-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, fjC1wIVqL3bXmpkDwncEa9qFAwydy/ynTCK6QTa/lvPTyCwcQcHWrFWBF8EvzkDK 5eZKDnS7JUmXwjtLXLvV2g== 0000045370-94-000018.txt : 19941223 0000045370-94-000018.hdr.sgml : 19941223 ACCESSION NUMBER: 0000045370-94-000018 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19941222 EFFECTIVENESS DATE: 19950110 SROS: MSE SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HANNA M A CO/DE CENTRAL INDEX KEY: 0000045370 STANDARD INDUSTRIAL CLASSIFICATION: FABRICATED RUBBER PRODUCTS, NEC [3060] IRS NUMBER: 340232435 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 033-57021 FILM NUMBER: 94565780 BUSINESS ADDRESS: STREET 1: SUITE 36-5000 STREET 2: 200 PUBLIC SQUARE CITY: CLEVELAND STATE: OH ZIP: 44114-2304 BUSINESS PHONE: (216)589-4000 FORMER COMPANY: FORMER CONFORMED NAME: HANNA MINING CO DATE OF NAME CHANGE: 19850523 S-8 1 Registration No. _______________________________________________________________________________ _______________________________________________________________________________ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________ FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ___________ M. A. HANNA COMPANY (Exact name of Registrant as Specified in its Charter) Delaware 34-0232435 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) ___________ Suite 36-5000, 200 Public Square, Cleveland, Ohio 44114-2304 (Address of Principal Executive Office Including Zip Code) __________ 401K Savings and Retirement Plan for Polymer Associates (Full title of plan) ___________ John S. Pyke, Jr., Esq. Vice President, General Counsel and Secretary M. A. Hanna Company Suite 36-5000, 200 Public Square, Cleveland, Ohio 44114-2304 (216) 589-4000
(Name, address and telephone number including area code of agent for service) ____________ CALCULATION OF REGISTRATION FEE _______________________________________________________________________________ Title of Securities Amount Price per Maximum aggregate Amount of to be Registered Registered(1) share(2) Offering Price(2) Registration Fee (2) ________________________________________________________________________________ Common Stock, 200,000 $23.438 $4,687,600 $1,616 Par Value $1.00 ________________________________________________________________________________ (1) Pursuant to Rule 416(c) under the Securities Act of 1933, this Registration Statement also covers an indeterminate amount of interests to be offered or sold pursuant to the employee benefit plan described herein. (2) Based upon the average of the high and low sales prices of the Common Stock in the consolidated reporting system on December 20, 1994; determined in accordance with Rule 457(c) solely for the purposes of determining the amount of the registration fee.
PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. Incorporation of Documents by Reference The following documents and reports filed by M. A. Hanna Company (File No. 1-5222) (the "Company") with the Securities and Exchange Commission (the "Commission") are incorporated herein by reference: (a) Annual Report of the Company on Form 10-K for the fiscal year ended December 31, 1993, as amended; (b) Quarterly Reports of the Company on Form 10-Q for the quarters ended March 31, 1994, June 30, 1994 and September 30, 1994; (c) Current Report of the Company on Form 8-K dated December 20, 1994; (d) The description of the Company's Common Stock contained in the registration statement filed under Section 12 of the Securities Exchange Act of 1934, including any amendment or report filed for the purpose of updating such description; (e) The description of the Company's Stock Purchase Rights contained in the Registration Statement on Form 8-A dated December 4, 1991, as amended. All documents filed after the date of the filing of this registration statement by the Company pursuant to Sections 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 deregisters all securities then remaining unsold, shall be deemed to be incorporated herein by reference and to be a part hereof from the date of filing of such documents. Item 6. Indemnification of Directors and Officers Subsection (b)(7) of Section 102 of the Delaware Law empowers a corporation in its original certificate of incorporation or an amendment thereto validly approved by stockholders to eliminate or limit the personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that such provision cannot eliminate or limit the liability of a director for (i) breach of his duty or loyalty, (ii) acts or omissions not in good faith or which involve intentional misconduct or knowing violation of law, (iii) payment of a stock dividend or approval of a stock repurchase which was illegal under Section 174 of the Delaware Law, or (iv) any transaction from which an improper personal benefit was derived. Articles Thirteenth and Fourteenth of the Registrant's Restated Certificate of Incorporation were approved at the Company's annual meeting of stockholders held in May 1987 to provide for limitation of liability of directors, and indemnification of directors, officers and others as follows: "THIRTEENTH: To the full extent permitted by the General Corporation law of the State of Delaware or any other applicable laws as presently or hereafter in effect, no Director of the Corporation shall be personally liable to the Corporation or its stockholders for or with respect to any acts or omissions in the performance of his or her duties as a Director of the Corporation. No amendment to or repeal of this Article THIRTEENTH shall apply to or have any effect on the liability or alleged liability of any Director of the Corporation for or with respect to any acts or omissions of such Director occurring prior to such amendment." "FOURTEENTH: Each person who is or was or had agreed to become a Director or officer of the Corporation, or each such person who is or was serving or had agreed to serve at the request of the Board of Directors or an officer of the Corporation as an employee or agent of the Corporation or as a Director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise (including the heirs, executors, administrators or estate of such person), shall be indemnified by the Corporation to the full extent permitted by the General Corporation Law of the State of Delaware or any other applicable laws as presently or hereafter in effect. Without limiting the generality or effect of the foregoing, the Corporation may enter into one or more agreements with any person which provide for indemnification greater or different than that provided in this Article. No amendment to or repeal of this Article FOURTEENTH shall apply to or have any effect on the right to indemnity permitted or authorized hereunder for or with respect to or have any effect on the right to indemnity permitted or authorized hereunder for or with respect to claims asserted before or after such amendment or repeal arising from acts or omissions occurring in whole or in part before the effective date of such amendment or repeal." Reference is made to Section 145 of the Delaware General Corporation law relating the indemnification of directors and officers of a Delaware corporation. The Company has entered into Indemnification Agreements with all of the Company's directors except Mr. Eyton and all of the Company's executive officers (the "Indemnitees") to specify the extent to which Indemnitees may receive indemnification under circumstances in which indemnity would not otherwise be provided by the Delaware Law. Pursuant to the Indemnification Agreements, an Indemnitee will be entitled to indemnification as provided by Section 145 of the Delaware Law and to indemnification for any amount which the Indemnitee is or becomes legally obligated to pay relating to or arising out of any claim made against such person because of any act, failure to act or neglect or breach of duty, including any actual or alleged error, misstatement or misleading statement, which such person commits, suffers, permits or acquiesces in while acting in the Indemnitee's position with the Company. The Indemnification Agreements provide specific procedures for securing indemnification and the Company is required to make payments in connection with any claim against the Indemnitee only to the extent expressly provided by law. The Company has purchased directors and officers liability insurance which provides for indemnification of directors and officers against certain liabilities. Item 8. Exhibits 4.1 Amended Certificate of Incorporation of the Company (filed as Exhibit 3(b) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1989) incorporated herein by reference. 4.2 By-laws of the Company (filed as Exhibit 3(d) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1987, File No. 1-5222) incorporated herein by reference. 4.3 Indenture dated September 15, 1991 between the Company and Ameritrust Company, National Association (now known as Society National Bank), Trustee, relating to Registrant's $100,000,000 aggregate principal amount of 9% Senior Notes due 1998 and $150,000,000 aggregate principal amount of 9 3/8% Senior Notes due 2003, (filed as Exhibit 4 to the Form S-3 of the Company on September 18, 1991) incorporated herein by reference. 4.4 Indenture dated September 26, 1991 between the Company and Ameritrust Texas, National Association, Trustee, relating to Registrant's $50,000,000 aggregate principal amount of 9% Notes due 1998, (filed as Exhibit 4 to the Form S-3 of the Company on October 24, 1991) incorporated herein by reference. 4.5 Credit Agreement dated June 30, 1994 between the Company, Citibank, N.A. and the other banks signatory thereto. 4.6 Rights Agreement dated December 4, 1991 between the Company and Ameritrust Company National Association (filed as Exhibit 2 to Form 8-A of M. A. Hanna Company on December 5, 1991, as amended and as Exhibit 8 to Form 8 of the Company filed on December 24, 1991) incorporated herein by reference. 23 Consent of Ernst & Young LLP. 24 Powers of Attorney. 99 401K Savings and Retirement Plan for Polymer Associates. The undersigned Registrant hereby undertakes that it will submit or has submitted the Plan and any amendment thereto to the Internal Revenue Service (the "IRS") in a timely manner and has made or will make all changes required by the IRS in order to qualify the Plan. Item 9. Undertakings A. 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: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) 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; (iii) 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, the paragraph (A)(1)(i) and (A)(1)(ii) do not apply if the registration statement is on Form S-3 or on Form S-8, and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to Section 13 or 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 offered 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 securities being registered which remain unsold at the termination of the offering. B. 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) or 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. C. Insofar as indemnification for liabilities 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 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. 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 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 Cleveland, State of Ohio on this 22nd day of December, 1994. M. A. HANNA COMPANY By: /S/ John S. Pyke, Jr. John S. Pyke, Jr. Vice President, General Counsel and Secretary Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities indicated as of December 22, 1994. Signatures Titles Date Martin D. Walker* Chairman, Chief Executive Officer Martin D. Walker (principal executive officer) and Director Douglas J. McGregor* President, Chief Operating Officer Douglas J. McGregor and Director /S/ Douglas R. Schrank Vice President, Chief Financial Douglas R. Schrank Officer (principal financial officer) /s/ Thomas E. Lindsey Controller (principal accounting Thomas E. Lindsey officer) B. Charles Ames* Director B. Charles Ames Carol A. Cartwright* Director Carol Cartwright Wayne R. Embry* Director Wayne R. Embry J. Trevor Eyton* Director J. Trevor Eyton George D. Kirkham* Director George D. Kirkham Marvin L. Mann* Director Marvin L. Mann Richard W. Pogue* Director Richard W. Pogue * John S. Pyke, Jr., theundersigned attorney-in-fact, by signing his name below, does hereby sign this registration statement on behalf of the above indicated directors and officers of M. A. Hanna Company (constituting a majority of the directors) pursuant to a power of attorney executed by such persons and filed with the Securities and Exchange Commission contemporaneously herewith. By: /s/ John S. Pyke, Jr. as attorney-in-fact John S. Pyke, Jr. The Plan Pursuant to the requirements of the Securities Act of 1933, the trustees (or other persons who administer the employee benefit plan) have duly cause this registration statement to be filed on its behalf by the undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio, on December 22, 1994. 401K Savings and Retirement Plan for Polymer Associates By: /s/ Douglas R. Schrank Name: Douglas R. Schrank Title: Committee for Employee Benefits Administration EXHIBITS ________________________________________________________________________ Pagination by Exhibit sequential Number Exhibit numbering ________________________________________________________________________ 3 Restated Certificate of Incorporation of Registrant (filed as Exhibit 4(a) to the Form S-8 of Registrant dated June 29, 1988) incorporated herein by reference and made a part hereof. 4.1 Amended Certificate of Incorporation of the Company (filed as Exhibit 3(b) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1989) incorporated herein by reference. 4.2 By-laws of the Company (filed as Exhibit 3(d) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1987, File No. 1-5222) incorporated herein by reference. 4.3 Indenture dated September 15, 1991 between the Company and Ameritrust Company, National Association, Trustee, relating to Registrant's $100,000,000 aggregate principal amount of 9% Senior Notes due 1998 and $150,000,000 aggregate principal amount of 9 3/8% Senior Notes due 2003 (filed as Exhibit 4 to the Form S-3 of the Company on October 24, 1991) incorporated herein by reference. 4.4 Indenture dated September 26, 1991 between the Company and Ameritrust Texas, National Association, Trustee, relating to Registrant's $50,000,000 aggregate principal amount of 9% Notes due 1998, (filed as Exhibit 4 to the Form S-3 of the Company on October 24, 1991) incorporated herein by reference. 4.5 Credit Agreement dated June 30, 1994 between the Company, Citibank, N.A. and the other banks signatory thereto. 4.6 Rights Agreement dated December 4, 1991 between the Company and Ameritrust Company National Association (filed as Exhibit 2 to Form 8-A of M. A. Hanna Company on December 5, 1991, as amended and as Exhibit 8 to Form 8 of the Company filed on December 24, 1991) incorporated herein by reference. 23 Consent of Ernst & Young LLP. 24 Powers of Attorney. 99 401K Savings and Retirement Plan for Polymer Associates. EX-4 2 EXHIBIT 4 EXECUTION COPY U.S. $200,000,000 CREDIT AGREEMENT Dated as of June 30, 1994 Among M.A. HANNA COMPANY as Borrower and THE BANKS NAMED HEREIN as Banks and CITIBANK, N.A. as Agent T A B L E O F C O N T E N T S Section Page ARTICLE I DEFINITIONS AND ACCOUNTING TERMS 1.01 Certain Defined Terms...................... 1 1.02 Computation of Time Periods................ 15 1.03 Accounting Terms........................... 15 1.04 Other Definitional Provisions.............. 15 ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES 2.01 Promise to Repay; Evidence of Debt......... 15 2.02 The Revolving Advances..................... 16 2.03 Making the Revolving Advances.............. 17 2.04 The Competitive Bid Advances............... 19 2.05 Facility Fee............................... 23 2.06 Reduction of the Commitments............... 24 2.07 Repayment of Revolving Advances............ 24 2.08 Interest on Advances....................... 24 2.09 Interest Rate Determination................ 25 2.10 Prepayments of Revolving Advances.......... 25 2.11 Increased Costs............................ 26 2.12 Payments and Computations.................. 27 2.13 Taxes...................................... 28 2.14 Sharing of Payments, Etc................... 30 ARTICLE III CONDITIONS OF LENDING 3.01 Conditions Precedent to Initial Advances... 31 3.02 Conditions Precedent to Each Borrowing..... 32 3.03 Conditions Precedent to Each Competitive... Bid Borrowing............................ 32 ARTICLE IV REPRESENTATIONS AND WARRANTIES 4.01 Representations and Warranties of the Borrower................................. 33 Section Page ARTICLE V COVENANTS OF THE BORROWER 5.01 Affirmative Covenants...................... 36 5.02 Negative Covenants......................... 40 ARTICLE VI EVENTS OF DEFAULT 6.01 Events of Default.......................... 43 ARTICLE VII THE AGENT 7.01 Authorization and Action................... 46 7.02 Agent's Reliance, Etc...................... 46 7.03 Citibank and Affiliates.................... 47 7.04 Lender Credit Decision..................... 47 7.05 Indemnification............................ 47 7.06 Successor Agent............................ 48 7.07 Agent's Fee................................ 48 ARTICLE VIII MISCELLANEOUS 8.01 Amendments, Etc............................ 48 8.02 Notices, Etc............................... 49 8.03 No Waiver; Remedies........................ 50 8.04 Costs, Expenses and Taxes.................. 50 8.05 Right of Set-off........................... 51 8.06 Binding Effect............................. 51 8.07 Assignments, Designations and Participations........................... 51 8.08 Governing Law.............................. 56 8.09 Execution in Counterparts.................. 56 8.10 Collateral................................. 56 8.11 Survival of Warranties and Agreements...... 57 8.12 Limitation of Liability.................... 57 8.13 Confidentiality............................ 57 8.14 Certain Consents and Waivers of the Borrower................................. 58 8.15 Waiver of Jury Trial....................... 58 -ii- Exhibit A-1 - Form of Revolving Note Exhibit A-2 - Form of Competitive Bid Note Exhibit B-1 - Notice of Revolving Borrowing Exhibit B-2 - Notice of Competitive Bid Borrowing Exhibit C - Form of Assignment and Acceptance Exhibit D - Form of Designation Agreement Exhibit E - Form of Opinion of Jones, Day, Reavis & Pogue, Counsel for the Borrower Exhibit F - Form of Opinion of Sidley & Austin, Counsel for the Agent Schedule I - List of Applicable Lending Offices Schedule II - Existing Liens -iii- CREDIT AGREEMENT CREDIT AGREEMENT dated as of June 30, 1994 (as amended, supplemented or otherwise modified from time to time, this "Agreement") among M.A. HANNA COMPANY, a Delaware corporation (the "Borrower"), the financial institutions (the "Banks") listed on the signature pages hereof and CITIBANK, N.A. ("Citibank"), as agent (together with any successor Agent appointed hereunder, the "Agent") for the Lenders hereunder. The parties hereto agree as follows: ARTICLE I DEFINITIONS AND ACCOUNTING TERMS SECTION 1.01. Certain Defined Terms. In addition to the terms defined above, as used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined): "Adjusted Eurodollar Rate" means, for any Interest Period for each Adjusted Eurodollar Rate Advance comprising part of the same Revolving Borrowing, an interest rate per annum equal to the rate per annum obtained by dividing (a) the rate of interest determined by the Agent to be the average (rounded upward to the nearest whole multiple of 1/16 of 1% per annum, if such average is not such a multiple) of the rate per annum at which deposits in U.S. dollars are offered by the principal office of each of the Reference Banks in London, England to prime banks in the London interbank market at 11:00 A.M. (London time) two Business Days before the first day of such Interest Period in an amount substantially equal to such Reference Bank's Adjusted Eurodollar Rate Advance comprising part of such Revolving Borrowing and for a period equal to such Interest Period by (b) a percentage equal to 100% minus the Adjusted Eurodollar Rate Reserve Percentage for such Interest Period. The Adjusted Eurodollar Rate for any Interest Period for each Adjusted Eurodollar Rate Advance comprising part of the same Revolving Borrowing shall be determined by the Agent on the basis of applicable rates furnished to and received by the Agent from the Reference Banks two Business Days before the first day of such Interest Period, subject, however, to the provisions of Section 2.09. "Adjusted Eurodollar Rate Advance" means a Revolving Advance which bears interest as provided in Section 2.08(a)(ii). "Adjusted Eurodollar Rate Reserve Percentage" of any Lender for any Interest Period for any Adjusted Eurodollar Rate Advance means the reserve percentage applicable two Business Days before the first day of such Interest Period under regulations issued from time to time by the Federal Reserve Board for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for such Lender with respect to liabilities or assets consisting of or including Eurocurrency Liabilities having a term equal to such Interest Period. "Adjusted Net Worth" means at any date (i) the Consolidated stockholders' equity of the Borrower and its Consolidated Subsidiaries, determined as of such date in accordance with GAAP, plus (ii) to the extent shown as a reduction in determining such Consolidated stockholders' equity, (x) all write-downs resulting from foreign currency translations and (y) the minimum pension liability adjustment shown as a reduction of stockholders' equity in accordance with Financial Accounting Statement No. 87, "Employers' Accounting for Pensions". "Advance" means a Revolving Advance or a Competitive Bid Advance. "Affiliate" means, as to any Person, any other Person that, directly or indirectly, controls, is controlled by or is under common control with such Person or is a director or officer of such Person. "Applicable Eurodollar Rate Margin" shall mean (i) a rate equal to 0.225% per annum for any day on which each of Majority Usage and Level I Status exists, (ii) a rate equal to 0.125% per annum for any day on which Level I Status, but not Majority Usage, exists, (iii) a rate equal to 0.325% per annum for any day on which each of Majority Usage and Level II Status exists, (iv) a rate equal to 0.225% per annum for any day on which Level II Status, but not Majority Usage, exists, (v) a rate equal to 0.375% per annum for any day on which each of Majority Usage and Level III Status exists, (vi) a rate equal to 0.275% per annum for any day on which Level III Status, but not Majority Usage, exists, (vii) a rate equal to 0.475% per annum for any day on which each of Majority Usage and Level IV Status exists, -2- (viii) a rate equal to 0.375% per annum for any day on which Level IV Status, but not Majority Usage, exists, (ix) a rate equal to 0.60% per annum for any day on which each of Majority Usage and Level V Status exists and (x) a rate equal to 0.50% per annum with respect to any Interest Period during which Level V Status, but not Majority Usage, exists. "Applicable Lending Office" means, with respect to each Lender, such Lender's Domestic Lending Office in the case of a Base Rate Advance and such Lender's Eurodollar Lending Office in the case of an Adjusted Eurodollar Rate Advance and, in the case of a Competitive Bid Advance, the office of such Lender notified by such Lender to the Agent as its Applicable Lending Office with respect to such Competitive Bid Advance. "Assignment and Acceptance" means an assignment and acceptance entered into by a Lender and an Eligible Assignee, and accepted by the Agent, in substantially the form of Exhibit C hereto. "Base Rate" means, for any period, a fluctuating interest rate per annum as shall be in effect from time to time which rate per annum shall at all times be equal to the highest of: (a) the rate of interest announced publicly by Citibank in New York, New York, from time to time, as Citibank's base rate; (b) the sum (adjusted to the nearest 1/4 of one percent or, if there is no nearest 1/4 of one percent, to the next higher 1/4 of one percent) of (i) 1/2 of one percent per annum plus (ii) the rate obtained by dividing (A) the latest three-week moving average of secondary market morning offering rates in the United States for three-month certificates of deposit of major United States money market banks, such three-week moving average being determined weekly on each Monday (or, if any such day is not a Business Day, on the next succeeding Business Day) for the three-week period ending on the previous Friday by the Agent on the basis of such rates reported by certificate of deposit dealers to and published by the Federal Reserve Bank of New York or, if such publication shall be suspended or terminated, on the basis of quotations for such rates received by the Agent from three New York certificate of deposit dealers of recognized standing selected by the Agent, by (B) a percentage equal to 100% minus the average of the daily percentages specified during such -3- three-week period by the Federal Reserve Board for determining the maximum reserve requirement (including, but not limited to, any emergency, supplemental or other marginal reserve requirement) for Citibank in respect of liabilities consisting of or including (among other liabilities) three-month U.S. dollar nonpersonal time deposits in the United States, plus (iii) the average during such three-week period of the daily net annual assessment rates estimated by Citibank for determining the current annual assessment payable by Citibank to the Federal Deposit Insurance Corporation (or any successor) for insuring U.S. dollar deposits of Citibank in the United States; or (c) for any day 1/2 of one percent per annum above the Federal Funds Rate. "Base Rate Advance" means a Revolving Advance which bears interest as provided in Section 2.08(a)(i). "Borrowing" means a Revolving Borrowing or a Competitive Bid Borrowing. "Business Day" means a day of the year on which banks are not required or authorized to close in New York City and, if the applicable Business Day relates to any Adjusted Eurodollar Rate Advances, on which dealings are carried on in the London interbank market. "Claim" means any claim or demand, by any Person, of whatsoever kind or nature for any alleged Liabilities and Costs, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute, Permit, ordinance or regulation, common law or otherwise. "Closing Date" shall mean the date on which the initial Borrowing is made hereunder. "Competitive Bid Advance" means an advance by a Lender to the Borrower as part of a Competitive Bid Borrowing resulting from the auction bidding procedure described in Section 2.04. "Competitive Bid Borrowing" means a borrowing consisting of simultaneous Competitive Bid Advances from each of the Lenders whose offer to make one or more Competitive Bid Advances as part of such borrowing has been accepted by the Borrower under the auction bidding procedure described in Section 2.04. "Competitive Bid Note" means a promissory note of the Borrower payable to the order of any Lender, in substantially the form of Exhibit A-2 hereto (with such -4- formal changes as are appropriate in the judgment of such Lender to reflect the terms of a Competitive Bid Advance that bears interest at other than a fixed rate), evidencing the indebtedness of the Borrower to such Lender resulting from a Competitive Bid Advance made by such Lender. "Competitive Bid Reduction" has the meaning specified in Section 2.02. "Commitment" has the meaning specified in Section 2.02. "Consolidated" refers to the consolidation of accounts in accordance with GAAP, including principles of consolidation, consistent with those applied in the preparation of the Consolidated financial statements referred to in Section 4.01(e). "Consolidated Interest Expense" means, for any period, with respect to the Borrower and its Subsidiaries on a Consolidated basis, total interest expense, whether paid or accrued (without duplication), including the interest component of obligations in respect of capital leases. "Contaminant" means any pollutant, hazardous substance, radioactive substance, toxic substance, hazardous waste, radioactive waste, special waste, petroleum or petroleum- derived substance or waste, asbestos, polychlorinated biphenyls (PCBs), or any hazardous or toxic constituent thereof and includes, but is not limited to, these terms as defined in Environmental, Health or Safety Requirements of Law. "Debt" of any Person means at any date (i) all indebtedness of such Person for borrowed money or for the deferred purchase price of property, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (iv) all obligations of such Person as lessee under leases which shall have been or should be, in accordance with GAAP, recorded as capital leases, (v) all obligations of such Person under direct or indirect guaranties in respect of, and all obligations (contingent or otherwise) of such Person to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect of, Debt of others and (vi) all Debt secured by a lien, mortgage or security interest on any asset of such Person, whether or not such Debt is otherwise an obligation of such Person. -5- "Default" means any Event of Default or any event that would constitute an Event of Default but for the requirement that notice be given or time elapse or both. "Designated Bidder" means (i) an Eligible Assignee or (ii) a special purpose corporation which is engaged in making, purchasing or otherwise investing in commercial loans in the ordinary course of its business and that issues (or the parent of which issues) commercial paper rated at least Prime-1 (or the then equivalent grade) by Moody's or A-1 (or the then equivalent grade) by S&P, that, in either case, (A) is organized under the laws of the United States or any State thereof, (B) shall have become a party hereto pursuant to Section 8.07(d) through (f) and (C) is not otherwise a Lender. "Designation Agreement" means a designation agreement entered into by a Lender (other than a Designated Bidder) and a Designated Bidder, and accepted by the Agent, in substantially the form of Exhibit D hereto. "Domestic Lending Office" means, with respect to any Lender, the office of such Lender specified as its "Domestic Lending Office" opposite its name on Schedule I hereto or in the Assignment and Acceptance pursuant to which it became a Lender, or such other office of such Lender as such Lender may from time to time specify to the Borrower and the Agent. "EBIT" means, for any period on a Consolidated basis for the Borrower and its Consolidated Subsidiaries, (i) the sum of the amounts for such period of (A) Consolidated net income (or loss), (B) Consolidated Interest Expense, (C) charges for federal, state, local and foreign income taxes and (D) extraordinary and non-operating losses (in each case on a pre-tax basis) which have been deducted in the calculation of Consolidated net income (or loss), minus (ii) extraordinary and non-operating income (in each case on a pre-tax basis). "Eligible Assignee" means (i) a commercial bank organized under the laws of the United States, or any State thereof, and having total assets in excess of $3,000,000,000 and a combined capital and surplus of at least $150,000,000; (ii) a savings and loan association or savings bank organized under the laws of the United States, or any State thereof, and having a combined capital and surplus of at least $300,000,000; (iii) a commercial bank organized under the laws of any other country which is a member of the OECD, or a political subdivision of any such country, and that either (x) has total assets in excess of $3,000,000,000 and a combined capital and surplus of at least $150,000,000 or (y) is acceptable to the Borrower and the Agent, provided in each case that such bank is acting through a branch or -6- agency located in the country in which it is organized or another country which is also a member of the OECD; (iv) the central bank of any country which is a member of the OECD; and (v) a finance company, insurance company or other financial institution or fund (whether a corporation, partnership or other entity) which is engaged in making, purchasing or otherwise investing in commercial loans in the ordinary course of its business, and having total assets in excess of $3,000,000,000. "Environmental, Health or Safety Requirements of Law" means all valid and enforceable Requirements of Law derived from or relating to federal, state and local laws or regulations relating to or addressing the environment, health or safety, including but not limited to any law, regulation, or order relating to the use, handling, or disposal of any Contaminant, any law, regulation, or order relating to Remedial Action and any law, regulation, or order relating to workplace or worker safety and health, and such Requirements of Law as are promulgated by the specifically authorized agent responsible for administering such requirements. "Environmental Lien" means a Lien in favor of any Governmental Authority for any (i) liabilities under any Environmental, Health or Safety Requirements of Law or (ii) damages arising from, or costs incurred by such Governmental Authority in response to, a Release or threatened Release of a Contaminant into the environment. "ERISA" means the Employee Retirement Income Security Act of 1974 and the rules and regulations thereunder, collectively, as the same may from time to time be supplemented or amended and remain in effect. "ERISA Affiliate" means any Person that for purposes of Title IV of ERISA is a member of the Borrower's controlled group, or under common control with the Borrower, within the meaning of Section 414 of the Internal Revenue Code and the regulations promulgated and rulings issued thereunder. "ERISA Event" means (a) a reportable event, within the meaning of Section 4043 of ERISA, unless the 30-day notice requirement with respect thereto has been waived by the PBGC; (b) the imposition of an obligation on the Borrower or any ERISA Affiliate to provide affected parties with written notice of intent to terminate a Plan in a distress termination described in Section 4041(c) of ERISA; (c) the partial or complete withdrawal of the Borrower or any ERISA Affiliate from a Multiemployer Plan; (d) the withdrawal by the Borrower or an ERISA Affiliate from a Plan during a plan year for which the Borrower or any ERISA Affiliate was a substantial employer, as defined in Section 4001(a)(2) of -7- ERISA; (e) the failure by the Borrower or any ERISA Affiliate to make a payment to a plan required under Section 302(f)(1) of ERISA; (f) the adoption of an amendment to a Plan requiring the provision of security to such Plan, pursuant to Section 307 of ERISA; or (g) the institution by the PBGC of proceedings to terminate a Plan, pursuant to Section 4042 of ERISA, or the occurrence of any event or condition that reasonably could constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, a Plan. "ERISA Group" means all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Borrower, are treated as a single employer under Section 414 of the Internal Revenue Code. "Eurocurrency Liabilities" has the meaning assigned to that term in Regulation D of the Federal Reserve Board, as in effect from time to time. "Eurodollar Lending Office" means, with respect to any Lender, the office of such Lender specified as its "Eurodollar Lending Office" opposite its name on Schedule I hereto or in the Assignment and Acceptance pursuant to which it became a Lender (or, if no such office is specified, its Domestic Lending Office), or such other office of such Lender as such Lender may from time to time specify to the Borrower and the Agent. "Events of Default" has the meaning specified in Section 6.01. "Existing Agreement" means the Credit Agreement dated as of September 15, 1989 among the Borrower, the banks named therein and Citibank, as agent, as amended, modified and supplemented prior to the date hereof. "Existing Liens" means the Liens existing on the date hereof upon or with respect to Property owned by the Borrower and its Subsidiaries and specified on Schedule II hereto. "Facility Fee" has the meaning specified in Section 2.05. "Federal Funds Rate" means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal -8- Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Agent from three Federal funds brokers of recognized standing selected by it. "Federal Reserve Board" means the Board of Governors of the Federal Reserve System or any successor thereto. "Fee Anticipation Letter" means the letter dated May 17, 1994 from Citibank addressed to and acknowledged by the Borrower relating to the anticipated amounts of certain fees and expenses payable by the Borrower. "Fee Letter" means the letter dated May 17, 1994 from Citibank addressed to and acknowledged by the Borrower relating to certain fees payable to Citibank. "GAAP" has the meaning specified in Section 1.03. "Governmental Authority" means any nation or govern- ment, any federal, state, local or other political sub- division thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. "Insufficiency" means, with respect to any Plan, the amount, if any, by which the present value of the vested accrued benefits under such Plan, as determined using the actuarial assumptions then used for the purpose of determining the contributions to be made to such Plan, exceeds the fair market value of the assets of such Plan allocable to such benefits, provided that, with respect to any Multiple Employer plan with respect to which an election under Section 412(c)(4)(A) of the Internal Revenue Code has been made, Insufficiency shall mean the portion of any such excess that is allocable to the Borrower or any ERISA Affiliate pursuant to the procedures in effect from time to time with respect to such Multiple Employer Plan for the allocation of such excess among the employers with respect to such Multiple Employer Plan. "Interest Period" means, for each Revolving Advance comprising part of the same Revolving Borrowing, the period commencing on the date of such Revolving Advance and ending on the last day of the period selected by the Borrower pursuant to the provisions below. The duration of each such Interest Period shall be (a) in the case of a Base Rate Advance, any number of days up to 30 days or 1,2,3 or 6 months and (b) in the case of an Adjusted Eurodollar Rate Advance, 1, 2, 3, 6 or, subject to availability, 12 months, in each case as the Borrower may select in the Notice of Borrowing for such Advance; provided, however, that: -9- (i) the duration of any Interest Period which commences before the Termination Date and would otherwise end after the Termination Date shall end on the Termination Date; (ii) Interest Periods commencing on the same date for Revolving Advances comprising part of the same Revolving Borrowing shall be of the same duration; and (iii) whenever the last day of any Interest Period would otherwise occur on a day other than a Business Day, the last day of such Interest Period shall be extended to occur on the next succeeding Business Day, provided, in the case of any Interest Period for an Adjusted Eurodollar Rate Advance, that if such extension would cause the last day of such Interest Period to occur in the next following calendar month, the last day of such Interest Period shall occur on the next preceding Business Day. "Internal Revenue Code" means the United States Internal Revenue Code of 1986, as amended, or any successor statute. "Lenders" means the Banks listed on the signature pages hereof, each Eligible Assignee that shall become a party hereto pursuant to Section 8.07(a), (b) and (c) and, except when used in reference to a Revolving Advance, a Revolving Borrowing, a Revolving Note, a Commitment or a related term, each Designated Bidder. "Level I Status" exists at any date if, at such date, the Borrower's outstanding senior unsecured long-term debt (without third-party credit enhancement) is rated either A- (or the then equivalent grade) or higher by S&P or A3 (or the then equivalent grade) or higher by Moody's. "Level II Status" exists at any date if, at such date, (i) the Borrower's outstanding senior unsecured long-term debt (without third-party credit enhancement) is rated either BBB+ (or the then equivalent grade) or higher by S&P or Baa1 (or the then equivalent grade) or higher by Moody's and (ii) Level I Status does not exist. "Level III Status" exists at any date if, at such date, (i) the Borrower's outstanding senior unsecured long-term debt (without third-party credit enhancement) is rated either BBB (or the then equivalent grade) or higher by S&P or Baa2 (or the then equivalent grade) or higher by Moody's and (ii) neither Level I Status nor Level II Status exists. "Level IV Status" exists at any date if, at such date, (i) the Borrower's outstanding senior unsecured long-term -10- debt (without third-party credit enhancement) is rated either BBB- (or the then equivalent grade) or higher by S&P or Baa3 (or the then equivalent grade) or higher by Moody's and (ii) none of Level I Status, Level II Status or Level III Status exists. "Level V Status" exists at any date if, at such date, none of Level I Status, Level II Status, Level III Status or Level IV Status exists. "Liabilities and Costs" means all direct or indirect, known or unknown, absolute or contingent, past, present or future liabilities, costs, expenses, obligations, responsibilities, damages (including, without limitation, punitive, economic, consequential and treble damages) and losses (including, without limitation, attorney, expert and consulting fees and costs of investigation, feasibility or Remedial Action studies, and fines, penalties and monetary sanctions and interest) with respect to or arising out of any of the following: personal injury, death, intentional, willful or wanton injury, damage or threat to the environment, natural resources or public health or welfare. "Lien" means any mortgage, deed of trust, pledge, hypothecation, assignment, conditional sale agreement, deposit arrangement, security interest, encumbrance, lien (statutory or other), preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever in respect of any property of a Person, whether granted voluntarily or imposed by law, and includes the interest of a lessor under a lease which shall have been or should be, in accordance with GAAP, recorded as a capital lease, or under any financing lease having substantially the same economic effect as any of the foregoing and the filing of any financing statement or similar notice (other than a financing statement filed by a "true" lessor pursuant to S 9-408 of the Uniform Commercial Code), naming the owner of such property as debtor, under the Uniform Commercial Code or other comparable law of any jurisdiction. "Loan Account" has the meaning specified in Section 2.01(b). "Loan Documents" means this Agreement, the Notes, the Fee Letter, the Fee Anticipation Letter and all other written agreements between the Borrower and the Agent or any Lender delivered to the Agent or such Lender pursuant to or in connection with this Agreement. "Majority Lenders" means at any time Lenders holding at least 51% of the then aggregate unpaid principal amount of the Revolving Notes held by Lenders, or, if no such principal amount is then outstanding, Lenders having at -11- least 51% of the Commitments (provided that, for purposes hereof, neither the Borrower, nor any of its Affiliates, if a Lender, shall be included in (i) the Lenders holding such amount of the Revolving Advances or having such amount of the Commitments or (ii) determining the aggregate unpaid principal amount of the Revolving Advances or the total Commitments). "Majority Usage" exists at any date if, at such date, the outstanding principal amount of the Advances is greater than 50% of the then existing Commitments. "Margin Stock" shall have the meaning assigned to that term in Regulation G and Regulation U. "Material Adverse Effect" means a material adverse effect upon (i) the condition (financial or otherwise), operations or Property of the Borrower, individually, or of the Borrower and its Subsidiaries, taken as a whole or (ii) the legality, validity or enforceability of this Agreement, any Note or any of the other Loan Documents. "Moody's" means Moody's Investors Service, Inc., and its successors. "Multiemployer Plan" means a "multiemployer plan" as defined in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is making or accruing an obligation to make contributions or has within any of the preceding three plan years made or accrued an obligation to make contributions. "Multiple Employer Plan" means an employee benefit plan, other than a Multiemployer Plan, subject to Title IV of ERISA to which the Borrower or any ERISA Affiliate, and one or more employers other than the Borrower or an ERISA Affiliate, is making or accruing an obligation to make contributions or, in the event that any such plan has been terminated, to which the Borrower or any ERISA Affiliate made or accrued an obligation to make contributions during any of the five plan years preceding the date of termination of such plan. "Note" means a Revolving Note or a Competitive Bid Note. "Notice of Competitive Bid Borrowing" has the meaning specified in Section 2.04(a). "Notice of Revolving Borrowing" has the meaning specified in Section 2.03(a). -12- "OECD" means the Organization for Economic Cooperation and Development. "PBGC" means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA. "Permits" means any permit, approval, authorization license, variance, or permission required from a Governmental Authority under an applicable Requirement of Law. "Person" means an individual, partnership, corporation (including a business trust), joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof. "Plan" means a pension plan (other than a Multiemployer Plan) which is covered by Title IV of ERISA and (i) with respect to which the Borrower or any ERISA Affiliate is or has been accruing or is or has been obligated to accrue contributions or (ii) which is providing benefits for employees (including former employees) of the Borrower or any ERISA Affiliate in respect of such employees' or former employees' employment with the Borrower or an ERISA Affiliate. "Property" means any real or personal property, plant, building, facility, structure, underground storage tank or unit, equipment, inventory, general intangible, or other asset owned, leased or operated by the Borrower or any of its Subsidiaries, as applicable (including any surface water thereon or adjacent thereto, and soil and groundwater thereunder). "Reference Banks" means Citibank, NBD Bank, N.A. and PNC Bank, National Association. "Register" has the meaning specified in Section 8.07(g). "Regulation G" means Regulation G of the Federal Reserve Board, as in effect from time to time. "Regulation T" means Regulation T of the Federal Reserve Board, as in effect from time to time. "Regulation U" means Regulation U of the Federal Reserve Board, as in effect from time to time. "Regulation X" means Regulation X of the Federal Reserve Board, as in effect from time to time. -13- "Release" means release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration into the indoor or outdoor environment or into or out of any Property, including the movement of Contaminants through or in the air, soil, surface water, groundwater or Property. "Remedial Action" means actions required to (i) clean up, remove, treat or in any other way address Contaminants in the indoor or outdoor environment; (ii) prevent the Release or threat of Release or minimize the further Release of Contaminants; or (iii) investigate and determine if a remedial response is needed and to design such a response and post-remedial investigation, monitoring, operation and maintenance and care. "Requirements of Law" means, as to any Person, the charter and by-laws or other organizational or governing documents of such Person, and any law, rule or regulation, or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject including, without limitation, the Securities Act of 1933, the Securities Exchange Act of 1934, as amended, Regulation G, Regulation T, Regulation U and Regulation X, ERISA, the Fair Labor Standards Act and any certificate of occupancy, zoning ordinance, building, or land use requirement or Permit or labor or employment rule or regulation, including Environ- mental, Health or Safety Requirements of Law. "Revolving Advance" means an advance by a Lender to the Borrower as part of a Revolving Borrowing and refers to a Base Rate Advance or an Adjusted Eurodollar Rate Advance, each of which shall be a "Type" of Revolving Advance. "Revolving Borrowing" means a borrowing consisting of simultaneous Revolving Advances of the same Type made by each of the Lenders pursuant to Section 2.02. "Revolving Note" means a promissory note of the Borrower payable to the order of any Lender, in substantially the form of Exhibit A-1 hereto, evidencing the aggregate indebtedness of the Borrower to such Lender resulting from the Revolving Advances made by such Lender. "S&P" means Standard and Poor's Corporation, and its successors. "Subsidiary" of any Person means any corporation, partnership, joint venture, trust or estate of which (or in which) more than 50% of -14- (a) the outstanding capital stock having ordinary voting power to elect a majority of the Board of Directors of such corporation (irrespective of whether or not at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency), (b) the interest in the capital or profits of such partnership or joint venture, or (c) the beneficial interest of such trust or estate, is at the time directly or indirectly (through one or more other Subsidiaries of such Person) owned or controlled by such Person. "Termination Date" means June 29, 1998 or the earlier date of termination in whole of the Commitments pursuant to Section 2.06 or 6.01. "Withdrawal Liability" means a liability in respect of a complete withdrawal or partial withdrawal from a Multiemployer Plan, as described in Part I of Subtitle E of Title IV of ERISA. SECTION 1.02. Computation of Time Periods. In this Agreement in the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including" and the words "to" and "until" each means "to but excluding". SECTION 1.03. Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles consistent with those applied in the preparation of the financial statements referred to in Section 4.01(e) ("GAAP"). 1.04. Other Definitional Provisions. References to "Articles", "Sections", "subsections", "Schedules" and "Exhibits" shall be to Articles, Sections, subsections, Schedules and Exhibits, respectively, of this Agreement unless otherwise specifically provided. The words "hereof", "herein", and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES SECTION 2.01. Promise to Repay; Evidence of Debt. (a) The Borrower hereby agrees to pay when due the principal amount -15- of each Advance, and further agrees to pay all unpaid interest accrued thereon, in accordance with the terms of this Agreement and the Notes applicable to such Advance. The Borrower shall execute and deliver to each Lender a Revolving Note on the Closing Date and a Competitive Bid Note in connection with any Competitive Bid Advance made pursuant to Section 2.04 and, thereafter, shall execute and deliver such other Revolving Notes and Competitive Bid Notes as are necessary to evidence the Revolving Advances or the Competitive Bid Advances, as the case may be, owing to the Lenders after giving effect to any assignment thereof pursuant to Section 8.07. (b) Each Lender shall maintain in accordance with its usual practice an account or accounts (a "Loan Account") evidencing the amounts due with respect to each Revolving Advance and Competitive Bid Advance made by such Lender from time to time, including the amount of principal and interest payable and paid to such Lender from time to time hereunder. (c) Control Account. The Register maintained by the Agent pursuant to Section 8.07(g) shall include a control account, and a subsidiary account for each Lender, which accounts (taken together) shall record (i) the date and amount of each Revolving Advance and Competitive Bid Advance made hereunder, the Type of Advance comprising each Revolving Advance and the Interest Period applicable thereto and the terms of each Competitive Bid Advance, (ii) the terms of each Assignment and Acceptance and Designation Agreement delivered to and accepted by the Agent, (iii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iv) the amount of any sum received by the Agent from the Borrower hereunder and each Lender's share thereof. (d) Entries Binding. The entries made in the Register and each Loan Account shall be conclusive and binding for all purposes, in the absence of manifest error. SECTION 2.02. The Revolving Advances. Each Lender severally agrees, on the terms and conditions hereinafter set forth, to make Revolving Advances to the Borrower from time to time on any Business Day during the period from the date hereof until the Termination Date in an aggregate amount not to exceed at any time outstanding the amount set opposite such Lender's name on the signature pages hereof or, if such Lender has entered into any Assignment and Acceptance, set forth for such Lender in the Register maintained by the Agent pursuant to Section 8.07(g), in either case, as such amount may be reduced or modified pursuant to the terms of this Agreement (such Lender's "Commitment"), provided that the aggregate amount of the Commitments of the Lenders shall be deemed used from time to time to the extent of the aggregate amount of the Competitive Bid Advances then outstanding and such deemed usage of the aggregate -16- amount of the Commitments shall be applied to the Lenders ratably according to their respective Commitments (such deemed usage of the aggregate amount of the Commitments being a "Competitive Bid Reduction"). Each Revolving Borrowing shall be in an aggregate amount not less than $10,000,000 or an integral multiple of $1,000,000 in excess thereof, and shall consist of Revolving Advances of the same Type made on the same day by the Lenders ratably according to their respective Commitments. Within the limits of each Lender's Commitment, the Borrower may from time to time borrow, repay pursuant to Section 2.07, prepay pursuant to Section 2.10(b) and reborrow under this Section 2.02. SECTION 2.03. Making the Revolving Advances. (a) Each Revolving Borrowing shall be made on notice, given not later than (i) 11:00 A.M. (New York City time) on the third Business Day prior to the date of the proposed Revolving Borrowing in the case of Adjusted Eurodollar Rate Advances and (ii) 11:00 A.M. (New York City time) on the date of the proposed Revolving Borrowing in the case of Base Rate Advances, by the Borrower to the Agent, which shall give to each Lender prompt notice thereof by telecopier, telex or cable. Each such notice of a Revolving Borrowing (a "Notice of Revolving Borrowing") shall be by telecopier, telex or cable, confirmed immediately in writing, in substantially the form of Exhibit B-1 hereto, specifying therein the requested (i) date of such Revolving Borrowing, (ii) Type of Revolving Advances comprising such Revolving Borrowing, (iii) aggregate amount of such Revolving Borrowing and (iv) in the case of a Revolving Borrowing comprised of Adjusted Eurodollar Rate Advances, the initial Interest Period for each such Revolving Advance. Each Lender shall, before (i) 11:00 A.M. (New York City time) on the date of such Revolving Borrowing in the case of a Revolving Borrowing consisting of Adjusted Eurodollar Rate Advances and (ii) 2:00 P.M. (New York City time) on the date of such Revolving Borrowing in the case of a Revolving Borrowing consisting of Base Rate Advances, make available for the account of its Applicable Lending Office to the Agent at its address referred to in Section 8.02, in same day funds, such Lender's ratable portion of such Revolving Borrowing. After the Agent's receipt of such funds and upon fulfillment of the applicable conditions set forth in Article III, the Agent will make such funds available to the Borrower at the Agent's aforesaid address. (b) Anything in subsection (a) above to the contrary notwithstanding, (i) if any Lender shall, at least one Business Day before the date of any requested Revolving Borrowing, notify the Agent that the introduction of or any change in or in the interpretation of any law or regulation makes it unlawful, or that any central bank or other Governmental Authority asserts that it is unlawful, for such Lender or its Eurodollar Lending Office to perform its obligations -17- hereunder to make Adjusted Eurodollar Rate Advances or to fund or maintain Adjusted Eurodollar Rate Advances hereunder, (x) the right of the Borrower to select Adjusted Eurodollar Rate Advances for such Revolving Borrowing or any subsequent Revolving Borrowing shall be suspended until such Lender shall notify the Agent that the circumstances causing such suspension no longer exist, and each Revolving Advance comprising such Revolving Borrowing shall be a Base Rate Advance, and (y) the Borrower shall forthwith prepay in full all Adjusted Eurodollar Rate Advances of all Lenders then outstanding, together with accrued interest thereon; (ii) if fewer than two Reference Banks furnish timely information to the Agent for determining the Adjusted Eurodollar Rate for any Adjusted Eurodollar Rate Advances comprising any requested Revolving Borrowing, the right of the Borrower to select Adjusted Eurodollar Rate Advances for such Revolving Borrowing or any subsequent Revolving Borrowing shall be suspended until the Agent shall notify the Borrower and the Lenders that the circumstances causing such suspension no longer exist, and each Revolving Advance comprising such Revolving Borrowing shall be a Base Rate Advance; (iii) if the Majority Lenders shall, at least one Business Day before the date of any requested Revolving Borrowing, notify the Agent that the Adjusted Eurodollar Rate for Adjusted Eurodollar Rate Advances comprising such Revolving Borrowing will not adequately reflect the cost to such Majority Lenders of making, funding or maintaining their respective Adjusted Eurodollar Rate Advances for such Revolving Borrowing, the right of the Borrower to select Adjusted Eurodollar Rate Advances for such Revolving Borrowing or any subsequent Revolving Borrowing shall be suspended until the Agent shall notify the Borrower and the Lenders that the circumstances causing such suspension no longer exist, and each Revolving Advance comprising such Revolving Borrowing shall be a Base Rate Advance; and (iv) at least three Business Days prior to the delivery to the Agent pursuant to Section 2.03(a) of a Notice of Revolving Borrowing requesting any Revolving Borrowing consisting of Adjusted Eurodollar Rate Advances with an Interest Period of 12 months, the Borrower shall notify the Agent of such proposed Revolving Borrowing and set forth the information required by Section 2.03(a) with respect thereto. The Agent shall promptly notify each Lender of the Borrower's intention to select such 12 month Interest Period. If, at least one Business Day prior to the day on which such Notice of Revolving Borrowing is otherwise required to be delivered to the Agent pursuant to Section 2.03(a), a Lender notifies the Agent that such Lender is not willing to fund its Revolving Advance for such 12 month -18- Interest Period, the Agent shall so advise the Borrower and the Borrower shall select an alternative Interest Period with a duration of less than 12 months for such Revolving Borrowing. (c) Each Notice of Revolving Borrowing shall be irrevocable and binding on the Borrower. In the case of any Revolving Borrowing which the related Notice of Revolving Borrowing specifies is to be comprised of Adjusted Eurodollar Rate Advances, the Borrower shall indemnify each Lender against any loss, cost or expense incurred by such Lender as a result of any failure to fulfill on or before the date specified in such Notice of Revolving Borrowing for such Revolving Borrowing the applicable conditions set forth in Article III, including, without limitation, any loss (including loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund the Revolving Advance to be made by such Lender as part of such Revolving Borrowing when such Revolving Advance, as a result of such failure, is not made on such date. (d) Unless the Agent shall have received notice from a Lender prior to the time of any Revolving Borrowing that such Lender will not make available to the Agent such Lender's ratable portion of such Revolving Borrowing, the Agent may assume that such Lender has made such portion available to the Agent on the date of such Revolving Borrowing in accordance with subsection (a) of this Section 2.03 and the Agent may, in reliance upon such assumption, make available to the Borrower on such date a corresponding amount. If and to the extent that such Lender shall not have so made such ratable portion available to the Agent, such Lender and the Borrower severally agree to repay to the Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Agent, at (i) in the case of the Borrower, the interest rate applicable at the time to Revolving Advances comprising such Revolving Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. If such Lender shall repay to the Agent such corresponding amount, such amount so repaid shall constitute such Lender's Revolving Advance as part of such Revolving Borrowing for purposes of this Agreement. (e) The failure of any Lender to make the Revolving Advance to be made by it as part of any Revolving Borrowing shall not relieve any other Lender of its obligation, if any, hereunder to make its Revolving Advance on the date of such Revolving Borrowing, but no Lender shall be responsible for the failure of any other Lender to make the Revolving Advance to be made by such other Lender on the date of any Revolving Borrowing. SECTION 2.04. The Competitive Bid Advances. (a) Each Lender severally agrees that the Borrower may make Competitive -19- Bid Borrowings under this Section 2.04 from time to time on any Business Day during the period from the date hereof until the date occurring 30 days prior to the Termination Date in the manner set forth below; provided that, following the making of each Competitive Bid Borrowing, the aggregate amount of the Advances then outstanding shall not exceed the aggregate amount of the Commitments of the Lenders (computed without regard to any Competitive Bid Reduction). (i) The Borrower may request a Competitive Bid Borrowing under this Section 2.04 by delivering to the Agent, by telecopier, telex or cable, confirmed immediately in writing, a notice of a Competitive Bid Borrowing (a "Notice of Competitive Bid Borrowing"), in substantially the form of Exhibit B-2 hereto, specifying the date and aggregate amount of the proposed Competitive Bid Borrowing, the maturity date for repayment of each Competitive Bid Advance to be made as part of such Competitive Bid Borrowing (which maturity date may not be earlier than the date occurring 30 days after the date of such Competitive Bid Borrowing or later than the Termination Date), the interest payment date or dates relating thereto, and any other terms to be applicable to such Competitive Bid Borrowing, not later than 10:00 A.M. (New York City time) (A) at least one Business Day prior to the date of the proposed Competitive Bid Borrowing, if the Borrower shall specify in the Notice of Competitive Bid Borrowing that the rates of interest to be offered by the Lenders shall be fixed rates per annum and (B) at least four Business Days prior to the date of the proposed Competitive Bid Borrowing, if the Borrower shall instead specify in the Notice of Competitive Bid Borrowing the basis to be used by the Lenders in determining the rates of interest to be offered by them. The Borrower shall pay to the Agent in connection with each request for a Competitive Bid Borrowing, promptly after receipt of an invoice therefor, a competitive bid administrative fee in the amount specified in the Fee Letter. The Agent shall in turn promptly notify each Lender of each request for a Competitive Bid Borrowing received by it from the Borrower by sending such Lender a copy of the related Notice of Competitive Bid Borrowing. (ii) Each Lender may, if, in its sole discretion, it elects to do so, irrevocably offer to make one or more Competitive Bid Advances to the Borrower as part of such proposed Competitive Bid Borrowing at a rate or rates of interest specified by such Lender in its sole discretion, by notifying the Agent (which shall give prompt notice thereof to the Borrower), before 10:00 A.M. (New York City time) (A) on the date of such proposed Competitive Bid Borrowing, in the case of a Notice of Competitive Bid Borrowing delivered pursuant to clause (A) of paragraph (i) above and (B) three Business Days before the date of such proposed Competitive -20- Bid Borrowing, in the case of a Notice of Competitive Bid Borrowing delivered pursuant to clause (B) of paragraph (i) above, of the minimum amount and maximum amount of each Competitive Bid Advance which such Lender would be willing to make as part of such proposed Competitive Bid Borrowing (which amounts may, subject to the proviso to the first sentence of this Section 2.04(a), exceed such Lender's Commitment), the rate or rates of interest therefor (specified to the nearest 1/10,000th of 1%) and such Lender's Applicable Lending Office with respect to such Competitive Bid Advance; provided that if the Agent in its capacity as a Lender shall, in its sole discretion, elect to make any such offer, it shall notify the Borrower of such offer before 9:00 A.M. (New York City time) on the date on which notice of such election is to be given to the Agent by the other Lenders. If any Lender shall elect not to make such an offer, such Lender shall so notify the Agent, before 10:00 A.M. (New York City time) on the date on which notice of such election is to be given to the Agent by the other Lenders, and such Lender shall not be obligated to, and shall not, make any Competitive Bid Advance as part of such Competitive Bid Borrowing; provided that the failure by any Lender to give such notice shall not cause such Lender to be obligated to make any Competitive Bid Advance as part of such proposed Competitive Bid Borrowing. It is understood and agreed that the Borrower may not accept any offer to make a Competitive Bid Advance if such offer is not made on a timely basis or otherwise fails to comply with the requirements of this Agreement. (iii) The Borrower shall, in turn, (A) before 11:00 A.M. (New York City time) on the date of such proposed Competitive Bid Borrowing, in the case of a Notice of Competitive Bid Borrowing delivered pursuant to clause (A) of paragraph (i) above and (B) before 1:00 P.M. (New York City time) three Business Days before the date of such proposed Competitive Bid Borrowing, in the case of a Notice of Competitive Bid Borrowing delivered pursuant to clause (B) of paragraph (i) above, either (x) cancel such Competitive Bid Borrowing by giving the Agent notice to that effect, or (y) accept one or more of the offers made by any Lender or Lenders pursuant to paragraph (ii) above, in ascending order, from the lowest cost to the highest cost acceptable to the Borrower in its sole discretion (subject, if necessary, to ratable allocation between or among Lenders offering the same interest rates), by giving notice to the Agent of the amount of each Competitive Bid Advance (which amount shall be equal to or greater than the minimum amount, and equal to or less than the maximum amount, notified to the Borrower -21- by the Agent on behalf of such Lender for such Competitive Bid Advance pursuant to paragraph (ii) above) to be made by each Lender as part of such Competitive Bid Borrowing, and reject any remaining offers made by Lenders pursuant to paragraph (ii) above by giving the Agent notice to that effect, provided that the aggregate principal amount of each Competitive Bid Borrowing may not exceed the applicable amount requested in the relevant Notice of Competitive Bid Borrowing. (iv) If the Borrower notifies the Agent that such Competitive Bid Borrowing is cancelled pursuant to paragraph (iii)(x) above, the Agent shall give prompt notice thereof to the Lenders and such Competitive Bid Borrowing shall not be made. (v) If the Borrower accepts one or more of the offers made by any Lender or Lenders pursuant to paragraph (iii)(y) above, the Agent shall in turn promptly notify (A) each Lender that has made an offer as described in paragraph (ii) above, of the date and aggregate amount of such Competitive Bid Borrowing and whether or not any offer or offers made by such Lender pursuant to paragraph (ii) above have been accepted by the Borrower, (B) each Lender that is to make a Competitive Bid Advance as part of such Competitive Bid Borrowing, of the amount of each Competitive Bid Advance to be made by such Lender as part of such Competitive Bid Borrowing and (C) each Lender that is to make a Competitive Bid Advance as part of such Competitive Bid Borrowing, upon receipt, that the Agent has received forms of documents appearing to fulfill the applicable conditions set forth in Article III. Each Lender that is to make a Competitive Bid Advance as part of such Competitive Bid Borrowing shall, before 12:00 noon (New York City time) on the date of such Competitive Bid Borrowing specified in the notice received from the Agent pursuant to clause (A) of the preceding sentence or any later time when such Lender shall have received notice from the Agent pursuant to clause (C) of the preceding sentence, make available for the account of its Applicable Lending Office to the Agent at its address referred to in Section 8.02 such Lender's portion of such Competitive Bid Borrowing, in same day funds. Upon fulfillment of the applicable conditions set forth in Article III and after receipt by the Agent of such funds, the Agent will make such funds available to the Borrower at the Agent's aforesaid address. Promptly after each Competitive Bid Borrowing the Agent will notify each Lender of the amount of the Competitive Bid Borrowing, the consequent Competitive Bid Reduction and the dates upon which such Competitive Bid Reduction commenced and will terminate. -22- (b) Each Competitive Bid Borrowing shall be in an aggregate amount not less than $10,000,000 or an integral multiple of $1,000,000 in excess thereof and, following the making of each Competitive Bid Borrowing, the Borrower shall be in compliance with the limitation set forth in the proviso to the first sentence of subsection (a) above. (c) Within the limits and on the conditions set forth in this Section 2.04, the Borrower may from time to time borrow under this Section 2.04, repay or prepay pursuant to subsection (d) below, and reborrow under this Section 2.04, provided that a Competitive Bid Borrowing shall not be made within three Business Days of the date of any other Competitive Bid Borrowing. (d) The Borrower shall repay to the Agent for the account of each Lender which has made a Competitive Bid Advance, or each other holder of a Competitive Bid Note, on the maturity date of each Competitive Bid Advance (such maturity date being that specified by the Borrower for repayment of such Competitive Bid Advance in the related Notice of Competitive Bid Borrowing delivered pursuant to subsection (a)(i) above and provided in the Competitive Bid Note evidencing such Competitive Bid Advance), the then unpaid principal amount of such Competitive Bid Advance. The Borrower shall have no right to prepay any principal amount of any Competitive Bid Advance unless, and then only on the terms, specified by the Borrower for such Competitive Bid Advance in the related Notice of Competitive Bid Borrowing delivered pursuant to subsection (a)(i) above and set forth in the Competitive Bid Note evidencing such Competitive Bid Advance. (e) The Borrower shall pay interest on the unpaid principal amount of each Competitive Bid Advance from the date of such Competitive Bid Advance to the date the principal amount of such Competitive Bid Advance is repaid in full, at the rate of interest for such Competitive Bid Advance specified by the Lender making such Competitive Bid Advance in its notice with respect thereto delivered pursuant to subsection (a)(ii) above, payable on the interest payment date or dates specified by the Borrower for such Competitive Bid Advance in the related Notice of Competitive Bid Borrowing delivered pursuant to subsection (a)(i) above, as provided in the Competitive Bid Note evidencing such Competitive Bid Advance. (f) The indebtedness of the Borrower resulting from each Competitive Bid Advance made to the Borrower as part of a Competitive Bid Borrowing shall be evidenced by a separate Competitive Bid Note of the Borrower payable to the order of the Lender making such Competitive Bid Advance. SECTION 2.05. Facility Fee. The Borrower agrees to pay to the Agent for the account of each Lender (other than the Designated Bidders) a facility fee (the "Facility Fee") on the maximum amount of such Lender's Commitment (regardless of -23- utilization) from the date hereof in the case of each Bank and from the effective date specified in the Assignment and Acceptance pursuant to which it became a Lender in the case of each other Lender until the Termination Date at a rate of (i) 0.125% per annum during any period in which the Borrower has maintained Level I Status, (ii) 0.15% per annum during any period in which the Borrower has maintained Level II Status, (iii) 0.175% per annum during any period in which the Borrower has maintained Level III Status, (iv) 0.225% per annum during any period in which the Borrower has maintained Level IV Status and (v) 0.50% per annum during any period in which the Borrower has maintained Level V Status, payable on the last day of each calendar quarter, commencing September 30, 1994, and on the Termination Date. SECTION 2.06. Reduction of the Commitments. The Borrower shall have the right, upon at least three Business Days' notice to the Agent, irrevocably to terminate in whole or reduce ratably in part the respective Commitments of the Lenders, provided that the aggregate amount of the Commitments of the Lenders shall not be reduced to an amount which is less than the aggregate principal amount of the Advances then outstanding and provided, further, that each partial reduction shall be in the aggregate amount of $10,000,000 or an integral multiple of $1,000,000 in excess thereof. SECTION 2.07. Repayment of Revolving Advances. The Borrower shall repay the principal amount of each Revolving Advance made by each Lender on the last day of the Interest Period for such Advance. SECTION 2.08. Interest on Advances. (a) Ordinary Interest. The Borrower shall pay interest on the unpaid principal amount of each Revolving Advance made by each Lender from the date of such Revolving Advance until such principal amount shall be paid in full, at the following rates per annum: (i) Base Rate Advances. If such Revolving Advance is a Base Rate Advance, a rate per annum equal at all times to the Base Rate in effect from time to time, payable quarterly on the last day of each calendar quarter and on the date such Base Rate Advance shall be paid in full. (ii) Adjusted Eurodollar Rate Advances. If such Revolving Advance is a Adjusted Eurodollar Rate Advance, a rate per annum equal at all times during the Interest Period for such Revolving Advance to the sum of the Adjusted Eurodollar Rate for such Interest Period plus the Applicable Eurodollar Rate Margin in effect from time to time, payable on the last day of such Interest Period and, if such Interest Period has a duration of more than three months, on each day which occurs during such Interest Period every three months from the first day of such Interest Period. -24- (b) Default Interest. If any amount of principal of an Advance is not paid when due (whether at stated maturity, by acceleration or otherwise), then (x) the principal amount of each Advance shall bear interest, from the date on which such amount is due until such amount is paid in full, payable on demand, at a rate per annum equal at all times to the greater of (1) 2% per annum above the rate per annum required to be paid on such Advance immediately prior to the date on which such amount became due and (2) 2% per annum above the Base Rate in effect from time to time and (y) all interest, fees and other amounts payable hereunder which are not paid when due shall bear interest, from the date on which any such amount referred to in this clause (y) is due until such amount is paid in full, payable on demand, at a rate per annum equal at all times to 2% per annum above the Base Rate in effect from time to time. SECTION 2.09. Interest Rate Determination. (a) Each Reference Bank agrees to furnish to the Agent timely information for the purpose of determining each Adjusted Eurodollar Rate. If any one of the Reference Banks shall not furnish such timely information to the Agent for the purpose of determining any such interest rate, but subject to Section 2.03(b)(ii), the Agent shall determine such interest rate on the basis of timely information furnished by the remaining Reference Banks. (b) The Agent shall give prompt notice to the Borrower and the Lenders of the applicable interest rate determined by the Agent for purposes of Section 2.08(a)(ii), and the applicable rate, if any, furnished by each Reference Bank for the purpose of determining the applicable interest rate under Section 2.08(a)(ii). SECTION 2.10. Prepayments of Revolving Advances. (a) The Borrower shall have no right to prepay any principal amount of any Advances other than as provided in subsection (b) below. (b) The Borrower may, upon at least three Business Days' notice to the Agent (in the case of Adjusted Eurodollar Rate Advances), and upon one Business Day's notice to the Agent (in the case of Base Rate Advances), in each case stating the proposed date and aggregate principal amount of the prepayment, and if such notice is given the Borrower shall, prepay the outstanding principal amounts of the Advances comprising part of the same Revolving Borrowing in whole or ratably in part, together with accrued interest to the date of such prepayment on the principal amount prepaid; provided, however, that (x) each partial prepayment shall be in an aggregate principal amount not less than $5,000,000 and (y) in the case of any such prepayment of an Adjusted Eurodollar Rate Advance, the Borrower shall be -25- obligated to reimburse the Lenders in respect thereof pursuant to Section 8.04(b). SECTION 2.11. Increased Costs. (a) If, due to either (i) the introduction of or any change (other than any change by way of imposition or increase of reserve requirements included in the Adjusted Eurodollar Rate Reserve Percentage) in or in the interpretation of any law or regulation or (ii) the compliance with any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law), there shall be any increase in the cost to any Lender of agreeing to make or making, funding or maintaining Adjusted Eurodollar Rate Advances, then the Borrower shall from time to time, upon demand by such Lender (with a copy of such demand to the Agent), pay to the Agent for the account of such Lender additional amounts sufficient to compensate such Lender for such increased cost; provided that, before making any such demand, each Lender agrees to use its best efforts (consistent with its internal policy and legal and regulatory restrictions) to designate a different Applicable Lending office if the making of such a designation would avoid the need for, or reduce the amount of, such increased cost and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender. A certificate as to the amount of such increased cost, submitted to the Borrower and the Agent by such Lender, shall be conclusive and binding for all purposes, in the absence of manifest error. (b) If any Lender (other than the Designated Bidders) determines that compliance with any law or regulation or any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law) affects or would affect the amount of capital required or expected to be maintained by such Lender or any corporation controlling such Lender and that the amount of such capital is increased by or based upon the existence of such Lender's commitment to lend hereunder and other commitments of this type, then, upon demand by such Lender (with a copy of such demand to the Agent), the Borrower shall immediately pay to the Agent for the account of such Lender, from time to time as specified by such Lender, additional amounts sufficient to compensate such Lender or such corporation in the light of such circumstances, to the extent that such Lender reasonably determines such increase in capital to be allocable to the existence of such Lender's commitment to lend hereunder. A certificate as to such amounts submitted to the Borrower and the Agent by such Lender shall be conclusive and binding for all purposes, in the absence of manifest error. (c) Except as provided in this subsection (c), failure on the part of any Lender to demand compensation for any increased costs or reduction in amounts received or receivable or reduction in return on capital with respect to any period shall not constitute a waiver of such Lender's right to demand compensation with respect to any other period. The protection of -26- this Section 2.11 shall be available to each Lender regardless of any possible contention of the invalidity or inapplicability of the law, rule, regulation, guideline or other change or condition which shall have occurred or been imposed so long as it shall be customary for Lenders affected thereby to comply therewith. No Lender shall be entitled to compensation under this Section 2.11 for any costs incurred or reductions suffered with respect to any date unless it shall have notified the Borrower that it will demand compensation for such costs or reductions not more than 90 days after the later of (i) such date and (ii) the date on which it shall have become aware of such costs or reductions. In the event the Borrower shall reimburse any Lender pursuant to this Section 2.11 for any cost and the Lender shall subsequently receive a refund in respect thereof, the Lender shall so notify the Borrower and, upon the Borrower's request, will pay to the Borrower the portion of such refund which it shall determine in good faith to be allocable to the cost so reimbursed. SECTION 2.12. Payments and Computations. (a) The Borrower shall make each payment hereunder and under the Notes not later than 11:00 A.M. (New York City time) on the day when due in U.S. dollars to the Agent at its address referred to in Section 8.02 in immediately available funds. The Agent will promptly thereafter cause to be distributed like funds relating to the payment of principal or interest or the Facility Fee ratably (other than amounts payable pursuant to Section 2.04, 2.11, 2.13 or 8.04(b)) to the Lenders for the account of their respective Applicable Lending Offices, and like funds relating to the payment of any other amount payable to any Lender to such Lender for the account of its Applicable Lending Office, in each case to be applied in accordance with the terms of this Agreement. Upon its acceptance of an Assignment and Acceptance and recording of the information contained therein in the Register pursuant to Section 8.07(g), from and after the effective date specified in such Assignment and Acceptance, the Agent shall make all payments hereunder and under the Notes in respect of the interest assigned thereby to the Lender assignee thereunder, and the parties to such Assignment and Acceptance shall make all appropriate adjustments in such payments for periods prior to such effective date directly between themselves. (b) The Borrower hereby authorizes each Lender, if and to the extent payment owed to such Lender is not made when due hereunder or under any Note held by such Lender, to charge from time to time against any or all of the Borrower's general deposit accounts with such Lender any amount so due. (c) All computations of interest pursuant to clauses (i) or (ii) of the definition of Base Rate shall be made by the Agent on the basis of a year of 365 or 366 days, as the case may be, and all computations of interest based on the Adjusted Eurodollar Rate or the Federal Funds Rate and of the Facility Fee shall be made by the Agent on the basis of a year of 360 days, in -27- each case for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest or Facility Fee is payable. Each determination by the Agent of an interest rate hereunder shall be conclusive and binding for all purposes, in the absence of manifest error. (d) Whenever any payment hereunder or under the Notes shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest or the Facility Fee, as the case may be; provided, however, if such extension would cause payment of interest on or principal of Adjusted Eurodollar Rate Advances to be made in the next following calendar month, such payment shall be made on the next preceding Business Day. (e) Unless the Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Lenders hereunder that the Borrower will not make such payment in full, the Agent may assume that the Borrower has made such payment in full to the Agent on such date and the Agent may, in reliance upon such assumption, cause to be distributed to each Lender on such due date an amount equal to the amount then due such Lender. If and to the extent that the Borrower shall not have so made such payment in full to the Agent, each Lender shall repay to the Agent forthwith on demand such amount distributed to such Lender together with interest thereon, for each day from the date such amount is distributed to such Lender until the date such Lender repays such amount to the Agent, at the Federal Funds Rate. SECTION 2.13. Taxes. (a) Any and all payments by the Borrower hereunder or under the Notes shall be made, in accordance with Section 2.12, free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding, in the case of each Lender and the Agent, taxes imposed on its net income, and franchise taxes imposed on it, by the jurisdiction under the laws of which such Lender or the Agent (as the case may be) is organized or any political subdivision thereof and, in the case of each Lender, taxes imposed on its net income, and franchise taxes imposed on it, by the jurisdiction of such Lender's Applicable Lending Office or any political subdivision thereof (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as "Taxes"). If the Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder or under any Note to any Lender or the Agent, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.13) such Lender or the Agent (as the case may be) receives an amount equal to the sum it would have -28- received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law. (b) In addition, the Borrower agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies which arise from any payment made hereunder or under the Notes or from the execution, delivery or registration of, or otherwise with respect to, this Agreement or the Notes (hereinafter referred to as "Other Taxes"). (c) The Borrower will indemnify each Lender and the Agent for the full amount of Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section 2.13) paid by such Lender or the Agent (as the case may be) and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted. This indemnification shall be made within 30 days from the date such Lender or the Agent (as the case may be) makes written demand therefor. (d) Within 30 days after the date of any payment of Taxes, the Borrower will furnish to the Agent, at its address referred to in Section 8.02, the original or a certified copy of a receipt evidencing payment thereof. If no Taxes are payable in respect of any payment hereunder or under the Notes, the Borrower will furnish to the Agent, at such address, a certificate from each appropriate taxing authority, or an opinion of counsel acceptable to the Agent, in either case stating that such payment is exempt from or not subject to Taxes. (e) Each Lender organized under the laws of a jurisdiction outside the United States, on or prior to the date of its execution and delivery of this Agreement in the case of each initial Lender and on the date of the Assignment and Acceptance pursuant to which it becomes a Lender in the case of each other Lender, and from time to time thereafter if requested in writing by the Borrower (but only so long as such Lender remains lawfully able to do so), shall provide the Borrower with Internal Revenue Service form 1001 or 4224, as appropriate, or any successor form prescribed by the Internal Revenue Service, certifying that such Lender is entitled to benefits under an income tax treaty to which the United States is a party which reduces the rate of withholding tax on payments of interest or certifying that the income receivable pursuant to this Agreement is effectively connected with the conduct of a trade or business in the United States. If the form provided by a Lender at the time such Lender first becomes a party to this Agreement indicates a United States interest withholding tax rate in excess -29- of zero, withholding tax at such rate shall be considered excluded from "Taxes" as defined in Section 2.13(a). (f) For any period with respect to which a Lender has failed to provide the Borrower with the appropriate form described in Section 2.13(e) (other than if such failure is due to a change in law occurring subsequent to the date on which a form originally was required to be provided, or if such form otherwise is not required under the first sentence of subsection (e) above), such Lender shall not be entitled to indemnification under Section 2.13(a) with respect to Taxes imposed by the United States; provided, however, that should a Lender become subject to Taxes because of its failure to deliver a form required hereunder, the Borrower shall take such steps as the Lender shall reasonably request to assist the Lender to recover such Taxes. (g) Notwithstanding any contrary provisions of this Agreement, in the event that a Lender that originally provided such form as may be required under Section 2.13(e) thereafter ceases to qualify for complete exemption from United States withholding tax, such Lender may assign its interest under this Agreement to any assignee and such assignee shall be entitled to the same benefits under this Section 2.13 as the assignor provided that the rate of United States withholding tax applicable to such assignee shall not exceed the rate then applicable to the assignor. (h) Without prejudice to the survival of any other agreement of the Borrower hereunder, the agreements and obligations of the Borrower contained in this Section 2.13 shall survive the payment in full of principal and interest hereunder and under the Notes. (i) Any Lender claiming any additional amounts payable pursuant to this Section 2.13 shall use its best efforts (consistent with its internal policy and legal and regulatory restrictions) to change the jurisdiction of its Applicable Lending Office if the making of such a change would avoid the need for, or reduce the amount of, any such additional amounts which may thereafter accrue and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender. A certificate of any Lender claiming compensation under this Section 2.13 shall be conclusive and binding for all purposes, in the absence of manifest error. SECTION 2.14. Sharing of Payments, Etc. If any Lender shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of the Revolving Advances made by it (other than pursuant to Section 2.11 or 2.13) in excess of its ratable share of payments on account of the Revolving Advances obtained by all the Lenders, such Lender shall forthwith purchase from the other Lenders such participations in the Revolving Advances made by them as shall be -30- necessary to cause such purchasing Lender to share the excess payment ratably with each of them, provided, however, that if all or any portion of such excess payment is thereafter recovered from such purchasing Lender, such purchase from each Lender shall be rescinded and such Lender shall repay to the purchasing Lender the purchase price to the extent of such recovery together with an amount equal to such Lender's ratable share (according to the proportion of (i) the amount of such Lender's required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered. The Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this Section 2.14 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation. ARTICLE III CONDITIONS OF LENDING SECTION 3.01. Conditions Precedent to Initial Advances. The obligation of each Lender (other than the Designated Bidders) to make its initial Advance is subject to the conditions precedent that (a) the Closing Date shall have occurred on or prior to June 29, 1994, (b) all fees and expenses payable to the Agent pursuant to the Fee Letter or to the Agent and the Lenders pursuant to this Agreement on or prior to the Closing Date shall have been paid in full, (c) the Borrower shall have repaid or prepaid or cause to be repaid or prepaid all Advances (as defined in the Existing Agreement) and the interest thereon and all fees, expenses and other amounts payable by the Borrower under the Existing Agreement, and the unused Commitments (as defined in the Existing Agreement) of the Lenders (as defined in the Existing Agreement), determined after giving effect to the repayment of all such Advances, shall have been reduced to zero and (d) the Agent shall have received on or before the day of such initial Borrowing the following, each dated as of the Closing Date, in form and substance satisfactory to the Agent and (except for the Revolving Notes) in sufficient copies for each Lender: (a) A Revolving Note payable to the order of each Lender in the principal amount of such Lender's Commitment. (b) Certified copies of the resolutions of the Board of Directors of the Borrower approving this Agreement and the Notes, and of all documents evidencing other necessary corporate action and governmental approvals, if any, with respect to this Agreement and the Notes. -31- (c) A certificate of the Secretary or an Assistant Secretary of the Borrower certifying the names and true signatures of the officers of the Borrower authorized to sign this Agreement and the Notes and the other documents to be delivered hereunder. (d) A favorable opinion of Jones, Day, Reavis & Pogue, counsel for the Borrower, substantially in the form of Exhibit E hereto and as to such other matters as any Lender through the Agent may reasonably request. (e) A favorable opinion of Sidley & Austin, counsel for the Agent, substantially in the form of Exhibit F hereto. SECTION 3.02. Conditions Precedent to Each Borrowing. The obligation of each Lender to make a Revolving Advance on the occasion of each Revolving Borrowing (including the initial Revolving Borrowing) shall be subject to the further conditions precedent that the Agent shall have received the Notice of Revolving Borrowing with respect thereto and that on the date of such Borrowing (a) the following statements shall be true (and each of the giving of the applicable Notice of Revolving Borrowing and the acceptance by the Borrower of the proceeds of such Revolving Borrowing shall constitute a representation and warranty by the Borrower that on the date of such Revolving Borrowing such statements are true): (i) the representations and warranties contained in Section 4.01 (excluding (except with respect to the initial Advance hereunder) those contained in subsections (f), (g) and (k) thereof) are correct on and as of the date of such Revolving Borrowing, before and after giving effect to such Revolving Borrowing and to the application of the proceeds therefrom, as though made on and as of such date, and (ii) no Default has occurred and is continuing, or would result from such Revolving Borrowing or from the application of the proceeds therefrom; and (b) the Agent shall have received such other approvals, opinions or documents as any Lender (other than the Designated Bidders) through the Agent may reasonably request. SECTION 3.03. Conditions Precedent to Each Competitive Bid Borrowing. The obligation of each Lender which is to make a Competitive Bid Advance on the occasion of a Competitive Bid Borrowing (including the initial Competitive Bid Borrowing) to make such Competitive Bid Advance as part of such Competitive Bid Borrowing is subject to the conditions precedent that (i) the Agent shall have received the written confirmatory Notice of Competitive Bid Borrowing with respect thereto, (ii) on or before the date of such Competitive Bid Borrowing, but prior to such -32- Competitive Bid Borrowing, the Agent shall have received a Competitive Bid Note payable to the order of such Lender for each of the one or more Competitive Bid Advances to be made by such Lender as part of such Competitive Bid Borrowing, in a principal amount equal to the principal amount of the Competitive Bid Advance to be evidenced thereby and otherwise on such terms as were agreed to for such Competitive Bid Advance in accordance with Section 2.04 and (iii) on the date of such Competitive Bid Borrowing the following statements shall be true (and each of the giving of the applicable Notice of Competitive Bid Borrowing and the acceptance by the Borrower of the proceeds of such Competitive Bid Borrowing shall constitute a representation and warranty by the Borrower that on the date of such Competitive Bid Borrowing such statements are true): (a) the representations and warranties contained in Section 4.01 (excluding (except with respect to any Competitive Bid Advance to be made on the Closing Date) those contained in subsections (f), (g) and (k) thereof) are correct on and as of the date of such Competitive Bid Borrowing, before and after giving effect to such Competitive Bid Borrowing and to the application of the proceeds therefrom, as though made on and as of such date, (b) no Default has occurred and is continuing, or would result from such Competitive Bid Borrowing or from the application of the proceeds therefrom and (c) no event has occurred and no circumstance exists as a result of which the information concerning the Borrower that has been provided to the Agent and each Lender by the Borrower in connection herewith would include an untrue statement of a material fact or omit to state any material fact or any fact necessary to make the statements contained therein, in the light of the circumstances under which they were made, not misleading. ARTICLE IV REPRESENTATIONS AND WARRANTIES SECTION 4.01. Representations and Warranties of the Borrower. The Borrower represents and warrants as follows: (a) Corporate Existence. The Borrower is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. (b) Corporate Authorization. The execution, delivery and performance by the Borrower of this Agreement, the Notes and the other Loan Documents are within the Borrower's corporate powers, have been duly authorized by all necessary -33- corporate action, and do not contravene, or constitute a default under, (i) the Borrower's charter or by-laws, or (ii) any other Requirement of Law or (iii) any agreement, contractual restriction or other instrument binding on or, to the Borrower's knowledge, affecting the Borrower or result in the creation or imposition of any Lien on any material asset of the Borrower or any of its Subsidiaries. (c) Governmental Authorization. No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority is required for the due execution, delivery and performance by the Borrower of this Agreement, the Notes or any other Loan Document. (d) Binding Effect. This Agreement is, and the Notes and the other Loan Documents when delivered hereunder will be, legal, valid and binding obligations of the Borrower enforceable against the Borrower in accordance with their respective terms. (e) Financial Information. The balance sheets of the Borrower and its Consolidated Subsidiaries as at December 31, 1993 and March 31, 1994, respectively, and the related statements of income, cash flows and (in the case of such fiscal year only) stockholders' equity of the Borrower and its Consolidated Subsidiaries for the fiscal year ended December 31, 1993 and the fiscal quarter ended March 31, 1994, copies of which have been furnished to each Bank, fairly present the financial condition of the Borrower and its Consolidated Subsidiaries as at each such date and the results of the operations and cash flows of the Borrower and its Consolidated Subsidiaries for the period ended on each such date, all in accordance with generally accepted accounting principles consistently applied. (f) No Changes, etc. Since December 31, 1993, except for possible changes relating to the Borrower's roofing business segment, which appears in the financial statements of the Borrower and its Consolidated Subsidiaries for the fiscal year ended December 31, 1993 as a discontinued operation, there has occurred no event which has had or is reasonably likely to have a Material Adverse Effect. (g) Litigation. There is no pending or threatened action or proceeding affecting the Borrower or any of its Subsidiaries before any Governmental Authority or arbitrator, which has had or is reasonably likely to have a Material Adverse Effect. (h) Compliance with Margin Regulations. The Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying Margin Stock, and no proceeds of any Advance have been used in violation of any -34- Requirement of Law (including, without limitation, Regulation G, Regulation T, Regulation U and Regulation X). At no time would more than 25% of the value of the assets of the Borrower or the Borrower and its Consolidated Subsidiaries that are subject to any "arrangement" (as such term is used in Section 221.2(g) of Regulation U) hereunder be represented by Margin Stock. (i) Investment Company. The Borrower is not an "investment company" within the meaning of the Investment Company Act of 1940, as amended. (j) ERISA Matters. (i) Each member of the ERISA Group has fulfilled its obligations under the minimum funding standards of ERISA and the Internal Revenue Code with respect to each Plan and is in compliance in all material respects with the presently applicable provisions of ERISA and the Internal Revenue Code, and has not incurred any liability to the PBGC or a Plan under Title IV of ERISA that has not been paid in full other than a liability to the PBGC for premiums under Section 4007 of ERISA. (ii) No ERISA Event which might result in liability to the PBGC (other than for premiums payable under Title IV of ERISA) has occurred or is reasonably expected to occur with respect to any Plan. (iii) Schedule B (Actuarial Information) to the annual report (Form 5500 Series) with respect to each Plan whose liabilities are in excess of its assets by an amount greater than $100,000, copies of which have been filed with the Internal Revenue Service prior to the date hereof and furnished to the Agent and the Lenders listed on the signature pages hereof, is complete and accurate and fairly presents the funding status and financial condition of such Plan, and since the date of such Schedule B there has been no material adverse change in such funding status or financial condition. (iv) As of the date of this Agreement, neither the Borrower nor any ERISA Affiliate has incurred, or is reasonably expected to incur, any Withdrawal Liability which has not been paid in full to any Multiemployer Plan (other than Withdrawal Liabilities, if any, which in the aggregate are immaterial or nominal). (v) As of the date of this Agreement, neither the Borrower nor any ERISA Affiliate has received any notification that any Multiemployer Plan is in reorganization or has been terminated, within the meaning of Title IV of ERISA, and no Multiemployer Plan is reasonably expected to be in reorganization or to be terminated within the meaning of Title IV of ERISA, which reorganization or -35- termination would result in any liability of the Borrower or any ERISA Affiliate (other than liabilities, if any, which in the aggregate are immaterial or nominal). (k) Environmental Matters. Neither the Borrower nor any of its Subsidiaries has received notice or otherwise obtained knowledge of any Claim, demand, action, event, condition, report or investigation indicating or concerning any potential or actual liability which individually or in the aggregate has had or is reasonably likely to have a Material Adverse Effect arising in connection with (i) any non-compliance with or violation of any Environmental, Health or Safety Requirements of Law or (ii) the Release or threatened Release of any Contaminant into the environment. None of the Borrower or its Subsidiaries or any of their respective operations or present or past Property are subject to any investigation by, or any judicial or administrative proceeding, order, judgment, decree or settlement alleging or addressing (i) a violation of any Environmental, Health or Safety Requirement of Law; (ii) any Remedial Action; or (iii) any Claims or Liabilities and Costs arising from the Release or threatened Release of a Contaminant into the environment, which (in any such case referred to in the preceding clauses (i), (ii) or (iii)) has had or is reasonably likely to have a Material Adverse Effect, nor has the Borrower or any of its Subsidiaries received any notice of any of the foregoing which the Borrower in good faith believes is reasonably likely to have a Material Adverse Effect. No Environmental Lien has attached to any Property of the Borrower or any of its Subsidiaries which has had or is reasonably likely to have a Material Adverse Effect. ARTICLE V COVENANTS OF THE BORROWER SECTION 5.01. Affirmative Covenants. So long as any Note shall remain unpaid or any Lender shall have any Commitment hereunder, the Borrower agrees that, unless the Majority Lenders shall otherwise consent in writing: (a) Compliance with Laws, Etc. The Borrower will comply, and cause each of its Subsidiaries to comply, in all material respects with all applicable Requirements of Law. (b) Preservation of Corporate Existence. The Borrower will preserve and maintain, and cause each of its Subsidiaries to preserve and maintain, its corporate existence, corporate rights (charter and statutory), and corporate franchises; provided, however, that neither the Borrower nor any of its Subsidiaries shall be required to preserve any right or franchise if the Board of Directors of -36- the Borrower or such Subsidiary shall determine that the preservation thereof is no longer necessary or desirable in the conduct of the business of the Borrower or such Subsidiary, as the case may be, and that the loss thereof is not disadvantageous in any material respect to the Borrower, such Subsidiary or the Lenders. Nothing in this Section 5.01(b) shall be deemed to prohibit any merger or consolidation involving the Borrower or any of its Subsidiaries which is permitted by Section 5.02(b). (c) Accuracy of Information Given to Lenders. The Borrower will use its best efforts to ensure that (i) all written information, exhibits or reports furnished by the Borrower or any of its Subsidiaries to the Agent or any Lender in connection herewith (other than financial projections) will at the time so furnished contain no untrue statement of a material fact and will not at such time omit to state any material fact or any fact necessary to make the statements contained therein not misleading, and (ii) all financial projections, if any, prepared by the Borrower and furnished by the Borrower to the Agent or any Lender in connection herewith will be prepared in good faith based upon reasonable assumptions (it being understood that any such projections will be subject to significant uncertainties and contingencies, and that no assurance can be given that any such projections will be realized). (d) Insurance. The Borrower will maintain, and cause each of its Subsidiaries to maintain, insurance with responsible and reputable insurance companies or associations in such amounts and covering such risks as is usually carried by companies engaged in similar businesses and owning similar properties in the same general areas in which the Borrower or such Subsidiary operates. (e) Books and Records. The Borrower will keep proper books of record and account in which entries in conformity with generally accepted accounting principles (and all legal requirements) shall be made of all dealings and transactions in relation to their businesses and activities. (f) Use of Proceeds. The proceeds of the Advances made under this Agreement will be used by the Borrower for any lawful purposes not prohibited by the terms of this Agreement, including, without limitation, acquisitions of companies and fees and expenses related to such acquisitions. None of such proceeds will be used in violation of any applicable Requirement of Law, including, without limitation, Regulation G, Regulation T, Regulation U and Regulation X. (g) Payment of Taxes, Etc. The Borrower will pay and discharge, and will cause each Subsidiary of the Borrower to -37- pay and discharge, before the same shall become delinquent, (i) all taxes, assessments and governmental charges or levies imposed upon it or upon it or upon its Property, and (ii) all lawful claims which, if unpaid, (x) might by law become a Lien upon its Property or (y) would otherwise be reasonably likely to have a Material Adverse Effect; provided, however, that neither the Borrower nor any of its Subsidiaries shall be required to pay or discharge any such tax, assessment, charge, levy or claim which is being contested in good faith by proper proceedings and as to which appropriate reserves are being maintained in accordance with GAAP. (h) Reporting Requirements. The Borrower will furnish to the Lenders: (i) as soon as available and in any event within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower, Consolidated balance sheets of the Borrower and its Subsidiaries as of the end of such quarter and Consolidated statements of income and cash flows of the Borrower and its Subsidiaries for the period commencing at the end of the previous fiscal year and ending with the end of such quarter, certified by the chief financial or accounting officer of the Borrower, together with (A) a certificate of said officer stating that no Default has occurred and is continuing or, if a Default has occurred and is continuing, a statement as to the nature thereof and the action that the Borrower has taken or proposes to take with respect thereto, and (B) a schedule in form satisfactory to the Agent of the computations used by the Borrower in determining compliance with the requirements and covenants contained in Section 5.02(c) and 5.02(d); (ii) as soon as available and in any event within 90 days after the end of each fiscal year of the Borrower, a copy of the annual report for such year for the Borrower and its Subsidiaries, containing financial statements for such year certified in a manner acceptable to the Majority Lenders by Ernst & Young or other independent public accountants acceptable to the Majority Lenders, together with (A) a certificate of such accounting firm stating that in the course of the regular audit of the business of the Borrower, which audit was conducted by such accounting firm in accordance with generally accepted auditing standards, such accounting firm has obtained no knowledge that a Default has occurred and is continuing, or, if, in the opinion of such accounting firm, a Default has occurred and is continuing, a statement as to the nature thereof and (B) a schedule in form satisfactory to the Agent of -38- the computations used by such accountants in determining, as of the end of such fiscal year, compliance with the requirements and covenants contained in Section 5.02(c) and 5.02(d); (iii) as soon as possible and in any event within two days after the occurrence of each Default continuing on the date of such statement, a statement of the chief financial or accounting officer of the Borrower setting forth details of such Default and the action which the Borrower has taken and proposes to take with respect thereto; (iv) as soon as possible and in any event (i) within thirty days after the Borrower or any ERISA Affiliate knows or has reason to know that any ERISA Event described in clause (a) of the definition of ERISA Event with respect to any Plan has occurred which reasonably could result in liability to the PBGC (other than liabilities, if any, which are immaterial or nominal in the aggregate) and (ii) within 10 days after the Borrower or any ERISA Affiliate knows or has reason to know that any other ERISA Event with respect to any Plan has occurred which reasonably could result in liability to the PBGC (other than liabilities, if any, which are immaterial or nominal in the aggregate), a statement of the chief financial or accounting officer of the Borrower describing such ERISA Event and the action, if any, that the Borrower or such ERISA Affiliate has taken or proposes to take with respect thereto; (v) promptly after the receipt thereof by the Borrower or any ERISA Affiliate, (A) copies of all reports and notices which could result in an adverse financial effect on the Borrower or any of its Subsidiaries which the Borrower or any ERISA Affiliate receives from the PBGC, the Internal Revenue Service or the U.S. Department of Labor with respect to any Plan, Multiemployer Plan or Multiple Employer Plan, (B) copies of each notice from the PBGC received by the Borrower or any ERISA Affiliate of the PBGC's intention to terminate any Plan or to have a trustee appointed to administer any Plan and (C) a copy of each notice from the sponsor of a Multiemployer Plan received by the Borrower or any ERISA Affiliate concerning (I) the imposition of Withdrawal Liability by a Multiemployer Plan, (II) the determination that a Multiemployer Plan is, or is expected to be, in reorganization within the meaning of Title IV of ERISA, (III) the termination of a Multiemployer Plan within the meaning of Title IV of ERISA or (IV) the amount of liability incurred, or expected to be incurred, by the Borrower or any ERISA -39- Affiliate in connection with any event described in clause (I), (II) or (III) above; (vi) promptly after the commencement thereof, notice of all actions, suits and proceedings before any domestic or foreign court or Governmental Authority affecting the Borrower or any of its Subsidiaries, of the type described in Section 4.01(g); (vii) promptly after the sending or filing thereof, copies of all proxy statements, financial statements and reports that the Borrower or any of its Subsidiaries sends to its stockholders generally, and copies of all regular, periodic and special reports, and all registration statements (other than any registration statement on Form S-8 or any successor form thereto), that the Borrower or any of its Subsidiaries files with the Securities and Exchange Commission or any Governmental Authority that may be substituted therefor, or with any national securities exchange; and (viii) such other information respecting the condition or operations, financial or otherwise, of the Borrower or any of its Subsidiaries as any Lender through the Agent may from time to time reasonably request. SECTION 5.02. Negative Covenants. So long as any Note or any amount due hereunder shall remain unpaid or any Lender shall have any Commitment hereunder, the Borrower will not, without the written consent of the Majority Lenders: (a) Liens, Etc. Create or suffer to exist, or permit any of its Subsidiaries to create or suffer to exist, any Lien upon or with respect to any of its Property, whether now owned or hereafter acquired, or assign, or permit any of its Subsidiaries to assign, any right to receive income in each case to secure or provide for the payment of any Debt of any Person; excluding, however, from the operation of the foregoing restrictions, (i) Existing Liens (including the replacement, extension or renewal of any such Existing Lien upon the same Property theretofore subject thereto and the replacement, extension or renewal (without increase of principal amount) of the Debt secured thereby), (ii) Liens for taxes, assessments or governmental charges or levies, not yet due and payable, or being contested in good faith and against which reserves have been established by the Borrower to the extent required under GAAP, (iii) Liens imposed by law, such as materialmen's, mechanics', carriers', workmen's, and repairmen's Liens and other similar Liens arising in the ordinary course of business securing obligations (other than Debt) which are not overdue -40- for a period of more than 30 days, (iv) pledges or deposits to secure obligations under workmen's compensation laws or similar legislation or to secure statutory obligations of the Borrower or any of its Subsidiaries which do not interfere with or adversely affect in any material respect the ordinary conduct of the business of the Borrower or any of its Subsidiaries, (v) Liens of landlords arising by operation of law or pursuant to leases entered into in the ordinary course of business securing rental obligations which are not overdue for a period of more than 30 days, (vi) Liens on property (including, without limitation, shares of capital stock) of a corporation existing at the time such corporation is merged with or into or consolidated with the Borrower or any of its Subsidiaries or at the time of a sale, lease or other disposition of the properties of such corporation as an entirety or substantially as an entirety to the Borrower or any of its Subsidiaries, provided, that (i) such Liens are not incurred in anticipation of such merger, consolidation or sale, lease or other disposition with or into the Borrower or any of its Subsidiaries and (ii) such Liens do not extend to any other Property of the Borrower or any of its Subsidiaries, (vii) Liens created in the ordinary course of business in favor of the United States of America or any State thereof, or any department, agency or political subdivision of the United States of America or any State thereof, to secure partial, progress, advance or other payments pursuant to any contract (other than for borrowed money) or statute, (viii) Liens created in the ordinary course of business by or resulting from any litigation or proceedings which are being contested in good faith, Liens arising in the ordinary course of business out of judgments or awards against the Borrower or any of its Subsidiaries with respect to which the Borrower or such Subsidiary is in good faith prosecuting an appeal or proceedings for review, or Liens incurred in the ordinary course of business by the Borrower or any of its Subsidiaries for the purpose of obtaining a stay or discharge in the course of any legal proceeding to which the Borrower or such Subsidiary is a party, (ix) easements, rights of way and other encumbrances on title to real property that do not render title to the Property encumbered thereby unmarketable or materially adversely affect the use of such Property for its intended purposes, (x) purchase money Liens upon or in Property acquired or held by the Borrower or any of its Subsidiaries in the ordinary course of business to secure the purchase price of such Property or to secure Debt incurred solely for the purpose of financing the acquisition, construction or improvement of any such Property to be subject to such Liens, or Liens existing on any such Property at the time of acquisition, or extensions, renewals or replacements of any of the foregoing for the same or a lesser amount, provided that no such Lien shall extend to or cover any Property other than the Property -41- being acquired, constructed or improved, and no such extension, renewal or replacement shall extend to or cover any Property not theretofore subject to the Lien being extended, renewed or replaced, and provided, further, that the aggregate principal amount of the Debt at any one time outstanding secured by Liens permitted by this clause (x) shall not exceed $10,000,000 at any one time outstanding and that any such Debt shall not otherwise be prohibited by the terms of this Agreement, and (xi) Liens not otherwise permitted hereunder securing Debt in an aggregate amount not to exceed at any time an amount equal to $35,000,000. (b) Mergers, Etc. Merge or consolidate with or into (unless the Borrower is the surviving corporation of such merger or consolidation), or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to, any Person, or permit any of its Subsidiaries to do so, except that (i) any Person may merge with and into the Borrower, (ii) any Subsidiary of the Borrower may merge with or into any other Person and (iii) any Subsidiary of the Borrower may sell or otherwise dispose of all or substantially all of its assets, provided that (w) immediately after giving effect to any such merger or sale or other disposition of assets referred to in clause (i), (ii) or (iii), no Default would exist, (x) the surviving corporation of any such merger referred to in clause (i) is, immediately after giving effect to such merger, the Borrower, (y) if the surviving corporation of any merger referred to in clause (ii) is not, immediately after giving effect to such merger, a Subsidiary of the Borrower, the Borrower and/or its Subsidiaries shall have received as consideration for such merger cash, property or securities representing the fair market value of the Borrower's and its Subsidiaries' interest in such Subsidiary immediately prior to such merger (as determined by the Board of Directors of the Borrower), and (z) in the case of any sale or other disposition referred to in clause (iii), the Borrower and/or its Subsidiaries shall have received as consideration for such sale or other disposition cash, property or securities representing the fair market value of such assets immediately prior to such sale or other disposition (as determined by the Board of Directors of the Borrower). (c) Interest Service Coverage. Permit, on the last day of March, June, September and December in each year, commencing September 30, 1994, the ratio of (i) Consolidated EBIT of the Borrower and its Consolidated Subsidiaries during the twelve-month period ending on such date to (ii) Consolidated Interest Expense of the Borrower and its Consolidated Subsidiaries for such twelve-month period to be less than 2.0 to 1.0. -42- (d) Adjusted Net Worth Ratio. Permit the ratio of (i) Consolidated Debt to (ii) the sum of (A) Consolidated Debt plus (B) Adjusted Net Worth of the Borrower and its Consolidated Subsidiaries to exceed 0.55 to 1.0 at any time. (e) Plan Terminations. Terminate, or permit any ERISA Affiliate to terminate, any Plan or Plans so as to result in liability of the Borrower or any ERISA Affiliate to the PBGC in excess of $5,000,000 in the aggregate, or permit to exist one or more events or conditions which reasonably present a material risk of a termination by the PBGC of any Plan or Plans with respect to which the Borrower or any ERISA Affiliate would, in the event of such termination, incur liability to the PBGC in excess of $5,000,000 in the aggregate. (f) Employee Benefit Costs and Liabilities. Fail to comply, or permit any ERISA Affiliate to fail to comply, with the minimum funding standards of ERISA and the Internal Revenue Code with respect to each Plan. ARTICLE VI EVENTS OF DEFAULT SECTION 6.01. Events of Default. If any of the following events ("Events of Default") shall occur and be continuing: (a) the Borrower shall fail to pay any principal of any Note when the same becomes due and payable, or shall fail to pay any interest on any Note or any other amount payable under this Agreement within five days of the due date thereof; or (b) any representation or warranty made (or deemed made in accordance with Section 3.02 or Section 3.03) by the Borrower herein or by the Borrower (or any of its officers) in connection with this Agreement shall prove to have been incorrect in any material respect when made (or deemed made); or (c) the Borrower shall fail to perform or observe any term, covenant or agreement contained in this Agreement on its part to be performed or observed, if such failure shall remain unremedied for 10 Business Days after written notice thereof shall have been given to the Borrower by the Agent or any Lender; or (d) the Borrower or any of its Subsidiaries shall fail to pay any principal of or premium or interest on any Debt which is outstanding in a principal amount of at least $10,000,000 in the aggregate (but excluding Debt evidenced -43- by the Notes) of the Borrower or such Subsidiary (as the case may be), when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Debt; or any other event shall occur or condition shall exist under any agreement or instrument relating to any such Debt and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to accelerate, or to permit the acceleration of, the maturity of such Debt; or any such Debt shall be declared to be due and payable, or required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or required sinking fund redemption payment), purchased or defeased, or an offer to prepay, redeem, purchase or defease such Debt shall be required to be made, in each case prior to the stated maturity thereof; or (e) the Borrower or any of its Subsidiaries shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against the Borrower or any of its Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, or other similar official for it or for any substantial part of its Property; or the Borrower or any of its Subsidiaries shall take any corporate action to authorize any of the actions set forth above in this subsection (e); or (f) any judgment or order for the payment of money in excess of $10,000,000 shall be rendered against the Borrower or any of its Subsidiaries and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order or (ii) there shall be any period of 10 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or (g) Any ERISA Event with respect to a Plan shall have occurred and, thirty days after notice thereof shall have been given to the Borrower by the Agent, (i) such ERISA Event shall still exist, (ii) such ERISA Event shall have caused or shall have created a material risk of the termination of or the appointment of a trustee with respect -44- to the affected Plan by or at the request of the PBGC and (iii) the sum (determined as of the date of occurrence of such ERISA Event) of the Insufficiency of such Plan and the Insufficiency of any and all other Plans with respect to which the events or circumstances described in the preceding clauses (i) and (ii) shall have occurred and then exist (or in the case of a Plan with respect to which an ERISA Event described in clauses (c) through (f) of the definition of ERISA Event shall have occurred and then exist, the liability related thereto) is equal to or greater than $5,000,000; or (h) The Borrower or any ERISA Affiliate shall have been notified by the sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability to such Multiemployer Plan in an amount that, when aggregated with all other amounts then required to be paid to Multiemployer Plans in connection with Withdrawal Liabilities (determined as of the date of such notification), exceeds $10,000,000; or (i) The Borrower or any ERISA Affiliate shall have been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or is being terminated, within the meaning of Title IV of ERISA, if as a result of such reorganization or termination the aggregate annual contributions of the Borrower and the ERISA Affiliates to all Multiemployer Plans that are then in reorganization or being terminated have been or will be increased over the amounts contributed to such Multiemployer Plans for the plan years that include the date hereof by an amount exceeding $10,000,000; or (j) Any person or group of persons (within the meaning of Section 13 or 14 of the Securities Exchange Act of 1934, as amended) shall have acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission under said Act) or control of 35% or more of the outstanding shares of common stock of the Borrower; or, during any period of twelve consecutive calendar months, individuals who were directors of the Borrower on the first day of such period shall cease to constitute a majority of the board of directors of the Borrower; then, and in any such event, the Agent (i) shall at the request, or may with the consent, of the Majority Lenders, by notice to the Borrower, declare the obligation of each Lender to make Advances to be terminated, whereupon the same shall forthwith terminate, and (ii) shall at the request, or may with the consent, of the Majority Lenders, by notice to the Borrower, declare the Notes, all interest thereon and all other amounts payable under this Agreement to be forthwith due and payable, whereupon the Notes, all such interest and all such amounts shall -45- become and be forthwith due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Borrower; provided, however, that in the event of an actual or deemed entry of an order for relief with respect to the Borrower or any of its Subsidiaries under the Federal Bankruptcy Code, (A) the obligation of each Lender to make Advances shall automatically be terminated and (B) the Notes, all such interest and all such amounts shall automatically become and be due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by the Borrower. ARTICLE VII THE AGENT SECTION 7.01. Authorization and Action. Each Lender hereby appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to the Agent by the terms hereof, together with such powers as are reasonably incidental thereto. As to any matters not expressly provided for by this Agreement (including, without limitation, enforcement or collection of the Notes), the Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Majority Lenders or all Lenders if required by Section 8.01, as applicable, and such instructions shall be binding upon all Lenders and all holders of Notes; provided, however, that the Agent shall not be required to take any action which exposes the Agent to personal liability or which is contrary to this Agreement or applicable law. The Agent agrees to give to each Lender prompt notice of each notice given to it by the Borrower pursuant to the terms of this Agreement. SECTION 7.02. Agent's Reliance, Etc. Neither the Agent nor any of its directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it or them under or in connection with this Agreement, except for its or their own gross negligence or willful misconduct. Without limitation of the generality of the foregoing, the Agent: (i) may treat the payee of any Note as the holder thereof until the Agent receives and accepts an Assignment and Acceptance entered into by the Lender which is the payee of such Note, as assignor, and an Eligible Assignee, as assignee, as provided in Section 8.07; (ii) may consult with legal counsel (including counsel for the Borrower), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (iii) makes no warranty or representation to any Lender and shall not be responsible to any Lender for any statements, warranties or -46- representations (whether written or oral) made in or in connection with this Agreement; (iv) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement on the part of the Borrower or to inspect the Property (including the books and records) of the Borrower; (v) shall not be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other instrument or document furnished pursuant hereto; and (vi) shall incur no liability under or in respect of this Agreement by acting upon any notice, consent, certificate or other instrument or writing (which may be by telecopier, telegram, cable or telex) believed by it to be genuine and signed or sent by the proper party or parties. SECTION 7.03. Citibank and Affiliates. With respect to its Commitment, the Advances made by it and the Notes issued to it, Citibank shall have the same rights and powers under this Agreement as any other Lender and may exercise the same as though it were not the Agent; and the term "Lender" or "Lenders" shall, unless otherwise expressly indicated, include Citibank in its individual capacity. Citibank and its affiliates may accept deposits from, lend money to, act as trustee under indentures of, and generally engage in any kind of business with, the Borrower, any of its subsidiaries and any Person who may do business with or own securities of the Borrower or any such subsidiary, all as if Citibank were not the Agent and without any duty to account therefor to the Lenders. SECTION 7.04. Lender Credit Decision. Each Lender acknowledges that it has, independently and without reliance upon the Agent or any other Lender and based on the financial statements referred to in Section 4.01 and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement. SECTION 7.05. Indemnification. The Lenders (other than the Designated Bidders) agree to indemnify the Agent (to the extent not reimbursed by the Borrower), ratably according to the respective principal amounts of the Revolving Notes then held by each of them (or if no Revolving Notes are at the time outstanding or if any Revolving Notes are held by Persons which are not Lenders, ratably according to the respective amounts of their Commitments), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against the Agent in any way relating to or arising out of this -47- Agreement or any action taken or omitted by the Agent under this Agreement, provided that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Agent's gross negligence or willful misconduct. Without limitation of the foregoing, each Lender (other than the Designated Bidders) agrees to reimburse the Agent promptly upon demand for its ratable share of any out-of-pocket expenses (including counsel fees) incurred by the Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, to the extent that the Agent is not reimbursed for such expenses by the Borrower. SECTION 7.06. Successor Agent. The Agent may resign at any time by giving written notice thereof to the Lenders and the Borrower and may be removed at any time with or without cause by the Majority Lenders. Upon any such resignation or removal, the Majority Lenders shall have the right to appoint a successor Agent. If no successor Agent shall have been so appointed by the Majority Lenders, and shall have accepted such appointment, within 30 days after the retiring Agent's giving of notice of resignation or the Majority Lenders' removal of the retiring Agent, then the retiring Agent may, on behalf of the Lenders, appoint a successor Agent, which shall be a commercial bank organized under the laws of the United States of America or of any State thereof and having total assets in excess of $3,000,000,000 and a combined capital and surplus of at least $150,000,000. Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations under this Agreement. After any retiring Agent's resignation or removal hereunder as Agent, the provisions of this Article VII shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement. SECTION 7.07. Agent's Fee. The Borrower shall pay to Citibank for its own account the administrative agent fee referred to in the Fee Letter. ARTICLE VIII MISCELLANEOUS SECTION 8.01. Amendments, Etc. No amendment or waiver of any provision of this Agreement or the Revolving Notes, nor consent to any departure by the Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed -48- by the Majority Lenders, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no amendment, waiver or consent shall, unless in writing and signed by all the Lenders (other than the Designated Bidders), do any of the following: (a) waive any of the conditions specified in Section 3.01, 3.02 (if and to the extent that the Borrowing which is the subject of such waiver would involve an increase in the aggregate outstanding amount of Advances over the aggregate amount of Advances outstanding immediately prior to such Borrowing) or 3.03, (b) increase the Commitments of the Lenders or subject the Lenders to any additional obligations, (c) reduce the principal of, or interest on, the Revolving Notes or any fees or other amounts payable hereunder, (d) postpone any date fixed for any payment of principal of, or interest on, the Revolving Notes or any fees or other amounts payable hereunder, (e) change the percentage of the Commitments or of the aggregate unpaid principal amount of the Revolving Notes, or the number of Lenders, which shall be required for the Lenders or any of them to take any action hereunder or (f) amend the definition of Majority Lenders or this Section 8.01; and provided, further, that no amendment, waiver or consent shall, unless in writing and signed by the Agent in addition to the Lenders required above to take such action, affect the rights or duties of the Agent under this Agreement or any Note. SECTION 8.02. Notices, Etc. All notices and other communications provided for hereunder shall be in writing (including telecopier, telegraphic, telex or cable communication) and mailed, telecopied, telegraphed, telexed, cabled or delivered, if to the Borrower, at its address at M.A. Hanna Company, 1301 East Ninth Street, Suite 3600, Cleveland, Ohio 44114, Attention: Treasury Department, with a copy marked to the attention of the Borrower's Corporate Secretary, at the same address; if to any Bank, at its Domestic Lending Office specified opposite its name on Schedule I hereto; if to any other Lender, at its Domestic Lending Office specified in the Assignment and Acceptance or Designation Agreement pursuant to which it became a Lender; and if to the Agent, at its address at Bank Loan Syndications, 1 Court Square, 7th Floor, Long Island City, New York 11120, Attention: Mr. Philip F. Green, telephone - (718) 248-4529, telecopier - (718) 248-4844, with a copy to each of Ms. Judith E. Goldkrand, Citibank, N.A., 399 Park Avenue, New York, New York 10043, telephone - (212) 559-4649, telecopier - (212) 793-3053, and Daniel S. Dokos, Esq., Sidley & Austin, 875 Third Avenue, New York, New York 10022; or, as to each party, at such other address as shall be designated by such party in a written notice to the other parties. All such notices and communications shall, when mailed, telecopied, telegraphed, telexed or cabled, be effective when deposited in the mails, telecopied, delivered to the telegraph company, confirmed by telex answerback or delivered to the cable company, respectively, except that notices and communications to the Agent pursuant to -49- Article II or VII shall not be effective until received by the Agent. SECTION 8.03. No Waiver; Remedies. No failure on the part of any Lender or the Agent to exercise, and no delay in exercising, any right hereunder or under any Note shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law. SECTION 8.04. Costs, Expenses and Taxes. (a) Subject to the terms of the Fee Anticipation Letter, the Borrower agrees to pay promptly upon request all costs and expenses in connection with the preparation, execution, delivery, administration, interpretation, modification and amendment of this Agreement, the Notes and the other documents to be delivered hereunder, including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the Agent with respect thereto and with respect to advising the Agent as to its rights and responsibilities under this Agreement. The Borrower further agrees to pay promptly upon request all costs and expenses, if any, of the Agent and each Lender (including, without limitation, reasonable counsel fees and expenses) in connection with the enforcement (whether through negotiations, legal proceedings or otherwise) of this Agreement, the Notes, the other Loan Documents and the other documents to be delivered hereunder and thereunder, (ii) in connection with any refinancing or restructuring of the credit arrangements provided hereunder in the nature of a "work-out" or in any insolvency or bankruptcy proceeding, (iii) in commencing, defending or intervening in any litigation or in filing a petition, complaint, answer, motion or other pleadings in any legal proceeding relating to this Agreement, the Notes, the other Loan Documents, the Property, the Borrower or any of the Borrower's Subsidiaries and related to or arising out of the transactions contemplated hereby or by any of the other Loan Documents and (iv) in taking any other action in or with respect to any suit or proceeding (bankruptcy or otherwise) described in clauses (i) through (iii) above. (b) If any payment of principal of any Adjusted Eurodollar Rate Advance is made other than on the last day of the Interest Period for such Revolving Advance, as a result of a payment pursuant to Section 2.10(b) or acceleration of the maturity of the Notes pursuant to Section 6.01 or for any other reason, the Borrower shall, promptly upon request by any Lender (with a copy of such request to the Agent), pay to the Agent for the account of such Lender any amounts required to compensate such Lender for any additional losses, costs or expenses which it may reasonably incur as a result of such payment, including, without limitation, any loss (including loss of anticipated profits), cost or expense incurred by reason of the liquidation -50- or reemployment of deposits or other funds acquired by any Lender to fund or maintain such Revolving Advance. (c) The Borrower agrees to indemnify and hold harmless the Agent and each Lender and their respective Affiliates, and each of their respective directors, officers, employees and agents, from and against any and all losses, claims, damages, liabilities and expenses (including, without limitation, fees and disbursements of counsel) which may be incurred by or asserted against the Agent or such Lender or Affiliate or any such director, officer, employee or agent in connection with or arising out of any investigation, litigation, or proceeding, whether or not the Agent or such Lender or Affiliate or any such director, officer, employee or agent is a party thereto, related to this Agreement or any transaction or proposed transaction (whether or not consummated) in which any proceeds of any Borrowing are applied or proposed to be applied, directly or indirectly, by the Borrower or any of its Subsidiaries, unless such loss, claim, damage, liability or expense is found in a final judgment of a court of competent jurisdiction to have resulted from such indemnified party's gross negligence or wilful misconduct. The obligations of the Borrower under this Section 8.04 shall survive the Termination Date. SECTION 8.05. Right of Set-off. Nothing herein shall derogate any Lender's right, if any, if and to the extent payment owed to such Lender is not made when due hereunder or under any Competitive Bid Note held by such Lender, to set off from time to time against any or all of the Borrower's general deposit accounts with such Lender any amount so due. Each Lender agrees promptly to notify the Borrower after any such set-off and application made by such Lender, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of each Lender under this Section 8.05 are in addition to other rights and remedies which such Lender may have. SECTION 8.06. Binding Effect. This Agreement shall become effective when it shall have been executed by the Borrower and the Agent and when the Agent shall have been notified by each Bank that such Bank has executed it and thereafter shall be binding upon and inure to the benefit of the Borrower, the Agent and each Lender and their respective successors and assigns, except that the Borrower shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of the Lenders. SECTION 8.07. Assignments, Designations and Participations. (a) Each Lender (other than the Designated Bidders) may and, if demanded by the Borrower (following a demand by such Lender pursuant to Section 2.13) upon at least three Business Days' notice to such Lender and the Agent, will, assign, with (except in the case of any assignment to an Affiliate of -51- such Lender) the consent of the Agent and the Borrower (which consent shall not be unreasonably withheld or delayed), to one or more banks or other entities all or a proportionate part of all of its rights and obligations under this Agreement (including, without limitation, all or a proportionate part of all of its Commitment, the Revolving Advances owing to it and the Revolving Note or Notes held by it); provided, however, that (i) each such assignment shall be of a constant, and not a varying, percentage of all rights and obligations under this Agreement (other than any right to make Competitive Bid Advances, Competitive Bid Advances owing to it or Competitive Bid Notes), (ii) the amount of the Commitment of the assigning Lender being assigned pursuant to each such assignment (determined as of the date of the Assignment and Acceptance with respect to such assignment) shall in no event be less than $5,000,000 and shall (unless such amount constitutes the entire remaining amount of the assigning Lender's Commitment) be an integral multiple of $1,000,000, (iii) each such assignment shall be to an Eligible Assignee, (iv) each such assignment made as a to result of a demand by the Borrower pursuant to this Section 8.07(a) shall be arranged by the Borrower after consultation with the Agent and shall be either an assignment of all of the rights and obligations of the assigning Lender under this Agreement (other than any Competitive Bid Advances or Competitive Bid Notes) or an assignment of a portion of such rights and obligations (other than any Competitive Bid Advances or Competitive Bid Notes) made concurrently with another such assignment or other such assignments which together cover all of the rights and obligations of the assigning Lender under this Agreement (other than any Competitive Bid Advances or Competitive Bid Notes), (v) no Lender shall be obligated to make any such assignment as a result of a demand by the Borrower pursuant to this Section 8.07(a) unless and until such Lender shall have received one or more payments from either the Borrower or one or more Eligible Assignees in an aggregate amount at least equal to the aggregate outstanding principal amount of the Revolving Advances owing to such Lender, together with accrued interest thereon to the date of payment of such principal amount and all other amounts payable to such Lender under this Agreement, and (vi) the parties to each such assignment shall execute and deliver to the Agent, for its acceptance and recording in the Register, an Assignment and Acceptance, together with any Revolving Note or Notes subject to such assignment and a processing and recordation fee of $3,000. Upon such execution, delivery, acceptance and recording, from and after the effective date specified in each Assignment and Acceptance, (x) the assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, have the rights and obligations of a Lender hereunder and (y) the Lender assignor thereunder shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be released from its obligations under this Agreement (and, in the case of an -52- Assignment and Acceptance covering all or the remaining portion of an assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto). (b) By executing and delivering an Assignment and Acceptance, the Lender assignor thereunder and the assignee thereunder confirm to and agree with each other and the other parties hereto as follows: (i) other than as provided in such Assignment and Acceptance, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other instrument or document furnished pursuant hereto; (ii) such assigning Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrower or the performance or observance by the Borrower of any of its obligations under this Agreement or any other instrument or document furnished pursuant hereto; (iii) such assignee confirms that it has received a copy of this Agreement, together with copies of the financial statements referred to in Section 4.01 and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (iv) such assignee will, independently and without reliance upon the Agent, such assigning Lender or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (v) such assignee confirms that it is an Eligible Assignee; (vi) such assignee appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to the Agent by the terms hereof, together with such powers as are reasonably incidental thereto; and (vii) such assignee agrees that it will perform in accordance with their terms all of the obligations which by the terms of this Agreement are required to be performed by it as a Lender. (c) Upon its receipt of an Assignment and Acceptance executed by an assigning Lender and an assignee representing that it is an Eligible Assignee, together with any Revolving Note or Notes subject to such assignment, the Agent shall, if such Assignment and Acceptance has been completed and is in substantially the form of Exhibit C hereto, (i) accept such Assignment and Acceptance, (ii) record the information contained therein in the Register and (iii) give prompt notice thereof to the Borrower. Within five Business Days after its receipt of such notice, the Borrower, at its own expense, shall execute and deliver to the Agent in exchange for the surrendered Revolving Note or Notes a new Revolving Note to the order of such Eligible Assignee in an amount equal to the Commitment assumed by it pursuant to such Assignment and Acceptance and, if the assigning -53- Lender has retained a Commitment hereunder, a new Revolving Note to the order of the assigning Lender in an amount equal to the Commitment retained by it hereunder. Such new Revolving Note or Notes shall be in an aggregate principal amount equal to the aggregate principal amount of such surrendered Revolving Note or Notes, shall be dated the effective date of such Assignment and Acceptance and shall otherwise be in substantially the form of Exhibit A-1 hereto. (d) Each Lender may assign to one or more banks or other entities any Competitive Bid Note or Notes held by it. In addition, each Lender (other than the Designated Bidders) may designate one or more banks or other entities to have a right to make Competitive Bid Advances as a Lender pursuant to Section 2.04; provided, however, that (i) no such Lender shall be entitled to make more than three such designations, (ii) each such Lender making one or more of such designations shall retain the right to make Competitive Bid Advances as a Lender pursuant to Section 2.04, (iii) each such designation shall be to a Designated Bidder and (iv) the parties to each such designation shall execute and deliver to the Agent, for its acceptance and recording in the Register, a Designation Agreement. Upon such execution, delivery, acceptance and recording, from and after the effective date specified in each Designation Agreement, the designee thereunder shall be a party hereto with a right to make Competitive Bid Advances as a Lender pursuant to Section 2.04 and the obligations related thereto. (e) By executing and delivering a Designation Agreement, the Lender making the designation thereunder and its designee thereunder confirm and agree with each other and the other parties hereto as follows: (i) such Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other instrument or document furnished pursuant hereto; (ii) such Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrower or the performance or observance by the Borrower or any of its obligations under this Agreement or any other instrument or document furnished pursuant hereto; (iii) such designee confirms that it has received a copy of this Agreement, together with copies of the financial statements referred to in Section 4.01 and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into the Designation Agreement; (iv) such designee will, independently and without reliance upon the Agent, such designating Lender or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (v) such designee confirms that it is a Designated Bidder; (vi) -54- such designee appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to the Agent by the terms hereof, together with such powers as are reasonably incidental thereto; and (vii) such designee agrees that it will perform in accordance with their terms all of the obligations which by the terms of this Agreement are required to be performed by it as a Lender. (f) Upon its receipt of a Designation Agreement executed by a designating Lender and a designee representing that it is a Designated Bidder, the Agent shall, if such Designation Agreement has been completed and is substantially in the form of Exhibit D hereto, (i) accept such Designation Agreement, (ii) record the information contained therein in the Register and (iii) give prompt notice thereof to the Borrower. (g) The Agent shall maintain at its address referred to in Section 8.02 a copy of each Assignment and Acceptance and each Designation Agreement delivered to and accepted by it and a register for the recordation of the names and addresses of each of the Lenders and, with respect to Lenders other than Designated Bidders, the Commitment of, and principal amount of the Revolving Advances owing to, each such Lender from time to time (the "Register"). The Register shall contain the information specified in Section 2.01(c), and the entries in the Register shall be conclusive and binding for the purposes of this Agreement, in the absence of manifest error, and the Borrower, the Agent and the Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for the purposes of this Agreement. The Register shall be available for inspection by the Borrower or any Lender at any reasonable time and from time to time upon reasonable prior notice. (h) Each Lender may sell participations to one or more banks or other entities in or to all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitment, the Advances owing to it and the Note or Notes held by it); provided, however, that (i) such Lender's obligations under this Agreement (including, without limitation, its Commitment to the Borrower hereunder) shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) such Lender shall remain the holder of any such Note for all purposes of this Agreement, and (iv) the Borrower, the Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement. Any participating interest shall provide that such Lender shall retain the sole right and responsibility to enforce the obligations of the Borrower hereunder including, without limitation, the right to approve any amendment, modification or waiver of any provision of this Agreement; provided that any participation agreement may provide that the relevant Lender will -55- not agree to any modification, amendment or waiver of this Agreement which (i) increases or decreases the Commitment of such Lender, (ii) reduces the principal of or rate of interest on any Advance or fees hereunder in which the participant has an interest or (iii) postpones the date fixed for any payment of principal of or interest on any Advance or any fees hereunder in which the participant has an interest without the consent of the participant. The Borrower agrees that each participant shall, to the extent provided in its participation agreement, be entitled to the benefits of Sections 2.11, 2.13 and 8.04(b) hereof with respect to its participating interest. No participant or other transferee of such Lender's rights shall be entitled to receive any greater payment under Sections 2.11, 2.13 and 8.04(b) hereof than such Lender would have been entitled to receive with respect to the rights transferred. (i) Subject to Section 8.13, any Lender may, in connection with any assignment, designation or participation or proposed assignment, designation or participation pursuant to this Section 8.07, disclose to the assignee, designee or participant or proposed assignee, designee or participant, any information relating to the Borrower furnished to such Lender by or on behalf of the Borrower in connection with this Agreement; provided that, prior to any such disclosure, the assignee, designee or participant or proposed assignee, designee or participant shall agree to preserve the confidentiality of any confidential information relating to the Borrower received by it from such Lender. (j) Anything in this Section 8.07 to the contrary notwithstanding, any Lender may, upon notice to the Agent and the Borrower, assign and pledge all or any portion of the Advances owing to it to a Federal Reserve Bank or the United States Treasury as collateral security pursuant to Regulation A of the Federal Reserve Board and any Operating Circular issued by such Federal Reserve Bank. SECTION 8.08. Governing Law. This Agreement and the Notes shall be governed by, and construed in accordance with, the laws of the State of New York. SECTION 8.09. Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. SECTION 8.10. Collateral. Each of the Lenders represents to the Agent and each of the other Lenders that it in good faith is not relying upon any Margin Stock as collateral in the extension or maintenance of the credit provided for in this Agreement. -56- SECTION 8.11. Survival of Warranties and Agreements. All representations and warranties made herein and all obligations of the Borrower in respect of taxes, indemnification and expense reimbursements shall survive the execution and delivery of this Agreement and the other Loan Documents, the making and repayment of the Advances and the termination of this Agreement and shall not be limited in any way by the passage of time or occurrence of any event and shall expressly cover time periods when the Agent or any of the Lenders may have come into possession or control of any of the Borrower's or its Subsidiaries' Property. SECTION 8.12. Limitation of Liability. No claim may be made by the Borrower, any Lender, the Agent or any other Person against the Agent or any other Lender or the Affiliates, directors, officers, employees, attorneys or agents of any of them for any special, consequential or punitive damages in respect of any claim for breach of contract or any other theory of liability arising out of or related to the transactions contemplated by this Agreement, or any act, omission or event occurring in connection therewith; and each of the Borrower, each Lender and the Agent hereby waives, releases and agrees not to sue upon any such claim for any such damages, whether or not accrued and whether or not known or suspected to exist in its favor. SECTION 8.13. Confidentiality. Each Lender agrees that during the period through and including the Termination Date it will take normal and reasonable precautions to hold and treat in confidence any information delivered or made available by the Borrower to it which is expressly designated in writing to be confidential; provided, however that nothing herein shall prevent any Lender from disclosing such information (i) to any Affiliate of such Lender, (ii) to any other Lender, (iii) upon the order of any court or administrative agency, (iv) upon the request or demand of any regulatory agency or authority having jurisdiction over such Lender, (v) which has been publicly disclosed, (vi) to the extent reasonably required in connection with any litigation to which the Agent, any Lender or their respective Affiliates may be a party, (vii) to the extent reasonably required in connection with the exercise of any remedy hereunder, (viii) to such Lender's legal counsel, independent auditors and other professional advisors, (ix) to any actual or proposed participant, assignee or other transferee of all or part of its rights hereunder which has agreed in writing to be bound by the provisions of this Section 8.13, or (x) that is also provided to such Lender by a Person other than the Borrower not in violation, to the actual knowledge of such Lender, of any duty of confidentiality; provided that any Lender's failure to comply with the provisions of this Section 8.13 shall not affect the obligations of the Borrower hereunder. -57- SECTION 8.14. Certain Consents and Waivers of the Borrower. (a) Personal Jurisdiction. (i) THE BORROWER IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY NEW YORK STATE COURT OR FEDERAL COURT SITTING IN NEW YORK, NEW YORK, AND ANY COURT HAVING JURISDICTION OVER APPEALS OF MATTERS HEARD IN SUCH COURTS, IN ANY ACTION OR PROCEEDING ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THE PARTIES HERETO IN CONNECTION WITH THIS AGREEMENT, WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND THE BORROWER IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE COURT OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. THE BORROWER AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. THE BORROWER WAIVES IN ALL DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE. (ii) THE BORROWER AGREES THAT THE AGENT SHALL HAVE THE RIGHT TO PROCEED AGAINST THE BORROWER OR ITS PROPERTY IN A COURT IN ANY LOCATION TO ENABLE THE AGENT AND THE LENDERS TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE AGENT OR ANY LENDER. THE BORROWER WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH THE AGENT OR ANY LENDER MAY COMMENCE A PROCEEDING DESCRIBED IN THIS SECTION. (b) Service of Process. THE BORROWER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER'S NOTICE ADDRESS SPECIFIED PURSUANT TO SECTION 8.02, SUCH SERVICE TO BECOME EFFECTIVE FIVE (5) DAYS AFTER SUCH MAILING. THE BORROWER IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY JURISDICTION SET FORTH ABOVE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF THE AGENT TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. SECTION 8.15. Waiver of Jury Trial. EACH OF THE BORROWER, THE AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTES OR ANY OF -58- THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. -59- IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written. M.A. HANNA COMPANY By /s/ Douglas R. Schrank Title: Vice President CITIBANK, N.A., as Agent By /s/ Mary Corkran Vice President -60- Banks Commitment $25,000,000 CITIBANK, N.A. By /s/ Mary Corkran Vice President $25,000,000 COMERICA BANK By /s/ Ian Hogan Title: Vice President $25,000,000 NBD BANK, N.A. By /s/ Winfred S. Pinet Title: Vice President $25,000,000 PNC BANK, NATIONAL ASSOCIATION By /s/ Chris D. Thornton Title: Assistant Vice President $25,000,000 SOCIETY NATIONAL BANK By /s/ Marianne Neil Title: Assistant Vice President $17,000,000 NATIONAL CITY BANK By /s/ Robert E. Little Title: Vice President/Senior Lending Officer $17,000,000 THE NORTHERN TRUST COMPANY By /s/ Robert Jones Title: Vice President $16,000,000 COMMERZBANK AKTIENGESELLSCHAFT, GRAND CAYMAN BRANCH By /s/ Mark D. Monson Title: Assistant Vice President $12,500,000 BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION By /s/ David B. Straut Title: Vice President $12,500,000 CONTINENTAL BANK N.A. By /s/ Carl W. Jordan Title: Vice President $200,000,000 Total of the Commitments -62- EXHIBIT A-1 FORM OF REVOLVING NOTE U.S.$ Dated: June , 1994 FOR VALUE RECEIVED, the undersigned, M.A. Hanna Company, a Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of (the "Lender") for the account of its Applicable Lending Office (as defined in the Credit Agreement referred to below) the principal amount of each Revolving Advance (as defined below) made by the Lender to the Borrower pursuant to the Credit Agreement (as defined below) on the last day of the Interest Period (as defined in the Credit Agreement) for such Advance. The Borrower promises to pay interest on the unpaid principal amount of each Revolving Advance from the date of such Revolving Advance until such principal amount is paid in full, at such interest rates, and payable at such times, as are specified in the Credit Agreement. Both principal and interest are payable in lawful money of the United States of America to Citibank, N.A., as Agent, at 399 Park Avenue, New York, New York 10043, in same day funds. Each Revolving Advance made by the Lender to the Borrower pursuant to the Credit Agreement, and all payments made on account of principal thereof, shall be recorded by the Lender and, prior to any transfer hereof, endorsed on the grid attached hereto which is part of this Promissory Note. This Promissory Note is one of the Revolving Notes referred to in, and is entitled to the benefits of, the Credit Agreement dated as of June 30, 1994 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement") among the Borrower, the Lender and certain other banks parties thereto, and Citibank, N.A., as Agent for the Lender and such other banks. The Credit Agreement, among other things, (i) provides for the making of advances (the "Revolving Advances") by the Lenders to the Borrower from time to time in an aggregate amount not to exceed at any time outstanding the U.S. dollar amount first above mentioned, the indebtedness of the Borrower resulting from each such Revolving Advance being evidenced by this Promissory Note, and (ii) contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments on account of principal hereof prior to the maturity hereof upon the terms and conditions therein specified. The Borrower hereby waives presentment, demand, protest and notice of any kind. No failure to exercise, and no delay in exercising, any rights hereunder on the part of the holder hereof shall operate as a waiver of such rights. This Promissory Note shall be governed by, and construed in accordance with, the laws of the State of New York, United States. M.A. HANNA COMPANY By Title: 2 ADVANCES AND PAYMENTS OF PRINCIPAL Amount of Unpaid of Date Amount of Principal Paid Principal Notation Advance or Prepaid Balance Made By 3 EXHIBIT A-2 FORM OF COMPETITIVE BID NOTE U.S.$ Dated: __, 19 FOR VALUE RECEIVED, the undersigned, M.A. Hanna Company, a Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of ____________ (the "Lender") for the account of its Applicable Lending Office (as defined in the Credit Agreement referred to below), on , 19 , the principal amount of Dollars ($ ). The Borrower promises to pay interest on the unpaid principal amount hereof from the date hereof until such principal amount is paid in full, at the interest rate and payable on the interest payment date or dates provided below: Interest Rate: % per annum (calculated on the basis of a year of days for the actual number of days elapsed). Interest Payment Date or Dates: Both principal and interest are payable in lawful money of the United States of America to Citibank, N.A. for the account of the Lender at the office of Citibank, N.A., at 399 Park Avenue, New York, New York 10043, in same day funds. This Promissory Note is one of the Competitive Bid Notes referred to in, and is entitled to the benefits of, the Credit Agreement dated as of June 30, 1994 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement") among the Borrower, the Lender and certain other banks parties thereto, and Citibank, N.A., as Agent for the Lender and such other banks. The Credit Agreement, among other things, contains provisions for acceleration of the maturity hereof upon the happening of certain stated events. The Borrower hereby waives presentment, demand, protest and notice of any kind. No failure to exercise, and no delay in exercising, any rights hereunder on the part of the holder hereof shall operate as a waiver of such rights. This Promissory Note shall be governed by, and construed in accordance with, the laws of the State of New York, United States. M.A. HANNA COMPANY By Title: 2 EXHIBIT B-1 NOTICE OF REVOLVING BORROWING Citibank, N.A., as Agent for the Lenders parties to the Credit Agreement referred to below 399 Park Avenue New York, New York 10043 [Date] Attention: Gentlemen: The undersigned, M.A. Hanna Company, refers to the Credit Agreement, dated as of June 30, 1994 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement", the terms defined therein being used herein as therein defined), among the undersigned, certain Lenders parties thereto and Citibank, N.A., as Agent for said Lenders, and hereby gives you notice, irrevocably, pursuant to Section 2.03 of the Credit Agreement that the undersigned hereby requests a Revolving Borrowing under the Credit Agreement, and in that connection sets forth below the information relating to such Revolving Borrowing (the "Proposed Revolving Borrowing") as required by Section 2.03(a) of the Credit Agreement (the terms defined in the Credit Agreement are used herein as therein defined): (i) The Business Day of the Proposed Revolving Borrowing is , 19 . (ii) The Type of Revolving Advances comprising the Proposed Revolving Borrowing is [Base Rate Advances] [Eurodollar Rate Advances]. (iii) The aggregate amount of the Proposed Revolving Borrowing is $ . (iv) The Interest Period for each Revolving Advance made as part of the Proposed Revolving Borrowing is [ days] [ month[s]]. The undersigned hereby certifies that the following statements are true on the date hereof, and will be true on the date of the Proposed Revolving Borrowing: (A) the representations and warranties contained in Section 4.01 (excluding those contained in subsections (f), (g) and (k) of such section 4.01) are correct, before and after giving effect to the Proposed Revolving Borrowing and to the application of the proceeds therefrom, as though made on and as of such date; and (B) no Default has occurred and is continuing, or would result from such Proposed Revolving Borrowing or from the application of the proceeds therefrom. Very truly yours, M.A. HANNA COMPANY By Title: 2 EXHIBIT B-2 NOTICE OF COMPETITIVE BID BORROWING Citibank, N.A., as Agent for the Lenders parties to the Credit Agreement referred to below 399 Park Avenue New York, New York 10043 [Date] Attention: Gentlemen: The undersigned, M.A. Hanna Company, refers to the Credit Agreement, dated as of June 30, 1994 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement", the terms defined therein being used herein as therein defined), among the undersigned, certain Lenders parties thereto and Citibank, N.A., as Agent for said Lenders, and hereby gives you notice pursuant to Section 2.04 of the Credit Agreement that the undersigned hereby requests a Competitive Bid Borrowing under the Credit Agreement, and in that connection sets forth the terms on which such Competitive Bid Borrowing (the "Proposed Competitive Bid Borrowing") is requested to be made: (A) Date of Competitive Bid Borrowing (B) Amount of Competitive Bid Borrowing (C) Maturity Date (D) Interest Rate Basis (E) Interest Payment Date(s) (F) (G) (H) The undersigned hereby certifies that the following statements are true on the date hereof, and will be true on the date of the Proposed Competitive Bid Borrowing: (a) the representations and warranties contained in Section 4.01 (excluding those contained in subsections (f), (g) and (k) of such Section 4.01) are correct, before and after giving effect to the Proposed Competitive Bid Borrowing and to the application of the proceeds therefrom, as though made on and as of such date; (b) no Default has occurred and is continuing, or would result from the Proposed Competitive Bid Borrowing or from the application of the proceeds therefrom; (c) no event has occurred and no circumstance exists as a result of which the information concerning the undersigned that has been provided to the Agent and each Lender by the undersigned in connection with the Credit Agreement would include an untrue statement of a material fact or omit to state any material fact or any fact necessary to make the statements contained therein, in the light of the circumstances under which they were made, not misleading; and (d) the aggregate amount of the Proposed Competitive Bid Borrowing and all other Borrowings to be made on the same day under the Credit Agreement is within the aggregate amount of the unused Commitments of the Lenders. The undersigned hereby confirms that the Proposed Competitive Bid Borrowing is to be made available to it in accordance with Section 2.04(a)(v) of the Credit Agreement. Very truly yours, M.A. HANNA COMPANY By: 2 EXHIBIT C ASSIGNMENT AND ACCEPTANCE Dated , 19 Reference is made to the Credit Agreement dated as of June 30, 1994 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement") among M.A. Hanna Company, a Delaware corporation (the "Borrower"), the Lenders (as defined in the Credit Agreement) and Citibank, N.A., as Agent for the Lenders (the "Agent"). Terms defined in the Credit Agreement are used herein with the same meaning. (the "Assignor") and (the "Assignee") agree as follows: 1. The Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, a ____1% interest in and to all of the Assignor's rights and obligations under the Credit Agreement as of the date hereof (other than in respect of Competitive Bid Advances owing to the Assignor or any Competitive Bid Notes held by it), including, without limitation, (x) such percentage interest in the Assignor's Commitment, which (after giving effect to any other assignments thereof made prior to the date hereof, whether or not such assignments have become effective, but without giving effect to any other assignments thereof also made on the date hereof) is $________, (y) the aggregate principal outstanding principal amount of Revolving Advances owing to the Assignor, which (after giving effect to any other assignments thereof made prior to the date hereof, whether or not such assignments have become effective, but without giving effect to any other assignments thereof also made on the date hereof) is $________, and (z) the Revolving Note held by the Assignor. 2. The Assignor (i) represents and warrants that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim; (ii) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Credit Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement or any other instrument or document furnished pursuant thereto; (iii) makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrower or the performance or observance by the Borrower of any of its obligations under the Credit Agreement or any other instrument or document furnished pursuant thereto; and 1 Specify percentage to no more than four decimal points. (iv) attaches the Revolving Note referred to in paragraph 1 above and requests that the Agent exchange such Revolving Note for [a new Revolving Note dated __________ __, 19__ in the principal amount of $_________ payable to the order of the Assignee] [new Revolving Notes as follows: a Revolving Note dated ________ __, 19__ in the principal amount of $__________ payable to the order of the Assignee and a Revolving Note dated _________ __, 19__ payable to the order of the Assignor]. 3. The Assignee (i) confirms that it has received a copy of the Credit Agreement, together with copies of the financial statements referred to in Section 4.01 thereof and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance and, if the Assignee is an insurance company, represents and warrants that the assignment hereunder shall not constitute or otherwise result in any prohibited transaction under Section 406 of ERISA or Section 4975 of the Internal Revenue Code; (ii) agrees that it will, independently and without reliance upon the Agent, the Assignor or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement; (iii) confirms that it is an Eligible Assignee; (iv) appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under the Credit Agreement as are delegated to the Agent by the terms thereof, together with such powers as are reasonably incidental thereto; (v) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender; [and] (vi) specifies as its Domestic Lending Office (and address for notices) and Eurodollar Lending Office the offices set forth beneath its name on the signature pages hereof [and (vii) attaches the forms prescribed by the Internal Revenue Service of the United States certifying as to the Assignee's status for purposes of determining exemption from United States withholding taxes with respect to all payments to be made to the Assignee under the Credit Agreement and the Notes or such other documents as are necessary to indicate that all such payments are subject to such rates at a rate reduced by an applicable tax treaty].2 4. Following the execution of this Assignment and Acceptance by the Assignor and the Assignee, it will be delivered to the Agent for acceptance and recording by the Agent. The effective date of this Assignment and Acceptance shall be the date of acceptance thereof by the Agent (the "Effective Date"). 2 If the Assignee is organized under the laws of a jurisdiction outside the United States. 2 5. Upon such acceptance and recording by the Agent, as of the Effective Date, (i) the Assignee shall be a party to the Credit Agreement and, to the extent provided in this Assignment and Acceptance, have the rights and obligations of a Lender thereunder and (ii) the Assignor shall, to the extent provided in this Assignment and Acceptance, relinquish its rights and be released from its obligations under the Credit Agreement. 6. Upon such acceptance and recording by the Agent, from and after the Effective Date, the Agent shall make all payments under the Credit Agreement and the Revolving Notes in respect of the interest assigned hereby (including, without limitation, all payments of principal, interest and commitment fees with respect thereto) to the Assignee. The Assignor and Assignee shall make all appropriate adjustments in payments under the Credit Agreement and the Revolving Notes for periods prior to the Effective Date directly between themselves. 7. This Assignment and Acceptance shall be governed by, and construed in accordance with, the laws of the State of New York. 8. This Assignment and Acceptance may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. IN WITNESS WHEREOF, the parties hereto have caused this Assignment and Acceptance to be executed by their respective officers thereunto duly authorized, as of the date first above written. [NAME OF ASSIGNOR] By:____________________ Title: [NAME OF ASSIGNEE] By:____________________ Title: Domestic Lending Office (and address for notices): [Address] Eurodollar Lending Office: [Address] 3 Consented to3 this ___ day of _____________, 19__ M.A. HANNA COMPANY By:______________________ Title: Consented to4 [and] [a]ccepted this ___ day of _____________, 19__ CITIBANK, N.A., as Agent By:______________________ 3 Pursuant to Section 8.07 of the Credit Agreement, the Borrower's consent is not required for an assignment to an Affiliate of the Assignor. 4 Pursuant to Section 8.07 of the Credit Agreement, the Agent's consent is not required for an assignment to an Affiliate of the Assignor. 4 EXHIBIT D DESIGNATION AGREEMENT Dated , 19 Reference is made to the Credit Agreement dated as of June 30, 1994 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement") among M.A. Hanna Company, a Delaware corporation (the "Borrower"), the Lenders (as defined in the Credit Agreement) and Citibank, N.A., as Agent for the Lenders (the "Agent"). Terms defined in the Credit Agreement are used herein with the same meaning. (the "Designator") and (the "Designee") agree as follows: 1. The Designator hereby designates the Designee, and the Designee hereby accepts such designation, to have a right to make Competitive Bid Advances pursuant to Section 2.04 of the Credit Agreement. 2. The Designator makes no representation or warranty and assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement or any other instrument or document furnished pursuant thereto and (ii) the financial condition of the Borrower or the performance or observance by the Borrower of any of its obligations under the Credit Agreement or any other instrument or document furnished pursuant thereto. 3. The Designee (i) confirms that it has received a copy of the Credit Agreement, together with copies of the financial statements referred to in Section 4.01 thereof and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Designation Agreement and, if the Designee is an insurance company, represents and warrants that the designation hereunder shall not constitute or otherwise result in any prohibited transaction under Section 406 of ERISA or Section 4975 of the Internal Revenue Code; (ii) agrees that it will, independently and without reliance upon the Agent, the Designator or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement; (iii) confirms that it is a Designated Bidder; (iv) appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under the Credit Agreement as are delegated to the Agent by the terms thereof, together with such powers as are reasonably incidental thereto; (v) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender; and (vi) specifies as its Applicable Lending Office with respect to Competitive Bid Advances (and address for notices) the offices set forth beneath its name on the signature pages hereof. 4. Following the execution of this Designation Agreement by the Designator and its Designee, it will be delivered to the Agent for acceptance and recording by the Agent. The effective date of this Designation Agreement shall be the date of acceptance thereof by the Agent (the "Effective Date"). 5. Upon such acceptance and recording by the Agent, as of the Effective Date, the Designee shall be a party to the Credit Agreement with a right to make Competitive Bid Advances as a Lender pursuant to Section 2.04 of the Credit Agreement and the rights and obligations of a Lender related thereto. 6. This Designation Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. 7. This Designation Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. IN WITNESS WHEREOF, the parties hereto have caused this Designation Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written. [NAME OF DESIGNATOR] By: Title: [NAME OF DESIGNEE] By: Title: Applicable Lending Office (and address for notices): [Address] 2 Accepted this day of , 19 CITIBANK, N.A., as Agent By:______________________ Title: 3 EX-23 3 EXHIBIT 23 Consent of Independent Auditors We consent to the incorporation by reference in the Registration Statement (Form S-8) pertaining to the 401K Savings and Retirement Plan for Polymer Associates, of our report dated January 31, 1994, with respect to the consolidated financial statements of M.A. Hanna Company and subsidiaries incorporated by reference in its Annual Report (From 10-K, as amended) for the year ended December 31, 1993 and the related financial statement schedules included therein, filed with the Securities and Exchange Commission. /s/ Ernst & Young LLP Cleveland, Ohio December 21, 1994 EX-24 4 EXHIBIT 24 401K Savings and Retirment Plan for Polymer Associates Power of Attorney KNOW ALL MEN BY THESE PRESENTS, that M. A. Hanna Company, a Delaware corporation (the "Company"), which anticipates filing with the Securities and Exchange Commission, Washington, D.C. ("SEC"), under the Securities Act of 1933, as amended ("Act"), a registration statement or registration statements on Form S-8 or such other form as the officers of the Company may determine to be appropriate with respect to shares of Common Stock, par value $1.00 per share, of the Company which may be issued in connection with the 401K Savings and Retirement Plan for Polymer Associates and each of the undersigned officers and directors of the Company hereby constitutes and appoints John S. Pyke, Jr., Valerie A. Gentile and Lyle G. Ganske, and each of them (with full power of substitution and resubstitution) his or her true and lawful attorney-in-fact and agent for each of such persons and on his or her behalf and in his or her name, place and stead, in any and all capacities, to sign, execute and file with the SEC such registration statement(s) aforesaid under the Act, including any amendments relating thereto with all exhibits, and any and all documents required to be filed with any federal or state regulatory authority including any state securities regulatory board or commission, pertaining to the securities subject to such registration, granting unto said attorneys, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises in order to effectuate the same as fully to all intents and purposes as each of them might or could do if personally present, hereby ratifying and confirming all that said attorney-in-fact and agents, or any of them, or any of their substitutes, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of the 7th day of December, 1994 /s/ B. Charles Ames B. Charles Ames 401K Savings and Retirment Plan for Polymer Associates Power of Attorney KNOW ALL MEN BY THESE PRESENTS, that M. A. Hanna Company, a Delaware corporation (the "Company"), which anticipates filing with the Securities and Exchange Commission, Washington, D.C. ("SEC"), under the Securities Act of 1933, as amended ("Act"), a registration statement or registration statements on Form S-8 or such other form as the officers of the Company may determine to be appropriate with respect to shares of Common Stock, par value $1.00 per share, of the Company which may be issued in connection with the 401K Savings and Retirement Plan for Polymer Associates and each of the undersigned officers and directors of the Company hereby constitutes and appoints John S. Pyke, Jr., Valerie A. Gentile and Lyle G. Ganske, and each of them (with full power of substitution and resubstitution) his or her true and lawful attorney-in-fact and agent for each of such persons and on his or her behalf and in his or her name, place and stead, in any and all capacities, to sign, execute and file with the SEC such registration statement(s) aforesaid under the Act, including any amendments relating thereto with all exhibits, and any and all documents required to be filed with any federal or state regulatory authority including any state securities regulatory board or commission, pertaining to the securities subject to such registration, granting unto said attorneys, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises in order to effectuate the same as fully to all intents and purposes as each of them might or could do if personally present, hereby ratifying and confirming all that said attorney-in-fact and agents, or any of them, or any of their substitutes, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of the 7th day of December, 1994 /s/ Wayne R. Embry Wayne R. Embry 401K Savings and Retirment Plan for Polymer Associates Power of Attorney KNOW ALL MEN BY THESE PRESENTS, that M. A. Hanna Company, a Delaware corporation (the "Company"), which anticipates filing with the Securities and Exchange Commission, Washington, D.C. ("SEC"), under the Securities Act of 1933, as amended ("Act"), a registration statement or registration statements on Form S-8 or such other form as the officers of the Company may determine to be appropriate with respect to shares of Common Stock, par value $1.00 per share, of the Company which may be issued in connection with the 401K Savings and Retirement Plan for Polymer Associates and each of the undersigned officers and directors of the Company hereby constitutes and appoints John S. Pyke, Jr., Valerie A. Gentile and Lyle G. Ganske, and each of them (with full power of substitution and resubstitution) his or her true and lawful attorney-in-fact and agent for each of such persons and on his or her behalf and in his or her name, place and stead, in any and all capacities, to sign, execute and file with the SEC such registration statement(s) aforesaid under the Act, including any amendments relating thereto with all exhibits, and any and all documents required to be filed with any federal or state regulatory authority including any state securities regulatory board or commission, pertaining to the securities subject to such registration, granting unto said attorneys, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises in order to effectuate the same as fully to all intents and purposes as each of them might or could do if personally present, hereby ratifying and confirming all that said attorney-in-fact and agents, or any of them, or any of their substitutes, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of the 7th day of December, 1994 /s/ J. Trevor Eyton J. Trevor Eyton 401K Savings and Retirment Plan for Polymer Associates Power of Attorney KNOW ALL MEN BY THESE PRESENTS, that M. A. Hanna Company, a Delaware corporation (the "Company"), which anticipates filing with the Securities and Exchange Commission, Washington, D.C. ("SEC"), under the Securities Act of 1933, as amended ("Act"), a registration statement or registration statements on Form S-8 or such other form as the officers of the Company may determine to be appropriate with respect to shares of Common Stock, par value $1.00 per share, of the Company which may be issued in connection with the 401K Savings and Retirement Plan for Polymer Associates and each of the undersigned officers and directors of the Company hereby constitutes and appoints John S. Pyke, Jr., Valerie A. Gentile and Lyle G. Ganske, and each of them (with full power of substitution and resubstitution) his or her true and lawful attorney-in-fact and agent for each of such persons and on his or her behalf and in his or her name, place and stead, in any and all capacities, to sign, execute and file with the SEC such registration statement(s) aforesaid under the Act, including any amendments relating thereto with all exhibits, and any and all documents required to be filed with any federal or state regulatory authority including any state securities regulatory board or commission, pertaining to the securities subject to such registration, granting unto said attorneys, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises in order to effectuate the same as fully to all intents and purposes as each of them might or could do if personally present, hereby ratifying and confirming all that said attorney-in-fact and agents, or any of them, or any of their substitutes, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of the 7th day of December, 1994 /s/ George D. Kirkham George D. Kirkham 401K Savings and Retirment Plan for Polymer Associates Power of Attorney KNOW ALL MEN BY THESE PRESENTS, that M. A. Hanna Company, a Delaware corporation (the "Company"), which anticipates filing with the Securities and Exchange Commission, Washington, D.C. ("SEC"), under the Securities Act of 1933, as amended ("Act"), a registration statement or registration statements on Form S-8 or such other form as the officers of the Company may determine to be appropriate with respect to shares of Common Stock, par value $1.00 per share, of the Company which may be issued in connection with the 401K Savings and Retirement Plan for Polymer Associates and each of the undersigned officers and directors of the Company hereby constitutes and appoints John S. Pyke, Jr., Valerie A. Gentile and Lyle G. Ganske, and each of them (with full power of substitution and resubstitution) his or her true and lawful attorney-in-fact and agent for each of such persons and on his or her behalf and in his or her name, place and stead, in any and all capacities, to sign, execute and file with the SEC such registration statement(s) aforesaid under the Act, including any amendments relating thereto with all exhibits, and any and all documents required to be filed with any federal or state regulatory authority including any state securities regulatory board or commission, pertaining to the securities subject to such registration, granting unto said attorneys, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises in order to effectuate the same as fully to all intents and purposes as each of them might or could do if personally present, hereby ratifying and confirming all that said attorney-in-fact and agents, or any of them, or any of their substitutes, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of the 7th day of December, 1994 /s/ Marvin L. Mann Marvin L. Mann 401K Savings and Retirment Plan for Polymer Associates Power of Attorney KNOW ALL MEN BY THESE PRESENTS, that M. A. Hanna Company, a Delaware corporation (the "Company"), which anticipates filing with the Securities and Exchange Commission, Washington, D.C. ("SEC"), under the Securities Act of 1933, as amended ("Act"), a registration statement or registration statements on Form S-8 or such other form as the officers of the Company may determine to be appropriate with respect to shares of Common Stock, par value $1.00 per share, of the Company which may be issued in connection with the 401K Savings and Retirement Plan for Polymer Associates and each of the undersigned officers and directors of the Company hereby constitutes and appoints John S. Pyke, Jr., Valerie A. Gentile and Lyle G. Ganske, and each of them (with full power of substitution and resubstitution) his or her true and lawful attorney-in-fact and agent for each of such persons and on his or her behalf and in his or her name, place and stead, in any and all capacities, to sign, execute and file with the SEC such registration statement(s) aforesaid under the Act, including any amendments relating thereto with all exhibits, and any and all documents required to be filed with any federal or state regulatory authority including any state securities regulatory board or commission, pertaining to the securities subject to such registration, granting unto said attorneys, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises in order to effectuate the same as fully to all intents and purposes as each of them might or could do if personally present, hereby ratifying and confirming all that said attorney-in-fact and agents, or any of them, or any of their substitutes, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of the 7th day of December, 1994 /s/ Douglas J. McGregor Douglas J. McGregor 401K Savings and Retirment Plan for Polymer Associates Power of Attorney KNOW ALL MEN BY THESE PRESENTS, that M. A. Hanna Company, a Delaware corporation (the "Company"), which anticipates filing with the Securities and Exchange Commission, Washington, D.C. ("SEC"), under the Securities Act of 1933, as amended ("Act"), a registration statement or registration statements on Form S-8 or such other form as the officers of the Company may determine to be appropriate with respect to shares of Common Stock, par value $1.00 per share, of the Company which may be issued in connection with the 401K Savings and Retirement Plan for Polymer Associates and each of the undersigned officers and directors of the Company hereby constitutes and appoints John S. Pyke, Jr., Valerie A. Gentile and Lyle G. Ganske, and each of them (with full power of substitution and resubstitution) his or her true and lawful attorney-in-fact and agent for each of such persons and on his or her behalf and in his or her name, place and stead, in any and all capacities, to sign, execute and file with the SEC such registration statement(s) aforesaid under the Act, including any amendments relating thereto with all exhibits, and any and all documents required to be filed with any federal or state regulatory authority including any state securities regulatory board or commission, pertaining to the securities subject to such registration, granting unto said attorneys, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises in order to effectuate the same as fully to all intents and purposes as each of them might or could do if personally present, hereby ratifying and confirming all that said attorney-in-fact and agents, or any of them, or any of their substitutes, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of the 7th day of December, 1994 /s/ Richrd W. Pogue Richard W. Pogue 401K Savings and Retirment Plan for Polymer Associates Power of Attorney KNOW ALL MEN BY THESE PRESENTS, that M. A. Hanna Company, a Delaware corporation (the "Company"), which anticipates filing with the Securities and Exchange Commission, Washington, D.C. ("SEC"), under the Securities Act of 1933, as amended ("Act"), a registration statement or registration statements on Form S-8 or such other form as the officers of the Company may determine to be appropriate with respect to shares of Common Stock, par value $1.00 per share, of the Company which may be issued in connection with the 401K Savings and Retirement Plan for Polymer Associates and each of the undersigned officers and directors of the Company hereby constitutes and appoints John S. Pyke, Jr., Valerie A. Gentile and Lyle G. Ganske, and each of them (with full power of substitution and resubstitution) his or her true and lawful attorney-in-fact and agent for each of such persons and on his or her behalf and in his or her name, place and stead, in any and all capacities, to sign, execute and file with the SEC such registration statement(s) aforesaid under the Act, including any amendments relating thereto with all exhibits, and any and all documents required to be filed with any federal or state regulatory authority including any state securities regulatory board or commission, pertaining to the securities subject to such registration, granting unto said attorneys, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises in order to effectuate the same as fully to all intents and purposes as each of them might or could do if personally present, hereby ratifying and confirming all that said attorney-in-fact and agents, or any of them, or any of their substitutes, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of the 7th day of December, 1994 /s/ Martin D. Walker Martin D. Walker 401K Savings and Retirment Plan for Polymer Associates Power of Attorney KNOW ALL MEN BY THESE PRESENTS, that M. A. Hanna Company, a Delaware corporation (the "Company"), which anticipates filing with the Securities and Exchange Commission, Washington, D.C. ("SEC"), under the Securities Act of 1933, as amended ("Act"), a registration statement or registration statements on Form S-8 or such other form as the officers of the Company may determine to be appropriate with respect to shares of Common Stock, par value $1.00 per share, of the Company which may be issued in connection with the 401K Savings and Retirement Plan for Polymer Associates and each of the undersigned officers and directors of the Company hereby constitutes and appoints John S. Pyke, Jr., Valerie A. Gentile and Lyle G. Ganske, and each of them (with full power of substitution and resubstitution) his or her true and lawful attorney-in-fact and agent for each of such persons and on his or her behalf and in his or her name, place and stead, in any and all capacities, to sign, execute and file with the SEC such registration statement(s) aforesaid under the Act, including any amendments relating thereto with all exhibits, and any and all documents required to be filed with any federal or state regulatory authority including any state securities regulatory board or commission, pertaining to the securities subject to such registration, granting unto said attorneys, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises in order to effectuate the same as fully to all intents and purposes as each of them might or could do if personally present, hereby ratifying and confirming all that said attorney-in-fact and agents, or any of them, or any of their substitutes, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of the 7th day of December, 1994 /s/ Carol A. Cartwright Carol A. Cartwright EX-99 5 EXHIBIT 99 401(k) SAVINGS AND RETIREMENT PLAN FOR POLYMER ASSOCIATES Plan and Trust Agreement Effective January 1, 1995 401(k) Savings and Retirement Plan for Polymer Associates and Trust Effective January 1, 1995 M.A. Hanna Company hereby establishes the 401(k) Savings and Retirement Plan for Polymer Associates for the benefit of eligible associates of the Company and its participating affiliates. The Plan is intended to constitute a qualified profit sharing plan, as described in Code section 401(a), which includes a qualified cash or deferred arrangement, as described in Code section 401(k). The provisions of this Plan and Trust relating to the Trustee constitute the trust agreement which is entered into by and between M.A. Hanna Company and Wells Fargo Bank, National Association. The Trust is intended to be tax exempt as described under Code section 501(a). The 401(k) Savings and Retirement Plan for Polymer Associates and Trust, as set forth in this document, is hereby effective as of January 1, 1995. Date: December 21, 1994 M.A. Hanna Company By: /s/ John S. Pyke, Jr. Title: Vice President, General Counsel and Secretary The trust agreement set forth in those provisions of this Plan and Trust which relate to the Trustee is hereby executed. Date: December 20, 1994 Wells Fargo Bank, National Association By: /s/ Dolores Upton Title: Vice President Date: December 20, 1994 Wells Fargo Bank, National Association By: /s/ Gwyn E. Slack Title: Vice President TABLE OF CONTENTS 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . 1 2 ELIGIBILITY . . . . . . . . . . . . . . . . . . . . . . 8 2.1 Eligibility . . . . . . . . . . . . . . . . . . . 8 2.2 Ineligible Associates . . . . . . . . . . . . . . 8 2.3 Ineligible or Former Participants . . . . . . . . 8 3 PARTICIPANT CONTRIBUTIONS . . . . . . . . . . . . . . . 9 3.1 Associate Pre-Tax Contribution Election . . . . . 9 3.2 Changing a Contribution Election . . . . . . . . . 9 3.3 Revoking and Resuming a Contribution Election . . 9 3.4 Contribution Percentage Limits . . . . . . . . . . 9 3.5 Refunds When Contribution Dollar Limit Exceeded . 10 3.6 Timing, Posting and Tax Considerations . . . . . . 10 4 ROLLOVERS & TRUST-TO-TRUST TRANSFERS . . . . . . . . . . 11 4.1 Rollovers . . . . . . . . . . . . . . . . . . . . 11 4.2 Transfers From Other Qualified Plans . . . . . . . 11 5 EMPLOYER CONTRIBUTIONS . . . . . . . . . . . . . . . . . 12 5.1 Company Matching Contributions . . . . . . . . . . 12 5.2 Retirement Contributions . . . . . . . . . . . . . 12 5.3 Supplemental Retirement Contributions . . . . . . 13 6 ACCOUNTING . . . . . . . . . . . . . . . . . . . . . . . 14 6.1 Individual Participant Accounting . . . . . . . . 14 6.2 Sweep Account is Transaction Account . . . . . . . 14 6.3 Trade Date Accounting and Investment Cycle . . . . 14 6.4 Accounting for Investment Funds . . . . . . . . . 14 6.5 Payment of Fees and Expenses . . . . . . . . . . . 14 6.6 Accounting for Participant Loans . . . . . . . . . 15 6.7 Error Correction . . . . . . . . . . . . . . . . . 15 6.8 Participant Statements . . . . . . . . . . . . . . 16 6.9 Special Accounting During Conversion Period . . . 16 6.10 Accounts for QDRO Beneficiaries . . . . . . . . . 16 7 INVESTMENT FUNDS AND ELECTIONS . . . . . . . . . . . . . 17 7.1 Investment Funds . . . . . . . . . . . . . . . . . 17 7.2 Investment Fund Elections . . . . . . . . . . . . 17 7.3 Responsibility for Investment Choice . . . . . . . 17 7.4 Default if No Election . . . . . . . . . . . . . . 18 7.5 Timing . . . . . . . . . . . . . . . . . . . . . . 18 7.6 Investment Fund Election Change Fees . . . . . . . 18 8 VESTING & FORFEITURES . . . . . . . . . . . . . . . . . 19 8.1 Fully Vested Contribution Accounts . . . . . . . . 19 8.2 Full Vesting upon Certain Events . . . . . . . . . 19 8.3 Vesting Schedule . . . . . . . . . . . . . . . . . 19 8.4 Forfeitures . . . . . . . . . . . . . . . . . . . 19 8.5 Rehired Associates . . . . . . . . . . . . . . . . 20 9 PARTICIPANT LOANS . . . . . . . . . . . . . . . . . . . 21 9.1 Participant Loans Permitted . . . . . . . . . . . 21 9.2 Loan Application, Note and Security . . . . . . . 21 9.3 Spousal Consent . . . . . . . . . . . . . . . . . 21 9.4 Loan Approval . . . . . . . . . . . . . . . . . . 21 9.5 Loan Funding Limits . . . . . . . . . . . . . . . 21 9.6 Maximum Number of Loans . . . . . . . . . . . . . 22 9.7 Source and Timing of Loan Funding . . . . . . . . 22 9.8 Interest Rate . . . . . . . . . . . . . . . . . . 22 9.9 Repayment . . . . . . . . . . . . . . . . . . . . 22 9.10 Repayment Hierarchy . . . . . . . . . . . . . . . 23 9.11 Repayment Suspension . . . . . . . . . . . . . . . 23 9.12 Loan Default . . . . . . . . . . . . . . . . . . . 23 9.13 Call Feature . . . . . . . . . . . . . . . . . . . 23 10 IN-SERVICE WITHDRAWALS . . . . . . . . . . . . . . . . . 24 10.1 In-Service Withdrawals Permitted . . . . . . . . . 24 10.2 In-Service Withdrawal Application and Notice . . . 24 10.3 Spousal Consent . . . . . . . . . . . . . . . . . 24 10.4 In-Service Withdrawal Approval . . . . . . . . . . 24 10.5 Minimum Amount, Payment Form and Medium . . . . . 24 10.6 Source and Timing of In-Service Withdrawal Funding . . . . . . . . . . . . . . . . . . . . . 25 10.7 Hardship Withdrawals . . . . . . . . . . . . . . . 25 10.8 Rollover Account Withdrawals . . . . . . . . . . . 26 10.9 Over Age 59 1/2 Withdrawals . . . . . . . . . . . 27 11 DISTRIBUTIONS ONCE EMPLOYMENT ENDS OR AS REQUIRED BY LAW . . . . . . . . . . . . . . . . . . . . . . . . . . 28 11.1 Benefit Information, Notices and Election . . . . 28 11.2 Spousal Consent . . . . . . . . . . . . . . . . . 28 11.3 Payment Form and Medium . . . . . . . . . . . . . 28 11.4 Distribution of Small Amounts . . . . . . . . . . 29 11.5 Source and Timing of Distribution Funding . . . . 29 11.6 Deemed Distribution . . . . . . . . . . . . . . . 29 11.7 Latest Commencement Permitted . . . . . . . . . . 29 11.8 Payment Within Life Expectancy . . . . . . . . . . 30 11.9 Incidental Benefit Rule . . . . . . . . . . . . . 30 11.10 Payment to Beneficiary . . . . . . . . . . . . . 30 11.11 Beneficiary Designation . . . . . . . . . . . . . 31 12 ADP AND ACP TESTS . . . . . . . . . . . . . . . . . . . 32 12.1 Contribution Limitation Definitions . . . . . . . 32 12.2 ADP and ACP Tests . . . . . . . . . . . . . . . . 35 12.3 Correction of ADP and ACP Tests . . . . . . . . . 35 12.4 Multiple Use Test . . . . . . . . . . . . . . . . 36 12.5 Correction of Multiple Use Test . . . . . . . . . 36 12.6 Adjustment for Investment Gain or Loss . . . . . . 36 12.7 Testing Responsibilities and Required Records . . 37 12.8 Separate Testing . . . . . . . . . . . . . . . . . 37 13 MAXIMUM CONTRIBUTION AND BENEFIT LIMITATIONS . . . . . . 38 13.1 "Annual Addition" Defined . . . . . . . . . . . . 38 13.2 Maximum Annual Addition . . . . . . . . . . . . . 38 13.3 Avoiding an Excess Annual Addition . . . . . . . . 38 13.4 Correcting an Excess Annual Addition . . . . . . . 38 13.5 Correcting a Multiple Plan Excess . . . . . . . . 39 13.6 "Defined Benefit Fraction" Defined . . . . . . . . 39 13.7 "Defined Contribution Fraction" Defined . . . . . 39 13.8 Combined Plan Limits and Correction . . . . . . . 39 14 TOP HEAVY RULES . . . . . . . . . . . . . . . . . . . . 40 14.1 Top Heavy Definitions . . . . . . . . . . . . . . 40 14.2 Special Contributions . . . . . . . . . . . . . . 41 14.3 Adjustment to Combined Limits for Different Plans 42 15 PLAN ADMINISTRATION . . . . . . . . . . . . . . . . . . 43 15.1 Plan Delineates Authority and Responsibility . . . 43 15.2 Fiduciary Standards . . . . . . . . . . . . . . . 43 15.3 Company is ERISA Plan Administrator . . . . . . . 43 15.4 Administrator Duties . . . . . . . . . . . . . . . 44 15.5 Advisors May be Retained . . . . . . . . . . . . . 44 15.6 Delegation of Administrator Duties . . . . . . . . 45 15.7 Committee Operating Rules . . . . . . . . . . . . 45 16 MANAGEMENT OF INVESTMENTS . . . . . . . . . . . . . . . 46 16.1 Trust Agreement . . . . . . . . . . . . . . . . . 46 16.2 Investment Funds . . . . . . . . . . . . . . . . . 46 16.3 Authority to Hold Cash . . . . . . . . . . . . . . 47 16.4 Trustee to Act Upon Instructions . . . . . . . . . 47 16.5 Administrator Has Right to Vote Registered Investment Company Shares . . . . 47 16.6 Custom Fund Investment Management . . . . . . . . 47 16.7 Authority to Segregate Assets . . . . . . . . . . 48 16.8 Maximum Permitted Investment in Company Stock . . 48 16.9 Participants Have Right to Vote and Tender Company Stock . . . . . . . . . . . . . . . . . . 48 16.10 Registration and Disclosure for Company Stock . . . . . . . . . . . . . . . . . . . . . . 49 16.11 Master Company Stock Fund . . . . . . . . . . . . 49 17 TRUST ADMINISTRATION . . . . . . . . . . . . . . . . . . 50 17.1 Trustee to Construe Trust . . . . . . . . . . . . 50 17.2 Trustee To Act As Owner of Trust Assets . . . . . 50 17.3 United States Indicia of Ownership . . . . . . . . 50 17.4 Tax Withholding and Payment . . . . . . . . . . . 51 17.5 Trustee Duties and Limitations . . . . . . . . . . 51 17.6 Trust Accounting . . . . . . . . . . . . . . . . . 51 17.7 Valuation of Certain Assets . . . . . . . . . . . 52 17.8 Legal Counsel . . . . . . . . . . . . . . . . . . 52 17.9 Fees and Expenses . . . . . . . . . . . . . . . . 52 18 RIGHTS, PROTECTION, CONSTRUCTION AND JURISDICTION . . . 53 18.1 Plan Does Not Affect Employment Rights . . . . . . 53 18.2 Limited Return of Contributions . . . . . . . . . 53 18.3 Assignment and Alienation . . . . . . . . . . . . 53 18.4 Facility of Payment . . . . . . . . . . . . . . . 54 18.5 Reallocation of Lost Participant's Accounts . . . 54 18.6 Claims Procedure . . . . . . . . . . . . . . . . . 54 18.7 Construction . . . . . . . . . . . . . . . . . . . 55 18.8 Jurisdiction and Severability . . . . . . . . . . 55 18.9 Indemnification by Employer . . . . . . . . . . . 55 19 AMENDMENT, MERGER, DIVESTITURES AND TERMINATION . . . . 57 19.1 Amendment . . . . . . . . . . . . . . . . . . . . 57 19.2 Merger . . . . . . . . . . . . . . . . . . . . . . 57 19.3 Divestitures . . . . . . . . . . . . . . . . . . . 57 19.4 Plan Termination . . . . . . . . . . . . . . . . . 58 19.5 Amendment and Termination Procedures . . . . . . . 58 19.6 Termination of Employer's Participation . . . . . 59 19.7 Replacement of the Trustee . . . . . . . . . . . . 59 19.8 Final Settlement and Accounting of Trustee . . . . 59 APPENDIX A - INVESTMENT FUNDS . . . . . . . . . . . . . . . . 61 APPENDIX B - PAYMENT OF PLAN FEES AND EXPENSES . . . . . . . 62 APPENDIX C - LOAN INTEREST RATE . . . . . . . . . . . . . . . 63 1 DEFINITIONS When capitalized, the words and phrases below have the following meanings unless different meanings are clearly required by the context: 1.1 "Account". The records maintained for purposes of accounting for a Participant's interest in the Plan. "Account" may refer to one or all of the following accounts which have been created on behalf of a Participant to hold specific types of Contributions under the Plan: (a) "Associate Pre-Tax Account". An account created to hold Associate Pre-Tax Contributions. (b) "Rollover Account". An account created to hold Rollover Contributions. (c) "Company Matching Account". An account created to hold Company Matching Contributions. (d) "Retirement Account". An account created to hold Retirement Contributions. (e) "Supplemental Retirement Account". An account created to hold Supplemental Retirement Contributions. 1.2 "ACP" or "Average Contribution Percentage". The percentage calculated in accordance with Section 12.1. 1.3 "Administrator". The Company, which may delegate all or a portion of the duties of the Administrator under the Plan to a Committee in accordance with Section 15.6. 1.4 "ADP" or "Average Deferral Percentage". The percentage calculated in accordance with Section 12.1. 1.5 "Associate". An individual who is: (a) directly employed by any Related Company and for whom any income for such employment is subject to withholding of income or social security taxes, or (b) a Leased Associate. 1.6 "Beneficiary". The person or persons who is to receive benefits after the death of the Participant pursuant to the "Beneficiary Designation" paragraph in Section 11, or as a result of a QDRO. 1.7 "Break in Service". The fifth anniversary (or sixth anniversary if absence from employment was due to a Parental Leave) of the date on which a Participant's employment ends. 1.8 "Code". The Internal Revenue Code of 1986, as amended. Reference to any specific Code section shall include such section, any valid regulation promulgated thereunder, and any comparable provision of any future legislation amending, supplementing or superseding such section. 1.9 "Committee". If applicable, the committee which has been appointed by the Company to administer the Plan in accordance with Section 15.6. 1.10 "Company". M.A. Hanna Company or any successor by merger, purchase or otherwise. 1.11 "Company Stock". Shares of common stock of the Company, its predecessor(s), or its successors or assigns, or any corporation with or into which said corporation may be merged, consolidated or reorganized, or to which a majority of its assets may be sold. 1.12 "Compensation". The sum of a Participant's Taxable Income and salary reductions, if any, pursuant to Code sections 125, 402(e)(3), 402(h), 403(b), 414(h)(2) or 457. For purposes of determining benefits under this Plan, Compensation is limited to $150,000 (as indexed for the cost of living pursuant to Code sections 401(a)(17) and 415(d)) per Plan Year. For purposes of the preceding sentence, in the case of an HCE who is a 5% Owner or one of the 10 most highly compensated Employees, (i) such HCE and such HCE's family group (as defined below) shall be treated as a single associate and the Compensation of each family group member shall be aggregated with the Compensation of such HCE, and (ii) the limitation on Compensation shall be allocated among such HCE and his or her family group members in proportion to each individual's Compensation before the application of this sentence. For purposes of this Section, the term "family group" shall mean an Associate's spouse and lineal descendants who have not attained age 19 before the close of the year in question. For the purpose of determining HCEs and key employees, Compensation for the entire Plan Year shall be used. For the purpose of determining ADP and ACP, Compensation shall be limited to amounts paid to an Eligible Associate while a Participant. 1.13 "Contribution". An amount contributed to the Plan by the Employer or an Eligible Associate, and allocated by contribution type to Participants' Accounts, as described in Section 1.1. Specific types of contribution include: (a) "Associate Pre-Tax Contribution". An amount contributed by the Employer on an eligible Participant's behalf in conjunction with a Participant's Code section 401(k) salary deferral election. (b) "Rollover Contribution". An amount contributed by an Eligible Associate which originated from another employer's qualified plan or an Employer's qualified plan. (c) "Company Matching Contribution". An amount contributed by the Employer on an eligible Participant's behalf based upon the amount contributed by the eligible Participant. (d) "Retirement Contribution". An amount contributed by the Employer on an eligible Participant's behalf and allocated on a pay based formula to the Participant. (e) "Supplemental Retirement Contribution". An amount contributed by the Employer on an eligible Participant's behalf and allocated on a pay based formula to the Participant. 1.14 "Contribution Dollar Limit". The annual limit placed on each Participant's Associate Pre-Tax Contributions, which shall be $7,000 per calendar year (as indexed for the cost of living pursuant to Code sections 402(g)(5) and 415(d)). For purposes of this Section, a Participant's Associate Pre-Tax Contributions shall include (i) any employer contribution made under any qualified cash or deferred arrangement as defined in Code section 401(k) to the extent not includible in gross income for the taxable year under Code section 402(e)(3) or 402(h)(1)(B) (determined without regard to Code section 402(g)), and (ii) any employer contribution to purchase an annuity contract under Code section 403(b) under a salary reduction agreement (within the meaning of Code section 3121(a)(5)(D)). 1.15 "Conversion Period". The period of converting the prior accounting system of the Plan and Trust, if such Plan and Trust were in existence prior to the Effective Date, or the prior accounting system of any plan and trust which is merged into this Plan and Trust subsequent to the Effective Date, to the accounting system described in Section 6. 1.16 "Direct Rollover". A payment from the Plan to an Eligible Retirement Plan specified by a Distributee. 1.17 "Disability". A Participant's total and permanent, mental or physical disability resulting in termination of employment as evidenced by presentation of medical evidence satisfactory to the Administrator. 1.18 "Distributee". An Associate or former Associate, the surviving spouse of an Associate or former Associate and a spouse or former spouse of an Associate or under a QDRO. 1.19 "Effective Date". January 1, 1995, unless stated otherwise. The date upon which the provisions of this document become effective. In general, the provisions of this document only apply to Participants who are Associates on or after the Effective Date. However, investment and distribution provisions apply to all Participants with Account balances to be invested or distributed after the Effective Date. 1.20 "Eligible Associate". A production Associate of an Employer at Colonial Rubber Works, Inc., a division of the Company, and an Associate of an Employer at PDC- Texas, except any Associate whose compensation and conditions of employment are covered by a collective bargaining agreement to which an Employer is a party unless the agreement calls for the Associate's participation in the Plan. 1.21 "Eligible Retirement Plan". An individual retirement account described in Code section 408(a), an individual retirement annuity described in Code section 408(b), an annuity plan described in Code section 403(a), or a qualified trust described in Code section 401(a), that accepts a Distributee's Eligible Rollover Distribution, except that with regard to an Eligible Rollover Distribution to a surviving spouse, an Eligible Retirement Plan is an individual retirement account or individual retirement annuity. 1.22 "Eligible Rollover Distribution". A distribution of all or any portion of the balance to the credit of a Distributee, excluding a 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 a Distributee or the joint lives (or joint life expectancies) of a Distributee and the Distributee's designated Beneficiary, or for a specified period of ten years or more; a distribution to the extent such distribution is required under Code section 401(a)(9); and the portion of a distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to Employer securities). 1.23 "Employer". The Company and any Subsidiary or other Related Company of either the Company or a Subsidiary which adopts this Plan with the approval of the Company. 1.24 "ERISA". The Employee Retirement Income Security Act of 1974, as amended. Reference to any specific section shall include such section, any valid regulation promulgated thereunder, and any comparable provision of any future legislation amending, supplementing or superseding such section. 1.25 "Forfeiture Account". An account holding amounts forfeited by Participants who have left the Employer, invested in interest bearing deposits of the Trustee, pending disposition as provided in this Plan and Trust and as directed by the Administrator. 1.26 "HCE" or "Highly Compensated Employee". An Associate described as a Highly Compensated Employee in Section 12. 1.27 "Ineligible". The Plan status of an individual during the period in which he or she is (1) an Associate of a Related Company which is not then an Employer, (2) an Associate, but not an Eligible Associate, or (3) not an Associate. 1.28 "Investment Fund" or "Fund". An investment fund as described in Section 16.2. The Investment Funds authorized by the Administrator to be offered as of the Effective Date to Participants and Beneficiaries are as set forth in Appendix A. 1.29 "Leased Associate". An individual who is deemed to be an associate of any Related Company as provided in Code section 414(n) or (o). 1.30 "Leave of Absence". A period during which an individual is deemed to be an Associate, but is absent from active employment, provided that the absence: (a) was authorized by a Related Company; or (b) was due to military service in the United States armed forces and the individual returns to active employment within the period during which he or she retains employment rights under federal law. 1.31 "NHCE" or "Non-Highly Compensated Employee". An Associate described as a Non-Highly Compensated Employee in Section 12. 1.32 "Normal Retirement Date". The date of a Participant's 55th birthday. 1.33 "Owner". A person with an ownership interest in the capital, profits, outstanding stock or voting power of a Related Company within the meaning of Code section 318 or 416 (which exclude indirect ownership through a qualified plan). 1.34 "Parental Leave". The period of absence from work by reason of pregnancy, the birth of an Associate's child, the placement of a child with the Associate in connection with the child's adoption, or caring for such child immediately after birth or placement as described in Code section 410(a)(5)(E). 1.35 "Participant". An Eligible Associate who begins to participate in the Plan after completing the eligibility requirements as described in Section 2.1. An Eligible Associate who makes a Rollover Contribution prior to completing the eligibility requirements as described in Section 2.1 shall also be considered a Participant except for purposes of provisions related to Contributions (other than a Rollover Contribution). A Participant's participation continues until his or her employment with all Related Companies ends and his or her Account is distributed or forfeited. 1.36 "Pay". All cash compensation paid to an Eligible Associate by an Employer while a Participant during the current period. Pay excludes reimbursements or other expense allowances, cash and non-cash fringe benefits, moving expenses, deferred compensation and welfare benefits. Pay is neither increased nor decreased by any salary credit or reduction pursuant to Code sections 125 or 402(e)(3). Pay is limited to $150,000 (as indexed for the cost of living pursuant to Code sections 401(a)(17) and 415(d)) per Plan Year. For purposes of the Contributions described in Section 5.2, the limitations as described in the second paragraph of Section 1.11 shall also apply. 1.37 "Period of Employment". The period beginning on the date an Associate first performs an hour of service and ending on the date his or her employment ends. Employment ends on the date the Associate quits, retires, is discharged, dies or (if earlier) the first anniversary of his or her absence for any other reason. The period of absence starting with the date an Associate's employment temporarily ends and ending on the date he or she is subsequently reemployed is (1) included in his or her Period of Employment if the period of absence does not exceed one year, and (2) excluded if such period exceeds one year. Period of Employment includes the period prior to a Break in Service. An Associate's service with a predecessor or acquired company shall only be counted in the determination of his or her Period of Employment for eligibility and/or vesting purposes if (1) the Company directs that credit for such service be granted, or (2) a qualified plan of the predecessor or acquired company is subsequently maintained by any Employer or Related Company. 1.38 "Plan". The 401(k) Savings and Retirement Plan for Polymer Associates set forth in this document, as from time to time amended. 1.39 "Plan Administrator". If applicable, the third party administrator which has been retained by the Company or the Committee, on the Company's behalf, to administer the Plan in accordance with Section 15.6. 1.40 "Plan Year". The annual accounting period of the Plan and Trust which ends on each December 31. 1.41 "QDRO". A domestic relations order which the Administrator has determined to be a qualified domestic relations order within the meaning of Code section 414(p). 1.42 "Reduction in Force". An Employer sponsored program developed to reduce force on a permanent basis. 1.43 "Related Company". With respect to any Employer, that Employer and any corporation, trade or business which is, together with that Employer, a member of the same controlled group of corporations, a trade or business under common control, or an affiliated service group within the meaning of Code section 414(b), (c), (m) or (o). 1.44 "Settlement Date". For each Trade Date, the Trustee's next business day. 1.45 "Spousal Consent". The written consent given by a spouse to a Participant's election or waiver of a specified form of benefit, including a loan or in- service withdrawal, or Beneficiary designation. The spouse's consent must acknowledge the effect on the spouse of the Participant's election, waiver or designation and be duly witnessed by a notary public. Spousal Consent shall be valid only with respect to the spouse who signs the Spousal Consent and only for the particular choice made by the Participant which requires Spousal Consent. A Participant may revoke (without Spousal Consent) a prior election, waiver or designation that required Spousal Consent at any time before payments begin. Spousal Consent also means a determination by the Administrator that there is no spouse, the spouse cannot be located, or such other circumstances as may be established by applicable law. 1.46 "Subsidiary". A company which is more than 50% owned, directly or indirectly, by the Company. 1.47 "Sweep Account". The subsidiary Account for each Participant through which all transactions are processed, which is invested in interest bearing deposits of the Trustee. 1.48 "Sweep Date". The cut off date and time for receiving instructions for transactions to be processed on the next Trade Date. 1.49 "Taxable Income". Compensation in the amount reported by the Employer as "Wages, tips, other compensation" on Form W-2, or any successor method of reporting under Code section 6041(d). 1.50 "Trade Date". Each day the Investment Funds are valued, which is normally every day the assets of such Funds are traded. 1.51 "Trust". The legal entity created by those provisions of this document which relate to the Trustee. The Trust is part of the Plan and holds the Plan assets which are comprised of the aggregate of Participants' Accounts, any unallocated funds invested in deposit or money market type assets pending allocation to Participants' Accounts or disbursement to pay Plan fees and expenses and the Forfeiture Account. 1.52 "Trustee". Wells Fargo Bank, National Association. 1.53 "Year of Vesting Service". A 12 month Period of Employment. Years of Vesting Service shall include service credited prior to January 1, 1995. 2 ELIGIBILITY 2.1 Eligibility Each Eligible Associate shall become a Participant on January 1, 1995 or thereafter, on the first day of the next month after the date he or she completes a 6- month Period of Employment. The eligibility period begins on the date an Associate's Period of Employment commences. 2.2 Ineligible Associates If an Associate completes the above eligibility requirements, but is Ineligible at the time participation would otherwise begin (if he or she were not Ineligible), he or she shall become a Participant on the first subsequent date on which he or she is an Eligible Associate. 2.3 Ineligible or Former Participants A Participant may not make or share in Plan Contributions, nor generally be eligible for a new Plan loan, during the period he or she is Ineligible, but he or she shall continue to participate for all other purposes. An Ineligible Participant or former Participant shall automatically become an active Participant on the date he or she again becomes an Eligible Associate. 3 PARTICIPANT CONTRIBUTIONS 3.1 Associate Pre-Tax Contribution Election Upon becoming a Participant, an Eligible Associate may elect to reduce his or her Pay by an amount which does not exceed the Contribution Dollar Limit, within the limits described in the Contribution Percentage Limits paragraph of this Section 3, and have such amount contributed to the Plan by the Employer as an Associate Pre-Tax Contribution. The election shall be made as a whole percentage of Pay in such manner and with such advance notice as prescribed by the Administrator. In no event shall an Associate's Associate Pre-Tax Contributions under the Plan and comparable contributions to all other plans, contracts or arrangements of all Related Companies exceed the Contribution Dollar Limit for the Associate's taxable year beginning in the Plan Year. 3.2 Changing a Contribution Election A Participant who is an Eligible Associate may change his or her Associate Pre-Tax Contribution election as of any January 1, April 1, July 1 or October 1 in such manner and with such advance notice as prescribed by the Administrator, and such election shall be effective with the first payroll paid after such date. Participants' Contribution election percentages shall automatically apply to Pay increases or decreases. 3.3 Revoking and Resuming a Contribution Election A Participant may revoke his or her Contribution election at any time in such manner and with such advance notice as prescribed by the Administrator, and such election shall be effective with the first payroll paid after such date. A Participant may resume Contributions by making a new Contribution election at the same time in which a Participant may change his or her election in such manner and with such advance notice as prescribed by the Administrator, and such election shall be effective with the first payroll paid after such date. 3.4 Contribution Percentage Limits The Administrator may establish and change from time to time, in writing, without the necessity of amending this Plan and Trust document, the minimum, if applicable, and maximum Associate Pre-Tax Contribution percentages, prospectively or retrospectively (for the current Plan Year), for all Participants. In addition, the Administrator may establish any lower percentage limits for Highly Compensated Employees as it deems necessary. As of the Effective Date, the Associate Pre-Tax Contribution maximum percentage is 11%. Irrespective of the limits that may be established by the Administrator in accordance with this paragraph, in no event shall the contributions made by or on behalf of a Participant for a Plan Year exceed the maximum allowable under Code section 415. 3.5 Refunds When Contribution Dollar Limit Exceeded A Participant who makes Associate Pre-Tax Contributions for a calendar year to this Plan and comparable contributions to any other qualified defined contribution plan in excess of the Contribution Dollar Limit may notify the Administrator in writing by the following March 1 (or as late as April 14 if allowed by the Administrator) that an excess has occurred. In this event, the amount of the excess specified by the Participant, adjusted for investment gain or loss, shall be refunded to him or her by April 15 and shall not be included as an Annual Addition under Code section 415 for the year contributed. Refunds shall not include investment gain or loss for the period between the end of the applicable Plan Year and the date of distribution. Excess amounts shall first be taken from unmatched Associate Pre-Tax Contributions and then from matched Associate Pre-Tax Contributions. Any Company Matching Contributions attributable to refunded excess Associate Pre-Tax Contributions as described in this Section shall be deemed a Contribution made by reason of a mistake of fact and removed from the Participant's Account. 3.6 Timing, Posting and Tax Considerations Participants' Contributions, other than Rollover Contributions, may only be made through payroll deduction. Such amounts shall be paid to the Trustee in cash and posted to each Participant's Account(s) as soon as such amounts can reasonably be separated from the Employer's general assets and balanced against the specific amount made on behalf of each Participant. In no event, however, shall such amounts be paid to the Trustee more than 90 days after the date amounts are deducted from a Participant's Pay. Associate Pre- Tax Contributions shall be treated as Employer Contributions in determining tax deductions under Code section 404(a). 4 ROLLOVERS & TRUST-TO-TRUST TRANSFERS 4.1 Rollovers The Administrator may authorize the Trustee to accept a rollover contribution in cash, within the meaning of Code section 402(c) or 408(d)(3)(A)(ii), directly from an Eligible Associate or as a Direct Rollover from another qualified plan on behalf of the Eligible Associate, even if he or she is not yet a Participant. The Associate shall be responsible for furnishing satisfactory evidence, in such manner as prescribed by the Administrator, that the amount is eligible for rollover treatment. A rollover contribution received directly from an Eligible Associate must be paid to the Trustee in cash within 60 days after the date received by the Eligible Associate from a qualified plan or conduit individual retirement account. Contributions described in this paragraph shall be posted to the applicable Associate's Rollover Account as of the date received by the Trustee. If it is later determined that an amount contributed pursuant to the above paragraph did not in fact qualify as a rollover contribution under Code section 402(c) or 408(d)(3)(A)(ii), the balance credited to the Associate's Rollover Account shall immediately be (1) segregated from all other Plan assets, (2) treated as a nonqualified trust established by and for the benefit of the Associate, and (3) distributed to the Associate. Any such nonqualifying rollover shall be deemed never to have been a part of the Plan. 4.2 Transfers From Other Qualified Plans The Administrator may instruct the Trustee to receive assets in cash or in kind directly from another qualified plan; provided that a transfer should not be directed if: (a) any amounts are not exempted by Code section 401(a)(11)(B) from the annuity requirements of Code section 417, unless the Plan complies with such requirements; or (b) any amounts include benefits protected by Code section 411(d)(6) which would not be preserved under applicable Plan provisions. The Trustee may refuse the receipt of any transfer if: (a) the Trustee finds the in-kind assets unacceptable; or (b) instructions for posting amounts to Participants' Accounts are incomplete. Such amounts shall be posted to the appropriate Accounts of Participants as of the date received by the Trustee. 5 EMPLOYER CONTRIBUTIONS 5.1 Company Matching Contributions (a) Frequency and Eligibility. For each Plan Year, the Employer shall make Company Matching Contributions, as described in the following Allocation Method paragraph, on behalf of each Participant who contributed during the period and was an Eligible Associate on the last day of the period. In addition, such Contributions shall be made on behalf of each Participant who ceased being an Associate during the period after having attained age 55, or by reason of Reduction in Force or his or her Disability or death. (b) Allocation Method. The Company Matching Contributions (including any Forfeiture Account amounts applied as Company Matching Contributions in accordance with Section 8.4) for each period shall total 25% to 100%, based on the percentage attainment of annual targeted Company Stock earnings per share, of each eligible Participant's Associate Pre-Tax Contributions for the period, provided that no Company Matching Contributions (and Forfeiture Account amounts) shall be made based upon a Participant's Contributions in excess of 6% of his or her Pay while contributing Associate Pre-Tax Contributions. The Employer may elect at any time before the Employer's federal tax filing date, including extensions, to change the matching rate or the 6% of considered Pay to any other percentages, including 0%. (c) Timing, Medium and Posting. The Employer shall make each period's Company Matching Contribution in cash, or in Company Stock or a combination thereof, as soon as is feasible, and not later than the Employer's federal tax filing date, including extensions, for deducting such Contribution. The Trustee shall post such amount to each Participant's Company Matching Account once the total Contribution received has been balanced against the specific amount to be credited to each Participant's Company Matching Account. 5.2 Retirement Contributions (a) Frequency and Eligibility. For each Plan Year, the Employer may make a Retirement Contribution on behalf of each Participant who was an Eligible Associate on the last day of the period and each Participant who is otherwise eligible but who ceased being an Associate during the period after having attained age 55, or by reason of Reduction in Force or his or her Disability or death. (b) Allocation Method. The Retirement Contribution (including any Forfeiture Account amounts applied as Retirement Contributions in accordance with Section 8.4) for each period, shall be in an amount determined by the Employer and allocated among eligible Participants in direct proportion to their Compensation while a Participant and Eligible Associate. (c) Timing, Medium and Posting. The Employer shall make each period's Retirement Contribution in cash, or in Company Stock or a combination thereof, as soon as is feasible, and not later than the Employer's federal tax filing date, including extensions, for deducting such Contribution. The Trustee shall post such amount to each Participant's Retirement Account once the total Contribution received has been balanced against the specific amount to be credited to each Participant's Retirement Account. 5.3 Supplemental Retirement Contributions (a) Frequency and Eligibility. For each Plan Year, the Employer may make a Supplemental Retirement Contribution on behalf of Non-Highly Compensated Employee Participants who were Eligible Associates at any time during the period. (b) Allocation Method. The Supplemental Retirement Contribution for each period shall be allocated to eligible Participants in order of each Participant's Taxable Income for the Plan Year beginning with the Participant with the lowest Taxable Income, in an amount so that the Annual Addition, as defined in Section 13.1, to each Participant's Account equals but does not exceed the Maximum Annual Addition, as defined in Section 13.2. Notwithstanding no Supplemental Retirement Contributions will be made in an amount in excess of the amount necessary to satisfy the tests described in Sections 12.2 and 12.4. (c) Timing, Medium and Posting. The Employer shall make each period's Supplemental Retirement Contribution in cash, or in Company Stock or a combination thereof, as soon as is feasible, and not later than the Employer's federal tax filing date, including extensions, for deducting such contribution. Notwithstanding, for purposes of satisfying the tests described in Sections 12.2 and 12.4 Supplemental Retirement Contributions must be made before the end of the Plan Year following the Plan Year being tested. The Trustee shall post such amount to each Participant's Supplemental Retirement Account once the total Contribution received has been balanced against the specific amount to be credited to each Participant's Supplemental Retirement Account. 6 ACCOUNTING 6.1 Individual Participant Accounting The Administrator shall maintain an individual set of Accounts for each Participant in order to reflect transactions both by type of Contribution and investment medium. Financial transactions shall be accounted for at the individual Account level by posting each transaction to the appropriate Account of each affected Participant. Participant Account values shall be maintained in shares for the Investment Funds and in dollars for their Sweep and Participant loan Accounts. At any point in time, the Account value shall be determined using the most recent Trade Date values provided by the Trustee. 6.2 Sweep Account is Transaction Account All transactions related to amounts being contributed to or distributed from the Trust shall be posted to each affected Participant's Sweep Account. Any amount held in the Sweep Account will be credited with interest up until the date on which it is removed from the Sweep Account. 6.3 Trade Date Accounting and Investment Cycle Participant Account values shall be determined as of each Trade Date. For any transaction to be processed as of a Trade Date, the Trustee must receive instructions for the transaction by the Sweep Date. Such instructions shall apply to amounts held in the Account on that Sweep Date. Financial transactions of the Investment Funds shall be posted to Participants' Accounts as of the Trade Date, based upon the Trade Date values provided by the Trustee, and settled on the Settlement Date. 6.4 Accounting for Investment Funds Investments in each Investment Fund shall be maintained in shares. The Trustee is responsible for determining the share values of each Investment Fund as of each Trade Date. To the extent an Investment Fund is comprised of collective investment funds of the Trustee, or any other fiduciary to the Plan, the share values shall be determined in accordance with the rules governing such collective investment funds, which are incorporated herein by reference. All other share values shall be determined by the Trustee. The share value of each Investment Fund shall be based on the fair market value of its underlying assets. 6.5 Payment of Fees and Expenses Except to the extent Plan fees and expenses related to Account maintenance, transaction and Investment Fund management and maintenance, as set forth below, are paid by the Employer directly, or indirectly, through the Forfeiture Account as directed by the Administrator, such fees and expenses shall be paid as set forth below. The Employer may pay a lower portion of the fees and expenses allocable to the Accounts of Participants who are no longer Associates or who are not Beneficiaries, unless doing so would result in discrimination. (a) Account Maintenance: Account maintenance fees and expenses, may include but are not limited to, administrative, Trustee, government annual report preparation, audit, legal, nondiscrimination testing, and fees for any other special services. Account maintenance fees shall be charged to Participants on a per Participant basis provided that no fee shall reduce a Participant's Account balance below zero. (b) Transaction: Transaction fees and expenses, may include but are not limited to, recurring payment, Investment Fund election change and loan fees. Transaction fees shall be charged to the Participant's Account involved in the transaction provided that no fee shall reduce a Participant's Account balance below zero. (c) Investment Fund Management and Maintenance: Management and maintenance fees and expenses related to the Investment Funds shall be charged at the Investment Fund level and reflected in the net gain or loss of each Fund. As of the Effective Date, a breakdown of which Plan fees and expenses shall generally be borne by the Trust (and charged to individual Participants' Accounts) and those that shall be paid by the Employer, directly or indirectly, is set forth in Appendix B and may be changed by the Administrator from time to time, in writing, without the necessity of amending this Plan and Trust document. The Trustee shall have the authority to pay any such fees and expenses, which remain unpaid by the Employer for 60 days, from the Trust. 6.6 Accounting for Participant Loans Participant loans shall be held in a separate Account of the Participant and accounted for in dollars as an earmarked asset of the borrowing Participant's Account. 6.7 Error Correction The Administrator may correct any errors or omissions in the administration of the Plan by restoring any Participant's Account balance with the amount that would be credited to the Account had no error or omission been made. Funds necessary for any such restoration shall be provided through payment made by the Employer, or by the Trustee to the extent the error or omission is attributable to actions or inactions of the Trustee, or if the restoration involves an Employer Contribution Account, the Administrator may direct the Trustee to use amounts from the Forfeiture Account. 6.8 Participant Statements The Administrator shall provide Participants with statements of their Accounts as soon after the end of each quarter of the Plan Year as is administratively feasible. 6.9 Special Accounting During Conversion Period The Administrator and Trustee may use any reasonable accounting methods in performing their respective duties during any Conversion Period. This includes, but is not limited to, the method for allocating net investment gains or losses and the extent, if any, to which contributions received by and distributions paid from the Trust during this period share in such allocation. 6.10 Accounts for QDRO Beneficiaries A separate Account shall be established for an alternate payee entitled to any portion of a Participant's Account under a QDRO as of the date and in accordance with the directions specified in the QDRO. In addition, a separate Account may be established during the period of time the Administrator, a court of competent jurisdiction or other appropriate person is determining whether a domestic relations order qualifies as a QDRO. Such a separate Account shall be valued and accounted for in the same manner as any other Account. (a) Distributions Pursuant to QDROs. If a QDRO so provides, the portion of a Participant's Account payable to an alternate payee may be distributed, in a form as permissible under the Distributions Once Employment Ends Section, to the alternate payee at the time specified in the QDRO, regardless of whether the Participant is entitled to a distribution from the Plan at such time. (b) Participant Loans. Except to the extent required by law, an alternate payee, on whose behalf a separate Account has been established, shall not be entitled to borrow from such Account. If a QDRO specifies that the alternate payee is entitled to any portion of the Account of a Participant who has an outstanding loan balance, all outstanding loans shall generally continue to be held in the Participant's Account and shall not be divided between the Participant's and alternate payee's Accounts. (c) Investment Direction. Where a separate Account has been established on behalf of an alternate payee and has not yet been distributed, the alternate payee may direct the investment of such Account in the same manner as if he or she were a Participant. 7 INVESTMENT FUNDS AND ELECTIONS 7.1 Investment Funds Except for Participants' Sweep and loan Accounts, the Trust shall be maintained in various Investment Funds. The Administrator shall select the Investment Funds offered to Participants and may change the number or composition of the Investment Funds, subject to the terms and conditions agreed to with the Trustee. As of the Effective Date, a list of the Investment Funds offered to Participants is set forth in Appendix A, and may be changed by the Administrator from time to time, in writing, without the necessity of amending this Plan and Trust document. 7.2 Investment Fund Elections Each Participant shall direct the investment of all of his or her Contribution Accounts except for these Accounts: Company Matching Account which shall be entirely invested in the Investment Fund specified by the Administrator, which Investment Fund as of the Effective Date is set forth in Appendix A. A Participant shall make his or her investment election in any combination of one or any number of the Investment Funds offered in accordance with the procedures established by the Administrator and Trustee. However, during any Conversion Period, Trust assets may be held in any investment vehicle permitted by the Plan, as directed by the Administrator, irrespective of Participant investment elections. The Administrator may set a maximum percentage of the total election that a Participant may direct into any specific Investment Fund, which maximum, if any, as of the Effective Date, is set forth in Appendix A, and may be changed from by the Administrator time to time, in writing, without the necessity of amending this Plan and Trust document. 7.3 Responsibility for Investment Choice Each Participant shall be solely responsible for the selection of his or her Investment Fund choices. No fiduciary with respect to the Plan is empowered to advise a Participant as to the manner in which his or her Accounts are to be invested, and the fact that an Investment Fund is offered shall not be construed to be a recommendation for investment. 7.4 Default if No Election The Administrator shall specify an Investment Fund for the investment of that portion of a Participant's Account which is not yet held in an Investment Fund and for which no valid investment election is on file. The Investment Fund specified as of the Effective Date is set forth in Appendix A, and may be changed by the Administrator from time to time, in writing, without the necessity of amending this Plan and Trust document. 7.5 Timing A Participant shall make his or her initial investment election upon becoming a Participant and may change his or her election at any time in accordance with the procedures established by the Administrator and Trustee. Investment elections received by the Trustee by the Sweep Date will be effective on the following Trade Date. 7.6 Investment Fund Election Change Fees A reasonable processing fee may be charged directly to a Participant's Account for Investment Fund election changes in excess of a specified number per year as determined by the Administrator. 8 VESTING & FORFEITURES 8.1 Fully Vested Contribution Accounts A Participant shall be fully vested in these Accounts at all times: Associate Pre-Tax Account Rollover Account Company Matching Account Supplemental Retirement Account 8.2 Full Vesting upon Certain Events A Participant's entire Account shall become fully vested once he or she has attained his or her Normal Retirement Date as an Associate or upon his or her leaving the Employer due to a Reduction in Force or his or her Disability or death. 8.3 Vesting Schedule In addition to the vesting provided above, a Participant's Retirement Account shall become vested in accordance with the following schedule: Years of Vesting Vested Service Percentage Less than 1 0% 1 but less than 2 20% 2 but less than 3 40% 3 but less than 4 60% 4 but less than 5 80% 5 or more 100% If this vesting schedule is changed, the vested percentage for each Participant shall not be less than his or her vested percentage determined as of the last day prior to this change, and for any Participant with at least three Years of Vesting Service when the schedule is changed, vesting shall be determined using the more favorable vesting schedule. 8.4 Forfeitures A Participant's non-vested Account balance shall be forfeited as of the Settlement Date following the Sweep Date on which the Administrator has reported to the Trustee that the Participant's employment has terminated with all Related Companies. Forfeitures from all Employer Contribution Accounts shall be transferred to and maintained in a single Forfeiture Account, which shall be invested in interest bearing deposits of the Trustee. Forfeiture Account amounts shall be utilized to restore Accounts, to pay Plan fees and expenses, and to reduce Company Matching and Retirement Contributions as directed by the Administrator. 8.5 Rehired Associates (a) Service. If a former Associate is rehired,all Periods of Employment credited prior to his or her termination of employment shall be counted in determining his or her vested interest. (b) Account Restoration. If a former Associate is rehired before he or she has a Break in Service, the amount forfeited when his or her employment last terminated shall be restored to his or her Account. The restoration shall include the interest which would have been credited had such forfeiture been invested in the Sweep Account from the date forfeited until the date the restoration amount is determined. The amount shall come from the Forfeiture Account to the extent possible, and any additional amount needed shall be contributed by the Employer. The vested interest in his or her restored Account shall then be equal to: V% times (AB + D) - D where: V% = current vested percentage AB = current account balance D = amount previously distributed 9 PARTICIPANT LOANS 9.1 Participant Loans Permitted Loans to Participants are permitted pursuant to the terms and conditions set forth in this Section. 9.2 Loan Application, Note and Security A Participant shall apply for any loan in such manner and with such advance notice as prescribed by the Administrator. All loans shall be evidenced by a promissory note, secured only by the portion of the Participant's Account from which the loan is made, and the Plan shall have a lien on this portion of his or her Account. 9.3 Spousal Consent A Participant is required to obtain Spousal Consent in order to take out a loan under the Plan. 9.4 Loan Approval The Administrator, or the Trustee if otherwise authorized by the Administrator and agreed to by the Trustee, is responsible for determining that a loan request conforms to the requirements described in this Section and granting such request. 9.5 Loan Funding Limits The loan amount must meet all of the following limits as determined as of the Sweep Date the loan is processed: (a) Plan Minimum Limit. The minimum amount for any loan is $1,000. (b) Plan Maximum Limit. Subject to the legal limit described in (c) below, the maximum a Participant may borrow, including the outstanding balance of existing Plan loans, is 100% of the following Accounts which are fully vested: Associate Pre-Tax Account Rollover Account (c) Legal Maximum Limit. The maximum a Participant may borrow, including the outstanding balance of existing Plan loans, is 50% of his or her vested Account balance, not to exceed $50,000. However, the $50,000 maximum is reduced by the Participant's highest outstanding loan balance during the 12 month period ending on the day before the Sweep Date as of which the loan is made. For purposes of this paragraph, the qualified plans of all Related Companies shall be treated as though they are part of this Plan to the extent it would decrease the maximum loan amount. 9.6 Maximum Number of Loans A Participant may have a maximum of two loans outstanding at any given time. 9.7 Source and Timing of Loan Funding A loan to a Participant shall be made solely from the assets of his or her own Accounts. The available assets shall be determined first by Account type and then by investment type within each type of Account. The hierarchy for loan funding by type of Account shall be the order listed in the preceding Plan Maximum Limit paragraph. Within each Account used for funding a loan, amounts shall first be taken from the Sweep Account and then taken by type of investment in direct proportion to the market value of the Participant's interest in each Investment Fund as of the Trade Date on which the loan is processed. Loans will be funded on the Settlement Date following the Trade Date as of which the loan is processed. The Trustee shall make payment to the Participant as soon thereafter as administratively feasible. 9.8 Interest Rate The interest rate charged on Participant loans shall be a fixed reasonable rate of interest, determined from time to time by the Administrator, which provides the Plan with a return commensurate with the prevailing interest rate charged by persons in the business of lending money for loans which would be made under similar circumstances. As of the Effective Date, the interest rate is determined as set forth in Appendix C, and may be changed by the Administrator from time to time, in writing, without the necessity of amending this Plan and Trust document. 9.9 Repayment Substantially level amortization shall be required of each loan with payments made at least monthly, generally through payroll deduction. Loans may be prepaid in full or in part at any time. The Participant may choose the loan repayment period, not to exceed 5 years. However, the term may be for any period not to exceed 15 years if the purpose of the loan is to acquire the Participant's principal residence. 9.10 Repayment Hierarchy Loan principal repayments shall be credited to the Participant's Accounts in the inverse of the order used to fund the loan. Loan interest shall be credited to the Participant's Accounts in direct proportion to the principal payment. Loan payments are credited by investment type based upon the Participant's current investment election for new Contributions. 9.11 Repayment Suspension The Administrator may agree to a suspension of loan payments for up to 12 months for a Participant who is on a Leave of Absence without pay. During the suspension period interest shall continue to accrue on the outstanding loan balance. At the expiration of the suspension period all outstanding loan payments and accrued interest thereon shall be due unless otherwise agreed upon by the Administrator. 9.12 Loan Default A loan is treated as a default if scheduled loan payments are more than 90 days late. A Participant shall then have 30 days from the time he or she receives written notice of the default and a demand for past due amounts to cure the default before it becomes final. In the event of default, the Administrator may direct the Trustee to report the default as a taxable distribution. As soon as a Plan withdrawal or distribution to such Participant would otherwise be permitted, the Administrator may instruct the Trustee to execute upon its security interest in the Participant's Account by distributing the note to the Participant. 9.13 Call Feature The Administrator shall have the right to call any Participant loan once a Participant's employment with all Related Companies has terminated or if the Plan is terminated. 10 IN-SERVICE WITHDRAWALS 10.1 In-Service Withdrawals Permitted In-service withdrawals to a Participant who is an Associate are permitted pursuant to the terms and conditions set forth in this Section and as required by law as set forth in Section 11. 10.2 In-Service Withdrawal Application and Notice A Participant shall apply for any in-service withdrawal in such manner and with such advance notice as prescribed by the Administrator. The Participant shall be provided the notice prescribed by Code section 402(f). If an in-service withdrawal is one to which Code sections 401(a)(11) and 417 do not apply, such in- service withdrawal may commence less than 30 days after the aforementioned notice is provided, if: (a) the Participant is clearly informed that he or she has the right to a period of at least 30 days after receipt of such notice to consider his or her option to elect or not elect a Direct Rollover for all or a portion, if any, of his or her in-service withdrawal which will constitute an Eligible Rollover Distribution; and (b) the Participant after receiving such notice, affirmatively elects a Direct Rollover for all or a portion, if any, of his or her in-service withdrawal which will constitute an Eligible Rollover Distribution or alternatively elects to have all or a portion made payable directly to him or her, thereby not electing a Direct Rollover for all or a portion thereof. 10.3 Spousal Consent A Participant is required to obtain Spousal Consent in order to make an in-service withdrawal under the Plan. 10.4 In-Service Withdrawal Approval The Administrator, or the Trustee if otherwise authorized by the Administrator and agreed to by the Trustee, is responsible for determining that an in- service withdrawal request conforms to the requirements described in this Section and granting such request. 10.5 Minimum Amount, Payment Form and Medium There is no minimum amount for any type of withdrawal. With regard to the portion of a withdrawal representing an Eligible Rollover Distribution, a Participant may elect a Direct Rollover for all or a portion of such amount. The form of payment for an in-service withdrawal shall be a single lump sum and payment shall be made in cash. 10.6 Source and Timing of In-Service Withdrawal Funding An in-service withdrawal to a Participant shall be made solely from the assets of his or her own Accounts and will be based on the Account values as of the Trade Date the in-service withdrawal is processed. The available assets shall be determined first by Account type and then by investment type within each type of Account. Within each Account used for funding an in-service withdrawal, amounts shall first be taken from the Sweep Account and then taken by type of investment in direct proportion to the market value of the Participant's interest in each Investment Fund (which excludes Participant loans) as of the Trade Date on which the in-service withdrawal is processed. In-Service withdrawals will be funded on the Settlement Date following the Trade Date as of which the in-service withdrawal is processed. The Trustee shall make payment as soon thereafter as administratively feasible. 10.7 Hardship Withdrawals (a) Requirements. A Participant who is an Associate may request the withdrawal of up to the amount necessary to satisfy a financial need including amounts necessary to pay any federal, state or local income taxes or penalties reasonably anticipated to result from the withdrawal. Only requests for withdrawals (1) on account of a Participant's "Deemed Financial Need", and (2) which are "Deemed Necessary" to satisfy the financial need will be approved. (b) "Deemed Financial Need". Financial commitments relating to: (1) the payment of unreimbursable medical expenses described under Code section 213(d) incurred (or to be incurred) by the Associate, his or her spouse or dependents; (2) the purchase (excluding mortgage payments) of the Associate's principal residence; (3) the payment of unreimbursable tuition and related educational fees for up to the next 12 months of post-secondary education for the Associate, his or her spouse or dependents; (4) the payment of funeral expenses of an Associate's family member; (5) the payment of amounts necessary for the Associate to prevent losing his or her principal residence through eviction or foreclosure on the mortgage; or (6) any other circumstance specifically permitted under Code section 401(k)(2)(B)(i)(IV). (c) "Deemed Necessary". A withdrawal is "deemed necessary" to satisfy the financial need only if the withdrawal amount does not exceed the financial need and all of these conditions are met: (1) the Associate has obtained all other possible withdrawals and nontaxable loans available from all plans maintained by Related Companies; (2) the Administrator shall suspend the Associate from making any contributions to this Plan, all other qualified and nonqualified plans of deferred compensation and all stock option or stock purchase plans maintained by Related Companies for 12 months from the date the withdrawal payment is made; and (3) the Administrator shall reduce the Contribution Dollar Limit for the Associate for the calendar year next following the calendar year of the withdrawal by the amount of the Associate's Associate Pre-Tax Contributions for the calendar year of the withdrawal. (d) Account Sources for Withdrawal. The withdrawal amount shall come from the following of the Participant's fully vested Accounts, in the priority order as follows: Rollover Account Associate Pre-Tax Account The amount that may be withdrawn from a Participant's Associate Pre-Tax Account shall not include any earnings credited to his or her Associate Pre-Tax Account. (e) Permitted Frequency. There is no restriction on the number of Hardship withdrawals permitted to a Participant. 10.8 Rollover Account Withdrawals No in-service withdrawals are permitted from a Participant's Rollover Account except as provided elsewhere in this Section. 10.9 Over Age 59 1/2 Withdrawals (a) Requirements. A Participant who is an Associate and over age 59 1/2 may withdraw from the Accounts listed in paragraph (b) below. (b) Account Sources for Withdrawal. The withdrawal amount shall come from the following of the Participant's fully vested Accounts, in the priority order as follows: Rollover Account Associate Pre-Tax Account A Participant's Company Matching, Retirement and Supplemental Retirement Accounts may also be included as Account sources for withdrawal for a Participant who is an Associate and over age 70 1/2. (c) Permitted Frequency. There is no restriction on the number of Over Age 59 1/2 withdrawals permitted to a Participant. (d) Suspension from Further Contributions. An Over Age 59 1/2 withdrawal shall not affect a Participant's ability to make or be eligible to receive further Contributions. 11 DISTRIBUTIONS ONCE EMPLOYMENT ENDS OR AS REQUIRED BY LAW 11.1 Benefit Information, Notices and Election A Participant, or his or her Beneficiary in the case of his or her death, shall be provided with information regarding all optional times and forms of distribution available, to include the notices prescribed by Code section 402(f) and Code section 411(a)(11). Subject to the other requirements of this Section, a Participant, or his or her Beneficiary in the case of his or her death, may elect, in such manner and with such advance notice as prescribed by the Administrator, to have his or her vested Account balance paid to him or her beginning upon any Settlement Date following the Participant's termination of employment with all Related Companies or, if earlier, at the time required by law as set forth in Section 11.7. 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 aforementioned notices are provided, if: (a) the Participant is clearly informed that he or she has the right to a period of at least 30 days after receipt of such notices to consider the decision as to whether to elect a distribution and if so to elect a particular form of distribution and to elect or not elect a Direct Rollover for all or a portion, if any, of his or her distribution which will constitute an Eligible Rollover Distribution; and (b) the Participant after receiving such notices, affirmatively elects a distribution and a Direct Rollover for all or a portion, if any, of his or her distribution which will constitute an Eligible Rollover Distribution or alternatively elects to have all or a portion made payable directly to him or her, thereby not electing a Direct Rollover for all or a portion thereof. 11.2 Spousal Consent A Participant is required to obtain Spousal Consent in order to receive a distribution under the Plan. 11.3 Payment Form and Medium A Participant may elect to be paid in any of these forms: (a) a single lump sum, or (b) a portion paid in a lump sum, and the remainder paid later, or (c) periodic installments over a period not to exceed the life expectancy of the Participant and his or her Beneficiary. Distributions shall be made in cash, except to the extent a distribution consists of a distribution of an offset amount as described in Section 9.13. With regard to the portion of a distribution representing an Eligible Rollover Distribution, a Distributee may elect a Direct Rollover for all or a portion of such amount. 11.4 Distribution of Small Amounts If, at the time a Participant's employment with all Related Companies ends, the Participant's vested Account balance is $3,500 or less, the Participant's benefit may be paid as a single lump sum, without his or her consent, and if married, his or her spouse's consent, after his or her employment with all Related Companies ends in accordance with procedures prescribed by the Administrator. 11.5 Source and Timing of Distribution Funding A distribution to a Participant shall be made solely from the assets of his or her own Accounts and will be based on the Account values as of the Trade Date the distribution is processed. The available assets shall be determined first by Account type and then by investment type within each type of Account. Within each Account used for funding a distribution, amounts shall first be taken from the Sweep Account and then taken by type of investment in direct proportion to the market value of the Participant's interest in each Investment Fund as of the Trade Date on which the distribution is processed. Distributions will be funded on the Settlement Date following the Trade Date as of which the distribution is processed. The Trustee shall make payment as soon thereafter as administratively feasible. 11.6 Deemed Distribution For purposes of Section 8.4, vested Account balances will be deemed distributed as of the Settlement Date following the Sweep Date on which the Administrator has reported to the Trustee that the Participant's employment with all Related Companies has terminated. 11.7 Latest Commencement Permitted In addition to any other Plan requirements and unless a Participant elects otherwise, his or her benefit payments will begin not later than 60 days after the end of the Plan Year in which the Participant attains his or her Normal Retirement Date or retires, whichever is later. However, if the amount of the payment or the location of the Participant (after a reasonable search) cannot be ascertained by that deadline, payment shall be made no later than 60 days after the earliest date on which such amount or location is ascertained but in no event later than as described below. A Participant's failure to elect in such manner as prescribed by the Administrator to have his or her vested Account balance paid to him or her, shall be deemed to be an election by the Participant to defer his or her distribution. Benefit payments shall begin by the April 1 immediately following the end of the calendar year in which the Participant attains age 70 1/2 (whether or not he or she is an Associate). 11.8 Payment Within Life Expectancy The Participant's payment election must be consistent with the requirement of Code section 401(a)(9) that all payments are to be completed within a period not to exceed the lives or the joint and last survivor life expectancy of the Participant and his or her Beneficiary. The life expectancies of a Participant and his or her Beneficiary may not be recomputed annually. 11.9 Incidental Benefit Rule The Participant's payment election must be consistent with the requirement that, if the Participant's spouse is not his or her sole primary Beneficiary, the minimum annual distribution for each calendar year, beginning with the year in which the Participant attains age 70 1/2 shall not be less than the quotient obtained by dividing (a) the Participant's vested Account balance as of the last Trade Date of the preceding year by (b) the applicable divisor as determined under the incidental benefit requirements of Code section 401(a)(9). 11.10 Payment to Beneficiary Payment to a Beneficiary must either: (1) be completed by the end of the calendar year that contains the fifth anniversary of the Participant's death or (2) begin by the end of the calendar year that contains the first anniversary of the Participant's death and be completed within the period of the Beneficiary's life or life expectancy, except that: (a) If the Participant dies after the April 1 immediately following the end of the calendar year in which he or she attains age 70 1/2, payment to his or her Beneficiary must be made at least as rapidly as provided in the Participant's distribution election; (b) If the surviving spouse is the Beneficiary, payments need not begin until the end of the calendar year in which the Participant would have attained age 70 1/2 and must be completed within the spouse's life or life expectancy; and (c) If the Participant and the surviving spouse who is the Beneficiary die (1) before the April 1 immediately following the end of the calendar year in which the Participant would have attained age 70 1/2 and (2) before payments have begun to the spouse, the spouse will be treated as the Participant in applying these rules. 11.11 Beneficiary Designation Each Participant may complete a beneficiary designation form indicating the Beneficiary who is to receive the Participant's remaining Plan interest at the time of his or her death. The designation may be changed at any time. However, a Participant's spouse shall be the sole primary Beneficiary unless the designation includes Spousal Consent for another Beneficiary. If no proper designation is in effect at the time of a Participant's death or if the Beneficiary does not survive the Participant, the Beneficiary shall be, in the order listed, the: (a) Participant's surviving spouse, (b) Participant's children, in equal shares, per stirpes (by right of representation), or (c) Participant's estate. 12 ADP AND ACP TESTS 12.1 Contribution Limitation Definitions The following definitions are applicable to this Section 12 (where a definition is contained in both Sections 1 and 12, for purposes of Section 12 the Section 12 definition shall be controlling): (a) "ACP" or "Average Contribution Percentage". The Average Percentage calculated using Contributions allocated to Participants as of a date within the Plan Year. (b) "ACP Test". The determination of whether the ACP is in compliance with the Basic or Alternative Limitation for a Plan Year (as provided in Section 12.2). (c) "ADP" or "Average Deferral Percentage". The Average Percentage calculated using Deferrals allocated to Participants as of a date within the Plan Year. (d) "ADP Test". The determination of whether the ADP is in compliance with the Basic or Alternative Limitation for a Plan Year (as provided in Section 12.2). (e) "Average Percentage". The average of the calculated percentages for Participants within the specified group. The calculated percentage refers to either the "Deferrals" or "Contributions" (as defined in this Section) made on each Participant's behalf for the Plan Year, divided by his or her Compensation for the portion of the Plan Year in which he or she was an Eligible Associate while a Participant. (Associate Pre-Tax Contributions to this Plan or comparable contributions to plans of Related Companies which will be refunded solely because they exceed the Contribution Dollar Limit are included in the percentage for the HCE Group but not for the NHCE Group.) (f) "Contributions" shall include Company Matching Contributions. In addition, Contributions may include Associate Pre-Tax and Supplemental Retirement Contributions, but only to the extent that (1) the Employer elects to use them, (2) they are not used or counted in the ADP Test, (3) Supplemental Retirement Contributions are fully vested when made and not withdrawable by an Associate before he or she attains age 59 1/2, and (4) Associate Pre-Tax Contributions are necessary to meet the ACP Test Alternative Limitation (defined in Section 12.2 (b)) or the Multiple Use Test. (g) "Deferrals" shall include Associate Pre-Tax Contributions. In addition, Deferrals may include Company Matching and Supplemental Retirement Contributions, but only to the extent that (1) the Employer elects to use them, (2) they are not used or counted in the ACP Test, and (3) such Contributions are fully vested when made and not withdrawable by an Associate before he or she attains age 59 1/2. (h) "Family Member". An Associate who is, at any time during the Plan Year or Lookback Year, a spouse, lineal ascendant or descendant, or spouse of a lineal ascendant or descendant of (1) an active or former Associate who at any time during Plan Year or Lookback Year is a more than 5% Owner (within the meaning of Code section 414(q)(3)), or (2) an HCE who is among the 10 Associates with the highest Compensation for such Year. (i) "HCE" or "Highly Compensated Employee". With respect to each Employer and its Related Companies, an Associate during the Plan Year or Lookback Year who (in accordance with Code section 414(q)): (1) Was a more than 5% Owner at any time during the Lookback Year or Plan Year; (2) Received Compensation during the Lookback Year (or in the Plan Year if among the 100 Associates with the highest Compensation for such Year) in excess of (i) $75,000 (as adjusted for such Year pursuant to Code sections 414(q)(1) and 415(d)), or (ii) $50,000 (as adjusted for such Year pursuant to Code sections 414(q)(1) and 415(d)) in the case of a member of the "top-paid group" (within the meaning of Code section 414(q)(4)) for such Year), provided, however, that if the conditions of Code section 414(q)(12)(B)(ii) are met, the Company may elect for any Plan Year to apply clause (i) by substituting $50,000 for $75,000 and not to apply clause (ii); (3) Was an officer of a Related Company and received Compensation during the Lookback Year (or in the Plan Year if among the 100 Associates with the highest Compensation for such Year) that is greater than 50% of the dollar limitation in effect under Code section 415(b)(1)(A) and (d) for such Year (or if no officer has Compensation in excess of the threshold, the officer with the highest Compensation), provided that the number of officers shall be limited to 50 Associates (or, if less, the greater of three Associates or 10% of the Associates); or (4) Was a Family Member at any time during the Lookback Year or Plan Year, in which case the Contributions and Compensation of the HCE and his or her Family Members shall be aggregated and they shall be treated as a single HCE. A former Associate shall be treated as an HCE if (1) such former Associate was an HCE when he separated from service, or (2) such former Associate was an HCE in service at any time after attaining age 55. The determination of who is an HCE, including the determinations of the number and identity of Associates in the top-paid group, the top 100 Associates and the number of Associates treated as officers shall be made in accordance with Code section 414(q). (j) "HCE Group" and "NHCE Group". With respect to each Employer and its Related Companies, the respective group of HCEs and NHCEs who are eligible to have amounts contributed on their behalf for the Plan Year, including Associates who would be eligible but for their election not to participate or to contribute, or because their Pay is greater than zero but does not exceed a stated minimum. (1) If the Related Companies maintain two or more plans which are subject to the ADP or ACP Test and are considered as one plan for purposes of Code sections 401(a)(4) or 410(b), all such plans shall be aggregated and treated as one plan for purposes of meeting the ADP and ACP Tests, provided that, for Plan Years beginning after December 31, 1989, plans may only be aggregated if they have the same Plan Year. (2) If an HCE, who is one of the top 10 paid Associates or a more than 5% Owner, has any Family Members, the Deferrals, Contributions and Compensation of such HCE and his or her Family Members shall be combined and treated as a single HCE. Such amounts for all other Family Members shall be removed from the NHCE Group percentage calculation and be combined with the HCE's. (3) If an HCE is covered by more than one cash or deferred arrangement maintained by the Related Companies, all such plans shall be aggregated and treated as one plan for purposes of calculating the separate percentage for the HCE which is used in the determination of the Average Percentage. (k) "Lookback Year". Pursuant to Code section 414(q), the Company elects as the Lookback Year the 12 months ending immediately prior to the start of the Plan Year. (l) "Multiple Use Test". The test described in Section 12.4 which a Plan must meet where the Alternative Limitation (described in Section 12.2(b)) is used to meet both the ADP and ACP Tests. (m) "NHCE" or "Non-Highly Compensated Employee". An Associate who is not an HCE. 12.2 ADP and ACP Tests For each Plan Year, the ADP and ACP for the HCE Group must meet either the Basic or Alternative Limitation when compared to the respective ADP and ACP for the NHCE Group, determined as follows: (a) Basic Limitation. The HCE Group Average Percentage may not exceed 1.25 times the NHCE Group Average Percentage. (b) Alternative Limitation. The HCE Group Average Percentage is limited by reference to the NHCE Group Average Percentage as follows: If the NHCE Group Then the Maximum HCE Average Group Average Percentage Percentage is: is: Less than 2% 2 times NHCE Group Average % 2% to 8% NHCE Group Average % plus 2% More than 8% NA - Basic Limitation applies 12.3 Correction of ADP and ACP Tests If the ADP or ACP Tests are not met, the Administrator shall determine, no later than the end of the next Plan Year, a maximum percentage to be used in place of the calculated percentage for all HCEs that would reduce the ADP and/or ACP for the HCE group by a sufficient amount to meet the ADP and ACP Tests. (a) ADP Correction. Associate Pre-Tax Contributions shall, by the end of the next Plan Year, be refunded (including amounts previously refunded because they exceeded the Contribution Dollar Limit) to the Participant in an amount equal to the actual Deferrals minus the product of the maximum percentage and the HCE's Compensation. Excess amounts shall first be taken from unmatched Associate Pre-Tax Contributions and then from matched Associate Pre-Tax Contributions. Any Company Matching Contributions attributable to refunded excess Associate Pre-Tax Contributions as described in this Section shall be deemed a Contribution made by reason of a mistake of fact and removed from the Participant's Account. (b) ACP Correction. Company Matching Contributions shall, by the end of the next Plan Year, be refunded to the Participant in an amount equal to the actual Contributions minus the product of the maximum percentage and the HCE's Compensation. (c) Investment Fund Sources. Once the amount of excess Deferrals and/or Contributions is determined amounts shall then be taken by type of investment in direct proportion to the market value of the Participant's interest in each Investment Fund (which excludes Participant loans) at the time the correction is made. (d) Family Member Correction. To the extent any reduction is necessary with respect to an HCE and his or her Family Members that have been combined and treated for testing purposes as a single Associate, the excess Deferrals and Contributions from the ADP and/or ACP Test shall be prorated among each such Participant in direct proportion to his or her Deferrals or Contributions included in each Test. 12.4 Multiple Use Test If the Alternative Limitation (defined in Section 12.2) is used to meet both the ADP and ACP Tests, the ADP and ACP for the HCE Group must also comply with the requirements of Code section 401(m)(9). Such Code section requires that the sum of the ADP and ACP for the HCE Group (as determined after any corrections needed to meet the ADP and ACP Tests have been made) not exceed the sum (which produces the most favorable result) of: (a) the Basic Limitation (defined in Section 12.2) applied to either the ADP or ACP for the NHCE Group, and (b) the Alternative Limitation applied to the other NHCE Group percentage. 12.5 Correction of Multiple Use Test If the multiple use limit is exceeded, the Administrator shall determine a maximum percentage to be used in place of the calculated percentage for all HCEs that would reduce either or both the ADP or ACP for the HCE Group by a sufficient amount to meet the multiple use limit. Any excess shall be handled in the same manner that the distribution of excess Deferrals or Contributions are handled. 12.6 Adjustment for Investment Gain or Loss Any excess Deferrals or Contributions to be refunded to a Participant or forfeited in accordance with Section 12.3 or 12.5 shall be adjusted for investment gain or loss. Refunds shall not include investment gain or loss for the period between the end of the applicable Plan Year and the date of distribution. 12.7 Testing Responsibilities and Required Records The Administrator shall be responsible for ensuring that the Plan meets the ADP Test, the ACP Test and the Multiple Use Test, and that the Contribution Dollar Limit is not exceeded. In carrying out its responsibilities, the Administrator shall have sole discretion to limit or reduce Deferrals or Contributions at any time. The Administrator shall maintain records which are sufficient to demonstrate that the ADP Test, the ACP Test and the Multiple Use Test, have been met for each Plan Year for at least as long as the Employer's corresponding tax year is open to audit. 12.8 Separate Testing (a) Multiple Employers: The determination of HCEs, NHCEs, and the performance of the testing and any corrective action resulting therefrom shall be made separately with regard to the Associates of each Employer (and its Related Companies) that is not a Related Company with the other Employer(s). (b) Collective Bargaining Units: The performance of the ADP Test, and if applicable, the ACP Test and Multiple Use Test, and any corrective action resulting therefrom shall be applied separately to Associates who are eligible to participate in the Plan as a result of a collective bargaining agreement. In addition, separate testing may be applied, at the discretion of the Administrator and to the extent permitted under Treasury regulations, to any group of Associates for whom separate testing is permissible. 13 MAXIMUM CONTRIBUTION AND BENEFIT LIMITATIONS 13.1 "Annual Addition" Defined The sum of all amounts allocated to the Participant's Account for a Plan Year. Amounts include contributions (except for rollovers or transfers from another qualified plan), forfeitures and, if the Participant is a Key Employee (pursuant to Section 14) for the applicable or any prior Plan Year, medical benefits provided pursuant to Code section 419A(d)(1). For purposes of this Section 13.1, "Account" also includes a Participant's account in all other defined contribution plans currently or previously maintained by any Related Company. The Plan Year refers to the year to which the allocation pertains, regardless of when it was allocated. The Plan Year shall be the Code section 415 limitation year. 13.2 Maximum Annual Addition The Annual Addition to a Participant's accounts under this Plan and any other defined contribution plan maintained by any Related Company for any Plan Year shall not exceed the lesser of (1) 25% of his or her Taxable Income or (2) the greater of $30,000 or one- quarter of the dollar limitation in effect under Code section 415(b)(1)(A). 13.3 Avoiding an Excess Annual Addition If, at any time during a Plan Year, the allocation of any additional Contributions would produce an excess Annual Addition for such year, Contributions to be made for the remainder of the Plan Year shall be limited to the amount needed for each affected Participant to receive the maximum Annual Addition. 13.4 Correcting an Excess Annual Addition Upon the discovery of an excess Annual Addition to a Participant's Account (resulting from forfeitures, allocations, reasonable error in determining Participant compensation or the amount of elective contributions, or other facts and circumstances acceptable to the Internal Revenue Service) the excess amount (adjusted to reflect investment gains) shall first be returned to the Participant to the extent of his or her unmatched Associate Pre-Tax Contributions and then to the extent of his or her matched Associate Pre-Tax Contributions (however to the extent Associate Pre-Tax Contributions were matched, the applicable Company Matching Contributions shall be forfeited in proportion to the returned matched Associate Pre-Tax Contributions) and the remaining excess, if any, shall be forfeited by the Participant and together with forfeited Company Matching Contributions used to reduce subsequent Contributions as soon as is administratively feasible. 13.5 Correcting a Multiple Plan Excess If a Participant, whose Account is credited with an excess Annual Addition, received allocations to more than one defined contribution plan, the excess shall be corrected by reducing the Annual Addition to this Plan only after all possible reductions have been made to the other defined contribution plans. 13.6 "Defined Benefit Fraction" Defined The fraction, for any Plan Year, where the numerator is the "projected annual benefit" and the denominator is the greater of 125% of the "protected current accrued benefit" or the normal limit which is the lesser of (1) 125% of the maximum dollar limitation provided under Code section 415(b)(1)(A) for the Plan Year or (2) 140% of the amount which may be taken into account under Code section 415(b)(1)(B) for the Plan Year, where a Participant's: (a) "projected annual benefit" is the annual benefit provided by the Plan determined pursuant to Code section 415(e)(2)(A), and (b) "protected current accrued benefit" in a defined benefit plan in existence (1) on July 1, 1982, shall be the accrued annual benefit provided for under Public Law 97-248, section 235(g)(4), as amended, or (2) on May 6, 1986, shall be the accrued annual benefit provided for under Public Law 99-514, section 1106(i)(3). 13.7 "Defined Contribution Fraction" Defined The fraction where the numerator is the sum of the Participant's Annual Addition for each Plan Year to date and the denominator is the sum of the "annual amounts" for each year in which the Participant has performed service with a Related Company. The "annual amount" for any Plan Year is the lesser of (1) 125% of the Code section 415(c)(1)(A) dollar limitation (determined without regard to subsection (c)(6)) in effect for the Plan Year and (2) 140% of the Code section 415(c)(1)(B) amount in effect for the Plan Year, where: (a) each Annual Addition is determined pursuant to the Code section 415(c) rules in effect for such Plan Year, and (b) the numerator is adjusted pursuant to Public Law 97-248, section 235(g)(3), as amended, or Public Law 99-514, section 1106(i)(4). 13.8 Combined Plan Limits and Correction If a Participant has also participated in a defined benefit plan maintained by a Related Company, the sum of the Defined Benefit Fraction and the Defined Contribution Fraction for any Plan Year may not exceed 1.0. If the combined fraction exceeds 1.0 for any Plan Year, the Participant's benefit under any defined benefit plan (to the extent it has not been distributed or used to purchase an annuity contract) shall be limited so that the combined fraction does not exceed 1.0 before any defined contribution limits will be enforced. 14 TOP HEAVY RULES 14.1 Top Heavy Definitions When capitalized, the following words and phrases have the following meanings when used in this Section: (a) "Aggregation Group". The group consisting of each qualified plan of an Employer (and its Related Companies) (1) in which a Key Employee is a participant or was a participant during the determination period (regardless of whether such plan has terminated), or (2) which enables another plan in the group to meet the requirements of Code sections 401(a)(4) or 410(b). The Employer may also treat any other qualified plan as part of the group if the group would continue to meet the requirements of Code sections 401(a)(4) and 410(b) with such plan being taken into account. (b) "Determination Date". The last Trade Date of the preceding Plan Year or, in the case of the Plan's first year, the last Trade Date of the first Plan Year. (c) "Key Employee". A current or former Associate (or his or her Beneficiary) who at any time during the five year period ending on the Determination Date was: (1) an officer of a Related Company whose Compensation (i) exceeds 50% of the amount in effect under Code section 415(b)(1)(A) and (ii) places him within the following highest paid group of officers: Number of Associates not Excluded Under Number of Code Highest Paid Section 414(q)(8) Officers Included Less than 30 3 30 to 500 10% of the number of Associates not excluded under Code section 414(q)(8) More than 500 50 (2) a more than 5% Owner, (3) a more than 1% Owner whose Compensation exceeds $150,000, or (4) a more than 0.5% Owner who is among the 10 Associates owning the largest interest in a Related Company and whose Compensation exceeds the amount in effect under Code section 415(c)(1)(A). (d) "Plan Benefit". The sum as of the Determination Date of (1) an Associate's Account, (2) the present value of his or her other accrued benefits provided by all qualified plans within the Aggregation Group, and (3) the aggregate distributions made within the five year period ending on such date. Plan Benefits shall exclude rollover contributions and plan to plan transfers made after December 31, 1983 which are both associate initiated and from a plan maintained by a non-related employer. (e) "Top Heavy". The Plan's status when the Plan Benefits of Key Employees account for more than 60% of the Plan Benefits of all Associates who have performed services at any time during the five year period ending on the Determination Date. The Plan Benefits of Associates who were, but are no longer, Key Employees (because they have not been an officer or Owner during the five year period), are excluded in the determination. 14.2 Special Contributions (a) Minimum Contribution Requirement. For each Plan Year in which the Plan is Top Heavy, the Employer shall not allow any contributions (other than a Rollover Contribution) to be made by or on behalf of any Key Employee unless the Employer makes a contribution (other than Associate Pre-Tax and Company Matching Contributions) on behalf of all Participants who were Eligible Associates as of the last day of the Plan Year in an amount equal to at least 3% of each such Participant's Taxable Income. The Administrator shall remove any such contributions (including applicable investment gain or loss) credited to a Key Employee's Account in violation of the foregoing rule and return them to the Employer or Associate to the extent permitted by the Limited Return of Contributions paragraph of Section 18. (b) Overriding Minimum Benefit. Notwithstanding, contributions shall be permitted on behalf of Key Employees if the Employer also maintains a defined benefit plan which automatically provides a benefit which satisfies the Code section 416(c)(1) minimum benefit requirements, including the adjustment provided in Code section 416(h)(2)(A), if applicable. If this Plan is part of an aggregation group in which a Key Associate is receiving a benefit and no minimum is provided in any other plan, a minimum contribution of at least 3% of Taxable Income shall be provided to the Participants specified in the preceding paragraph. In addition, the Employer may offset a defined benefit minimum by contributions (other than Associate Pre-Tax and Company Matching Contributions) made to this Plan. 14.3 Adjustment to Combined Limits for Different Plans For each Plan Year in which the Plan is Top Heavy, 100% shall be substituted for 125% in determining the Defined Benefit Fraction and the Defined Contribution Fraction. 15 PLAN ADMINISTRATION 15.1 Plan Delineates Authority and Responsibility Plan fiduciaries include the Company, the Administrator, the Committee and/or the Trustee, as applicable, whose specific duties are delineated in this Plan and Trust. In addition, Plan fiduciaries also include any other person to whom fiduciary duties or responsibility is delegated with respect to the Plan. Any person or group may serve in more than one fiduciary capacity with respect to the Plan. To the extent permitted under ERISA section 405, no fiduciary shall be liable for a breach by another fiduciary. 15.2 Fiduciary Standards Each fiduciary shall: (a) discharge his or her duties in accordance with this Plan and Trust to the extent they are consistent with ERISA; (b) use that degree of care, skill, prudence and diligence that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims; (c) act with the exclusive purpose of providing benefits to Participants and their Beneficiaries, and defraying reasonable expenses of administering the Plan; (d) diversify Plan investments, to the extent such fiduciary is responsible for directing the investment of Plan assets, so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so; and (e) treat similarly situated Participants and Beneficiaries in a uniform and nondiscriminatory manner. 15.3 Company is ERISA Plan Administrator The Company is the plan administrator, within the meaning of ERISA section 3(16), which is responsible for compliance with all reporting and disclosure requirements, except those that are explicitly the responsibility of the Trustee under applicable law. The Administrator and/or Committee shall have any necessary authority to carry out such functions through the actions of the Administrator, duly appointed officers of the Company, and/or the Committee. 15.4 Administrator Duties The Administrator shall have the discretionary authority to construe this Plan and Trust, other than the provisions which relate to the Trustee, and to do all things necessary or convenient to effect the intent and purposes thereof, whether or not such powers are specifically set forth in this Plan and Trust. Actions taken in good faith by the Administrator shall be conclusive and binding on all interested parties, and shall be given the maximum possible deference allowed by law. In addition to the duties listed elsewhere in this Plan and Trust, the Administrator's authority shall include, but not be limited to, the discretionary authority to: (a) determine who is eligible to participate, if a contribution qualifies as a rollover contribution, the allocation of Contributions, and the eligibility for loans, withdrawals and distributions; (b) determine what fees are to be charged to each Participant's Account including the fees described in Appendix B; (c) provide each Participant with a summary plan description no later than 90 days after he or she has become a Participant (or such other period permitted under ERISA section 104(b)(1)), as well as informing each Participant of any material modification to the Plan in a timely manner; (d) make a copy of the following documents available to Participants during normal work hours: this Plan and Trust (including subsequent amendments), all annual and interim reports of the Trustee related to the entire Plan, the latest annual report and the summary plan description; (e) determine the fact of a Participant's death and of any Beneficiary's right to receive the deceased Participant's interest based upon such proof and evidence as it deems necessary; (f) establish and review at least annually a funding policy bearing in mind both the short-run and long-run needs and goals of the Plan. To the extent Participants may direct their own investments, the funding policy shall focus on which Investment Funds are available for Participants to use; and (g) adjudicate claims pursuant to the claims procedure described in Section 18. 15.5 Advisors May be Retained The Administrator may retain such agents and advisors (including attorneys, accountants, actuaries, consultants, record keepers, investment counsel and administrative assistants) as it considers necessary to assist it in the performance of its duties. The Administrator shall also comply with the bonding requirements of ERISA section 412. 15.6 Delegation of Administrator Duties The Company, as Administrator of the Plan, may appoint a Committee to administer the Plan on its behalf. The Company or the Committee, on the Company's behalf, may retain a Plan Administrator to assist it in performance of some or all of the Committee's administrative duties. The Plan Administrator shall carry on such duties as directed by the Company or the Committee. The Company shall provide the Trustee with the names and specimen signatures of any persons authorized to serve as Committee members, or as Plan Administrator, and act as or on its behalf. Any Committee member appointed by the Company shall serve at the pleasure of the Company, but may resign by written notice to the Company. Committee members shall serve without compensation from the Plan for such services. Except to the extent that the Company otherwise provides, any delegation of duties to a Committee shall carry with it the full discretionary authority of the Administrator to complete such duties. 15.7 Committee Operating Rules (a) Actions of Majority. Any act delegated by the Company to the Committee may be done by a majority of its members. The majority may be expressed by a vote at a meeting or in writing without a meeting, and a majority action shall be equivalent to an action of all Committee members. (b) Meetings. The Committee shall hold meetings upon such notice, place and times as it determines necessary to conduct its functions properly. Meetings may be held by telephone conference call so long as all persons participating in the meeting can hear each other. (c) Reliance by Trustee. The Committee may authorize one or more of its members to execute documents on its behalf and may authorize one or more of its members or other individuals who are not members to give written direction to the Trustee in the performance of its duties. The Committee shall provide such authorization in writing to the Trustee with the name and specimen signatures of any person authorized to act on its behalf. The Trustee shall accept such direction and rely upon it until notified in writing that the Committee has revoked the authorization to give such direction. The Trustee shall not be deemed to be on notice of any change in the membership of the Committee, parties authorized to direct the Trustee in the performance of its duties, or the duties delegated to and by the Committee until notified in writing. 16 MANAGEMENT OF INVESTMENTS 16.1 Trust Agreement All Plan assets shall be held by the Trustee in trust, in accordance with those provisions of this Plan and Trust which relate to the Trustee, for use in providing Plan benefits and paying Plan expenses not paid directly by the Employer. Plan benefits will be drawn solely from the Trust and paid by the Trustee as directed by the Administrator. Notwithstanding, the Administrator may appoint, with the approval of the Trustee, another trustee to hold and administer Plan assets which do not meet the requirements of Section 16.2. 16.2 Investment Funds The Administrator is hereby granted authority to direct the Trustee to invest Trust assets in one or more Investment Funds. The number and composition of Investment Funds may be changed from time to time, in writing, without the necessity of amending this Plan and Trust document. The Trustee may establish reasonable limits on the number of Investment Funds as well as the acceptable assets for any such Investment Fund. Each of the Investment Funds may be comprised of any of the following: (a) shares of a registered investment company, whether or not the Trustee or any of its affiliates is an advisor to, or other service provider to, such company; (b) collective investment funds maintained by the Trustee, or any other fiduciary to the Plan, which are available for investment by trusts which are qualified under Code sections 401(a) and 501(a); (c) individual equity and fixed income securities which are readily tradeable on the open market; (d) guaranteed investment contracts issued by a bank or insurance company; (e) interest bearing deposits of the Trustee; and (f) Company Stock. Any Investment Fund assets invested in a collective investment fund, shall be subject to all the provisions of the instruments establishing and governing such fund. These instruments, including any subsequent amendments, are incorporated herein by reference. 16.3 Authority to Hold Cash The Trustee shall have the authority to cause the investment manager of each Investment Fund to maintain sufficient deposit or money market type assets in each Investment Fund to handle the Fund's liquidity and disbursement needs. Each Participant's and Beneficiary's Sweep Account, which is used to hold assets pending investment or disbursement, shall consist of interest bearing deposits of the Trustee. 16.4 Trustee to Act Upon Instructions The Trustee shall carry out instructions to invest assets in the Investment Funds as soon as practicable after such instructions are received from the Administrator, Participants, or Beneficiaries. Such instructions shall remain in effect until changed by the Administrator, Participants or Beneficiaries. 16.5 Administrator Has Right to Vote Registered Investment Company Shares The Administrator shall be entitled to vote proxies or exercise any shareholder rights relating to shares held on behalf of the Plan in a registered investment company. Notwithstanding, the authority to vote proxies and exercise shareholder rights related to such shares held in a Custom Fund is governed by Section 16.6 hereof. 16.6 Custom Fund Investment Management The Administrator may designate, with the consent of the Trustee, an investment manager for any Investment Fund established by the Trustee solely for Participants of this Plan (a "Custom Fund"). The investment manager may be the Administrator, Trustee or an investment manager pursuant to ERISA section 3(38). The Administrator shall advise the Trustee in writing of the appointment of an investment manager and shall cause the investment manager to acknowledge to the Trustee in writing that the investment manager is a fiduciary to the Plan. A Custom Fund shall be subject to the following: (a) Guidelines. Written guidelines, acceptable to the Trustee, shall be established for a Custom Fund. If a Custom Fund consists solely of collective investment funds or shares of a registered investment company (and sufficient deposit or money market type assets to handle the Fund's liquidity and disbursement needs), its underlying instruments shall constitute the guidelines. (b) Authority of Investment Manager. The investment manager of a Custom Fund shall have the authority to vote or execute proxies, exercise shareholder rights, manage, acquire, and dispose of Trust assets. Notwithstanding, the authority to vote proxies and exercise shareholder rights related to shares of Company Stock held in a Custom Fund is governed by Section 16.9 hereof. (c) Custody and Trade Settlement. Unless otherwise agreed to by the Trustee, the Trustee shall maintain custody of all Custom Fund assets and be responsible for the settlement of all Custom Fund trades. For purposes of this section, shares of a collective investment fund, shares of a registered investment company and guaranteed investment contracts issued by a bank or insurance company, shall be regarded as the Custom Fund assets instead of the underlying assets of such instruments. (d) Limited Liability of Co-Fiduciaries. Neither the Administrator nor the Trustee shall be obligated to invest or otherwise manage any Custom Fund assets for which the Trustee or Administrator is not the investment manager nor shall the Administrator or Trustee be liable for acts or omissions with regard to the investment of such assets except to the extent required by ERISA. 16.7 Authority to Segregate Assets The Company may direct the Trustee to split an Investment Fund into two or more funds in the event any assets in the Fund are illiquid or the value is not readily determinable. In the event of such segregation, the Company shall give instructions to the Trustee on what value to use for the split-off assets, and the Trustee shall not be responsible for confirming such value. 16.8 Maximum Permitted Investment in Company Stock If the Company provides for a Company Stock Fund directly or through a Master Company Stock Fund the Fund shall be comprised of Company Stock and sufficient deposit or money market type assets to handle the Fund's liquidity and disbursement needs. The Fund may be as large as necessary to comply with Participants' and Beneficiaries' investment elections as well as the total investment of Participants' and Beneficiaries' Company Matching Accounts. 16.9 Participants Have Right to Vote and Tender Company Stock Each Participant or Beneficiary shall be entitled to instruct the Trustee as to the voting or tendering of any full or partial shares of Company Stock held on his or her behalf in the Company Stock Fund. Prior to such voting or tendering of Company Stock, each Participant or Beneficiary shall receive a copy of the proxy solicitation or other material relating to such vote or tender decision and a blank form for the Participant or Beneficiary to complete which confidentially instructs the Trustee to vote or tender such shares in the manner indicated by the Participant or Beneficiary. Upon receipt of such instructions, the Trustee shall act with respect to such shares as instructed. The Administrator shall instruct the Trustee with respect to how to vote or tender any shares for which instructions are not received from Participants or Beneficiaries. 16.10 Registration and Disclosure for Company Stock The Administrator shall be responsible for determining the applicability (and, if applicable, complying with) the requirements of the Securities Act of 1933, as amended, the California Corporate Securities Law of 1968, as amended, and any other applicable blue sky law. The Administrator shall also specify what restrictive legend or transfer restriction, if any, is required to be set forth on the certificates for the securities and the procedure to be followed by the Trustee to effectuate a resale of such securities. 16.11 Master Company Stock Fund The Trustee may establish, at the direction of the Company, a single Company Stock Investment Fund (the "Master Company Stock Fund"), for the benefit of this Plan and any other plan of a Related Company for which the Trustee acts as trustee pursuant to a plan and trust document that contains a provision substantially identical to this Section 16.11. The assets of this Plan, to the extent invested in the Master Company Stock Fund, shall consist only of that percentage of the assets of the Master Company Stock Fund represented by the shares held by this Plan. 17 TRUST ADMINISTRATION 17.1 Trustee to Construe Trust The Trustee shall have the discretionary authority to construe those provisions of this Plan and Trust which relate to the Trustee and to do all things necessary or convenient to the administration of the Trust, whether or not such powers are specifically set forth in this Plan and Trust. Actions taken in good faith by the Trustee shall be conclusive and binding on all interested parties, and shall be given the maximum possible deference allowed by law. 17.2 Trustee To Act As Owner of Trust Assets Subject to the specific conditions and limitations set forth in this Plan and Trust, the Trustee shall have all the power, authority, rights and privileges of an absolute owner of the Trust assets and, not in limitation but in amplification of the foregoing, may: (a) receive, hold, manage, invest and reinvest, sell, tender, exchange, dispose of, encumber, hypothecate, pledge, mortgage, lease, grant options respecting, repair, alter, insure, or distribute any and all property in the Trust; (b) borrow money, participate in reorganizations, pay calls and assessments, vote or execute proxies (subject to Section 16), exercise subscription or conversion privileges, exercise options and register any securities in the Trust in the name of the nominee, in federal book entry form or in any other form as will permit title thereto to pass by delivery; (c) renew, extend the due date, compromise, arbitrate, adjust, settle, enforce or foreclose, by judicial proceedings or otherwise, or defend against the same, any obligations or claims in favor of or against the Trust; and (d) lend, through a collective investment fund, any securities held in such collective investment fund to brokers, dealers or other borrowers and to permit such securities to be transferred into the name and custody and be voted by the borrower or others. 17.3 United States Indicia of Ownership The Trustee shall not maintain the indicia of ownership of any Trust assets outside the jurisdiction of the United States, except as authorized by ERISA section 404(b). 17.4 Tax Withholding and Payment (a) Withholding. The Trustee shall calculate and withhold federal (and, if applicable, state) income taxes with regard to any Eligible Rollover Distribution that is not paid as a Direct Rollover in accordance with the Participant's withholding election or as required by law if no election is made or the election is less than the amount required by law. With regard to any taxable distribution that is not an Eligible Rollover Distribution, the Trustee shall calculate and withhold federal (and, if applicable, state) income taxes in accordance with the Participant's withholding election or as required by law if no election is made. (b) Taxes Due From Investment Funds. The Trustee shall pay from the Investment Fund any taxes or assessments imposed by any taxing or governmental authority on such Fund or its income, including related interest and penalties. 17.5 Trustee Duties and Limitations Unless otherwise agreed to by the Trustee, the Trustee's duties shall be confined to construing the terms of the Plan and Trust as they relate to the Trustee, receiving funds on behalf of and making payments from the Trust, safeguarding and valuing Trust assets, and investing and reinvesting Trust assets in the Investment Funds as directed by the Administrator or Participants. The Trustee shall have no duty or authority to ascertain whether Contributions are in compliance with the Plan, to enforce collection or to compute or verify the accuracy or adequacy of any amount to be paid to it by the Employer. The Trustee shall not be liable for the proper application of any part of the Trust with respect to any disbursement made at the direction of the Administrator. 17.6 Trust Accounting (a) Annual Report. Within 60 days (or other reasonable period) following the close of the Plan Year, the Trustee shall provide the Administrator with an annual accounting of Trust assets and information to assist the Administrator in meeting ERISA's annual reporting and audit requirements. (b) Periodic Reports. The Trustee shall maintain records and provide sufficient reporting to allow the Administrator to properly monitor the Trust's assets and activity. (c) Administrator Approval. Approval of any Trustee accounting will automatically occur 90 days after such accounting has been received by the Administrator, unless the Administrator files a written objection with the Trustee within such time period. Such approval shall be final as to all matters and transactions stated or shown therein and binding upon the Administrator. 17.7 Valuation of Certain Assets If the Trustee determines the Trust holds any asset which is not readily tradable and listed on a national securities and is exchange registered under the Securities Exchange Act of 1934, as amended, the Trustee may engage a qualified independent appraiser to determine the fair market value of such property, and the appraisal fees shall be paid from the Investment Fund containing the asset. 17.8 Legal Counsel The Trustee may consult with legal counsel of its choice, including counsel for the Employer or counsel of the Trustee, upon any question or matter arising under this Plan and Trust. When relied upon by the Trustee, the opinion of such counsel shall be evidence that the Trustee has acted in good faith. 17.9 Fees and Expenses The Trustee's fees for its services as Trustee shall be such as may be mutually agreed upon by the Company and the Trustee. Trustee fees and all reasonable expenses of counsel and advisors retained by the Trustee shall be paid in accordance with Section 6. 18 RIGHTS, PROTECTION, CONSTRUCTION AND JURISDICTION 18.1 Plan Does Not Affect Employment Rights The Plan does not provide any employment rights to any Associate. The Employer expressly reserves the right to discharge an Associate at any time, with or without cause, without regard to the effect such discharge would have upon the Associate's interest in the Plan. 18.2 Limited Return of Contributions Except as provided in this paragraph, (1) Plan assets shall not revert to the Employer nor be diverted for any purpose other than the exclusive benefit of Participants or their Beneficiaries; and (2) a Participant's vested interest shall not be subject to divestment. As provided in ERISA section 403(c)(2), the actual amount of a Contribution made by the Employer (or the current value of the Contribution if a net loss has occurred) may revert to the Employer if: (a) such Contribution is made by reason of a mistake of fact; (b) initial qualification of the Plan under Code section 401(a) is not received and a request for such qualification is made within the time prescribed under Code section 401(b) (the existence of and Contributions under the Plan are hereby conditioned upon such qualification); or (c) such Contribution is not deductible under Code section 404 (such Contributions are hereby conditioned upon such deductibility) in the taxable year of the Employer for which the Contribution is made. The reversion to the Employer must be made (if at all) within one year of the mistaken payment of the Contribution, the date of denial of qualification, or the date of disallowance of deduction, as the case may be. A Participant shall have no rights under the Plan with respect to any such reversion. 18.3 Assignment and Alienation As provided by Code section 401(a)(13) and to the extent not otherwise required by law, no benefit provided by the Plan may be anticipated, assigned or alienated, except: (a) to create, assign or recognize a right to any benefit with respect to a Participant pursuant to a QDRO, or (b) to use a Participant's vested Account balance as security for a loan from the Plan which is permitted pursuant to Code section 4975. 18.4 Facility of Payment If a Plan benefit is due to be paid to a minor or if the Administrator reasonably believes that any payee is legally incapable of giving a valid receipt and discharge for any payment due him or her, the Administrator shall have the payment of the benefit, or any part thereof, made to the person (or persons or institution) whom it reasonably believes is caring for or supporting the payee, unless it has received due notice of claim therefor from a duly appointed guardian or conservator of the payee. Any payment shall to the extent thereof, be a complete discharge of any liability under the Plan to the payee. 18.5 Reallocation of Lost Participant's Accounts If the Administrator cannot locate a person entitled to payment of a Plan benefit after a reasonable search, the Administrator may at any time thereafter treat such person's Account as forfeited and use such amount to reduce subsequent Contributions as soon as administratively feasible or as otherwise provided in Section 8. If such person subsequently presents the Administrator with a valid claim for the benefit, such person shall be paid the amount treated as forfeited, plus the interest that would have been earned in the Sweep Account to the date of determination. The Administrator shall pay the amount through an additional Employer Contribution or direct the Trustee to pay the amount from the Forfeiture Account. 18.6 Claims Procedure (a) Right to Make Claim. An interested party who disagrees with the Administrator's determination of his or her right to Plan benefits must submit a written claim and exhaust this claim procedure before legal recourse of any type is sought. The claim must include the important issues the interested party believes support the claim. The Administrator, pursuant to the authority provided in this Plan, shall either approve or deny the claim. (b) Process for Denying a Claim. The Administrator's partial or complete denial of an initial claim must include an understandable, written response covering (1) the specific reasons why the claim is being denied (with reference to the pertinent Plan provisions) and (2) the steps necessary to perfect the claim and obtain a final review. (c) Appeal of Denial and Final Review. The interested party may make a written appeal of the Administrator's initial decision, and the Administrator shall respond in the same manner and form as prescribed for denying a claim initially. If the interested party does not make an appeal within a period of six months after the Administrator's final decision, the interested party shall be conclusively presumed to have accepted as final and binding the final decision of the Administrator on his or her claim. (d) Time Frame. The initial claim, its review, appeal and final review shall be made in a timely fashion, subject to the following time table: Days to Respond Action From Last Action Administrator determines benefit NA Interested party files initial request 60 days Administrator's initial decision 90 days Interested party requests final review 60 days Administrator's final decision 60 days However, the Administrator may take up to twice the maximum response time for its initial and final review if it provides an explanation within the normal period of why an extension is needed and when its decision will be forthcoming. 18.7 Construction Headings are included for reading convenience. The text shall control if any ambiguity or inconsistency exists between the headings and the text. The singular and plural shall be interchanged wherever appropriate. References to Participant shall include Beneficiary when appropriate and even if not otherwise already expressly stated. 18.8 Jurisdiction and Severability The Plan and Trust shall be construed, regulated and administered under ERISA and other applicable federal laws and, where not otherwise preempted, by the laws of the State of California. If any provision of this Plan and Trust shall become invalid or unenforceable, that fact shall not affect the validity or enforceability of any other provision of this Plan and Trust. All provisions of this Plan and Trust shall be so construed as to render them valid and enforceable in accordance with their intent. 18.9 Indemnification by Employer The Employers hereby agree to indemnify all Plan fiduciaries against any and all liabilities resulting from any action or inaction, (including a Plan termination in which the Company fails to apply for a favorable determination from the Internal Revenue Service with respect to the qualification of the Plan upon its termination), in relation to the Plan or Trust (1) including (without limitation) expenses reasonably incurred in the defense of any claim relating to the Plan or its assets, and amounts paid in any settlement relating to the Plan or its assets, but (2) excluding liability resulting from actions or inactions made in bad faith, or resulting from the negligence or willful misconduct of the Trustee. The Company shall have the right, but not the obligation, to conduct the defense of any action to which this Section applies. The Plan fiduciaries are not entitled to indemnity from the Plan assets relating to any such action. 19 AMENDMENT, MERGER, DIVESTITURES AND TERMINATION 19.1 Amendment The Company reserves the right to amend this Plan and Trust at any time, to any extent and in any manner it may deem necessary or appropriate. The Company (and not the Trustee) shall be responsible for adopting any amendments necessary to maintain the qualified status of this Plan and Trust under Code sections 401(a) and 501(a). If the Committee is acting as the Administrator in accordance with Section 15.6, it shall have the authority to adopt Plan and Trust amendments which have no substantial adverse financial impact upon any Employer or the Plan. All interested parties shall be bound by any amendment, provided that no amendment shall: (a) become effective unless it has been adopted in accordance with the procedures set forth in Section 19.5; (b) except to the extent permissible under ERISA and the Code, make it possible for any portion of the Trust assets to revert to an Employer or to be used for, or diverted to, any purpose other than for the exclusive benefit of Participants and Beneficiaries entitled to Plan benefits and to defray reasonable expenses of administering the Plan; (c) decrease the rights of any Associate to benefits accrued (including the elimination of optional forms of benefits) to the date on which the amendment is adopted, or if later, the date upon which the amendment becomes effective, except to the extent permitted under ERISA and the Code; nor (d) permit an Associate to be paid the balance of his or her Associate Pre-Tax Account unless the payment would otherwise be permitted under Code section 401(k). 19.2 Merger This Plan and Trust may not be merged or consolidated with, nor may its assets or liabilities be transferred to, another plan unless each Participant and Beneficiary would, if the resulting plan were then terminated, receive a benefit just after the merger, consolidation or transfer which is at least equal to the benefit which would be received if either plan had terminated just before such event. 19.3 Divestitures In the event of a sale by an Employer which is a corporation of: (1) substantially all of the Employer's assets used in a trade or business to an unrelated corporation, or (2) a sale of such Employer's interest in a subsidiary to an unrelated entity or individual, lump sum distributions shall be permitted from the Plan, except as provided below, to Participants with respect to Employees who continue employment with the corporation acquiring such assets or who continue employment with such subsidiary, as applicable. Notwithstanding, distributions shall not be permitted if the purchaser agrees, in connection with the sale, to be substituted as the Company as the sponsor of the Plan or to accept a transfer of the assets and liabilities representing the Participants' benefits into a plan of the purchaser or a plan to be established by the purchaser. 19.4 Plan Termination The Company may, at any time and for any reason, terminate the Plan in accordance with the procedures set forth in Section 19.5, or completely discontinue contributions. Upon either of these events, or in the event of a partial termination of the Plan within the meaning of Code section 411(d)(3), the Accounts of each affected Associate who has not yet incurred a Break in Service shall be fully vested. If no successor plan is established or maintained, lump sum distributions will be made in accordance with the terms of the Plan as in effect at the time of the Plan's termination or as thereafter amended provided that a post-termination amendment will not be effective to the extent that it violates Section 19.1 unless it is required in order to maintain the qualified status of the Plan upon its termination. The Trustee's and Employer's authority shall continue beyond the Plan's termination date until all Trust assets have been liquidated and distributed. 19.5 Amendment and Termination Procedures The following procedural requirements shall govern the adoption of any amendment or termination (a "Change") of this Plan and Trust: (a) The Company may adopt any Change by action of its board of directors in accordance with its normal procedures. (b) The Committee, if acting as Administrator in accordance with Section 15.6, may adopt any amendment within the scope of its authority provided under Section 19.1 and in the manner specified in Section 15.7(a). (c) Any Change must be (1) set forth in writing, and (2) signed and dated by an officer of the Company or, in the case of an amendment adopted by the Committee, at least one of its members. (d) If the effective date of any Change is not specified in the document setting forth the Change, it shall be effective as of the date it is signed by the last person whose signature is required under clause (2) above, except to the extent that another effective date is necessary to maintain the qualified status of this Plan and Trust under Code sections 401(a) and 501(a). (e) No Change shall become effective until it is accepted and signed by the Trustee (which acceptance shall not unreasonably be withheld). 19.6 Termination of Employer's Participation Any Employer may, at any time and for any reason, terminate its Plan participation by action of its board of directors in accordance with its normal procedures. Written notice of such action shall be signed and dated by an officer of the Employer and delivered to the Company. If the effective date of such action is not specified, it shall be effective on, or as soon as reasonably practicable, after the date of delivery. Upon the Employer's request, the Company may instruct the Trustee and Administrator to spin off all affected Accounts and underlying assets into a separate qualified plan under which the Employer shall assume the powers and duties of the Company. Alternatively, the Company may treat the event as a partial termination described above or continue to maintain the Accounts under the Plan. 19.7 Replacement of the Trustee The Trustee may resign as Trustee under this Plan and Trust or may be removed by the Company at any time upon at least 90 days written notice (or less if agreed to by both parties). In such event, the Company shall appoint a successor trustee by the end of the notice period. The successor trustee shall then succeed to all the powers and duties of the Trustee under this Plan and Trust. If no successor trustee has been named by the end of the notice period, the Company's chief executive officer shall become the trustee, or if he or she declines, the Trustee may petition the court for the appointment of a successor trustee. 19.8 Final Settlement and Accounting of Trustee (a) Final Settlement. As soon as is administratively feasible after its resignation or removal as Trustee, the Trustee shall transfer to the successor trustee all property currently held by the Trust. However, the Trustee is authorized to reserve such sum of money as it may deem advisable for payment of its accounts and expenses in connection with the settlement of its accounts or other fees or expenses payable by the Trust. Any balance remaining after payment of such fees and expenses shall be paid to the successor trustee. (b) Final Accounting. The Trustee shall provide a final accounting to the Administrator within 90 days of the date Trust assets are transferred to the successor trustee. (c) Administrator Approval. Approval of the final accounting will automatically occur 90 days after such accounting has been received by the Administrator, unless the Administrator files a written objection with the Trustee within such time period. Such approval shall be final as to all matters and transactions stated or shown therein and binding upon the Administrator. APPENDIX A - INVESTMENT FUNDS I. Investment Funds Available The Investment Funds offered to Participants and Beneficiaries as of the Effective Date include this set of daily valued funds: Category Funds Money Market Money Market Income U.S. Treasury Allocation Balanced Asset Allocation Equity Company Stock S&P 500 Stock II. Default Investment Fund The default Investment Fund as of the Effective Date is the Money Market Fund. III. Contribution Accounts For Which Investment is Restricted A Participant or Beneficiary may direct the investment of his or her entire Account except for the following Contribution Accounts, and except as otherwise provided in Section 7, which shall be invested as of the Effective Date as follows: Company Matching Company Stock Fund Balances in the Company Matching Account are not eligible for transfer to other Investment Funds. However, every two years on a date to be determined by the Administrator, Participant balances in the Company Matching Account will be released automatically from the transfer restrictions and become eligible for transfer to other Investment Funds. IV. Maximum Percentage Restrictions Applicable to Certain Investment Funds As of the Effective Date, there are no maximum percentage restrictions applicable to any Investment Funds. APPENDIX B - PAYMENT OF PLAN FEES AND EXPENSES As of the Effective Date, payment of Plan fees and expenses shall be as follows: 1) Investment Management Fees: These are paid by Participants in that management fees reduce the investment return reported and credited to Participants, except that the Employer shall pay the fees related to the Company Stock Fund. 2) Recordkeeping Fees: These are paid by the Employer. 3) Loan Fees: A $3.50 per month fee is assessed and billed/collected quarterly from the Account of each Participant who has an outstanding loan balance. 4) Recurring Payment Fees: These are paid by the Employer on a quarterly basis. 5) Additional Fees Paid by Employer: All other Plan related fees and expenses, including the compensation of a Plan Administrator, if applicable, shall be paid by the Employer. To the extent that the Administrator later elects that any such fees shall be borne by Participants, estimates of the fees shall be determined and reconciled, at least annually, and the fees will be assessed monthly and billed/collected from Accounts quarterly. APPENDIX C - LOAN INTEREST RATE As of the Effective Date, the interest rate charged on Participant loans shall be equal to the Trustee's prime rate, plus 1%. -----END PRIVACY-ENHANCED MESSAGE-----