801]
============
Deferred compensation 180 180
Sale of 5,500,000 shares of
common stock 5 181,105 181,110
----------- ----------- ------------ ------------- --------------
BALANCE DECEMBER 31, 1999 41 (318,661) 250,482 (13,028) (81,166)
Comprehensive income:
Net income [$ 107,904] 107,904 107,904
------------
Other comprehensive loss,
net of tax:
Translation adjustments (10,702) (10,702) (10,702)
-------------
Comprehensive income [$ 97,202]
=============
Stock options exercised,
including tax benefit 2,501 2,501
Deferred compensation 180 180
279,414 shares issued in
connection with acquisitions 1 10,516 10,517
----------- ----------- ------------ ------------- --------------
BALANCE DECEMBER 31, 2000 42 (305,464) 358,386 (23,730) 29,234
Comprehensive income:
Net income [$ 83,710] 83,710 83,710
-------------
Other comprehensive loss,
net of tax:
Translation adjustments (9,612) (9,612) (9,612)
Revaluation of interest
rate derivatives (8,837) (8,837) (8,837)
Minimum pension liability
adjustment (15,802) (15,802) (15,802)
-------------
Other comprehensive loss (34,251)
-------------
Comprehensive income [$ 49,459]
=============
Deferred compensation 240 240
606,796 shares issued in
connection with acquisition 25,000 25,000
----------- ----------- ------------ ------------- --------------
BALANCE DECEMBER 31, 2001 $ 42 $ (280,224) $ 442,096 $ (57,981) $ 103,933
=========== =========== ============ ============= ==============
</Table>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
23
<Page>
CONSOLIDATED STATEMENT OF CASH FLOW
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<Table>
<Caption>
YEAR ENDED DECEMBER 31,
- ----------------------------------------------------------------------------------------------------------
2001 2000 1999
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net income $ 83,710 $107,904 $ 35,621
Adjustments for cash from operations:
Depreciation and amortization 32,316 29,448 27,673
Amortization of goodwill 14,340 13,394 12,371
Amortization of deferred debt issuance costs 2,235 2,237 2,733
Net extraordinary loss on early extinguishment of debt 8,674
Net change in:
Accounts receivable 74,924 (70,879) (27,793)
Inventory (2,793) (4,402) (9,795)
Prepaid expenses and other assets (1,331) 1,213 (2,856)
Accounts payable (44,206) 41,440 2,646
Accrued liabilities (34,470) 26,257 12,792
Accrued interest (2,099) 1,332 (2,262)
Accrued pension and post employment benefits (1,827) 2,052 1,113
Deferred taxes and other liabilities (1,492) 6,886 2,887
Other (457) (2,729) 291
-------- -------- --------
Cash flow provided by operations 118,850 154,153 64,095
-------- -------- --------
Cash flow from investing activities:
Additions to property, plant and equipment (38,555) (53,105) (23,464)
Investments in acquisitions (60,518) (67,716) (12,274)
-------- -------- --------
Cash flow used by investing activities (99,073) (120,821) (35,738)
-------- -------- --------
Cash flow from financing activities:
Net change in borrowings under revolving credit facilities 24,413 (6,308) (14,328)
Decrease in borrowings under Bank Agreement (30,000) (42,252) (80,500)
Repurchase of Senior Subordinated Notes (105,480)
Net change in receivables sold (10,800) 25,000
Proceeds from exercise of stock options 1,915
Sale of common stock 181,754
-------- -------- --------
Cash flow used by financing activities (16,387) (21,645) (18,554)
-------- -------- --------
Net change in cash and short-term cash investments 3,390 11,687 9,803
Cash and short-term cash investments balance, beginning of period 24,585 12,898 3,095
-------- -------- --------
Cash and short-term cash investments balance, end of period $ 27,975 $ 24,585 $ 12,898
======== ======== ========
Cash paid during the year for:
Interest $ 55,425 $ 58,521 $ 78,091
Income taxes paid, net of refunds 60,662 54,429 20,285
</Table>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
24
<Page>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
OPERATIONS
Amphenol Corporation ("Amphenol" or the "Company") is in two business
segments which consist of manufacturing and selling interconnect products and
assemblies, and manufacturing and selling cable products.
USE OF ESTIMATES
The preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the consolidated financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company
and its subsidiaries. All intercompany transactions have been eliminated in
consolidation.
CASH AND SHORT-TERM CASH INVESTMENTS
Cash and short-term cash investments consist of cash and liquid investments
with an original maturity of less than three months. The carrying amount
approximates fair value of those instruments.
INVENTORIES
Inventories are stated at the lower of standard cost, which approximates
average cost, or market. The principal components of cost included in
inventories are materials, direct labor and manufacturing overhead.
DEPRECIABLE ASSETS
Property, plant and equipment are carried at cost. Depreciation and
amortization of property, plant and equipment are provided on a straight-line
basis over the respective asset lives determined on a composite basis by asset
group or on a specific item basis using the estimated useful lives of such
assets which range from 3 to 12 years for machinery and equipment and 20 to 40
years for buildings. It is the Company's policy to periodically review fixed
asset lives.
DEFERRED DEBT ISSUANCE COSTS
Deferred debt issuance costs are being amortized on the interest method
over the term of the related debt and such amortization is included in interest
expense.
EXCESS OF COST OVER FAIR VALUE OF NET ASSETS ACQUIRED
Through December 31, 2001, for acquisitions completed prior to July 1,
2001, the excess of cost over the fair value of net assets acquired (goodwill)
was being amortized on the straight-line basis over a period of 40 years.
Accumulated amortization is $148,779 and $134,439 at December 31, 2001 and
2000, respectively. Effective July 1, 2001, the Company adopted the
provisions of Financial Accounting Standards ("FAS") No. 141, "Business
Combinations" and No. 142, "Goodwill and Other Intangible Assets," applicable
to business combinations completed after June 30, 2001. In accordance with
these standards, goodwill resulting from acquisitions after June 30, 2001 is
not amortized and beginning January 1, 2002, goodwill for acquisitions
completed prior to July 1, 2001 will not be amortized. The Company will adopt
the additional provisions of FAS No. 142 effective January 1, 2002, which
include provisions for annual evaluations for impairment of goodwill. The
Company is in the process of evaluating the effect of this new standard;
however, it anticipates that discontinuing the amortization of goodwill
beginning in 2002 will have the effect of reducing expenses by approximately
$14.5 million; and, the Company does not anticipate that it will recognize an
impairment loss of goodwill on adoption of such standard.
REVENUE RECOGNITION
Sales and related cost of sales are recognized upon shipment of products.
RETIREMENT PENSION PLANS
Costs for retirement pension plans include current service costs and
amortization of prior service costs over periods of up
25
<Page>
to thirty years. It is the Company's policy to fund current pension costs taking
into consideration minimum funding requirements and maximum tax deductible
limitations. The expense of retiree medical benefit programs is recognized
during the employees' service with the Company as well as amortization of a
transition obligation recognized on adoption of the accounting principle.
INCOME TAXES
Deferred income taxes are provided for revenue and expenses which are
recognized in different periods for income tax and financial statement purposes.
Deferred income taxes are not provided on undistributed earnings of foreign
affiliated companies which are considered to be permanently invested.
RESEARCH AND DEVELOPMENT
Research, development and engineering expenditures for the creation and
application of new and improved products and processes were $22,604, $23,505 and
$18,467, for the years 2001, 2000 and 1999, respectively.
ENVIRONMENTAL OBLIGATIONS
The Company recognizes the potential cost for environmental remediation
activities when assessments are made, remedial efforts are probable and related
amounts can be reasonably estimated; potential insurance reimbursements are not
recorded. The Company regularly assesses its environmental liabilities through
reviews of contractual commitments, site assessments, feasibility studies and
formal remedial design and action plans.
NET INCOME PER COMMON SHARE
Basic income per common share is based on the net income for the period
divided by the weighted average common shares outstanding. Diluted income per
common share assumes the exercise of outstanding, dilutive stock options using
the treasury stock method. In April 2000, the Company effected a two-for-one
split of its common stock; all share and per-share amounts in the financial
statements have been restated to reflect the split.
DERIVATIVE FINANCIAL INSTRUMENTS
Derivative financial instruments, which are periodically used by the
Company in the management of its interest rate and foreign currency exposures,
are accounted for on an accrual basis. Income and expense are recorded in the
same category as that arising from the related asset or liability. For example,
amounts to be paid or received under interest rate swap agreements are
recognized as an increase or decrease of interest expense in the periods in
which they accrue.
In June 1998 the Financial Accounting Standards Board issued FAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." The statement
requires that an entity recognize all derivatives as either assets or
liabilities in the Consolidated Balance Sheet and measure those instruments
at fair value. The accounting for changes in the fair value of a derivative
(that is, gains and losses) depends on the intended use of the derivative and
its resulting designation. The Company adopted FAS 133, as amended by FAS
138, beginning January 1, 2001. Adoption of this new accounting standard
resulted in a cumulative after-tax gain of $291 in accumulated other
comprehensive income as of that date. Gains and losses on derivatives
designated as cash flow hedges resulting from changes in fair value are
recorded in other comprehensive income, and subsequently reflected in net
income in a manner that matches the timing of the actual income or expense of
such instruments with the hedged transaction.
NOTE 2 - LONG-TERM DEBT
Long-term debt consists of the following:
<Table>
<Caption>
DECEMBER 31,
- ---------------------------------------------------------------------------------------------
INTEREST RATE AT
DECEMBER 31, 2001 MATURITY 2001 2000
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Bank Agreement:
Term Loan 6.35% 2002-2006 $ 527,248 $ 557,248
Revolving Credit Facility 3.29% 2004 15,100
Senior Subordinated Notes 9.875% 2007 144,000 144,000
Notes payable to foreign banks and other debt 1.0%-9.5% 2002-2004 33,971 27,098
--------- ----------
720,319 728,346
Less current portion 59,705 28,130
--------- ----------
Total long-term debt $ 660,614 $ 700,216
========= ==========
- ---------------------------------------------------------------------------------------------
</Table>
26
<Page>
The Company has a bank loan agreement (Bank Agreement) which includes a
Term Loan, encompassing a Tranche A and B, and a $150,000 revolving credit
facility. At December 31, 2001 the Tranche A had a balance of $242,748 and
matures over the period 2002 to 2004, and the Tranche B had a balance of
$284,500 and matures over the period 2005 and 2006. The revolving credit
facility expires in 2004; availability under the facility at December 31, 2001
was $127,624, after reduction of $7,276 for outstanding letters of credit.
At December 31, 2001, interest under the Bank Agreement generally accrues
at .75% to 1.50% over LIBOR. The Company also pays certain annual agency and
commitment fees. At December 31, 2001, the Company had interest rate protection
in the form of swap agreements that effectively fixed the Company's LIBOR
interest rate on $450,000 of floating rate bank debt at 5.76%. These agreements
expire in 2002. While it is not the Company's intention to terminate the
interest rate swap agreements, the fair values were estimated by obtaining
quotes from brokers which represented the amounts that the Company would receive
or pay if the agreements were terminated. These fair values indicated that
termination of the agreements at December 31, 2001 and 2000 would have resulted
in a pre-tax loss of $14,631 and a pre-tax gain of $448, respectively. At
December 31, 2001 the derivatives loss, net of tax, of $8,837 was recorded in
other comprehensive income. Due to the volatility of interest rates, these
estimated results may or may not be realized.
The Bank Agreement is secured by a first priority pledge of 100% of the
capital stock of the Company's direct domestic subsidiaries and 65% of the
capital stock of direct material foreign subsidiaries, as defined in the Bank
Agreement. The Bank Agreement also requires that the Company satisfy certain
financial covenants including interest coverage and leverage ratio tests, and
includes limitations with respect to, among other things, (i) incurring debt,
(ii) creating or incurring liens, (iii) making other investments, (iv) acquiring
or disposing of assets, (v) capital expenditures, and (vi) restricted payments,
including dividends on the Company's common stock.
The 9 7/8% Senior Subordinated Notes due 2007 ("Notes") are general
unsecured obligations of the Company. The Notes are subject to redemption at the
option of the Company, in whole or in part, beginning in 2002 at 104.938% and
declining to 100% by 2005. In December 1999, the Company funded the redemption
of $96,000 principal amount of Notes at a price of 109.875% plus accrued
interest. Such funding was from a portion of the proceeds received on issuance
of 5.5 million shares of common stock. The redemption resulted in an
extraordinary loss for the early extinguishment of debt (consisting of a
prepayment premium and the write off of related deferred debt issuance costs) of
$13,553, less tax benefits of $4,879.
The fair value of the Company's long-term debt is estimated based on the
quoted market prices for the same or similar issues or on the current rates
offered to the Company for debt of the same remaining maturities. At December
31, 2001 and 2000, based on market quotes for the same or similar securities it
is estimated that the Company's Notes were trading at a premium of approximately
6% over book value. The book value of the Company's other long-term debt
approximates fair value.
The maturity of the Company's long-term debt over each of the next five
years ending December 31, is as follows: 2002 - $59,705; 2003 - $83,468; 2004 -
$131,550; 2005 - $105,077; and 2006 - $187,084.
NOTE 3 - INCOME TAXES
The components of income before income taxes and extraordinary item and the
provision for income taxes are as follows:
<Table>
<Caption>
YEAR ENDED DECEMBER 31,
- ------------------------------------------------------------------------------------
2001 2000 1999
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
Income before taxes and extraordinary item:
United States $ 58,129 $ 79,024 $ 18,508
Foreign 77,226 94,194 57,662
--------- ---------- ---------
$ 135,355 $ 173,218 $ 76,170
========= ========== =========
Current provision:
United States $ 26,826 $ 45,799 $ 13,671
Foreign 16,811 25,125 18,353
--------- ---------- ---------
43,637 70,924 32,024
--------- ---------- ---------
Deferred provision (benefit):
United States $ 5,841 $ (4,095) $ (260)
Foreign 2,167 (1,515) 111
--------- ---------- ---------
8,008 (5,610) (149)
--------- ---------- ---------
Total provision for income taxes $ 51,645 $ 65,314 $ 31,875
========= ========== =========
</Table>
27
<Page>
At December 31, 2001, the Company had $8,736 of foreign tax loss
carryforwards, of which $1,575 expire at various dates through 2006 and the
balance can be carried forward indefinitely. A valuation allowance of $1,024
and $559 at December 31, 2001 and 2000, respectively, has been recorded which
relates primarily to foreign net operating loss carryforwards. The net change
in the valuation allowance for deferred tax assets was an increase of $465 in
2001 and a decrease of $3,164 in 2000. In both 2001 and 2000 the net change
in the valuation allowance was related to foreign net operating loss
carryforwards. Accrued income tax liabilities of $4,560 and $6,260 at
December 31, 2001 and 2000, respectively, are included in other accrued
expenses in the Consolidated Balance Sheet.
Differences between the U.S. statutory federal tax rate and the Company's
effective income tax rate are analyzed below:
<Table>
<Caption>
YEAR ENDED DECEMBER 31,
- ----------------------------------------------------------------------------------
2001 2000 1999
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. statutory federal tax rate 35.0% 35.0% 35.0%
State and local taxes 1.9 1.6 1.7
Non-deductible purchase accounting differences 3.6 2.7 5.7
Foreign earnings and dividends taxed at different rates (2.3) .9 2.1
Valuation allowance .4 (1.8) (2.9)
Other (.4) (.7) .3
----- ----- -----
Effective tax rate 38.2% 37.7% 41.9%
===== ===== =====
</Table>
The Company's deferred tax assets and liabilities, excluding a valuation
allowance, were comprised of the following:
<Table>
<Caption>
DECEMBER 31,
---------------------
2001 2000
--------- ---------
<S> <C> <C>
Deferred tax assets:
Accrued liabilities and reserves $ 9,848 $ 6,619
Inventory reserves 5,916 7,722
Operating loss carry forwards 2,586 3,325
Employee benefits 3,885 2,059
--------- ---------
$ 22,235 $ 19,725
========= =========
Deferred tax liabilities:
Depreciation $ 5,526 $ 5,768
Prepaid pension costs 8,202
--------- ---------
$ 5,526 $ 13,970
========= =========
</Table>
The Company has not provided for U.S. deferred income taxes or foreign
withholding taxes on undistributed earnings of its non-U.S. subsidiaries, since
the Company intends to reinvest these earnings indefinitely. The Company is
subject to periodic audits of its various tax returns by government agencies;
management does not believe that amounts, if any, which may be required to be
paid by reason of such audits will have a material effect on the Company's
financial position or results of operations.
NOTE 4 - SHAREHOLDERS' EQUITY
In May 1997, the Company adopted the 1997 Option Plan, and in May 2000,
adopted the 2000 Option Plan ("Plans"). The Plans authorize the granting of
stock options by a committee of the Board of Directors. At December 31, 2001,
the maximum number of shares of common stock available for the granting of stock
options under the Plans was 887,317. Options granted under the Plans vest
ratably over a period of five years and are exercisable over a period of ten
years from the date of grant. In addition, shares issued in conjunction with the
exercise of stock options are generally subject to Management Stockholder
Agreements which, among other things, places restrictions on the sale or
transfer of such shares.
Stock option activity for 1999, 2000, and 2001 was as follows:
28
<Page>
<Table>
<Caption>
- -----------------------------------------------------------------------------------------------
OPTIONS AVERAGE PRICE
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
OPTIONS OUTSTANDING AT DECEMBER 31, 1998 2,540,872 $ 13.92
Options granted 482,800 19.24
Options cancelled (106,612) 14.99
---------
OPTIONS OUTSTANDING AT DECEMBER 31, 1999 2,917,060 14.77
Options granted 1,129,500 49.40
Options exercised (192,986) 13.94
Options cancelled (98,152) 23.51
---------
OPTIONS OUTSTANDING AT DECEMBER 31, 2000 3,755,422 25.00
Options granted 522,450 40.97
Options cancelled (58,175) 36.22
---------
OPTIONS OUTSTANDING AT DECEMBER 31, 2001 4,219,697 $ 26.82
=========
</Table>
The following table summarizes information about stock options outstanding
at December 31, 2001:
<Table>
<Caption>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
----------------------------------- ----------------------
AVERAGE REMAINING AVERAGE
EXERCISE PRICE SHARES PRICE TERM SHARES PRICE
- -------------- --------- -------- ---------- --------- -------
<S> <C> <C> <C> <C> <C>
$13.00 2,009,781 $ 13.00 5.38 1,588,795 $ 13.00
15.00-20.00 493,716 18.53 7.17 215,885 18.30
25.00-30.00 123,400 28.90 6.42 72,040 28.93
31.00-40.00 47,000 35.67 9.16 3,000 33.13
41.00-50.00 1,537,300 46.94 8.71 210,770 49.56
55.00-60.00 8,500 56.75 8.76 1,700 56.75
</Table>
The Company applies APB Opinion 25, "Accounting for Stock Issued to Employees,"
and related interpretations in accounting for stock options. Accordingly, no
compensation cost has been recognized for the Plans. Had compensation cost for
stock options been determined based on the fair value of the option at date of
grant consistent with the requirements of FAS No. 123, "Accounting for
Stock-Based Compensation," the Company's income before extraordinary item and
net income and earnings per share would have been reduced to the pro forma
amounts indicated below:
<Table>
<Caption>
2001 2000 1999
--------- ---------- ----------
<S> <C> <C> <C>
Pro forma before extraordinary item:
Income $ 75,074 $ 101,898 $ 42,261
Income per share - Basic $ 1.79 $ 2.45 $ 1.17
Income per share - Diluted $ 1.75 $ 2.38 $ 1.15
Pro forma:
Net income $ 75,074 $ 101,898 $ 33,587
Net income per share - Basic $ 1.79 $ 2.45 $ .93
Net income per share - Diluted $ 1.75 $ 2.38 $ .92
</Table>
29
<Page>
The fair value of each stock option has been estimated at the date of grant
using the Black-Scholes option pricing model with the following weighted-average
assumptions:
<Table>
<Caption>
2001 2000 1999
------- ------- -------
<S> <C> <C> <C>
Risk free interest rate 4.3% 5.1% 5.6%
Expected life 5 years 4 years 4 years
Expected volatility 54.0% 67.0% 40.0%
Expected dividend yield 0.0% 0.0% 0.0%
</Table>
The weighted-average fair values of options granted during 2001, 2000 and
1999 were $20.98, $27.04 and $7.51, respectively.
At December 31, 2001, KKR and its affiliates owned 49.4% of the Company's
outstanding common stock.
Balances of related after-tax components comprising accumulated other
comprehensive loss, included in shareholders' equity at December 31, 1999, 2000
and 2001 are as follows:
<Table>
<Caption>
- ----------------------------------------------------------------------------------------------------------
FOREIGN REVALUATION MINIMUM ACCUMULATED
CURRENCY OF INTEREST PENSION OTHER
TRANSLATION RATE LIABILITY COMPREHENSIVE
ADJUSTMENT DERIVATIVES ADJUSTMENT LOSS
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance at December 31, 1998 $ (7,208) $ (7,208)
Translation adjustments (5,820) (5,820)
--------- --------- ---------- ---------
Balance at December 31, 1999 (13,028) (13,028)
Translation adjustments (10,702) (10,702)
--------- --------- ---------- ---------
Balance at December 31, 2000 (23,730) (23,730)
Translation adjustments (9,612) (9,612)
Revaluation of interest rate
derivatives, net of tax of $5,794 $ (8,837) (8,837)
Minimum pension liability adjustment,
net of tax of $10,360 $ (15,802) (15,802)
--------- --------- ---------- ---------
Balance at December 31, 2001 $ (33,342) $ (8,837) $ (15,802) $ (57,981)
========= ========= ========== =========
</Table>
30
<Page>
NOTE 5 - BENEFIT PLANS AND OTHER POSTRETIREMENT BENEFITS
The Company and its domestic subsidiaries have a defined benefit plan
covering substantially all U.S. employees. Plan benefits are generally based on
years of service and compensation and are generally noncontributory. Certain
foreign subsidiaries have defined benefit plans covering their employees.
Certain U.S. employees not covered by the defined benefit plan are covered by
defined contribution plans. The following is a summary of the Company's defined
benefit plans funded status as of the most recent actuarial valuations (December
31, 2001 and 2000).
<Table>
<Caption>
DECEMBER 31, 2001 DECEMBER 31, 2000
- --------------------------------------------------------------------------------------------
ACCUMULATED ASSETS ACCUMULATED ASSETS
BENEFITS EXCEED BENEFITS EXCEED
EXCEED ACCUMULATED EXCEED ACCUMULATED
ASSETS BENEFITS ASSETS BENEFITS
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Change in benefit obligation:
Benefit obligation at beginning of year $ 193,810 $ 21,268 $ 25,347 $ 187,585
Service cost 3,814 1,177 834 3,952
Interest cost 14,344 1,446 1,609 13,345
Plan participants' contributions 139 197
Amendments 3,938
Actuarial (gain) loss 11,810 (1,993) 266 1,139
Foreign exchange (1,273) (486) (1,504) (2,125)
Benefits paid (14,814) (654) (939) (14,628)
--------- --------- --------- ---------
Benefit obligation at end of year 211,629 20,897 25,613 189,465
--------- --------- --------- ---------
Change in plan assets:
Fair value of plan assets at beginning of
year 193,214 26,355 1,326 237,221
Actual return on plan assets (9,314) (2,232) 44 (1,747)
Employer contribution 207 104
Plan participants' contributions 139 197
Foreign exchange (80) (563) (47) (2,854)
Benefits paid (13,882) (654) (47) (14,628)
--------- --------- --------- ---------
Fair value of plan assets at end of year 170,145 23,045 1,380 218,189
--------- --------- --------- ---------
Funded status (41,484) 2,148 (24,233) 28,724
Unrecognized net actuarial (gain) loss 36,607 3,806 2,300 (5,585)
Unrecognized prior service cost 10,796 (445) 663 7,702
Unrecognized transition obligation net 61 (1,459) 82 (1,817)
Additional minimum pension liability (36,862)
--------- --------- --------- ---------
(Accrued) prepaid benefit cost $ (30,882) $ 4,050 $ (21,188) $ 29,024
========= ========= ========= =========
</Table>
<Table>
<Caption>
YEAR ENDED DECEMBER 31,
- --------------------------------------------------------------------------------------------
2001 2000 1999
--------- --------- ---------
<S> <C> <C> <C>
Components of net pension cost:
Service cost $ 4,991 $ 4,786 $ 5,266
Interest cost 15,790 14,954 14,342
Expected return on plan assets (22,014) (21,167) (19,110)
Net amortization of actuarial losses 926 1,101 1,376
--------- --------- ---------
Net pension cost (income) $ (307) $ (326) $ 1,874
========= ========= =========
- --------------------------------------------------------------------------------------------
</Table>
31
<Page>
The weighted-average discount rate and rate of increase in future
compensation levels used in determining actuarial present value of the projected
benefit obligation was 7.25% (7.5% in 2000 and 1999) and 3.25% (3.5% in 2000 and
1999), respectively. The expected long-term rate of return on assets was 10.5%.
Plan assets consist primarily of U.S. equity and debt securities. The Company
has also adopted an unfunded Supplemental Employee Retirement Plan ("SERP")
which provides for the payment of the portion of annual pension which cannot be
paid from the retirement plan as a result of regulatory limitations on average
compensation for purposes of the benefit computation. The largest non-U.S.
pension plan, in accordance with local custom, is unfunded and had an
accumulated benefit obligation of approximately $19,356 and $19,253 at December
31, 2001 and 2000, respectively. Such obligation is included in the Consolidated
Balance Sheet and the tables above.
In accordance with the Provisions of FAS No. 87, the Company recorded a
minimum pension liability at December 31, 2001 of $36,862 for circumstances in
which a pension plan's accumulated benefit obligation exceeded the fair value of
the plan's assets and accrued pension liability. Such liability was partially
offset by an intangible asset equal to the unrecognized prior service cost, with
the balance recorded as a reduction in shareholders' equity, net of related
deferred tax benefits.
The Company maintains self insurance programs for that portion of its
health care and workers compensation costs not covered by insurance. The Company
also provides certain health care and life insurance benefits to certain
eligible retirees through postretirement benefit programs. The Company's share
of the cost of such plans for most participants is fixed, and any increase in
the cost of such plans will be the responsibility of the retirees. The Company
funds the benefit costs for such plans on a pay-as-you-go basis. Since the
Company's obligation for postretirement medical plans is fixed and since the
accumulated postretirement benefit obligation ("APBO") and the net
postretirement benefit expense are not material in relation to the Company's
financial condition or results of operations, management believes any change in
medical costs from that estimated will not have a significant impact on the
Company. The discount rate used in determining the APBO at December 31, 2001 and
2000 was 7.25% and 7.5%, respectively.
Summary information on the Company's postretirement medical plans as of
December 31, 2001 and 2000 is as follows:
<Table>
<Caption>
DECEMBER 31,
--------------------------
2001 2000
--------- ---------
<S> <C> <C>
Change in benefit obligation:
Benefit obligation at beginning of year $ 10,835 $ 12,480
Service cost 75 61
Interest cost 972 819
Paid benefits and expenses (1,620) (2,332)
Actuarial (gain) loss 3,501 (193)
--------- ---------
Benefit obligation at end of year $ 13,763 $ 10,835
========= =========
Funded status $ (13,763) $ (10,835)
Unrecognized net actuarial loss 10,499 7,973
Unrecognized transition obligation 683 745
--------- ---------
Accrued benefit cost $ (2,581) $ (2,117)
========= =========
</Table>
32
<Page>
<Table>
<Caption>
YEAR ENDED DECEMBER 31,
----------------------------
2001 2000 1999
------- ------- -------
<S> <C> <C> <C>
Components of net postretirement benefit cost:
Service cost $ 75 $ 61 $ 68
Interest cost 972 819 901
Amortization of transition obligation 62 62 62
Net amortization of actuarial losses 975 731 1,107
------- ------- -------
Net postretirement benefit cost $ 2,084 $ 1,673 $ 2,138
======= ======= =======
</Table>
NOTE 6 - LEASES
At December 31, 2001, the Company was committed under operating leases
which expire at various dates through 2008. Total rent expense under operating
leases for the years 2001, 2000, and 1999 was $16,762, $17,429 and $15,895,
respectively.
Minimum lease payments under non-cancelable operating leases are as
follows:
<Table>
<S> <C>
2002 $ 12,301
2003 9,342
2004 5,414
2005 3,375
2006 2,481
Beyond 2006 4,239
--------
Total minimum obligation $ 37,152
========
</Table>
NOTE 7 - REPORTABLE BUSINESS SEGMENTS AND INTERNATIONAL OPERATIONS
The Company has two reportable business segments: interconnect products and
assemblies and cable products. The interconnect products and assemblies segment
produces connectors and connector assemblies primarily for the communications,
aerospace, industrial and automotive markets. The cable products segment
produces coaxial and flat ribbon cable and related products primarily for
communication markets, including cable television. The accounting policies of
the segments are the same as those for the Company as a whole and are described
in Note 1 herein. The Company evaluates the performance of business units on,
among other things, profit or loss from operations before interest expense,
goodwill and other intangible amortization expense, headquarters' expense
allocations, income taxes and nonrecurring gains and losses. The Company's
reportable segments are an aggregation of business units that have similar
production processes and products.
<Table>
<Caption>
INTERCONNECT PRODUCTS CABLE
AND ASSEMBLIES PRODUCTS TOTAL
---------------------------------- ------------------------------ -------------------------------------
2001 2000 1999 2001 2000 1999 2001 2000 1999
--------- ----------- --------- --------- --------- --------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Sales
- external $ 906,799 $ 1,009,162 $ 769,967 $ 196,972 $ 350,540 $ 240,636 $ 1,103,771 $ 1,359,702 $ 1,010,603
- intersegment 1,454 71 569 7,200 16,385 9,417 8,654 16,456 9,986
Depreciation and
amortization 27,330 24,773 21,953 4,551 3,706 3,446 31,881 28,479 25,399
Segment operating
income 180,729 194,688 135,721 38,239 75,943 47,585 218,968 270,631 183,306
Segment assets 418,066 435,279 347,844 83,581 73,081 53,554 501,647 508,360 401,398
Additions to property,
plant and equipment 27,444 38,109 21,321 11,083 14,771 2,032 38,527 52,880 23,353
</Table>
33
<Page>
Reconciliation of segment operating income to consolidated income before taxes
and extraordinary item:
<Table>
<Caption>
2001 2000 1999
--------- --------- ---------
<S> <C> <C> <C>
Segment operating income $ 218,968 $ 270,631 $ 183,306
Amortization of goodwill (14,340) (13,394) (12,371)
Interest expense (56,099) (61,710) (79,297)
Headquarters' expense and other net expenses (13,174) (22,309) (15,468)
--------- --------- ---------
Consolidated income before taxes
and extraordinary item $ 135,355 $ 173,218 $ 76,170
========= ========= =========
</Table>
Reconciliation of segment assets to consolidated total assets:
<Table>
<Caption>
2001 2000 1999
----------- ----------- ---------
<S> <C> <C> <C>
Segment assets $ 501,647 $ 508,360 $ 401,398
Goodwill 460,442 411,182 360,999
Other unallocated assets 64,654 84,780 73,979
----------- ----------- ---------
Consolidated total assets $ 1,026,743 $ 1,004,322 $ 836,376
=========== =========== =========
</Table>
Geographic information:
<Table>
<Caption>
LAND AND
NET SALES DEPRECIABLE ASSETS
------------------------------------- -----------------------------------
2001 2000 1999 2001 2000 1999
----------- ----------- ----------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
United States $ 538,325 $ 690,743 $ 519,459 $ 80,343 $ 77,245 $ 65,536
International 565,446 668,959 491,144 84,544 83,740 54,414
----------- ----------- ----------- --------- --------- ----------
Total $ 1,103,771 $ 1,359,702 $ 1,010,603 $ 164,887 $ 160,985 $ 119,950
=========== =========== =========== ========= ========= ==========
</Table>
Revenues by geographic area are based on origin of shipment except that
international sales include international coaxial cable sales, which are
primarily export sales.
NOTE 8 - OTHER EXPENSES, NET
Other income (expense) is comprised as follows:
<Table>
<Caption>
YEAR ENDED DECEMBER 31,
- --------------------------------------------------------------------------------------------
2001 2000 1999
-------- -------- --------
<S> <C> <C> <C>
Foreign currency transaction gains $ 1,398 $ 3,298 $ 499
Program fees on sale of accounts receivable (3,888) (5,527) (3,851)
Minority interests (1,792) (5,415) (2,220)
Agency and commitment fees (471) (670) (701)
Other (820) (1,181) 1,011
-------- -------- --------
$ (5,573) $ (9,495) $ (5,262)
======== ======== ========
</Table>
NOTE 9 - COMMITMENTS AND CONTINGENCIES
In the course of pursuing its normal business activities, the Company is
involved in various legal proceedings and claims. Management does not expect
that amounts, if any, which may be required to be paid by reason of such
proceedings or claims will have a material effect on the Company's financial
position or results of operations.
Subsequent to the acquisition of Amphenol from Allied Signal Corporation in
1987 (Allied Signal merged with Honeywell International Inc. in December 1999
("Honeywell")), Amphenol and Honeywell have been named jointly and severally
liable as potentially responsible parties in relation to several environmental
cleanup sites. Amphenol and Honeywell have jointly consented to perform certain
investigations and remedial and monitoring activities at two sites and they have
been jointly ordered to perform work at another site. The responsibility for
costs incurred relating to these three sites is apportioned between Amphenol and
Honeywell based on an agreement entered into in connection with the acquisition
in 1987. For sites covered by this agreement, to the extent that conditions or
circumstances occurred or existed at the time of or prior to the acquisition,
Honeywell is currently obligated to pay 80% of the costs up to $30,000 and 100%
of the costs in excess of $30,000. At December 31, 2001, approximately $26,000
of costs have been incurred applicable to this agreement. Honeywell
representatives work closely with the Company in addressing the most
significant environmental liabilities. Management does not believe that the
costs associated with resolution of these or any other environmental matters
will have a material adverse effect on the
34
<Page>
Company's financial condition or results of operations.
A subsidiary of the Company has an agreement with a financial institution
whereby the subsidiary can sell an undivided interest of up to $85,000 in a
designated pool of qualified accounts receivable. The agreement expires in
May 2004 with respect to $60,000 of accounts receivable and expires in July
2002 with respect to an additional $25,000 of accounts receivable. Under the
terms of the agreement, new receivables are added to the pool as collections
reduce previously sold accounts receivable. The aggregate value of receivables
transferred to the pool for the year 2001, 2000 and 1999 were $598,659,
$833,653, and $646,675, respectively. At December 31, 2001, and 2000,
respectively, $20,548 and $53,581 of accounts receivable were transferred to
the subsidiary, but not purchased by the financial institution and are
therefore included in the accounts receivable balance in the accompanying
Consolidated Balance Sheet. Due to the short-term nature of the accounts
receivable, the fair value approximates the carrying value. The Company
services, administers and collects the receivables on behalf of the
purchaser. Program fees payable to the purchaser under this agreement are
equivalent to rates afforded high quality commercial paper issuers plus
certain administrative expenses and are included in other expenses, net, in
the accompanying Consolidated Statement of Income. The agreement contains
certain covenants and provides for various events of termination. In certain
circumstances the Company is contingently liable for the collection of the
receivables sold; management believes that its allowance for doubtful
accounts is adequate to absorb the expense of any such liability. At December
31, 2001 and 2000, approximately $74,200 and $85,000, respectively, of
receivables were sold under the agreement and are therefore not reflected in
the accounts receivable balance in the accompanying Consolidated Balance
Sheet.
NOTE 10 - SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
<Table>
<Caption>
THREE MONTHS ENDED
- --------------------------------------------------------------------------------------------------
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
2001
Net sales $ 316,672 $ 274,146 $ 252,581 $ 260,372
Gross profit, including depreciation 109,149 94,090 82,749 81,705
Net income 28,505 22,536 16,633 16,036
Net income per share - Basic .68 .54 .40 .38
Net income per share - Diluted .67 .53 .39 .37
Stock price - High 50.75 57.99 45.95 52.95
- Low 28.30 29.11 32.00 32.50
2000
Net sales $ 300,049 $ 335,510 $ 354,694 $ 369,449
Gross profit, including depreciation 96,034 108,745 116,158 123,430
Net income 20,264 26,210 28,834 32,596
Net income per share - Basic .49 .63 .69 .78
Net income per share - Diluted .48 .61 .67 .76
Stock price - High 52.13 66.50 70.38 68.25
- Low 30.31 43.19 48.38 32.00
1999
Net sales $ 237,164 $ 247,438 $ 256,857 $ 269,144
Gross profit, including depreciation 73,323 78,509 81,804 86,448
Income before extraordinary items 8,239 10,463 11,586 14,007
Income per share before extraordinary item -
Basic .23 .29 .32 .38
Income per share before extraordinary item -
Diluted .23 .29 .32 .37
Net income 8,239 10,463 11,586 5,333
Net income per share - Basic .23 .29 .32 .14
Net income per share - Diluted .23 .29 .32 .14
Stock price - High 19.25 20.19 28.31 35.75
- Low 14.72 17.25 19.66 22.88
</Table>
35
<Page>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH INDEPENDENT ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Pursuant to Instruction G(3) to Form 10-K, the information required by Item
10 with respect to the Directors of the Registrant is incorporated by reference
from the Company's definitive proxy statement which is expected to be filed
pursuant to Regulation 14A within 120 days following the end of the fiscal year
covered by this report.
The information required by Item 10 with respect to the Executive Officers
of the Registrant has been included in Part I of this Form 10-K in reliance on
Instruction G(3) of Form 10-K and Instruction 3 to Item 401(b) of Regulation
S-K.
ITEM 11. EXECUTIVE COMPENSATION
Pursuant to Instruction G(3) to Form 10-K, the information required in Item
11 is incorporated by reference from the Company's definitive proxy statement
which is expected to be filed pursuant to Regulation 14A within 120 days
following the end of the fiscal year covered by this report.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Pursuant to Instruction G(3) to Form 10-K, the information required in Item
12 is incorporated by reference from the Company's definitive proxy statement
which is expected to be filed pursuant to Regulation 14A within 120 days
following the end of the fiscal year covered by this report.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Pursuant to Instruction G(3) to Form 10-K, the information required in Item
13 is incorporated by reference from the Company's definitive proxy statement
which is expected to be filed pursuant to Regulation 14A within 120 days
following the end of the fiscal year covered by this report.
36
<Page>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
<Table>
<Caption>
(a)(1) CONSOLIDATED FINANCIAL STATEMENTS PAGE
<S> <C>
Report of Management 20
Independent Auditors' Report 20
Consolidated Statement of Income -
Years Ended December 31, 2001, December 31, 2000 and December 31, 1999 21
Consolidated Balance Sheet -
December 31, 2001 and December 31, 2000 22
Consolidated Statement of Changes in Shareholders' Equity -
Years Ended December 31, 2001, December 31, 2000 and December 31, 1999 23
Consolidated Statement of Cash Flow -
Years Ended December 31, 2001, December 31, 2000 and December 31, 1999 24
Notes to Consolidated Financial Statements 25
<Caption>
(a)(2) FINANCIAL STATEMENT SCHEDULES FOR THE THREE YEARS ENDED DECEMBER 31, 2001
<S> <C>
SCHEDULE
Independent Auditors' Report on Schedule 42
II - Valuation and Qualifying Accounts 43
</Table>
Schedules other than the above have been omitted because they are either not
applicable or the required information has been disclosed in the consolidated
financial statements or notes thereto.
37
<Page>
(a)(3) LISTING OF EXHIBITS
2.1 Agreement and Plan of Merger dated as of January 23, 1997 between NXS
Acquisition Corp. and Amphenol Corporation (incorporated by reference to
Current Report on Form 8-K dated January 23, 1997).*
2.2 Amendment, dated as of April 9, 1997, to the Agreement and Plan of Merger
between NXS Acquisition Corp. and Amphenol Corporation, dated as of
January 23, 1997 (incorporated by reference to the Registration Statement
on Form S-4 (registration No. 333-25195) filed on April 15, 1997).*
3.1 Certificate of Merger, dated May 19, 1997 (including Restated Certificate
of Incorporation of Amphenol Corporation) (filed as Exhibit 3.1 to the
June 30, 1997 10-Q).*
3.2 By-Laws of the Company as of May 19, 1997 - NXS Acquisition Corp. By-Laws
(filed as Exhibit 3.2 to the June 30, 1997 10-Q).*
3.3 Amended and Restated Certificate of Incorporation, dated April 24, 2000
(filed as Exhibit 3.1 to the April 28, 2000 Form 8-K).*
4.1 Indenture between Amphenol Corporation and IBJ Schroeder Bank and Trust
Company, as Trustee, dated as of May 15, 1997, relating to Senior
Subordinated Notes due 2007 (filed as Exhibit 4.1 to the June 30, 1997
10-Q).*
10.1 Amended and Restated Receivables Purchase Agreement dated as of May 19,
1997 among Amphenol Funding Corp., the Company, Pooled Accounts
Receivable Capital Corporation and Nesbitt Burns Securities, Inc., as
Agent (filed as Exhibit 10.1 to the June 30, 1997 10-Q).*
10.2 Amended and Restated Purchase and Sale Agreement dated as of May 19, 1997
among the Originators named therein, Amphenol Funding Corp. and the
Company (filed as Exhibit 10.2 to the June 30, 1997 10-Q).*
10.3 Credit Agreement dated as of May 19, 1997 among the Company, Amphenol
Holding UK, Limited, Amphenol Commercial and Industrial UK, Limited, the
Lenders listed therein, The Chase Manhattan Bank, as Syndication Agent,
the Bank of New York, as Documentation Agent and Bankers Trust Company,
as Administrative Agent and Collateral Agent (filed as Exhibit 10.3 to
the June 30, 1997 10-Q).*
10.4 2000 Amphenol Incentive Plan (filed as Exhibit 10.6 to the December 31,
1999 10-K).*
10.5 2001 Amphenol Incentive Plan.
10.6 2002 Amphenol Incentive Plan.
10.7 Pension Plan for Employees of Amphenol Corporation as amended and
restated effective January 1, 2002.
- -------------------------------------------------------
* Incorporated herein by reference as stated.
38
<Page>
10.8 Amphenol Corporation Supplemental Employee Retirement Plan formally
adopted effective January 25, 1996 (filed as Exhibit 10.18 to the 1996
10-K).*
10.9 LPL Technologies Inc. and Affiliated Companies Employee Savings/401 (k)
Plan, dated and adopted January 23, 1990 (filed as Exhibit 10.19 to the
1991 Registration Statement).*
10.10 Management Agreement between the Company and Dr. Martin H. Loeffler,
dated July 28, 1987 (filed as Exhibit 10.7 to the 1987 Registration
Statement).*
10.11 Amphenol Corporation Directors' Deferred Compensation Plan (filed as
Exhibit 10.11 to the December 31, 1997 10-K).*
10.12 Agreement and Plan of Merger among Amphenol Acquisition Corporation,
Allied Corporation and the Company, dated April 1, 1987, and the
Amendment thereto dated as of May 15, 1987 (filed as Exhibit 2 to the
1987 Registration Statement).*
10.13 Settlement Agreement among Allied Signal Inc., the Company and LPL
Investment Group, Inc. dated November 28, 1988 (filed as Exhibit 10.20 to
the 1991 Registration Statement).*
10.14 Registration Rights Agreement dated as of May 19, 1997, among NXS
Acquisition Corp., KKR 1996 Fund L.P., NXS Associates L.P., KKR Partners
II, L.P. and NXS I, L.L.C. (filed as Exhibit 99.5 to Schedule 13D,
Amendment No. 1, relating to the beneficial ownership of shares of the
Company's Common Stock by NXS I, L.L.C., KKR 1996 Fund, L.P., KKR
Associates (1996) L.P., KKR 1996 GP LLC, KKR Partners II, L.P., KKR
Associates L.P., NXS Associates L.P., KKR Associates (NXS) L.P., and
KKR-NXS L.L.C. dated May 27, 1997).*
10.15 Management Stockholders' Agreement entered into as of May 19, 1997
between the Company and Martin H. Loeffler (filed as Exhibit 10.13 to the
June 30, 1997 10-Q).*
10.16 Management Stockholders' Agreement entered into as of May 19, 1997
between the Company and Edward G. Jepsen (filed as Exhibit 10.14 to the
June 30, 1997 10-Q).*
10.17 Management Stockholders' Agreement entered into as of May 19, 1997
between the Company and Timothy F. Cohane (filed as Exhibit 10.15 to the
June 30, 1997 10-Q).*
10.18 1997 Option Plan for Key Employees of Amphenol and Subsidiaries (filed as
Exhibit 10.16 to the June 30, 1997 10-Q).*
10.19 Amended 1997 Option Plan for Key Employees of Amphenol and Subsidiaries
(filed as Exhibit 10.19 to the June 30, 1998 10-Q).*
10.20 Non-Qualified Stock Option Agreement between the Company and Martin H.
Loeffler dated as of May 19, 1997 (filed as Exhibit 10.17 to the June 30,
1997 10-Q).*
10.21 Non-Qualified Stock Option Agreement between the Company and Edward G.
Jepsen dated as of May 19, 1997 (filed as Exhibit 10.18 to the June 30,
1997 10-Q).*
10.22 Non-Qualified Stock Option Agreement between the Company and Timothy F.
Cohane dated as of
- --------------------------------------------------
* Incorporated herein by reference as stated.
39
<Page>
May 19, 1997 (filed as Exhibit 10.19 to the June 30, 1997 10-Q).*
10.23 First Amendment to Amended and Restated Receivables Purchase Agreement
dated as of September 26, 1997 (filed as Exhibit 10.20 to the September
30, 1997 10-Q).*
10.24 Second Amendment to Amended and Restated Receivables Purchase Agreement
dated as of June 30, 2000 (filed as Exhibit 10.27 to the June 30, 2000
10-Q).*
10.25 Third Amendment to Amended and Restated Receivables Purchase Agreement
dated as of June 28, 2001 (filed as Exhibit 10.27 to the September 30,
2001 10-Q).*
10.26 Fourth Amendment to Amended and Restated Receivables Purchase Agreement
dated as of September 30, 2001 (filed as Exhibit 10.28 to the September
30, 2001 10-Q).*
10.27 Canadian Purchase and Sale Agreement dated as of September 26, 1997 among
Amphenol Canada Corp., Amphenol Funding Corp. and Amphenol Corporation,
individually and as the initial servicer (filed as Exhibit 10.21 to the
September 30, 1997 10-Q).*
10.28 Amended and Restated Credit Agreement dated as of October 3, 1997 among
the Company, Amphenol Holding UK, Limited, Amphenol Commercial and
Industrial UK, Limited, the Lenders listed therein, The Chase Manhattan
Bank, as Syndication Agent, the Bank of New York, as Documentation Agent
and Bankers Trust Company, as Administrative Agent and Collateral Agent
(filed as Exhibit 10.22 to the September 30, 1997 10-Q).*
10.29 First Amendment dated as of May 1, 1998 to the Amended and Restated
Credit Agreement dated as of October 3, 1997 among the Company, Amphenol
Holding UK, Limited, Amphenol Commercial and Industrial UK, Limited, the
Lenders listed therein, The Chase Manhattan Bank, as Syndication Agent,
the Bank of New York, as Documentation Agent and Bankers Trust Company,
as Administrative Agent and Collateral Agent (filed as Exhibit 10.25 to
the March 31, 1998 10-Q).*
10.30 2000 Stock Purchase and Option Plan for Key Employees of Amphenol and
Subsidiaries (filed as Exhibit 10.30 to the June 30, 2001 10-Q).*
10.31 Management Stockholders' Agreement entered into as of June 6, 2000
between the Company and Martin H. Loeffler.
10.32 Management Stockholders' Agreement entered into as of June 6, 2000
between the Company and Edward G. Jepsen.
10.33 Management Stockholders' Agreement entered into as of June 6, 2000
between the Company and Timothy F. Cohane.
10.34 Non-Qualified Stock Option Agreement between the Company and Martin H.
Loeffler dated as of June 6, 2000.
10.35 Non-Qualified Stock Option Agreement between the Company and Edward G.
Jepsen dated as of June 6, 2000.
- -------------------------------------------------
* Incorporated herein by reference as stated.
40
<Page>
10.36 Non-Qualified Stock Option Agreement between the Company and Timothy F.
Cohane dated as of June 6, 2000.
11 Statement regarding computation of per share earnings.
12 Statement regarding computation of ratio of earnings to fixed charges.
22 Subsidiaries of the Company.
23 Consent of Deloitte & Touche LLP.
(b) REPORTS ON FORM 8-K
No reports on Form 8-K were filed during the last quarter of the period
covered by this report.
41
<Page>
INDEPENDENT AUDITORS' REPORT
TO THE BOARD OF DIRECTORS AND
SHAREHOLDERS OF AMPHENOL CORPORATION
Wallingford,Connecticut
We have audited the consolidated balance sheets of Amphenol Corporation and
subsidiaries as of December 31, 2001 and 2000, and the related consolidated
statements of income, changes in shareholders' equity, and cash flows for each
of the three years in the period ended December 31, 2001, and have issued our
report thereon dated January 15, 2002 included elsewhere in this Form 10-K. Our
audits also included the financial statement schedule of Amphenol Corporation
listed in Item 14. This financial statement schedule is the responsibility of
the Company's management. Our responsibility is to express an opinion based on
our audits. In our opinion, such financial statement schedule, when considered
in relation to the basic consolidated financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.
/s/ Deloitte & Touche LLP
Hartford, Connecticut
January 15, 2002
42
<Page>
SCHEDULE II
AMPHENOL CORPORATION AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
(DOLLARS IN THOUSANDS)
<Table>
<Caption>
BALANCE AT CHARGED TO CHARGED BALANCE AT
BEGINNING OF COST AND TO OTHER END OF
DESCRIPTION PERIOD EXPENSES ACCOUNTS ACQUISITIONS DEDUCTIONS PERIOD
------------ ---------- -------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
2001 Allowance for doubtful
accounts $ 3,044 $ 3,379 $ 75 $ 201 $ (1,508) $ 5,191
2000 Allowance for doubtful
accounts 2,232 1,027 65 197 (477) 3,044
1999 Allowance for doubtful
accounts 1,832 1,001 (99) (502) 2,232
</Table>
43
<Page>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, there unto duly authorized in the Town of
Wallingford, State of Connecticut on the 28th day of March 2002.
AMPHENOL CORPORATION
/s/ Martin H. Loeffler
----------------------------
Martin H. Loeffler
Chairman, Chief Executive
Officer and President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and as of the date indicated below.
<Table>
<Caption>
Signature Title Date
<S> <C> <C>
/s/ Martin H. Loeffler Chairman, Chief Executive Officer March 28, 2002
Martin H. Loeffler and President
(Principal Executive Officer)
/s/ Edward G. Jepsen Chief Financial Officer March 28, 2002
Edward G. Jepsen (Principal Financial Officer and
Principal Accounting Officer)
/s/ Andrew M. Clarkson Director March 28, 2002
/s/ Henry R. Kravis Director March 28, 2002
/s/ Andrew E. Lietz Director March 28, 2002
/s/ Marc S. Lipschultz Director March 28, 2002
/s/ Michael W. Michelson Director March 28, 2002
/s/ Scott Nuttall Director March 28, 2002
/s/ George R. Roberts Director March 28, 2002
</Table>
44
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.5
<SEQUENCE>3
<FILENAME>a2073881zex-10_5.txt
<DESCRIPTION>EXHIBIT 10.5
<TEXT>
<Page>
EXHIBIT 10.5
2001
AMPHENOL MANAGEMENT INCENTIVE PLAN
I. PURPOSE
The purpose of the Plan is to reward eligible key employees of Amphenol
Corporation and affiliated operations with cash bonus payments based on
contributions to overall results and specific accomplishments.
II. ELIGIBILITY
Select management personnel, as designated by the Chairman, President and
CEO. Generally, participation includes senior management positions,
corporate staff managers, general managers and their designated direct
reports.
III. PLAN COMPONENTS
There are several key performance factors that are considered by executive
management and the Compensation Committee. These include, but are not
limited to, the following:
- Year-over-year improvement
- Accomplishments against budget
- Customer satisfaction
- Quality management
- New market/new product positioning
- Cost reductions/productivity improvements
- Balance sheet management
- Overall Amphenol performance
Financial performance is measured by revenues, operating income, cash flow
of operating units and EPS growth for total Amphenol.
IV. ADMINISTRATION
- Generally, payments are made during the first calendar quarter
following the plan year. All payments are subject to the
recommendation of the Chairman, President and CEO and to the approval
of the Compensation Committee.
- Payments are based upon average base salary during the plan year (new
hires will be prorated accordingly if hired after February 1st of plan
year).
- The maximum allowable payout under the plan is 2x the target bonus as
applied to average base salary.
- To be eligible for the bonus payment, a participant must be an active
employee on the payroll at the time when the bonus payment is issued.
Exceptions must be recommended by the Chairman, President and the CEO
and be approved by the Compensation Committee.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.6
<SEQUENCE>4
<FILENAME>a2073881zex-10_6.txt
<DESCRIPTION>EXHIBIT 10.6
<TEXT>
<Page>
EXHIBIT 10.6
2002
AMPHENOL MANAGEMENT INCENTIVE PLAN
I. PURPOSE
The purpose of the Plan is to reward eligible key employees of Amphenol
Corporation and affiliated operations with cash bonus payments based on
contributions to overall results and specific accomplishments.
II. ELIGIBILITY
Select management personnel, as designated by the Chairman, President and
CEO. Generally, participation includes senior management positions,
corporate staff managers, general managers and their designated direct
reports.
III. PLAN COMPONENTS
There are several key performance factors that are considered by executive
management and the Compensation Committee. These include, but are not
limited to, the following:
- Year-over-year improvement
- Accomplishments against budget
- Customer satisfaction
- Quality management
- New market/new product positioning
- Cost reductions/productivity improvements
- Balance sheet management
- Overall Amphenol performance
Financial performance is measured by revenues, operating income, cash flow
of operating units and EPS growth for total Amphenol.
IV. ADMINISTRATION
- Generally, payments are made during the first calendar quarter
following the plan year. All payments are subject to the
recommendation of the Chairman, President and CEO and to the approval
of the Compensation Committee.
- Payments are based upon average base salary during the plan year (new
hires will be prorated accordingly if hired after February 1st of plan
year).
- The maximum allowable payout under the plan is 2x the target bonus as
applied to average base salary.
- To be eligible for the bonus payment, a participant must be an active
employee on the payroll at the time when the bonus payment is issued.
Exceptions must be recommended by the Chairman, President and the CEO
and be approved by the Compensation Committee.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.7
<SEQUENCE>5
<FILENAME>a2073881zex-10_7.txt
<DESCRIPTION>EXHIBIT 10.7
<TEXT>
<Page>
Exhibit 10.7
PENSION PLAN FOR EMPLOYEES OF
AMPHENOL CORPORATION
(1) Amended and restated effective January 1, 2002, except to the extent
the applicable laws named below or the plan amendments incorporated
herein and referenced below provide for an earlier effective date, in
which case such earlier date or dates shall apply.
(2) This Plan document restates the Pension Plan for Employees of Amphenol
Corporation document signed November 21, 1997, by incorporating the
First Amendment effective January 1, 1997, the Second Amendment
effective Various Dates, the Third Amendment effective December 31,
1999, the Fourth Amendment effective December 31, 1999, the Fifth
Amendment effective Various Dates, the Sixth Amendment effective
January 1, 2001, the Seventh Amendment effective Various Dates and the
applicable requirements of the Uruguay Round Agreements Act ("GATT"),
Uniformed Services Employment and Reemployment Rights Act of 1994,
Small Business Job Protection Act of 1996, Taxpayer Relief Act of
1997, Internal Revenue Service Restructuring and Reform Act of 1998,
and the Community Renewal Tax Relief Act of 2000.
<Page>
TABLE OF CONTENTS
<Table>
<Caption>
PAGE
----
ARTICLE I.
ELIGIBILITY
<S> <C> <C>
1.1. Eligibility............................................................................. 3
ARTICLE II.
EMPLOYER CONTRIBUTIONS
2.1. Payment of Contributions................................................................ 4
2.2. Limitation on Contribution.............................................................. 4
2.3. Time of Payment......................................................................... 4
2.4. No Additional Liability................................................................. 4
ARTICLE III.
EMPLOYEE CONTRIBUTIONS
3.1. Required Contributions.................................................................. 5
ARTICLE IV.
PLAN BENEFITS
4.1. Plan Benefits........................................................................... 6
4.2. Minimum Benefit for Top Heavy Plan...................................................... 6
4.3. Non-Duplication of Benefits............................................................. 8
4.4. Transfers; Service with Affiliated Employers............................................ 8
ARTICLE V.
CODE SECTION 415 LIMITATIONS ON BENEFITS
5.1. Maximum Annual Benefit................................................................ 9
5.2. Adjustments to Annual Benefit and Limitations......................................... 10
5.3. Annual Benefit Not in Excess of $10,000............................................... 13
</Table>
-i-
<Page>
<Table>
<S> <C> <C>
5.4. Participation or Service Reductions................................................... 14
5.5. Multiple Plan Reduction............................................................... 14
5.6. Incorporation by Reference............................................................ 18
ARTICLE VI.
VESTING
6.1. Vesting Rights.......................................................................... 19
6.2. Top-Heavy Vesting....................................................................... 19
6.3. Service Computation Period; Service Credit.............................................. 19
6.4. Amendment of Vesting Schedule........................................................... 19
6.5. Amendments Affecting Vested and/or Accrued Benefit...................................... 20
6.6. No Divestiture for Cause................................................................ 20
ARTICLE VII.
PAYMENT OF BENEFITS
7.1. Notice.................................................................................. 21
7.2. Waiver of Thirty (30) Day Notice Period................................................. 21
7.3. Form of Payment......................................................................... 21
7.4. Actuarial Equivalent Benefit............................................................ 22
7.5. Payment Without Participant Consent..................................................... 22
7.6. Restrictions on Immediate Distributions................................................. 23
7.7. Limitation of Benefits on Plan Termination.............................................. 23
7.8. Early Plan Termination Restrictions..................................................... 26
7.9. Suspension of Benefits.................................................................. 28
7.10. Restrictions on Commencement of Retirement Benefits..................................... 30
7.11. Minimum Distribution Requirements....................................................... 30
7.12. TEFRA Election Transitional Rule........................................................ 34
7.13. Distribution of Death Benefit........................................................... 35
7.14. Date Distribution Deemed to Begin....................................................... 37
7.15. Distribution Pursuant to Qualified Domestic Relations Orders............................ 37
</Table>
-ii-
<Page>
<Table>
<S> <C> <C>
7.16. Payment to a Person Under a Legal Disability............................................ 37
7.17. Unclaimed Benefits Procedure............................................................ 38
7.18. Direct Rollovers........................................................................ 39
7.19. Certain Highly Compensated Employees.................................................... 39
ARTICLE VIII.
JOINT AND SURVIVOR ANNUITY REQUIREMENTS
8.1. Applicability of Provisions............................................................. 40
8.2. Payment of Qualified Joint and Survivor Annuity......................................... 40
8.3. Payment of Qualified Pre-Retirement Survivor Annuity.................................... 40
8.4. Notice Requirements For Qualified Joint and Survivor Annuity............................ 40
8.5. Notice Requirements For Qualified Pre-Retirement Survivor Annuity....................... 41
8.6. Qualified Election...................................................................... 42
8.7. Election Period......................................................................... 43
8.8. Pre-age Thirty-five (35) Waiver......................................................... 44
8.9. Transitional Joint And Survivor Annuity Rules........................................... 44
ARTICLE IX.
QUALIFIED DOMESTIC RELATIONS ORDERS
9.1. Qualified Domestic Relations Orders................................................... 47
ARTICLE X.
TRANSFERS FROM OTHER QUALIFIED PLANS; DIRECT ROLLOVERS
10.1. Transfers from Other Qualified Plans, Direct Rollovers................................ 50
ARTICLE XI.
TRANSFERS FROM OTHER QUALIFIED PLANS; DIRECT ROLLOVERS
11.1. Transfers.................................................................................. 51
</Table>
-iii-
<Page>
ARTICLE XII.
AMENDMENT, TERMINATION, MERGER OR CONSOLIDATION
<Table>
<S> <C> <C>
12.1. Amendment of the Plan................................................................... 52
12.2. Termination............................................................................. 52
12.3. Merger or Consolidation of the Plan..................................................... 56
ARTICLE XIII.
PARTICIPATING EMPLOYERS
13.1. Adoption by Other Employers........................................................... 58
13.2. Requirements of Participating Employers............................................... 58
13.3. Designation of Agent.................................................................. 58
13.4. Employee Transfers.................................................................... 59
13.5. Participating Employer's Contribution................................................. 59
13.6. Discontinuance of Participation....................................................... 59
13.7. Plan Administrator's Authority........................................................ 60
ARTICLE XIV.
ADMINISTRATION OF THE PLAN
14.1. Appointment of Plan Administrator and Trustee........................................... 61
14.2. Plan Administrator...................................................................... 61
14.3. Delegation of Powers.................................................................... 61
14.4. Trust Agreement......................................................................... 62
14.5. Appointment of Advisers................................................................. 62
14.6. Records and Reports..................................................................... 63
14.7. Information From Employer............................................................... 63
14.8. Majority Actions........................................................................ 63
14.9. Expenses................................................................................ 63
14.10. Discretionary Acts...................................................................... 63
14.11. Responsibility of Fiduciaries........................................................... 64
14.12. Indemnity by Employer................................................................... 64
14.13. Claims Procedures....................................................................... 64
</Table>
-iv-
<Page>
ARTICLE XV.
GENERAL
<Table>
<S> <C> <C>
15.1. Bonding................................................................................. 66
15.2. Action by the Employer.................................................................. 66
15.3. Employment Rights....................................................................... 66
15.4. Nonalienation of Benefits............................................................... 67
15.5. Governing Law........................................................................... 68
15.6. Conformity to Applicable Law............................................................ 68
15.7. Usage................................................................................... 69
15.8. Legal Action............................................................................ 69
15.9. Exclusive Benefit....................................................................... 69
15.10. Prohibition Against Diversion of Funds.................................................. 69
15.11. Return of Contribution.................................................................. 69
15.12. Employer's Protective Clause............................................................ 70
15.13. Insurer's Protective Clause............................................................. 70
15.14. Receipt and Release for Payments........................................................ 70
15.15. Headings................................................................................ 71
ARTICLE XVI.
DEFINITIONS
16.1. Accrued Benefit......................................................................... 72
16.2. Actuarial Equivalent.................................................................... 72
16.3. Administrative Committee................................................................ 73
16.4. Affiliated Employer..................................................................... 73
16.5. Aggregation Group....................................................................... 73
16.6. Anniversary Date...................................................................... 74
16.7. Annual Benefit........................................................................ 74
16.8. Annuity............................................................................... 74
16.9. Annuity Starting Date................................................................. 74
16.10. Average Monthly Compensation.......................................................... 75
</Table>
-v-
<Page>
<Table>
<S> <C> <C>
16.11. Beneficiary........................................................................... 75
16.12. Break in Service...................................................................... 76
16.13. Code.................................................................................. 77
16.14. Compensation.......................................................................... 77
16.15. Controlled Group...................................................................... 80
16.16. Determination Date.................................................................... 80
16.17. Direct Rollover....................................................................... 80
16.18. Disability.............................................................................. 80
16.19. Distributee............................................................................. 81
16.20. Earliest Retirement Date................................................................ 81
16.21. Early Retirement Age.................................................................... 81
16.22. Early Retirement Date................................................................... 81
16.23. Eligible Class.......................................................................... 81
16.24. Eligible Retirement Plan................................................................ 84
16.25. Eligible Rollover Distribution.......................................................... 84
16.26. Employee................................................................................ 84
16.27. Employer................................................................................ 85
16.28. Employment Commencement Date.......................................................... 85
16.29. Exhibit............................................................................... 85
16.30. ERISA................................................................................. 85
16.31. Family Member......................................................................... 85
16.32. Fiscal Year........................................................................... 85
16.33. Foreign Subsidiary.................................................................... 85
16.34. Forfeiture............................................................................ 86
16.35. Highly Compensated Employee........................................................... 86
16.36. Highly Compensated Participant........................................................ 88
16.37. Hour of Service....................................................................... 88
16.38. Inactive Participant.................................................................. 90
16.39. Key Employee.......................................................................... 90
16.40. Late Retirement Date.................................................................. 91
16.41. Leased Employee....................................................................... 91
16.42. Limitation Year....................................................................... 92
</Table>
-vi-
<Page>
<Table>
<S> <C> <C>
16.43. Non-Highly Compensated Employee....................................................... 92
16.44. Non-Key Employee...................................................................... 92
16.45. Normal Form of Benefit................................................................ 92
16.46. Normal Retirement Age................................................................. 93
16.47. Normal Retirement Date................................................................ 93
16.48. Participant........................................................................... 93
16.49. Participating Employer.................................................................. 93
16.50. Period of Military Duty................................................................. 93
16.51. Period of Service....................................................................... 93
16.52. Period of Severance..................................................................... 93
16.53. Plan.................................................................................... 93
16.54. Plan Administrator...................................................................... 95
16.55. Plan Year............................................................................... 95
16.56. Predecessor Employer.................................................................... 95
16.57. Present Value of Accrued Benefit........................................................ 95
16.58. Primary Social Security Retirement Benefit.............................................. 95
16.59. Qualified Domestic Relations Order...................................................... 96
16.60. Qualified Joint and Survivor Annuity.................................................... 97
16.61. Qualified Pre-Retirement Survivor Annuity............................................... 97
16.62. Re-employment Commencement Date......................................................... 97
16.63. Re-entry Date........................................................................... 97
16.64. Regulation.............................................................................. 97
16.65. Retirement.............................................................................. 97
16.66. Social Security Retirement Age.......................................................... 97
16.67. Spouse.................................................................................. 98
16.68. Straight Life Annuity................................................................... 98
16.69. Super Top-Heavy Plan.................................................................... 98
16.70. Top-Heavy Group......................................................................... 98
16.71. Top-Heavy Plan.......................................................................... 98
16.72. Top-Heavy Ratio......................................................................... 99
16.73. Top-Paid Group.......................................................................... 100
16.74. Trust Agreement......................................................................... 101
</Table>
-vii-
<Page>
<Table>
<S> <C> <C>
16.75. Trust Fund.............................................................................. 101
16.76. Trustee................................................................................. 101
16.77. Valuation Date.......................................................................... 101
16.78. Year of Accrual Service................................................................. 101
16.79. Year of Eligibility Service............................................................. 101
16.80. Year of Service......................................................................... 102
16.81. Year of Vesting Service................................................................. 102
</Table>
-viii-
<Page>
PENSION PLAN FOR EMPLOYEES OF
AMPHENOL CORPORATION
PREAMBLE
The Board of Directors of AMPHENOL CORPORATION, a Delaware corporation,
approved and adopted a defined benefit pension plan for certain Employees,
effective as of December 31, 1997, which amended and restated the Salaried
Employees Pension Plan of the Amphenol Corporation, as previously amended
effective January 1, 1989 (hereinafter referred to as the "Predecessor Plan");
and which now serves as the single plan to pay benefits to Employees previously
participating in certain other plans maintained by the Employer or its
affiliates, which plans were merged and consolidated into the Plan effective as
of December 31, 1997.
Prior to December 31, 1997, Amphenol Corporation and certain of its
affiliates maintained the following defined benefit pension plans for eligible
employees:
- Salaried Employee's Pension Plan of the Amphenol Corporation
- The Hourly Employees' Pension Plan of Amphenol Corporation
- Pension Plan for Hourly Paid Employees of Chatham Cable Company
- Pyle-National Retirement Plan for Salaried Employees
- LPL Technologies Inc. Retirement Plan
- Pyle-National Retirement Plan for Hourly Employees
- Pension Plan for Salaried Employees of the Sidney Division of the
Amphenol Corporation
- Pension Plan for Hourly Employees of the Sidney Division of the Amphenol
Corporation
All of the aforesaid plans were merged and consolidated effective as of
December 31, 1997. All benefits previously provided under the plans are provided
under the Plan subsequent to the merger and consolidation. All assets of the
plans were transferred to the Plan and Trust and are, on an ongoing basis,
available to pay benefits to employees and their beneficiaries;
The Employer continues to desire to retain the distinct benefit structures
that applied to the participants of the plans prior to the merger and
consolidation to the greatest extent possible. To accomplish this, the Plan
document cross-references certain Exhibits which constitute the text of the
pre-merger plans with subsequent amendments. The persons eligible to participate
in the Plan are defined by the language of the Plan
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<Page>
document which cross-references the Exhibits. To the extent there is a
discrepancy between the Plan document and any Exhibit with respect to the
definition of the Eligible Class of employees, the Plan document will govern.
The Exhibits do not reflect amendments required to be made pursuant to the
applicable laws referenced on the cover page. All such amendments have been made
to the Plan document, and apply to the Exhibits. In other respects, to the
extent practicable the Exhibits shall govern the nature, form and timing of
benefits under the Plan.
It is the intention of Amphenol Corporation to restate the Plan as of the
date set forth on the cover page, and that the Plan continue to meet the
requirements of Section 401(a) of the Internal Revenue Code.
-2-
<Page>
ARTICLE I.
ELIGIBILITY
1.1. Eligibility: An Employee shall be eligible to participate in this Plan
only to the extent that he or she is in an Eligible Class. The terms and
conditions of eligibility shall be determined by reference to the Exhibit
attached hereto which corresponds to the Employee's Eligible Class.
-3-
<Page>
ARTICLE II.
EMPLOYER CONTRIBUTIONS
2.1. Payment of Contributions: The Employer shall contribute to the Plan
from time to time such amounts as the Plan Administrator and the Employer shall
determine are necessary to provide Plan benefits. Such amounts shall be
determined under accepted actuarial methods and assumptions, and may be
contributed in cash or property.
2.2. Limitation on Contribution: Notwithstanding the foregoing, the
Employer's contribution for any Plan Year will not exceed the maximum amount
allowable as a deduction to the Employer under Code Section 404, except to the
extent necessary to satisfy the minimum funding standard required under Code
Section 412 or to correct an error, in which event, the Employee shall make a
contribution to the Plan even if it causes the limitation under Code Section 404
to be exceeded.
2.3. Time of Payment: The Employer will pay to the Trustee its contribution
to the Plan for each Plan Year, within the time prescribed by law, including
extensions of time, for the filing of the Employer's federal income tax return
for the Fiscal Year. In no event, however, will payment to the Trustee be made
after the expiration of the time limit prescribed for satisfaction of the
minimum funding requirements of Code Section 412.
2.4. No Additional Liability: The pension benefits to be provided under the
Plan shall be only such as can be provided by the assets of the Trust Fund and,
except as provided by law, there shall be no liability or obligation on the part
of the Employer to make any further contributions to the Plan in the event of
its termination. Except as otherwise required by ERISA or other applicable law,
no liability for the payment of benefits hereunder shall be imposed upon the
Employer, or the officers, directors or stockholders of the Employer.
-4-
<Page>
ARTICLE III.
EMPLOYER CONTRIBUTIONS
3.1. Required Contributions: The amount of contributions required of
Participants as a condition for receiving benefits provided hereunder shall be
determined by reference to the Exhibit that corresponds to the Participant's
classification and status.
-5-
<Page>
ARTICLE IV.
PLAN BENEFITS
4.1. Plan Benefits: A Participant's benefits, including death benefits,
shall be determined by reference to the Exhibit corresponding to the
Participant's classification and status; provided, however, effective December
12, 1994, notwithstanding any provision of this Plan to the contrary, including
any applicable Exhibit, benefits with respect to qualified military service will
be provided in accordance with section 414(u) of the Code.
4.2. Minimum Benefit for Top-Heavy Plan:
(a) The minimum Accrued Benefit derived from Employer contributions to
be provided under this Section for each Non-Key Employee who is a Participant
during a Plan Year in which the Plan is Top-Heavy Plan shall equal the product
of (1) said Participant's Compensation averaged over the five (5) consecutive
Limitation Years (or actual number of Limitation Years, if less) which produce
the highest average and (2) the lesser of (i) two percent (2%) multiplied by
Years of Service or (ii) twenty percent (20%).
(b) For purposes of providing the aforesaid minimum benefit under Code
Section 416, a Non-Key Employee who is not a Participant solely because (1) his
Compensation is below a stated amount or (2) he declined to make required
contributions (if required) to the Plan will be considered to be a Participant.
Furthermore, such minimum benefit shall be provided regardless of whether such
Non-Key Employee is employed on a specified date.
(c) For purposes of this Section, Years of Service for any Plan Year
beginning before January 1, 1984, or for any Plan Year during which the Plan was
not a Top-Heavy Plan shall be disregarded.
(d) For purposes of this Section, Compensation for any Limitation Year
ending in a Plan Year which began prior to January 1, 1984, subsequent to the
last Limitation Year during which the Plan is a Top-Heavy Plan, or in which the
Participant failed to complete a Year of Service, shall be disregarded.
-6-
<Page>
(e) For the purposes of determining the top-heavy minimum benefit
under this Section, Compensation shall be limited to $200,000 (as adjusted in
such manner as permitted under Code Section 415(d)).
(f) If the Article herein entitled "Payment of Benefits" provides for
the Normal Retirement Benefit to be paid in form other than a single life
annuity, the Accrued Benefit under this Section shall be the Actuarial
Equivalent of the minimum Accrued Benefit under (a) above.
(g) If payment of the minimum Accrued Benefit commences at a date
other than Normal Retirement Date, the minimum Accrued Benefit shall be the
Actuarial Equivalent of the minimum Accrued Benefit commencing at Normal
Retirement Date.
(h) If a Non-Key Employee participants in this Plan and a defined
contribution plan included in a Required Aggregation Group which is top-heavy,
the minimum benefits shall be provided under this Plan.
(i) For any Plan Year when (1) the Plan is a Top-Heavy Plan but not a
Super Top-Heavy Plan and (2) a Key Employee is a Participant in both this Plan
and a defined contribution plan included in a Required Aggregation Group which
is top-heavy, the extra minimum Accrued Benefit (required by the Article herein
entitled "Section 415 Limitation on Benefits" to provide the higher limitations)
shall be provided for each Non-Key Employee who is a Participant by substituting
three percent (3%) for two percent (2%) and thirty percent (30%) for twenty
percent (20%) in (a) above.
(j) In lieu of the above, if a Non-Key Employee participates in this
Plan and a defined contribution plan included in a Required Aggregation Group
which is top-heavy, a minimum allocation of five percent (5%) of Compensation
shall be provided under the defined contribution plan. If the defined
contribution plan is amended so that the minimum benefits are no longer provided
under the defined contribution plan, the minimum benefits shall be provided
under this Plan.
However, for any Plan Year when (1) the Plan is a Top-Heavy Plan but not a
Super Top-Heavy Plan and (2) a Key Employee is a Participant in both this Plan
and a
-7-
<Page>
defined contribution plan included in a Required Aggregation Group which
is top-heavy, seven and one-half percent (71%) shall be substituted for five
percent (5%) above.
(k) The preceding provisions of this Section shall be inapplicable to
the extent not required of this Plan pursuant to Code Section 416(i)(4).
4.3. Non-Duplication of Benefits: If an Inactive Participant who is no
longer actively employed by the Employer again becomes actively employed by the
Employer in the same Eligible Class, any such renewed participation shall not
result in duplication of benefits. Accordingly, if such Participant has received
or was deemed to have received a distribution of a vested Accrued Benefit under
the Plan by reason of prior participation (and such distribution has not been
repaid to the Plan with interest as described in the preceding paragraph within
a period of the earlier of five (5) years after the first date on which the
Participant is subsequently reemployed by the Employer or the close of the first
period of five (5) consecutive Breaks in Service commencing after the
distribution), his Accrued Benefit shall be reduced by the Accrued Benefit
determined as of the date of distribution.
4.4. Transfers, Service with Affiliated Employers: The benefits provided
hereunder as to an Employee who transfers employment to or from an Affiliated
Employer or into another Eligible Class shall be determined by reference to this
Article and the Article herein entitled "TRANSFERS; SERVICE WITH AFFILIATED
EMPLOYERS."
-8-
<Page>
ARTICLE V.
CODE SECTION 415 LIMITATIONS ON BENEFITS
5.1. Maximum Annual Benefit
(a) Notwithstanding the foregoing and subject to the exceptions below,
the maximum Annual Benefit payable to a Participant under this Plan in any
Limitation Year shall equal the lesser of:
(1) $90,000, or
(2) one hundred percent (100%) of the Participant's Compensation
averaged over three consecutive Limitation Years (or the actual number of
Limitation Years for Employees who have been employed for less than three
consecutive Limitation Years) during which the Employee had the greatest
aggregate Code Section 415 Compensation from the Employee.
(b) Notwithstanding anything in this Article to the contrary, the
maximum Annual Benefit for any Participant in a defined benefit plan in
existence on July 1, 1982, shall not be less than the "protected current accrued
benefit", payable annually, provided for under question T-3 of Internal Revenue
Notice 83-10.
(c) Notwithstanding anything in the Article to the contrary, if the
Plan was in existence on May 6,
1986, and had complied at all times with the requirements of Code Section 415,
the maximum Annual Benefit for any individual who is a Participant as of the
first day of the Limitation Year beginning after December 31, 1986, shall not be
less than the Current Accrued Benefit. "Current Accrued Benefit" shall mean a
Participant's Accrued Benefit under the Plan, determined as if the Participant
had separated from service as of the close of the last Limitation Year beginning
before January 1, 1987, when expressed as an Annual Benefit within the meaning
of Code Section 415(b)(2). In determining the amount of a Participant's Current
Accrued Benefit, the following shall be disregarded: (1) any change in the terms
and conditions of the Plan after May 5, 1986; and (2) any cost of living
adjustment occurring after May 5, 1986.
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(d) The dollar limitation under Code Section 415(b)(1)(A) stated in
paragraph (a)(1) above shall be adjusted annually as provided in Code Section
415(d) pursuant to the Regulations. The adjusted limitation is effective as of
January 1st of each calendar year and is applicable to Limitation Years ending
with or within that calendar year.
(e) The limitation stated in paragraph (a)(2) above for Participants
who have separated from service with a non-forfeitable right to an Accrued
Benefit shall be adjusted annually as provided in Code Section 415(d) pursuant
to the Regulations prescribed by the Secretary of the Treasury.
(f) For the purpose of this Article, all qualified defined benefit
plans (whether terminated or not) ever maintained by the Employer shall be
treated as one defined benefit plan, and all qualified defined contribution
plans (whether terminated or not) ever maintained by the Employer shall be
treated as one defined contribution plan.
(g) For the purpose of this Article, if the Employer is a member of a
controlled group of corporations, trades or businesses under common control (as
defined by Code Section 1563(a) or Code Section 414(b) and (c) as modified by
Code Section 415(h)) or is a member of an affiliated service group (as defined
by Code Section 414(m)), all employees of such employers shall be considered to
be employed by a single employer.
(h) For the purpose of this Article, if this Plan is a Code Section
413(c) plan, all employers of a Participant who maintain this Plan will be
considered to be a single employer.
5.2. Adjustments to Annual Benefit and Limitations:
(a) If the Annual Benefit begins before the Participant's Social
Security Retirement Age under the Social Security Act then the $90,000
limitation shall be reduced in such manner as the Secretary of the Treasury
shall prescribe which is consistent with the reduction for old-age insurance
benefits commencing before the Social Security Retirement Age under the Social
Security Act.
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(b) Notwithstanding the aforesaid, for Limitation Years beginning
prior to January 1, 1987, the $90,000 limit shall not be reduced if the annual
benefit begins on or after age sixty-two (62). If the Annual Benefit begins
before age sixty-two (62), the $90,000 limitation shall be reduced by each month
benefits commence before the Participant attains age sixty-two (62) so that it
is the Actuarial Equivalent of the $90,000 limitation beginning at age sixty-two
(62). However, the $90,000 limitation shall not be actuarially reduced to less
than:
(1) $75,000 if the Annual Benefit commences on or after age
fifty-five (55), or
(2) the amount which is the Actuarial Equivalent of the $75,000
limitation at age fifty-five (55) if the Annual Benefit commences prior to age
fifty-five (55).
For purposes of adjusting the $90,000 limitation applicable prior to age
sixty-two (62) or the $75,000 limitation applicable prior to age fifty-five
(55), the adjustment shall be made pursuant to the general principles set forth
in this Plan for determining Actuarial Equivalence except that the interest rate
assumption shall be the greater of five percent (5%) or the rate specified in
Schedule A hereto and the mortality decrement shall be ignored to the extent
that a Forfeiture does not occur at death.
(c) If the Annual Benefit begins after the Participant's Social
Security Retirement Age or for Plan Years beginning prior to January 1, 1987,
age 65, the $90,000 limitation shall be increased so that it is the Actuarial
Equivalent of the $90,000 limitation at the Participant's Social Security
Retirement Age (or for Plan Years beginning prior to January 1, 1987, age 65).
(d) If the Annual Benefit begins before age sixty-two (62), then the
$90,000 limitation shall be reduced so that it is the Actuarial Equivalent of
the $90,000 limitation beginning at age sixty-two (62). However, the $90,000
shall not be actuarially reduced to less than:
(1) $75,000 if the Annual Benefit commences on or after age
fifty-five (55), or
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(2) the amount which is the Actuarial Equivalent of the $75,000
limitation at age fifty-five (55) if the Annual Benefit commences prior to age
fifty-five (55).
For purposes of adjusting the $90,000 limitation applicable prior to
age sixty-two (62) or the $75,000 limitation applicable prior to age fifty-five
(55), the adjustment shall be made pursuant to the general principles used
herein for determining the Actuarial Equivalent except that the interest rate
assumption shall be the greater of five percent (5%) or the rate specified in
Schedule A hereto and the mortality decrement shall be ignored to the extent
that a Forfeiture does not occur at death.
(e) For purposes of adjusting the Annual Benefit to a Straight
Life Annuity, the adjustment shall be made pursuant to Section 2.2 except that
the interest rate assumption shall be the greater of five percent (5%) or the
rate specified in Schedule A hereto.
(f) For purposes of adjusting the $90,000 limitation applicable
after age 65, the adjustment shall be made the Actuarial Equivalent except that
the interest rate assumption shall be the lesser of five percent (5%) or the
rate specified in Schedule A hereto and the mortality decrement shall be ignored
to the extent that a Forfeiture does not occur at death.
(g) For purposes of adjusting the $90,000 limitation applicable
after the Participant's Social Security Retirement Age (or for Plan Years
beginning prior to January 1, 1987, age 65) the adjustment shall be made for the
Actuarial Equivalent except that the interest rate assumption shall be the
lesser of five percent (5%) or the rate specified in Schedule A hereto and the
mortality decrement shall be ignored to the extent that a Forfeiture does not
occur at death.
(h) For purposes of the aforesaid adjustments, no adjustments
under Code Section 415(d) shall be taken into account before the Limitation Year
for which such adjustment first takes effect.
(i) For purposes of this Section, no adjustment is required for
Qualified Joint and Survivor Annuity benefits, Qualified Pre-Retirement Survivor
Annuity benefits and post-retirement medical benefits.
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(j) Notwithstanding the aforesaid, effective for Plan Years after
January 1, 1997, if benefits commence prior to age 62, the dollar limitation
under Code Section 415(b) shall be the Actuarial Equivalent of the Participant's
limitation for benefits commencing at age 62, reduced for each month by which
benefits commence before the month in which the Participant attains age 62. In
order to determine Actuarial Equivalents for this purpose, the lesser of the
Actuarial Equivalent amount computed using the Plan interest rate and the
Applicable Mortality Table, and the amount computed using 5% interest and the
Applicable Mortality Table shall be used. If the annual benefit is paid in a
form other than a non-decreasing life annuity payable for a period not less than
the life of a Participant (or, in the case of a Qualified Pre-Retirement
Survivor Annuity, the life of the surviving spouse,) the Actuarial Equivalent
amount shall be determined by substituting the Applicable Interest Rate for five
percent (5%) in the preceding sentence.
Further, for purposes of adjusting the benefit to a straight life annuity,
the equivalent Annual Benefit shall be the greater of the equivalent Annual
Benefit computed using the Plan interest rate and the Applicable Mortality
Table, and the equivalent Annual Benefit computed using five-percent (5%)
interest rate assumption and the Applicable Mortality Table. If the Annual
Benefit is paid in a form other than a non-decreasing life annuity payable for a
period not less than the life of a Participant or, in the case of a Qualified
Pre-Retirement Survivor Annuity, the life of the surviving spouse, the
Applicable Interest Rate shall be substituted for five percent (5%) in the
preceding sentence.
5.3. Annual Benefit Not in Excess of $10,000: This Plan may pay an Annual
Benefit to any Participant in excess of his maximum Annual Benefit if the Annual
Benefit derived from Employer contributions under this Plan and all other
defined benefit plans maintained by the Employer does not in the aggregate
exceed $10,000 for the Limitation Year or for any prior Limitation Year and the
Employer has not at any time maintained a defined contribution plan in which the
Participant participated. For purposes of this paragraph, if this Plan provides
for voluntary or
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mandatory Employee contributions, such contribution will not be considered a
separate defined contribution plan maintained by the Employer.
5.4. Participation or Service Reductions: If a Participant has less than
ten (10) Years of Participation in the Plan at the time he begins to receive
benefits under the Plan, the limitations in Sections 5.1(a)(1) and 5.2 shall be
reduced by multiplying such limitations by a fraction (a) the numerator of which
is the number of years of participation (or part thereof) in the Plan, and (b)
the denominator of which is ten (10); provided, however, that said fraction
shall in no event be less than 1/10th. The limitations of Sections 5.1(a)(2) and
5.3 shall be reduced in the same manner except the preceding sentence shall be
applied with respect to Years of Service with the Employer rather than Years of
Participation in the Plan. Additionally, to the extent provided in Regulations,
for years beginning after December 31, 1986, the above described reductions to
the limitations in Sections 5.1(a)(1) (except for purposes of Section 5.5(c)(2))
and 5.2 shall be applied separately with respect to each change in the benefits
structure of the Plan adopted before August 3, 1992.
5.5. Multiple Plan Reduction:
(a) Subject to the exceptions in Section 5.5(f) and Section 5.5(g)
below, if a Participant is (or has been) a participant in one or more defined
benefit plans and one or more defined contribution plans maintained by the
Employer, the sum of the defined benefit plan fraction and the defined
contribution plan fraction for any Limitation Year may not exceed 1.0.
(b)(1). The defined benefit plan fraction is a fraction, the numerator
of which is the sum of the Participant's projected annual benefits under all
defined benefit plans (whether terminated or not) maintained by the Employer,
and the denominator of which is the lesser of one hundred twenty-five percent
(125%) of the dollar limitation determination for the Limitation Year under Code
Sections 415(b) and (d) or one hundred forty percent (140%) of the highest
average compensation, including any adjustments under Code Section 415(b).
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
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benefit plans maintained by the Employer 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
such plans after May 5, 1986.
The preceding sentence applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements of Code Section 415
for all Limitation Years beginning before January 1, 1987.
(2) For purposes of applying the limitations of Code Section 415,
the "projected annual benefit" for any Participant is the benefit, payable
annually, under the terms of the Plan determined pursuant to Regulation
1.415-7(b)(3).
(3) For purposes of applying the limitations of Code Section 415,
"protected current accrued benefit" for any Participant in a defined benefit
plan in existence on July 1, 1982 will be the accrued benefit, payable annually,
provided for under question T-3 of Internal Revenue Service Notice 83-10.
(c)(1) The defined contribution plan fraction is a fraction, the
numerator of which is the sum of the annual additions to the Participant's
account under all the defined contribution plans (whether or not terminated)
maintained by the Employer for the current and all prior Limitation Years
(including the annual additions attributable to the Participant's nondeductible
Employee contributions to all defined benefit plans (whether or not terminated)
maintained by the Employer; and the annual additions attributable to all welfare
benefit funds, as defined in Code Section 419(e) or individual medical accounts,
as defined in Code Section 415(1)(2), maintained by the Employer, and the
denominator of which is the sum of the "maximum aggregate amounts" for the
current and all prior Limitation Years of service with the Employer (regardless
of whether a defined contribution plan was maintained by the Employer). The
"maximum aggregate amount" in any Limitation Year is the lesser of one hundred
twenty-five percent (125%) of the dollar limitation determined under Code
Sections
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415(b) and (d) in effect under Code Section 415(c)(1)(A) or thirty-five
percent (35%) of the Participant's Section 415 Compensation for such Limitation
Year.
If the Employee 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 maintained by the Employer 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 1.0 under the
terms of this Plan. Under the adjustment, an amount equal to
(i) the excess of the sum of the fraction over 1.0, multiplied by
(ii) 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 such plans made after May 5, 1986, but using the
Section 415 limitation applicable to the first Limitation Year beginning on or
after January 1, 1987.
The annual addition for any Limitation Year beginning before January 1, 1987,
will not be recomputed to treat all Employee contributions as annual additions.
(2) Notwithstanding the foregoing, the numerator of the defined
contribution plan fraction will be adjusted pursuant to Regulation 1.415-7(d)(1)
and questions T-6 and T-7 of Internal Revenue Service Notice 83-10.
(3) For defined contribution plans in effect on or before June 1,
1982, the Plan Administrator may elect, for any Limitation Year ending after
December 31, 1982, that the amount taken into account in the denominator for
every Participant for all Limitation Years ending before January 1, 1983 will be
an amount equal to (A) the denominator for the Limitation Year ending in 1982
determined under the law in effect for the Limitation Year ending in 1982,
multiplied by (B) the "transition fraction".
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(4) For purposes of the preceding paragraph, the term "transition
fraction" will mean a fraction (A) the numerator of which is the lesser of (i)
$51,875 or (ii) 1.4 multiplied by twenty-five percent (25%) of the Participant's
415 Compensation for the Limitation Year ending in 1981, and (B) the denominator
of which is the lesser of (i) $41,500 or (ii) twenty-five percent (25%) of the
Participant's 415 Compensation for the Limitation Year ending in 1981.
(5) Notwithstanding the foregoing, for any Limitation Year in
which the Plan is a Top-Heavy Plan, $41,500 will be substituted for $51,875 in
determining the "transition fraction" unless the extra minimum allocation is
being provided under the Plan pursuant to Code Section 416(h)(2). However, for
any Limitation Year in which this Plan is a Super Top-Heavy Plan, $41,500 will
be substituted for $51,875 in any event.
(d) Notwithstanding the foregoing, for any Limitation Year in which
the Plan is a Top-Heavy Plan, "One Hundred Percent (100%)" will be substituted
for "One Hundred Twenty-Five Percent (125%)" in paragraphs (b)(1) and (c)(1)
unless the extra minimum allocation is being provided hereunder pursuant to Code
Section 416(h)(2). However, for any Limitation Year in which the Plan is a Super
Top-Heavy Plan, "One Hundred Percent (100%)" will be substituted for "One
Hundred Twenty-Five Percent (125%)" in any event.
(e) If the sum of the defined benefit plan fraction and the defined
contribution plan fraction will exceed 1.0 in any Limitation Year for any
Participant, the Plan Administrator will adjust the numerator of the defined
benefit plan fraction so that the sum of both fractions will not exceed 1.0 in
any Limitation Year for such Participant.
(f) If (1) the substitution of One Hundred Percent (100%) for One
Hundred Twenty-five Percent (125%) and $41,500 for $51,875 above, or (2) the
excess benefit accruals or annual additions provided for in Internal Revenue
Service Notice 82-19 cause the 1.0 limitation to be exceeded for any Participant
in any Limitation Year, such Participant will be subject to the following
restrictions for each future Limitation Year until the 1.0 limitation is
satisfied:
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(i) the Participant's Accrued Benefit under the defined benefit
plan will not increase,
(ii) no annual additions may be credited to a Participant's
accounts, and
(iii) no Employee contributions (voluntary or mandatory) will be
made under any defined benefit plan or any defined contribution plan of the
Employer.
(g) Notwithstanding any provision to the contrary in this Section, for
Limitation Years beginning after December 31, 1999, if an Employee is (or has
been) a Participant in one or more defined benefit plans and one or more defined
contribution plans maintained by the Employer, the sum of the defined benefit
plan fraction and the defined contribution plan fraction for any limitation year
MAY exceed 1.0. After the above effective date, only the limitations of Code
Section 415(b) will apply to this defined benefit plan. No adjustment need be
made to either the defined benefit or defined contribution fraction in the event
that the combined defined benefit/defined contribution limit exceeds 1.0 in any
Limitation Year.
5.6. Incorporation By Reference: Notwithstanding anything contained in this
Section to the contrary, the limitations, adjustments and other requirements
prescribed in this Section will at all times comply with the provisions of Code
Section 415 and the Regulations thereunder, the terms of which are specifically
incorporated herein by reference.
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ARTICLE VI.
VESTING
6.1. Vesting Rights: A Participant will acquire a vested and nonforfeitable
interest in his or her Accrued Benefit attributable to Employer contributions in
accordance with the Exhibit attached hereto which corresponds to the
Participant's classification and status.
6.2. Top-Heavy Vesting: Notwithstanding the vesting provided for above, for
any Top-Heavy Plan Year, the vested portion of the Accrued Benefit of any
Participant who has one (1) Hour of Service after the Plan becomes a Top-Heavy
Plan will be a percentage of the Participant's Accrued Benefit determined on the
basis of the Participant's number of Years of Vesting Service according to the
schedule included in the Exhibit corresponding to the Participant's
classification and status.
6.3. Service Computation Period; Service Credit For vesting purposes, Years
of Vesting Service, Breaks in Service and any other conditions relative to
vesting shall be determined by reference to the Exhibit corresponding to the
Participant's classification and status.
6.4. Amendment of Vesting Schedule: If the Plan's vesting schedule is
amended, or the Plan is amended in any way that directly or indirectly affects
the computation of the Participant's nonforfeitable percentage or if the Plan is
deemed amended by an automatic change to or from a top-heavy vesting schedule,
each Participant with at least three (3) Years of Service with the Employer may
elect, within a reasonable period after the adoption of the amendment or change,
to have the nonforfeitable percentage computed under the Plan without regard to
such amendment or change. For Participants who do not have at least one (1) Hour
of Service in any Plan Year beginning after December 31, 1988, the preceding
sentence will be applied by the substitution of "5 Years of Service" for "3
Years of Service" where such language appears.
The period during which the election may be made will commence with the
date the amendment is adopted or deemed to be made and will end on the latest
of:
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(a) sixty (60) days after the amendment is adopted;
(b) sixty (60) days after the amendment becomes effective; or
(c) sixty (60) days after the Participant is issued written
notice of the amendment by the Employer or Plan Administrator.
Notwithstanding the foregoing, no such change in the Plan's vesting
schedule or computation of a Participant's nonforfeitable percentage shall apply
to a Participant unless such Participant is credited with an Hour of Service on
or after the date of the change.
6.5. Amendments Affecting Vested and/or Accrued Benefit. No amendment to
the Plan will be effective to the extent that it has the effect of decreasing a
Participant's Accrued Benefit. Notwithstanding the preceding sentence, a
Participant's Accrued Benefit may be reduced to the extent permitted under
Section 412(c) (8) of the Code. For purposes of this Section, a Plan amendment
which has the effect of decreasing a Participant's Accrued Benefit or
eliminating an optional form of benefit, with respect to benefits attributable
to service before the amendment will be treated as reducing an Accrued Benefit.
Furthermore, if the vesting schedule of a Plan is amended, in the case of an
Employee who is a Participant as of the later of the date such amendment is
adopted or the date it becomes effective, the nonforfeitable percentage
(determined as of such date) of such Employee's right to his or her
Employer-provided Accrued Benefit will not be less than the percentage computed
under the Plan without regard to such amendment.
6.6. No Divestiture for Cause: Amounts vested pursuant to this Section
shall not be subjected to divestiture for cause.
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ARTICLE VII.
PAYMENT OF BENEFITS
7.1. Notice: The Plan Administrator shall provide the Participant with a
notice of rights of payment no less than thirty (30) and no more than ninety
(90) days before the Participant's Annuity Starting Date. Such notice shall be
in writing and shall set forth the following information:
(a) an explanation of the eligibility requirements for, the
material features of, and the relative values of the alternate forms of benefits
available hereunder; and
(b) the Participant's right to defer receipt of a Plan
distribution. Such notice shall be given to the Participant in person or shall
be mailed to the Participant's current address as reflected in the Employer's
records.
7.2. Waiver of Thirty (30) Day Notice Period: Notwithstanding the
provisions of Section 7.1 above, such distribution may commence less than thirty
(30) days after the notice required under Regulation Section 1.411(a)-11(c) is
given, provided that:
(a) the Plan Administrator clearly informs the Participant that the
Participant 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 a distribution
(and, if applicable, a particular distribution option);
(b) the Participant, after receiving the notice, affirmatively elects
the distribution; and
(c) to the extent applicable, the requirements of Section 8.4 are
satisfied.
7.3. Form of Payment. The automatic form of retirement benefit, and any
optional forms of benefits shall be determined by reference to the Exhibit
corresponding to the Participant's classification and status.
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7.4. Actuarial Equivalent Benefit : Except to the extent a Participant's
benefits are suspended in accordance with the rules set forth in the Section
below captioned "Suspension of Benefits", or as otherwise specifically set forth
herein, the amount of any form of benefit under the terms of this Plan will be
the Actuarial Equivalent of the Participant's Accrued Benefit in the Normal Form
commencing at Normal Retirement Age.
7.5. Payment Without Participant Consent:
(a) Effective for Plan Years beginning after December 31, 1997, with
respect to Accrued Benefits payable by reference to an Exhibit which provided
for the immediate cash-out of de minimis benefits prior to January 1, 1998, if
the Actuarial Equivalent present value of Participant's vested Accrued Benefit
derived from Employer and Employee contributions does not exceed $5,000, the
Participant or beneficiary entitled to such benefit will receive a single sum
distribution of cash or property of the Actuarial Equivalent value of the entire
vested Accrued Benefit. If the value of a Participant's Vested Accrued Benefit
exceeded $5,000 at the time of any distribution under the Plan, the value of the
benefit shall be deemed to exceed $5,000 at all times thereafter until March 22,
1999. If the Participant has no vested interest in a benefit, the Participant
shall be deemed to have a distribution of zero dollars on the Participant's
termination from service date. This provision is applicable to all distributions
under the Plan, including any death benefit.
(b) In the event that the Participant has terminated employment and
the Participant (and the Participant's Spouse, if applicable) neither consents
to receive a Plan distribution nor elects to defer receipt of a Plan
distribution, the Participant's Accrued Benefit shall be distributed in the
Automatic Form as soon as practicable thereafter, but in no event before the
date the Participant attains Normal Retirement Age, if such vested Accrued
Benefits exceeds $3,500, or, effective January 1, 1998, $5,000 or such greater
amount as permitted under the Code.
(c) Notwithstanding the foregoing, the Plan Administrator may, upon
the Participant's termination of employment, distribute an annuity contract to
the Participant which provides that payments thereunder shall not commence until
a
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later date if such annuity contract satisfies the requirements of Sections
401(a)(11) and 417 of the Code.
7.6. Restrictions on Immediate Distributions:
(a) An Accrued Benefit is immediately distributable if any part of the
Accrued Benefit could be distributed to the Participant (or surviving Spouse)
before the Participant attains (or would have attained whether or not deceased)
the later of the Normal Retirement Age or age sixty-two (62).
(b) If the present value of a Participant's vested Accrued Benefit
derived from Employer and Employee contributions exceeds $3,500, or, effective
January 1, 1998, $5,000 or such greater amount as permitted under the Code, and
the Accrued Benefit is immediately distributable, the Participant and his or her
Spouse (or where either the Participant or the Spouse has died, the survivor)
must consent to any distribution of such Accrued Benefit. The consent of the
Participant and the Spouse shall be obtained in writing within the 90-day period
ending on the Annuity Starting Date. The Plan Administrator shall notify the
Participant and the Participant's Spouse of the right to defer any distribution
until the Participant's Accrued Benefit is no longer immediately distributable.
Such notification shall include a general description of the material features,
and an explanation of the relative values of, the optional forms of benefit
available under the Plan in a manner that would satisfy the notice requirements
of Code Section 417(a)(3), and shall be provided no less than 30 days and no
more than 90 days prior to the Annuity Starting Date.
(c) Notwithstanding the foregoing, only the Participant need consent
to the commencement of a distribution in the form of a Qualified Joint and
Survivor Annuity while the Accrued Benefit is immediately distributable. Neither
the consent of the Participant nor the Participant's Spouse shall be required to
the extent that a distribution is required to satisfy Code Section 401(a)(9) or
Code Section 415.
7.7. Limitation of Benefits on Plan Termination: The restrictions of
paragraphs (a) and (b) below are included solely to meet the requirements of
Proposed Treasury Regulation Section 1.401(a)4-5(c). If the provisions of
paragraphs (a) and (b) below are no longer necessary to qualify the Plan under
said Proposed Regulation or
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the Code, said paragraphs (a) and (b) shall be ineffective without the necessity
of further amendment.
(a) In the event that the Plan is terminated, the benefit of each
Highly Compensated Participant and each former Highly Compensated Employee shall
be limited to a benefit which is nondiscriminatory within the meaning of Code
Section 401(a)(4) and the Regulations thereunder.
(b) For Plan Years beginning on or after January 1, 1993, the monthly
payments made from the Plan to Highly Compensated Employees and to former Highly
Compensated Employees who are among the twenty-five most highly paid Employees
with the greatest Compensation in the current or any prior year, shall be
limited to an amount equal to the monthly payments that would be made on behalf
of the Employee under a Straight Life Annuity that is the Actuarial Equivalent
of the sum of the Employee's Accrued Benefit, the Employee's other benefits
under the Plan (other than a social security supplement, within the meaning of
Section 1.411(a)-7(c)(4)(ii) of the Regulations), and the amount the Employee is
entitled to receive under a social security supplement.
The restrictions of this paragraph (b) shall not apply, however, if
(1) after payment of benefits to an Employee described above, the
value of Plan assets equals or exceeds one hundred ten percent (110%) of the
value of current liabilities, as defined in Code Section 412(d)(7),
(2) the value of benefits provided under the Plan for an Employee
described above is less than one percent (1%) of the value of current
liabilities before distribution, or
(3) the value of the benefits payable under the Plan to any
Employee described above does not exceed $3,500, or, effective January 1, 1998,
$5,000 or such greater amount as permitted under the Code.
(c) For purposes of this Section, the term "benefit" shall include
loans in excess of the amounts set forth in Code Section 72(p)(2)(A), any
periodic income, any withdrawal values payable to a living Employee and any
death benefits not provided for by insurance on the Employee's life.
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An Employee's otherwise restricted benefit may be distributed in full to
the affected Employee if prior to receipt of the restricted amount the Employee
enters into a written agreement with the Plan Administrator to secure repayment
to the Plan of the restricted amount. The restricted amount is the excess of the
amounts distributed to the Employee (accumulated with reasonable interest) over
the amounts that could have been distributed to the Employee under the Normal
Form described in Section 4.1 of the Plan (accumulated with reasonable
interest). The Employee may secure repayment of the restricted amount upon
distribution by: (1) entering into an agreement for promptly depositing in
escrow with an acceptable depositary property having a fair market value equal
to at least one hundred twenty-five percent (125%) of the restricted amount, (2)
providing a bank letter of credit in an amount equal to at least one hundred
percent (100%) of the restricted amount, or (3) posting a bond equal to at least
one hundred percent (100%) of the restricted amount. If the Employee elects to
post bond, the bond will be furnished by an insurance company, bonding company
or other surety for federal bonds.
The escrow arrangement may provide that an Employee may withdraw amounts in
excess of one hundred twenty-five percent (125%) of the restricted amount. If
the market value of the property in an escrow account falls below one hundred
ten percent (110%) of the remaining restricted amount, the Employee must deposit
additional property to bring the value of the property held by the depositary up
to one hundred twenty-five percent (125%) of the restricted amount. The escrow
arrangement may provide that Employee may have the right to receive any income
from the property placed in escrow, subject to the Employee's obligation to
deposit additional property, as set forth in the preceding sentence.
A surety or bank may release any liability on a bond or letter of credit in
excess of one hundred percent (100%) of the restricted amount.
If the Plan Administrator certifies to the depositary, surety or bank that
the Employee (or the Employee's estate) is no longer obligated to repay any
restricted amount, a depositary may redeliver to the Employee any property held
under an escrow
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agreement, and a surety or bank may release any liability on an
Employee's bond or letter of credit.
7.8. Early Plan Termination Restrictions: Notwithstanding any provision in
this Plan to the contrary, prior to the Plan Year beginning on January 1, 1993,
and during the first ten (10) years after the effective date hereof, and if full
current costs had not been met at the end of the first ten (10) years, until
said full current costs are Net, the benefits provided by the Employer's
contributions for the Participants whose anticipated annual retirement benefit
at Normal Retirement Date exceeds $1,500 and who at the effective date of the
Plan were among the twenty-five (25) highest paid Employees of the Employer will
be subject to the conditions set forth in the following provisions.
(a) The benefit payable to a Participant described in this Section or his
Beneficiary shall not exceed the greater of the following:
(1) those benefits purchasable by the greater of (i) $20,000, or (ii)
an amount equal to 20% of the first $50,000 of the Participant's annual
Compensation multiplied by the number of years from the effective date of the
Plan to the earlier of (A) the date of termination of the Plan, or (B) the date
the benefit of the Participant becomes payable or (C) the date of a failure on
the part of the Employer to meet the full current costs of the Plan; or
(2) if a Participant is a "substantial owner" (as defined in ERISA
Section 4022(b)(5)(A)), the present value of the benefit guaranteed for
"substantial owners" under ERISA Section 4022, or
(3) if the Participant is not a "substantial owner", the present value
of the maximum benefit provided in ERISA Section 4022(b)(3)(B), determined on
the date the Plan terminates or on the date benefits commence, whichever is
earlier and in accordance with regulations of the Pension Benefit Guaranty
Corporation.
(b) If the Plan is terminated or the full current costs thereof have not
been met at any time within ten (10) years after the effective date, the
benefits which any of the Participants described in this Section may receive
from the Employer's contribution shall not exceed the benefits set forth in
paragraph (a) above. If at the end
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of the first ten (10) years the full current costs are not met, the restrictions
will continue to apply until the full current costs are funded for the first
time.
(c) If a Participant described in this Section leaves the employ of the
Employer of withdraws from participation in the Plan when the full current costs
have been met, the benefits which he may receive from the Employer contributions
shall not at any time within the first ten (10) years after the effective date
exceed the benefits set forth in paragraph (a) above, except as provided in
paragraph (i) below.
(d) These conditions shall not restrict the full payment of any survivor's
benefits on behalf of a Participant who dies while in the Plan and the full
current costs have been met.
(e) These conditions shall not restrict the current payment of full
retirement benefits called for by the Plan for any retired Participant while the
Plan is in full effect and its full current costs have been met, provided an
agreement, adequately secured, guarantees the repayment of any part of the
distribution that is or may become restricted.
(f) If the benefits of, or with respect to, any Participant shall have been
suspended or limited in accordance with the limitations of paragraphs (a), (b),
and (c) above because the full current costs of the Plan shall not then have
been met, and if such full current costs shall thereafter be met, then the full
amount of the benefits payable to such Participant shall be resumed and the
parts of such benefits which have been suspended shall then be paid in full.
(g) Notwithstanding anything in paragraphs (a), (b) and (c) above, if on
the termination of the Plan within the first ten (10) years after the effective
date, the funds, contracts, or other property under the Plan are mot than
sufficient to provide Accrued Benefits for Participants and their Beneficiaries
including full benefits for all Participants other than such of the twenty-five
(25) highest paid Employees as are still in the service of the Employer and also
including Accrued Benefits as limited by this Section for such twenty-five (25)
highest paid Employees, then any excess of such funds, contracts, and property
shall be used to provide Accrued Benefits for the twenty-
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five (25) highest paid Employees in excess of such limitations of this Section
up to the Accrued Benefits to which such Employees would be entitled without
such limitations.
(h) In the event that Congress should provide by statutes, or the Treasury
Department or the Internal Revenue Services should provide by regulation or
ruling, that the limitations provided for in this Article are not longer
necessary in order to meet the requirement for a qualified plan under the Code
as then in effect, the limitations in this Article shall become void and shall
no longer apply without the necessity of amendment to this Plan.
(i) In the event a lump-sum distribution is made to any Employee subject to
the above restrictions in an amount in excess of that amount otherwise permitted
under this Article, an agreement shall be made, with adequate security
guaranteeing repayment of any amount of the distribution that is restricted.
Adequate security shall mean property having a fair market value of at least one
hundred twenty-five percent (125%) of the amount which would be repayable if the
Plan had terminated on the date of distribution of such lump sum. If the fair
market value of the property falls below on hundred ten percent (110%) of the
amount which would then be repayable if the Plan were then to terminate, the
distributee shall deposit additional property to bring the value of the property
to one hundred twenty-five percent (125%) of such amount.
In the event of the termination of partial termination of this Plan, the
rights of all affected Employees to benefits accrued to the date of such
termination or partial termination (to the extent funded as of such date) shall
be nonforfeitable.
7.9. Suspension of Benefits:
(a) Normal or early retirement benefits in pay status will be
suspended for each calendar month during which the Employee completes at least
40 Hours of Service as defined in Section 203(a)(3)(B) of ERISA. Consequently,
the amount of benefits which are paid later than Normal Retirement Age will be
computed without regard to amounts which were suspended under the preceding
sentence, i.e. as if the Employee had been receiving benefits since Normal
Retirement Age.
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(b) Resumption of Payment. If benefit payments have been suspended,
payments shall resume no later than the first day of the third calendar month
after the calendar month in which the Employee ceases to be employed in
"service" as defined in ERISA Section 203(a)(3)(B). This initial payment upon
resumption shall include the payment scheduled to occur in the calendar month
when payments resume and any amounts withheld during the period between the
cessation of "service" under Section 203(a)(3)(B) of ERISA and the resumption of
payments.
(c) Notification. No payment shall be withheld by the Plan pursuant to
this Section unless the Plan Administration notifies the Employee by personal
delivery or first class mail during the first calendar month or payroll period
in which the Plan withholds payments that such Employee's benefits are
suspended. Such notification shall contain a description of the specific reasons
why benefit payments are being suspended, a description of the Plan provision
relating to the suspension of payments, a copy of such provisions, and a
statement to the effect that applicable Department of Labor regulations may be
found in Section 2530.203-3 of Title 29 of the Code of Federal Regulations.
In addition, the notice shall inform the Employee of the Plan's procedures
for affording a review of the suspension of benefits. Requests for such reviews
may be considered in accordance with the claims procedure adopted by the Plan
pursuant to Section 503 of ERISA and applicable regulations.
(d) Amount Suspended.
(1) Annuity Payments. In the case of benefits payable
periodically as a monthly basis for as long as a life (or lives) continues, such
as a Straight Life Annuity of a Qualified Joint and Survivor Annuity, an amount
equal to the portion of a monthly benefit payment derived from Employer
contributions.
(2) Other Benefit Forms. In the case of a benefit payable in a
form other than the form described in subsection (1) above, an amount equal to
the Employer-provided portion of benefit payments for a calendar month in which
the Employee is employed in ERISA Section 203(a)(3)(B) service, equal to the
lesser of
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(i) The amount of benefits which would have been payable to
the Employee if he or she had been receiving monthly benefits under the Plan
since actual retirement based on a Straight Life Annuity commencing at actual
retirement age; or
(ii) The actual amount paid or scheduled to be paid to the
Employee for such month. Payments which are scheduled to be paid less frequently
than monthly may be converted to monthly payments.
(e) Minimum Benefits.This Section does not apply to the minimum
benefit to which the participant is entitled under the top-heavy rules of the
Section entitled "Minimum Benefit for Top-Heavy Plan".
7.10. Restrictions on Commencement Of Retirement Benefits:
(a) Unless the Participant elects otherwise, distribution of benefits
will begin no later than the 60th day after the later of the close of the Plan
Year in which:
(1) the Participant attains Normal Retirement Age;
(2) occurs the 10th anniversary of the Plan Year in which the
Participant commenced participated in the Plan; or
(3) the Participant terminates services with the Employer.
(b) Notwithstanding the foregoing, the failure of a Participant and
the Participant's Spouse, if any, to consent to a distribution while a benefit
is payable under the Article entitled "Plan Benefits", will be deemed an
election to defer commencement of payment of any benefit sufficient to satisfy
this paragraph.
7.11. Minimum Distribution Requirements: All distributions required under
this Article will be determined and made in accordance with the minimum
distribution requirements of Code Section 401(a)(9) and the Regulations
thereunder, including the minimum distribution incidental benefit rules found at
Regulations Section 1.401(a)(9)-2. Notwithstanding the preceding sentence, for
Plan Years beginning after December 31, 1996, the term "required beginning date"
means
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the pre-Small Business Job Protection Act required beginning date of April 1
of the calendar year following the calendar year in which the Participant
attains age 70 1/2 regardless of whether the Participant is a 5-percent owner
(as defined in Code Section 416). Life expectancy and joint and last survivor
life expectancy are computed by using the expected return multiples found in
Tables V and VI of Regulations Section 1.72-9.
(a) Required Beginning Date: The entire interest of a Participant
must be distributed or begin to be distributed no later than the Participant's
required beginning date.
(1) General Rule: The "required beginning date" of a Participant is
the first day of April of the calendar year following the calendar year in which
the Participants attains age 70 1/2.
(2) Transitional Rules: The required beginning date of a Participant
who attains age 70 1/2 before 1988 will be determined in accordance with (i) or
(ii) below:
(i) Non-5-percent owners: The required beginning date of a
Participant who is not a 5-percent owner is the first day of April of the
calendar year following the calendar year in which occurs the later of
requirement or attainment of age 70 1/2. The required beginning date of a
Participant who is not a 5-percent owner who attains age 70 1/2 during 1988 and
who has not retired as of January 1, 1989, is April 1, 1990.
(ii) 5-percent owners: The required beginning date of a
Participant who is a 5-percent owner during any year beginning after December
31, 1979 is the first day of April following the later of:
(A) the calendar year in which the Participant attains age
70 1/2, or
(B) the earlier of the calendar year with or within which ends
the Plan Year in which the Participant becomes a 5-percent owner, or the
calendar year in which the Participant retires.
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(3) A Participant is treated as a 5-percent owner for purposes of
this paragraph if such Participant is a 5-percent owner as defined in Code
Section 416(i) (determined in accordance with Code Section 416 but without
regard to whether the Plan is a Top-Heavy Plan) at any time during the Plan
Year ending with or within the calendar year in which such owner attains age
66 1/2 or at any subsequent Plan Year.
(4) Once distributions have begun to a 5-percent owner under this
paragraph, distributions must continue, even if the Participant ceases to be a
5-percent owner in a subsequent year.
(b) Limits On Distribution Periods: As of the first distribution
calendar year, distributions, if not made in a single sum, may only be made over
one of the following periods (or a combination thereof):
(1) the life of the Participant;
(2) the life of the Participant and a designated
Beneficiary;
(3) a period certain not extending beyond the life
expectancy of the Participant; or
(4) a period certain not extending beyond the joint and last
survivor expectancy of the Participant and a designated Beneficiary.
(c) Required Distributions On Or After The Required Beginning
Date:
(1) If a Participant's benefit is to be distributed over (i)
a period not extending beyond the life expectancy of the Participant or the
joint life and last survivor expectancy of the Participant and the Participant's
designated Beneficiary, or (ii) a period not extending beyond the life
expectancy of the designated Beneficiary, the amount required to be distributed
for each calendar year, beginning with distributions for the first distribution
calendar year, must at least equal the quotient obtained by dividing the
Participant's Accrued Benefit by the Applicable Life Expectancy.
(2) For calendar years beginning before 1989, if the
Participant's Spouse is not the designated Beneficiary, the method of
distribution
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selected must have assured that at least 50% of the Present Value
of the Accrued Benefit available for distribution was to be paid within the life
expectancy of the Participant.
(3) For calendar years beginning after 1988, the amount to
be distributed each year, beginning with distributions for the first
distribution calendar year, will not be less than the quotient obtained by
dividing the Participant's Accrued Benefit by the lesser of (i) the applicable
life expectancy, or (ii) if the Participant's Spouse is not the designated
Beneficiary, the applicable divisor determined from the table set forth in Q&A-4
of the Proposed Regulations Section 1.401(a)(9)-2. Distributions after the death
of the Participant will be distributed using the "applicable life expectancy" as
the relevant divisor without regard to Proposed Regulations Section
1.401(a)(9)-2.
(4) The minimum distribution required for the Participant's
first distribution calendar year must be made on or before the Participant's
required beginning date. The minimum distribution for other calendar years,
including the minimum distribution for the distribution calendar year in which
the Participant's required beginning date occurs, must be made on or before
December 31 of that distribution calendar years.
(5) If the Participant's Accrued Benefit is to be
distributed in the form of an annuity purchased from an insurance company, no
such annuity contract will be purchased unless the distributions thereunder will
be made in accordance with the requirements of Code Section 401(a)(9) and the
Proposed Regulations thereunder.
(6) For purposes of determining the amount of the required
distribution for the first distribution calendar year, the Accrued Benefit to be
used will be the Accrued Benefit as of the last Valuation Date in the calendar
year immediately preceding the first distribution calendar year. For all other
years, the Accrued Benefit will be determined as of the last Valuation Date
preceding such distribution calendar year.
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For purposes of this paragraph, if any portion of the
minimum distribution for the first distribution calendar is made in the second
distribution calendar year on or before the required beginning date, the amount
of the minimum distribution made in the second distribution calendar year will
be treated as if it had been made in the immediately preceding distribution
calendar year for purposes of determining the Accrued Benefit.
7.12. TEFRA Election Transitional Rule:
(a) Notwithstanding the other requirements of this Article and subject
to the requirements of the Article herein entitled "Joint and Survivor Annuity
Requirements", distribution on behalf of any Participant, including 5-percent
owner, will be made in accordance with all of the following requirements
(regardless of when such distribution commences):
(1) The distribution by the Trust Fund is one which would not
have disqualified the Trust Fund under Code Section 401(a)(9) as in effect prior
to amendment by the Deficit Reduction Act of 1984;
(2) The distribution is in accordance with a method of
distribution designated by the Participant whose interest in the Trust Fund is
being distributed or, if the Participants is deceased, by the Beneficiary of the
Participant.
(3) Such designation was made in writing, was signed by the
Participant or the Beneficiary, and was made before January 1, 1984;
(4) The Participant has accrued a benefit under the Plan as of
December 31, 1983; and
(5) The method of distribution designated by the Participant or
the Beneficiary specifies the time at which distributions will commence, the
period over which distributions will be made, and in the case of any
distribution upon the Participant's death, the beneficiaries of the Participant
listed in order of priority.
(b) A distribution upon death will not be covered by this
transitional rule unless the information in the designation contains the
required
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information described above with respect to the distributions to be made upon
the death of the Participant.
(c) For any distribution which commences before January 1, 1984,
but continues after December 31, 1983, the Participant or the Beneficiary to
whom such distributions is being made will be presumed to have designated the
method of distribution under which the distribution is being made if the method
of distribution was specified in writing and the distribution satisfies the
requirements in the sub-paragraphs of (a) above.
(d) If a designation is revoked, any subsequent distribution must
satisfy the requirements of Code Section 401(a)(9) and the Proposed Regulations
thereunder. If a designation is revoked subsequent to the date distributions are
required to begin, the Plan must distribute by the end of the calendar year
following the calendar year in which the revocation occurs the total amount not
yet distributed which would have been required to have been distributed to
satisfy Code Section 401(a)(9) and the Proposed Regulations thereunder, but for
an election under the Tax Equity and Fiscal Responsibility Act ("TEFRA") Section
242(b)(2). For calendar years beginning after December 31, 1988, such
distributions must meet the minimum distribution incidental benefit requirements
in Regulations Section 1.401(a)(9)-2. Any changes in the designation will be
considered to be a revocation of the designation. However, the mere substitution
or addition of another beneficiary (one not named in the designation) under the
designation will not be considered to be a revocation of the designation so long
as such substitution or addition does not alter the period over which
distributions are to be made under the designation, directly or indirectly (for
example, by altering the relevant measuring life). If an amount is transferred
or rolled over from one plan to another plan, the rules in Q&A 1-2 and Q&A 1-3
of Proposed Treasury Regulations 1.401(a)(9)-2 will apply.
7.13. Distribution of Death Benefit
(a) Beneficiary Designation: Each Participant will file a written
designation of Beneficiary with the Employer upon becoming a Participant in
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the Plan. Such designation will remain in force until revoked by the Participant
by filing a new Beneficiary form with the Employer.
(b) Distribution Beginning Before Death: If the Participant dies
after distribution of benefits has begun, the remaining portion of such
Participant's Accrued Benefit will continue to be distributed at least as
rapidly as under the method of distribution being used prior to the
Participant's death.
(c) Distribution Beginning After Death: If the Participant dies
before distribution of benefits begins, distribution of the Participant's
Accrued Benefit will be completed by December 31 of the calendar year in which
occurs the fifth anniversary of the Participant's death except to the extent
that an election is made to receive distributions as provided below:
(1) If any portion of the Participant's Accrued Benefit is
payable to a designated Beneficiary, distributions may be made over the life of,
or over a period certain not greater than the life expectancy of, the designated
Beneficiary commencing on or before December 31 of the calendar year immediately
following the calendar year in which the Participant died.
(2) If the designated Beneficiary is the Participant's
surviving Spouse, the date distributions are required to begin in accordance
with (1) above will not be earlier than the later of (i) December 31 of the
calendar year immediately following the calendar year in which the Participant
died, or (ii) December 31 of the calendar year in which the Participant would
have attained age 701/2.
If the Participant has not made an election pursuant to this paragraph
prior to death, the Participant's designated Beneficiary must elect the method
of distribution no later than the earlier of (1) December 31 of the calendar
year in which distributions would be required to begin under this Section, or
(2) December 31 of the calendar year in which occurs the fifth anniversary of
the Participant's death. If the Participant has no designated Beneficiary, or if
the designated Beneficiary does not elect a method of distribution, distribution
of the Participant's Accrued Benefit must be completed by December 31 of the
calendar year in which occurs the fifth anniversary of the Participant's death.
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For purposes of this paragraph, if the surviving Spouse dies after the
Participant but before payments to such Spouse begin, the provisions of this
paragraph, with the exception of such paragraph (2) therein, will be applied as
if the surviving Spouse were the Participant.
For purposes of this Section, any amount paid to a child of the
Participant will be treated as if it had been paid to the surviving Spouse if
the amount becomes payable to the surviving Spouse when the child attains the
age of majority.
7.14. Date Distribution Deemed to Begin: For purposes of this Article,
distribution of a Participant's interest is considered to begin on the
Participant's required beginning date (or, if the surviving Spouse dies after
the Participant but before payments to such Spouse begin, the date distribution
is required to begin to the surviving Spouse pursuant to Section 7.14(c)). If
distribution in the form of an annuity irrevocably commences to the Participant
before the required beginning date, the date distribution is considered to begin
is the date distribution actually commences.
7.15. Distribution Pursuant to Qualified Domestic Relations Orders:
Notwithstanding any other provision regarding distributions or payment of
benefits, an Alternate Payee, as defined in Code Section 414(p), will be
entitled to receive a distribution not in excess of a Participant's vested
Accrued Benefit pursuant to any final judgment, decree or order determined by
the Plan Administrator to be a Qualified Domestic Relations Order ("QDRO") as
defined in ERISA and Code Section 414 (p). Such distribution will be made only
in a form of benefit available under the Plan.
7.16. Payment to a Person Under a Legal Disability: Every person receiving
or claiming benefits under the Plan shall be conclusively presumed to be
mentally competent until the date on which the Plan Administrator receives a
written notice, in a form and manner acceptable to the Plan Administrator, that
such person is incompetent, and that a guardian, conservator or other person
legally vested with the care of the person or estate has been appointed;
provided, however, that if the Plan Administrator shall find that any person to
whom a benefit is payable under the Plan is unable to care for such person's
affairs because of incompetency, any payment due (unless a prior claim therefore
shall have been made by a duly appointed legal
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representative) may be paid to the spouse, a child, a parent, a brother or
sister, or to any person or institution deemed by the Plan Administrator to have
incurred expense for such person otherwise entitled to payment. Any such payment
so made shall be a complete discharge of liability thereof under the Plan. In
the event a guardian or conservator of the estate of any person receiving or
claiming benefits under the Plan shall be appointed by a court of competent
jurisdiction, retirement payments may be made to such guardian or conservator
provided that proper proof of appointment and continuing qualification is
furnished in a form and manner acceptable to the Plan Administrator. Any payment
made on behalf of any such person as provided in this Section shall be binding
on such person and shall be in full discharge of any obligation of such payment
to such person.
7.17. Unclaimed Benefits Procedure: The Plan does not require either the
Trustees or the Employer to search for, or ascertain the whereabouts of, any
Participant or beneficiary. The Employer, by certified or registered mail
addressed to the Participant's last known address of record with the Employer,
shall notify any Participant or beneficiary that he or she is entitled to a
distribution under the Plan. In the event that all consecutive checks in payment
of benefits under the Plan remain outstanding for a period of six (6) months,
payment of all such outstanding checks shall be stopped and the issuance of any
further checks shall be suspended until such time as the payee reestablishes
contact and claims benefits. In any event, if the Participant or Beneficiary
fails to claim benefits or make his or her whereabouts known in writing to the
Employer within twelve (12) months of the date of mailing of the notice, or
before the termination or discontinuance of the Plan, whichever should first
occur, the Employer shall treat the Participant's or Beneficiary's unclaimed
Accrued Benefit as a Forfeiture. If a Participant or Beneficiary who has
incurred a Forfeiture of his Accrued Benefit under the provisions of this
Section makes a claim at any time for his or her forfeited Accrued Benefit, the
Employer shall restore the Participant's or Beneficiary's forfeited Accrued
Benefit within sixty (60) days after the Plan Year in which the Participant or
Beneficiary makes the claim.
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7.18. Direct Rollovers: This Section applies to distributions made on or
after January 1, 1993. Notwithstanding any provision of the Plan to the contrary
that would otherwise limit a Distributee's election under this part, a
Distributee may elect, at the time and in the manner prescribed by the Plan
Administrator, to have any portion of an Eligible Rollover Distribution paid
directly to an Eligible Retirement Plan specified by the Distributee in a Direct
Rollover.
7.19 Certain Highly Compensated Employees: Effective January 1, 1998, to
the extent necessary to comply with the non-discrimination provisions of Section
401(a)(4) of the Code and regulations issued thereunder, the monthly payments
from the Plan to Highly Compensated Employees and to former Highly Compensated
Employees who are among the twenty-five most highly paid Employees with the
greatest Compensation in the current or any prior year, shall be limited to an
amount equal to the monthly payments that would be made on behalf of the
Employee under a Straight Life Annuity that is the Actuarial Equivalent of the
sum of the Employee's other benefits under the Plan (other than a social
security supplement) and the amount the Employee is entitled to receive under a
social security supplement.
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ARTICLE VIII.
JOINT AND SURVIVOR ANNITY REQUIREMENTS
8.1. Applicability Of Provisions: The provisions of this Article will
apply to any Participant who is credited with at least one Hour of Service with
the Employer on or after August 23, 1984 and such other Participants as provided
in this Article to the extent not inconsistent with the terms and provisions of
the Exhibit corresponding to the Participant's classification and status.
8.2. Payment Of Qualified Joint and Survivor Annuity: Unless an
optional form of benefit is selected pursuant to a qualified election, defined
herein, within the 90-day period ending on the Annuity Starting Date, the vested
Accrued Benefit of a married Participant will be paid in the form of a Qualified
Joint and Survivor Annuity. Any other Participant's vested Accrued Benefit will
be paid in the form of a Straight Life Annuity.
8.3. Payment Of Qualified Pre-Retirement Survivor Annuity: Unless an
optional form of benefit has been selected within the election period pursuant
to a qualified election, as defined herein, if a Participant dies before the
Annuity Starting Date, the Participant's vested Accrued Benefit will be paid to
the surviving Spouse in the form of a Qualified Pre-Retirement Survivor Annuity
if the Participant has been married to the same Spouse for at least
12-consecutive months. The surviving Spouse shall receive benefits commencing on
the Earliest Retirement Date benefits could have been paid to the Participant if
he has ceased to be an Employee on the date of his death and survived to retire.
8.4. Notice Requirements For Qualified Joint and Survivor Annuity: In
the case of a Qualified Joint and Survivor Annuity, the Plan Administrator
shall, no less than thirty (30) days and no more than ninety (90) days prior to
the Annuity Starting Date, as defined below, provide each Participant a written
explanation of:
(a) the terms and conditions of a Qualified Joint and Survivor
Annuity;
(b) the Participant's right to make, and the effect of, an
election to waive the Qualified Joint and Survivor Annuity form of benefit;
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(c) the rights of a Participant's Spouse; and
(d) the right to make, and the effect of, a revocation of a
previous election to waive the Qualified Joint and Survivor Annuity.
For the purposes of this Section, the Annuity Starting Date will mean
the first day of the first period for which an amount is paid as an annuity,
whether by reason of retirement or disability.
Notwithstanding the above, a distribution to a Participant may
commence less than 30 days after the notice required by Code Section 417(a)(3)
is given, provided that the following requirements are met:
(1) The Plan Administrator provides information to the Participant
clearly indicating that the Participant has a right to a period of at least 30
days to consider whether to waive the Qualified Joint and Survivor Annuity and
consent to a form of distribution other than a Qualified Joint and Survivor
Annuity.
(2) The Participant is permitted to revoke an affirmative distribution
election at least until the Annuity Staring Date, or, if later, at any time
prior to the expiration of the 7-day period that begins the day after the
explanation of the Qualified Joint and Survivor Annuity is provided to the
Participant;
(3) The Annuity Staring Date is after the date that the explanation of
the Qualified Joint and Survivor Annuity is provided to the Participant.
However, the Annuity Starting Date may be before the date that any affirmative
distribution election is made by the Participant and before the date that the
distribution is permitted to commence under (4) below, and
(4) Distribution in accordance with the affirmative election does not
commence before the expiration of the 7-day period that begins the day after the
explanation of the Qualified Joint and Survivor Annuity is provided to the
Participant.
8.5. Notice Requirements For Qualified Pre-Retirement Survivor
Annuity: In the case of a Qualified Pre-Retirement Survivor Annuity, the Plan
Administrator will provide each Participant within the applicable period for
such Participant a written explanation of the Qualified Pre-Retirement Survivor
Annuity in such terms and in such manner as would be comparable to the
explanation provided for
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meeting the requirements of the above Section applicable to a Qualified Joint
and Survivor Annuity. The applicable period for a Participant is whichever of
the following periods ends last:
(a) the period beginning with the first day of the Plan Year in
which the Participant attains age thirty-two (32) and ending with the close of
the Plan Year preceding the Plan Year in which the Participant attains age
thirty-five(35);
(b) a reasonable period ending after the individual becomes a
Participant;
(c) a reasonable period ending after this paragraph ceases to
apply to the Participant; (d) a reasonable period ending after this Article
first applies to the Participant. Notwithstanding the foregoing, notice must be
provided within a reasonable period ending after separation from service in the
case of a Participant who separates from service before attaining age
thirty-five (35).
For purposes of applying the preceding paragraph, a reasonable period
ending after the enumerated events described in paragraphs (b), (c) and (d) is
the end of the two (2) year period beginning one (1) year prior to the date the
applicable event occurs, and ending one (1) year after that date. In the case of
a Participant who separates from service before the Plan Year in which age
thirty-five (35) is attained, notice will be provided within the two (2) year
period beginning one (1) year prior to separation and ending one (1) year after
separation from service. If such a Participant thereafter returns to employment
with the Employer, the applicable period for such Participant will be
re-determined.
8.6. Qualified Election: A qualified election will mean a waiver of a
Qualified Joint and Survivor Annuity or a Qualified Pre-Retirement Survivor
Annuity. Any waiver of a Qualified Joint and Survivor Annuity or a Qualified
Pre-Retirement Survivor Annuity will not be effective unless:
(a) the Participant's Spouse consents in writing to the election;
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(b) the election designates a specific Beneficiary, including any
class of Beneficiaries or any contingent Beneficiaries, which may not be changed
without spousal consent (or the Spouse expressly permits designations by the
Participant without any further spousal consent);
(c) the election designates a form of benefit payment which may
not be changed without spousal consent (or the Spouse expressly permits
designations by the Participant without any further spousal consent);
(d) the Spouse's consent acknowledges the effect of the election;
and
(e) the Spouse's consent is witnessed by a Plan representative or
notary public.
If it is established to the satisfaction of the Plan Administrator
that there is no Spouse or that the Spouse cannot be located, a waiver which
complies with (b) and (c) above will be deemed a qualified election. Any consent
by a Spouse obtained under this provision (or establishment that the consent of
a Spouse can not be obtained) will be effective only with respect to such
Spouse. A consent that permits designations by the Participant without any
requirement of further consent by such Spouse must acknowledge that the Spouse
has the right to limit consent to a specific Beneficiary, and a specific form of
benefit where applicable, and that the Spouse voluntarily elects to relinquish
either or both of such rights. A revocation of a prior waiver may be made by a
Participant without the consent of the Spouse at any time before the
commencement of benefits. The number of revocations will not be limited. No
consent obtained under this provision will be valid unless the Participant has
received notice as provided in the paragraphs below.
8.7 Election Period: The period which begins on the first day of the
Plan Year in which the Participant attains age thirty-five (35) and ends on the
date of the Participant's death. If a Participant separates from service prior
to the first day of the Plan Year in which age thirty-five (35) is attained,
with respect to the Accrued Benefit as of the date of separation, the election
period shall begin on the date of separation.
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8.8. Pre-age Thirty-five (35) Waiver: Not applicable.
8.9. Transitional Joint and Survivor Annuity Rules: Special transition
rules apply to Participants who were not receiving benefits on August 23, 1984.
(a) Any living Participant not receiving benefits on August 23,
1984, who would otherwise not receive the benefits prescribed by the previous
paragraphs of this Article, must be given the opportunity to elect to have the
prior Sections of this Article apply if such Participant is credited with at
least one (1) Hour of Service under this Plan or a predecessor plan in a Plan
Year beginning on or after January 1, 1976, and if such Participant had at least
ten (10) Years of Service for vesting purposes when the Participant separated
from service.
(b) Any living Participant not receiving benefits on August 23,
1984, who was credited with at least one Hour of Service under this Plan or a
predecessor plan on or after September 2, 1974, and who is not otherwise
credited with any service in a Plan Year beginning on or after January 1, 1976,
must be given the opportunity to have Accrued Benefits paid in accordance with
subparagraph (d) below.
(c) The respective opportunities to elect (as described in (a)
and (b) above) must be afforded to the appropriate Participants during the
period commencing on August 23, 1984, and ending on the date benefits would
otherwise commence to said Participants.
(d) Any Participant who has elected pursuant to subparagraph (b)
and any Participant who does not elect under subparagraph (a) or who meets the
requirements of subparagraph (a) except that such Participant does not have at
least ten (10) Years of Service for vesting purposes on separation from service,
will have his or her Accrued Benefit distributed in accordance with all of the
following requirements if benefits would have been payable in the form of a life
annuity:
(1) Automatic Joint and Survivor Annuity. If benefits in the
form of a life annuity become payable to a married Participant who:
(i) begins to receive payments under the Plan on or after
Normal Retirement Age;
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(ii) dies on or after Normal Retirement Age while still
working for the Employer;
(iii) begins to receive payments under the Plan on or
after the Qualified Early Retirement Age; or
(iv) separates from service on or after attaining Normal
Retirement Age (or the Early Retirement Age) and after satisfying the
eligibility requirements for the payment of benefits under the Plan and
thereafter dies before beginning to receive such benefits, such benefits will be
paid in the form of a Qualified Joint and Survivor Annuity, unless the
Participant has elected otherwise during the election period. The election
period must begin at least six (6) months before the Participant attains
Qualified Early Retirement Age and end no more than ninety (90) days before the
commencement of benefits. Any election hereunder must be in writing and may be
changed by the Participant at any time.
(2) Election of Early Survivor Annuity. A Participant who is
employed after attaining the Qualified Early Retirement Age will be given the
opportunity to elect, during the election period, to have an early survivor
annuity payable on death. If the Participant elects the early survivor annuity,
payments under such annuity must not be less than the payments which would have
been made to the Spouse under the Qualified Joint and Survivor Annuity if the
Participant has retired on the day after his or her death. Any election under
this provision will be in writing and may be changed by the Participant at any
time. The election period begins on the later of:
(i) the 90th day before the Participant attains the
Qualified Early Retirement Age, or
(ii) the date on which participation begins, and ends on
the date the Participant terminates employment with the Employer.
(3) Qualified Early Retirement Age. For purposes of this
Section, Qualified Early Retirement Age is the latest of;
(i) the earliest date, under the Plan, on which the
Participant may elect to receive retirement benefits,
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(ii) the first day of the 120th month beginning before
the Participant reaches Normal Retirement Age, or
(iii) the date the Participant begins participation.
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ARTICLE IX.
QUALIFIED DOMESTIC RELATIONS ORDERS
9.1. Qualified Domestic Relations Orders: Notwithstanding any of the
provisions herein concerning alienation of Plan benefits, the Plan will honor
and abide by the terms of a domestic relations order determined by the Plan
Administrator to be a Qualified Domestic Relations Order as defined in Code
Section 414(p) ("QDRO") providing for the assignment to a Spouse or former
Spouse of the Participant of all or any portion of the Participant's vested
Accrued Benefit under the Plan. The Employer will adopt guidelines for
determining the qualified status of a domestic relations order (the "Order")
which states the requirements for such Order, the procedures for review of such
Order and all other provisions for such Order to be determined to be a QDRO.
(a) An Order shall specifically state all of the following in
order to be deemed a QDRO:
(1) The name and last known mailing address (if any) of the
Participant and of each alternate payee covered by the Order. However, if the
Order does not specify the current mailing address of the alternate payee, but
the Plan Administrator has independent knowledge of that address, the Order may
still be a valid QRDO.
(2) The dollar amount or percentage of the Participant's
benefit to be paid by the Plan to each alternate payee; or the manner in which
the amount or percentage will be determined.
(3) The number of payments or period for which the Order
applies.
(4) The specific plan (by name) to which the Order applies.
(b) An Order shall not be deemed a QDRO if it requires the Plan
to provide:
(1) any type or form of benefit, or any option not already
provided for in the Plan;
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(2) increased benefits, or benefits in excess of the
Participant's vested rights;
(3) payment of a benefit earlier than allowed by the Plan's
earliest retirement provisions; or
(4) payment of benefits to an alternate payee which are
required to be paid to another alternate payee under another QDRO.
(c) Promptly, upon receipt of an Order which may or may not be
"Qualified", the Plan Administrator shall notify the Participant and any
alternate payee(s) named in the Order of such receipt. The Plan Administrator
may then forward the Order to the Plan's legal counsel for an opinion as to
whether or not the Order is in fact "Qualified" as defined in Code Section
414(p). Within a reasonable time after receipt of the Order, not to exceed 60
days, the Plan's legal counsel shall make a determination as to its "Qualified"
status and the Participant and any alternate payee(s) shall be promptly notified
in writing of the determination.
(d) If the "Qualified" status of the Order is in question, there
will be a delay in any payout to any payee including the Participant, until the
status is resolved. In such event, the Plan Administrator shall separately
account for the amount that would have been payable to the alternate payee(s) if
the Order has been deemed a QDRO. If the Order is not Qualified, or the status
is not resolved (for example, it has been sent back to the Court for
clarification or modification) within 18 months beginning with the date the
first payment would have to be made under the Order, the Plan Administrator
shall pay the separately accounted for amounts to the person(s) who would have
been entitled to the benefits had there been no Order. If a determination as to
the Qualified status of the Order is made after the 18-month period described
above, then the Order shall only be applied on a prospective basis. If the Order
is determined to be a QDRO, the Participant and alternate payee(s) shall again
be notified promptly after such determination. Once an Order is deemed a QDRO,
the Plan Administrator shall pay to the alternate payee(s) all the amounts due
under the QDRO, including separately accounted for amounts during a dispute as
to the Order's qualification.
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(e) The Earliest Retirement Age with regard to the Participant
against whom the Order is entered shall be the date the Participant would
otherwise first be eligible for benefits under the Plan.
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ARTICLE X.
TRANSFERS FROM OTHER QUALIFIED PLANS; DIRECT ROLLOVERS
10.1. Transfers From Other Qualified Plans; Direct Rollovers:
Transfers or Direct Rollovers from other qualified plans are not permitted.
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PENSION PLAN FOR EMPLOYEES OF
AMPHENOL CORPORATION
(1) Amended and restated effective January 1, 2002, except to the extent
the applicable laws named below or the plan amendments incorporated
herein and referenced below provide for an earlier effective date, in
which case such earlier date or dates shall apply.
(2) This Plan document restates the Pension Plan for Employees of Amphenol
Corporation document signed November 21, 1997, by incorporating the
First Amendment effective January 1, 1997, the Second Amendment
effective Various Dates, the Third Amendment effective December 31,
1999, the Fourth Amendment effective December 31, 1999, the Fifth
Amendment effective Various Dates, the Sixth Amendment effective
January 1, 2001, the Seventh Amendment effective Various Dates and the
applicable requirements of the Uruguay Round Agreements Act ("GATT"),
Uniformed Services Employment and Reemployment Rights Act of 1994,
Small Business Job Protection Act of 1996, Taxpayer Relief Act of
1997, Internal Revenue Service Restructuring and Reform Act of 1998,
and the Community Renewal Tax Relief Act of 2000.
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ARTICLE XI.
TRANSFERS; SERVICE WITH AFFILIATED EMPLOYERS
11.1. Transfers:
In the event any Employee transfers out of an Eligible Class or from
one Eligible Class to another, such Employee shall receive credit for service
and compensation for determining eligibility, benefit accrual and vesting as set
forth in the Exhibit attached hereto corresponding to each respective Eligible
Class.
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ARTICLE XII.
AMENDMENT, TERMINATION, MERGER OR CONSOLIDATION
12.1. Amendment of the Plan: The Employer, acting by its Board of
Directors, has the right to amend, modify, suspends, or terminate the Plan at
any time. However, no amendment will authorize or permit any part of the Trust
Fund (other than any part that is required to pay taxes and administration
expenses) to be used for or diverted to purposes other than for the exclusive
benefit of the Participants or their Beneficiaries or estates; no amendment will
cause any reduction in the Accrued Benefit of any Participant or cause or permit
any portion of the Trust Fund to revert to or become the property of the
Employer; except to the extent such amendment is required to qualify or maintain
the qualification of the Plan or to deduct or maintain the deductibility of
contributions made to the Plan under the applicable sections of the Code. Any
amendment will become effective as provided therein upon its execution.
For the purposes of this paragraph, an amendment to the Plan which has
the effect of:
(a) eliminating or reducing an early retirement benefit or a
retirement-type subsidy;
(b) eliminating an optional form of benefit (as provided in
Regulations under the Code); or
(c) restricting, directly or indirectly, the benefits provided to
any Participant prior to the amendment will be treated as reducing the Accrued
Benefit of a Participant, except that an amendment described in clause (b)
(other than an amendment having an effect described in clause (a)) will not be
treated as reducing the Accrued Benefit of a Participant to the extent so
provided in Regulations or under the Code.
12.2. Termination:
(a) The Employer, acting by its Board of Directors, shall have
the right to terminate the Plan by delivering to the Trustee and the Plan
Administrator written notice of such termination. However, any termination
(other than a partial termination or an involuntary termination pursuant to
ERISA Section
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4042) must satisfy the requirements and follow the procedures outlined herein
and in ERISA Section 4041 for a Standard Termination or a Distress Termination.
Upon any termination (full or partial), all amounts shall be allocated in
accordance with the provisions hereof and the Accrued Benefit, to the extent
funded as of such date, of each affected Participant shall become fully vested
and shall not thereafter be subject to Forfeiture.
Upon termination of the Plan, the Employer, by notice to the Trustee
and Plan Administrator, may direct:
(1) complete distribution of the Trust Fund to the Participants,
in cash or in kind, in a manner consistent with the requirements of the Plan;
(2) the purchase of insurance company annuity contracts;
(3) continuation of the Trust Fund for the Plan and the
distributions of benefits at such time and in such manner as though the Plan had
not been terminated; or
(4) transfer of the assets of the Plan to another qualified plan,
provided that the trust to which the assets are transferred permits the transfer
to be made and, in the opinion of legal counsel for the Employer, the transfer
will not jeopardize the tax-exempt status of the plan or create adverse tax
consequences for the Employer. The amounts transferred will be fully vested at
all times and will not be subject to forfeiture for any reason.
(b) Standard Termination Procedure -
(1) The Plan Administrator shall first notify all "affected
parties" (as defined in ERISA Section 4001(a)(21)) of the Employer's intention
to terminate the Plan and the proposed date of termination. Such termination
notice must be provided at least sixty (60) days prior to the proposed
termination date. However, in the case of a standard termination, it shall not
be necessary to provide such notice to the Pension Benefit Guaranty Corporation
(PBGC). As soon as practicable after the termination notice is given, the Plan
Administrator shall provide a follow-up notice to the PBGC setting forth the
following:
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(i) a certification of an enrolled actuary of the projected
amount of the assets of the Plan as of the proposed date of final distribution
of assets, the actuarial present value of the "benefit liabilities" (as defined
in ERISA Section 4001(a)(16)) under the Plan as of the proposed termination
date, and confirmation that the Plan is projected to be sufficient for such
"benefit liabilities" as of the proposed date of final distribution;
(ii) a certification by the Plan Administrator that the
information provided to the PBGC and upon which the enrolled actuary based his
certification is accurate and complete; and
(iii) such other information as the PBGC may prescribe by
regulation.
The certification of the enrolled actuary and of the Plan
Administrator shall not be applicable in the case of a Plan funded
exclusively by individual insurance contracts.
(2) No later than the date on which the follow-up notice is sent
to PBGC, the Plan Administrator shall provide all Participants and Beneficiaries
under the Plan with an explanatory statement specifying each such person's
"benefit liabilities", the benefit form on the basis of which such amount is
determined, and any additional information used in determining "benefit
liabilities" that may be required pursuant to regulations promulgated by the
PBGC.
(3) A standard termination may only take place if at the time the
final distribution of assets occurs, the Plan is sufficient to meet all "benefit
liabilities" determined as of the termination date.
(c) Distress Termination Procedure
(1) The Plan Administrator shall first notify all "affected
parties" of the Employer's intention to terminate the Plan and the proposed date
of termination. Such termination notice must be provided at least 60 days prior
to the proposed termination date. As soon as practicable after the termination
notice is given, the Plan Administrator shall also provide a follow-up notice to
the PBGC setting forth the following:
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(i) a certification of an enrolled actuary of the amount, as
of the proposed termination date, of the current value of the assets of the
Plan, the actuarial present value (as of such date) of the "benefit liabilities"
under the Plan, whether the Plan is sufficient for "benefit liabilities" as of
such date, the actuarial present value (as of such date) of benefits under the
Plan guaranteed under ERISA Section 4022, and whether the plan is sufficient for
guaranteed benefits as of such date;
(ii) in any case in which the Plan is not sufficient for
"benefit liabilities" as of such date, the name and address of each Participant
and Beneficiary under the Plan as of such date;
(iii) a certification by the Plan Administrator that the
information provided to the PBGC and upon which the enrolled actuary based his
certification is accurate and complete; and
(iv) such other information as the PBGC may prescribe by
regulation.
The certification of the enrolled actuary and of the Plan
Administrator shall not be applicable in the case of a Plan funded
exclusively by individual insurance contracts.
(2) A "distress termination" may only take place if:
(i) the Employer demonstrates to the PBGC that such
termination is necessary to enable the Employer to pay its debts while staying
in business, or to avoid unreasonably burdensome pension costs caused by a
decline in the Employer's work force;
(ii) the Employer is the subject of a petition seeking
liquidation in a bankruptcy or insolvency proceeding which has not been
dismissed as of the proposed termination date; or
(iii) the Employer is the subject of a petition seeking
reorganization in a bankruptcy or insolvency proceeding which has not been
dismissed as of the proposed termination date, and the bankruptcy court (or such
other appropriate court) approves the termination and determines that the
Employer will be unable to continue in business outside a Chapter 11
reorganization process and that such
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termination is necessary to enable the Employer to pay its debts pursuant to a
plan of reorganization.
(d) Priority and Payment of Benefits
In the case of a distress termination, upon approval by the PBGC that the
Plan is sufficient for "benefit liabilities" or for "guaranteed benefits", or
in the case of a "standard termination", a letter of non-compliance has not
been issued within the sixty (60) day period (as extended) following the
receipt by the PBGC of the follow-up notice, the Plan Administrator shall
allocate the assets of the Plan among Participants and Beneficiaries pursuant
to ERISA Section 4044(a). As soon as practicable thereafter, the assets of
the Plan shall be distributed to the Participants and Beneficiaries, in cash,
in property, or through the purchase or irrevocable commitments from an
insurer. However, if all liabilities with respect to Participants and
Beneficiaries under the Plan have been satisfied and there remains a balance
in the Plan due to erroneous actuarial computation or any other reason, such
balance, if any, shall be returned to the Employer. In the case of a
"distress termination" in which the PBGC is unable to determine that the Plan
is sufficient for guaranteed benefits, the assets of the Plan shall only be
distributed in accordance with proceedings instituted by the PBGC.
(e) The termination of the Plan shall comply with such other
requirements and rules as may be promulgated by the PBGC under authority of
Title IV of the ERISA including any rules relating to time periods or deadlines
for providing notice or for making a necessary filing.
12.3. Merger or Consolidation of the Plan: The Plan and Trust Fund for
the Plan may be merged or consolidated with, or its assets and/or liabilities
may be transferred to, any other plan and trust. In the event of a merger,
consolidation or transfer, each Participant must receive a benefit immediately
after the merger, consolidation or transfer (as if the Plan had then been
terminated) which is at least equal to the benefit each Participant would have
received if the Plan had terminated immediately before the transfer, merger or
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consolidation. Such transfer, merger or consolidation may not otherwise result
in the elimination or reduction of any benefit protected under Code Section
411(d)(6).
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ARTICLE XIII.
PARTICIPATING EMPLOYERS
13.1. Adoption by Other Employers: Notwithstanding anything herein to
the contrary, with the consent of the Employer, any other corporation or entity,
whether an affiliate or subsidiary or not, may adopt this Plan and all of the
provisions hereof, and participate herein and be known as a Participating
Employer, by a properly executed document evidencing said intent and will of
such Participating Employer.
13.2. Requirements of Participating Employers:
(a) Each Participating Employer will use the same Trustee as
provided in this Plan.
(b) The Trustee may, but will not be required to, commingle, hold
and invest as one Trust Fund all contributions made by Participating Employers,
as well as any earnings thereon.
(c) The transfer of any Participant from or to any Employer
participating in this Plan, whether an Employee of the Employer or a
Participating Employer, will not affect such Participant's rights under the
Plan, and all amounts credited to the Participant's account as well as to the
Participant's accumulated service time with the transferor or predecessor and
length of participation in the Plan, will continue to the Participant's credit.
(d) All rights and values forfeited by termination of employment
will inure only to the benefit of the Participants of the Employer or
Participating Employer for which the forfeiting Participant was employed.
(e) Any expenses of the Plan which are to be paid by the Employer
or borne by the Trust Fund will be paid by each Participating Employer in the
same proportion that the total amount standing to the credit of all Participants
employed by such employer bears to the total amount standing to the credit of
all Participants in the Plan.
13.3. Designation of Agent. Each Participating Employer will be deemed
to be a part of this Plan; provided, however, that with respect to all of its
relations with the Trustee and Plan Administrator for purposes of this Plan,
each
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Participating Employer will be deemed to have designated irrevocably the
Employer as its agent. Unless the context of the Plan clearly indicates the
contrary, "Employer" will be deemed to include each Participating Employer as
related to its adoption of the Plan.
13.4. Employee Transfers. It is anticipated that an Employee may be
transferred between Participating Employers, and in the event of any such
transfer, the Employee involved will transfer any accumulated service and
eligibility. No such transfer will effect a termination of employment hereunder,
and the Participating Employer to which the Employee is transferred will
thereupon become obligated hereunder with respect to such Employee in the same
manner as was the Participating Employer from whom the Employee was transferred.
13.5. Participating Employer's Contribution: All contributions made by
a Participating Employer, as provided for in this Plan, will be determined
separately by each Participating Employer, and will be paid to and held by the
Trustee for the exclusive benefit of the Employees of such Participating
Employer and the Beneficiaries of such Employees, subject to all the terms and
conditions of this Plan. On the basis of the information furnished by the Plan
Administrator, the Trustee will keep separate books and records concerning the
affairs of each Participating Employer hereunder and as to the accounts and
credits of the Employees of each Participating Employer. The Trustee may, but
need not, register contracts so as to evidence that a particular Participating
Employer is the interested Employer hereunder, but in the event of an Employee
transfer from one Participating Employer to another, the employing Employer will
immediately notify the Trustee thereof.
13.6. Discontinuance of Participation: Any Participating Employer will
be permitted to discontinue or revoke its participation in the Plan. At the time
of any such discontinuance or revocation, satisfactory evidence thereof and of
any applicable conditions imposed will be delivered to the Trustee. The Trustee
will thereafter transfer, deliver and assign Trust Fund assets allocable to the
Participants of such Participating Employer to such new trustee as will have
been designated by such Participating Employer, in the event that it has
established a separate pension plan for
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its Employees; provided, however, that no such transfer will be made if the
result is the elimination or reduction of any protected benefits under Section
411(d) or (e) of the Code. If no successor is designated, the Trustee will
retain such assets for the Employees of said Participating Employer. In no such
event will any part of the Trust Fund as it relates to such Participating
Employer be used for or diverted for purposes other than for the exclusive
benefit of the Employees for such Participating Employer.
13.7. Plan Administrator's Authority: The Plan Administrator will have
authority to make all necessary rules and regulations, binding upon all
Participating Employers and all Participants, to effectuate the purpose of this
Article.
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ARTICLE XIV.
ADMINISTRATION OF THE PLAN
14.1. Appointment of Plan Administrator and Trustee: The Employer is
authorized to appoint the Trustee and the Plan Administrator as it deems
necessary for the proper administration of the Plan. The Employer will from time
to time informally review the performance of the Trustee, Plan Administrator or
other persons to whom duties have been delegated or allocated by it. Any person
serving as Plan Administrator may resign upon thirty (30) days prior written
notice to the Employer. The Employer is authorized to remove any person serving
as Plan Administrator at any time and in its sole discretion appoint a successor
whenever a vacancy occurs.
14.2. Plan Administrator: The Plan Administrator is responsible for
administering the Plan for the exclusive benefit of the Participants and their
Beneficiaries, subject to the specific terms of the Plan. The Plan Administrator
will manage, operate and administer the Plan in accordance with the terms of the
Plan and will have full power and authority to construe and resolve all
questions arising in connection with the administration, interpretation, and
application of the Plan. Any determination by the Plan Administrator will be
final and binding upon all persons, and unless it can be shown to be arbitrary
and capricious will not be subject to "de novo" review. The Plan Administrator
may establish procedures, correct any defect, supply any information, or
reconcile any inconsistency in any manner and to any extent as it deems
necessary to carry out the purpose of the Plan; provided, however, that any
procedure, discretionary act, interpretation or construction be
nondiscriminatory and based upon principles consistent with the intent of the
Plan to continue to be deemed a qualified plan under the terms of Code Section
401(a). The Plan Administrator will have all powers necessary or appropriate to
accomplish its duties under this Plan.
14.3. Delegation of Powers: The Plan Administrator may appoint such
assistants or representatives as it deems necessary for the effective exercise
of its duties. The Plan Administrator may delegate to such assistants and
representatives any powers and duties, both ministerial and discretionary, as it
deems expedient or appropriate.
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14.4. Trust Agreement
(a) The Employer shall execute a Trust Agreement with a Trustee
or Trustees chosen by the Employer to hold and manage the assets of the Trust
Fund, and to receive, hold and disburse contributions, interest and other income
for the purpose of paying the pensions under the Plan and the expenses incident
to the operation and maintenance of the Plan. From time to time, one or more
investment managers may be appointed by the Employer to manage assets of the
Trust Fund, which investment managers shall be solely responsible for investing,
reinvesting and managing the assets of the Trust Fund. A Trustee may also be an
investment manager and in the absence of any separate agreement with an
investment manager, the Trustee shall be the investment manager.
Each Trustee and investment manager so appointed shall
acknowledge that it is a fiduciary within the meaning of ERISA, and shall be
either (i) an investment advisor registered under the Investment Advisors Act of
1940, (ii) a bank as defined in the Investment Advisors Act of 1940, or (iii) an
insurance company qualified to manager, acquire or dispose of assets under the
laws of more than one state.
(b) The Employer shall determine the form and terms of any Trust
Agreement or investment management agreement, which may authorize the inclusion
of obligations and stock of the Employer and its subsidiaries and affiliates
among the investments of the Trust Fund (subject to the provisions of any
applicable law), and which may authorize the pooling of the Trust Fund for
investment purposes with other Internal Revenue Service qualified pension funds
of the Employer and its subsidiaries and affiliates. The Employer may modify
such Trust Agreement or investment management agreement from time to time, or
terminate them pursuant to the terms thereof. In case of a conflict between the
Plan and the Trust Agreement, the provisions of the Trust Agreement shall be
deemed controlling.
14.5. Appointment of Advisers: The Plan Administrator may appoint
counsel, specialists, advisers, and other persons as the Plan Administrator
deems necessary or desirable in connection with the administration of the Plan.
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14.6. Records and Reports: The Plan Administrator will keep a record
of all actions taken. In addition, it will keep all other books, records, and
other data that are necessary for administration of the Plan, and it will be
responsible for supplying all information and reports to Participants,
Beneficiaries, the Internal Revenue Service, the Department of Labor and others
as required by law.
14.7. Information from Employer: The Employer will supply the Plan
Administrator with full and timely information on all matters relating to the
Compensation of all Participants, their Hours of Service, their Years of
Service, their retirement, death, Disability, or termination of employment, and
such other pertinent facts as the Plan Administrator may require from time to
time. The Plan Administrator will advise the Trustee of the foregoing facts as
may be pertinent to the Trustee's duties under the Plan. The Plan Administrator
and Trustee may rely on information supplied by the Employer and will have no
duty or responding to verify the information.
14.8. Majority Actions: Except where there has been an allocation and
delegation of administrative authority or where specifically expressed herein to
the contrary, if there shall be more than one Plan Administrator, they shall act
by a majority of their number, but may authorize one or more of them to sign any
documents on their behalf.
14.9. Expenses: All expenses and costs of administering the Plan may
be paid out of the Trust Fund unless actually paid by the Employer. Expenses
will include any expenses incident to the functioning of the Plan Administrator,
including, but not limited to, fees of accountants, counsel, and other
specialists and their agents, and other costs of administering the Plan. Until
paid, the expenses will be considered a liability of the Trust Fund. However,
the Employer may reimburse the Trust Fund for any administrative expense
incurred. Any administrative expense paid to the Trust Fund as a reimbursement
will not be considered an Employer contribution.
14.10. Discretionary Acts: Any discretionary actions of the Plan
Administrator with respect to the administration of the Plan shall be made in a
manner which does not discriminate in favor of stockholders, officers and Highly
Compensated Employees.
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14.11. Responsibility of Fiduciaries: The Plan Administrator and
members of the Administrative Committee, and their assistants and
representatives shall be free from all liability for their acts and conduct in
the administration of the Plan except for acts of willful misconduct, provided,
however, that the foregoing shall not relieve any of them from any liability for
any responsibility, obligation or duty they may have pursuant to ERISA or the
Code.
14.12. Indemnity by Employer: In the event of and to the extent not
insured against by any insurance company pursuant to provisions of any
applicable insurance policy, the Employer shall indemnify and hold harmless, to
the extent permitted by law, any individual Trustee, the Plan Administrator, and
their assistants and representatives from any and all claims, demands, suits or
proceedings which may in connection with the Plan or Trust Agreement be brought
by the Employer's Employees, Participants or their Beneficiaries or legal
representatives, or by any other person, corporation, entity, government or
agency thereof; provided, however, that such indemnification shall not apply to
any such person for such person's acts of willful misconduct in connection with
the Plan or Trust Agreement.
14.13. Claims Procedure: Claims may be filed with the Plan
Administrator. Written or electronic notice of the disposition of a claim will
be furnished to the claimant within ninety (90) days (or 180 days in the event
of special circumstances, in which case written notice of the extension will be
furnished to the claimant before the expiration of the initial ninety (90) day
period) after the application is filed. In addition, in the event the claim is
denied, the Plan Administrator shall:
(a) state the specific reason or reasons for the denial,
(b) provide specific reference to pertinent Plan provisions on
which the denial is based,
(c) provide a description of any additional material or
information necessary for the Participant or his representative to perfect the
claim and an explanation of why such material or information is necessary, and
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(d) explain the Plan's claim review procedure as contained in
this Plan.
Any claimant who has been denied a benefit by the Plan Administrator will be
entitled to request the Plan Administrator to give further consideration to the
claim by filing with the Plan Administrator a request for a hearing. The
request, together with a written statement of the reasons why the claimant
believes the claim should be allowed, must be filed with the Plan Administrator
within sixty (60) days after the claimant receives written or electronic
notification from the Plan Administrator regarding the denial of the claimant's
claim. The Plan Administrator may conduct a hearing within the next sixty (60)
days, at which time the claimant may be represented by an attorney or any other
representative of his or her choosing and at which time the claimant will have
an opportunity to submit written and oral evidence and arguments in support of
the claim. At the hearing (or prior thereto upon five (5) business days written
notice to the Plan Administrator) the claimant or his or her representative will
have an opportunity to review all documents in the possession of the Plan
Administrator which are pertinent to the claim at issue and its disallowance.
Either the claimant or the Plan Administrator may cause a court reporter to
attend the hearing and record the proceedings, in which event a complete written
transcript of the proceedings will be furnished to both parties by the court
reporter. The full expense of the court reporter and transcripts will be borne
by the party causing the court reporter to attend the hearing. A final decision
as to the allowance of the claim will be made by the Plan Administrator within
sixty (60) days of the Plan's receipt of a request for review, unless there has
been an extension of time due to special circumstances (such as the need to hold
a hearing), in which case a decision will be rendered as soon as possible but
not later than 120 days after receipt of a request for review. The final
decision will be written and will include specific reasons for the decision and
specific references to the pertinent Plan provisions on which the decision is
based.
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ARTICLE XV.
GENERAL
15.1. Bonding: Every fiduciary, except a bank or an insurance company,
unless exempted by the Act and regulations thereunder, shall be bonded in an
amount not less than 10% of the amount of the funds such fiduciary handles;
provided, however, that the minimum bond shall be $1,000 and the maximum bond,
$500,000. The amount of funds handled by such person, group, or class to be
covered and their predecessors, if any, during the preceding Plan Year, or if
there is not preceding Plan Year, then by the amount of the funds to be handled
during the then current year. The bond shall provide protection to the Plan
against any loss by reason of acts of fraud or dishonesty by the fiduciary alone
or in connivance with others. The surety shall be a corporate surety company (as
such term is used in ERISA Section 412(a)(2)), and the bond shall be in a form
approved by the Secretary of Labor. Notwithstanding anything in the Plan to the
contrary, the cost of such bonds shall be an expense of and may, at the election
of the Plan Administrator, be paid from the Trust fund or by the Employer.
15.2. Action by the Employer: Whenever the Employer under the terms of
the Plan is permitted or required to do or perform any act or matter or thing,
it shall be done and performed by a person duly authorized by its legally
constituted authority.
15.3. Employment Rights: The Plan is not to be deemed to constitute a
contract of employment between the Employer and any Participant or to be a
consideration for, or an inducement or condition of, the employment of any
Participant or Employee. Nothing contained in the Plan is to be deemed
(a) to give any Participant the right to be retained in the
service of the Employer,
(b) to interfere with the right of the Employer to discharge any
Participant at any time,
(c) to give the Employer the right to require any Employee to
remain in its employ, or
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(d) to affect any Employee's right to terminate employment at any
time.
15.4. Nonalienation of Benefits.
(a) Except as permitted by section 401(a)(13) of the Code or (b)
below, no benefit at any time under the Plan shall be subject in any manner to
alienation, sale, transfer, assignment, pledge, attachment, or encumbrances of
any kind. Any attempt to alienate, sell, transfer, assign, pledge or otherwise
encumber any such benefits, whether presently or thereafter payable shall be
void. No retirement benefit nor the Fund shall in any manner be liable for or
subject to the debts or liability of any Employee, Terminated Vested
Participant, Participant, Beneficiary or pensioner entitled to any retirement
benefit. If the Employee, Participant, former Participant, Beneficiary or
pensioner shall attempt to or shall alienate, sell, transfer, assign, pledge or
otherwise encumber his benefit under the Plan or any part thereof, or if by
reason of his bankruptcy or other event happening at any time, such benefits
would devolve upon anyone else or would not be enjoyed by him, then the
Employer, in its discretion, may terminate such third party's interest in any
such benefit, and hold or apply it to or for the benefit of such Employee,
Participant, former Participant, Beneficiary or pensioner, his Spouse, children,
or other dependent or any of them, in such manner as the Employer may deem
proper. This Section shall also apply to the creation, assignment or recognition
of a right to any benefit payable with respect to a Participant pursuant to a
domestic relations order, unless such order is determined to be a Qualified
Domestic Relations Order or any domestic relations order entered before January
1, 1985.
(b) For all judgments, orders or decrees issued, or settlements
entered into, on or after August 5, 1997:
A Participant's benefits provided under the Plan may be
offset by an amount that the Participant is ordered or required to pay to the
Plan if:
(i) the order or requirement to repay arises (1) under a
judgment of conviction for a crime involving such Plan, (2) under a civil
judgment (including a consent order or decree) entered by a court in an action
brought in
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connection with a violation (or alleged violation) of part 4 of subtitle B of
Title I of the Employee Retirement Income Security Act of 1974, or (3) pursuant
to a settlement agreement between the Secretary of Labor and the Participant, or
a settlement agreement between the Pension Benefit Guaranty Corporation and the
Participant, in connection with a violation (or alleged violation) of part 4 of
such subtitle by a fiduciary or any other person,
(ii) the judgment, order, decree, or settlement agreement
expressly provides for the offset of all or part of the amount ordered or
required to be paid to the Plan against the participant's benefits provided
under the Plan, and
(iii) in a case in which distributions to the Participant are
subject to the survivor annuity requirements of IRC section 401(a)(11), if the
Participant has a spouse at the time at which the offset is to be made, the
spouse has: (1) either consented to the offset (with such consent obtained in
accordance with the requirements of IRC section 417(a)) or previously elected to
waive the qualified joint and survivor annuity or qualified preretirement
survivor annuity, (2) been ordered or required in such judgment, order, decree
or settlement to pay an amount to the Plan in connection with a violation of
part 4 of subtitle B, or (3) retained the right to receive a survivor annuity
form of benefit pursuant to IRC section 401(a)(11) under such judgment, order,
decree or settlement.
15.5. Governing Law: This Plan will be construed and enforced
according to ERISA and the laws of the state in which the Employer has its
principal office, other than its laws respecting choice of law, to the extent
not preempted by ERISA.
15.6. Conformity to Applicable Law: It is the intention of the
Employer that the Plan and the trust established by the Employer to implement
the Plan, be in compliance with the provisions of Sections 401 and 501 of the
Code and the requirements of ERISA, and the corresponding provisions of any
subsequent laws, and the provisions of the Plan shall be construed to effectuate
such intention.
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15.7. Usage: Any term used herein in the singular or plural or in the
masculine, feminine or neuter form will be construed in the singular or plural,
or in the masculine, feminine or neuter form as proper reading requires.
15.8. Legal Action: In the event any claim, suit, or proceeding is
brought regarding the Plan or Trust for the Plan established hereunder to which
the Trustee or the Plan Administrator may be a party, and the claim, suit, or
proceeding is resolved in favor of the Trustee or Plan Administrator, they will
be entitled to reimbursement from the Trust Fund for any and all costs,
attorneys' fees, and other expenses pertaining thereto incurred by them for
which they will have been liable.
15.9. Exclusive Benefit: Except as provided below and otherwise
specifically permitted by law, the Trust Fund maintained pursuant to the Plan
may not be diverted to or used for other than the exclusive benefit of the
Participants, retired Participants or their Beneficiaries.
15.10. Prohibition Against Diversion of Funds: Except as provided
below and otherwise specifically permitted herein or by law, it shall be
impossible by operation of the Plan by power of revocation or amendment, by the
happening of any contingency, by collateral arrangement or by any other means,
for any part of the corpus or income of any fund maintained pursuant to the Plan
or any funds contributed thereto to be used for, or diverted to, purposes other
than the exclusive benefit of former or current Participants, retired
Participants, or their Beneficiaries.
15.11. Return of Contribution: Employer contributions to the fund
shall be irrevocable except as provided below:
(a) In the event the Employer makes an excessive contribution
because of a mistake of fact (pursuant to Section 403(c)(2)(A) of ERISA), the
Employer may demand repayment of such excessive contribution at any time within
one year following the time of payment and the Trustee thereupon will return the
excessive amount to the Employer within the one-year period. Earnings of the
Plan attributable to the excess contribution will not be returned to the
Employer but any losses attributable thereto will reduce the amount so returned.
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(b) In the event the Plan receives an adverse determination from
the Commissioner of the Internal Revenue with respect to its initial
qualification, any contribution made incident to the initial qualification by
the Employer may be returned to the Employer within one-year after such
determination, provided the application for the determination is made by the
time prescribed by law for filing the Employer's return for the taxable year in
which the Plan was adopted, or such later date as the Secretary of the Treasury
may prescribe.
(c) Notwithstanding any provisions of the Plan to the contrary,
all contributions by the Employer are conditioned upon the deductibility of the
contributions by the Employer under the Code and, to the extent any such
deduction is disallowed, the Employer may, within one year following the
disallowance of the deduction, demand repayment of such disallowed contribution
and the Trustee must return the contribution within one year following the
disallowance. Earnings of the Plan attributable to the contribution for which
such deduction is disallowed may not be returned to the Employer, but any losses
attributable thereto must reduce the amount so returned.
15.12. Employer's Protective Clause: Neither the Employer nor the
Trustee, nor their successors, will be responsible for the validity of any
insurance or annuity contract issued hereunder or for the failure on the part of
the insurer to make payments provided by any contract, or for the action of any
person which may delay payment or render a contract null and void or
unenforceable in whole or in part.
15.13. Insurer's Protective Clause: Any insurer who will issue
contracts hereunder will not have any responsibility for the validity of this
Plan or for the tax or legal aspects of this Plan. The insurer will be protected
and held harmless in acting in accordance with any written direction of the
Trustee, and will have no duty to see to the application of any funds paid to
the Trustee, nor will be required to question any actions directed by the
Trustee.
15.14. Receipt and Release for Payments: Any payment to a Participant,
a Participant's legal representative or Beneficiary, or to any guardian
appointed for the Participant or Beneficiary will, to the extent thereof, be in
full
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satisfaction of all claims hereunder against the Trustee and the Employer,
either of whom may require the Participant, legal representative or Beneficiary
or guardian, as a condition precedent to such payment, to execute a receipt and
release thereof in such form as determined by the Trustee or Employer.
15.15. Headings: The headings and subheadings of this Plan have been
inserted for convenience of reference and are to be ignored in any construction
of the provisions hereof.
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ARTICLE XVI.
DEFINITIONS
For purposes of the Plan, the following words and phrases will have
the following meaning unless a different meaning is expressly stated or ascribed
to them in the Exhibit corresponding to the Participant's classification and
status.
16.1 Accrued Benefit: The Retirement Benefit payable at Normal
Retirement Age determined pursuant to the Exhibit corresponding to the
Employee's classification and status accrued as of any date.
Notwithstanding the above, a Participant's Accrued Benefit derived
from Employer contributions shall not be less than the minimum Accrued Benefit
provided pursuant to the Section entitled "Minimum Benefit for Top-Heavy Plan."
16.2. Actuarial Equivalent: The conversion to a form of benefit
differing in time, period, or manner of payment from the specific benefit
provided under the Article herein entitled "Plan Benefits" accomplished by
applying the actuarial assumptions set forth in Schedule A attached to the
Exhibit corresponding to the Employee's classification and status.
Notwithstanding the preceding sentence, effective with the Plan Year beginning
after December 31, 1997, the mortality table and the interest rate used for the
purposes of determining an Actuarial Equivalent amount (other than
non-decreasing life annuities payable for a period not less than the life of a
Participant, or, in the case of a Qualified Pre-Retirement Survivor Annuity, the
life of the surviving spouse) shall be the "Applicable Mortality Table" and the
"Applicable Interest Rate" described below.
(1) The "Applicable Mortality Table" means the mortality table
prescribed by the Secretary of the Treasury. Such table shall be based on the
prevailing commissioners' standard table (described in Code Section
807(d)(5)(A)) used to determine reserves for group annuity contracts issued on
the date as of which present value is being determined (without regard to any
other subparagraph of Code Section 807(d)(5)).
(2) The "Applicable Interest Rate" means the annual rate of interest
on 30-year Treasury securities determined as of the second calendar month (the
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lookback month) preceding the first day of the Plan Year during which the
Annuity Starting Date occurs. The Applicable Interest Rate shall remain
consistent for the Plan Year stability period.
Notwithstanding anything contained in the Plan to the contrary, a
Participant's Accrued Benefit shall not be considered to be reduced in violation
of Code Section 411(d)(6) merely because of the above changes in the interest
rate and mortality assumption used to calculate Actuarial Equivalent amounts.
16.3. Administrative Committee: The person or persons or entity
appointed by the Plan Administrator to administer the Plan.
16.4. Affiliated Employer: The Employer and any corporation which is a
member of a controlled group of corporations (as defined in Code Section 414(b))
which includes the Employer; any trade or business (whether or not incorporated)
which is under common control (as defined in Code Section 414(c)) with the
Employer; and any other entity required to be aggregated with the Employer
pursuant to Regulations under Code Section 414(o).
16.5. Aggregation Group: Either a Required Aggregation Group or a
Permissive Aggregation Group.
(a) Required Aggregation Group: The group of plans consisting of
the following, which are required to be aggregated:
(1) all the plans of the Employer in which a Key Employee is
a Participant during the Plan Year containing the Determination Date or any of
the preceding four Plan Years; and
(2) any other plan of the Employer which enables any plan in
which a Key Employee participates to meet the requirements of Code Section
401(a)(4) or 410.
If the Required Aggregation Group is a Top-Heavy Group, all
plans in the Required Aggregation Group in which the Determination Dates fall
within the same calendar year will be considered Top-Heavy Plans. If the
Required Aggregation is not a Top-Heavy Group, no plan in the Required
Aggregation Group will be considered a Top-Heavy Plan.
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(b) Permissive Aggregation Group: The group of plans consisting
of the following:
(1) the Required Aggregation Group; and
(2) any plan not in the Required Aggregation Group which the
Employer wishes to treat as being aggregated with the Required Aggregation
Group, provided that the resulting group, taken as a whole, would continue to
satisfy the provisions of Code Sections 401(a) and 410.
If the Permissive Aggregation Group is a Top-Heavy Group,
only those plans which are part of the Required Aggregation Group and in which
the Determination Dates fall within the same calendar year will be considered
Top-Heavy Plans. If the Permissive Aggregation Group is not a Top-Heavy Group,
then no plan in the Permissive Aggregation Group will be considered a Top-Heavy
Plan.
(c) Any terminated plan maintained by the Employer within the
last five Plan Years ending on the Determination Date will be included in
determining the Aggregation Group.
16.6. Anniversary Date: The first day of the Plan Year.
16.7. Annual Benefit: The benefit payable annually under the terms of
the Plan (exclusive of any benefit not required to be considered for purposes of
applying the limitations of Code Section 415 to the Plan) payable in the form of
a Straight Life Annuity with no ancillary benefits. If the benefit under the
Plan is payable in any other form, the Annual Benefit shall be adjusted to be
the Actuarial Equivalent of a Straight Life Annuity.
16.8. Annuity: A single premium annuity contract or an annuity under a
group annuity contract purchased by the Trustee on behalf of a Participant or
Beneficiary from an insurance company for purposes of providing the benefits
payable under the terms of the Plan.
16.9. Annuity Starting Date: The first day of the first period for
which an amount is paid as an annuity or, in the case of a benefit not payable
in the form of an annuity, the first day on which all events have occurred that
entitles the Participant
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to such benefit. In the case of a deferred annuity, the Annuity Starting Date
shall be the date on which the annuity payments are scheduled to commence.
16.10. Average Monthly Compensation: See Exhibit corresponding to
Participant's classification and status.
16.11. Beneficiary:
(a) The last person or persons designated by the Participant to
receive benefits payable under the Plan in the event of death. In the event a
Beneficiary is not designated, the Participant's surviving Spouse will be the
deemed Beneficiary. If neither a designated Beneficiary nor the Participant's
Spouse survives the Participant the Participant's estate will be deemed the
Beneficiary.
(b) Subject to the terms of any life insurance policy, any
designated Beneficiary may be changed from time to time. To change a beneficiary
in a policy the Participant must inform the Plan Administrator and the Trustee
in writing. The Trustee must take immediate steps to complete the change with
the insurer but will not be liable for any delay in making the change, unless
caused by its gross negligence. No change of Beneficiary will be binding upon
the insurer until forms properly executed by the Trustee have been filed with
and acknowledged by the insurer at its home office.
(c) No designation of Beneficiary or change of designation of
Beneficiary made under this Section will be effective until the Plan
Administrator and the Trustee actually receive a written notice of such
designation or change, signed by the Participant, and, if the Participant is
married and the designated Beneficiary is not the Participant's Spouse,
consented to by the Participant's Spouse. The Spouse's written consent will
acknowledge the effect of the consent and will be witnessed by the Plan
Administrator or by a notary public.
(d) No spousal consent to a Beneficiary designation is required
if
(1) The Participant's Spouse has waived the right to be the
Participant's Beneficiary and such waiver is in accordance with the last
sentence of paragraph (c) above;
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(2) it is established to the satisfaction of the Plan
Administrator that
(i) the Participant has no Spouse, or
(ii) the Participant's Spouse cannot be located;
(3) no spousal consent is required in accordance with
applicable Treasury or Department of Labor Requirements.
In such event, the designation of a Beneficiary shall be made on a
form satisfactory to the Plan Administrator. A Participant may at any time
revoke his designation of a Beneficiary or change his Beneficiary by filing
written notice of such revocation or change with the Plan Administrator.
However, the Participant's Spouse must again consent in writing to any change in
Beneficiary unless the original consent acknowledged that the Spouse had the
right to limit consent only to a specific Beneficiary and that the Spouse
voluntarily elected to relinquish such right.
16.12. Break in Service: A Period of Severance of at least twelve (12)
consecutive months.
In the case of an individual who is absent from work for maternity or
paternity reasons, the 12-consecutive month period beginning on the first
anniversary of the first date of such absence will not constitute a Break in
Service. For purposes of this paragraph, an absence from work for maternity or
paternity reasons means an absence:
(1) by reason of the pregnancy of the individual,
(2) by reason of the birth of a child of the individual,
(3) by reason of the placement of a child with the individual in
connection with the adoption of such child by such individual, or
(4) for purposes of caring for such child for a period beginning
immediately following such birth or placement.
If the Employer is a member of an affiliated service group (under Code
Section 414(m)), a controlled group of corporations (under Code Section 414(b)),
a group of trades or businesses under common control (under Code Section 414
(c)) or any other entity required to be aggregated with the Employer pursuant to
Code Section
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414(o) and the regulations thereunder, service will be credited for any
employment for any period of time for any other member of such group. Service
will also be credited for any individual required under Code Section 414(n) or
414(o) and the Regulations thereunder to be considered an Employee of any
employer aggregated under Code Section 414(b), (c) or (m).
Effective December 12, 1994, notwithstanding any provision of this
Plan to the contrary, no Break in Service shall occur if the sole basis for the
Period of Severance is attributable to qualified military service as defined in
Section 414(u) of the Code.
16.13. Code: The Internal Revenue Code of 1986, including any
amendments thereto.
16.14. Compensation: A Participant's wages and salaries received
during the calendar year for personal services rendered to the Employer as an
Employee in the Eligible Class, as may be modified in the Exhibit corresponding
to the Employee's classification and status.
Compensation shall also include any amount which is contributed by the
Employer pursuant to a salary reduction agreement under Code Section 401(k),
Section 402(e)(3) and Section 402(h), a simplified employee pension plan under
Code Section 408(k), a cafeteria plan under Code Section 125, a tax-deferred
annuity under Code Section 403(b) or a qualified transportation program under
Code Section 132(f).
For years beginning after December 31, 1988, the Compensation of each
Participant which may be taken into account for determining all benefits
provided under the Plan for any Plan Year will not exceed $200,000, as adjusted
under Code Section 415(d) of the Code, except that the dollar increase in effect
on January 1 of any calendar year is effective for years beginning in such
calendar year and the first adjustment to the $200,000 limitation is effected on
January 1, 1990.
Notwithstanding the foregoing, for Plan Years beginning after December
31, 1993, the Compensation of each Participant which may be taken into account
under the Plan will not exceed $150,000, except as adjusted as follows. For any
Plan Year beginning after December 31, 1994, such $150,000 annual compensation
limit shall be
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adjusted as provided under Code Section 415(d), except that such adjustments
shall only be made in increments of $10,000, rounded down to the next lowest
multiple of $10,000. Notwithstanding the foregoing, if the Plan is maintained
pursuant to one or more collective bargaining agreements ratified before August
10, 1993, the above provision limiting Compensation to $150,000 shall not apply
to contributions made or benefits accrued pursuant to such collective bargaining
agreements for Plan Years beginning before the earlier of:
(1) January 1, 1997, or
(2) the latest of
(a) January 1, 1994, or
(b) the date on which the last of such collective bargaining
agreements terminates, without regard to any extension, amendment, or
modification made on or after August 10, 1993.
If the period for determining compensation used in calculating an
Employee's allocation for a determination period is a short plan year (i.e.
shorter than 12 months), the annual compensation limit is an amount equal to the
otherwise applicable annual compensation limit multiplied by the fraction, the
numerator of which is the number of months in the short plan year, and the
denominator of which is 12. In determining the compensation of a Participant for
purposes of this limitation, the rules of section 414(q)(6) of the Code shall
apply except in applying such rules, the term Family Member shall include only
the Spouse of the Participant and any lineal descendants of the Participant who
have not attained age 19 before the close of the Plan Year. If, as a result of
the application of such rules the adjusted, applicable annual compensation limit
is exceeded, then (except for purposes of determining the portion of
compensation up to the integration level if this plan provides for permitted
disparity), the limitation shall be prorated among the affected individuals in
proportion to each such individual's compensation as determined under this
Section prior to the application of this limitation or, the limitation shall be
adjusted in accordance with any other method permitted by Regulation.
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Notwithstanding anything to the contrary in this Plan, effective for
Plan Years beginning after December 31, 1996, if an individual is employed by
the Employer and is a member of the family of a 5-percent owner, then such
individual shall be considered a separate Employee and any Compensation paid to
such individual and any applicable contribution or benefit on behalf of such
individual shall be treated as if it were attributable solely to that
individual. Except as provided in Treasury Regulations, this provision shall be
applied in determining the Compensation of or contributions or benefits on
behalf of any Employee for purposes of any section with respect to which a
Highly Compensated Employee is defined by reference to Section 414(q) of the
Code. For purposes of determining whether an Employee is a Highly Compensated
Employee for the 1997 Plan Year only, the family aggregation rules are
considered to have been repealed for 1996.
If compensation for any prior determination period is taken into
account in determining an Employee's benefit for the current determination
period, the compensation for such prior year is subject to the applicable annual
compensation limit in effect for that prior year. For this purpose, for years
beginning before January 1, 1990, the applicable annual compensation limit is
$200,000.
For purposes of applying the limitations of Code Section 415, "Code
Section 415 Compensation" will include the Participant's wages, salaries, fees
for professional service, (including for Plan Years beginning after December 31,
1997, elective deferrals as defined in Section 402(g)(3) of the Code and salary
reduction contributions of the Participant not includable in his or her gross
income by reasons of Section 125 or Section 132 of the Code), and other amounts
for personal services actually rendered in the course of employment with an
Employer maintaining the Plan (including, but not limited to, commissions paid
to salesmen, compensation for services on the basis of a percentage of profits,
commissions on insurance premiums, tips and bonuses and, in the case of a
Participant who is an Employee within the meaning of Code Section 401(c)(1) and
the Regulations thereunder, the Participant's Earned Income (as described in
Code Section 401(c)(2) and the Regulations thereunder)) paid during the
Limitation Year. "415 Compensation" will exclude:
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(a) Employer contributions to a plan of deferred compensation
which are not includible in the Employee's gross income for the taxable year in
which contributed, or Employer contributions under a simplified employee pension
plan to the extent such contributions are deductible by the Employee, or any
distributions from a plan of deferred compensation;
(b) Amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by the Employee either
becomes freely transferable or is no longer subject to a substantial risk of
forfeiture;
(c) Amounts realized from the sale, exchange or other disposition
of stock acquired under a qualified stock option; and
(d) Other amounts which received special tax benefits, or
contributions made by the Employer (whether or not under a salary reduction
agreement) towards the purchase of an annuity described in Section 403(b) of the
Internal Revenue Code (whether or not the amounts are actually excludable from
the gross income of the Employee).
For purposes of applying the limitations of Code Section 415, "415
Compensation" for a Limited Year is the compensation actually paid or includible
in gross income during such Limitation Year.
16.15. Controlled Group: Any group of business entities under common
control, including but not limited to proprietorships and partnerships, or a
controlled group of corporations within the meaning of Code Sections 414(b), (c)
and (d).
16.16. Determination Date: For any Plan Year subsequent to the first
Plan Year, the last day of the preceding Plan Year. For the first Plan Year, the
last day of that Plan Year.
16.17. Direct Rollover: A direct rollover is a payment by the Plan to
an Eligible Retirement Plan specified by the Distributee.
16.18. Disability: A bodily injury, disease or mental condition which
prevents the individual from engaging in any employment or occupation for wage
or profit on a continued and permanent basis for the remainder of the
individual's life, for which such individual is eligible for and receiving a
disability benefit under Title II of
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the Federal Social Security Act. The permanence and degree of such incapacity
will be supported by medical evidence. No Participant shall be deemed to have
incurred a Disability, if disability results from engaging in a criminal act, a
self-inflicted injury, service in the armed forces of any county, or war,
insurrection or rebellion.
16.19. Distributee: A distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's surviving Spouse and
the Employee's or former Employee's former Spouse who is the alternate payee
under a qualified domestic relations order, as defined in Section 414(p) of the
Code, are Distributees with regard to the interest of the Spouse or former
Spouse.
16.20. Earliest Retirement Date: The earliest date on which the
Participant could elect to receive retirement benefits under the Plan.
16.21. Early Retirement Age: The age on which a Participant shall have
attained the age and completed the requisite Years of Service as set forth in
the Exhibit corresponding to the Participant's classification and status.
16.22. Early Retirement Date: The first day of the month next
following a Participant's attainment of Early Retirement Age on which the
Participant elects to begin receiving his retirement benefits hereunder.
16.23. Eligible Class:
(a) With respect to benefits described in Exhibit A: Employment
as a salaried Employee at a participating division or participating location of
Amphenol Corporation or any other Participating Employer who receives a regular
stated compensation other than a retirement payment, retainer or fee, excluding
however:
(i) Any person in any other Eligible Class currently accruing
credits under the Plan or any other defined benefit pension plan to which the
Employer or any Affiliated Employer is contributing;
(ii) Any employee whose conditions of employment are
determined by collective bargaining, unless such employment shall be included in
the Plan by the express terms of a collective bargaining agreement;
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(iii) Any person whose employment is not for at least 1,000
Hours of Service during any Plan Year;
(iv) Any Employee of a Foreign Subsidiary if such Employee is
not a citizen of the United States;
(v) Any Employee of a Foreign Subsidiary if contributions
under a funded plan of deferred compensation are provided by a person or
corporation, other than the Employer, with respect to the remuneration paid to
such Employee by such Foreign Subsidiary; and
(vi) Any Employee of a Foreign Subsidiary if such Employee
was not transferred by the Employer to employment with the Foreign Subsidiary
directly from employment with the Employer. Without limitation, Sine
Systems*Pyle Connections Corporation, Amphenol T&M Antennas, Inc., Advanced
Circuit Technology, Inc. and Connex Connector Corporation are not Participating
Employers, and Amphenol Aerospace Operations and Amphenol Assemble Tech are not
participating divisions or locations of Amphenol Corporation.
(b) With respect to benefits described in Exhibit B: Employees at
a participating division or location of Amphenol Corporation or another
Participating Employer employed on an hourly basis; excluding, however,
(i) Any Employee in any other Eligible Class who is an active
participant of the Plan or any plan maintained by a Participating Employer;
(ii) Any Employee whose conditions of employment are
determined by collective bargaining, unless such Employee shall be included in
the Plan by the express terms of a collective bargaining agreement;
(iii) Any Employee who is not a Spectra Strip Employee whose
regularly scheduled employment is for less than 1,000 Hours of Service during a
Plan Year;
(iv) Any Employee of a Foreign Subsidiary if such Employee is
not a citizen of the United States; and
(v) Any Employee of a Foreign Subsidiary if contributions
under a funded plan of deferred compensation are provided by any person
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or corporation, other than the Employer, with respect to the remuneration paid
to such Employee by such Foreign Subsidiary; and
(vi) Any Employee of a Foreign Subsidiary if such Employee
was not transferred by the Employer to employment with the Foreign Subsidiary
directly from employment with the Employer. Without limitation, Sine
Systems*Pyle Connections Corporation, Amphenol T&M Antennas, Inc., Advanced
Circuit Technology, Inc. and Connex Connector Corporation are not Participating
Employers, and Amphenol Aerospace Operations and Amphenol Assemble Tech are not
participating divisions or locations of Amphenol Corporation.
(c) With respect to benefits described in Exhibit C: Employment
on the salaried payroll of LPL Technologies, Inc., Times Fiber Communications,
Inc. or Amphenol Corporation Headquarters; excluding, however any Amphenol
operations employee hired prior to June 1, 1987.
(d) With respect to any benefits described in Exhibit D: Hourly
Employees at a participating division or location of Times Fiber Communications,
Inc. (Chatham, Virginia, Phoenix, Arizona and Liberty, North Carolina).
(e) With respect to any benefits described in Exhibit E: Salaried
Employees of Sine Systems*Pyle Connectors Corporation who shall have been
employed at Pyle-National, Inc. on the date before the date of the merger with
The Sine Companies, Inc.
(f) With respect to benefits described in Exhibit F: Employment
at the Pyle-National Division, represented by the General Service Employees'
Union, Local No. 73 of the Service Employees' International Union, AFL-CIO.
(g) With respect to benefits described in Exhibit G: Employment
as a salaried Employee at a participating division or location of Amphenol
Aerospace Operations. Without limitation, Amphenol Backplane Systems is not a
participating division or location of Amphenol Aerospace Operations.
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(h) With respect to benefits described in Exhibit H: Employment
at a participating division or location of Amphenol Aerospace Operations on an
hourly basis, including employment as an hourly rated person on incentive pay
plan, within the scope of the collective bargaining agreement between the
Employer and the Participating Unit. Without limitation, Amphenol Backplane
Systems is not a participating division or location of Amphenol Aerospace
Operations.
16.24. Eligible Retirement Plan: An individual retirement account
described in Section 408(a) of the Code, an individual retirement annuity
described in Section 408(b) of the Code, an annuity plan described in Section
403(a) of the Code, or a qualified trust described in Section 401(a) of the
Code, that accepts the Distributee's Eligible Rollover Distribution. However, in
the case of an Eligible Rollover Distribution to the surviving Spouse, an
Eligible Retirement Plan is only an individual retirement account or individual
retirement annuity.
16.25. Eligible Rollover Distribution: Any distribution of all or any
portion of the balance to the credit of the Distributee, except that an eligible
rollover distribution does not include: any distribution that is one of a series
of substantially equal periodic payments (not less frequently than annually)
made for the life (or life expectancy) of the Distributee or the joint lives (or
joint life expectancies) of the Distributee and the Distributee's designated
Beneficiary, or for a specified period of ten (10) years or more; any
distribution to the extent such distribution is required under Section 401(a)(9)
of the Internal Revenue Code; and 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).
16.26. Employee: Any person in the employ of the Employer or of any
other employer required to be aggregated with the Employer under Sections
414(b), (c), (m) or (o) of the Code, excluding any person who is designated, or
otherwise determined to be, an independent contractor, regardless of whether
such individual is ultimately determined to be an employee pursuant to the Code
or any other applicable law.
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The term Employee will also include any Leased Employee deemed to be
an Employee of any employer described in the previous paragraph as provided in
Sections 414(n) or (o) of the Code.
16.27. Employer: Amphenol Corporation, any successor which will
maintain this Plan and any predecessor which has maintained this Plan. The
Employer is a corporation, with principal offices in the State of Connecticut.
16.28. Employment Commencement Date: The date the Employee first
performs an Hour of Service for the Employer.
16.29. Exhibit: The attachment to this Plan which forms a part of this
Plan which describes the benefits, rights and features applicable to Employees
within a certain Eligible Class. Notwithstanding the distinct benefit
structures, rights and features described in any Exhibit, the Plan is to be
treated as a single plan as described in Regulation Section 1.414(1)-1(b)(1) and
all provisions shall be construed in a manner consistent with such treatment.
16.30. ERISA: The Employee Retirement Income Act of 1974, as it may
from time to time be amended or supplemented.
16.31. Family Member: The Employee's spouse, any of the Employee's
lineal descendants and ascendants and the spouses of the Employee's lineal
descendants and ascendants, all as described in Code Section 414(q)(6)(B).
16.32. Fiscal Year: The Employer's accounting year of 12 months
commencing on January 1 of each year and ending the following December 31.
16.33. Foreign Subsidiary: Any corporation organized or created
otherwise than in or under the laws of the United States or any State therein or
territory thereof if:
(a) twenty percent (20%) or more of such foreign corporation's
voting stock is owned by the Employer; or
(b) fifty percent (50%) or more of such foreign corporation's
voting stock is owned by a foreign corporation described in subparagraph (a)
immediately above; provided, in either case, that an agreement which remains in
effect has been entered into by the Employer to have the insurance system
established under
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Title II of the Social Security Act, as amended, extended to cover all United
States citizens who are employed by such foreign corporation; and it is not an
Affiliated Employer.
16.34. Forfeiture: That portion of a Participant's Accrued Benefit
that is not vested, and occurs on the earlier of:
(a) the distribution of the entire vested portion of a
Participant's Accrued Benefit; or
(b) the last day of the Plan Year in which the Participant incurs
five (5) consecutive 1-Year Breaks in Service.
Furthermore, for purposes of paragraph (a) above, in the case of a
Participant who has terminated employment with the Employer, and whose vested
Accrued Benefit is zero, such Participant shall be deemed to have received a
distribution of his vested Accrued Benefit upon his termination of employment.
In addition, the term Forfeiture shall also include amounts deemed to be
Forfeitures pursuant to any other provision of this Plan.
16.35. Highly Compensated Employee:
An Employee who, on the snapshot day:
(a) is a five percent (5%) owner (as defined in the definition of
"Key Employee");
(b) received Compensation from the Employer in excess of the
amount set forth in Code Section 414(q)(1)(B) (as adjusted pursuant to Section
415(d) of the Code);
(c) received Compensation from the Employer in excess of the
amount set forth in Code Section 414(q)(1)(C) and was a member of the Top-Paid
Group; or
(d) was an officer of the Employer described in Code Section
414(q)(1)(D).
Notwithstanding the above, for Plan Years beginning after December 31,
1996 (except that for purposes of determining whether an Employee is a Highly
Compensated Employee for the Plan Year beginning in 1997, this provision shall
be
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treated as having been in effect for Plan Years beginning in 1996), "Highly
Compensated Employee" means any employee who:
(a) was a 5-percent owner at any time during the Plan Year or the
preceding year, or
(b) for the preceding year had Compensation from the Employer in
excess of $80,000.
If the determination on Employee's status as a Highly Compensated
Employee is made earlier than the last day of the Plan Year, Compensation shall
be projected for the Plan Year under a reasonable method established by the
Employer.
In the event there are Employees not employed on the snapshot day that
are taken into account for purposes of the "nondiscrimination requirements"
identified in Rev. Proc. 93-42, the term Highly Compensated Employee shall
include any eligible Employee for the Plan Year who:
(a) terminated employment prior to the snapshot day and was a
Highly Compensated Employee in the prior year;
(b) terminated prior to the snapshot day and
(i) was a five percent (5%) owner;
(ii) has Compensation for the Plan Year greater than or equal
to the projected Compensation of any Employee who is treated as a Highly
Compensated Employee on the snapshot day (except for Employees who are Highly
Compensated Employees solely because they are five percent (5%) owners or
officers); or
(iii) is an officer and has Compensation greater than or
equal to the projected Compensation of any other officer who is a Highly
Compensated Employee on the snapshot day solely because that person is an
officer.
In applying the above method in determining Highly Compensated
Employees, the terms and provisions of Regulation Section 1.414(q)-IT shall
apply to the extent that they are not inconsistent with the methods
specifically provided above and in Rev. Proc. 93-42.
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16.36. Highly Compensated Participant: A Highly Compensated Employee
who has satisfied the eligibility requirements and is participating in the Plan.
16.37. Hours of Service:
(1) Each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for the Employer. These hours will be
credited to the Employee for the computation period in which the duties are
performed.
(2) Each hour for which an Employee is paid, or entitled to
payment, by the Employer on account of a period of time during which no duties
are performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
Disability), layoff, jury duty, military duty or leave of absence, during the
applicable computation period. These hours include the normally scheduled work
hours for the Employee during the first six (6) months of disability or while
the Employee is receiving any short-term or long-term disability benefits under
any insured or non-insured disability plan to which the Employer contributes.
Notwithstanding the above,
(a) no more than 501 Hours of Service shall be credited to an
Employee on account of any single continuous period during which the Employee
performs no duties (whether or not such period occurs in a single computation
period);
(b) an hour for which an Employee is directly or indirectly paid,
or entitled to payment, on account of a period during which no duties are
performed shall not be credited to the Employee if such payment is made or due
under a plan maintained solely for the purposes of complying with applicable
worker's compensation, or unemployment compensation or disability insurance
laws; and
(c) Hours of Service shall not be credited for a payment which
solely reimburses an Employee for medical or medically related expenses incurred
by the Employee.
For purposes of this Section, a payment shall be deemed to be made by
or due from the Employer regardless of whether such payment is made by or due
from the Employer directly, or indirectly through, among others, a trust fund,
or insurer, to which the Employer contributes or pays premiums and regardless of
whether
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contributions made or due to the trust fund, insurer, or other entity are for
the benefit of particular Employees or are on behalf of a group of Employees in
the aggregate.
(3) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. The same Hours of
Service will not be credited both under paragraph (1) or paragraph (2), as the
case may be, and under this paragraph (3). These hours will 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.
(4) Each hour of the normally scheduled work hours for each week
during any period the Employee is on any leave of absence from work with the
Employer for military service with the armed forces of the United States, but
not to exceed the period required under the law pertaining to veteran's
reemployment rights: provided, however, if the Employee fails to report to work
at the end of such leave during which the Employee has reemployment rights, the
Employee shall not receive credit for hours on such leave.
(5) The number of normally scheduled work hours for each day of
authorized leave of absence, granted by the Employer for which the Employee is
not compensated.
Hours of Service will be credited for employment with other
members of an affiliated service group (under Code Section 414(m)), a controlled
group of corporations (under Code Section 414(b)), or a group of trades or
businesses under common control (under Code Section 414 (c)) of which the
adopting Employer is a member, and any other entity required to be aggregated
with the Employer pursuant to Code Section 414(o) and the Regulations
thereunder.
Hours of Service will also be credited for any individual
considered an Employee for purposes of this Plan under Code Section 414(n) or
Code Section 414(o) and the Regulations thereunder.
The provisions of Department of Labor Regulations 2530.200b-2(b)
and (c) are incorporated herein by reference.
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Solely to determine whether a one Year Break in Service has
occurred for eligibility or vesting purposes for an Employee who is absent on
maternity or paternity leave, a Break in Service will not be deemed to occur
until the second anniversary of the first day of the maternity or paternity
leave. The period between the first and second anniversaries of the maternity or
paternity leave neither counts as a Break in Service nor as a Year of Service.
Service will be determined on the basis of actual hours for which
an Employee is paid or entitled to payment. When no time records are available,
the Employee shall be given credit for Hours of Service based on the number of
normally scheduled work hours for each week the Employee is on the Employer's
payroll (which shall not be less than 40 hours per week for exempt salaried
Employees), as determined in accordance with reasonable standards and policies
from time to time adopted by the Plan Administrator pursuant to Department of
Labor Regulations Section 2530.200b-2(b) and (c).
16.38. Inactive Participants: A former active Participant who has an
Accrued Benefit.
16.39. Key Employee: An Employee who, at any time during the Plan Year
or any of the four preceding Plan Years, is
(a) an officer of the Employer having Compensation greater than
fifty percent (50)% of the amount in effect under Section 415(b)(1)(A) of the
Code for any Plan Year;
(b) one of the ten (10) Employees having Compensation from the
Employer of more than the limitation in effect under Section 415(c)(1)(A) of the
Code and owning (or considered as owning within the meaning of Code Section 318)
the largest interest in the Employer;
(c) a five percent (5%) owner of the Employer. "Five percent (5%)
owner" means any person who owns (or is considered within the meaning of Code
Section 318) more than five percent (5%) of the outstanding stock of the
Employer or stock possessing more than five percent (5%) of the total combined
voting power of all stock of the Employer, or in the case of an unincorporated
business, any
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person who owns more than five percent (5%) of the capital or profits interest
in the Employer; or
(d) a one percent (1%) owner of the Employer having Compensation
from the Employer of more than $150,000. "One percent (1%) owner" means any
person who owns (or is considered as owning within the meaning of Code Section
318) more than one percent (1%) of the outstanding stock of the Employer or
stock possessing more than one percent (1%) of the total combined voting power
of all Stock of the Employer, or in the case of an unincorporated business, any
person who owns more than one percent (1%) of the capital or profits interest in
the Employer.
For purposes of paragraph (a), no more than the lesser of (i) fifty
(50) Employees, or (ii) the greater of ten percent (10%) of the Employees or
three Employees will be treated as officers. For purposes of paragraph (b), if
two (2) Employees have the same interest in the Employer, the Employee having
greater Compensation from the Employer will be treated as having a larger
interest. Such term will not include any officer or Employee of an entity
referred to in Section 414(d) of the Code (relating to governmental plans). For
purposes of determining the number of officers taken into account under
paragraph (a), Employees described in Section 414(q)(5) of the Code will be
excluded.
16.40. Late Retirement Date: The first day of the month coinciding
with or next following the date the Participant retires after attaining his or
her Normal Retirement Age.
16.41. Leased Employee: Any person (other than an Employee of the
Employer) who pursuant to an agreement between the Employer and any other person
("leasing organization") has performed for the Employer (or for the Employer and
related persons determined in accordance with Section 414(n)(6) of the Code)
services of a type historically performed by employees in the business field of
the Employer on a substantially full-time basis for a period of at least one
year. Contributions or benefits provided a Leased Employee by the leasing
organization which are attributable to services performed for the Employer will
be treated as provided by the Employer.
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Notwithstanding the aforesaid, for Plan Years beginning after December 31,
1996, for all purposes in the Plan, "Leased Employee" means any person who is
not a common law employee of the recipient and who provides services to the
recipient if:
(a) such services are provided pursuant to an agreement between
the recipient and any other person (in this Section referred to as the "Leasing
Organization");
(b) such person has performed such services for the recipient (or
for the recipient and related persons) on a substantially full-time basis for a
period of at least one (1) year; and
(c) such services are performed under primary direction or
control by the recipient.
A Leased Employee will not be considered an Employee of the Employer if:
(a) such Leased Employee is covered by a money purchase pension
plan providing:
(1) a nonintegrated employer contribution rate of at least
ten percent (10%) of compensation, as defined in Section 415(c)(3) of the Code,
but including amounts contributed pursuant to a salary reduction agreement which
are excludable from the employee's gross income under Section 125, Section
402(e)(3), Section 402(h) or Section 403(b) of the Code,
(2) immediate participation, and
(3) full and immediate vesting; and
(b) Leased Employees do not constitute more than twenty percent
(20%) of the Employer's Non-Highly Compensated Employees.
16.42. Limitation Year: The Plan Year.
16.43. Non-Highly Compensated Employee: Any Employee who is not a
Highly Compensated Employee.
16.44. Non-Key Employee: Any Employee who is not a Key Employee.
16.45. Normal Form of Benefit: The form of benefit set forth in the
Exhibit corresponding to the Participant's classification and status.
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16.46. Normal Retirement Age: Age sixty-five (65), or such other age
set forth in Exhibit corresponding to the Participant's classification and
status.
16.47. Normal Retirement Date: The first day of the month coinciding
with or next following the date a Participant attains Normal Retirement Age.
16.48. Participant: Any Employee who has satisfied the eligibility
requirements and is participating in the Plan.
16.49. Participating Employer: Any corporation or entity, other than
the Employer, whether an affiliate or subsidiary of the Employer or not, who,
with the consent of the Employer and the Trustee, adopts the Plan and all of the
provisions hereof by a properly executed document evidencing said intent of such
Participating Employer.
16.50. Period of Military Duty: The period of time from the date the
Employee was first absent from active work for the Employer because of duty in
the armed forces of the United States to the date the Employee was re-employed
by the Employer at a time when the Employee had a right to re-employment in
accordance with seniority rights as protected under Section 2021 through 2026 of
Title 38 of the U.S. Code.
16.51. Period of Service: The aggregate of all time period(s)
commencing with the Employee's Employment Commencement Date and ending on the
date a Break in Service begins.
16.52. Period of Severance: A continuous period of time of at least
twelve (12) months during which the Employee is not employed by the Employer.
Such period begins on the date the Employee retires, quits or is discharged, or
if earlier, the twelve (12) month anniversary of the date on which the Employee
was otherwise first absent from service.
16.53 Plan: The Employer's qualified retirement plan as set forth in
this document, including the Exhibits attached hereto and made a part hereof and
as hereafter amended, known as the Pension Plan for Employees of Amphenol
Corporation.
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Effective February 12, 1975, the Eltra Corporation Pension Plan for
Salaried Employees was formed by the merger of the seven pension plans then
sponsored by the Eltra Corporation. Effective December 31 1979, this plan was
amended to provide benefits to Spectra Strip employees. Effective January 1,
1982, this plan was renamed the Bunker Ramo/Eltra Corporation Pension Plan for
Salaried Employees - former Eltra Salaried Plan (the "Eltra Plan").
Effective January 1, 1976, the Bunker Ramo Profit Sharing Retirement
Plan (the "Profit Sharing Plan") was integrated and merged with the Bunker Ramo
Corporation Pension Plan, which was subsequently renamed the Bunker Ramo/Eltra
Corporation Pension Plan for Salaried Employees (the "Bunker Plan").
Effective December 9, 1985, all assets and liabilities of the Bunker
Plan, except for those related to active employees, were spunoff into the Bunker
Ramo/Eltra Corporation Retirement Plan ("B/E Retirement Plan").
Effective December 30, 1985, all assets and liabilities of the Eltra
Plan, except for those related to active and former employees of the
Mergenthaler and Spectra Strip divisions, were spunoff into five additional
plans, one of which was the NARCO Retirement Plan ("NARCO Plan").
Effective June 17, 1986, the Eltra Plan was merged with the Bunker
Plan, with each plan's structure preserved. Effective August 1, 1986, the merged
plan was renamed the Allied Corporation Pension Plan for Salaried Employees (the
"Allied Plan").
Prior to December 10, 1986, all liabilities and assets of the Bunker
Ramo/Eltra Corporation Pension Plan for Hourly Rated Mergenthaler Employees
Represented by Local 365 UAW (the "Mergenthaler Plan") were merged into the
Allied Plan, with benefits for active participants equal to those under the
Eltra Plan.
Prior to December 31, 1986, all liabilities and certain assets of the
NARCO Plan and the B/E Retirement Plan were merged into the Allied Plan.
Effective January 1, 1987, assets and liabilities related to active,
terminated and retired employees of the Amphenol Corporation were spun off to
the Salaried Employees' Pension Plan of the Amphenol Corporation.
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Effective January 1, 1987, assets and liabilities related to active,
terminated and retired employees of the Linotype Company were spun off to the
Linotype Company Pension Plan.
Effective December 31, 1997, all liabilities and assets of the defined
benefit pension plans then sponsored by the Employer and its affiliates were
merged with the Plan (formerly known as the Salaried Employees Pension Plan of
Amphenol Corporation) which was subsequently renamed Pension Plan for Employees
of Amphenol Corporation.
16.54. Plan Administrator: The Employer or such persons or entities
designated by the Employer to administer the Plan on behalf of the Employer. The
Plan Administrator shall be a named "fiduciary", as referred to in Section
402(a) of ERISA, with respect to the management, operation and administration of
the Plan.
16.55. Plan Year: The 12-consecutive month period designated by the
Employer beginning January 1 of each year ending the following December 31.
16.56. Predecessor Employer: A firm absorbed by the Employer by change
of name, merger, acquisition or a change of corporate status, or a firm of which
the Employer was once a part.
16.57. Present Value of Accrued Benefit: The lump sum value of a
Participant's Accrued Benefit at a valuation date, calculated by reference to
the actuarial assumptions set forth in Schedule A attended to the corresponding
Exhibit hereto.
16.58. Primary Social Security Retirement Benefit: A Participant's
Primary Social Security Retirement Benefit is the estimated Primary Insurance
Amount to which the Participant is entitled at his Normal Retirement Date of
Late Retirement Date, if later. If a Participant's Normal Retirement Date or
Late Retirement Date precedes his Social Security Retirement Age, his Primary
Insurance Amount will be decreased by the applicable reduction factor provided
under Title II of the federal Social Security Act for the period between Normal
Retirement Date or Late Retirement Date and his Social Security Retirement Age.
If a Participant retires after his Social Security Retirement Age, his Primary
Insurance Amount will be increased by the
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applicable delayed retirement credit provided under Title II of the federal
Social Security Act for the period between his Social Security Retirement Age
and his actual retirement date or age seventy (70), whichever is earlier. The
failure of the Participant to receive such amount or any portion thereof for
whatever reason shall be disregarded. When determining the Participant's Primary
Insurance Amount, it will be assumed that the Participant received Compensation
for all prior years by applying a retrospective salary scale to the
Participant's Compensation which he received during the plan year preceding his
last day of employment. This retrospective salary scale will be based on the
actual past changes in the national average wages from year to year as
determined by the Social Security Administration. The application of this
retrospective salary scale to the Participant's Compensation which he received
during the plan year preceding his last day of employment will produce an
estimate of Compensation from the Participant's last day of employment backwards
to the calendar year of the Participant's eighteen birthday. If a Participant's
last day of employment occurs before his 65th birthday, his Compensation which
he received during the plan year preceding his last day of employment will be
assumed to continue from his last day of employment to his 65th birthday for
purposes of determining his Primary Insurance Amount. However, if the
Participant provides the Employer with satisfactory evidence of the
Participant's actual past compensation for such prior years and if such past
compensation is treated as wages under the Social Security Act, the Plan must
use such actual past compensation. The Plan must provide written notice to each
Participant of the Participant's right to supply actual compensation history and
of the financial consequences of failing to supply such history. The notice must
be given each time the summary plan description is provided to the Participant
and must also be given upon the Participant's separation from service. The
notice must also state that the Participant can obtain the actual compensation
history from the Social Security Administration.
16.59. Qualified Domestic Relations Order: A signed domestic relations
order issued by a state court which creates, recognizes or assigns to an
alternate payee(s) the right to receive all or part of a Participant's Accrued
Benefit and which meets the requirements of Code Section 414(p).
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16.60. Qualified Joint and Survivor Annuity: An annuity for the life
of the Participant with a survivor annuity for the life of the Participant's
Spouse equal to fifty percent (50%) of the amount of the annuity payable during
the joint lives of the Participant and the Participant's Spouse, and which is
the Actuarial Equivalent of the Normal Form of Benefit.
16.61. Qualified Pre-Retirement Survivor Annuity: An annuity form of
payment for the life of the surviving Spouse of the Participant who dies prior
to his Annuity Starting Date in an amount equal to the benefit that would have
been payable if the Participant had:
(a) separated from service on the date of death (or date of
separation from service, if earlier),
(b) survived to the Earliest Retirement Age,
(c) retired as of the Earliest Retirement Age with an immediate
Qualified Joint and Survivor Annuity, and
(d) died on the day after the Earliest Retirement Age.
16.62. Re-employment Commencement Date: The date the Employee is first
credited with an Hour of Service for performing duties following a Break in
Service or Period of Severance.
16.63. Re-entry Date: The date an Inactive Participant re-enters the
Plan.
16.64. Regulation: Income Tax Regulations as promulgated by the
Secretary of the Treasury or his delegate, and as amended from time to time.
16.65. Retirement: Termination of employment while in the Eligible
Class:
(a) after the Participant attains Normal Retirement Age;
(b) after the Participant attains Early Retirement Age; or
(c) due to disability.
16.66. Social Security Retirement Age: The age used as the retirement
age under Section 216(I) of the Social Security Act, except that such Section
shall be
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applied without regard to the age increase factor and as if the early retirement
age under Section 216 (I)(2) of such Act were sixty-two (62).
16.67. Spouse: The husband or wife, or surviving husband or wife, of
the Participant under applicable law; provided that a person who was formerly
legally married to a Participant will be treated as the Spouse or surviving
Spouse, and a person who is currently legally married to a Participant will not
be treated as the Spouse or surviving Spouse, to the extent provided under a
Qualified Domestic Relations Order.
16.68. Straight Life Annuity: An annuity payable in equal installments
for the life of the Participant that terminates upon the Participant's death.
16.69. Super Top-Heavy Plan: This Plan for any Plan Year in which, as
of the Determination Date, "90%" were substituted for "60%" where it appears in
the definition of "Top-Heavy Plan".
16.70. Top-Heavy Group: Any Aggregation Group for which the sum as of
the Determination Date of
(a) the present value of the cumulative accrued benefits for Key
Employees under all defined benefit plans included in the Aggregation Group, and
(b) the aggregate of the accrued benefit of Key Employees under
all defined contribution plans in the Aggregation Group, exceeds sixty percent
(60%) of the similar sum determined for all Employees.
16.71. Top-Heavy Plan: This Plan for any Plan Year in which, as of the
Determination Date, the sum of:
(a) the Accrued Benefits of Key Employees under this Plan and any
other defined benefit plan of the Employer which is included with this Plan in
an Aggregation Group, plus
(b) the present value of the cumulative accrued benefits for Key
Employees under any defined contribution pension plan of Employer which is
included with this Plan in an Aggregation Group, exceeds sixty percent (60%) of
a similar sum determined for all Key Employees and Non-Key Employees.
To the extent required by Code Section 416(g)(3), distributions from
such plans during the five-year period ending on the Determination Date will be
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added to said Accrued Benefits and said aggregate of present values of the
cumulative accrued benefits (both for Key Employees and all Key Employees and
Non-Key Employees).
For purposes of this Section and to the extent required by Code
Section 416(g)(4)(A) and (B), rollover contributions or similar transfers
initiated by an Employee and made after December 31, 1983, and benefits and
accounts of an Employee who was a Key Employee but who will have ceased to be a
Key Employee will not be taken into account for purposes of determining whether
the Plan is a Top-Heavy Plan.
To the extent required by Code Section 416(g)(4)(E), if an
Employee has not performed services for the Employer at any time during the five
(5) year period ending on the Determination Date, any Accrued Benefits and
present value of cumulative accrued benefits for such Employee will not be taken
into account in determining whether the Plan is a Top-Heavy Plan.
16.72. Top-Heavy Ratio:
(a) If the Employer maintains one or more defined contribution
plans (including any simplified employee pension plan) and the Employer
maintains or has maintained one or more defined benefit plans which during the
5-year period ending on the Determination Date(s) has or has had any accrued
benefits, the Top-Heavy Ratio for any Required or Permissive Aggregation Group
as appropriate is a fraction, the numerator of which is the sum of account
balances under the aggregated defined contribution plan or plans for all Key
Employees, and the present value of accrued benefits under the aggregated
defined benefit plan or plans for all Key Employees as of the Determination
Date(s), and the denominator of which is the sum of the account balances under
the aggregated defined contribution plan or plans for all participants, and the
present value of accrued benefits under the defined plan or plans for all
participants as of the Determination Date(s), all determined in accordance with
Section 416 of the Code and the Regulations thereunder. The accrued benefits
under a defined benefit plan in both the numerator and denominator of the
Top-Heavy Ratio are
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increased for any distribution of an accrued benefit made in the 5-year period
ending on the Determination Date.
(b) For purposes of paragraph (a) above the value of account
balances and the Present Value of Accrued Benefits will be determined as of the
most recent Valuation Date that falls within or ends with the 12-month period
ending on the Determination 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 account balances and accrued benefits of a Participant (1) who
is not a Key Employee but who was a Key Employee in a prior year, or (2) who has
not been credited with at least one Hour of Service with any Employer
maintaining the Plan at any time during the 5-year period ending on the
Determination Date will be disregarded. The calculation of the Top-Heavy Ratio,
and the extent to which distributions, rollovers, and transfers are taken into
account will be made in accordance with Section 416 of the Code and the
Regulations thereunder. Deductible Employee contributions will not be taken into
account for purposes of computing the Top-Heavy Ratio. When aggregating plans
the value of account balances and accrued benefits will be calculated with
reference to the Determination Dates that fall within the same calendar year.
The accrued benefit of a Participant other than a Key Employee shall
be determined under (a) the method, if any, that uniformly applied for accrual
purposes under all defined benefit plans maintained by the Employer, or (b) if
there is no such method, as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under the fractional rule of Section 411(b)(I)(C)
of the Code.
16.73. Top-Paid Group: The group consisting of the top twenty percent
(20%) of Employees when ranked on the basis of Compensation paid during such
year. For purposes of determining the number of Employees in the group (but not
for purposes of determining who is in it), the following Employees will be
excluded:
(a) Employees who have not completed six (6) months of service
with the Employer.
(b) Employees who normally work for the Employer less than
seventeen and one-half (17 1/2) hours per week.
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(c) Employees who normally do not work for the Employer more than
six (6) months during any Plan Year.
(d) Employees who have not attained age twenty-one (21).
(e) Employees included in a collective bargaining unit who are
covered by an agreement between Employee representatives and the Employer, where
retirement benefits were the subject of good faith bargaining, provided that
ninety percent (90%) or more of the Employer's Employees are covered by this
agreement.
(f) Employees who are nonresident aliens and who receive no
earned income which constitutes income from sources within the United States.
16.74. Trust Agreement. The instrument executed by the Employer and
the Trustee fixing the rights and liabilities of each with respect to holding
and administering Plan assets for the purposes of the Plan.
16.75. Trust Fund. The assets of the Plan as held and administered by
the Trustee.
16.76. Trustee. The trustees named in the Trust Agreement and their
successors.
16.77. Valuation Date. The Anniversary Date of the Plan or such other
date as agreed to by the Employer and the Trustee on which Participant Accrued
Benefits are revalued.
16.78. Year of Accrual Service: As defined in the Exhibit
corresponding to the Participant's classification and status; provided, however,
effective December 12, 1994, notwithstanding any provision of this Plan to the
contrary, including any Exhibit, service credit with respect to qualified
military service will be provided in accordance with section 414(u) of the
Internal Revenue Code.
16.79. Year of Eligibility Service: A twelve (12) consecutive month
period (computation period) described in the Exhibit corresponding to the
Employee's classification and status; provided, however, effective December 12,
1994, notwithstanding any provision of this Plan to the contrary, including any
Exhibit,
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service credit with respect to qualified military service will be provided in
accordance with section 414(u) of the Internal Revenue Code.
16.80. Year of Service: The total years of employment of an Employee
with the Employer commencing with the Employee's Employment Commencement Date,
and ending with the date such Employee Quits, retires, or is discharged or
released, or the date of expiration of an Employee's authorized leave of
absence; provided, however, effective December 12, 1994, notwithstanding any
provision of this Plan to the contrary, including any Exhibit, service credit
with respect to qualified military service will be provided in accordance with
section 414(u) of the Internal Revenue Code.
The computation period shall be the twelve (12) month period
commencing of the Employee's Employment Commencement Date or Re-Employment
Commencement Date, and anniversaries thereof unless a different computation
period is expressly stated.
16.81. Year of Vesting Service: As defined in the Exhibit
corresponding to the Employee's classification and status; provided, however,
effective December 12, 1994, notwithstanding any provision of this Plan to the
contrary, including any Exhibit, service credit with respect to qualified
military service will be provided in accordance with section 414(u) of the
Internal Revenue Code.
The computation period shall be the twelve (12) month period
commencing on the Employee's Employment Commencement Date or Re-Employment
Commencement Date, and anniversaries thereof unless a different computation
period is expressly stated.
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IN WITNESS WHEREOF, the amended and restated PENSION PLAN FOR
EMPLOYEES OF AMPHENOL CORPORATION is adopted of February 22, 2002.
AMPHENOL CORPORATION
By
-------------------------
ATTEST:
<Page>
EXHIBIT A: SALARIED EMPLOYEES' PENSION PLAN OF THE AMPHENOL CORPORATION
ELIGIBLE CLASS:
(a) Employment as a salaried Employee at a participating location or
division of Amphenol Corporation or any Participating Employer who receives a
regular stated compensation other than a retirement payment, retainer or fee,
excluding however:
(i) Any person in any other Eligible Class currently accruing
credits under the Plan or any other defined benefit pension plan to which the
Employer or any Affiliated Employer is contributing;
(ii) Any employee whose conditions of employment are determined by
collective bargaining, unless such employment shall be included in the Plan by
the express terms of the collective bargaining agreement;
(iii) Any person whose employment is not for at least 1,000 Hours
of Service during any Plan Year;
(iv) Any Employee of a Foreign Subsidiary if such Employee is not
a citizen of the United States;
(v) Any Employee of a Foreign Subsidiary if contributions under a
funded plan of deferred compensation are provided by a person or corporation,
other than the Employer, with respect to the remuneration paid to such Employee
by such Foreign Subsidiary; and
(vi) Any employee of a Foreign Subsidiary if such Employee was not
transferred by the Employer to employment with the Foreign Subsidiary directly
from employment with the Employer.
Without limitation, Sine Systems*Pyle Connections Corporation, Amphenol T&M
Antennas, Inc., Advanced Circuit Technology, Inc. and Connex Connector
Corporation are not Participating Employers, and Amphenol Aerospace Operations
and Amphenol Assemble Tech are not participating divisions or locations of
Amphenol Corporation.
NOTE:
THIS EXHIBIT CONSTITUTES (i) THE TEXT OF A PRIOR PLAN THAT WAS MERGED AND
CONSOLIDATED WITH THE PLAN EFFECTIVE DECEMBER 31, 1997, AND (ii) SUBSEQUENT
AMENDMENTS TO THE TERMS OF THE PRIOR PLAN. THIS DOCUMENT DOES NOT REFLECT
AMENDMENTS REQUIRED TO BE MADE PURSUANT TO GUST. ALL SUCH AMENDMENTS HAVE BEEN
MADE TO THE PLAN DOCUMENT, AND APPLY TO THIS EXHIBIT.
<Page>
SALARIED EMPLOYEES
PENSION PLAN OF THE
AMPHENOL CORPORATION
Exhibit A
<Page>
TABLE OF CONTENTS
<Table>
<Caption>
PAGE
----
ARTICLE I.
ELIGIBILITY
<S> <C>
1.1. Eligibility Requirements.................................................................................1
1.2. Service Computation Period...............................................................................1
1.3. Service Credit...........................................................................................1
1.4. Change in Classification of Employment...................................................................2
ARTICLE II.
EMPLOYER CONTRIBUTIONS
2.1. Payment of Contributions.................................................................................2
2.2. Limitation on Contribution...............................................................................2
2.3. Time of Payment..........................................................................................2
2.4. No Additional Liability..................................................................................3
ARTICLE III.
EMPLOYEE CONTRIBUTIONS
3.1. Required Contributions...................................................................................3
3.2. Employee Contributions Under a Prior Plan................................................................3
ARTICLE IV.
PLAN BENEFITS
4.1. Normal Retirement Benefit................................................................................4
4.2. Normal Form of Retirement Benefit........................................................................7
4.3. Early Retirement Benefit.................................................................................7
4.4. Late Retirement Benefit..................................................................................8
4.5. Disability Benefits......................................................................................8
4.6. Death Benefits..........................................................................................10
4.7. Benefits on Termination of Employment - Deferred
Vested Pension..........................................................................................11
4.8. In-Service Benefits.....................................................................................12
4.9. Restoration of Benefit..................................................................................12
4.10. Non-Duplication of Benefits.............................................................................13
4.11. Minimum Benefit for Top Heavy Plan......................................................................13
4.12. Transfers; Service with Affiliated Employers............................................................15
4.13. Bunker Ramo Profit Sharing Retirement Plan Balances.....................................................15
</Table>
Exhibit A
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<Table>
ARTICLE V.
CODE SECTION 415 LIMITATIONS ON BENEFITS
<S> <C>
5.1. Maximum Annual Benefit..................................................................................17
5.2. Adjustments to Annual Benefit and Limitations...........................................................18
5.3. Annual Benefit Not in Excess of $10,000.................................................................20
5.4. Participation or Service Reductions.....................................................................20
5.5. Multiple Plan Reduction.................................................................................21
5.6. Incorporation by Reference..............................................................................24
ARTICLE VI.
VESTING
6.1. Vesting Rights..........................................................................................24
6.2. Top-Heavy Vesting.......................................................................................24
6.3. Service Computation Period..............................................................................25
6.4. Service Credit..........................................................................................25
6.5. Vesting Break in Service................................................................................25
6.6. Vesting on Distribution Before Break in Service; Cash-outs..............................................26
6.7. Amendment of Vesting Schedule...........................................................................26
6.8. Amendments Affecting Vested and/or Accrued Benefit......................................................27
6.9. No Divestiture for Cause................................................................................27
ARTICLE VII.
PAYMENT OF BENEFITS
7.1. Notice..................................................................................................27
7.2. Waiver of Thirty (30) Day Notice Period.................................................................27
7.3. Automatic Form of Payment...............................................................................28
7.4. Optional Forms of Benefit...............................................................................28
7.5. Actuarial Equivalent Benefit............................................................................29
7.6. Payment Without Participant Consent.....................................................................29
7.7. Restrictions on Immediate Distributions.................................................................30
7.8. Limitation of Benefits on Plan Termination..............................................................30
7.9. Early Plan Termination Restrictions.....................................................................32
7.10. Suspension of Benefits..................................................................................34
7.11. Restrictions on Commencement of Retirement Benefits.....................................................35
7.12. Minimum Distribution Requirements.......................................................................36
7.13. TEFRA Election Transitional Rule........................................................................38
7.14. Distribution of Death Benefit...........................................................................39
7.15. Date Distribution Deemed to Begin.......................................................................40
7.16. Distribution Pursuant to Qualified Domestic Relations Orders............................................40
7.17. Payment to a Person Under a Legal Disability............................................................41
7.18. Unclaimed Benefits Procedure............................................................................41
</Table>
Exhibit A
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<Table>
<S> <C>
7.19. Direct Rollovers........................................................................................42
ARTICLE VIII.
JOINT AND SURVIVOR ANNUITY REQUIREMENTS
8.1. Applicability of Provisions.............................................................................42
8.2. Payment of Qualified Joint And Survivor Annuity.........................................................42
8.3. Payment of Qualified Pre-Retirement Survivor Annuity....................................................42
8.4. Notice Requirements For Qualified Joint And Survivor Annuity............................................42
8.5. Notice Requirements For Qualified Pre-Retirement Survivor Annuity.......................................43
8.6. Qualified Election......................................................................................43
8.7. Election Period.........................................................................................44
8.8. Pre-age Thirty-five (35) Waiver.........................................................................44
8.9. Transitional Joint And Survivor Annuity Rules...........................................................44
ARTICLE IX.
QUALIFIED DOMESTIC RELATIONS ORDERS
9.1. Qualified Domestic Relations Orders.....................................................................46
ARTICLE X.
TRANSFERS FROM OTHER QUALIFIED PLANS; DIRECT ROLLOVERS
10.1. Transfers from Other Qualified Plans, Direct Rollovers..................................................48
ARTICLE XI.
TRANSFERS; SERVICE WITH AFFILIATED EMPLOYERS
11.1. Transfer Out of Eligible Class..........................................................................48
11.2. Transfer From Salaried Employment.......................................................................49
11.3. Transfer From Hourly Employment.........................................................................49
ARTICLE XII.
AMENDMENT, TERMINATION, MERGER OR CONSOLIDATION
12.1. Amendment of the Plan...................................................................................50
12.2. Termination.............................................................................................51
12.3. Merger or Consolidation of the Plan.....................................................................54
ARTICLE XIII.
PARTICIPATING EMPLOYERS
13.1. Adoption by Other Employers.............................................................................54
13.2. Requirements of Participating Employers.................................................................54
</Table>
Exhibit A
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<Page>
<Table>
<S> <C>
13.3. Designation of Agent....................................................................................55
13.4. Employee Transfers......................................................................................55
13.5. Participating Employer's Contribution...................................................................55
13.6. Discontinuance of Participation.........................................................................55
13.7. Plan Administrator's Authority..........................................................................56
ARTICLE XIV.
ADMINISTRATION OF THE PLAN
14.1. Appointment of Plan Administrator and Trustee...........................................................56
14.2. Plan Administrator......................................................................................56
14.3. Delegation of Powers....................................................................................56
14.4. Trust Agreement.........................................................................................56
14.5. Appointment of Advisers.................................................................................57
14.6. Records and Reports.....................................................................................57
14.7. Information From Employer...............................................................................57
14.8. Majority Actions........................................................................................57
14.9. Expenses................................................................................................58
14.10. Discretionary Acts......................................................................................58
14.11. Responsibility of Fiduciaries...........................................................................58
14.12. Indemnity by Employer...................................................................................58
14.13. Claims Procedure........................................................................................58
ARTICLE XV.
GENERAL
15.1. Bonding.................................................................................................59
15.2. Action by the Employer..................................................................................60
15.3 Employment Rights.......................................................................................60
15.4 Alienation..............................................................................................60
15.5. Governing Law...........................................................................................60
15.6. Conformity to Applicable Law............................................................................60
15.7. Usage...................................................................................................61
15.8. Legal Action............................................................................................61
15.9. Exclusive Benefit.......................................................................................61
15.10. Prohibition Against Diversion of Funds..................................................................61
15.11. Return of Contribution..................................................................................61
15.12. Employer's Protective Clause............................................................................62
15.13. Insurer's Protective Clause.............................................................................62
15.14. Receipt and Release for Payments........................................................................62
15.15. Headings................................................................................................62
</Table>
Exhibit A
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<Table>
ARTICLE XVI.
DEFINITIONS
<S> <C>
16.1. Accrued Benefit.........................................................................................62
16.2. Actuarial Equivalent....................................................................................63
16.3. Administrative Committee................................................................................63
16.4. Affiliated Employer.....................................................................................63
16.5. Aggregation Group.......................................................................................63
16.6. Anniversary Date........................................................................................64
16.7. Annual Benefit..........................................................................................64
16.8. Annuity.................................................................................................64
16.9. Annuity Starting Date...................................................................................64
16.10. Average Monthly Compensation............................................................................64
16.11. Beneficiary.............................................................................................65
16.12. Break in Service........................................................................................66
16.13. Code....................................................................................................66
16.14. Compensation............................................................................................67
16.15. Controlled Group........................................................................................70
16.16. Determination Date......................................................................................70
16.17. Direct Rollover.........................................................................................70
16.18. Disability..............................................................................................70
16.19. Distributee.............................................................................................70
16.20. Earliest Retirement Date................................................................................70
16.21. Early Retirement Age....................................................................................70
16.22. Early Retirement Date...................................................................................70
16.23. Eligible Class..........................................................................................71
16.24. Eligible Retirement Plan................................................................................71
16.25. Eligible Rollover Distribution..........................................................................71
16.26. Employee................................................................................................72
16.27. Employer................................................................................................72
16.28. Employment Commencement Date............................................................................72
16.29. ERISA...................................................................................................72
16.30. Family Member...........................................................................................72
16.31. Fiscal Year.............................................................................................72
16.32. Foreign Subsidiary......................................................................................72
16.33. Forfeiture..............................................................................................72
16.34. Highly Compensated Employee.............................................................................73
16.35. Highly Compensated Participant..........................................................................74
16.36. Hour of Service.........................................................................................74
16.37. Inactive Participant....................................................................................76
16.38. Key Employee............................................................................................76
16.39. Late Retirement Date....................................................................................77
16.40. Leased Employee.........................................................................................77
16.41. Limitation Year.........................................................................................77
</Table>
Exhibit A
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<Table>
<S> <C>
16.42. Non-Highly Compensated Employee.........................................................................77
16.43. Non-Key Employee........................................................................................78
16.44. Normal Form of Benefit..................................................................................78
16.45. Normal Retirement Age...................................................................................78
16.46. Normal Retirement Date..................................................................................78
16.47. Participant.............................................................................................78
16.48. Participating Employer..................................................................................78
16.49. Period of Military Duty.................................................................................78
16.50. Period of Service.......................................................................................78
16.51. Period of Severance.....................................................................................78
16.52. Plan....................................................................................................78
16.53. Plan Administrator......................................................................................79
16.54. Plan Year...............................................................................................80
16.55. Predecessor Employer....................................................................................80
16.56. Present Value of Accrued Benefit........................................................................80
16.57. Primary Social Security Retirement Benefit..............................................................80
16.58. Qualified Domestic Relations Order......................................................................81
16.59. Qualified Joint and Survivor Annuity....................................................................81
16.60. Qualified Pre-Retirement Survivor Annuity...............................................................81
16.61. Re-employment Commencement Date.........................................................................81
16.62. Re-entry Date...........................................................................................81
16.63. Regulation..............................................................................................81
16.64. Retirement..............................................................................................81
16.65. Social Security Retirement Age..........................................................................82
16.66. Spouse..................................................................................................82
16.67. Straight Life Annuity...................................................................................82
16.68. Super Top-Heavy Plan....................................................................................82
16.69. Top-Heavy Group.........................................................................................82
16.70. Top-Heavy Plan..........................................................................................82
16.71. Top-Heavy Ratio.........................................................................................83
16.72. Top-Paid Group..........................................................................................84
16.73. Trust Agreement.........................................................................................84
16.74. Trust Fund..............................................................................................84
16.75. Trustee.................................................................................................85
16.76. Valuation Date..........................................................................................85
16.77. Year of Accrual Service.................................................................................85
16.78. Year of Eligibility Service.............................................................................86
16.79. Year of Service.........................................................................................86
16.80. Year of Vesting Service.................................................................................86
</Table>
Exhibit A
- vi -
<Page>
SALARIED EMPLOYEES
PENSION PLAN
OF THE
AMPHENOL CORPORATION
BY RESOLUTION of its Board of Directors, on the _____ day of
______________________, 19____, AMPHENOL CORPORATION, a Delaware corporation,
has approved and adopted a Defined Benefit Pension Plan for certain Employees,
effective as of the first day of January, 1989, which amends and restates the
Salaried Employees Pension Plan of the Amphenol Corporation, as previously
amended effective January 1, 1987 (hereinafter referred to as the "Predecessor
Plan"). This amended and restated Plan provides as follows:
ARTICLE I.
ELIGIBILITY
1.1. Eligibility Requirements: Any Employee who
(a) is a salaried employee of Amphenol Corporation, and
(b) has completed one (1) Year of Eligibility Service,
will become a Participant on the first day of the month coinciding with or next
following the date such requirements are satisfied, provided said Employee is
still employed by the Employer and in the Eligible Class as of such date. If not
employed in the Eligible Class on such date, the Employee will become a
Participant as of the first day of the month coinciding with or next following
the date the Employee first performs an Hour of Service as an eligible Employee
if a Break in Service has not occurred.
1.2. Service Computation Period:
For purposes of determining Years of Eligibility Service and Breaks
in Service for purposes of eligibility, the initial eligibility computation
period is the 12-consecutive month period beginning on the Employee's Employment
Commencement Date.
The succeeding 12-consecutive month periods commence with the first
anniversary of the Employee's Employment Commencement Date.
1.3. Service Credit: All Years of Service with the Employer are
counted toward Years of Eligibility Service except the following:
Exhibit A
- 1 -
<Page>
(a) Any "Year of Service" excluded as of December 31, 1985, in
accordance with the Plan as constituted and in effect immediately before such
date, shall be excluded for all purposes thereafter.
(b) In the case of a Participant who does not have any
nonforfeitable right to the Accrued Benefit derived from Employer contributions,
Years of Eligibility Service before a period of consecutive Breaks in Service
will not be taken into account in computing service if the number of consecutive
Breaks in Service in such period equals or exceeds the greater of five (5) or
the aggregate number of Years of Eligibility Service completed by the Employee
before such break. Such aggregate number of Years of Eligibility Service will
not include any Years of Eligibility Service disregarded under the preceding
sentence by reason of prior Breaks in Service.
(c) If a Participant's Years of Eligibility Service are
disregarded pursuant to the preceding paragraph, such Participant will be
treated as a new Employee for eligibility purposes. If a Participant's Years of
Eligibility Service may not be disregarded pursuant to the preceding paragraph,
such Participant will continue to participate in the Plan or, if terminated,
will participate immediately upon reemployment in the Eligible Class.
1.4. Change in Classification of Employment: In the event a
Participant is no longer a member of the Eligible Class of Employees and becomes
ineligible to participate, such Employee will participate immediately upon
returning to the Eligible Class of Employees. In the event an Employee who is
not a member of the Eligible Class of Employees becomes a member of the Eligible
Class, such Employee will participate immediately upon becoming a member of the
Eligible Class.
ARTICLE II.
EMPLOYER CONTRIBUTIONS;
2.1. Payment of Contributions: The Employer shall contribute to the
Plan from time to time such amounts as the Plan Administrator and the Employer
shall determine are necessary to provide Plan benefits. Such amounts shall be
determined under accepted actuarial methods and assumptions, and may be
contributed in cash or property.
2.2. Limitation on Contribution: Notwithstanding the foregoing, the
Employer's contribution for any Plan Year will not exceed the maximum amount
allowable as a dedication to the Employer under Code Section 404, except to the
extent necessary to satisfy the minimum funding standard required under Code
Section 412 or to correct an error, in which event, the Employer shall make a
contribution to the Plan even if it causes the limitation under Code Section 404
to be exceeded.
2.3. Time of Payment: The Employer will pay to the Trustee its
contribution to the Plan for each Plan Year, within the time prescribed by law,
including extensions of
Exhibit A
- 2 -
<Page>
time, for the filing of the Employer's federal income tax return for the Fiscal
Year. In no event, however, will payment to the Trustee be made after the
expiration of the time limit prescribed for satisfaction of the minimum funding
requirements of Code Section 412.
2.4. No Additional Liability: The pension benefits to be provided
under the Plan shall be only such as can be provided by the assets of the Trust
Fund and, except as provided by law, there shall be no liability or obligation
on the part of the Employer to make any further contributions to the Plan in the
event of its termination. Except as otherwise required by ERISA or other
applicable law, no liability for the payment of benefits hereunder shall be
imposed upon the Employer, or the officers, directors or stockholders of the
Employer.
ARTICLE III.
EMPLOYEE CONTRIBUTIONS
3.1. Required Contributions: No contributions shall be required of
Participants as a condition for receiving benefits provided hereunder.
3.2. Employee Contributions Under a Prior Plan: If any Employee has
made contributions under any predecessor to this Plan and such contributions,
together with credited interest thereon, have not been withdrawn, benefit
payments under this Plan shall be subject to the following conditions:
(a) Commencing January 1, 1975, an Employee's contributions under
the predecessor plan, with credited interest thereon, determined pursuant to the
provisions of such predecessor plan as of January 1, 1975, shall be credited
with interest as of December 31, 1975, and each December 31 thereafter, at such
rate of interest as the Plan Administrator determines, such amount being
referred to herein as an Employee's "accumulated contributions."
(b) Upon death or termination of employment of an Employee prior
to qualifying for benefits under the Plan, the accumulated contributions shall
be paid in a lump sum to the Employee, or in the event of death, to the Spouse,
or absent a Spouse, to the named Beneficiary.
(c) Upon the death of an Employee whose benefits are payable on a
Straight Life Annuity basis, the accumulated contributions, less the total
benefits paid to the Employee, will be paid in a lump sum to the Spouse, or
absent a Spouse to the named Beneficiary, or estate of the Employee if no
Beneficiary is designated or living.
(d) Upon the death of a Beneficiary who is receiving benefits
under the Plan, the accumulated contributions, less the total benefits paid to
the Employee and the Beneficiary, will be paid in a lump sum to the estate of
such Beneficiary.
Exhibit A
- 3 -
<Page>
(e) Except as provided herein, an Employee's accumulated
contributions shall not be paid to the Employee or any other person.
ARTICLE IV.
PLAN BENEFITS
4.1. Normal Retirement Benefit: A Participant who terminates
employment upon attaining Normal Retirement Age will be entitled to receive
normal retirement benefits in the amount of the Participant's Accrued Benefit.
If the Participant elects to continue working past his or her Normal Retirement
Age, he or she will continue as an active Participant until his or her actual
retirement date, unless a minimum distribution is required by law.
(a) Accrued Benefit - Employees of Amphenol Corporation other
than Spectra Strip Employees. The amount of the monthly retirement benefit in
the Normal Form to be provided for each Participant who is not a Spectra Strip
Employee shall be equal to such Participant's monthly Accrued Benefit as of any
date, determined as the greater of the Post-TRA Benefit or Grandfathered Benefit
below:
POST-TRA BENEFIT: the greater of (1) and (2) below:
(1) Basic Formula: the sum of (i) plus (ii) minus (iii):
(i) one and eight tenths of one percent (1.8%) of such
Participant's Average Monthly Compensation multiplied by such Participant's
Years of Accrual Service up to a maximum of Twenty-five (25) Years, and
(ii) one percent (1%) of such Participant's Average
Monthly Compensation multiplied by such Participant's years of Accrual Service
in excess of Twenty-five (25), minus
(iii) two percent (2%) of such Participant's estimated
Primary Social Security Retirement Benefit multiplied by such Participant's
Years of Accrual Service, up to a maximum of Thirty (30) years.
(2) Alternative Formula: One and one tenth of one percent
(1.1%) of such Participant's Average Monthly Compensation, multiplied by such
Participant's Years of Accrual Service.
GRANDFATHERED BENEFIT: the greater of (1) and (2) below:
(1) Basic Formula: the sum of (i) plus (ii) minus (iii):
Exhibit A
- 4 -
<Page>
(i) one and eight tenths of one percent (1.8%) of such
Participant's Average Monthly Compensation determined as of December 31, 1988,
multiplied by such Participant's Years of Accrual Service determined as of
December 31, 1988, up to a maximum of Twenty-five (25) Years, and
(ii) one percent (1%) of such Participant's Average
Monthly Compensation determined as of December 31, 1988, multiplied by such
Participant's Years of Accrual Service in excess of Twenty-five (25) determined
as of December 31, 1988, minus
(iii) the lesser of
(A) two percent (2%) of such Participant's estimated
Primary Social Security Retirement Benefit determined as of December 31, 1988,
as if the Participant had attained age sixty-five (65) as of such date
multiplied by such Participant's Years of Accrual Service determined as of
December 31, 1988, up to a maximum of Twenty-five (25) years, and
(B) Seventy-two and ninety-one one-hundredths percent
(72.91%) of such Participant's estimated Primary Social Security Retirement
Benefit determined as of December 31, 1988, multiplied by a fraction, the
numerator or which equals such Participant's Year of Accrual Service determined
as of December 31, 1988, and the denominator of which is the expected number of
Years of Accrual Service such Participant would have had at his or her Normal
Retirement Age if such Participant had remained employed by the Employer until
his or her Normal Retirement Age.
(2) Alternative Formula: One and one tenth of one percent
(1.1%) of such Participant's Average Monthly Compensation determined as of
December 31, 1988, multiplied by such Participant's Years of Accrual Service
determined as of December 31, 1988.
(b) Accrued Benefit - Spectra Strip Employees. The amount of the
monthly retirement benefit in the Normal Form to be provided for each
Participant who is a Spectra Strip Employee and who retires on his or her Normal
Retirement Date shall be equal to such Participant's monthly Accrued Benefit as
of any date, determined as the greater of the Post-TRA Benefit or Grandfathered
benefit below:
POST-TRA BENEFIT - the greater of (1) and (2) below:
(1) Basic Formula: the sum of (i) plus (ii) minus (iii):
(i) one and nine-tenths of one percent (1.9%) of such
Participant's Average Monthly Compensation multiplied by such Participant's
Years of Accrual Service up to a maximum of Fifteen (15) Years, and
Exhibit A
- 5 -
<Page>
(ii) one and five-tenths of one percent (1.5%) of such
Participant's Average Monthly Compensation multiplied by such Participant's
Years of Accrual Service in excess of Fifteen (15%) up to a maximum of Fifteen
(15) excess Years, minus
(iii) one and two-thirds of one percent (1 2/3%) of such
Participant's estimated Primary Social Security Retirement Benefit multiplied by
such Participant's Years of Accrual Service, up to a maximum of Thirty (30)
years.
(2) Alternative Formula: Six Dollars ($6.00) multiplied by
such Participant's Years of Accrual Service.
GRANDFATHERED BENEFIT
(1) Basic Formula: the sum of (i) plus (ii) minus (iii):
(i) one and nine-tenths of one percent (1.9%) of such
Participant's Average Monthly Compensation determined as of December 31, 1988,
multiplied by such Participant's Years of Accrual Service determined as of
December 31, 1988, up to a maximum of Fifteen (15) Years, and
(ii) one and five-tenths of one percent (1.5%) of
such Participant's Average Monthly Compensation determined as of December 31,
1988, multiplied by such Participant's Years of Accrual Service in excess of
Fifteen (15) determined as of December 31, 1988, up to a maximum of Fifteen (15)
excess Years, minus
(iii) one and two-thirds of one percent (1 2/3%) of
such Participant's estimated Primary Social Security Retirement Benefit
determined as of December 31, 1988, multiplied by such Participant's Years of
Accrual Service determined as of December 31, 1988, up to a maximum of Thirty
(30) years.
(2) Alternative Formula: Six Dollars ($6.00) multiplied
by such Participant's Years of Accrual Service determined as of December 31,
1988.
(c) Reduction for Qualified Pre-Retirement Survivor Annuity
Coverage (terminated vested Participants). If a Qualified Pre-Retirement
Survivor Annuity has been in effect for any Participant who shall have
terminated employment, and who shall have elected a Qualified Pre-Retirement
Survivor Annuity, the amount of benefit determined above will be reduced by
multiplying the appropriate factor from the table below by the number of full
years that such coverage was in effect after December 31, 1984:
Exhibit A
- 6 -
<Page>
<Table>
<Caption>
Reduction for Each
Full Year of Coverage
After Termination of Employment
-------------------------------
<S> <C>
Prior to Age 65 .3%
After Age 65 None
</Table>
The amount of benefit determined above will be further reduced for
Qualified Pre-Retirement Survivor Annuity coverage prior to December 31, 1984 in
accordance with the provisions of the Plan then in effect.
(d) Payment of Normal Retirement Benefits. Normal retirement
benefits will be payable as the Participant's Normal Retirement Date in
accordance with the Article herein entitled "Payment of Benefits". If the
Participant begins receiving benefits at an age other than Normal Retirement
Age, the Participant's benefit will be determined in accordance with the
appropriate Section of this Article.
4.2. Normal Form of Retirement Benefit: The Normal Retirement Benefit
payable to a Participant pursuant to this Article shall be a monthly pension
commencing on the Participant's retirement date and continuing for life. The
actual form of distribution of such benefit, however, shall be determined by
reference to the Article herein entitled "Payment of Benefits".
4.3. Early Retirement Benefit: A Participant who has attained Early
Retirement Age and who terminates employment with the Employer will be entitled
to receive any one of the following retirement benefits after attaining Early
Retirement Age as the Participant may elect:
(a) A deferred Normal Retirement Benefit, commencing at the
Participant's Normal Retirement Date, determined in accordance with Section 4.1
above, based upon Years of Accrual Service at the time of the Participant's
Retirement.
(b) An early retirement benefit, equal to the deferred benefit in
(a) above reduced as follows:
(1) A Participant who is not a Spectra Strip Employee shall
be entitled to receive a benefit equal to the deferred benefit provided in (a)
above reduced by 1/180th for each month of the first sixty (60) months by which
the Participant's Early Retirement Date precedes his or her Normal Retirement
Date, plus 1/360th for each month in excess of sixty (60) by which the
Participant's Early Retirement Date precedes his or her Normal Retirement Date.
Exhibit A
- 7 -
<Page>
(2) A Spectra Strip Employee shall be entitled to receive
a benefit equal to the deferred benefit provided in (a) above reduced by
(i) 1/180th for each month of the first sixty (60) months
by which the Participant's Early Retirement Date precedes his or her Normal
Retirement Date, plus 1/360th for each month in excess of sixty (60) by which
the Participant's Early Retirement Date precedes his or her Normal Retirement
Date, with respect to the Post-TRA Benefit described in (a) above, and
(ii) one-half of one percent (0.5%) for each complete
month by which such Participant's Early Retirement Date precedes the first day
of the month following his or her attainment of age sixty-two (62), with respect
to the Grandfathered Benefit described in (a) above.
In the event that a Participant shall terminate employment prior to
attaining the Early Retirement Age, but having satisfied the service
requirement, the Participant shall be entitled to elect benefits hereunder upon
satisfaction of the age requirement.
Early retirement benefits shall be payable to the Participant on the
first day of the first month after (i) the Participant shall have become
eligible for such benefits and (ii) the Participant shall have filed an
application for such benefits and shall otherwise be payable in accordance with
the Article herein entitled "Payments of Benefits". Early retirement benefits
for Participants retiring prior to the date hereof shall be calculated in
accordance with the provisions of the Plan in effect on the date of such
Participant's termination of employment.
4.4. Late Retirement Benefit: In the event a Participant continues
employment beyond his Normal Retirement Date, no retirement benefit will be paid
to the Participant until he actually retires; subject, however, to any minimum
distributions required under Code Section 401(a)(9). A Participant's retirement
benefit on his Late Retirement Date shall be equal to the Participant's
retirement benefit recalculated using the Participant's Years of Accrual Service
and Average Monthly Compensation determined as of the Participant's actual
retirement date.
The monthly retirement benefit calculated pursuant to this
Section shall be offset by the Actuarial Equivalent of the total minimum
distributions required under Code Section 401(a)(9) actually made prior to the
Participant's actual retirement date.
A Participant's retirement benefit payable in the Normal Form of
Benefit shall not be less than the greatest amount of benefit that would have
been provided for him had he retired on any earlier date on or after his Normal
Retirement Date.
Late retirement benefits will be paid as soon as practicable
after the Participant's Late Retirement Date in accordance with the Article
herein entitled "Payment of Benefits."
Exhibit A
- 8 -
<Page>
4.5. Disability Benefits:
If a Participant terminates employment as an active Employee as an
result of a Disability, has completed ten (10) or more Years of Eligibility
Service, remains disabled for a period of at least six (6) months, and makes
application for a disability preretirement benefit, said Participant shall be
entitled to any one of the following disability retirement benefits, as the
Participant may elect:
(a) a deferred Disability retirement benefit, commencing at the
Participant's Normal Retirement Date, determined in accordance with Section 4.1
above and based upon Years of Accrual Service at the time of the Participant's
Disability; provided, however, that any reduction in the benefit determined
under Section 4.1 above which is based on the Participant's Primary Social
Security Retirement Benefit shall not exceed sixty-four (64%) of such
Participant's disability insurance benefit awarded under the Federal Social
Security Act as in effect at the time of the Participant's Disability Retirement
Date.
(b) an immediate Disability retirement benefit commencing at
Disability Retirement Date equal to the deferred benefit provided in (a) above.
(1) with respect to Spectra Strip Employees, without
reduction for early payment; and
(2) with respect to non-Spectra Strip Employees, reduced, by
a percentage equal to 1/180th for each month of the first sixty (60) months by
which the Participant's Disability Retirement Date precedes his or her Normal
Retirement Date, plus 1/360th for each month in excess of sixty (60) by which
the Participant's Disability Retirement Date precedes his or her Normal
Retirement Date.
Any Participant receiving disability retirement benefits, or any
applicant for a disability retirement, may be required to submit to a medical
examination at any time but not more often than semi-annually, to determine
whether such Participant is eligible for a disability retirement benefit. If it
is found that the Participant receiving disability retirement benefits is no
longer disabled, no further disability retirement benefit shall be paid. If the
Participant refuses to submit to such medical examination, no disability
retirement benefit shall be paid until such Participant submits to an
examination and is determined to be eligible.
Disability retirement benefits will be paid as soon as practicable
after the Plan Administrator's receipt of certification of Disability and the
satisfaction of the other conditions to the receipt of disability benefits under
this Section 4.5, in accordance with the Article herein entitled "Payment of
Benefits".
Exhibit A
- 9 -
<Page>
4.6 Death Benefits:
The provisions of this section shall apply on or after August 23,
1984, to any Participant who is credited with at least one Hour of Service or
one hour of paid leave on or after August 23, 1984 or any Participant who
terminated employment prior to August 23, 1984 who at the time of termination of
employment shall have been eligible for a deferred vested pension and who shall
have made an election for optional coverage hereunder.
If a Participant dies before his Annuity Starting Date, death benefits
shall be determined under subsections (a), (b) and (c) below. The distribution
of death benefits shall be subject to the Article herein entitled "Payment of
Benefits".
(a) Qualified Preretirement Survivor Annuity:
A Qualified Preretirement Survivor Annuity shall be payable as a
death benefit with respect to a Participant if the following requirements are
met:
(1) The Participant is survived by a Spouse to whom he
was continuously married throughout the one-year period ending on the date of
his death,
(2) The Participant's vested percentage of Employer
contributions on the date of his death was greater than zero,
(3) The Participant is not entitled to a Pre-Retirement
Surviving Spouse Benefit described in paragraph (b) below, and
(4) The Participant and his Spouse have not waived the
Qualified Preretirement Survivor Annuity. Any waiver of the Qualified
Preretirement Survivor Annuity must be made according to the Article herein
captioned "Joint and Survivor Annuity Requirements".
If the above requirements are met on the date the Participant
dies, a Qualified Preretirement Survivor Annuity shall be payable. The Spouse
may elect to start benefits on the first day of any month on or after the
earliest date retirement benefits could have been paid to the Participant if he
had ceased to be an Employee on the date of his death and survived to such date.
If the Spouse dies before the date the Qualified Preretirement Survivor Annuity
starts, no death benefit will be payable.
(b) Pre-Retirement Surviving Spouse Benefit: If a Participant who
is not a Spectra Strip Employee dies before his Annuity Starting Date and such
Participant would have been eligible for an early retirement benefit had such
Participant voluntarily retired hereunder on the date next preceding the day on
which such Participant died and if such Participant shall leave a surviving
Spouse, then such Spouse shall be eligible to receive a surviving Spouse's
benefit from the Plan. The monthly amount of the surviving Spouse's
Exhibit A
- 10 -
<Page>
benefit payable to the Spouse eligible therefor shall be equal to 50% of the
monthly benefit the deceased Participant would have been entitled to receive
beginning as of such Participant's retirement if such Participant had retired on
the date next preceding the day on which such Participant died, on the basis of
such Participant's actual Years of Accrual Service; provided, however, if the
surviving Spouse's age is more than five years less than the Participant's age,
then the 50% shall be decreased by subtracting therefrom a 1% for each 12 months
in excess of five years that the Spouse's age at the Participant's death is less
than the Participant's age at death.
The monthly surviving Spouse's benefit shall be payable to the
Spouse for life, beginning as of the first day of the calendar month coincident
with or next following the date of the Participant's death.
(c) Death Benefit After Actual Retirement Date but Before the
Annuity Starting Date:
(1) If a Participant dies on or after his actual
Retirement date and before his Annuity Starting Date, the provisions of
subsections (a) and (b) shall not apply. Instead the death benefit shall be
based on the Normal Form of Benefit or a properly elected optional form of
benefit. This death benefit is the death benefit which would have been payable
to the Participant's Beneficiary or contingent annuitant if the Participant's
retirement date had occurred on the date he died. For purposes of this death
benefit only, an election of an optional form of benefit shall be a qualified
election even if it is not made within 90 days of the date retirement benefits
would have begun if it meets all of the other requirements for a qualified
election.
(2) Any death benefit payable after a Participant's Annuity
Starting Date will be determined by the form of retirement benefit in effect on
a Participant's Annuity Starting Date.
4.7 Benefits on Termination of Employment - Deferred Vested Pension: A
Participant who terminates employment prior to Normal Retirement Age, Early
Retirement Age, Disability or death will be entitled to receive benefits in the
amount of the Participant's vested Accrued Benefit. The amount of the monthly
retirement benefit to be provided for each Participant who becomes an Inactive
Participant prior to his Normal or Early Retirement Date, date of Disability or
death shall be determined as follows:
(a) A deferred monthly retirement benefit in the Normal Form to
begin on his Normal Retirement Date. The deferred retirement benefit will be
equal to the product of (i) and (ii):
(i) The Participant's Accrued Benefit as of the day before he
or she became an Inactive Participant;
Exhibit A
- 11 -
<Page>
(ii) The Participant's vesting percentage on the date he or
she ceased to be an Employee.
(b) A deferred monthly retirement benefit in the Normal Form of
Benefit to begin on his Early Retirement Date, in the event that all service
requirements have been satisfied. The deferred early retirement benefit shall be
equal to the product of (i) and (ii):
(i) the Participant's early retirement benefit set forth in
Section 4.3; and
(ii) the Participant's vesting percentage on the date he or
she ceased to be an Employee.
The amount of payment under any form (other than the Normal Form of
Benefit) shall be determined as provided under the Article herein entitled
"Payment of Benefits".
4.8. In-Service Benefits: No distribution will be made to a
Participant who remains in the employ of the Employer beyond Normal Retirement
Age, unless a minimum distribution is required by law.
4.9. Restoration of Benefit: If an Employee receives a distribution of
a vested Accrued Benefit under the Plan and the Employee resumes employment in
the Eligible Class, he or she shall have the right to restore his or her
Employer-provided Accrued Benefit to the extent forfeited upon the repayment to
the Plan of
(a) the amount of the distribution,
(b) interest on such distribution compounded annually at the rate
of five percent (5%) per annum from the date of distribution to the date of
repayment or to the last day of the first Plan Year ending on or after December
31, 1987, if earlier, and
(c) interest on the sum of (a) and (b) above compounded annually
at the rate of 120 percent of the federal mid-term rate (as in effect under Code
Section 1274 for the first month of a Plan Year) from the beginning of the first
Plan Year beginning after December 31, 1987 or the date of distribution,
whichever is later, to the date of repayment.
Such repayment must be made before the earlier of five (5) years
after the first date on which the Participant is subsequently reemployed by the
Employer, or the date the Participant incurs five (5) consecutive Breaks in
Service following the date of distribution. If an Employee is deemed to receive
a distribution, and the Employee resumes employment in the Eligible Class before
the date the Participant incurs five (5) consecutive Breaks in Service, upon the
reemployment of such Employee in the Eligible Class, the employer-provided
Exhibit A
- 12 -
<Page>
Accrued Benefit will be restored to the amount of such Accrued Benefit on the
date of the deemed distribution.
4.10. Non-Duplication of Benefits: If an Inactive Participant who is
no longer actively employed by the Employer again becomes actively employed by
the Employer in the Eligible Class, any such renewed participation shall not
result in duplication of benefits. Accordingly, if such Participant has received
or was deemed to have received a distribution of a vested Accrued Benefit under
the Plan by reason of prior participation (and such distribution has not been
repaid to the Plan with interest as described in the preceding paragraph within
a period of the earlier of five (5) years after the first date on which the
Participant is subsequently reemployed by the Employer or the close of the first
period of five (5) consecutive Breaks in Service commencing after the
distribution), his Accrued Benefit shall be reduced by the Accrued Benefit
determined as of the date of distribution.
Notwithstanding any provisions of the Plan to the contrary, if a
Participant is entitled to any retirement income or other benefits from any
other qualified plans provided by the Employer, including any Affiliated
Employer, other than benefits provided under any federal or State retirement
program, which benefits are determined by reference to Years of Accrual Service
for which the Participant is entitled to benefits hereunder, benefits payable
under this Plan shall be reduced and offset by the amount of such other
retirement benefits.
4.11. Minimum Benefit for Top-Heavy Plan:
(a) The minimum Accrued Benefit derived from Employer
contributions to be provided under this Section for each Non-Key Employee who is
a Participant during a Plan Year in which the Plan is Top-Heavy Plan shall equal
the product of (1) said Participant's Compensation averaged over the five (5)
consecutive Limitation Years (or actual number of Limitation Years, if less)
which produce the highest average and (2) the lesser of (i) two percent (2%)
multiplied by Years of Service or (ii) twenty percent (20%).
(b) For purposes of providing the aforesaid minimum benefit under
Code Section 416, a Non-Key Employee who is not a Participant solely because (1)
his Compensation is below a stated amount or (2) he declined to make required
contributions (if required) to the Plan will be considered to be a Participant.
Furthermore, such minimum benefit shall be provided regardless of whether such
Non-Key Employee is employed on a specified date.
(c) For purposes of this Section, Years of Service for any Plan
Year beginning before January 1, 1984, or for any Plan Year during which the
Plan was not a Top-Heavy Plan shall be disregarded.
(d) For purposes of this Section, Compensation for any Limitation
Year ending in a Plan Year which began prior to January 1, 1984, subsequent to
the last
Exhibit A
- 13 -
<Page>
Limitation Year during which the Plan is a Top-Heavy Plan, or in which
the Participant failed to complete a Year of Service, shall be disregarded.
(e) For the purposes of determining the top-heavy minimum benefit
under this Section, Compensation shall be limited to $200,000 (as adjusted in
such manner as permitted under Code Section 415(d)).
(f) If the Article herein entitled "Payment of Benefits" provides
for the Normal Retirement Benefit to be paid in form other than a single life
annuity, the Accrued Benefit under this Section shall be the Actuarial
Equivalent of the minimum Accrued Benefit under (a) above.
(g) If payment of the minimum Accrued Benefit commences at a date
other than Normal Retirement Date, the minimum Accrued Benefit shall be the
Actuarial Equivalent of the minimum Accrued Benefit commencing at Normal
Retirement Date.
(h) If a Non-Key Employee participates in this Plan and a defined
contribution plan included in a Required Aggregation Group which is top-heavy,
the minimum benefits shall be provided under this Plan.
(i) For any Plan Year when (1) the Plan is a Top-Heavy Plan but
not a Super Top-Heavy Plan and (2) a Key Employee is a Participant in both this
Plan and a defined contribution plan included in a Required Aggregation Group
which is top-heavy, the extra minimum Accrued Benefit (required by the Article
herein entitled "Section 415 Limitation on Benefits" to provide the higher
limitations) shall be provided for each Non-Key Employee who is a Participant by
substituting three percent (3%) for two percent (2%) and thirty percent (30%)
for twenty percent (20%) in (a) above.
(j) In lieu of the above, if a Non-Key Employee participates in
this Plan and a defined contribution plan included in a Required Aggregation
Group which is top-heavy, a minimum allocation of five percent (5%) of
Compensation shall be provided under the defined contribution plan. If the
defined contribution plan is amended so that the minimum benefits are no longer
provided under the defined contribution plan, the minimum benefits shall be
provided under this Plan.
However, for any Plan Year when (1) the Plan is a Top-Heavy Plan
but not a Super Top-Heavy Plan and (2) a Key Employee is a Participant in both
this Plan and a defined contribution plan included in a Required Aggregation
Group which is top-heavy, seven and one-half percent (7 1%) shall be substituted
for five percent (5%) above.
(k) The preceding provisions of this Section shall be
inapplicable to the extent not required of this Plan pursuant to Code Section
416(i)(4).
Exhibit A
- 14 -
<Page>
4.12. Transfers; Service with Affiliated Employers. The benefits
provided hereunder as to an Employee who transfers employment to or from an
Affiliated Employer shall be determined by reference to this Article and the
Article herein entitled "TRANSFERS; SERVICE WITH AFFILIATED EMPLOYERS."
4.13. Bunker Ramo Profit Sharing Retirement Plan Balances:
(a) The Plan Administrator shall continue to maintain a separate
account (herein designated "Profit Sharing Plan Account") for each participant
of the Bunker Ramo Profit Sharing Retirement Plan whose General Account has been
transferred to the Plan, which Profit Sharing Plan Account shall reflect the
value of such transferred account and shall be adjusted by the Plan
Administrator in accordance with the provisions of this Section.
(b) Credit balances of all Profit Sharing Plan Accounts of
Participants then in the employ of the Employer shall be increased or decreased,
as the case may be, by the greater of the rate of return earned by the Trust
Fund of the Plan during the Plan Year; and 7%.
(c) Each Participant's Profit Sharing Plan Account shall be
charged with any payments made to a Participant, or the Participant's Spouse or
Beneficiary under the provisions of the Plan until such time as such account is
exhausted.
(d) "Profit Sharing Plan Account Value" means for each
Participant who is entitled to a benefit under the Plan and who has elected not
to receive a lump sum distribution of such Participant's Profit Sharing Plan
Account, the dollar value of such Participant's Profit Sharing Plan Account
determined as of the last day of the quarter of any Plan Year coincident with or
next preceding the date as of which the Participant's benefits are to commence
under the Plan. For any other Participant, the Profit Sharing Plan Account Value
of such Participant shall be the dollar value of the Participant's Profit
Sharing Plan Account determined as of the last day of the quarter of any Plan
Year coincident with or next preceding the date on which the Participant has a
Break in Service. In each case a Participant's Profit Sharing Plan Account Value
shall not be less than the value of the Participant's General Account under the
Profit Sharing Plan as of December 31, 1975, increased by 7% annually,
compounded, to the date of determination described above, which minimum value
shall not be dependent on the earnings of the Employer during such period. If
the last day of the quarter coincident with or next preceding a determination
date described above is not the same as the last day of the Plan Year, the Plan
Administrator may determine a Participant's Profit Sharing Plan Account Value on
the basis of a ratio reflective of the change in net worth of the assets of all
such Profit Sharing Plan Accounts since the last adjustment of the Participant's
Profit Sharing Plan Accounts, in accordance with the procedures described above.
(e) "Profit Sharing Plan Account Value Annuity" means a monthly
benefit equal to the Participant's Profit Sharing Plan Account Value, increased
with PBGC
Exhibit A
- 15 -
<Page>
interest, compounded annually, to the first of the month following the
65th birthday of the Participant or the Participant's Beneficiary, as the case
may be, and multiplied by the following percentage based on such PBGC interest.
PBGC interest means the annual rate of interest used by the Pension Benefit
Guaranty Corporation for purposes of valuing immediate annuities under plans
terminating during the month preceding the earlier of (a) the month of payment
of such Profit Sharing Plan Account Value and (b) the month benefits commence
under the Plan.
<Table>
<Caption>
PBGC Interest PBGC Interest
Rate Percentage Rate Percentage
---- ---------- ---- ---------
<S> <C> <C> <C>
6.00% or less 0.84% 8.75% 1.00%
6.25% 0.85% 9.00% 1.02%
6.50% 0.87% 9.25% 1.04%
6.75% 0.88% 9.50% 1.05%
7.00 % 0.90% 9.75% 1.07%
7.25% 0.91% 10.00% 1.08%
7.50% 0.93% 10.25% 1.10%
7.75% 0.94% 10.50% 1.11%
8.00% 0.96% 10.75% 1.13%
8.25% 0.98% 11.00% or more 1.15%
8.50% 0.99%
</Table>
(f) Upon termination of the Plan that portion of any assets then
held in the Trust Fund allocable to Participants and their Beneficiaries shall
be allocated so that first priority shall be given to the payment of benefits to
Participants having Profit Sharing Plan Accounts in an amount which shall be no
less than the Participant's Profit Sharing Plan Account Value remaining on the
date of termination.
(g) If, at the time of termination of the Participant's
employment for any reason (including death), a Participant, or Beneficiary in
case of death, is not entitled to any benefit under Article IV of the Plan, then
the Participant's Profit Sharing Plan Account Value shall be paid to the
Participant or to the Participant's Beneficiary, as the case may be. The
Participant, subject to the consent provisions of Article VIII, or the
Participant's Beneficiary, may elect to receive a lump sum, and upon payment of
such lump sum the Participant and the Participant's Beneficiaries thereunder
shall not be entitled to any further benefit on account of the Participant's
Profit Sharing Plan Account. The Beneficiary of a married Participant shall
automatically be the Participant's Spouse. If a Participant is rehired by the
Employer and subsequently becomes entitled to benefits under Article IV of the
Plan, any benefit the Participant or the Participant's Beneficiary would
otherwise be entitled to receive shall be reduced by the Participant's Profit
Sharing Plan Account Value Annuity based on the Participant's Profit Sharing
Plan Account Value previously distributed to the Participant or the
Participant's Beneficiary.
Exhibit A
- 16 -
<Page>
(h) If at the time of termination of the Participant's employment
for any reason other than death, the Participant is entitled to a benefit under
the Plan, then the monthly retirement benefit payable to the Participant shall
not be less than the Participant's Profit Sharing Plan Account Value Annuity.
Subject to the consent provisions of the Plan, the Participant may elect to
receive in a lump sum the Participant's Profit Sharing Account Value at such
termination of employment, and upon payment of such lump sum any benefit the
Participant would otherwise be entitled to receive shall be reduced by the
Participant's Profit Sharing Plan Account Value Annuity.
(i) If at the time of a Participant's death, the Participant's
Spouse is entitled to a benefit under the Plan, then the monthly benefit payable
to the Spouse under the Plan shall not be less than the Profit Sharing Plan
Account Value Annuity. The Spouse may elect to receive in a lump sum the
Participant's Profit Sharing Plan Account Value, and upon payment of such lump
sum any benefit the Spouse would otherwise be entitled to receive under Article
IV shall be reduced by the Profit Sharing Plan Account Value Annuity.
(j) Upon cessation of all benefit payments payable to a
Participant or the Participant's Beneficiary entitled to benefits who has not
elected to receive a lump sum payment of the Participant's Profit Sharing Plan
Account Value, the Participant's Beneficiary, or the estate of such Beneficiary,
shall be paid in a lump sum the excess, if any, of the Participant's Profit
Sharing Plan Account Value over the aggregate of the benefits paid under the
Plan to the Participant and the Participant's Beneficiary.
ARTICLE V.
CODE SECTION 415 LIMITATIONS ON BENEFITS
5.1. Maximum Annual Benefit:
(a) Notwithstanding the foregoing and subject to the exceptions
below, the maximum Annual Benefit payable to a Participant under this Plan in
any Limitation Year shall equal the lesser of:
(1) $90,000, or
(2) one hundred percent (100%) of the Participant's
Compensation averaged over the three consecutive Limitation Years (or the actual
number of Limitation Years for Employees who have been employed for less than
three consecutive Limitation Years) during which the Employee had the greatest
aggregate Code Section 415 Compensation from the Employer.
(b) Notwithstanding anything in this Article to the contrary, the
maximum Annual Benefit for any Participant in a defined benefit plan in
existence on July 1,
Exhibit A
- 17 -
<Page>
1982, shall not be less than the "protected current accrued benefit", payable
annually, provided for under question T-3 of Internal Revenue Notice 83-10.
(c) Notwithstanding anything in this Article to the contrary, if
the Plan was in existence on May 6, 1986, and had complied at all times with the
requirements of Code Section 415, the maximum Annual Benefit for any individual
who is a Participant as of the first day of the Limitation Year beginning after
December 31, 1986, shall not be less than the Current Accrued Benefit. "Current
Accrued Benefit" shall mean a Participant's Accrued Benefit under the Plan,
determined as if the Participant had separated from service as of the close of
the last Limitation Year beginning before January 1, 1987, when expressed as an
Annual Benefit within the meaning of Code Section 415(b)(2). In determining the
amount of a Participant's Current Accrued Benefit, the following shall be
disregarded: (1) any change in the terms and conditions of the Plan after May 5,
1986; and (2) any cost of living adjustment occurring after May 5, 1986.
(d) The dollar limitation under Code Section 415(b)(1)(A) stated
in paragraph (a)(1) above shall be adjusted annually as provided in Code Section
415(d) pursuant to the Regulations. The adjusted limitation is effective as of
January 1st of each calendar year and is applicable to Limitation Years ending
with or within that calendar year.
(e) The limitation stated in paragraph (a)(2) above for
Participants who have separated from service with a non-forfeitable right to an
Accrued Benefit shall be adjusted annually as provided in Code Section 415(d)
pursuant to the Regulations prescribed by the Secretary of the Treasury.
(f) For the purpose of this Article, all qualified defined
benefit plans (whether terminated or not) ever maintained by the Employer shall
be treated as one defined benefit plan, and all qualified defined contribution
plans (whether terminated or not) ever maintained by the Employer shall be
treated as one defined contribution plan.
(g) For the purpose of this Article, if the Employer is a member
of a controlled group of corporations, trades or businesses under common control
(as defined by Code Section 1563(a) or Code Section 414(b) and (c) as modified
by Code Section 415(h)) or is a member of an affiliated service group (as
defined by Code Section 484(m)), all employees of such employers shall be
considered to be employed by a single employer.
(h) For the purpose of this Article, if this Plan is a Code
Section 413(c) plan, all employers of a Participant who maintain this Plan will
be considered to be a single employer.
5.2. Adjustments to Annual Benefit and Limitations:
(a) If the Annual Benefit begins before the Participant's Social
Security Retirement Age under the Social Security Act, then the $90,000
limitation shall be
Exhibit A
- 18 -
<Page>
reduced in such manner as the Secretary of the Treasury shall prescribe which is
consistent with the reduction for old-age insurance benefits commencing before
the Social Security Retirement Age under the Social Security Act.
(b) Notwithstanding the aforesaid, for Limitation Years beginning
prior to January 1, 1987, the $90,000 limit shall not be reduced if the annual
benefit begins on or after age sixty-two (62). If the Annual Benefit begins
before age sixty-two (62), the $90,000 limitation shall be reduced by each month
benefits commence before the Participant attains age sixty-two (62) so that it
is the Actuarial Equivalent of the $90,000 limitation beginning at age sixty-two
(62). However, the $90,000 limitation shall not be actuarially reduced to less
than:
(1) $75,000 if the Annual Benefit commences on or after
age fifty-five (55), or
(2) the amount which is the Actuarial Equivalent of the
$75,000 limitation at age fifty-five (55) if the Annual Benefit commences prior
to age fifty-five (55).
For purposes of adjusting the $90,000 limitation applicable
prior to age sixty-two (62) or the $75,000 limitation applicable prior to age
fifty-five (55), the adjustment shall be made pursuant to the general principles
set forth in this Plan for determining Actuarial Equivalence except that the
interest rate assumption shall be the greater of five percent (5%) or the rate
specified in Schedule A hereto and the mortality decrement shall be ignored to
the extent that a Forfeiture does not occur at death.
(c) If the Annual Benefit begins after the Participant's Social
Security Retirement Age or for Plan Years beginning prior to January 1, 1987,
age 65, the $90,000 limitation shall be increased so that it is the Actuarial
Equivalent of the $90,000 limitation at the Participant's Social Security
Retirement Age (or for Plan Years beginning prior to January 1, 1987, age 65).
(d) If the Annual Benefit begins before age sixty-two (62), then
the $90,000 limitation shall be reduced so that it is the Actuarial Equivalent
of the $90,000 limitation beginning at age sixty-two (62). However, the $90,000
shall not be actuarially reduced to less than:
(1) $75,000 if the Annual Benefit commences on or after age
fifty-five (55), or
(2) the amount which is the Actuarial Equivalent of the
$75,000 limitation at age fifty-five (55) if the Annual Benefit commences prior
to age fifty-five (55).
Exhibit A
- 19 -
<Page>
For purposes of adjusting the $90,000 limitation applicable
prior to age sixty-two (62) or the $75,000 limitation applicable prior to age
fifty-five (55), the adjustment shall be made pursuant to the general principles
used herein for determining the Actuarial Equivalent except that the interest
rate assumption shall be the greater of five percent (5%) or the rate specified
in Schedule A hereto and the mortality decrement shall be ignored to the extent
that a Forfeiture does not occur at death.
(e) For purposes of adjusting the Annual Benefit to a Straight
Life Annuity, the adjustment shall be made pursuant to Section 2.2 except that
the interest rate assumption shall be the greater of five percent (5%) or the
rate specified in Schedule A hereto.
(f) For purposes of adjusting the $90,000 limitation applicable
after age 65, the adjustment shall be made the Actuarial Equivalent except that
the interest rate assumption shall be the lesser of five percent (5%) or the
rate specified in Schedule A hereto and the mortality decrement shall be ignored
to the extent that a Forfeiture does not occur at death.
(g) For purposes of adjusting the $90,000 limitation applicable
after the Participant's Social Security Retirement Age (or for Plan Years
beginning prior to January 1, 1987, age 65), the adjustment shall be made for
the Actuarial Equivalent except that the interest rate assumption shall be the
lesser of five percent (5%) or the rate specified in Schedule A hereto and the
mortality decrement shall be ignored to the extent that a Forfeiture does not
occur at death.
(h) For purposes of the aforesaid adjustments, no adjustments
under Code Section 415(d) shall be taken into account before the Limitation Year
for which such adjustment first takes effect.
(i) For purposes of this Section, no adjustment is required for
Qualified Joint and Survivor Annuity benefits, Qualified Pre-Retirement Survivor
Annuity benefits and post-retirement medical benefits.
5.3. Annual Benefit Not in Excess of $10,000: This Plan may pay an
Annual Benefit to any Participant in excess of his maximum Annual Benefit if the
Annual Benefit derived from Employer contributions under this Plan and all other
defined benefit plans maintained by the Employer does not in the aggregate
exceed $10,000 for the Limitation Year or for any prior Limitation Year and the
Employer has not at any time maintained a defined contribution plan in which the
Participant participated. For purposes of this paragraph, if this Plan provides
for voluntary or mandatory Employee contributions, such contribution will not be
considered a separate defined contribution plan maintained by the Employer.
5.4. Participation or Service Reductions: If a Participant has less
than ten (10) Years of Participation in the Plan at the time he begins to
receive benefits under the Plan, the limitations in Sections 5.1(a)(1) and 5.2
shall be reduced by multiplying such limitations by
Exhibit A
- 20 -
<Page>
a fraction (a) the numerator of which is the number of years of participation
(or part thereof) in the Plan, and (b) the denominator of which is ten (10);
provided, however, that said fraction shall in no event be less than 1/10th. The
limitations of Sections 5.1(a)(2) and 5.3 shall be reduced in the same manner
except the preceding sentence shall be applied with respect to Years of Service
with the Employer rather than Years of Participation in the Plan. Additionally,
to the extent provided in Regulations, for years beginning after December 31,
1986, the above described reductions to the limitations in Sections 5.1(a)(1)
(except for purposes of Section 5.5(c)(2)) and 5.2 shall be applied separately
with respect to each change in the benefit structure of the Plan adopted before
August 3, 1992.
5.5. Multiple Plan Reduction:
(a) Subject to the exception in Section 5.5(f) below, if a
Participant is (or has been) a participant in one or more defined benefit plans
and one or more defined contribution plans maintained by the Employer, the sum
of the defined benefit plan fraction and the defined contribution plan fraction
for any Limitation Year may not exceed 1.0.
(b) (1) The defined benefit plan fraction is a fraction, the
numerator of which is the sum of the Participant's projected annual benefits
under all defined benefit plans. (whether terminated or not) maintained by the
Employer, and the denominator of which is the lesser of one hundred twenty-five
percent (125%) of the dollar limitation determined for the Limitation Year under
Code Sections 415(b) and (d) or one hundred forty percent (140%) of the highest
average compensation, including any adjustments under Code Section 415(b).
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 maintained by the
Employer 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 such plans after May 5,
1986. The preceding sentence applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements of Code Section 415
for all Limitation Years beginning before January 1, 1987.
(2) For purposes of applying the limitations of Code Section
415, the "projected annual benefit" for any Participant is the benefit, payable
annually, under the terms of the Plan determined pursuant to Regulation
1.415-7(b)(3).
(3) For purposes of applying the limitations of Code Section
415, "protected current accrued benefit" for any Participant in a defined
benefit plan in existence on July 1, 1982 will be the accrued benefit, payable
annually, provided for under question T-3 of Internal Revenue Service Notice
83-10.
Exhibit A
- 21 -
<Page>
(c) (1) The defined contribution plan fraction is a fraction, the
numerator of which is the sum of the annual additions to the Participant's
account under all the defined contribution plans (whether or not terminated)
maintained by the Employer for the current and all prior Limitation Years
(including the annual additions attributable to the Participant's nondeductible
Employee contributions to all defined benefit plans (whether or not terminated)
maintained by the Employer; and the annual additions attributable to all welfare
benefit funds, as defined in Code Section 419(e) or individual medical accounts,
as defined in Code Section 415(1)(2), maintained by the Employer, and the
denominator of which is the sum of the "maximum aggregate amounts" for the
current and all prior Limitation Years of service with the Employer (regardless
of whether a defined contribution plan was maintained by the Employer). The
"maximum aggregate amount" in any Limitation Year is the lesser of one hundred
twenty-five percent (125%) of the dollar limitation determined under Code
Sections 415(b) and (d) in effect under Code Section 415(c)(1)(A) or thirty-five
percent (35%) of the Participant's Section 415 Compensation for such Limitation
Year.
If the Employee 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 maintained by the Employer 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 1.0
under the terms of this Plan. Under the adjustment, an amount equal to
(i) the excess of the sum of the fraction over 1.0,
multiplied by
(ii) 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 such plans made after
May 5, 1986, but using the Section 415 limitation applicable to the first
Limitation Year beginning on or after January 1, 1987.
The annual addition for any Limitation Year beginning before
January 1, 1987, will not be recomputed to treat all Employee contributions as
annual additions.
(2) Notwithstanding the foregoing, the numerator of the
defined contribution plan fraction will be adjusted pursuant to Regulation
1.415-7(d)(1) and questions T-6 and T-7 of Internal Revenue Service Notice
83-10.
(3) For defined contribution plans in effect on or before
June 1, 1982, the Plan Administrator may elect, for any Limitation Year ending
after December 31, 1982, that the amount taken into account in the denominator
for every Participant for all
Exhibit A
- 22 -
<Page>
Limitation Years ending before January 1, 1983 will be an amount equal to (A)
the denominator for the Limitation Year ending in 1982 determined under the law
in effect for the Limitation Year ending in 1982, multiplied by (B) the
"transition fraction".
(4) For purposes of the preceding paragraph, the term
"transition fraction" will mean a fraction (A) the numerator of which is the
lesser of (i) $51,875 or (ii) 1.4 multiplied by twenty-five percent (25%) of the
Participant's 415 Compensation for the Limitation Year ending in 1981, and (B)
the denominator of which is the lesser of (i) $41,500 or (ii) twenty-five
percent (25%) of the Participant's 415 Compensation for the Limitation Year
ending in 1981.
(5) Notwithstanding the foregoing, for any Limitation Year in
which the Plan is a Top-Heavy Plan, $41,500 will be substituted for $51,875 in
determining the "transition fraction" unless the extra minimum allocation is
being provided under the Plan pursuant to Code Section 416(h)(2). However, for
any Limitation Year in which this Plan is a Super Top-Heavy Plan, $41,500 will
be substituted for $51,875 in any event.
(d) Notwithstanding the foregoing, for any Limitation Year in
which the Plan is a Top-Heavy Plan, "One Hundred Percent (100%)" will be
substituted for "One Hundred Twenty-five Percent (125%)" in paragraphs (b)(1)
and (c)(1) unless the extra minimum allocation is being provided hereunder
pursuant to Code Section 416(h)(2). However, for any Limitation Year in which
the Plan is a Super Top-Heavy Plan, "One Hundred Percent (100%)" will be
substituted for "One Hundred Twenty-Five Percent (125%)" in any event.
(e) If the sum of the defined benefit plan fraction and the
defined contribution plan fraction will exceed 1.0 in any Limitation Year for
any Participant, the Plan Administrator will adjust the numerator of the defined
benefit plan fraction so that the sum of both fractions will not exceed 1.0 in
any Limitation Year for such Participant.
(f) If (1) the substitution of One Hundred Percent (100%) for One
Hundred Twenty-Five Percent (125%) and $41,500 for $51,875 above, or (2) the
excess benefit accruals or annual additions provided for in Internal Revenue
Service Notice 82-19 cause the 1.0 limitation to be exceeded for any Participant
in any Limitation Year, such Participant will be subject to the following
restrictions for each future Limitation Year until the 1.0 limitation is
satisfied.
(i) the Participant's Accrued Benefit under the defined
benefit plan will not increase,
(ii) no annual additions may be credited to a
Participant's accounts, and
Exhibit A
- 23 -
<Page>
(iii) no Employee contributions (voluntary or mandatory)
will be made under any defined benefit plan or any defined contribution plan of
the Employer.
5.6. Incorporation By Reference: Notwithstanding anything contained in
this Section to the contrary, the limitations, adjustments and other
requirements prescribed in this Section will at all times comply with the
provisions of Code Section 415 and the Regulations thereunder, the terms of
which are specifically incorporated herein by reference.
ARTICLE VI.
VESTING
6.1. Vesting Rights: A Participant will acquire a vested and
nonforfeitable interest in his or her Accrued Benefit attributable to Employer
contributions in accordance with the following schedule, based upon Years of
Vesting Service with the Employer, provided that if a Participant is not already
fully vested, he or she will become so upon attaining Normal Retirement Age or
Early Retirement Age, or on termination of the Plan:
VESTING SCHEDULE
(for Employees credited with at least one (1)
Hour of Service on or after the first day of the Plan Year
commencing on or after January 1, 1989)
<Table>
<Caption>
YEARS OF VESTING SERVICE PERCENTAGE
------------------------ ----------
<S> <C>
less than 5 0%
5 or more 100%
</Table>
VESTING SCHEDULE
(for Employees not credited with at least one (1)
Hour of Service on or after the first day of the Plan Year
commencing on or after January 1, 1989)
<Table>
<Caption>
YEARS OF VESTING SERVICE PERCENTAGE
------------------------ ----------
<S> <C>
less than 10 0%
10 or more 100%
</Table>
6.2. Top-Heavy Vesting: Notwithstanding the vesting provided for
above, for any Top-Heavy Plan Year, the vested portion of the Accrued Benefit of
any Participant
Exhibit A
- 24 -
<Page>
who has one (1) Hour of Service after the Plan becomes a Top-Heavy Plan will be
a percentage of the Participant's Accrued Benefit determined on the basis of the
Participant's number of Years of Vesting Service according to the following
schedule:
TOP HEAVY
VESTING SCHEDULE
<Table>
<Caption>
YEARS OF VESTING SERVICE PERCENTAGE
------------------------ ----------
<S> <C>
Less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
</Table>
If in any subsequent Plan Year, the Plan ceases to be a Top-Heavy
Plan, the Administrator will revert to the vesting schedule in effect before
this Plan became a Top-Heavy Plan. Any such reversion will be treated as a Plan
amendment. The vesting percentage determined above applies to all of the
Participant's Accrued Benefit resulting from Employer contributions, including
contributions the Employer makes before the TEFRA compliance date or when the
Plan is not a Top-Heavy Plan.
6.3. Service Computation Period:
For vesting purposes, Years of Vesting Service and Breaks in
Service will be measure by reference to the 12-consecutive month period
commencing on the Employee's Employment Commencement Date or Re-Employment
Commencement Date. Each subsequent 12-consecutive month period will commence on
the anniversary of such date.
6.4. Service Credit: All Years of Vesting Service with the Employer
are counted to determine the nonforfeitable vested percentage in such Employee's
Employer-provided Accrued Benefit, except that any "Period of Service" excluded
as of December 31, 1985, in accordance with the Plan as constituted and in
effect before December 31, 1985, shall be excluded for all purposes thereafter.
6.5. Vesting Break in Service: If any Participant is re-employed after
a Break in Service, Years of Vesting Service prior to the Break in Service will
be counted toward vesting subject to the following:
A Participant's pre-break service will count in vesting the post-break
Employer-provided Accrued Benefit only if either:
Exhibit A
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(a) such Participant has a nonforfeitable interest in the Accrued
Benefit attributable to Employer contributions at the time of separation from
service; or
(b) upon the Participant's return to service, the number of
consecutive Breaks in Service is less than the greater of (1) the number of
prior Years of Vesting Service (disregarding any Years of Vesting Service that
were excluded because of a previous Break in Service, or (2) five (5) years.
6.6. Vesting on Distribution Before Break in Service; Cash-outs:
(a) If a Participant terminates employment and the value of the
Participant's vested Accrued Benefit derived from Employer and Required
Contributions is not greater than $3,500, the Participant will receive a
distribution of the value of the entire vested portion of such Accrued Benefit
and the nonvested portion will be treated as a forfeiture. For purposes of this
Article, if the present value of an Employee's vested Accrued Benefit is zero,
the Employee shall be deemed to have received a distribution of such vested
Accrued Benefit.
(b) If a Participant terminates employment, and elects to receive
the value of his or her vested Accrued Benefits, the nonvested portion will be
treated as a Forfeiture. If the Participant elects to have distributed less than
the entire vested portion of the Accrued Benefit derived from Employer
contributions, the part of the nonvested portion that will be treated as a
Forfeiture is the total nonvested portion multiplied by a fraction, the
numerator of which is the amount of the distribution attributable to Employer
contributions and the denominator of which is the total value of the vested
Employer-derived Accrued Benefit.
6.7. Amendment of Vesting Schedule: If the Plan's vesting schedule is
amended, or the Plan is amended in any way that directly or indirectly affects
the computation of the Participant's nonforfeitable percentage or if the Plan is
deemed amended by an automatic change to or from a top-heavy vesting schedule,
each Participant with at least three (3) Years of Service with the Employer may
elect, within a reasonable period after the adoption of the amendment or change,
to have the nonforfeitable percentage computed under the Plan without regard to
such amendment or change. For Participants who do not have at least one (1) Hour
of Service in any Plan Year beginning after December 31, 1988, the preceding
sentence will be applied by the substitution of "5 Years of Service" for "3
Years of Service" where such language appears.
The period during which the election may be made will commence with
the date the amendment is adopted or deemed to be made and will end on the
latest of:
(a) sixty (60) days after the amendment is adopted;
(b) sixty (60) days after the amendment becomes effective; or
Exhibit A
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(c) sixty (60) days after the Participant is issued written
notice of the amendment by the Employer or Plan Administrator.
Notwithstanding the foregoing, no such change in the Plan's vesting
schedule or computation of a Participant's nonforfeitable percentage shall apply
to a Participant unless such Participant is credited with an Hour of Service on
or after the date of the change.
6.8. Amendments Affecting Vested and/or Accrued Benefit: No amendment
to the Plan will be effective to the extent that it has the effect of decreasing
a Participant's Accrued Benefit. Notwithstanding the preceding sentence, a
Participant's Accrued Benefit may be reduced to the extent permitted under
Section 412(c)(8) of the Code. For purposes of this Section, a Plan amendment
which has the effect of decreasing a Participant's Accrued Benefit or
eliminating an optional form of benefit, with respect to benefits attributable
to service before the amendment will be treated as reducing an Accrued Benefit.
Furthermore, if the vesting schedule of a Plan is amended, in the case of an
Employee who is a Participant as of the later of the date such amendment is
adopted or the date it becomes effective, the nonforfeitable percentage
(determined as of such date) of such Employee's right to his or her
Employer-provided Accrued Benefit will not be less than the percentage computed
under the Plan without regard to such amendment.
6.9. No Divestiture for Cause: Amounts vested pursuant to this Section
shall not be subject to divestiture for cause.
ARTICLE VII.
PAYMENT OF BENEFITS
7.1. Notice: The Plan Administrator shall provide the Participant with
a notice of rights of payment no less than thirty (30) and no more than ninety
(90) days before the Participant's Annuity Starting Date. S