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FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
TWIN DISC, INCORPORATED
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(Exact name of issuer as specified in its charter)
Wisconsin 39-0667110
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(State of other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1328 Racine Street, Racine, Wisconsin 53403
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(Address of Principal Executive Offices) (Zip Code)
Twin Disc, Incorporated - The Accelerator 401(k) Savings Plan
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(Full title of the plan)
Fred H. Timm, 1328 Racine Street, Racine, Wisconsin 53403
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(Name and address of agent for service)
(262) 638-4200
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(Telephone number, including area code, of agent for service)
Calculation of Registration Fee
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Proposed Proposed
Title of Class Maximum Maximum
of Securities Amount Offering Aggregate Amount of
to be to be Price Per Offering Registration
Registered Registered Share Price Fee
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Common Stock 100,000 $13.80 $1,380,000$126.96
(No par value) Shares
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Pursuant to Rule 416(c) under the Securities Act of 1933, as amended,
this Registration Statement also covers an indeterminate amount of interests
to be offered or sold pursuant to the Plan described herein.
Pursuant to Rule 457(h)(2), no filing fee is required with respect to the
participation interests in the Plan registered hereunder.
Pursuant to Rule 457(c), the "Proposed maximum offering price per share"
and "Proposed maximum aggregate offering price" are based upon $13.80 per
share, the closing price at which such stock was sold on September 3, 2002.
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PART I
This registration statement pertains to 100,000 shares of the Common Stock, no
par value, of Twin Disc, Incorporated (the "Company"), pursuant to the Twin
Disc, Incorporated The Accelerator 401(k) Savings Plan (the "Plan").
Purchases by the Plan of Common Stock may be from the Company or from the open
market.
Documents containing the information specified in Part I of Form S-8 will be
sent or given to employees eligible to participate in the Plan by the Company
as specified by Rule 428(b)(1), 17 C.F.R. 230.428(b)(1).
PART II
Item 3 - Incorporation of Documents by Reference
The following documents and all documents subsequently filed by the Company
pursuant to Section 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act
of 1934, prior to the filing of a post-effective amendment which indicates
that all securities offered have been sold or which de-registers securities
then remaining unsold, are hereby incorporated by reference from the date of
filing of such documents:
1. The Company's 2001 Annual Report on Form 10-K.
2. The Auditor's Consent to incorporate the Company's financial reports
contained in the Annual Report on Form 10-K.
3. The Company's first quarter report on Form 10-Q for the quarter ended
September 30, 2001.
4. The Company's second quarter report on Form 10-Q for the quarter ended
December 31, 2001
5. The Company's third quarter report on Form 10-Q for the quarter ended
March 31, 2002.
6. The Plan's Annual Report on Form 11-K for the year ended December 31,
2001.
7. The description of the Company's Common Stock contained in Item 1 of
the Company's Registration Statement on Form 8-A dated January 21,
1977, and any amendments or reports filed for the purpose of updating
such description.
8. The description of the Company's Preferred Stock Purchase Rights
contained in Item 1 of the Company's Registration Statement on Form
8-A, filed May 4,1998, and any amendments or reports filed for the
purpose of updating such description.
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Item 4 - Description of Securities
Not Applicable.
Item 5 - Interests of Named Experts and Counsel
None.
Item 6 - Indemnification of Directors and Officers
Certain provisions of the Wisconsin Business Corporation Law, Chapter 180 of
the Wisconsin Statutes ("WBCL"), provide that the Company will indemnify the
directors and officers of the Company and each subsidiary company against
liabilities and expenses incurred by such person by reason of the fact that
such person was serving in such capacity, subject to certain limitations and
conditions set forth in the WBCL. The Company's By-Laws also provide that the
Company will indemnify its directors and officers, and, at the Company's
request, will indemnify any person serving as a director or officer with
respect to serving or having served another business entity, to the extent
permitted by the WBCL.
It is the public policy of the State of Wisconsin, expressed in Section
180.0859 of the WBCL, to require or permit indemnification and allowance of
expenses for any liability incurred in connection with a proceeding involving
federal or state statutory or administrative regulation of the offer, sale or
purchase of securities, provided the applicable requirements for
indemnification and allowance of expenses are satisfied.
The Company has purchased liability insurance policies that indemnify the
Company's directors and officers against loss arising from claims by reason of
their legal liability for acts of such directors or officers, subject to
limitations and conditions as set forth in the policies.
Item 7 - Exemption From Registration Claimed
Not Applicable.
Item 8 - Exhibits
Exhibit Description
4(a) Form of Rights Agreement dated as of April 17, 1998 by and between
the Company and the Firstar Trust Company, as Rights Agent, with Form
of Rights Certificate (Incorporated by reference to Exhibits 1 and 2 of
the Company's Form 8-A dated May 4, 1998).
4(b) Announcement of Shareholder Rights Plan per news release dated April
17, 1998 (Incorporated by reference to Exhibit 6(a), of the Company's
Form 10-Q dated May 4, 1998).
*5a) Opinion of von Briesen & Roper, s.c., regarding the validity of
original issuance securities
b) In lieu of an opinion of counsel concerning compliance with the
requirements of ERISA or an Internal Revenue Service (IRS)
determination letter that the Plan is qualified under Section 401 of
the Internal Revenue Code, the registrant hereby undertakes that it has
submitted or will submit the Plan and any amendments thereto to the IRS
in a timely manner and has made or will make all changes required by
the IRS in order to qualify the Plan.
*23 Consent of Independent Accountants
*24 Power of Attorney
*99 Twin Disc, Incorporated - The Accelerator 401(k) Savings Plan.
* Filed herewith
Item 9 - Undertakings
The undersigned registrant hereby undertakes:
(1)To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(a) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
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(b) to reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in the volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of a prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20% change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table above; and
(c) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
Provided, however, that paragraph (a) and (b) shall not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 of Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2)That, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities therein, and the offering
of such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(3)To remove from registration by means of a post-effective amendment any of
the securities being registered that remain unsold at the termination of
the offering.
The undersigned registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) of Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as any indemnification arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Racine, State of Wisconsin, on September 6, 2002.
TWIN DISC, INCORPORATED
By: /s/ Fred H. Timm
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Fred H. Timm, Vice President
Administration/Secretary
(Chief Accounting Officer)
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and on
the date indicated.
/s/ Michael E. Batten
September 6, 2002 - - - - - - - - - - - - - - - -
Michael E. Batten, Chairman,
Chief Executive Officer and Director
/s/ Michael H. Joyce
September 6, 2002 - - - - - - - - - - - - - - - -
Michael H. Joyce, President,
Chief Operating Officer and Director
/s/ James O. Parrish
September 6, 2002 - - - - - - - - - - - - - - - -
James O. Parrish, Vice President
Finance/Treasurer And Director
(Chief Financial Officer)
September 6, 2002 Paul J. Powers, Director
David L. Swift, Director
John A. Mellowes, Director
George E. Wardeberg, Director
David R. Zimmer, Director
David B. Rayburn, Director
By: /s/ James O. Parrish
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James O. Parrish, Attorney in Fact
Pursuant to the requirements of the Securities Act of 1933, the members of the
Committee which administers the Plan have caused this registration statement
to be signed on behalf of the Plan by the undersigned, thereunto duly
authorized, in the City of Racine, State of Wisconsin, on this 6th day of
September, 2002.
TWIN DISC, INCORPORATED -
THE ACCELERATOR 401(K) SAVINGS PLAN
September 6, 2002 /s/ JAMES O. PARRISH
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James O. Parrish
Vice President-Finance/Treasurer
/s/ FRED H. TIMM
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Fred H. Timm
Vice President-Administration/Secretary
/s/ DENISE L. WILCOX
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Denise L. Wilcox
Director, Corporate Human Resources
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EXHIBIT INDEX
Exhibit No. Description of Exhibit
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4a) Form of Rights Agreement dated as of April 17, 1998
by and between the Company and the Firstar Trust
Company, as Rights Agent, with Form of Rights Certificate
(Incorporated by reference to Exhibits 1 and 2 of the
Company's Form 8-A dated May 4, 1998).
4b) Announcement of Shareholder Rights Plan per news
release dated April 17, 1998 (Incorporated by reference
to Exhibit 6(a), of the Company's Form 10-Q dated May 4, 1998).
*5a) Opinion of von Briesen & Roper, s.c., regarding the validity
Of original issuance securities
5b) In lieu of an opinion of counsel concerning compliance
with the requirements of ERISA or an Internal Revenue
Service (IRS) determination letter that the Plan is
qualified under Section 401 of the Internal Revenue Code,
the registrant hereby undertakes that it has submitted
or will submit the Plan and any amendments thereto to the
IRS in a timely manner and has made or will make all changes
required by the IRS in order to qualify the Plan.
*23 Consent of Independent Accountants
*24 Power of Attorney
*99 Twin Disc, Incorporated - The Accelerator 401(k) Savings Plan.
* Filed herewith
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EXHIBIT 99
TWIN DISC, INCORPORATED
THE ACCELERATOR 401(k) SAVINGS PLAN
As Amended and Restated Effective January 1, 1997
Effective as of April 1, 1986, Twin Disc, Incorporated (the "Company")
adopted the Twin Disc, Incorporated -- The Accelerator 401(k) Savings Plan
(the "Plan") to enable eligible employees to save for retirement on a
tax-deferred basis.
Effective as of January 1, 1997, the Plan was amended and restated as set
forth herein, to meet the requirements of the Internal Revenue Code and to
make other clarifying and desirable revisions.
The Company intends that the Plan and related Trust qualify as a profit
sharing plan with a qualified cash or deferred arrangement under Sections
401(a), 401(k),and 501(a) of the Internal Revenue Code of 1986, as amended,
and the provisions of the Employee Retirement Income Security Act of 1974, as
amended, and each of the terms of the Plan and Trust shall be so interpreted.
The provisions of this Plan shall apply only to a Participant who
terminates employment on or after January 1, 1997. The rights and benefits,
if any, of a Participant who terminated employment prior to January 1. 1997,
shall be determined in accordance with the provisions of the Plan as in effect
on the date his employment terminated.
ARTICLE I
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DEFINITIONS
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1.1 "Account" means the separate account which is maintained for the
benefit of each Participant in the Plan.
1.2 "Affiliate" means any (i) corporation or other business entity which
is included in a controlled group of corporations in which the Company is also
included, as provided in Section 414(b) of the Code (as modified, for purposes
of Section 5.5 of the Plan, by Section 415(h) of the Code); (ii) which is a
trade or business under common control with the Company, as provided in
Section 414(c) of the Code (as modified, for purposes of Section 5.5 of the
Plan, by Section 415(h) of the Code); (iii) which constitutes a member of an
affiliated service group in which the Company is also included, as provided
in Section 414(m) of the Code; or (iv) which is required to be aggregated with
the Company pursuant to regulations issued under Section 414(o) of the Code.
1.3 "Authorized Leave of Absence" shall mean any absence authorized by
the Employer under the Employer's personnel practices, provided that all
persons under similar circumstances are treated in a uniform and
nondiscriminatory manner in the granting of such Authorized Leaves of Absence,
and provided further that the Participant returns to employment with the
Employer or retires within the period specified in the Authorized Leave of
Absence.
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An absence for service in the Armed Forces of the United States shall be
considered an authorized Leave of Absence provided that the Employee complies
with all the requirements of Federal Law to be entitled to reemployment and
provided further that the Employee returns to employment with the Employer
within the period provided by such law.
1.4 "Beneficiary" means the person or persons or other entity designated
by a Participant pursuant to Section 7.5 to receive any benefits under the
Plan which may be due upon the Participant's death.
1.5 "Code" means the Internal Revenue Code of 1986, as amended from time
to time. Reference to any section of the Code includes any successor
provision.
1.6 "Company" means Twin Disc, Incorporated, a Wisconsin Corporation,
the Plan sponsor.
1.7 "Compensation" means the total of all amounts paid to a Participant
by the Employer for personal services as an Employee of the Employer as
reflected on Form W-2 (wages within the meaning of Code Section 3401(a) and
all other payments of compensation to a Participant by the Employer in the
course of their trades or businesses for which they are required to furnish
the Participant a written statement under Code Sections 6041(d), 6051(a)(3),
and 6052 of the Code, determined without regard to any rules under Code
Section 3401(a) that limit the remuneration included in wages based on the
nature or location of the employment or services performed, such as the
exception for agricultural labor in Section 3401(a)(2)), plus any salary
reduction the Participant elects under Code Sections 125, 129 or 401(k) but
excluding severance pay and all of the following items, (even if includable in
gross income); reimbursements or other expense allowances, fringe benefits
(cash and noncash), moving expenses, deferred compensation, and welfare
benefits; provided, however, the Plan shall disregard Compensation in excess
of Section 401(a)(17) of the Code, indexed for inflation.
1.8 "Employee" means an individual who is receiving remuneration for
personal services rendered to an Employer (or would be receiving such
remuneration except for an Authorized Leave of Absence); provided, however,
that any individual who is a member of a collective bargaining unit whose
bargaining representative has bargained in good faith with an Employer (or its
bargaining representative) with respect to retirement benefits shall not be
considered an Employee under this Plan except to the extent that the
applicable collective bargaining agreement provides for participation
under this Plan by such individual. Any leased employee (within the meaning
of Section 414(n)(2) of the Code) of an Employer performing services shall be
deemed to be in a class of employees not eligible to participate in this Plan
unless such participation is required as a condition of the Plan's
qualification under Code Section 401(a).
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1.9 "Employer" means the Company and any Affiliate which adopts the Plan
with the consent of the Company. The following Affiliates have adopted the
Plan: TD Electronics, Inc. and Southern Diesel Systems, Inc. (Effective August
22, 2000, Twin Disc Southeast, Inc.)
1.10 "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time. Reference to any section of ERISA includes any
successor provision.
1.11 "Fund" means the Trust Fund.
1.12 "Normal Retirement Age" means a Participant's sixty-fifth (65th)
birthday.
1.13 "Participant" means either (i) an Employee who becomes a Participant
pursuant to Article II or (ii) an individual who has an Account in the Plan.
1.14 "Plan" means the Twin Disc, Incorporated -- The Accelerator 401(k)
Savings Plan herein set forth and as it may be amended from time to time.
1.15 "Plan Year" means the Calendar Year.
1.16 "Rollover Contributions" means the contributions made by an Employee
or a Participant pursuant to Section 3.6, of sums distributed to him from or
directly transferred from either any other qualified employee benefit plan or
an individual retirement account derived from a qualified plan, provided such
prior distribution or transfer meets all of the applicable requirements under
the Code to qualify for rollover or transfer treatment.
1.17 "Termination of Employment" means the end of an Employee's
employment with the Company or an Affiliate determined in accordance with the
Company's personnel policies. Termination of employment results when an
Employee quits, is discharged, retires, dies, is absent but not on an
Authorized Leave of Absence, or fails to return to active employment with the
Company or to retire by the date on which an Authorized Leave of Absence
expired. Termination of Employment for an Employee who is laid off occurs
upon the earliest of the following events:
(a) The Employee fails to return to work within three days of recall or
within such other longer period as may be specified by the Employer;
or
(b) The Employee=s period of layoff equals three (3) months.
1.18 "Trust" means the trust agreement or agreements between the Company
and the Trustee, known as the Twin Disc, Incorporated -- The Accelerator
401(k) Savings Trust, as from time to time amended.
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1.19 "Trust Fund" means all such money or other property which shall be
held by the Trustee pursuant to the terms of the Trust.
1.20 "Trustee" means the trustee or trustees appointed by the Company and
acting as such under the Trust Agreement, including any successor or
successors.
1.21 "Valuation Date" means each business day.
ARTICLE II
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ELIGIBILITY AND PARTICIPATION
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2.1 Eligibility and Participation.
(a) An Employee shall become a Participant in the Plan as of
January 1, 1997, if he was a Participant in the Plan on December 31, 1996.
(b) An Employee shall be eligible to become a Participant as of the
first day of the first payroll period coincident with or next following the
date he completes two months of employment. An Employee may become a
Participant on the first day of any payroll period on or after the date he is
eligible by authorizing salary reduction contributions to the Plan.
Notwithstanding the foregoing, for purposes of Section 3.5 of the Plan, an
Employee of Southern Diesel Systems, Inc. (effective August 22, 2000, Twin
Disc Southeast, Inc.) will become a Participant on the first day of the
payroll period beginning on or after the date he is eligible, regardless of
whether he authorizes salary reduction contributions.
(c) Notwithstanding any provision of this Plan to the contrary,
contributions, benefits, and service will be provided in accordance with (i)
Section 414(u) of the Code and (ii) any agreement for the acquisition of a
business.
2.2 Participation Upon Reemployment. A Participant whose employment has
terminated and who is subsequently reemployed by an Employer shall reenter the
Plan as a Participant on the date of his reemployment. If a reemployed
Employee was not formerly a Participant in the Plan, he shall be considered a
new Employee and shall be required to meet the requirements of Section 2.1 to
be eligible to participate in the Plan. However, if an Employee who was not
formerly a Participant in the Plan is reemployed by an Employer, his prior
period of employment will be recognized for purposes of the
two-months-of-employment service requirement.
2.3 Termination of Employment. Upon a Participant's Termination of
Employment with the Employer, the Participant's active participation in the
Plan shall cease and the Plan shall not allocate additional contributions to
the Participant=s Account in the Plan.
2.4 Transfers.
(a) Transfers between Employers shall not interrupt a Participant's
participation in the Plan.
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(b) If an Employee is transferred from an ineligible position with
an Employer or an Affiliate that is not an Employer to a position which makes
him eligible for coverage under the Plan, his period of employment in the
ineligible position shall be counted as employment and Vesting Service
hereunder. Such an Employee shall be eligible to become a Participant as of
the later of the date of transfer or the date he first completes the
requirements of Section 2.1.
(c) If a Participant is transferred to employment with an
Affiliate that is not an Employer or to employment that makes him ineligible
for active participation under the Plan, his active participation under the
Plan shall be suspended. During the period of his employment in such an
ineligible position, he shall cease to have any right to make elections
pursuant to Sections 3.1 and 3.3, and he shall continue to share in the
performance of the investment funds in which his Accounts are invested.
ARTICLE III
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CONTRIBUTIONS
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3.1 Salary Reduction Contribution.
(a) Salary reduction contributions are made pursuant to an agreement
between a Participant and his Employer for the Participant to accept a salary
reduction in consideration of a pre-tax contribution to the Plan by the
Employer on the Participant's behalf in the same amount. Each Participant
shall have the option to enter into a written salary reduction agreement with
the Employer which shall be applicable to all Compensation received
thereafter. The salary reduction agreement shall provide that the Participant
agrees to accept a reduction in salary from the Employer in an amount equal to
any whole number percentage of the Participant's Compensation for the relevant
Plan Year as determined by the Plan Administrator. The Employer shall
contribute to the Trust Fund, as soon as practicable after, and in no event
later than fifteen (15) days after, the end of each payroll period, an amount
equal to the salary reduction contributions of all Participants for such
payroll period.
(b) Each Participant may change the amounts of his salary
reduction contributions as of any pay day by filing a new authorization form
with the Plan Administrator at least one week before the end of the applicable
payroll period.
(c) Each Participant may discontinue his salary
reduction contributions as of any pay day by notifying the Plan Administrator
at least one week before the end of the applicable payroll period.
3.2 Limitation on Salary Reduction Contributions.
(a) No Participant shall be permitted to have salary reduction
contributions made under the Plan
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and any other plan maintained by the Employer during any taxable year inexcess
of the dollar limitation contained in Code Section 402(g) as in effect at the
beginning of such taxable year. An Employer may limit, revoke or amend its
agreement to make salary reduction contributions on behalf of any Participant
under Section 3.1 to effect compliance with the Code Section 402(g)
limitation.
(b) Excess Elective Deferrals under this Plan, plus any income
and minus any losses allocable thereto, must be distributed to the Participant
no later than April 15 of the following year.
(c) Definitions.
(i) "Excess Elective Deferrals" shall mean those salary
reduction contributions under Code Section 402(g) to the extent such
Participant's Elective Deferrals for a taxable year exceed the
dollar limitation under such Code section. Excess Elective
Deferrals shall be treated as Annual Additions under Section 5.5
of the Plan.
(ii) "Elective Deferrals" with respect to any taxable year,
shall mean, the sum of all employer contributions (including those
of another employer who is not an Employer who has adopted this
Plan) made on behalf of a Participant pursuant to an election to
defer under any qualified cash or deferred arrangement as described
in Code Section 401(k), any simplified employee pension cash or
deferred arrangement as described in Code Section 402(h)(l)(B), any
eligible deferred compensation plan under Code Section 457, any plan
as described under Section 501(c)(18), and any employer
contributions made on the behalf of a Participant for the purchase
of an annuity contract under Code Section 403(b) pursuant to a
salary reduction agreement.
(d) Determination of income or loss. Excess Elective Deferrals
shall be adjusted for any income or loss up to the end of the Plan Year
in which they occur using the method described in this subsection or any
other method permitted under Treasury Regulation Section 1.402(g)-1(e)(5).
The income or loss allocable to Excess Elective Deferrals is the income
or loss allocable to the Participant's 401(k) Contributions for the
taxable year multiplied by a fraction, the numerator of which is such
Participant's Excess Elective Deferrals for the year and the denominator of
which is the Participant's Account Balance attributable to401(k) Contributions
without regard to any income or loss occurring during such taxable year.
3.3 Employer Matching Contributions. For each Participant who is an
Employee of the Employer, the Employer shall contribute to the Trust Fund a
discretionary Employer matching contribution. Employer matching contributions
shall be made to the Trustee no later than as soon as practicable after the
end of the Plan Year to which they relate, but not later than the time
prescribed by law for the filing of the Company's Federal income tax return
for the applicable Plan Year, including any extensions thereof.
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3.4 Limitations on Contributions For Nondiscrimination Testing Purposes.
(a) Contributions allocated to the Accounts of Highly Compensated
Employees (as defined below in Section 3.4(d)(iii)) shall not in any Plan Year
exceed the limits specified in this Section 3.4. The Plan Administrator may
make the adjustments authorized in this Section 3.4 to ensure that the limits
of Subsections (b) (the "Actual Deferral Percentage test") and (c) (the
"Actual Contribution Percentage test") are not exceeded, regardless of whether
such adjustments affect some Participants more than others. This Section
shall be administered and interpreted in accordance with Code Sections 401(k)
and 401(m).
(b) The Actual Deferral Percentage of the Highly Compensated
Employees shall not exceed, in any Plan Year, the greater of:
(i) The Actual Deferral Percentage of all other Participants
for the prior Plan Year multiplied by 1.25; or
(ii) The lesser of the (A) Actual Deferral Percentage of all
other Participants for the prior Plan Year multiplied by two (2)and
(B) the Actual Deferral Percentage of all other Participants for
such Plan Year plus two (2) percentage points, or such lesser amount
as the Secretary of the Treasury shall prescribe to prevent the
multiple use of this alternative limitation with respect to any
Highly-Compensated Employee.
(c) The Actual Contribution Percentage of the Highly Compensated
Employees shall not exceed, in any Plan Year, the greater of:
(i) The Actual Contribution Percentage of all other
Participants for the prior Plan Year multiplied by 1.25; or
(ii) The lesser of (A) the Actual Contribution Percentage of all
other Participants for such Plan Year multiplied by two (2) and(B)
the Actual Contribution Percentage of all other Participants for the
prior Plan Year plus two (2) percentage points, or such lesser
amount as the Secretary of the Treasury shall prescribe to prevent
the multiple use of this alternative limitation with respect to any
Highly Compensated Employee.
(d) The following terms shall have the meanings specified herein
for purposes of this Section 3.4.
8
(i) Actual Deferral Percentage. The average, for a specified
group of Participants for a Plan Year, of the ratios (calculated
separately for each Participant in such group) of (1) the amount of
Employer contributions actually paid over to the Trust on behalf of
such Participant for the Plan Year to (2) the Participant's
compensation for such Plan Year, as determined under Treasury
Regulation Section 1.401(k)-1(g)(2). For this purpose, Employer
contributions on behalf of any Participant shall include salary
reduction contributions, including amounts in excess of the 402(g)
limit (as adjusted) described in Section 3.2, but excluding salary
reduction contributions that are taken into account in the actual
Contribution Percentage test (provided that the Actual Deferral
Percentage test is satisfied both with and without exclusion of
these 401(k) Contributions). For purposes of computing Actual
Deferral Percentages, an Employee who would be a Participant
but for the failure to make salary reduction contributions shall
be treated as a Participant on whose behalf no salary reduction
contributions are made.
(ii) Actual Contribution Percentage. The average for a
designated group of Employees of the ratios (calculated separately
for each Employee in the group) of (1) the sum of (A) the Employer
matching contributions paid and credited to the Account of such
Employee for a Plan Year, (B) after-tax contributions credited to
the Account of such Employee for the Plan Year, and (C) any salary
reduction contributions which are to be taken into account for
purposes of the Actual Contribution Percentage Test, to (2) such
Employee's compensation for such Plan Year, as determined under
Treasury Regulation Section1.401(k)-1(g)(2). Salary Reduction
Contributions may be used in the Actual Contribution Percentage test
provided that the Actual Deferral Percentage test is met before the
salary reduction contributions are used in the Actual Contribution
Percentage test and continues to be met following the exclusion of
those contributions that are used to meet the Actual Contribution
Percentage test.
(iii) Highly Compensated Employee. The term Highly Compensated
Employee shall mean Highly Compensated active Employees and Highly
Compensated Former Employees.
A Highly Compensated active Employee includes any Employee who
performs services for the Company during the determination year
and who, during the look-back year: (A) received compensation
from the Company in excess of $80,000 (as adjusted pursuant to Code
Section 415(d)) and (B) was a five (5) percent owner of the Company.
(e) The Plan Administrator shall maintain records sufficient to
demonstrate satisfaction of the Actual Deferral Percentage test and the Actual
Contribution Percentage test and the amount of salary reduction contributions,
after-tax contributions and Employer matching contributions used in such test.
9
(f) Treatment of Excess Contributions. If Employer matching
contributions or salary reduction contributions exceed any of the limits
specified in this Section 3.4 for a Plan Year, then the Plan Administrator
shall correct such excess in accordance with the provisions of this Subsection
(f).
(i) Unless the Employer makes sufficient qualified nonelective
contributions under Subsection (iv) below, excess contributions
and excess aggregate contributions (as defined in subsections (ii)
and (iii)below), plus any income and minus any loss allocable
thereto for the Plan Year in which such excess contributions and
excess aggregate contributions occur, such income or loss
determined and allocated in accordance with Treasury Regulation
Section 1.401(k)-1(f)(4)(ii), shall be distributed no later than the
last day of each Plan Year to Participants to whose Accounts such
excess contributions and excess aggregate contributions were
allocated for the preceding Plan Year. Excess contributions and
excess aggregate contributions shall be treated as Annual Additions
under Section 5.5 of the Plan.
(ii) "Excess contributions" shall mean, with respect to any
Plan Year, the excess of:
(A) The aggregate amount of Employer contributions
actually taken into account in computing the Actual Deferral
Percentage of Highly Compensated Employees for such Plan Year,
over
(B) The maximum amount of such contributions permitted by
the Actual Deferral Percentage test (determined by reducing
contributions made on behalf of Highly Compensated Employees in
order of the Actual Deferral Percentages, beginning with the
highest of such percentages).
(iii) "Excess aggregate contributions" shall mean, with respect
to any Plan Year, the excess of:
(A) The aggregate amount of Employer contributions taken
into account in computing the numerator of the Actual
Contribution Percentage actually made on behalf of Highly
Compensated Employees for such Plan Year, over
(B) The maximum amount of Employer contributions
permitted by the Actual Contribution Percentage test
(determined by reducing contributions made on behalf of Highly
Compensated Employees in order of their Contribution
Percentages beginning with the highest of such percentages).
10
(iv) The Plan Administrator may, in its sole discretion,
require the Employer to contribute a qualified nonelective
contribution to the Trust in an amount necessary to satisfy any or
all of the requirements of Section 3.4. Qualified nonelective
contributions for a Plan Year shall be allocated to the Accounts of
Participants who are not Highly Compensated Employees in the ratio
in which such Participant's Compensation for such Plan Year bears to
the total Compensation of all such Participants for such Plan Year.
To the extent that qualified nonelective contributions are taken
into account for the Actual Deferral Percentage test they may not be
taken into account for the Actual Contribution Percentage test. For
purposes of this Section 3.5(h)(v), "qualified nonelective
contributions" shall mean Employer contributions (other than
Employer matching contributions)which are allocated to Participants'
Accounts; which Participants may not elect to receive in cash until
distributed from the Plan; which are nonforfeitable when made; and
which are subject to the special distribution requirements of
Section 7.4.
(vi) An Employer may limit, revoke or amend its agreement to make
salary reduction contributions on behalf of any Participant under
Sections 3.1 to effect compliance with the nondiscrimination
limitations of this Section 3.4.
3.5 Southern Diesel Systems, Inc. (effective August 22, 2000 Twin Disc
Southeast, Inc.) Profit Sharing Contributions. Southern Diesel Systems, Inc.
(effective August 22, 2000, Twin Disc Southeast, Inc.) ("SDS") shall make
profit sharing contributions for each Employee who is a Participant under this
Plan in an amount equal to 2.5% of such Participant's Compensation. SDS
shall make profit sharing contributions to the Trustee as soon as practicable
after the end of the Plan Year to which they relate, but not later than the
time prescribed by law for the filing of the Company's Federal income tax
return for the applicable Plan Year, including any extensions thereof.
3.6 Rollover Contributions. Each Employee or each Participant may elect
to make Rollover Contributions to the Plan or to have assets transferred in a
direct trustee-to-trustee transfer into the Trust Fund representing the
Employee's interest in another qualified plan (or individual retirement
account) that is 100% vested at the time of transfer. However, a
trustee-to-trustee transfer shall not be permitted to the extent such transfer
would subject the Plan to the joint and survivor annuity requirements of Code
Section 401(a)(11). Any Employee or Participant who elects to make Rollover
Contributions shall complete such forms as may be required by the Company.
3.7 Deductible Limit. The total Employer contributions for any Plan
Year(including 401(k) Contributions) shall not exceed the maximum amount
deductible by the Company for such Plan Year for Federal income tax purposes
under Section 404 of the Code.
11
ARTICLE IV
- - - - -
INVESTMENT OF CONTRIBUTIONS
- - - - - - - - - - - - - -
4.1 Investment of Accounts.
(a) The Plan Administrator shall direct the Trustee to establish and
maintain separate investment funds, each with such investment objectives as
the Plan Administrator determines. The Plan Administrator may from time to
time add, change or eliminate one (1) or more investment funds, without Plan
amendment upon such terms and conditions as it may consider appropriate.
(b) Each Participant (and each Employee who makes Rollover
Contributions) shall elect, upon becoming a Participant (or making such
Rollover Contributions), the manner in which all contributions made to his
Account are to be invested in such investment funds as well as the manner in
which amounts already accumulated in his Accounts are to be invested. A
Participant may direct his Account to be invested in any combination of
the investment funds. Such investment election shall remain in force until the
Participant changes such election in accordance with Section 4.2 of the Plan.
If a Participant fails to elect the manner in which the contributions to his
Account are to be invested, then the contributions to his Account shall be
invested in such fund as the Plan Administrator shall deem appropriate, upon
notice to the Participant.
(c) The Plan may hold in a Participant's Account common stock of
the Employer.
4.2 Change In Investment Election And Transfers Between Investment
Funds. Each Participant may change the manner in which the Plan invests his
Account or direct that the Plan make a transfer from one fund to another by
contacting the Trustee.
ARTICLE V
- - - - -
ALLOCATIONS, ACCOUNTING AND ADJUSTMENTS
- - - - - - - - - - - - - - - - - - - -
5.1 Composition Of Trust Fund. All amounts contributed to the Plan,
as increased or decreased by income, expenditure, appreciation and
depreciation, shall constitute a single fund known as the Trust Fund. The
maintenance of Participants' subaccounts is only for accounting purposes, and
a segregation of assets of the Trust Fund to each Account shall not be
required.
5.2 Allocation Of Earnings To Account. As of each Valuation Date, after
the allocation of contributions described in Article III and deduction for
distributions since the prior Valuation Date, there shall be allocated to the
Participant's Account, by credit or deduction therefrom, as the case may be, a
12
portion of the increase or decrease in the value of the applicable separate
investment funds pursuant to Section 4.1 since the preceding Valuation Date
attributable to interest, dividends, changes in market value, expenses and
gains and losses realized from the sale of assets. Such allocation shall be
made in the proportion that each Participant's account balance invested in an
investment fund as of the date of the allocation bears to the total of all
Participants' account balances invested in such investment fund as of the date
of the allocation.
5.3 Allocation Of Employer Matching Contributions and SDS Contributions.
Employer matching contributions shall be allocated to the Accounts of the
Participants on whose behalf such Employer Matching Contributions were made on
the basis of Participants' salary reduction contributions, and SDS
Contributions shall be allocated to the Accounts of the Participants who are
Southern Diesel Systems, Inc. (effective August 22, 2000,Twin Disc Southeast,
Inc.) Employees on whose behalf such SDS Contributions were made on the day
the Trustee receives such contributions.
5.4 Allocation Of Salary Reduction Contributions. The salary reduction
contributions made during a Plan Year on behalf of each Participant shall be
credited to his Account within a reasonable time after the Trustee receives
the contributions.
5.5 Maximum Annual Additions. In accordance with Section 1106(h) of the
Tax Reform Act of 1986, the limits of Section 415 of the Code are incorporated
herein by reference.
ARTICLE VI
- - - - - -
VESTING
- - - -
A Participant shall at all times have a fully vested, nonforfeitable interest
in his Account.
ARTICLE VII
- - - - - -
TIME AND METHOD OF PAYMENT
- - - - - - - - - - - - -
7.1 When Benefits Payable.
(a) When the Participant's Termination of Employment occurs or the
Participant is Disabled, the Participant may file with the Plan Administrator
his written election to receive his distribution on such form or forms and
subject to such rules as the Plan Administrator may establish. Benefits are
payable to a Participant or his Beneficiary as soon as practicable after the
Participant's Termination of Employment and filing of election to receive his
distribution. The distribution shall be in the amount of the value of the
vested percentage of the Participant's Account (determined as of the last
Valuation Date immediately preceding distribution) in lump sum or to the
extent the Participant's Account had Employee common stock
13
immediately prior to the distribution, in the form of Employer common stock;
provided, however, that distributions in Employer common stock shall be
applied at the fair market value of the assets distributed on the date of such
distribution. The value of fractional shares of Employer common stock will be
distributed in cash.
(b) If the value of the Participant's Account exceeds $3,500
(effective January 1, 1998, $5,000), except in the case of death, no
distribution shall be made prior to the Participant's Normal Retirement Age
without the prior written consent of the Participant.
(c) If the total value of the Participant's vested Accounts is
$3,500(effective January 1, 1998, $5,000) or less as of the Valuation Date
coincident with or immediately following the date of the Participant's
Termination of Employment, then his Accounts shall be automatically
distributed as soon as practicable after such Valuation Date.
(d) A Participant who has been on a period of layoff of at least
one year may request to be treated as having a Termination of Employment for
purposes of requesting a distribution of his Accounts under the Plan.
7.2 Payment Upon Death of Participant. If a Participant dies before
benefit payments begin, his Beneficiary will receive the entire amount in the
Participant Account (including contributions made but not yet allocated).
Payment will be made in a lump sum payment as soon as practicable after the
Participant's death, based on the Value of the Participant's Account as of
such Valuation Date immediately preceding the date of distribution;
provided, however, that the Beneficiary may elect to defer benefit payment
to the extent otherwise permitted under this Article VII.
7.3 Required Beginning Date For Distributions. Notwithstanding anything
to the contrary, distributions to Participants, determined with respect to the
Plan year ending in the calendar year in which such individual attains age
seventy and one-half(70-1/2)) shall commence no later than April 1 following
the calendar year in which such individual attains age seventy and one-half
(70-1/2), whether or not such individual has retired. Notwithstanding the
foregoing, effective January 1, 2000, an active Participant may defer his
required beginning date until he actually retires.
7.4 Special Distribution Rules.
(a) The requirements of this Section 7.4 shall apply to any
distribution of a Participant's interest and will take precedence over any
inconsistent provision of this Plan.
(b) All distributions required under this Article VII shall be
determined and made in accordance with the provisions of Section 401(a)(9) of
the Code and the regulations issued thereunder, including the minimum
distribution incidental benefit requirement of Section 1.401(a)(9)-2 of the
regulations; provided, however, for required minimum distributions made
prior to January 1, 1998, the required minimum distribution shall be the
Participant's Account payable in a single sum, and for required minimum
distributions made after December 31, 1997, the required minimum distribution
should be the Participant's Account payable over the life expectancy of the
Participant.
14
(c) Salary reduction contributions and qualified nonelective
contributions, and income allocable thereto, shall not be distributed to
Participants or Beneficiaries earlier than upon separation from service,
death, or disability, or upon the occurrence of one of the following events:
(i) The termination of the Plan without establishment of a
successor defined contribution plan; or
(ii) The disposition by the Company of substantially all of the
assets (within the meaning of Section 409(d)(2) of the Code) used in
the trade or business of the Company if the Company continues to
maintain this Plan after the disposition, but only with respect to
Employees who continue employment with the corporation acquiring
such assets; or
(iii) The disposition by the Company to an unrelated entity of
the Company's interest in a subsidiary (within the meaning of
Section409(d)(3) of the Code) if the Company continues to maintain
this Plan, but only with respect to Employees who continue
employment with such subsidiary; or
(iv) Subject to Section 8.3, the attainment by the Participant
of age 59-1/2; or
(v) The hardship of the Participant, in accordance with
Section 8.1.
(d) Unless the Participant elects otherwise, the payment of
benefits under the Plan to the Participant will begin not later than the 60th
day after the latest of the close of the Plan Year in which
(i) the Participant attains Normal Retirement Age;
(ii) the 10th anniversary of the year in which the Participant
commenced participation in the Plan occurs, or
(iii)the participant terminates his service with the employer.
15
7.5 Beneficiary Designation.
(a) If a Participant is married on the date of his death, the
Beneficiary of such Participant shall be his spouse unless the Participant's
spouse consents in writing not to be his Beneficiary and to the naming of
another specific Beneficiary and such written consent is witnessed either by
the Plan Administrator or a notary public. Notwithstanding the foregoing,
this paragraph (a) shall not apply if it is established to the Plan
Administrator's satisfaction either that the spouse cannot be located or that
other circumstances set forth in regulations promulgated under Section 417 of
the Code which preclude the necessity of the spouse's consent are present with
respect to the Participant.
(b) Except as otherwise provided in paragraph (a), each Participant
shall have the right to designate, by giving a written designation to the
Plan Administrator, a Beneficiary to receive any death benefit which may
become payable upon the death of such Participant. Successive designations
may be made, and the last designation received by the Plan Administrator prior
to the death of the Participant shall be effective and shall revoke all prior
designations. If a designated Beneficiary shall die before the Participant,
his interest shall terminate, and such interest shall be paid as provided
below in Section 7.5(c). Except as otherwise provided in paragraph (a), the
Participant shall have the right to revoke the designation of any Beneficiary
without the consent of the Beneficiary.
(c) If a Participant shall fail to designate a Beneficiary, if
such designation shall for any reason be illegal or ineffective, or if no
Beneficiary shall survive the Participant, his death benefits shall be paid in
the following order of priority:
(i) to his surviving spouse;
(ii) If there is no surviving spouse, to his children; or
(iii)If there is neither a surviving spouse nor surviving
children, to the Participant's mother and father; or
(iv) If there are no surviving parents, to the Participant's
estate.
(d) The Plan Administrator may determine the identity of the
distributees and in so doing may act and rely upon any information it may deem
reliable upon reasonable inquiry, and upon any affidavit, certificate or other
paper believed by it to be genuine, and upon any evidence believed by it to be
sufficient.
7.6 Administrative Powers Relating to Payments. If a Participant or
Beneficiary is unable, in the opinion of the Plan Administrator, to attend
properly to his personal financial matters, the Trustee may make such payments
in such of the following ways as the Plan Administrator shall direct:
(a) Directly to such Participant or Beneficiary;
(b) To the legal representative of such Participant or Beneficiary;
or
16
Any payment made pursuant to this Section 7.6 shall be in complete
discharge of the obligation for such payment under the Plan.
7.7 Direct Rollovers.
(a) Notwithstanding any provision of the Plan to the contrary that
would otherwise limit a Distributee's election under this Section 7.7, 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.
(b) Eligible Rollover Distribution. An Eligible Rollover
Distribution is any distribution of all or any portion of the balance to the
credit of the Distributee, except that an Eligible Rollover Distribution does
not include: a hardship distribution(effective January 1, 1999), any
distribution that is one of a series of substantially equal periodic payments
(not less frequently than annually) made for the life (or life expectancy) of
the Distributee or the joint lives (or joint life expectancies) of the
Distributee and the Distributee's designated beneficiary, or for a specified
period of ten years or more; any distribution to the extent such distribution
is required under Section 401(a)(9) of the 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).
(c) Eligible Retirement Plan. An Eligible Retirement Plan is an
individual retirement account described in Section 408(a) of the Code, an
individual retirement annuity described in Section 408(b) of the Code, an
annuity plan described in Section403(a) of the Code, or a qualified trust
described in Section 401(a) of the Code, that accepts the Distributee's
Eligible Rollover Distribution. However, in the case of an Eligible
Rollover Distribution to the surviving spouse, an Eligible Retirement Plan is
an individual retirement account or individual retirement annuity.
(d) 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 spouse or former spouse who is the
alternate payee under a qualified domestic relations order, as defined in
Section 414(p) of the Code, are Distributees with regard to the interest of
the spouse or former spouse.
(e) Direct Rollover. A Direct Rollover is a payment by the Plan to
the Eligible Retirement Plan specified by the Distributee.
(f) If a distribution is one to which Code Sections 401(a)(11) and
417 do not apply, such distribution may commence less than 30 days after the
notice required under Treasury Regulation Section 1.411(a)-11(c), provided
that:
17
(i) the Plan Administrator clearly informs the Participant
that the Participant has a right to a period of at least 30 days
after receiving the notice to consider the decision of whether or
not to elect distribution (and, if applicable, a particular
distribution option), and
(ii) the Participant, after receiving the notice, affirmatively
elects a distribution.
ARTICLE VIII
- - - - - -
WITHDRAWALS AND LOANS
- - - - - - - - - - -
8.1 Hardship Withdrawals of Salary Reduction Contributions.
(a) Prior to the termination of the Participant's employment, upon
a demonstration to the Plan Administrator by the Participant of an immediate
and heavy financial need that cannot be met from other resources that are
reasonably available to the Participant, a Participant shall be permitted to
make a withdrawal of an amount not exceeding the lesser of (i)the amount
needed to satisfy such need, or (ii) 100% of the balance in the Participant's
Account. Notwithstanding the foregoing, distributions made pursuant to this
Section may not include any earnings credited on or after January 1, 1989 to
the balance of salary reduction contributions in the Participant=s Account.
(b) For purposes of this Section, "an immediate and heavy financial
need" shall be deemed to exist if the distribution is on account of:
(i) Unreimbursed medical expenses described in Code Section
213(d) incurred by the Participant, the Participant's spouse, or any
dependent of the Participant (as defined in Code Section 152) or an
amount necessary for these persons to obtain medical care described
in Code Section 213(d);
(ii) Costs directly related to the purchase of a principal
residence for the Participant (excluding mortgage payments);
(iii)Payment of tuition and related fees for the next 12 months
of post-secondary education for the Participant, his or her spouse,
children or dependents;
(iv) The need to prevent the eviction of the Participant from
his principal residence or foreclosure on the mortgage on the
Participant's principal residence; or
18
(v) Other events provided for in rulings, notices or other
documents published by the Commissioner of Internal Revenue. The
amount of an immediate and heavy financial need may include amounts
necessary to pay any federal, state, or local income taxes or
penalties reasonably anticipated to result from the distribution.
(c) In order to demonstrate that a need cannot be met from other
resources, the Participant may be required to provide such documents or
information as the Plan Administrator may require and to certify that the need
cannot be relieved (i) through reimbursement from insurance, (ii) by
reasonable liquidation of assets, (iii) by cessation of401(k) Contributions
under the Plan, or (iv) by other withdrawals under or loans from this or any
other plan or a loan from a commercial lender, on reasonable terms.
(d) Withdrawals under this Section shall be permitted only if the
Participant has first withdrawn all amounts available to him under this or any
other Employer plan and borrowed all amounts available to him under any other
Employer plan. All of the Participant's contributions to this Plan and
contributions to all other plans maintained by the Employer (except
contributions to welfare benefit plans and mandatory employee contributions
to defined benefit plans) shall be suspended for a period of 12 months
following such withdrawal, and the amount which the Participant may contribute
as salary reduction contributions for the Plan Year following such withdrawal
shall not exceed the amount described in Code Section 402(g),reduced by the
amount of the Participant's actual salary reduction contributions for the Plan
Year in which the withdrawal occurred.
(e) Distributions pursuant to this Section shall be made as soon as
administratively feasible after the withdrawal is approved.
(f) Distribution will be made out of the Participant's interests in
each of the Investment Funds in accordance with the proportion of the
Participant's Account then invested in such Fund.
8.2 Withdrawals Upon Attainment of Age 59 1/2. An active Participant
may elect in writing to withdraw once each calendar year any amount of his
account upon the attainment of age 59 1/2.
8.3 Withdrawals of Contributions After Termination of Employment. In
accordance with procedures adopted by the Plan Administrator, after the
Participant's Termination of Employment, the Participant, prior to attaining
age seventy and one-half(70 1/2), may make one partial withdrawal from his
Account. The Plan may charge a reasonable administrative fee for a
Participant's partial withdrawal of his Account balance.
19
8.4 Withdrawal Applications. Withdrawal applications shall be made by a
Participant on written forms supplied by the Plan Administrator for that
purpose. The Plan Administrator may limit the number of withdrawals a
Participant may make to no more than one withdrawal per Account in a 12-month
period or may impose a minimum withdrawal amount. Any Plan Administrator
rules regarding withdrawals shall be administered in a uniform
nondiscriminatory manner.
8.5 Loans.
(a) The Plan Administrator may appoint an employee to administer
loans in accordance with a Loan Policy, which shall be set forth in a separate
document incorporated by reference into this Plan. The Plan Administrator may
amend the Loan Policy at any time provided that such changes are applied in a
uniform, nondiscriminatory manner and comply with the Code, ERISA, and
applicable regulations. The Plan Administrator or its designee may direct the
Trustee to lend a Participant an amount which, when added to the outstanding
balance of all other loans made to the Participant from the Plan, does not
exceed the lesser of (i) or(ii) below:
(i) Fifty thousand dollars ($50,000), reduced by the excess
(if any) of:
(A) The highest outstanding balance of all loans made to
the Participant from the Plan during the one (1) year period
ending on the day before the loan is made; over
(B) The outstanding balance of all other loans made to
the Participant from the Plan on the day on which the loan is
made.
(ii) Fifty percent (50%) of the total of his nonforfeitable
Account balances determined under the provisions of Article 6 as if
he had ceased to be a Participant on the date such loan was made.
(b) All loans shall be made only at the request of the Participant
and upon the approval of the Plan Administrator or its designee, which shall
follow the uniform, nondiscriminatory Loan Policy in reviewing such requests.
(c) In addition to the Loan Policy, all loans shall comply with the
following terms and conditions:
(i) A Participant with the written consent of his/her spouse
must in writing make an application for a loan to the Plan
Administrator or its designee to whose action thereon shall be
final. The Plan Administrator shall specify the form of the
application and any supporting data required.
20
(ii) Repayment of loans shall be made through regular payroll
deduction, and the Participant shall complete an authorization of
Payroll Deduction form as prescribed by the Plan Administrator. The
period of repayment for any loan shall be five (5) years from the
first day of the month following the date the loan is approved. Any
loan used to acquire a dwelling unit which within a reasonable time
will be used as the principal residence of the Participant does not
have to be repaid within five (5) years, but shall be paid in a time
agreed by the Plan Administrator and the Participant, but in no more
than fifteen (15) years from the first day of the month following
the date the loan is approved. The loan shall be considered an
investment of such Participant's Accounts, and the interest paid on
the loan shall be credited to the Accounts of the Participant. The
amount of the outstanding loan shall not share in the allocation of
earnings of the Trust Fund. In the event of Termination of
Employment while any loan is outstanding, the unpaid balance and
any interest due shall become due and payable and go into default
after six (6) months from the Termination of Employment date and
shall be charged against the amounts which are distributable to such
Participant or Beneficiary.
(iii) Each loan shall bear interest at a reasonable rate which
is comparable to the current rate being charged by commercial banks
in the Company's geographic area for similar loans, provided that
such rate does not violate any applicable usury laws.
(iv) Each loan shall be supported by collateral which shall be
fifty percent (50%) of the Participant's vested interest in the
Trust. A loan shall also be supported by the Participant's
promissory note for the amount of the loan, including interest,
payable to the order of the Trustee. In the event of either
default, or a termination of employment for any reason foreclosure
on the note and attachment of security will not occur until a
distributable event occurs under the Plan.
(v) If a Participant borrows amounts under more than one
qualified plan maintained by the Company, all the plans are treated
as one plan for purposes of the borrowing restrictions outlined in
this Section 8.5.
(vi) Loans must be in an amount of at least $1,000.
(vii)Participants are not permitted to renegotiate loans made
under this Plan.
(d) A loan made to a Participant pursuant to this Section 8.5 shall
be considered an investment of, and repayments shall be credited to the
Account of the Participant.
21
8.6 Voluntary Contributions. A Participant may elect in writing to
withdraw any amount from his Voluntary Contributions Account no more than once
in any twelve (12) month period provided that any request for withdrawal must
be submitted at least thirty (30) days prior to the effective date of the
withdrawal and must be in a form approved by the Company. No withdrawal shall
be allowed unless, within the ninety (90) day period preceding the withdrawal,
the Participant's spouse consents in writing to the withdrawal, and such
consent is witnessed by a Plan representative or a notary public. No spousal
consent is needed if it is established to the satisfaction of the Plan
Administrator that spousal consent cannot be obtained because there is no
spouse or the spouse cannot be located. The Plan Administrator may establish
additional administrative rules with respect to the frequency and timing of
withdrawals.
ARTICLE IX
- - - - -
TOP-HEAVY PROVISIONS
- - - - - - - - - - -
9.1 Effective Date. Notwithstanding anything here in to the contrary,
the following provisions shall apply and shall supersede any conflicting Plan
provisions with respect to any Plan Year in which this Plan is deemed to be
Top-Heavy.
9.2 Determination of Top-Heavy. The Plan will be considered a Top-Heavy
Plan for the Plan Year if as of the last day of the initial Plan Year (or for
any Plan Year commencing thereafter, as of the last day of the preceding Plan
Year), (i) the value of the sum of the 401(k) Savings Accounts, Employer
Matching Contribution Accounts, and SDS Contributions Accounts (but not
including any allocations to be made as of such last day of the Plan Year
except contributions actually made on or before that date) of Participants who
are Key Employees (as defined in Section 416(i) of the Code but in making such
determination considering compensation as defined in Section 1.415-2(d) of the
Income Tax Regulations) exceeds 60% of the value of the sum of 401(k) Savings
Accounts, Employer Matching Contribution Accounts, and SDS Contributions
Accounts (but not including any allocations to be made as of such last day of
the Plan Year except contributions actually made on or before that date) of
all Participants (the "60% Test") or (ii) the Plan is part of a required
aggregation group (as defined below) and the required aggregation group is
Top-Heavy. However, and notwithstanding the results of the 60% Test, the Plan
shall not be considered a Top-Heavy Plan for any Plan Year in which the Plan
is a part of a required or permissive aggregation group (as defined below)
which is not Top-Heavy.
9.3 Minimum Benefit. Any minimum benefit required shall be provided
under the Employers' defined benefit plan(s).
22
9.4 Impact on Maximum Benefits. For Plan Years prior to January 1,
2000, in which the Plan is a Top-Heavy Plan, Section 5.5 shall be read by
substituting the number "1.00" for the number "1.25" wherever it appears
therein, except such substitution shall not have the effect of reducing any
benefit accrued under a defined benefit plan prior to the first day of the
Plan Year in which this provision becomes applicable. After December 31,
1999, this Section 9.4 shall be void and be of no force or effect.
9.5 Aggregation With Other Plans.
(a) Required Aggregation. If a Key Employee under this Plan also
participates in another plan of the Employers which is qualified under Code
Section 401(a) or if this Plan and another plan must be aggregated so that
either this Plan or the other plan will meet the non-discrimination and
coverage requirements of Code Section 401(a)(4) or 410, then this Plan and any
such other plan will be aggregated for purposes of determining Top-Heaviness.
This Plan will automatically be deemed Top-Heavy if such required aggregation
of plans is Top-Heavy as a group and will automatically be deemed not
Top-Heavy if such required aggregate of plans is not Top-Heavy as a group.
(b) Permissive Aggregation. Any other plan of the Employers which
is qualified under Code Section 401(a) or which is a simplified employee
pension plan under Code Section 408(k),and which is not in the required
aggregation referenced in (a)above, may be aggregated with this Plan (and with
any other plan(s) in the required aggregation group in (a) above) for purposes
of determining Top-Heaviness if such aggregation would continue to meet the
non-discrimination and coverage requirements of Code Sections 401(a)(4)and
410. This Plan will automatically be deemed not Top-Heavy if such permissive
aggregation of plans is not Top-Heavy as a group.
(c) Determining Aggregate Top-Heavy Status. The Top-Heavy status
of the plans as a group is determined by aggregating the plans' respective
Top-Heavy determinations that are made as of determination dates that fall
within the same calendar year.
ARTICLE X
- - - - -
MANAGEMENT OF FUNDS
- - - - - - - - - -
10.1 Trust Fund. All contributions made pursuant to this Plan shall be
paid to the Trustee under the Trust Agreement and shall become a part of the
Trust Fund. The Trust Fund shall be held and disbursed in accordance with the
provisions of the Plan. No person shall have any interest in, or right to,
any part of the Trust Fund, except as expressly provided in the Plan, and then
only to the extent of the benefits payable under the Plan to such Employee out
of the assets of the Trust Fund. The Trustee shall have exclusive authority
and discretion to manage and control the assets of the Plan unless the
authority to manage, acquire or dispose of such assets is delegated to one or
more investment managers pursuant to Section 10.3. All payments of benefits
provided for in this Plan shall be made solely out of the assets of the Trust
Fund.
23
This Plan specifically permits the holding of qualifying employer
securities, which may constitute up to 100% of the Plan's assets.
Notwithstanding the above paragraph, contributions made by the Employers
to the Plan are expressly conditioned upon deductibility under Section 404 of
the Code. Upon an Employer's request, any contribution made by mistake of
fact or for which a deduction under Code Section 404 was disallowed shall be
returned to such Employer within one year after the payment of the
contribution or the disallowance of the deduction (to the extent disallowed).
10.2 Appointment of Trustee. The Company may appoint a Trustee and may
remove the Trustee at any time upon notice as provided in the Trust, and, in
such event or in the event any Trustee shall resign, the Company shall appoint
a successor Trustee.
10.3 Appointment of Investment Manager. The Company may appoint one or
more investment managers (as defined under ERISA) which may be provided for
under the Trust.
10.4 Records. The Company shall maintain records of the establishment of
the funding policies and methods in effect from time to time and of the
determinations of the amounts of contributions to be made to the Fund and
shall provide the Board of Directors of the Company with such reports as may
be requested or required by ERISA.
ARTICLE XI
- - - - - -
ADMINISTRATION OF PLAN
- - - - - - - - - - -
11.1 Plan Administrator. The Company shall be the Plan Administrator and
it shall have the responsibility for carrying out the provisions hereof. The
Company may delegate its responsibilities to one or more individuals acting as
the "Retirement Committee."
11.2 Retirement Committee. The Company may appoint the Retirement
Committee which shall have the specific delegated powers and duties described
in this Article XI and such further powers and duties as the Company may
delegate to the Retirement Committee. Any member of the Retirement Committee
may resign or the Company may remove a member. The Retirement Committee shall
consist of at least three persons. The Retirement Committee shall select a
Chairman and may select a Secretary (who may, but need not, be a member of the
Retirement Committee) to keep its records or to assist it in the doing of any
act or thing to be done or performed by the Retirement Committee. The
Retirement Committee shall advise the Trustee of any such persons selected.
24
The secretary shall keep a record of all meetings and forward all necessary
communications to the Company, Trustee, or Actuary. The members of the
Retirement Committee who are employed by the Company shall serve without
compensation for their services on the Retirement Committee, but all
reasonable expenses incurred in the performance of their duties shall be paid
by the Company or by the Trustee from the Trust Fund. The Retirement Committee
may delegate the day-to-day operations of the Plan to one or more Employees.
11.3 Action of Retirement Committee. A majority of the members of the
Retirement Committee at the time in office shall constitute a quorum for the
transaction of business at any meeting. Any determination or action of the
Retirement Committee may be made or taken by a majority of the members present
at any meeting thereof or without a meeting by a resolution or written
memorandum concurred in by a majority of the members then in office. The
Committee may adopt such bylaws and regulations as it deems desirable for the
conduct of its affairs and may adopt such rules as it deems necessary,
desirable, or appropriate. All rules and decisions of the Committee shall be
uniformly and consistently applied to all Participants in similar
circumstances.
11.4 Powers and Duties of Retirement Committee. The Retirement
Committee, to the extent not delegated to others, shall administer the Plan
and shall have the discretionary power and the duty to take all action and to
make all decisions necessary or proper, including making factual
determinations to carry out the terms of the Plan. The determination of the
Retirement Committee as to any question involving the general administration
and interpretation of the Plan or determination of any question of fact shall
be final, conclusive and binding. Any discretionary actions to be taken under
the Plan by the Retirement Committee with respect to the classification of
Employees, Participants, contributions or benefits shall be uniform in their
nature and applicable to all persons similarly situated. Without limiting
the generality of the foregoing, the Retirement Committee shall have the
following powers and duties.
(a) To require any person to furnish such information as it may
request for the purpose of the proper administration of the Plan as a
condition to receiving any benefit under the Plan;
(b) To make and enforce such rules and regulations and prescribe
the use of such forms as it shall deem necessary for the efficient
administration of the Plan;
(c) Discretionary authority to: construe and interpret the Plan,
including to resolve ambiguities, inconsistencies and omissions; decide
questions concerning the Plan and the eligibility of any Employee to
participate in the Plan or to receive benefits under the Plan, in accordance
with the provisions of the Plan; and to make factual determinations under the
Plan; and
(d) To prescribe procedures to be followed by Participants or
beneficiaries filing applications for benefits;
25
(e) To prepare and distribute, in such manner as the Retirement
Committee deems appropriate, information explaining the Plan;
(f) To furnish the Employers, upon request, such annual reports
with respect to the administration of the Plan as are reasonable and
appropriate;
(g) To receive, review and keep on file (as it deems convenient or
proper) reports of benefit payments by the Trustee and reports of
disbursements for expenses directed by the Committee;
(h) To make such reports to government agencies and Employees as
may be required by the Code and ERISA.
11.5 Employment of Administrative Professionals. The Retirement
Committee may employ counsel and agents such as clerical or accounting
services as the Retirement Committee may require in carrying out the
provisions of the Plan.
11.6 Liability and Indemnification. The Employers, the Company and any
person to whom it may delegate any duty or power in connection with
administering the Plan, the Retirement Committee and the officers and
Directors of the Company, shall be entitled to rely conclusively upon, and
shall be fully protected in any action taken or suffered by them in good
faith in the reliance upon, any accountant, counsel, other specialist or
other person selected by the Retirement Committee or in reliance upon any
tables, valuations, certificates, opinions or reports which shall be furnished
by any of them or by the Trustee. No member of the Retirement Committee, the
Employers, the Company, the officers or directors, or employees thereof shall
be liable for any neglect, omission or wrongdoing of the Trustee to the
extent allowed by the ERISA and the Code. The Board of Directors of the
Company, Retirement Committee, the individual members thereof, and employees
shall be indemnified by the Company (not from the Trust Fund) against any and
all liabilities arising by reason of any act or failure to act made in good
faith in accordance with the Plan, including expenses reasonably incurred in
the defense of any related claim.
11.7 Administrative Expenses. All expenses incurred prior to termination
of the Plan that shall arise in connection with the administration of the
Plan, including but not limited to the compensation of the Trustee,
administrative expenses and other proper charges and disbursements of the
Trustee and compensation and other expenses and charges of any actuary,
accountant, counsel, investment manager, specialist or other person who shall
be employed by the Retirement Committee in connection with the administration
thereof, shall be paid by the Company except to the extent that such expenses
are charged to the Trust Fund.
11.8 Disbursement of Funds. Subject to the provisions of the Trust
Agreement, the Company (or the Retirement Committee if so designated by the
Company) shall determine the manner in which the funds of the Plan shall be
disbursed pursuant to the Plan.
26
11.9 Delegation. The Retirement Committee may authorize one or more of
their number or any agent to act for the Retirement Committee.
11.10 Claims Procedure.
(a) If any part of an application for benefits is denied, the Plan
Administrator will provide the applicant with a written notice stating (i) the
reason why the claim was denied, (ii) the provisions of the Plan upon which
the denial was based, and (iii) an explanation of the Plan's review procedure.
Any written notice of denial will be sent to the applicant within 90 days
after the claim is delivered to the Plan Administrator, unless special
circumstances require an extension of time for processing the claim. If
the Plan Administrator needs an extension of time to process a claim, written
notice will be delivered to the applicant before the end of the initial 90 day
period. The notice of extension will include a statement of the special
circumstances requiring an extension of time and the date by which the Plan
Administrator expects to render its final decision. However, that extension
may not exceed 90 days after the end of the initial period. If the Plan
Administrator rejects an application for failure to furnish necessary material
or information, the written notice to the applicant will explain what more is
needed and why, and will tell the applicant that he may refile a proper
application.
(b) If a claim is denied or if the Plan Administrator does not act
on an application within 90 days of its delivery, the applicant may appeal by
delivering a written notice to the Plan Administrator specifying the reasons
for the appeal. That notice must be delivered within 60 days after receiving
the Plan Administrator's notice of denial or, if no notice of denial was
received, within 150 days after the claim was filed. If he appeals, the
applicant may review pertinent documents at any reasonable time and place
specified by the Retirement Committee and may submit any additional written
material pertinent to the appeal.
(c) The Plan Administrator will decide the appeal not later than
60 days after delivery of the notice of appeal. If special circumstances
require an extension of time, the Retirement Committee will notify the
applicant by written notice that a decision will be made as soon as possible,
but not later than 120 days after receipt of the notice of appeal. The
applicant may appear before the Retirement Committee to present his claim.
The Retirement Committee's decision will be in writing and will state clearly
the reasons for the decision, including specific reference to Plan provisions
supporting the decision. The applicant may deem a claim denied if a decision
is not furnished within the time prescribed above.
(d) No individual may bring a cause of action under the Plan until
the individual has exhausted all administrative remedies under the Plan.
11.11 Effect Of Mistake. In the event of a mistake or misstatement as
to the age of eligibility, service or participation of a Participant, or the
amount of distributions made or to be made to a Participant, the Plan
Administrator shall, to the extent it deems it possible, make such adjustments
as will in its judgment accord to such Participant or other person the credits
or distributions to which he is properly entitled under the Plan.
27
In the event that the mistake requires that additional amounts to be
allocated to a Participant's Account, upon written notice from the Plan
Administrator, the Employer shall make a supplemental contribution to the
Plan.
ARTICLE XII
- - - - - -
AMENDMENT OR TERMINATION
- - - - - - - - - - - - -
12.1 Amendment. The Company reserves the right at any time and from time
to time, and retroactively if deemed necessary or appropriate or to meet the
requirements of ERISA, Sections 401(a) or 501(a) of the Code, and any similar
provisions of subsequent revenue laws or the rules and regulations from time
to time in effect under any of such laws or to conform with governmental
regulations or other policies, to modify or amend in whole or in part any or
all of the provisions of the Plan. Such modification or amendment shall be
made by written instrument executed by a duly authorized officer of the
Company. However, no such modification or amendment shall make it possible
for any part of the corpus or income of the Fund to be used for, or diverted
to, purposes other than for the exclusive benefit of Participants and their
beneficiaries under the Plan (other than such part as is required to pay taxes
and administration expenses). No amendment or modification shall make it
possible to deprive any Participant of a vested right.
If the Plan's vesting schedule is amended or the Plan is amended in any
way that directly or indirectly affects the computation of a Participant's
vesting in his benefit under the Plan, or if the Plan is deemed amended by an
automatic change to or from a Top-Heavy vesting schedule, each Participant
with at least 3 years of employment may elect within a reasonable period after
the adoption of the amendment or change, to have his vesting computed under
the Plan without regard to such amendment or change. The period during which
the election may be made shall commence with the date the amendment is adopted
or deemed to be made and shall end on the latest of:
(1) 60 days after the amendment is adopted;
(2) 60 days after the amendment becomes effective; or
(3) 60 days after the Participant is issued written notice of the
amendment by the Company or Plan Administrator.
12.2 Discontinuance, Suspension, Reduction or Termination of
Contributions. It is the intention of the Company to continue the Plan and
make its contributions regularly each year, but an Employer, may for any
reason discontinue, suspend or terminate its contributions.
28
12.3 Termination. The Company intends to continue the Plan indefinitely,
but reserves the right to terminate the Plan at any time. If the Company
terminates the Plan, in whole or in part, or if Employer contributions are
permanently discontinued, the interests of all affected Participants shall be
fully vested and nonforfeitable.
12.4 Merger, Consolidation, or Transfer. In the case of any merger or
consolidation with, or transfer of assets or liabilities of the Plan to any
other plan qualified under Section 401(a) of the Code, each Participant shall
(if the Plan then terminated) be entitled to receive a benefit immediately
after the merger, consolidation or transfer which is at least equal to the
benefit he would have been entitled to receive immediately before the merger,
consolidation or transfer (if the Plan had then terminated).
ARTICLE XIII
- - - - - - -
GENERAL PROVISIONS
- - - - - - - - - -
13.1 Plan is Not an Employment Contract. This Plan shall not be deemed
to constitute a contract between the Company or any Employer and any Employee
or other person in the employ of the Company or any Employer and nothing
herein contained shall be deemed to give any Employee or other person in the
employ of the Company or any Employer any right to be retained in the employ
of the Company or any Employer, or to interfere with the right of the
Company or any Employer to discharge any Employee or such other person at
anytime and to treat him without regard to the effect which such treatment
might have upon him as a Participant of the Plan.
13.2 Alienation.
(a) Except as may be prohibited by law, no distribution or payment
under the Plan to any Participant or Beneficiary shall be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge, whether voluntary or involuntary, and any attempt to so
anticipate, alienate, sell, transfer, assign, pledge, encumber or charge, the
same shall be void, nor shall any such distribution or payment be in any way
liable for or subject to the debts, contracts, liabilities, engagements or
torts of any person entitled to such distribution or payment.
(b) Notwithstanding the foregoing, the Plan Administrator may
recognize a qualified domestic relations order with respect to child support,
alimony payments, or marital property rights if such order contains sufficient
information for the Plan Administrator to determine that it meets the
applicable requirements of Section 414(p) of the Code. The Plan
Administrator shall establish written procedures concerning the notification
of interested parties and the determination of the validity of such orders.
The Plan Administrator may direct distributions to an alternate payee pursuant
to a qualified domestic relations order as defined under Code Section 414(p)
prior to the date the Participant attains the earliest retirement age,
provided that the Retirement Committee has properly notified the affected
Participant and each alternate payee of the order and has determined that the
order is qualified under Code Section 414(p) and ERISA Section 206(d).
29
13.3 Exclusive Benefit. The Company intends that the Plan (including the
Trust forming a part thereof) shall be a profit sharing plan of an employer
for the exclusive benefit of its Employees or their beneficiaries as provided
for in Sections 401(a) and 501(a)of the Code and as may be provided for in any
similar provisions of subsequent revenue laws, and that the Trust shall be a
qualified trust under such provisions and exempt under Section 501(a) of the
Code and as may be provided for in any similar provisions of subsequent
revenue laws.
13.4 State Law. To the extent not inconsistent with or superseded by
ERISA, the provisions of the Plan shall be construed, administered and
governed under the laws of the State of Wisconsin.
13.5 Expenses. To the extent not to paid by each Participant Employer,
the Plan shall pay the reasonable expenses of the Plan Administrative. Each
participating Employer shall pay such proportionate part of the expenses
incurred in the administration of the Plan as the Company shall determine.
ARTICLE XIV
- - - - - -
PLAN ADOPTION
- - - - - - -
14.1 Adoption Procedure. With the written consent of the Company, any
organization or Affiliate of the Company may adopt the Plan for the
Affiliates.
14.2 Withdrawal. A participating Affiliate may withdraw from the Plan
by giving written notice to the Company of Affiliate=s intention to withdraw
from participating in the Plan.
IN WITNESS WHEREOF, the Company has caused this instrument to be executed
this day of , 2001.
TWIN DISC, INCORPORATED
By:
- - - - - - - - - - - - - - - - - - - - - - -
30
TWIN DISC, INCORPORATED --
THE ACCELERATOR 401(k) SAVINGS PLAN
As Amended and Restated Effective January 1, 1997
TABLE OF CONTENTS
- - - - - - - - - PAGE
- - -
ARTICLE I - DEFINITIONS 1
1.1 "Account" 1
1.2 "Affiliate" 1
1.3 "Authorized Leave of Absence" 1
1.4 "Beneficiary" 2
1.5 "Code" 2
1.6 "Company" 2
1.7 "Compensation" 2
1.8 "Employee" 2
1.9 "Employer" 3
1.10 "ERISA" 3
1.11 "Fund" 3
1.12 "Normal Retirement Age" 3
1.13 "Participant" 3
1.14 "Plan" 3
1.15 "Plan Year" 3
1.16 "Rollover Contributions" 3
1.17 "Termination of Employment" 3
1.18 "Trust" 3
1.19 "Trust Fund" 4
1.20 "Trustee" 4
1.21 "Valuation Date" 4
ARTICLE II - ELIGIBILITY AND PARTICIPATION 4
2.1 Eligibility and Participation 4
2.2 Participation Upon Reemployment 4
2.3 Termination of Employment 4
2.4 Transfers 4
ARTICLE III - CONTRIBUTIONS 5
3.1 Salary Reduction Contribution 5
3.2 Limitation on Salary Reduction Contributions 5
3.3 Employer Matching Contributions 6
3.4 Limitations on Contributions For
Nondiscrimination Testing Purposes 7
3.5 Southern Diesel Systems, Inc.
(effective August 22, 2000Twin Disc Southeast, Inc.)
Profit Sharing Contributions 10
3.6 Rollover Contributions 10
3.7 Deductible Limit 10
31
ARTICLE IV - INVESTMENT OF CONTRIBUTIONS 11
4.1 Investment of Accounts 11
4.2 Change In Investment Election And Transfers
Between Investment Funds 11
ARTICLE V - ALLOCATIONS, ACCOUNTING AND ADJUSTMENTS 11
5.1 Composition Of Trust Fund 11
5.2 Allocation Of Earnings To Account 11
5.3 Allocation Of Employer Matching Contributions and
SDS Contributions 12
5.4 Allocation Of Salary Reduction Contributions 12
5.5 Maximum Annual Additions 12
ARTICLE VI - VESTING 12
ARTICLE VII - TIME AND METHOD OF PAYMENT 12
7.1 When Benefits Payable 12
7.2 Payment Upon Death of Participant 13
7.3 Required Beginning Date For Distributions 13
7.4 Special Distribution Rules 13
7.5 Beneficiary Designation 14
7.6 Administrative Powers Relating to Payments 15
7.7 Direct Rollovers 16
ARTICLE VIII - WITHDRAWALS AND LOANS 17
8.1 Hardship Withdrawals of Salary Reduction
Contributions 17
8.2 Withdrawals Upon Attainment of Age 59 1/2 18
8.3 Withdrawals of Contributions After Termination
of Employment 18
8.4 Withdrawal Applications 18
8.5 Loans 19
8.6 Voluntary Contributions 21
ARTICLE IX - TOP-HEAVY PROVISIONS 21
9.1 Effective Date 21
9.2 Determination of Top-Heavy 21
9.3 Minimum Benefit 21
9.4 Impact on Maximum Benefits 21
9.5 Aggregation With Other Plans 22
ARTICLE X - MANAGEMENT OF FUNDS 22
10.1 Trust Fund 22
10.2 Appointment of Trustee 23
10.3 Appointment of Investment Manager 23
10.4 Records 23
32
ARTICLE XI - ADMINISTRATION OF PLAN 23
11.1 Plan Administrator 23
11.2 Retirement Committee 23
11.3 Action of Retirement Committee 24
11.4 Powers and Duties of Retirement Committee 24
11.5 Employment of Administrative Professionals 25
11.6 Liability and Indemnification 25
11.7 Administrative Expenses 25
11.8 Disbursement of Funds 25
11.9 Delegation 26
11.10Claims Procedure 26
ARTICLE XII - AMENDMENT OR TERMINATION 27
12.1 Amendment 27
12.2 Discontinuance, Suspension, Reduction or
Termination of Contributions 27
12.3 Termination 28
12.4 Merger, Consolidation, or Transfer 28
ARTICLE XIII - GENERAL PROVISIONS 28
13.1 Plan is Not an Employment Contract 28
13.2 Alienation 28
13.3 Exclusive Benefit 29
13.4 State Law 29
13.5 Expenses 29
ARTICLE XIV - PLAN ADOPTION 29
14.1 Adoption Procedure 29
14.2 Withdrawal 30
1
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated July 20, 2001, except as to Note G
which is as of August 1, 2001, relating to the financial statements, which
appears in the 2001 Annual Report to Shareholders of Twin Disc, Incorporated,
which is incorporated by reference in Twin Disc, Incorporated's Annual Report
on Form 10-K for the year ended June 30, 2001. We also consent to the
incorporation by reference of our report dated July 20, 2001, except as to
Note G which is as of August 1, 2001, relating to the financial statement
schedules, which appears in such Annual Report on Form 10-K.
/s/ PricewaterhouseCoopers LLP
Milwaukee, Wisconsin
September 4, 2002
1
EXHIBIT 24
POWER OF ATTORNEY
- - - - - - - - -
The undersigned directors of Twin Disc, Incorporated (the "Company") hereby
severally constitute Michael E. Batten and James O. Parrish, and each of them
singly, true and lawful attorneys-in-fact with full power to them, and each of
them, singly, to sign for us and in our names as directors the proposed
registration statement on Form S-8 to be filed by the Company in connection
with the registration of 100,000 shares of Twin Disc, Incorporated common
stock, no par value, to be available for purchase by employees through The
Accelerator 401(k) Savings Plan, and to sign any and all amendments (including
post-effective amendments) to said registration statement, and generally do
all such things in our names and behalf as directors to enable Twin Disc,
Incorporated to comply with the provisions of the Securities Act of 1933 and
the Securities and Exchange Act of 1934 and all requirements of the Securities
and Exchange Commission, hereby ratifying and confirming our signatures so
they may be signed by our attorneys-in-fact, or either of them, as set forth
below.
/s/ JOHN A. MELLOWES
- - - - - - - - - - - - - - - - - - - - -
John A. Mellowes, Director
/s/ PAUL J. POWERS
- - - - - - - - - - - - - - - - - - - - - -
Paul J. Powers, Director
/s/ DAVID B. RAYBURN
- - - - - - - - - - - - - - - - - - - - - -
David B. Rayburn, Director
/s/ DAVID L. SWIFT
- - - - - - - - - - - - - - - - - - - - - -
David L. Swift, Director
/s/ GEORGE E. WARDEBERG
- - - - - - - - - - - - - - - - - - - - -
George E. Wardeberg, Director
/s/ DAVID R. ZIMMER
- - - - - - - - - - - - - - - - - - - - - -
David R. Zimmer, Director
July 26, 2002
1
EXHIBIT 5a
September 6, 2002
VIA E-MAIL AND FEDERAL EXPRESS
The Board of Directors
Twin Disc, Incorporated
1328 Racine Street
Racine, WI 53403
Gentlemen:
This firm is counsel for Twin Disc, Incorporated (the "Company"), which is the
registrant in a Registration Statement under the Securities Act of 1933 on
Form S-8, dated September 6, 2002, relating to the registration of 100,000
shares of the Company's common stock, no par value per share (the "Shares"),
to be offered and sold pursuant to the Twin Disc, Incorporated - The
Accelerator 401(k) Savings Plan (the "Plan").
As counsel, we are familiar with the actions taken by the Company in
connection with the authorization of the Shares. We have examined such
records and other documents as we have deemed necessary for the opinions
hereinafter expressed.
Based upon the foregoing, and having regard to legal considerations that we
deem relevant, we are of the opinion that the Shares, described in the
Registration Statement, will be, when sold, legally issued by the Company,
fully paid and non-assessable, except to the extent provided in
Section 180.0622(2)(b) of the Wisconsin Statutes, which provides, in part,
that shareholders of a Wisconsin corporation are personally liable to an
amount equal to the par value of shares owned by them for all debts owing to
employees of the corporation for services performed for such corporation, but
not exceeding six months service in any one case.
We hereby consent to the inclusion of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/S/ von BRIESEN & ROPER, s.c.
