Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
--------------------------------
Westmoreland Coal Company
-------------------------
(Exact name of registrant as specified in its charter)
Delaware 23-1128670
- -------------------------------- -----------------
(State or other jurisdiction of I.R.S. Employer
incorporation or organization) Identification No.
14th Floor, 2 North Cascade Avenue
Colorado Springs, Colorado 80903
719-442-2600
(Address and Telephone Number of Principal Executive Offices)
Westmoreland Coal Company
And
Affiliated Companies
Employees' Savings/Retirement Plan
(Full title of the plan)
Christopher K. Seglem
President, Chief Executive Officer and Director
14th Floor, 2 North Cascade Avenue
Colorado Springs, Colorado 80903
(Name and address of agent for service)
719-442-2600
(Telephone number, including area code, of agent for service)
with a copy to:
Paul W. Durham, Esquire Rhonda R. Cohen, Esquire
Assistant General Counsel Ballard Spahr Andrews & Ingersoll
Westmoreland Coal Company 1735 Market Street, 51st Floor
14th Floor, 2 North Cascade Avenue Philadelphia, Pennsylvania
Colorado Springs, Colorado 19103-7599
80908 (215) 665-8500
(719) 448-5807
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CALCULATION OF REGISTRATION FEE
--------------------------------
- -----------------------------------------------------------------
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Per Offering Registration
Registered (1) Registered Share(2) Price(2) Fee
- -----------------------------------------------------------------
Common Stock,
par value $2.50
per share(3)
325,000 shs. $ 1-3/32 $ 355,469 $ 108
Depository Shares,
each representing
a one-quarter share of
Series A Convertible
Exchangeable Preferred
Stock, par value $0.25
per Depository Share
7,000 shs. $ 5-5/16 $ 37,188 $ 12
- -----------------------------------------------------------------
1) In addition, 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) Calculated in accordance with Rule 457(c) and (h), on the
basis of the average of the bid and asked prices of Westmoreland
Coal Company Common Stock on July 28, 1997, $1-3/32, and on the
basis of the average of the bid and asked prices of Westmoreland
Coal Company Depository Shares on July 28, 1997, $5-5/16, as
reported on the Over-The-Counter Bulletin Board.
3) Each share of Westmoreland Coal Company Common Stock offered
hereby will be accompanied by one Preferred Stock Purchase Right.
<PAGE>
WESTMORELAND COAL COMPANY
AND
AFFILIATED COMPANIES
EMPLOYEES' SAVINGS/RETIREMENT PLAN
SUMMARY PLAN DESCRIPTION AND PROSPECTUS
This document constitutes part of a Prospectus covering
securities that have been registered under the
Securities Act of 1933, as amended.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
This document is dated as of July 30, 1997.
<Page i>
WESTMORELAND COAL COMPANY
AND
AFFILIATED COMPANIES
EMPLOYEES' SAVINGS/RETIREMENT PLAN
SUMMARY PLAN DESCRIPTION AND PROSPECTUS
INTRODUCTION 1
GENERAL PLAN INFORMATION 2
HOW THE PLAN WORKS 3
Purpose of Plan 3
The Plan in Brief 3
Who to Contact for More Information 4
WHO MAY PARTICIPATE IN THE PLAN 4
CONTRIBUTIONS TO THE PLAN 5
Employee Contributions 5
Employer Contributions 7
Valuation and Account Statements 7
Types of Accounts 7
Limits on Your Contributions 7
VESTING 8
INVESTING YOUR ACCOUNT 8
Investment Options 8
Your Investment Responsibilities 9
The Plan's Responsibilities 10
Investment in Company Stock 11
Keeping Track of Your Investments 12
DISTRIBUTIONS FROM THE PLAN 13
Distributions upon Separation from Service 13
Distributions Upon Reaching Age 70-1/2 13
Timing of Distribution 13
Form of Distribution 14
Withdrawals of Your Account 14
Loans During Employment 15
TAX TREATMENT OF DISTRIBUTIONS 16
<Page ii>
BENEFICIARY DESIGNATION 17
AMENDMENT OR TERMINATION OF THE PLAN 18
PLAN INSURANCE DOES NOT APPLY 18
GENERAL PROVISIONS 18
Assignment of Benefits 18
Top-heavy Benefits 18
Claim for Benefits 18
Denial of Claim for Benefits 18
YOUR RIGHTS UNDER ERISA 19
AVAILABLE INFORMATION 20
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 21
APPENDIX A - AVAILABLE INVESTMENT OPTIONS A-1
APPENDIX B - DESCRIPTION OF COMPANY PREFERRED STOCK, B-1
REPRESENTED BY DEPOSITORY SHARES
<Page 1>
WESTMORELAND COAL COMPANY
AND
AFFILIATED COMPANIES
EMPLOYEES' SAVINGS/RETIREMENT PLAN
SUMMARY PLAN DESCRIPTION AND PROSPECTUS
INTRODUCTION
This booklet is a summary of your benefits currently
provided under the Westmoreland Coal Company and Affiliated
Companies Employees' Savings/Retirement Plan ("the Plan").
Westmoreland Coal Company (the "Company") and certain
participating affiliated companies adopted the Plan for you and
other employees to help you build financial resources for the
future. Benefits under the Plan are funded through a trust
established with Mellon Bank and are in addition to those you may
be eligible to receive under the Federal Social Security Program.
This booklet satisfies two purposes. First, it
constitutes part of a Prospectus for purposes of the Securities
Act of 1933, as amended (the "Securities Act"), and second, it
serves as a Summary Plan Description under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
The purpose of the Prospectus is to provide you with information
about the Company, the Company's common stock ("Common Stock"),
and the Company's Series A Convertible Exchangeable Preferred
Stock, four of which are represented by one depository share (the
"Preferred Stock" and "Depositary Shares," respectively). In
this booklet, Common Stock and Preferred Stock are referred to
together as "Company Stock." This information is provided so
that you will be able to make an informed decision as to whether
to invest in Company Stock through the Plan. As of June 30,
1997, 6,965,328 shares of Common Stock, $2.50 Par Value, and
2,300,000 depository shares, each representing one quarter of a
share of the Company's Series A Convertible Exchangeable
Preferred Stock, $0.25 Par Value per depository share, are
outstanding.
This booklet describes the Plan as it currently
operates. The Plan is effective September 1, 1987, as amended
through the date of this booklet. Also, prior versions of the
Plan continue to apply to events that occurred while those
versions were in effect. For example, participants who
previously retired or terminated employment had their benefits
determined under the Plan that was in effect at the time of their
retirement or termination. Their benefits are not affected by
later amendments to the Plan or changes in the law.
Please read this booklet carefully. The Summary Plan
Description is, as its name suggests, only a summary of the Plan.
The precise rules of the Plan are set forth in the Plan document
and, in case of any inconsistency, the Plan document will govern.
If you wish to see a copy of the actual Plan document, you may do
so by contacting the Plan Administrator.
<Page 2>
GENERAL PLAN INFORMATION
1. Name of Plan: Westmoreland Coal Company and Affiliated
Companies Employees' Savings/Retirement Plan.
2. Employer (Plan Sponsor) and IRS Employer Identification
Number:
Westmoreland Coal Company
EIN: 23-1128670
14th Floor
2 North Cascade Avenue
Colorado Springs, Colorado 80903
3. Participating Employers: The list of participating
affiliated companies changes from time to time and is
available upon request from the Plan Administrator.
4. Plan Number: 001
5. Type of Plan: Defined Contribution
6. Type of Administration: The Plan is trusteed.
7. Plan Administrator:
Westmoreland Coal Company Savings/Retirement Plan
Administrative Committee
c/o Westmoreland Coal Company
14th Floor
2 North Cascade Avenue
Colorado Springs, Colorado 80903
(719) 448-5822
Attention: Cheryl M. Sprague
The above-named Committee is the Administrator of the Plan
for purposes of ERISA. As such, the Committee is
responsible for preparing certain reports, returns and
disclosures required by law and is responsible for
controlling and managing the operation and administration of
the Plan. Members of the Committee may be appointed or
removed at any time by the Company's Board of Directors in
its sole discretion. The Committee is also the named
fiduciary responsible for benefit applications and claims
review.
8. Agent for the Service of Legal Process: None designated.
Legal process on matters relating to the Plan may be served
in the name of the Plan on the Plan Administrator or the
Trustee.
<Page 3>
9. Plan Trustee:
Mellon Bank, N.A.
One Mellon Bank Center
Defined Contribution Services
9th Floor
Pittsburgh, PA 15258-0001
The Trustee manages and holds the Plan's assets in trust and
provides recordkeeping services for the Plan. Pursuant to
the instructions of the Company, the Trustee invests Plan
assets, holds cash in deposit accounts, keeps investments in
nominee or bearer form, pays benefits and expenses of
administering the Plan, and otherwise acts on behalf of the
Plan as set forth in a Trust Agreement.
The Company may contract for additional professional and
other services to carry out the Plan. The Plan provides
that all administration expenses of the Plan and the Trustee
will be paid by the Company or, at its option,
proportionally from the funds held pursuant to the Plan.
10. Investment Manager: The Investment Manager or Advisor for
each of the investment alternatives is named in the
description of investment options attached as Appendix A.
11. Plan Year: September 1 - August 31. Plan records are
maintained on this basis.
HOW THE PLAN WORKS
PURPOSE OF PLAN
The purpose of the Plan is to provide for employee
security in retirement and to encourage employees to save on a
regular basis.
THE PLAN IN BRIEF
The Plan is an individual account defined contribution
plan with a cash or deferred arrangement. As such, it is
intended to qualify under Section 401(a) of the Internal Revenue
Code of 1986, as amended (the "Internal Revenue Code"). The Plan
is subject to most provisions contained in Titles I, II and III
of ERISA, including provisions governing reporting, disclosure,
participation, vesting and fiduciary responsibility.
After you are eligible to enroll in the Plan, you may
elect to contribute up to 15% of your pay on a before-tax basis
to the Plan. The amount of your contribution will be deducted
from each pay check. The Company will then match a certain
percentage of your salary reduction contributions. Because your
contributions are made on a pre-tax basis, you defer paying
income taxes on them, on the Company's matching contributions and
also on any earnings on the money in your account until you
actually receive these amounts.
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All contributions made to the Plan on your behalf are
held in the Plan's Fund and are invested for your benefit. Your
account under the Plan will reflect the amount that you have
contributed, any amount that has been contributed for you by the
Company, and any investment gains and losses allocable to these
contributions. Thus, the benefits you ultimately receive from
the Plan will depend on the amount you have contributed and the
investment performance you experience while you have an account
in the Plan. The Plan will pay you a benefit upon your
retirement, disability or death.
If you are a "Corona Participant," that is, you were an
employee of the Corona Engineering and Consulting Division of
OESI Power Corporation on September 30, 1995 and became an
employee of the Corona Division of Westmoreland Energy, Inc. on
October 1, 1995, then some special rules, as described later in
this booklet, may apply to you.
WHO TO CONTACT FOR MORE INFORMATION
The day-to-day operations of the Plan are handled by
the Company's Plan Administrator. The Plan Administrator is a
committee whose members are appointed from time to time by the
Board of Directors of the Company. Additional information about
the Plan and the Plan Administrator may be obtained by calling
Cheryl M. Sprague, Director of Human Resources, at
(719) 448-5822.
Recordkeeping and investment of Plan assets are handled
by Mellon Bank. Info Line, a telephone computer link arranged
through Mellon Bank, permits you to make choices and receive
information about your account over the telephone. The Info Line
number is 1-800-407-4015. Plan participants will have electronic
access to their accounts 24 hours a day. Dreyfus Retirement
Services Plan Specialists will be available to assist callers
Monday through Friday from 9 A.M. to 8 P.M. (Eastern Time).
WHO MAY PARTICIPATE IN THE PLAN
In order to participate in the Plan you must:
- have reached age 21
- be employed by the Company or a participating
affiliate of the Company
- not be covered by a collective bargaining
agreement
- have worked at least one hour of service since the
current Plan became effective on September 1, 1987, and
- have completed 1,000 hours of service.
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If you have met all of these eligibility requirements,
you can participate in the Plan on the first day of the month
following the date you complete 1,000 hours of service. If you
have met these eligibility requirements but you are no longer
employed by the Company or a participating affiliate, or you
become subject to a collective bargaining agreement, you can
become eligible to participate again as soon as you work one hour
of service as an employee of the Company or a participating
affiliate and you are not covered by a collective bargaining
agreement.
If you are a Corona Participant, your hours of service
with Corona when it was a division of OESI Power Corporation will
be counted towards your hours of service requirement for
participation under the Plan.
CONTRIBUTIONS TO THE PLAN
EMPLOYEE CONTRIBUTIONS
SALARY REDUCTION CONTRIBUTIONS
You do not automatically participate in the Plan just
because you are eligible. Instead, you must enroll in the Plan
and choose to reduce a certain percentage of your pay through
payroll deduction. These contributions to the Plan are called
Salary Reduction Contributions. If you elect to make Salary
Reduction Contributions, your base pay, up to certain limits
established and adjusted for cost of living by Federal tax law,
will be reduced by the amount you choose. Then, this amount will
be contributed to your Salary Reduction Contribution account.
Your Salary Reduction Contributions are taken from your
pay before Federal income taxes are deducted. Since these taxes
are based on a lower income (your pay minus your before-tax
contributions), your taxes are lower. Your Salary Reduction
Contributions, however, are subject to Federal Social Security
(FICA) tax and Federal unemployment (FUTA) tax.
After February 28, 1995, you can elect to have up to 15
percent of your pay withheld from your paycheck and contributed
to the Plan. (Before this time, you could only contribute up to
10 percent of your pay.) The amount of your contributions will
ultimately change as your base pay changes. In order to
determine the amount of your Salary Reduction Contributions and
Matching Contributions, your "pay" is the amount of your base pay
from the Company or a participating affiliate excluding overtime
pay, bonuses, commissions, and any other form of incentive or
special pay and expense reimbursements. Your pay for these
purposes does include your Salary Reduction Contributions to the
Plan and contributions under any cafeteria plan. Under Federal
tax law, the maximum amount of your pay that may be included in
determining Salary Reduction Contributions is $160,000 for 1997.
(This number will be adjusted periodically for inflation.)
<Page 6>
The maximum amount of Salary Reduction Contributions
you can make in any calendar year is limited by the Internal
Revenue Service ("the IRS"). In 1997, the IRS limit is $9,500.
(See "Limits on Your Contributions-Salary Reduction
Contributions" below for more information on the limits
applicable to Salary Reduction Contributions.)
After February 28, 1995, you may change the percentage
rate you defer on any day, up to once a month. (Before then, you
could only make changes once a quarter.) You may also
discontinue your Salary Reduction Contributions at any time, but,
if you want to start deferring again, you must wait until the
first day of the payroll period following the first day of the
next calendar month. If you wish to change or stop your Salary
Reduction Contributions, either complete an Enrollment and Change
Form from your enrollment kit or call the Info Line at
1-800-407-1015. Salary Reduction Contribution elections become
effective as soon as administratively possible, but not before
the first payroll period following the payroll period during
which the election is made.
VOLUNTARY CONTRIBUTIONS
These are after-tax contributions you may have made
prior to June 1, 1984 under the Plan that was then in effect.
You are no longer permitted to make these after-tax contributions
to the Plan. The after-tax contributions you made before
June 1, 1984 will continue to be held under the Plan.
ROLLOVER CONTRIBUTIONS
If you had an account under a former employer's
qualified retirement plan or if you transferred a distribution
from such a plan to an individual retirement account (IRA), you
may be able to transfer or "roll over" these funds into this
Plan, if you comply with certain rules established for rollovers.
Amounts rolled over to this Plan will be placed in a separate
account in your name, known as your Rollover account.
The tax laws that apply to rollovers are complex. If
you have money in a former employer's plan or in a rollover IRA
and you wish to arrange for a rollover of these amounts into the
Plan, please see your Plan Administrator.
<Page 7>
EMPLOYER CONTRIBUTIONS
MATCHING CONTRIBUTIONS
If you make Salary Reduction Contributions in a
particular Plan Year, the Company will match 50% for each dollar
you contribute, up to the first 5% you contribute from your pay.
For example, if your monthly paycheck is $2,000 and you
contribute 5% of your pay before taxes ($100), the Company would
add $50 to your account for that month. This Matching
Contribution will be added to your account on the date of your
paycheck. Note that under Federal tax law, the maximum amount of
your pay that may be included in determining Matching
Contributions is $160,000 for 1997. (This number will be
adjusted periodically for inflation.)
If you are a Corona Participant, effective
October 1, 1995, the Company will match one dollar for each
dollar you contribute from your pay as a Salary Reduction
Contribution, up to the first 7% you contribute from your pay.
VALUATION AND ACCOUNT STATEMENTS
Generally, the value of your account will be determined
each business day according to the fair market value of the
investment option you have chosen. You will receive quarterly
statements from Mellon Bank showing your account balance and
transactions during that quarter. You may obtain your account
balance at any time by calling the Info Line.
TYPES OF ACCOUNTS
You will have your own account within the Plan's Fund.
Within your account are several sub-accounts, one for each type
of investment election you make and one for each type of
contribution made to your account, such as Salary Reduction
Contributions, Matching Contributions and Rollover funds. Each
sub-account also contains the appropriate adjustments for
withdrawals, distributions, earnings, losses and expenses.
LIMITS ON YOUR CONTRIBUTIONS
Federal tax law imposes certain limitations on the
amount of contributions that may be made to the Plan:
SALARY REDUCTION CONTRIBUTIONS
The maximum amount of Salary Reduction Contributions
you may make to the Plan in any calendar year is limited by the
IRS. In 1997, the limit is $9,500. The IRS may adjust this
limit in the future. To comply with this limit, the Company may
either prospectively restrict your election or return to you any
extra amounts contributed, together with any earnings on those
amounts, on or before the April 15th following the end of the
calendar year.
<Page 8>
If you are considered a highly paid employee (as
defined by IRS regulations), other limitations may apply to you
as well. Federal law requires that the Plan be tested annually
to ensure that the percentage of compensation contributed by
highly paid employees, on average, does not exceed the percentage
of compensation contributed by other employees by more than a
permitted amount. If the test cannot be passed, or if this
limitation is or may be exceeded, highly paid employees may have
their contributions reduced or suspended during the year (or, in
some cases, prior employee contributions may have to be returned
to highly paid employees). If you are affected by this
restriction, you will be notified.
MATCHING CONTRIBUTIONS
A similar test may limit the Company's matching
contributions for highly paid employees. If the limit is
exceeded by any highly paid employee, the excess matching
contributions together with earnings will be distributed to the
highly paid employee after the end of the year. If you are
affected by this restriction, you will be notified.
TOTAL ANNUAL CONTRIBUTION
In addition, there is a limit on the total amount
(i.e., Salary Reduction Contributions and Matching Contributions)
you can add to your account in any Plan Year. Generally
speaking, this limit is $30,000 or 25% of your pay for the year,
whichever is less. Again, the maximum amount of pay that can be
taken into account for this purpose in 1997 is $160,000 (as
indexed for inflation). If you are affected by these
restrictions, you will be notified. Your contributions may be
limited to prevent this total annual contribution limit from
being exceeded.
VESTING
At all times you will be 100% vested in your entire
account under the Plan. This means that you have earned a
nonforfeitable right to receive 100% of your account from the
Plan in the future, regardless of when you stop working for the
Company.
INVESTING YOUR ACCOUNT
INVESTMENT OPTIONS
Under the Plan, you decide how your account will be
invested, except for certain amounts that have already been
automatically invested in Company Stock before 1994 (see
"Investment in Company Stock" below). The investment options
currently available are described in Appendix A to this booklet.
<Page 9>
There are transaction fees or expenses charged to you
or your account when you purchase or sell the investments offered
under the Plan. These fees are described in Appendix A to this
booklet For information about the administrative and management
fees incurred by the investment funds, see the Prospectus or
Product Description for the respective fund.
YOUR INVESTMENT RESPONSIBILITIES
Each investment option has different investment
objectives, different expected rates of return, and different
risks. See Appendix A for a description of the investment
options currently available under the Plan. More information
about the investment options may be found in the fund
Prospectuses or Product Descriptions and other related materials
contained in your enrollment kit and available from the Plan
Administrator or in the Prospectuses or Product Descriptions
available from Dreyfus Retirement Services. To receive
additional information relating to an investment in Company
Stock, you should read the section in this booklet called
"Investment in Company Stock" and you may also contact
Westmoreland Coal Company directly at the address and phone
number provided in Item 7 of the General Information section of
this booklet. You should be sure to read all of the information
describing the funds before making any investment decisions. NO
INVESTMENT CAN GUARANTEE A CERTAIN RATE OF RETURN. NO INVESTMENT
CAN BE GUARANTEED AGAINST LOSS.
When you make an investment choice, your investment
election will remain in place until you change it. Your election
applies to your contributions as well as any earnings on them.
On and after March 1, 1995, you generally may transfer funds
among the investment options (or change how new contributions
will be invested) on any day of any calendar month, as long as
you make only one election in any month, subject to the
restrictions on the Company Stock discussed in the section in
this booklet called "Resale of Company Stock Acquired from the
Plan." (Note that before March 1, 1995, investment selection
could only be made once each Plan quarter.) You may call the
Info Line to make investment selections and changes. Most
investment selections become effective on the same or next day
that you request the change. You may inquire about the effective
date of your particular selections when you call the Info Line.
THE PLAN'S RESPONSIBILITIES
The Plan is intended to comply with the requirements of
section 404(c) of ERISA. This means that the Plan permits
participants to direct the investment of their accounts. As long
as the Plan complies with the requirements of section 404(c), you
have the responsibility to decide how your accounts are invested
and the parties that otherwise would be responsible for making
investment decisions (the "fiduciaries" of the Plan) will not be
liable for any losses that result directly from investment
instructions that you make. Mellon Bank will not take any action
regarding the investment of your account without specific
instructions from you.
<Page 10>
To comply with section 404(c), the Plan must permit
participants to choose from a broad range of investment
alternatives and must provide participants with certain
information about the investment alternatives and the operation
of the Plan. In addition to the information included in this
booklet and the accompanying Appendix that describes the
investment options available under the Plan, you may request the
following information:
- A description of the annual operating expenses of
each investment fund, and the aggregate amount of such
expenses expressed as a percentage of average net
assets of the investment fund.
- Copies of any prospectuses, financial statements
and reports and any other materials relating to the
investment funds to the extent such information is
provided to the Plan.
- A list of assets comprising the portfolio of each
investment fund that constitute Plan assets within the
meaning of ERISA and the value of each such asset.
- Information concerning the value of shares or
units in each investment fund, as well as the past and
current investment performance of such investment fund,
determined, net of expenses, on a reasonable and
consistent basis.
- Information concerning the value of shares or
units in investment funds held in your account.
You will be able to receive most of this information
from Dreyfus Retirement Services by calling the Info Line or by
writing to Dreyfus Retirement Services at 144 Glenn Curtiss
Boulevard, Uniondale, NY 11556-0144.
The Administrative Committee of the Westmoreland Coal
Company is the named fiduciary responsible for providing the
information described above for all investment alternatives
available under the Plan, so if you do not receive information
you need from Dreyfus Retirement Services, you should contact the
Company at the address or phone number provided in Item 7 of the
General Information section of this booklet.
<Page 11>
INVESTMENT IN COMPANY STOCK
AUTOMATIC INVESTMENT IN COMPANY STOCK
All Salary Reduction Contributions and Rollover
Contributions made before March 1, 1990, Matching Contributions
made before December 1, 1993 and Voluntary Contributions made
before June 1, 1984 were automatically invested in Company Stock.
These contributions may not be transferred into other investment
options until you reach age 55, unless between June 1, 1990 and
September 1, 1994 you elected, no more than once a Plan Year, to
transfer up to 20% of the value of these pre-1990 Salary
Reduction Contributions, pre-1990 Rollover Contributions and
Voluntary Contributions to other investment options. After you
reach age 55, you may transfer a portion of your remaining
pre-1990 Salary Reduction Contributions, pre-1990 Rollover
Contributions, Voluntary Contributions and pre-1994 Matching
Contributions to other investment options once a Plan Year. Here
is a schedule that shows what percentage of these shares you can
transfer per Plan Year depending on your age:
...then you may transfer
up to this percentage of
If you are this age... the shares described above
--------------------- --------------------------
55 40%
56 60%
57 80%
58 or older 100%
Additionally, you may choose to have the entire amount of
Matching Contributions made to your account before
December 1, 1993 and invested in Company Stock invested in either
Common Stock or Preferred Stock, but you are prohibited from
later changing this election until you reach age 55.
OPTIONAL INVESTMENT IN COMPANY STOCK
The rest of your account, that is, Salary Reduction
Contributions and Rollover Contributions made on and after
March 1, 1990 and Matching Contributions made on and after
December 1, 1993, can be invested in any investment option you
select, including Company Stock, and you may change your
investment mix up to once a month on any day of the month.
Descriptions of Common Stock and Preferred Stock are
included in Appendix A of this booklet. Preferred Stock is
described further in Appendix B.
PURCHASE OF COMPANY STOCK
If you invest in Company Stock, the Trustee will
purchase the Company Stock on the over-the-counter market at
prevailing market prices as soon as practicable.
<Page 12>
Procedures have been established by the Company to
ensure that your decisions to purchase, hold and sell Company
Stock remain confidential. Your investment instructions are sent
to the Plan's recordkeeper who communicates these instructions to
the Trustee. Your decision to invest in Company Stock is
communicated only to the people who must know the information to
properly administer the Plan. The person responsible for
monitoring these confidentiality procedures and other procedures
which ensure that your voting decisions with respect to the
shares of the Company Stock held in your account remain
confidential is:
Westmoreland Coal Company Savings/Retirement Plan
Administrative Committee
c/o Westmoreland Coal Company
14th Floor
2 North Cascade Avenue
Colorado Springs, Colorado 80903
(719) 448-5822
Attention: Cheryl M. Sprague
VOTING OF COMPANY STOCK
If you invest in Company Stock, the stock certificates
will be issued in the Trustee's name and held by the Trustee, but
you will have the power to direct the Trustee how to vote your
shares. You will be notified from time to time that a vote is
scheduled and how you can instruct the Trustee how to vote your
shares. The Company will not know how you voted and your voting
decision will be kept confidential. If you do not direct the
Trustee, the Trustee will vote your stock at its discretion. In
addition, you will be able to give confidential instructions to
the Trustee in the case of tender offers affecting the shares of
Company Stock held in your account.
RESALE OF COMPANY STOCK ACQUIRED FROM THE PLAN
The Plan imposes no limitation or restriction on
resales of Company Stock acquired in a distribution from the
Plan. In addition, shares of Company Stock that have been
registered under the Securities Act may generally be resold by
participants who have received them in a distribution of Company
Stock from the Plan. However, participants who may be deemed to
be "affiliates" of Westmoreland Coal Company may resell shares of
Company Stock received in a distribution only pursuant to an
effective registration statement specifically relating to such
resales, pursuant to Rule 144 under the Securities Act or in a
transaction otherwise exempt from registration under the
Securities Act.
KEEPING TRACK OF YOUR INVESTMENTS
You may obtain more information about your investments
under the Plan by calling the Info Line at any time.
<Page 13>
DISTRIBUTIONS FROM THE PLAN
With the exception of certain withdrawals and loans
(described on pages 14-16), benefits under the Plan are
ordinarily paid ONLY upon retirement, disability, other permanent
separation from service or death. Funds are not otherwise
available to you.
DISTRIBUTIONS UPON SEPARATION FROM SERVICE
RETIREMENT
If you retire at or after reaching age 65, you are
entitled to receive your entire account balance.
DEATH
If you die before the entire interest in your account
is paid out to you, the remaining interest will be paid to your
beneficiary as soon as practicable following your death.
TOTAL DISABILITY
If you become totally disabled, your account will be
paid out to you. As of September 1, 1995, you are considered
totally disabled if you are receiving benefits under a long term
disability program sponsored by the Company or a participating
affiliate and if your disability is expected to be indefinite,
rendering you unable to return to work. If you became totally
disabled before September 1, 1995 you had to remain totally
disabled for six consecutive months before your account could be
distributed to you. If you became totally disabled on or after
September 1, 1995 there is no longer a six month waiting period.
OTHER SEPARATION FROM SERVICE
If you leave for any other reason, you are entitled to
receive the entire interest in your account.
DISTRIBUTIONS UPON REACHING AGE 70-1/2
If you reach age 70-1/2 and your benefits have not yet
begun to be paid, you will start receiving a benefit on the
April 1 after the calendar year in which you reach age 70-1/2,
even if you have not retired or otherwise separated from service
at this time.
TIMING OF DISTRIBUTION
If you have $3,500 or less in your account or you have
reached age 65, you will automatically receive your benefits on
the soonest practicable date after your account has been valued
after your separation from service.
<Page 14>
If you have ever had more than $3,500 in your account
or you have not reached age 65, you will receive your benefits on
the soonest practicable date after your account has been valued
after your separation from service or, at a later date you
choose, but not later than the time you reach age 65.
FORM OF DISTRIBUTION
If your interest in your account does not exceed
$3,500, your interest will be paid to you or your beneficiaries
in a single lump sum.
In all other cases, you or your beneficiaries may
choose to receive your interest in a single lump sum or in the
form of an annuity providing for payments for a term of 5, 10 or
15 years, but no longer than your life expectancy at the time
your benefits begin. If you do not choose a form of benefit,
your benefit will be paid in a single lump sum.
If your account contains Company Stock, you may elect
to receive your distribution in cash or in stock, unless you have
fewer than ten shares, in which case the distribution will be
made in cash.
You will be provided with the appropriate forms to make
these elections prior to the time of distribution.
WITHDRAWALS OF YOUR ACCOUNT
VOLUNTARY CONTRIBUTION AND ROLLOVER ACCOUNTS
You may withdraw, once a Plan Year, any amount from
your Voluntary Contribution account or your Rollover account.
SALARY REDUCTION CONTRIBUTION ACCOUNT - WITHDRAWAL FOR
FINANCIAL NECESSITY
You may withdraw, up to once a Plan Year, any amount
from your Salary Reduction Contribution account if you show the
Plan Administrator that you have an immediate and heavy financial
need and demonstrate that this money is needed to satisfy that
need. A need will be considered immediate and heavy if it arises
from:
- expenses for medical care for you, your spouse or
your dependents,
- the purchase by you of a new principal residence
(not mortgage payments),
- payment of tuition and related educational fees
for the next year of post-secondary education for you,
your spouse, children or dependents, or
- payments needed to prevent your eviction or
foreclosure from your principal residence.
<Page 15>
You cannot withdraw more than you need to meet your
hardship (including whatever is needed to satisfy the tax on the
withdrawal) and you must have obtained money from all other
permissible distributions and non-taxable loans, if any, under
this or other plans maintained by your employer.
If you make a hardship withdrawal, you may not make any
Salary Reduction Contributions to your account for the next 12
months. Further, in the following calendar year when you are
able to make Salary Reduction Contributions again, you will be
limited in how much you may contribute.
AGE 59-1/2 WITHDRAWALS
When you reach age 59-1/2, you may withdraw up to the
total amount in your account, less any amounts already withdrawn.
TAXES ON WITHDRAWALS
All distributions, including withdrawals (except
withdrawals of after-tax contributions) are subject to Federal
income tax in the year you receive the payment. (See "Tax
Treatment of Distributions," below, for more information.)
LOANS DURING EMPLOYMENT
You may borrow from your account only if you are an
active employee participating in the Plan. You may apply for a
loan from the Plan once a calendar year, but you can never have
more than one outstanding loan at a time. To apply for a loan,
contact the Plan Administrator for loan application forms.
Beginning March 1, 1990, the minimum loan amount is $1,000.
(Before March 1, 1990, the minimum loan amount was $500.) You
may borrow up to 50% of the total value of your account as long
as that amount is no more than $50,000, but you cannot borrow
more than you have personally contributed to your account. In
addition, you are limited in the total amount you can borrow from
this and other plans sponsored by the Company and affiliated
companies.
If you take out a loan, you must pay interest on the
loan. Beginning February 28, 1995, the interest rate is the
prime rate plus 1%, fixed as of the date of your loan
application. This rate will remain the same for the entire
period of the loan. (Before February 28, 1995, the rate was
equal to the fixed rate the Trustee charged for unsecured loans.)
Generally, you have five years to repay your loan,
unless you use it to acquire your principal residence, in which
case your repayment term may be as long as 15 years. You repay
the loan in installments through automatic payroll deductions.
You will authorize these deductions when you request your loan.
Each payment you make of principal and interest will be credited
to your account. You may pay off the outstanding balance of your
loan at any time in a lump sum with no penalty by notifying
Mellon Bank. If you do this, however, you may not apply for
another loan for the next 12 months.
<Page 16>
Certain events, such as death, separation from service,
certain reductions in salary, failures to pay, or attempts to revoke a
payroll deduction authorization for repayment will accelerate the
loan so that the principal and interest become payable in full
immediately. If you fail to pay in the time specified, the
outstanding balance of the loan plus accrued interest will be
deducted from your account and you will be subject to Federal
income tax on it.
TAX TREATMENT OF DISTRIBUTIONS
The Plan is intended to qualify for certain favorable
tax treatment (that is, it is intended to be a "qualified" plan
under Section 401(a) of the Internal Revenue Code). Taxes
generally are not due on any contributions when they are made.
Your benefits from the Plan, including withdrawals
during employment, generally are subject to tax when distributed.
The distribution is generally subject to Federal income tax at
ordinary income tax rates; however, any after-tax contributions
are exempt from tax when distributed. You should be aware of the
following additional rules:
- ROLLOVER TO OTHER PLANS. You have the right to
instruct the Plan Administrator to transfer all or a
portion of a lump sum payment from the Plan (but not
less than $500) directly to either an IRA (individual
retirement account or individual retirement annuity) or
to another employer's plan that accepts rollovers. (If
you receive a benefit payment because you are age
70-1/2 or older, part of the payment may not be
eligible for rollover, in which case the Plan
Administrator will let you know.) If you choose a
direct rollover, no Federal income tax will be withheld
on the amount you roll over and you will not pay tax in
the current year on the amount you roll over.
If, instead, you choose to receive the payment,
the Plan Administrator is required by law to withhold
20% of the payment as Federal income tax withholding to
be credited toward the amount of tax you owe for the
year. The payment will be taxed in the current year,
unless you roll over the payment to an IRA or another
employer's qualified plan that accepts rollovers within
60 days of receiving the payment. The amount rolled
over will not be taxed until you take it out of the IRA
or the other employer's plan. If you want to roll over
the full amount of the payment, you must find other
money to replace the 20% that was withheld; otherwise
you will have to pay tax in the current year on the
amount that was withheld.
Prior to distributing funds to you from the Plan,
the Plan Administrator will provide you with a notice
generally explaining your rollover options, as well as
the withholding requirements and possible tax
consequences of your election.
- 10% PENALTY TAX MAY APPLY. If you receive a
taxable distribution or withdrawal from the Plan before
you reach age 59-1/2, you will be required to pay an
additional 10% Federal tax unless you meet one of the
limited exceptions to this rule. You should consult a
tax advisor about the tax consequences of any
particular withdrawal or distribution to determine if
the 10% penalty tax will apply.
The laws that govern the tax treatment of
contributions to and benefit payments from retirement
plans are quite complex. YOU SHOULD CONSULT WITH YOUR
PERSONAL TAX ADVISOR ABOUT YOUR OWN PARTICULAR
SITUATION AND HOW THESE RULES APPLY TO A SPECIFIC
PAYOUT TO YOU.
BENEFICIARY DESIGNATION
You may choose a beneficiary or beneficiaries to
receive your interest in your account after your death. However,
if you are married, you must designate your spouse as your
beneficiary, unless your spouse properly consents to a different
beneficiary on the form provided for this purpose. You may
change your beneficiary designation at any time so long as you
properly notify the Plan Administrator.
AMENDMENT OR TERMINATION OF THE PLAN
Although the Company intends for this Plan to be
permanent, each participating company has the right to terminate
its participation in the Plan at any time. In addition, the
Company may terminate or amend the Plan at any time by action of
the Company's Board of Directors or its delegate.
If the Plan is completely discontinued, the total
amounts then in your accounts will be fully vested and held for
distribution to you in accordance with the benefit provisions of
the Plan or in such other manner as the Company may determine.
PLAN INSURANCE DOES NOT APPLY
The Plan is not covered by the Federal insurance
program of the Pension Benefit Guaranty Corporation (PBGC). The
PBGC only guarantees pensions for defined benefit plans which
fund for a specific monthly benefit upon retirement. Because the
Plan is a defined contribution plan with benefits based on an
account and not a specific monthly benefit, the Plan is not
insurable.
<Page 18>
GENERAL PROVISIONS
ASSIGNMENT OF BENEFITS
Your account balance belongs to you and may not be
sold, assigned, transferred or pledged to another person under
most circumstances. However, if you become a party to a divorce
property settlement or a court order, or if you become liable for
support or alimony payments, the Plan may be legally required to
pay all or a portion of your benefit to your spouse, ex-spouse,
children or other dependents in compliance with a qualified
domestic relations order.
TOP-HEAVY BENEFITS
Federal law provides that in the event that the Plan is
shown to benefit certain "key employees" disproportionately, the
Plan may be declared "top-heavy" and become subject to special
rules. If the Plan is declared "top-heavy," you will receive
information concerning the new rules that would apply to the
Plan. It is extremely unlikely that the Plan will become
top-heavy.
CLAIM FOR BENEFITS
After an event that entitles you to benefits has
occurred, you may apply for your Plan benefits by filing a
request with the Plan Administrator.
DENIAL OF CLAIM FOR BENEFITS
If the Plan Administrator denies, in whole or in part,
your claim for benefits, the Plan Administrator will notify you
within 90 days of the specific reasons for the denial and how you
may perfect your claim or how you can appeal the denial. In
special circumstances the Plan Administrator may extend the
response period for up to an additional 90 days, in which event
it will notify you in writing of the extension, and the reasons
for it.
You or your representative have 60 days from receipt of
a notice of claim denial to petition the Plan Administrator in
writing for a full and fair review of the denial. You or your
representative will be able to review pertinent documents and to
submit issues and comments in writing to the Plan Administrator.
The Plan Administrator will review the denial and will tell you
its decision and reasons for it in writing within 60 days of
receipt of the petition; provided, however, that in special
circumstances the Plan Administrator may extend the response
period for up to an additional 60 days, in which event it will
notify you in writing of the extension. This is the only way to
contest a decision denying benefits under the Plan.
<Page 19>
YOUR RIGHTS UNDER ERISA
As a participant in the Plan, you are entitled to
certain rights and protections under ERISA. ERISA provides that
all Plan participants shall be entitled to:
- Examine, without charge, all Plan documents,
including insurance contracts and copies of all
documents filed by the Plan with U.S. Department of
Labor, such as detailed annual reports and Plan
descriptions. The documents may be examined at the
Plan Administrator's office.
- Obtain copies of all Plan documents and other Plan
information upon written request to the Plan
Administrator, who may make a reasonable charge for the
copies.
- Receive a summary of the Plan's annual financial
report. The Plan Administrator is required by law to
furnish each participant with a copy of this summary
annual report.
- Obtain a statement of your account balance. You
must request such a statement in writing, and not more
than once a year. This service is free of charge.
In addition to creating rights for Plan participants,
ERISA imposes duties upon the people, called "fiduciaries," who
are responsible for the operation of the employee benefit plan.
They have a duty to operate the Plan prudently and in the
interest of Plan participants and beneficiaries. The Company may
not fire you or otherwise discriminate against you in any way to
prevent you from obtaining a benefit or exercising your rights
under ERISA. If your claim for a benefit is denied in whole or
in part, you must receive a written explanation of the reason for
the denial. You have the right to have your claim reviewed and
reconsidered.
Under ERISA, there are steps you can take to enforce
the above rights. For instance, you may file suit in a Federal
court if you request materials from the Plan and do not receive
them within 30 days. The court may require the Plan
Administrator to provide the materials and pay you up to $100 a
day until you receive them (unless the materials were not sent
because of reasons beyond the Plan Administrator's control). If
your claim for benefits is denied in whole or in part, or
ignored, you may file suit in a state or Federal court. If you
believe Plan fiduciaries have misused the Plan's money, or have
discriminated against you for asserting your rights, you may seek
assistance from the U.S. Department of Labor, or file suit in a
Federal court. If you are successful, the court may order the
person you have sued to pay court costs and legal fees. If you
lose, the court may order you to pay (for example, if it finds
your claim to be frivolous).
<Page 20>
If you have any questions about the Plan, you should
contact the Plan Administrator. If you have any questions about
this statement or about your rights under ERISA, you should
contact the nearest Area Office of the U.S. Labor Management
Services Administration, Department of Labor.
AVAILABLE INFORMATION
The Company is subject to the informational
requirements of the Securities Exchange Act of 1934 (the
"Exchange Act") and, in accordance therewith, files reports,
proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company with the
Commission can be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street N.W.,
Washington, D.C. 20549, and at its Regional Offices: 7 World
Trade Center, New York, New York 10048; and 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies can also be
obtained upon payment of prescribed rates from the Public
Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 or from the Commission's World Wide Web
site at http:\\www.sec.gov.
The Company has filed with the Commission a
Registration Statement on Form S-8 (together with all amendments
and exhibits thereto, the "Registration Statement") under the
Securities Act covering the registration of the securities that
may be offered under the Plan. The foregoing description does
not contain all of the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission.
The Company will furnish, without charge, to each
eligible participant in the Plan a copy of its most recent 10-K
and, if available, annual report to shareholders and will also
deliver to each person holding an interest in the Plan, who does
not otherwise receive such materials as a shareholder of the
Company, copies of all reports, proxy statements and other
communications distributed to the shareholders of the Company
generally. The Company also will provide, without charge, to
each person to whom a copy of this booklet is delivered, on the
written or oral request of any such person, a copy of any or all
of the documents which have been or may be incorporated by
reference in Item 3 of Part II of the Registration Statement,
which items are incorporated by reference into this booklet,
other than exhibits to such documents. Requests for such copies
should be directed to Westmoreland Coal Company, Corporate
Secretary, 14th Floor, 2 North Cascade Avenue, Colorado Springs,
Colorado 80903, (719) 442-2600.
Except where otherwise indicted herein, this booklet
speaks as of its date, and neither the delivery of this booklet
nor any sales hereunder shall under any circumstances create any
implication that there has been no change in the affairs of the
Company since that date or that the information contained herein
is correct as of any time subsequent to that date. No person has
been authorized to give any information or to make any
representations, other than as contained in this booklet and in
other documents relating to the Plan delivered to eligible
employees in connection with the offer described in this booklet
and if given or made such information or representations must not
be relied upon. This booklet does not constitute an offer of any
securities other than those to which it relates, or an offer of
those to which it relates in any state to any person to whom it
is unlawful to make such offer in such state.
<Page 21>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the
Commission pursuant to the Exchange Act are incorporated herein
by reference:
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and
Exchange Commission (the "Commission") pursuant to the Securities
Exchange Act of 1934 (the "Exchange Act") by Westmoreland Coal
Company (the "Company") (File No. 0-752) are incorporated herein
by reference:
(i) the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1996;
(ii) the description of the Company's Common
Stock contained in its Registration Statement on
Form 8-A, filed May 22, 1992 and
(iii) the description of the Company's
Depository Shares contained in its Registration
Statement on Form 8-A, filed June 23, 1992.
Each document filed by the Company after the date
hereof pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold
or which deregisters all securities remaining unsold, shall be
deemed to be incorporated by reference in this Registration
Statement and shall be part hereof from the date of filing of
such document.
<Page A-1>
APPENDIX A TO
SUMMARY PLAN DESCRIPTION AND PROSPECTUS
DATED JULY , 1997
AVAILABLE INVESTMENT OPTIONS
This Appendix provides additional information regarding each
of the investment options available under the Plan. These
investment options consist of Company Stock and the following
investment funds available through Dreyfus Retirement Services:
* Dreyfus New Leaders Fund, Inc.
* Dreyfus International Growth Fund
* Dreyfus Cash Management
* Dreyfus Short-Intermediate Government Fund
* Dreyfus S&P 500 Index Fund
* Dreyfus Disciplined Stock Fund
* Capital Preservation Fund
The following are investment profiles for each of the
Dreyfus Retirement Services investment funds, followed by
information regarding the Company Stock. Such profiles are based
on information provided by Dreyfus Retirement Services.
Additional information, including financial data, investment
policies, management, distribution, and service fees and expenses
with respect to each of these funds is contained in the
Prospectus or Product Description for the fund, a copy of which
can be obtained through Dreyfus Retirement Services. As with any
mutual fund, there is no assurance that the fund will achieve its
stated objective.
<Page A-2>
DREYFUS
Retirement Services
DREYFUS NEW LEADERS FUND, INC.
FUND DESCRIPTION
The Fund's goal is to maximize capital appreciation.
INVESTMENT STRATEGY
The Fund seeks out companies that Dreyfus believes have the
potential for significant growth. The Fund is particularly alert
to companies which it considers to be new leaders, that is,
emerging smaller-sized companies (typically with market
capitalizations of less than $750,000), both domestic and
foreign, which the Fund's management believes to be characterized
by new or innovative products, services or processes which should
enhance prospects for growth in future earnings. The Fund will
also invest in special situations such as corporate
restructurings. During normal market conditions the Fund will
invest aggressively in domestic and foreign common stocks. For
defensive purposes the Fund can invest in money market
instruments. The Fund may also invest up to 25% of its assets in
foreign securities.
INVESTOR PROFILE
Dreyfus New Leaders Fund may be appropriate for investors seeking
long-term capital growth who are looking to supplement an overall
investment program with a more aggressive equity investment.
INVESTMENT RISKS
The Fund invests principally in common stocks. Stock prices move
up and down in response to the performance of their issuers and
general economic and market factors. The prices of stocks move in
different degrees, based on varying impact of these factors over
time, which affects the relative volatility of a fund.
Investments in smaller-sized companies tend to be more volatile
than investments in larger-sized companies, which can cause the
fund's share price also to be more volatile. The Fund can also
invest in foreign securities, which involve additional risks
including political and economic climates and currency
fluctuations, and use sophisticated investment techniques
including investments in derivative instruments. When you sell
your shares of the Fund, they may be worth more or less than what
you paid for them.
EXPENSES
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management fees .75%
Other Expenses .46%
Total Portfolio Operating Expenses 1.21%
Example: You would pay the following expenses on a $1,000
investment assuming ( 1 ) a 5% annual return and (2) redemption
at the end of each period.
One year $ 12
Three years $ 38
Five years $ 66
Ten years $ 147
<Page A-3>
These amounts should not be considered representative of past or
future expenses and actual expenses may be greater or less than
those indicated. Moreover, the Fund's actual performance will
vary and returns may be greater or less than 5%.
INVESTMENT ADVISER
The Dreyfus Corporation serves as the Fund's investment manager.
BUYING AND SELLING SHARES THROUGH YOUR 401(k) PLAN
Your plan sponsor has established specific procedures for
enrolling in the plan, for allocating contributions to the Fund,
and for making exchanges or transfers among the different
investment options available under your plan. A Fund's exchange
privilege may be modified or terminated at any time upon notice
to shareholders. Please consult your Human Resources
Representative for specific information on these and other
related matters, including withdrawals from your plan.
DISTRIBUTIONS
Dividends and capital gains are generally declared and paid
annually. All distributions to retirement accounts will be
automatically reinvested in addition' al Fund shares.
THIS RETIREMENT PLAN PROSPECTUS CONTAINS SUMMARY INFORMATION
CONCERNING ONE OF THE INVESTMENT OPTIONS AVAILABLE UNDER YOUR PLAN.
IF YOU WOULD LIKE A COMPLETE PROSPECTUS BEFORE ALLOCATING ALL OR A
PORTION OF YOUR RETIREMENT PLAN ASSETS TO THIS INVESTMENT OPTION,
PLEASE CONTACT YOUR HUMAN RESOURCES REPRESENTATIVE.
Premier Mutual Fund Services, Distributor
@) 1996 Dreyfus Retirement Services, a division of Dreyfus Service
Corporation
<Page A-4>
DREYFUS NEW LEADERS FUND, INC.
MANAGED BY THE DREYFUS CORPORATION
SMALLER CAPITALIZATION COMPANIES
BENCHMARK Russell 2000 Index with dividends reinvested.*
STRATEGY The Fund invests primarily in common stocks
of domestic and foreign issuers typically with
market capitalizations below $1.5 billion at time
of purchase. There are approximately 5,000
companies available for consideration in this
market capitalization range. The Fund may invest
up to 25% of the value of its assets in the
securities of foreign companies which are not
publicly traded in the United States and the debt
securities of foreign governments. Investments in
foreign securities involve additional risks. For
defensive purposes, the Fund may invest in short-
term money market instruments and cash. The Fund's
share price and investment return fluctuate such
that an investor's shares may be worth more or less
than original cost upon redemption. The Fund seeks
to identify and invest in smaller capitalization
companies falling into one of three investment
designations as described below.
PROCESS In order to identify opportunities from
a 5,000 company universe, Dreyfus employs a sector
manager approach in its equity research process.
The process is driven by fundamental research.
Cash flow analysis is the initial step including:
outlining an issuer's long-term financial posture
as the central fiduciary interest of management
towards shareholders; establishing management's
true evaluation of returns available from producing
assets; and exploring capital requirements critical
for future growth.
Dreyfus managers will typically assign one of three
investment designations. Primary emphasis is
placed on growth companies defined by dominant
market position, sustained record of achievement,
and strong financial condition. Expectation of a
high growth rate should be matched by high rates of
return on invested capital.
Relative sector attractiveness is the second
approach to stock selection and may comprise 20-30%
of the portfolio. Dreyfus attempts to identify
prospective economic or political change that may
have a uniformly beneficial effect on an entire
industry. Finally, special situations may be
identified, including those companies active in
acquisition, divestiture, share repurchase or other
processes which develop corporate focus. A key
element is evaluation of the corporation's balance
sheet and the expected return on assets, coupled
with management's firm resolve to aim toward
growth, not simple survival.
Stocks in the portfolio may be sold if the original
investment designation (growth, sector
attractiveness, special situation) breaks down or
fails to materialize. Margin deterioration at any
level is frequently the early indicator of
corporate stress. The balance inherent in this
structure can result in an all-weather, rather than
simply aggressive, approach to small company
investing.
<Page A-5>
MGMT. & DIST. FEES The Fund is a no-load mutual fund. The
management fee is payable monthly at the annual
rate of 0.75 of 1% of the value of the Fund's
average daily net assets. The Fund bears certain
costs for services provided to shareholders
pursuant to a Shareholder Services Plan at an
annual rate of 0.25 of 1% of the value of the
Fund's average daily net assets. A 1% redemption
fee will be charged and retained by the Fund on
certain shares redeemed or exchanged within the
first six months of issuance and will be deducted
from redemption proceeds. The redemption fee will
not be charged for redemption of Fund shares
through omnibus accounts for various retirement
plans, as well as certain other accounts as
described in the Fund's prospectus.
*Benchmark used for comparative purposes only.
PREMIER MUTUAL FUND SERVICES - DISTRIBUTOR
60 State Street - Boston, MA 02109
Copyright-1997 Dreyfus Service Corporation
<Page A-6>
DREYFUS NEW LEADERS FUND, INC.
PIE CHARTS DEPICTING SECTOR ALLOCATION VERSUS BENCHMARK AS OF MARCH 31, 1997
Tech/Cap Goods 21% Tech/Cap Goods 18%
Consumer 8% Consumer 18%
Mat'ls & Process 13% Mat'ls & Process 11%
Energy 4% Energy 5%
Credit Sens 27% Credit Sens 33%
Healthcare 14% Healthcare 10%
Other 9% Transport 4%
Cash 4% Other 1%
100% 100%
DREYFUS NEW LEADERS FUND RUSSELL 2000 INDEX
TEN LARGEST OTHER PORTFOLIO
HOLDINGS INFORMATION CHARACTERISTICS+
AS OF AS OF AS OF MARCH 31, 1997
FEBRUARY 28, MARCH 31, 1997
1997
Global 1.7% Assets ($Mill) 693.6 Fund Russ 2000
Industries
Price/
Executive 1.6% Managment Fee 0.75% Earnings 17.5 21.4
Risk Ratio
Everest 1.6% Total Expense 1.12% Price/Book 3.1 2.3
Reinsurance Ratio Ratio
Holdings
Varian 1.5% Port. Turnover 102.22% Med Mkt 1,045 340
Associates Rate* Cap ($Mil)
Thiokol 1.5% Net Asset 37.98 5-Yr Earnings 19.9 11.6
Value ($) Growth (%)
Consolidated 1.5% Dividend 0.7 1.6
Stores Yield (%)++
Finova Group 1.4% Equity 0.99 1.00
Beta
Universal 1.4% Primary Since Return Beta 0.92 1.00
Health Portfolio Mgrs.
Services
Crompton & 1.4% Paul Kandel 1996 5 yr Std 10.6 11.0
Knowles Dev (%)
Mentor 1.4% Hilary Woods 1996 Number of 104 1911
Holdings
**As of last fiscal year end (12/31/96)
+Sources: FactSet & Frank Russell Co.
++Wtd. avg. dividend yield of equities in portfolio.
BAR GRAPH DEPICTING PERFORMANCE FOR PERIODS
ENDED MARCH 31, 1997
New Leaders Russell
(w/divs) 2000(w/divs)*
-6.77% -5.17%
One Year 4.13% 5.11%
Three Years 13.32% 12.70%
Five Years 12.07% 12.78%
Ten Years 11.40% 9.42%
Fund Inception January 29, 1985
<Page A-7>
Calendar Year Performance+
Dreyfus Russell
New 2000
Leaders Index*
Fund
1996 17.31% 16.50%
1995 29.80% 28.44%
1994 -0.15% -1.82%
1993 17.07% 18.91%
1992 9.43% 18.41%
1991 45.39% 46.05%
1990 -11.86% -19.51%
1989 31.29% 16.24%
1988 23.35% 24.89%
1987 -5.12% -8.77%
+Reflects total return each year.
Past performance is no guarantee of future results; share price
and investment return fluctuate such that an investor's shares
may be worth more or less than original cost upon redemption. A
1% redemption fee will be charged and retained by the Fund on
shares redeemed or exchanged within the first six months of
purchase. Portfolio composition is subject to change at any
time.
*Source: Frank Russell Company. The Russell 2000 Index is
unmanaged; the performance results represent total return and the
reinvestment of dividends and other earnings.
This material must be preceded or accompanied by a current
Prospectus which contains additional information on fees and
expenses. Please read the Prospectus carefully before investing.
Premier Mutual Fund Services -
Distributor
60 State Street-Boston, MA 02109
<Page A-8>
DREYFUS
Retirement Services
DREYFUS INTERNATIONAL
GROWTH FUND
FUND DESCRIPTION
The Fund's goal is to provide you with capital growth by
investing primarily in foreign equity securities.
INVESTMENT STRATEGY
Under normal market conditions at least 65% of the Fund's assets
will be invested in equity securities of foreign issuers. The
Fund may also invest in high grade debt securities of foreign
issuers that management believes offer opportunities for capital
growth. While there are no geographic limits, the Fund will seek
to invest its assets in at least three foreign countries. For
defensive purposes the Fund may invest in money market
securities.
INVESTOR PROFILE
The Fund may be appropriate for long-term investors who would
like to take advantage of international growth opportunities and
are willing to assume greater risks involved in international
investing. An investment in the Fund should be as a supplement to
an overall investment program.
INVESTMENT RISKS
The Fund invests principally in common stocks of foreign issuers.
Generally stock prices move up and down in response to the
performance of their issuers and general economic and market
factors. The prices of stocks move in different degrees, based on
the varying impact of these factors over time, which affects the
relative volatility of a fund. Foreign securities involve
additional risks, including being subject to potentially volatile
political and economic climates and currency fluctuations. The
Fund can use sophisticated investment techniques including
investments in derivative instruments. As a result the Fund's
portfolio may be more volatile than a portfolio invested in
domestic equity securities. When you sell your shares of the
Fund, they may be worth more or less than what you paid for them.
EXPENSES
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fees .75%
12b-1 Fees .51%
Other Expenses .78%
Total Portfolio Operating Expenses 2.04%
Example: You would pay the following expenses on a $1 ,000
investment assuming (1) a 5% annual return and (2) redemption at
the end of each period.
Class R shares
One year $ 21
Three years $ 64
Five years $110
Ten years $237
<Page A-9>
These amounts should not be considered representative of past or
future expenses and actual expenses may be greater or less than
those indicated. Moreover, the Portfolio's actual performance
will vary and may be greater or less than 5 %.
INVESTMENT ADVISER
The Dreyfus Corporation serves as the Fund's investment adviser.
The Fund portfolio manager is Ronald Chapman, Director of
International Equity for The Dreyfus Corporation.
BUYING AND SELLING SHARES THROUGH YOUR 401(k) PLAN
Your plan sponsor has established specific procedures for
enrolling in the plan, for allocating contributions to the Fund,
and for making exchanges or transfers among the different
investment options available under your plan. A Fund's exchange
privilege may be modified or terminated at any time upon notice
to shareholders. Please consult with your Human Resources
Representative for specific information on these and other
related matters, including withdrawals from your plan.
DISTRIBUTIONS
Dividends, and capital gains, if any, are declared and paid
annually. All distributions to retirement accounts will be
automatically reinvested in additional Fund shares.
THIS RETIREMENT PLAN PROSPECTUS CONTAINS SUMMARY INFORMATION
CONCERNING ONE OF THE INVESTMENT OPTIONS AVAILABLE UNDER YOUR
PLAN. IF YOU WOULD LIKE A COMPLETE PROSPECTUS BEFORE ALLOCATING ALL OR
A PORTION OF YOUR RETIREMENT PLAN ASSETS TO THIS INVESTMENT
OPTION, PLEASE CONTACT YOUR HUMAN RESOURCES REPRESENTATIVE.
Premier Mutual Fund Services, Inc., Distributor
Copyright-1996 Dreyfus Retirement Services. a division of Dreyfus Service
Corporation, Broker/Dealer
<Page A-10>
DREYFUS INTERNATIONAL GROWTH FUND
MANAGED BY THE DREYFUS CORPORATION
BENCHMARK Morgan Stanley Capital International
Europe, Australia, Far East (EAFE)(Registered Trademark)
Index with net dividends reinvested.*
STRATEGY The Fund invests primarily in equity
securities of foreign issuers, including
common stocks, convertible securities and
preferred stocks. The Fund also may invest in
debt securities of foreign issuers that
management believes offer opportunities for
capital growth.
The Fund's goal is to provide capital growth.
There can be no assurance that the Fund's
investment objective will be achieved. The
Fund's investment in foreign securities, as
well as its use of certain investment
techniques, involve additional risks. These
risks are described more fully in the Fund's
Prospectus. The Fund's share price and
investment return fluctuate and are not
guaranteed.
PROCESS At least 65% of the value of
the Fund's total assets (except when
maintaining a temporary defensive position)
will be invested in equity securities of
foreign (non U.S.) issuers located throughout
the world. The equity securities in which the
Fund may invest include those of issuers
located in emerging markets, which present
additional risks. Under normal market
conditions it is expected that substantially
all of the Fund's assets will be invested in
securities of foreign issuers. While there
are no prescribed limits on geographic asset
distribution outside the United States, the
Fund ordinarily will seek to invest its assets
in no fewer than three foreign countries.
The Fund also may invest in debt securities of
foreign issuers that management believes,
based on market conditions, the financial
condition of the issuer, general economic
conditions and other relevant factors, offer
opportunities for capital growth.
MGMT. & ADMIN. FEES The management fee is payable monthly at
the annual rate of 0.75 of 1% of the value of
the Fund's average daily net assets. The Fund
pays for advertising, marketing and
distributing its shares at an annual rate of
0.50 of 1% of the value of the Fund's average
daily net assets under a distribution plan
adopted pursuant to Rule 12b-1 under the
Investment Company Act of 1940. The Fund also
pays for the provision of certain services to
its shareholders at the annual rate of 0.25 of
1% of the value of the Fund's average daily
net assets under a Shareholder Services Plan.
*Benchmark used for comparative purposes only.
EAFE (Registed Trademark) is the property of Morgan
Stanley & Co., Incorporated.
PREMIER MUTUAL FUND SERVICES - DISTRIBUTOR
60 State Street - Boston, MA 02109
Copyright-1997 Dreyfus Service Corporation
<Page A-11>
DREYFUS INTERNATIONAL GROWTH FUND
PIE CHARTS DEPICTING COUNTRY ALLOCATION VERSUS BENCHMARK AS OF
MARCH 31, 1997
DREYFUS MSCI EAFE(Registered Trademark)
INTERNATIONAL INDEX
GROWTH FUND
Japan 27% Japan 29%
UK 8% UK 20%
Germany 9% Germany 9%
France 7% France 8%
Oth Europe 23% Switzerland 6%
Malaysia 6% Oth Europe 17%
Other 12% Hong Kong 4%
Hong Kong 3% Other 7%
Sht Term Sec 5%
100%
100%
Ten Largest Holdings Other Information
as of February 28, 1997 as of March 31, 1997
British Sky Broadcasting 2.2%
Parmalat Finanziaria 1.9% Assets ($Mill) 84.2
Tele Brasileiras, ADR 1.8% Management Fee# 0.75%
Deutsche Bank 1.7% Total Expense Ratio 2.07%
Nintendo 1.7% Net Asset Value ($) 15.13
Banque Nationale De Paris 1.6%
Cultor Oy 1.6%
Vodafone Group PLC 1.6% Primary Portfolio Manager Since
Goudsmit Nv 1.5% Ronald Chapman Mar-96
Kfc Holdings Berhad 1.4%
# Annualized
BAR GRAPH DEPICTING PERFORMANCE FOR
PERIODS ENDED MARCH 31, 1997
Dreyfus EAFE (Registered Trademark)
International Index*
Growth
1Q 97 1.88% -1.57%
One Year 4.44% 1.45%
Three Years 2.58% 6.53%
Since Inception 7.33% 8.25%
Av. Annual Return Since Incept. 8.25%
Fund Inception June 29, 1993
<Page A-12>
Calendar Year Performance
Dreyfus MSCI
International EAFE(Registered Trademark)
Growth Fund Index*
1996 8.49% 6.05%
1995 0.70% 11.21%
1994 -5.44% 7.84%
Past performance is no guarantee of future results; share price
and investment return fluctuate such that an investor's shares
may be worth more or less than original cost upon redemption.
Performance figures reflect the absorption of certain expenses by
The Dreyfus Corporation; had such expenses not been absorbed, the
Fund's performance would have been lower. Portfolio composition
is subject to change at any time.
*Source: Morgan Stanley Capital International. The EAFE (Registered
Trademark) Index, which is an unmanaged index of non-U.S.
equity market performance, is the property of Morgan Stanley
& Co. Incorporated; the performance results shown represent total
return and reflect the reinvestment of net dividends and other
earnings.
This must be preceded or accompanied by a current Prospectus
which contains additional information on fees and expenses.
Please read the Prospectus carefully before investing.
Premier Mutual Fund Services -
Distributor
60 State Street-Boston, MA 02109
<Page A-13>
DREYFUS
Retirement Services
DREYFUS CASH MANAGEMENT
FUND DESCRIPTION
The Fund's goal is to provide investors with as high a level of
current income as is consistent with the preservation of capital
and the maintenance of liquidity.
INVESTMENT STRATEGY
The Fund invests in short-term money market obligations including
securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities. During normal market conditions,
the Fund will invest at least 25% of its assets in bank
obligations. The Fund is managed to keep its share price stable
at $1.00.
INVESTOR PROFILE
Dreyfus Cash Management is appropriate for investors seeking
current income plus stability of principal.
INVESTMENT RISKS
The Fund is managed to maintain a stable $1.00 share price.
However, a money market fund investment is neither insured nor
guaranteed by the FDIC or the U.S. Government, and there can be
no guarantee that the $1.00 share price will be maintained. In an
effort to maintain a stable share price, the Fund invests in
high-quality, short-term paper with remaining maturities not
exceeding 13 months, and maintains an average portfolio maturity
of 90 days or less. Sharp interest rate changes and credit
concerns related to portfolio securities, among other factors,
will impact the Fund's ability to maintain its share price.
EXPENSES
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Class A shares
Management Fees .20%
Total Portfolio Operating Expenses .20%
Example: You would pay the following expenses on a $1,000
investment assuming (1) a 5% annual return and (2) redemption at
the end of each period.
Class A shares
One year $ 2
Three years $ 6
Five years $ 11
Ten years $ 26
These amounts should not be considered representative of past or
future expenses and actual expenses may be greater or less than
those indicated. Moreover, the Fund's actual performance will
vary and may be greater or less than 5%.
<Page A-14>
INVESTMENT ADVISER
The Dreyfus Corporation serves as the Fund's investment adviser.
BUYING AND SELLING SHARES THROUGH YOUR 401(K) PLAN
Your plan sponsor has established specific procedures for
enrolling in the plan, for allocating contributions to the Fund,
and for making exchanges or transfers among the different
investment options available under your plan. A Fund's exchange
privilege may be modified or terminated at any time upon notice
to shareholders. Please consult with your Human Resources
Representative for specific information on these and other
related matters, including withdrawals from your plan.
DISTRIBUTIONS
Dividends are generally declared daily and paid monthly. Capital
gains, if any, generally are declared and paid annually. All
distributions to retirement accounts will be automatically
reinvested in additional Fund Share.
THIS RETIREMENT PLAN PROSPECTUS CONTAINS SUMMARY INFORMATION
CONCERNING ONE OF THE INVESTMENT OPTIONS AVAILABLE UNDER YOUR
PLAN. IF YOU WOULD LIKE A COMPLETE PROSPECTUS BEFORE ALLOCATING
ALL OR A PORTION OF YOUR RETIREMENT PLAN ASSETS TO THIS
INVESTMENT OPTION, PLEASE CONTACT YOUR HUMAN RESOURCES
REPRESENTATIVE.
Mutual fund shares are not deposits or obligations of, or
guaranteed or endorsed by, any bank and are not federally insured
by the FDIC, the Federal Reserve Board or any other agency. All
mutual fund shares involve certain investment risks, including
the possible loss of principal.
Premier Mutual Fund Services, Distributor
Copyright-1996 Dreyfus Retirement Services, a division of Dreyfus Service
Corporation
<Page A-15>
DREYFUS CASH MANAGEMENT
MANAGED BY THE DREYFUS CORPORATION
BENCHMARK Lipper Institutional Money Market Funds
Average.*
STRATEGY The Fund invests in short-term money market
obligations, including securities issued or
guaranteed by the U.S. Government or its agencies
or instrumentalities, certificates of deposit, time
deposits, bankers' acceptances and other short-term
obligations issued by domestic banks or London
branches of domestic banks, repurchase agreements,
and high-grade commercial paper and other short-
term corporate obligations.
The Fund's objective is to provide investors with
as high a level of current income as is consistent
with the preservation of capital and the
maintenance of liquidity. The Fund seeks to
maintain a net asset value of $1.00 per share for
purchases and redemptions. The Fund's yield
fluctuates and there can be no assurance that the
Fund will be able to maintain a stable net asset
value of $1.00 per share.
The Fund will maintain a dollar-weighted average
portfolio maturity of 90 days or less, purchase
only instruments having remaining maturities of 13
months or less and invest only in U.S. dollar
denominated securities determined in accordance
with procedures established by the Board of
Trustees to present minimal credit risks and which
are rated in one of two highest rating categories
for debt obligations by at least two nationally
recognized statistical rating organizations (or one
rating organization if the instrument was rated by
only one such organization) or, if unrated, are of
comparable quality. Moreover, the Fund will
purchase only instruments so rated in the highest
rating category or, if unrated, of comparable
quality as determined in accordance with procedures
established by the Board of Trustees. During
normal market conditions, the Fund will invest at
least 25% of its assets in bank obligations.
BACKGROUND Dreyfus Cash Management is an open-end, diversified
money market mutual fund. It commenced operations
in 1985. On January 6, 1994, the Fund began
offering two classes of shares, namely Class A and
Class B shares. On November 20, 1996, the Fund
commenced offering two additional classes of shares
designated as Administrative Shares and Participant
shares and the renamed Class A and Class B shares
as Institutional Shares and Investor shares,
respectively.
The Fund is designed for institutional investors,
particularly banks, acting for themselves or in a
fiduciary, advisory, agency, custodial or similar
capacity. Fund shares may not be purchased
directly by individuals, although institutions may
purchase shares for accounts maintained by
individuals.
MGMT. & DIST. FEES The management fee is payable monthly at
the annual rate of 0.20 of 1% of the value of the
Fund's average daily net assets. Administrative
Shares, Investor Shares and Participant Shares bear
certain costs for distribution and service at the
annual rate of 0.10 of 1%, 0.25 of 1% and .40 of
1%, respectively, of the value of the average daily
net assets attributable to such class in accordance
with a service plan adopted pursuant to Rule 12b-1
under the Investment Company Act of 1940, as
amended. No Rule 12b-1 costs are borne by
Institutional Shares. Total expenses for
Institutional Shares, Administrative Shares,
Investor Shares and Participant Shares are capped
at 20, 30, 45 and 60 basis points, respectively.
<Page A-16>
*Benchmark used for comparative purposes only.
PREMIER MUTUAL FUND SERVICES - DISTRIBUTOR
60 State Street - Boston, MA 02109
Copyright-1997 Dreyfus Service Corporation
<Page A-17>
DREYFUS CASH MANAGEMENT
PIE CHART DEPICTING SECTOR
ALLOCATION AS OF
FEBRUARY 28, 1997
Corp Notes 6%
CD's 13%
Comm Paper 57%
US Gov't Agen 10%
ST Bank Notes 4%
Repo's 10%
Other 0%
100%
Dreyfus Cash Management
General Information
as of March 31, 1997
Institutional Investor
Shares Shares
Average Maturity 60 days Assets ($Mil) 2,345.7 535.4
(2/28/97)
Number of Issues 87 Management Fee 0.20% 0.20%
(2/28/97)
Total Expense Ratio 0.20% 0.45%
7-Day Yield 5.29% 5.05%
Portfolio Manager Since
P. Larkin 1991
+Unless The Dreyfus Corporation gives the Fund's investors at
least 90 days' notice to the contrary, The Dreyfus Corporation,
and not the Fund, will be liable for all expenses of the Fund
other than the following expenses, which will be borne by the
Fund: (i) the management fee payable by the Fund to The Dreyfus
Corporation monthly at the annual rate of .20 of 1% of the value
of the Fund's average daily net assets; and (ii) as to
Administrative Shares, Investor Shares and Participant Shares
only, payments made at the annual rate of .10 of 1%, .25 of 1%,
.40 of 1%, respectively, of the value of the average daily net
assets attributable to such class, pursuant to a service plan
adopted in accordance with Rule 12b-1 under the Investment
Company Act of 1940,
BAR GRAPH DEPICTING PERFORMANCE FOR PERIODS ENDED
MARCH 31, 1997 - INSTITUTIONAL SHARES
Dreyfus Cash Mgmt Lipper Inst'l
(Institutional Fd Avg**
Shares)
1Q 97 1.30% 1.24%
One Year 5.38% 5.12%
Three Years 5.35% 5.11%
Five Years 4.54% 4.33%
Ten Years 6.06% 5.86%
As of 3/31/97, total return for Investor Shares
for 1Q 1997 was 1.24%; average annual total
return for one year was 5.11% and since
inception on January 10, 1994 was 4.94%.
Fund Inception March 11, 1985
<Page A-18>
As of 3/31/97, total return for Investor Shares for 1Q 1997 was
1.24%; average annual total return for one year was 5.11% and
since inception on January 10, 1994 was 4.94%.
Calendar Year Performance++
Dreyfus Lipper Inst'l
Cash MM Fund
Management Average**
(Institutional
Shares)
1996 5.42% 5.16%
1995 6.01% 5.75%
1994 4.08% 4.00%
1993 3.17% 2.93%
1992 3.80% 3.29%
1991 6.22% 5.67%
1990 8.38% 7.77%
1989 9.51% 8.83%
1988 7.67% 7.01%
1987 6.67% 6.12%
++Reflects total return each year.
An investment in the Fund is neither insured nor guaranteed by
the U.S. Government and there can be no assurance that the Fund
will be able to maintain a stable net asset value of $1.00 per
share. Past performance is no guarantee of future results.
Yield fluctuates. Portfolio composition is subject to change.
**Source: Lipper Analytical Services, Inc. Reflects the
reinvestment of income.
This must be preceded or accompanied by the Fund's current
Prospectus which contains additional information on fees,
distribution & other expenses. Please read the Prospectus
carefully before investing.
Premier Mutual Fund Services -
Distributor
60 State Street-Boston, MA 02109
<Page A-18>
DREYFUS
Retirement Services
DREYFUS SHORT, INTERMEDIATE
GOVERNMENT FUND
FUND DESCRIPTION
The Fund's goal is to provide you with as high a level of current
income as is consistent with the preservation of capital through
investments in government securities.
INVESTMENT STRATEGY
The Fund will invest primarily in securities issued or guaranteed
by the U.S. Government or its agencies or instrumentalities and
repurchase agreements in respect of such. The Fund will not
purchase any securities with remaining maturities over three and
half years. Short to intermediate term securities are designed to
provide generally higher income than a government money market
fund and less volatility in share price than a comparable higher
yielding longer-term bond fund. Neither the market value of the
Fund's portfolio securities nor the value of the Fund shares are
guaranteed or insured by the U.S. Government.
INVESTOR PROFILE
Dreyfus Short-Intermediate Government Fund may be appropriate for
investors seeking high current income plus the credit safety
provided by investments in U.S. Government securities.
INVESTMENT RISKS
The Fund invests in bonds. Bond prices are generally affected by
changes in interest rates and/or supply and demand conditions.
Because the Fund is a U.S. Government bond fund, portfolio
securities are of the highest credit quality. The prices of bonds
move in different degrees, based on the varying impact of these
factors over time, which affects the relative volatility of a
fund. The Fund can also use sophisticated investment techniques
which involve increased risk. When you sell your shares of the
Fund, they may be worth more or less than what you paid for them.
EXPENSES
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Class R shares
Management fees .50%
Other Expenses .25%
Total Portfolio Operating Expenses .75%
<Page A-20>
Example: You would pay the following expenses on a $1 ,000
investment assuming ( I ) a 5% annual return and (2) redemption
at the end of each period
Class R shares
One year $ 8
Three year $ 24
Five year $ 42
Ten year $ 93
These amounts should not be considered representative of past or
future expenses and actual expenses may be greater or less than
those indicated. Moreover, the Fund's actual performance will
vary and returns may be greater or less than 5%.
INVESTMENT ADVISER
The Dreyfus Corporation is the Fund's investment manager.
BUYING AND SELLING SHARES THROUGH YOUR 401(k) PLAN
Your plan sponsor has established specific procedures for
enrolling in the plan, for allocating contributions to the Fund,
and for making exchanges or transfers among the different
investment options available under your plan. A Fund's exchange
privilege may be modified or terminated at any time upon notice
to shareholders. Please consult your Human Resources
Representative for specific information on these and other
related matters, including withdrawals from your plan.
DISTRIBUTIONS
Dividends are declared and paid monthly. Capital gains, if any,
are declared and paid annually. All distributions to retirement
accounts will be automatically reinvested in additional Fund
shares.
THIS RETIREMENT PLAN PROSPECTUS CONTAINS SUMMARY INFORMATION
CONCERNING ONE OF THE INVESTMENT OPTIONS AVAILABLE UNDER YOUR
PLAN. IF YOU WOULD LIKE A COMPLETE PROSPECTUS BEFORE ALLOCATING
ALL OR A PORTION OF YOUR RETIREMENT PLAN ASSETS TO THIS
INVESTMENT OPTION, PLEASE CONTACT YOUR HUMAN RESOURCES
REPRESENTATIVE.
Mutual fund shares are not deposits or obligations of, or
guaranteed or endorsed by, any bank and are not federally insured
by the FDIC, the Federal Reserve Board or any other agency. All
mutual fund shares involve certain investment risks, including
the possible loss of principal.
Premier Mutual Fund Services, distributor
Copyright-1996 Dreyfus Retirement Services, a division of Dreyfus Service
Corporation
<Page A-21>
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
MANAGED BY THE DREYFUS CORPORATION
BENCHMARK Merrill Lynch Governments, U.S. Treasury,
Short-Term (1-2.99 Years) Index.*
STRATEGY The Fund invests in securities issued or
guaranteed by the U.S. Government or its agencies
or instrumentalities and repurchase agreements in
respect of such securities. These include: U.S.
Treasury Bills, Treasury Notes and Treasury Bonds;
Government National Mortgage Association pass-
through certificates, and obligations of the
Federal Home Loan Banks, Federal National Mortgage
Association and Student Loan Marketing
Association. The maximum remaining maturity of
any instrument held in the portfolio will not
exceed 3-1/2 years.
The Fund's objective is to provide as high a level
of current income as is consistent with the
preservation of capital. The value of the
portfolio securities held by the Fund will vary
inversely to changes in prevailing interest rates.
Neither the market value of the Fund's portfolio
securities nor the Fund's shares are insured or
guaranteed by the U.S. Government. The Fund's
share price, yield and investment return fluctuate
and are not guaranteed.
MGMT. FEES Dreyfus Short-Intermediate Government Fund is
a no-load mutual fund. The management fee is
payable monthly at the annual rate of 0.50 of 1%
of the value of the Fund's average daily net
assets. Pursuant to a Shareholder Services Plan,
the Fund bears expenses for providing certain
services to the shareholders at an annual rate of
0.25% of 1% of the value of the average daily net
assets of the Fund.
*Benchmark used for comparative purposes only.
PREMIER MUTUAL FUND SERVICES - DISTRIBUTOR
60 State Street - Boston, MA 02109
Copyright-1997 Dreyfus Service Corporation
<Page A-22>
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
PIE CHARTS DEPICTING SECTOR ALLOCATION AND MATURITY BREAKDOWN AS
OF FEBRUARY 28, 1997
US Treas Notes 75% < 1 Year 4%
US Gov & Agencies 25% 1-5 Years 96%
US Treas Strips 0%
Short Term Instr 0%
100% 100%
Dreyfus Short-Intermediate Dreyfus Short-Intermediate
Government Fund Government Fund
General Information
as of March 31, 1997
Average Maturity 2.63 Years Management Fee+ 0.50%
(2/28/97)
Duration (2/28/97) 2.36 Years Total Expense Ratio+ 0.75%
Number of Issues 22 Net Asset Value ($) 10.71
(2/28/97)
Assets ($Mill) 542.5
Portfolio Manager Since
G. Thunelius 1994
+The Dreyfus Corporation has undertaken, until November 30, 1997
that if in any fiscal year the aggregate expenses (excluding
taxes and certain other expenses) of the Fund exceed 0.75 of 1%
of the value of the Fund's average daily net assets for the
fiscal year, the Fund may deduct from the payment to be made to
Dreyfus under the Management Agreement, or Dreyfus will bear such
excess expense.
BAR GRAPH DEPICTING PERFORMANCE FOR PERIODS ENDED MARCH 31, 1997
Dreyfus Merrill Lynch
Short- Governments, U.S.
Intermediate Treasury, Short
Gov't Fund Term (1-2.99 Years)
Index*
-0.07% 0.66%
One Year 4.07% 5.32%
Three Yrs 5.45% 5.83%
Five Yrs 6.15% 5.70%
Since Inception 7.17%
<Page A-23>
Calendar Year Performance**
Dreyfus Merrill Lynch
Short- Governments,
Intermediate US Treasury,
Government Short Term
Fund (1-2.99 Years)
Index*
1996 3.96% 4.98%
1995 12.61% 11.00%
1994 -0.75% 0.57%
1993 7.33% 5.41%
1992 7.02% 6.30%
1991 13.50% 11.68%
1990 10.04% 9.72%
1989 11.29% 10.87%
1988 5.64% 6.22%
Past performance is no guarantee of future results; net asset
value, yield and investment return fluctuate so that an
investor's shares may be worth more or less than original cost
upon redemption. Portfolio composition is subject to change.
*Source: Bloomberg Financial Markets. The Index is an unmanaged
performance benchmark for Treasury securities with maturities of
1-2.99 years. Unlike the Fund, the index does not take into
account charges, fees and other expenses. Reflects the
reinvestment of income dividends and, where applicable, capital
gains distributions.
**The Fund's performance reflects the absorption of certain Fund
expenses by The Dreyfus Corporation. Had these expenses not been
absorbed, the Fund's total and average annual total returns would
have been lower.
This must be preceded or accompanied by a current Prospectus
which contains additional information on fees and expenses.
Please read the Prospectus carefully before investing.
Premier Mutual Fund Services -
Distributor
60 State Street-Boston, MA 02109
<Page A-24>
DREYFUS
Retirement Services
DREYFUS S&P 500 INDEX FUND
FUND DESCRIPTION
The Fund seeks to replicate the overall performance of the
Standard & Poor's 500 Composite Stock Price Index (the "S&P 500
Index" or the "index") primer fly through investments in equity
securities which compose the Index. The S&P 500 Index is composed
of 500 stocks, most of which trade on the New York Stock
Exchange, and represents about 75% of the market value of all
U.S. common stocks.
INVESTMENT STRATEGY
The Fund seeks to be fully invested in the common stocks included
in the S&P 500 Index; at least 80% of the Fund's assets will be
so invested. To maintain liquidity, the Fund may invest 5% of its
assets in Short-Term securities. Each stock composing the Index
is weighted by its market capitalization relative to the total
market value of the Index, and the Fund's port folio seeks to be
constructed in the same manner.
INVESTOR PROFILE
The Dreyfus S&P 500 Index Fund may be appropriate for investors
seeking a simplified and diversified approach to stock market
investing through investment in a stock index fund.
INVESTMENT RISKS
The Fund invests principally in common stocks composing the
Index. Stock prices move up and down in response to the
performance of their issuers and general economic and market
factors. The prices of stocks move in different degrees, based on
the varying impact of these factors over time, which affects the
relative volatility of a fund. The Fund can use sophisticated
investment techniques including investments in derivative
instruments. The Fund's performance will be directly impacted by
the performance of the Index. Because a large number of
securities compose the Index, the Fund will have greater
difficulty replicating the performance of the Index to the extent
that its assets are not sufficient to appropriately construct a
representative portfolio. When you sell your shares of the Fund,
they may be worth more or less than what you paid for them.
EXPENSES
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fee .30%
Other Expenses .25%
Total Fund Operating Expenses .55%
Example: You would pay the following expenses on a $1,000
investment assuming (1) a 5% annual return and (2) redemption at
the end of each period.
One year $ 6
Three years $18
Five years $31
Ten years $69
<Page A-25>
These amounts should not be considered representative of past or
future expenses and actual expenses may be greater or less than
those indicated. Moreover, the Fund's actual performance will
vary and may be greater or less than 5%.
INVESTMENT ADVISER
The Dreyfus Corporation serves as the Fund's manager. Mellon
Equity Associates serves as the Fund's index manager.
BUYING AND SELLING SHARES THROUGH YOUR 401(k) PLAN
Your plan sponsor has established specific procedures for
enrolling in the plan, for allocating contributions to the Fund,
and for making exchanges or transfers among the different
investment options available under your plan. A Fund's exchange
privilege may be modified or terminated at any time upon notice
to shareholders. Please consult with your Human Resources
Representative for specific information on these and other
related matters, including withdrawals from your plan.
DISTRIBUTIONS
Dividends and capital gains, if any, generally are declared and
paid annually. All distributions to retirement accounts will be
automatically reinvested in additional Fund shares.
THIS RETIREMENT PLAN PROSPECTUS CONTAINS SUMMARY INFORMATION
CONCERNING ONE OF THE INVESTMENT OPTIONS AVAILABLE UNDER YOUR
PLAN. IF YOU WOULD LIKE A COMPLETE PROSPECTUS BEFORE ALLOCATING
ALL OR A PORTION OF YOUR RETIREMENT PLAN ASSETS TO THIS
INVESTMENT OPTION, PLEASE CONTACT YOUR HUMAN RESOURCES
REPRESENTATIVE.
Mutual fund shares are not deposits or obligations of, or
guaranteed or endorsed by, any bank and are not federally insured
by the FDIC, the Federal Reserve Board or any other agency. All
mutual fund shares involve certain investment risks, including
the possible loss of principal,
Premier Mutual Fund Services, Distributor
Copyright-1996 Dreyfus Retirement Services, a division of Dreyfus Service
Corporation
<Page A-26>
DREYFUS INSTITUTIONAL S&P 500 STOCK INDEX FUND*
BENCHMARK Standard & Poor's 500 Composite Stock Price
Index with dividends reinvested.
STRATEGY The Fund's objective is to replicate the
total return of the Standard & Poor's 500
Composite Stock Price Index ("S&P 500 Index" or
"Index") primarily through investments in equity
securities. There can be no assurance that the
Fund's objective will be achieved.
PROCESS The Fund is not managed according to
traditional methods of "active" investment
management, which involves the buying and selling
of securities based upon economic, financial and
market analysis and investment judgment. Instead,
the Fund utilizes a "passive" investment approach,
attempting to duplicate the investment performance
of the S&P 500 Index through statistical
procedures.
The S&P 500 Index is composed of 500 common stocks
that are selected by Standard & Poor's Corporation
to capture best the price performance of a large
cross-section of the U.S. publicly traded stock
market. The 500 securities, most of which trade
on the New York Stock Exchange, represent
approximately 75% of the market value of all U.S.
common stocks. Each stock in the S&P 500 Index is
weighted by its market capitalization. That is,
each security is weighted by its total market
value relative to the total market value of all
the securities in the S&P 500 Index. Component
stocks included in the S&P 500 Index are chosen
with the aim of achieving a distribution at the
index level representative of the various
components of the U.S. economy and therefore do
not represent the 500 largest companies.
Aggregate market value and trading activity are
also considered in the selection process.
As the Fund's assets increase, the Fund expects to
invest in all 500 stocks in the S&P 500 Index in
proportion to their weighting in the Index,
including Mellon Bank Corporation stock. To the
extent that the size of the Fund does not permit
it to invest in all 500 stocks in the Index, the
Fund will purchase a representative sample of
stock from each industry sector included in the
Index in proportion to that industry's weighting
in the Index. To the extent that the Fund seeks
to replicate the S&P 500 Index using such sampling
techniques, a close correlation between the Fund's
performance and the performance of the Index is
anticipated in both rising and falling markets.
The Fund attempts to achieve a correlation between
the performance of its investments and that of the
Index of at least 0.95, before deduction of
expenses. A correlation of 1.00 would represent
perfect correlation between Fund and Index
performance. It is anticipated that the
correlation of the Fund's performance to that of
the Index will increase as the size of the Fund
increases. The Fund's ability to achieve
significant correlation between Fund and Index
performance may be affected by changes in
securities markets, changes in the composition of
the Index and the timing of purchases and
redemptions of Fund shares. Under normal
circumstances, the Fund invests at least 95% of
its assets in the common stocks included in the
Index.
"S&P 500" is a trademark of McGraw Hill, Inc. and
has been licensed for use. The Fund is not
sponsored, sold, endorsed or promoted by S&P, and
S&P makes no representation regarding the
advisability of investing in the Fund.
<Page A-27>
MGMT. & DIST. FEES The Fund's management fee is computed daily
and paid monthly at the annual rate of 0.20% of
the Fund's average daily net assets less certain
expenses. Effective September 15, 1995, the
Fund's management fee was reduced from 0.40% to
0.20%, the Fund's name changed to Dreyfus
Institutional S&P 500 Stock Index Fund and the
Fund's separate share class designations were
eliminated and the Fund became a single class
fund. Currently, the Fund's minimum initial and
subsequent investment requirements are $25,000 and
$1,000, respectively. Please see the Prospectus
for further details.
* A separate portfolio of The Dreyfus/Laurel
Funds, Inc.
PREMIER MUTUAL FUND SERVICES - DISTRIBUTOR
60 State Street - Boston, MA 02109
Copyright-1997 Dreyfus Service Corporation
<Page A-28>
DREYFUS INSTITUTIONAL S&P 500 STOCK INDEX FUND
PIE CHART DEPICTING SECTOR ALLOCATION AS OF MARCH 31, 1997
Health Care 10%
Energy 10%
Utilities 9%
Interest Sens 15%
Consumer Staples 14%
Consumer Cyc/Disc 12%
Capital Spending 23%
Basic Industry 5%
Other 2%
Cash 0%
100%
PIE CHART DEPICTING ASSET ALLOCATION AS OF MARCH 31, 1997
Common Stock 98%
Equit. Cash 2%
100%
Ten Largest Holdings Other Information
as of March 31, 1997 as of March 31, 1997
General 2.8%
Electric
Coca- 2.4% Assets ($Mill) 500.0
Cola
Exxon 2.3% Management Fee 0.20%
Intel 2.0% Total Expense Ratio 0.20%
Microsoft 1.9% Net Asset Value $16.32
Per Share
Merck & Co. 1.8%
Philip Morris 1.6%
Royal Dutch 1.6% Portfolio Manager Since
Petroleum
Procter & Gamble 1.4% Steve Falci Inception
IBM 1.2%
* Effective September 15, 1995, the Fund's separate share class
designations were eliminated and the Fund became a single class
fund.
BAR GRAPH DEPICTING PERFORMANCE FOR PERIODS ENDED MARCH 31, 1997
Dreyfus
Institutional S&P
S&P 500 Stock 500
Index (w/divs)**
1Q 97 2.58% 2.68%
One Year 19.49% 19.82%
Three Years 21.78% 22.30%
Since Inception 17.96% 18.30%
Av. Annual Return Since Incept. 18.30%
Fund Inception September 30, 1993
<Page A-29>
Calendar Year Performance+
Dreyfus Institutional S&P
S&P 500 Stock 500
Index Fund Index**
1996 22.76% 22.96%
1995 36.82% 37.58%
1994 0.83% 1.32%
+Reflects total return.
Past performance is no guarantee of future results; share price
and investment return fluctuate so that an investor's shares may
be worth more or less than original cost upon redemption.
Effective September 15, 1995, the Fund's management fee was
reduced from .40% to .20% of the Fund's average daily net assets;
and the Fund's separate share class designations were eliminated
and the Fund became a single class fund. Since inception
performance results reflect the performance of the Fund's former
Class R shares (which were not subject to a Rule 12b-1 fee) from
inception on September 30, 1993 through September 14, 1995 and
the performance of the Fund's single class of shares thereafter.
Portfolio composition is subject to change at anytime.
** Source: Lipper Analytical Services, Inc. The S&P 500 is an
unmanaged index of stock market performance; performance results
represent total return and reflect the reinvestment of dividends
and other earnings.
This must be preceded or accompanied by a current Prospectus
which contains additional information on fees and expenses.
Please read the Prospectus carefully before investing.
Premier Mutual Fund Services -
Distributor
60 State Street-Boston, MA 02109
<Page A-30>
DREYFUS
Retirement Services
DREYFUS DISCIPLINED STOCK FUND
FUND DESCRIPTION
The Dreyfus Disciplined Stock Fund seeks investment returns that
are consistently higher than the Standard & Poor's 500 Composite
Stock Price Index (" S&P 500 Index"), by investing in a broadly
diver' sifted list of equity securities. The Fund is not an
index fund.
INVESTMENT STRATEGY
Individual security selection is the foundation of the Fund's
investment approach. The Fund will use sophisticated risk
control techniques in selecting securities. Consistency of
returns which exceed the S&P 500 and stability of the Fund's
asset value relative to the S&P 500 are primary goals of the
investment process. Valuation models are used to form a
computerized ranking system which will select common stocks that
appear to be over or undervalued. The system will then
categorize individual securities within each industry according
to relative attractiveness. Fundamental analysis then determines
the most attractive of the top-rated securities and those issues
that should be sold. Under normal circumstances, at least 65% of
the Fund's total assets will be invested in equity securities.
For defensive purposes the Fund can invest up to 20% in high
quality money market secu' rities.
INVESTOR PROFILE
This Fund may be appropriate for investors seeking long-term
growth from a portfolio composed of common stocks selected by
the use of sophisticated quantitative analysis and techniques.
INVESTMENT RISKS
The Fund invests principally in stocks. Stock prices move up and
down in response to the performance of their issuers and general
economic and market factors. The prices of stocks move in
different degrees, based on the varying impact of these factors
over time, which affects the relative volatility of a fund. The
Fund's investment process uses a disciplined control of fund
risk and a rigorous security selection. Risk is managed by
controlling potential size, growth rate, financial condition and
earnings variability. The structure of the Fund is controlled so
that characteristics such as economic sector, industry exposure,
growth, size, volatility and quality are maintained similar to
those of the S&P 500 at all times. When you sell your shares of
the Fund, they may be worth more or less than what you paid for
them.
EXPENSES
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Class R shares
Management fees .90%
12b- 1 Fees None
Other Expenses .00%
Total Portfolio Operating Expenses .90%
<Page A-31>
Example: You would pay the following expenses on a $1,000
investment assuming (1) a 5% annual return and (2) redemption at
the end of each period.
Class R shares
One year $ 9
Three year $ 29
Five year $ 50
Ten year $111
These amounts should not be considered representative of future
expenses and actual expenses may be greater or less than those
indicated. Moreover, the Portfolio's actual performance will
vary and may be greater or less than 5%.
INVESTMENT ADVISER
The Dreyfus Corporation serves as the Fund's investment adviser.
The Fund is managed by Burt Mullins, portfolio manager of Dreyfus
and a vice president for Mellon Bank, N.A., Dreyfus' parent
company.
BUYING AND SELLING SHARES THROUGH YOUR 401(k) PLAN
Your plan sponsor has established specific procedures for
enrolling in the plan, for allocating contributions to the Fund,
and for making exchanges or transfers among the different
investment options available under your plan. A Fund's exchange
privilege may be modified or terminated at any time upon notice
to shareholders. Please consult with your Human Resources
Representative for specific information on these and other
related matters, including withdrawals from your plan.
DISTRIBUTIONS
Dividends, if any, are declared and paid quarterly. Capital
gains, if any, generally are declared and paid annually. All
distributions to retirement accounts will be automatically
reinvested in additional Fund shares.
THIS RETIREMENT PLAN PROSPECTUS CONTAINS SUMMARY INFORMATION
CONCERNING ONE OF THE INVESTMENT OPTIONS AVAILABLE UNDER YOUR
PLAN. IF YOU WOULD LIKE A COMPLETE PROSPECTUS BEFORE ALLOCATING
ALL OR A PORTION OF YOUR RETIREMENT PLAN ASSETS TO THIS
INVESTMENT OPTION, PLEASE CONTACT YOUR HUMAN RESOURCES
REPRESENTATIVE.
Mutual fund shares are not deposits or obligations of, or
guaranteed or endorsed by, any bank and are not federally insured
by the FDIC, the Federal Reserve Board or any other agency. All
mutual fund shares involve certain investment risks, including
the possible loss of principal.
The Fund is a separate Portfolio of The Dreyfus/Laurel Funds, Inc.
Premier Mutual Fund Services, Distributor
Copyright-1995 Dreyfus Retirement Services, a division of Dreyfus Service
Corporation
<Page A-32>
DREYFUS DISCIPLINED STOCK FUND*
BENCHMARK Standard & Poor's 500 Composite Stock Price
Index.**
STRATEGY The Fund seeks investment returns (including
capital appreciation and income) consistently
superior to the Standard & Poor's 500 Composite
Stock Price Index ("S&P 500 Index") by investing
in a broadly diversified list of equity securities
generated by the application of quantitative
security selection and risk management techniques.
There can be no assurance that the Fund will meet
its stated investment objective. Under normal
market conditions, at least 65% of the Fund's
total assets will be invested in equity
securities. A certain percentage of assets -
typically less than 20% - may be placed in high-
quality money market securities for liquidity
purposes. The Fund's share price and investment
return fluctuate such that an investor's shares
may be worth more or less than original cost upon
redemption.
PROCESS Individual security selection is the
foundation of the Fund's investment approach.
Consistency of returns which exceed the S&P 500
Index and stability of the Fund's asset value
relative to the S&P 500 Index are primary goals of
the investment process. More than 1,600 stocks of
well-established companies are analyzed by
computer, using up to 15 sophisticated statistical
models. The result is a measurement of each
stock's attractiveness based on many factors,
including earnings momentum, relative valuation
and dividend discount calculations, price to book,
price to earnings and return on equity ratios.
Next, senior investment analysts assemble
information on individual securities collected
from a variety of sources. Using both
quantitative and fundamental techniques, the
managers refine the relative ranking of stocks.
This investment process utilizes disciplined
management of fund risk and a process of rigorous
security selection. Risk is managed in that
portfolio characteristics such as economic sector,
industry exposure, growth, size, volatility and
quality are maintained similar to those of the S&P
500 Index at all times. Common stocks held in the
Fund, most but not all of which pay dividends,
typically include a broad range of investment
characteristics. The Fund is not an index fund
and its investments are not limited to securities
of issuers in the S&P 500 Index.
MGMT. & DIST. FEES The Fund's management fee is computed daily
and paid monthly at the annual rate of 0.90% of
the Fund's average daily net assets less certain
expenses. In order to compensate the Investment
Manager for paying virtually all of the Fund's
expenses, the Fund's management fee is higher than
the management fee paid by most investment
companies. Please see the Prospectus for complete
details. The Fund currently offers two classes of
shares. Effective July 15, 1996, the Fund's Class
R shares were redesignated as Retail shares and
are offered to any investor. Also effective July
15, 1996, the Fund's Investor shares were
redesignated as Institutional shares and are
offered only to clients of banks, securities
brokers or dealers and other financial
institutions that have entered into a Selling
Agreement with the Fund's distributor and omnibus
accounts held by institutions that provide sub-
accounting or recordkeeping services to their
clients. Existing Institutional class
shareholders may continue to purchase
Institutional shares whether or not they otherwise
would be eligible to do so. The Fund's
Institutional shares currently are subject to a
Distribution Plan adopted pursuant to Rule 12b-1
under the Investment Company Act of 1940. The
Plan allows the Fund to spend annually 0.25% of
its average daily net assets attributable to
Institutional shares. Please refer to the Fund's
Prospectus which contains more information on the
Fund's share classes.
<Page A-33>
* A separate portfolio of The Dreyfus/Laurel
Funds, Inc.
** Benchmark used for comparative purposes only.
PREMIER MUTUAL FUND SERVICES - DISTRIBUTOR
60 State Street - Boston, MA 02109
Copyright-1997 Dreyfus Service Corporation
<Page A-34>
DREYFUS DISCIPLINED STOCK FUND
PIE CHARTS DEPICTING SECTOR ALLOCATION VERSUS BENCHMARK AS OF
MARCH 31, 1997
Fund Index Health Care 9%
Health Care 10% Energy 10%
Energy 10% Utilities 9%
Utilities 9% Interest Sens 15%
Interest Sens 15% Consumer 12%
Cyclical
Consumer 12% Consumer 14%
Cyclical Staples
Consumer 13% Capital 23%
Staples Spending
Capital 23% Basic Industry 5%
Spending
Basic 5% Other 3%
Industry
Other 3% 0%
Cash 0%
100% 100%
Dreyfus Disciplined Stock Fund S&P 500 Index
Ten Largest Holdings Other Information
as of March 31, 1997 as of March 31, 1997
General Electric 2.8% Retail
Shares*
Intel 2.5%
Coca-Cola 2.5% Assets ($Bill) 1.015
Exxon Corp. 2.3% Total Expense Ratio 0.90%
Microsoft 2.2% Port. Turnover Rate+ 64.47%
Merck & Co. 2.1% Net Asset Value ($) 26.57
Phillip Morris Cos. 1.5%
Bell South Corp. 1.4% Primary Portfolio Mgr Since
IBM 1.4% Bert Mullins Inception
Proctor & Gamble 1.4%
* Effective July 15, 1996, the Fund's Class R shares were redesignated as
Retail shares.
+ As of 10/31/96.
Dreyfus S&P 500
Disciplined (w/divs)*
Stock
(Retail)
1Q 97 0.64% 2.68%
One Year 18.80% 19.82%
Three Yrs 20.78% 22.30%
Five Yrs 16.23% 16.42%
Since Inception 16.42% 16.46%
Av. Annual Return Since Incept. 16.46%
Fund Inception December 31, 1987
<Page A-35>
Calendar Year Performance
Dreyfus S&P
Disciplined 500
Stock Fund Index*
(Retail
Shares)
1996 24.88% 22.96%
1995 36.86% 37.58%
1994 -1.04% 1.32%
1993 11.83% 10.06%
1992 7.58% 7.61%
1991 33.64% 30.40%
1990 0.23% -3.11%
1989 34.33% 31.63%
1988 10.72% 16.56%
Past performance is no guarantee of future results; share price
and investment return fluctuate such that an investor's shares
may be worth more or less than original cost upon redemption.
Effective July 15, 1996, the Fund's Class R shares were
redesignated as Retail shares and are offered to any investor.
These performance figures relate to Retail shares only; the Fund
also offers Institutional shares. Institutional shares, but not
Retail shares, are subject to a 0.25% Rule 12b-1 plan. Portfolio
composition is subject to change at any time.
*Source: Lipper Analytical Services, Inc. The S&P 500 is an
unmanaged index of stock market performance. Performance results
represent total return and reflect reinvestment of dividends.
This must be preceded or accompanied by a current Prospectus
which contains additional information on fees, expenses and share
classes. Please read the Prospectus carefully before investing.
Premier Mutual Fund Services -
Distributor
60 State Street-Boston, MA 02109
<Page A-36>
DREYFUS
Retirement Services
CAPITAL PRESERVATION FUND
FUND DESCRIPTION
The Capital Preservation Fund is a collective investment fund
that seeks high current income and stability of principal. It
invests primarily in Guaranteed Investment Contracts (GICs) and
similar instruments including alternative GICs and separate
account GICs.
Guaranteed Investment Contracts are popular investment vehicles
for retirement plans. GICs are contracts issued by insurance
companies that guarantee stated rates of return on invested
assets for the life of these contracts and the return of
principal at maturity.
INVESTMENT STRATEGY
The Fund will invest primarily in GICs that are issued by
insurance companies meeting certain credit criteria and other
similar instruments including alternative GICs and separate
account GICs. In addition, the Fund may also invest in repurchase
agreements, private placements, certificates of deposit,
commercial paper, shares of registered investment companies, bank
investment contracts and corporate investment contracts.
INVESTOR PROFILE
This Fund may be appropriate for investors looking for high
current income with stability of principal.
INVESTMENT RISKS
There can be no assurance that the Fund will achieve its
investment objective of high current income and stability of
principal. While LaSalle National Trust, N.A. will seek to
maintain the stability of the value of units in the Fund at
approximately one dollar ($1.00) per unit, neither the value of
the Fund's portfolio nor an investment in the Fund is insured or
guaranteed and there can be no assurance that the value of units
in the Fund will not fluctuate. The Fund risks possible loss of
principal if an issuer is unable to pay on or before maturity.
Units in the Fund are not deposits or obligations of, or
guaranteed or endorsed by, LaSalle National Trust, N.A., or any
other bank, credit union or insurance company, and are not
insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board, or any other agency.
ANNUAL FEE
LaSalle National Trust, N.A. charges each employee benefit trust
participating in the Capital Preservation Fund an annual fee
which covers LaSalle National Trust, N.A.'s fee for managing the
Fund and The Dreyfus Trust Company's fee for performing
sub-accounting and administrative services with respect to the
Fund. The annual fee is generally 0.50 of 1% of each trust's or
plan's average daily net assets invested in the Fund. The annual
fee is accrued daily and paid on a monthly basis.
TRUSTEE AND PORTFOLIO MANAGER
LaSalle National Trust, N.A., based in Chicago, Illinois, is the
Fund's portfolio manager. LaSalle National Trust, N.A. is a
subsidiary of ABN/AMRO Bank, N.V. While The Dreyfus Trust Company
performs certain sub-accounting and administrative services with
respect to the Fund, LaSalle National Trust, N.A., as trustee and
portfolio manager, is solely responsible for the management and
investment performance of the Fund's portfolio.
<Page A-37>
BUYING AND SELLING UNITS THROUGH YOUR 401(k) PLAN
Your plan sponsor has established specific procedures for
enrolling in the plan, for allocating contributions to the Fund,
and for making exchanges or transfers among the different
investment options available under your plan. Please consult with
your Human Resources Representative for specific information on
these and other related matters, including withdrawals from your
plan.
DISTRIBUTIONS
Income distributed from the Fund will be applied to the purchase
of additional units in the Fund.
THIS MATERIAL CONTAINS SUMMARY INFORMATION
CONCERNING ONE OF THE INVESTMENT OPTIONS AVAILABLE UNDER YOUR
PLAN. IF YOU WOULD LIKE A COMPLETE PRODUCT DESCRIPTION BEFORE
ALLOCATING ALL OR A PORTION OF YOUR RETIREMENT PLAN ASSETS TO
THIS INVESTMENT OPTION, PLEASE CONTACT YOUR HUMAN RESOURCES
REPRESENTATIVE.
Copyright-1996 The Dreyfus Trust Company. Trustee
<Page A-38>
CAPITAL PRESERVATION FUND (CPF)
MANAGED BY LASALLE NATIONAL TRUST, N.A.
STRATEGY The Fund is a collective investment fund for
employee benefit trusts and plans investing
primarily in guaranteed investment contracts, bank
investment contracts, money market instruments,
separate account structures and alternative
investment contracts. The investment objective of
the Fund is stability of principal and high
current income.
All GICs purchased will be from insurance
companies which, at the time of issuance, are
rated at least A by the A.M. Best Company, Inc.
In addition, they will carry at least a minimum
Townsend & Schupp rating of A-. All companies
rated by Standard & Poor's, at the time of
purchase, must carry a AA- rating. All U.S.
Treasury and Agency obligations are considered to
be AAA equivalents. All other investments will be
from an approved list of bank and corporate
issuers.
The maximum average maturity of the fund will be
three years. No GIC/BIC will be purchased with a
maturity over 5 years. Any alternative GIC/BIC
purchased will have an average life limited to 6
years. In addition, the fund generally will hold
approximately 5% in money market instruments and
at least 20% of the fund's investments will mature
in less than one year.
The portfolio is managed by LaSalle National
Trust, N.A., a pioneer in the development of GIC
funds. In seeking its dual goals of high current
income and principal stability, the Capital
Preservation Fund's management follows a
conservative investment approach. Safety of
principal is the primary concern.
LaSalle National Trust, N.A. will attempt to
maintain the stability of the value of units in
the Fund at approximately one dollar ($1.00 per
unit). However, the value of the Fund's portfolio
is not guaranteed and there can be no assurance
that the value of units in the Fund will not
fluctuate.
PROCESS All issuers must meet minimum credit
standards from several private and public rating
services. While high current income and price
stability are important concerns, other
considerations include:
Diversification: The portfolio is
diversified among multiple GIC
issuers, which can help reduce
risk.
Liquidity: Benefit payments and other
distributions (e.g. exchanges)
generally can be made without
long delays and without
penalties such as surrender
charges.
<Page A-39>
ANNUAL FEE LaSalle National Trust, N.A. charges each employee
benefit trust participating in the CPF an annual
fee which covers LaSalle National Trust, N.A.'s
fee for managing the CPF and The Dreyfus Trust
Company's fee for performing sub-accounting and
administrative services with respect to the CPF.
The annual fee is generally 0.50 of 1% of each
trust's or plan's average daily net assets
invested in the CPF. The annual fee is accrued
daily and paid on a monthly basis.
PREMIER MUTUAL FUND SERVICES - DISTRIBUTOR
60 State Street - Boston, MA 02109
Copyright-1997 Dreyfus Service Corporation
<Page A-40>
CAPITAL PRESERVATION FUND
Ten Largest Holdings
as of April 3, 1997
CDC Invest Man Corp Alternative 11.2%
Nat'l Westminster Bank Alternative 9.4%
General Reinsurance Alternative 8.4%
Gov't Money Mkt Instr. 8.4%
JP Morgan Alternative 8.0%
Rabobank Alternative 7.8%
Peoples Security Life Alternative 7.2%
Pacific Mutual Alternative 6.5%
John Hancock Actively Managed Alternative 5.2%
Commonwealth Life Alternative 5.0%
Capital Preservation Fund
Pie Chart Depicting Maturity
Breakdown as of April 3, 1997
< 1 Year 20%
1 - 2 Years 15%
2 - 3 Years 23%
3 - 4 Years 10%
4 - 6 Years 32%
100%
Portfolio Characteristics
as of April 3, 1997
Weighted Avg Maturity 2 years, 10 months
Number of Issuers 19
Assets ($Bill) 2.04
<Page A-41>
BAR GRAPH DEPICTING PERFORMANCE FOR PERIODS
ENDED MARCH 31, 1997
Capital
Preservation
Fund
1Q 97 1.54%
One Year 6.38%
Three Years 6.33%
Five Years 6.36%
Ten Years 7.50%
Calendar Year Performance
Capital Preservation Fund
1996 6.38%
1995 6.38%
1994 6.11%
1993 6.12%
1992 7.10%
1991 8.38%
1990 8.87%
1989 8.90%
1988 8.77%
1987 8.56%
Past performance is no guarantee of future results. An
investment in the CPF is neither insured nor guaranteed by the
U.S. Government. Units in the CPF are not deposits or
obligations of, or guaranteed or endorsed by, LaSalle National
Trust, N.A. or any other bank, and are not Federally insured by
the Federal Deposit Insurance Corporation, the Federal Reserve
Board, or any other agency. While LaSalle National Trust, N.A.
will attempt to maintain the stability of the value of units in
the CPF at approximately one dollar per unit, the value of the
CPF's portfolio is not guaranteed and there can be no assurance
that the value of units in the CPF will not fluctuate. The CPF's
performance shown here does not reflect The Dreyfus Trust
Company's fee for providing subaccounting and administrative
services for the CPF.
Please see the current Product Description for more complete
information.
<Page A-42>
COMPANY STOCK
The following information regarding the Company Stock
investment option has been provided by the Company.
ON DECEMBER 23, 1996, WESTMORELAND COAL COMPANY AND FOUR
SUBSIDIARIES, WESTMORELAND RESOURCES, INC., WESTMORELAND COAL
SALES COMPANY, WESTMORELAND ENERGY, INC., AND WESTMORELAND
TERMINAL COMPANY (THE "DEBTOR CORPORATIONS"), FILED VOLUNTARY
PETITIONS FOR REORGANIZATION UNDER CHAPTER 11 OF THE UNITED
STATES BANKRUPTCY CODE IN THE UNITED STATES BANKRUPTCY COURT FOR
THE DISTRICT OF COLORADO. AT THE DATE OF THIS PROSPECTUS, THE
DEBTOR CORPORATIONS ARE IN POSSESSION OF THEIR RESPECTIVE
PROPERTIES AND ASSETS AND ARE OPERATING AS DEBTORS IN POSSESSION
PURSUANT TO PROVISIONS OF THE BANKRUPTCY CODE. NO ASSURANCE CAN
BE GIVEN THAT THE DEBTOR CORPORATIONS WILL BE SUCCESSFUL IN
REORGANIZING THEIR AFFAIRS WITHIN THE CHAPTER 11 BANKRUPTCY
PROCEEDINGS. REGARDLESS OF WHETHER THE DEBTOR CORPORATIONS ARE
SUCCESSFUL IN THIS EFFORT, THE RIGHTS AND BENEFITS ATTACHED TO
THE COMPANY'S COMMON STOCK AND PREFERRED STOCK ARE SUBJECT TO
MODIFICATION BY THE BANKRUPTCY COURT, AND THESE MODIFICATIONS CAN
SIGNIFICANTLY REDUCE OR ELIMINATE THE VALUE OF THESE SECURITIES.
Contributions to the Company Stock fund will be used to
purchase Company Stock at prevailing market prices. Company Stock
was traded on the New York Stock Exchange ("NYSE") through
December 23, 1996 under the symbols "WCX" for the Common Stock
and "WCXPRA" for the Depositary Shares. Prices shown below for
this period are the high and low sales prices on the NYSE. From
December 24, 1996 through February 6, 1997, there was not an
established public trading market for the Company Stock. Since
February 7, 1997, the Company Stock has been traded over-the-
counter under the symbols "WMCLQ" for the Common Stock and
"WMCCQ" for the Depositary Shares and reported on the Over-The-
Counter Bulletin Board. Prices shown below for the latter period
are the range of high and low bid quotations as reported by the
National Quotation Bureau. The bid quotations are inter-dealer
bid prices without allowance for mark-ups, mark-downs or
commissions and may not necessarily reflect actual transactions.
Common Stock Depository Shares
Quarterly
High Low High Low Dividend
1994
First Quarter 5 7/8 4 1/4 20 15 1/4 .53125
Second Quarter 5 1/4 4 3/8 16 1/4 13 1/2 -
Third Quarter 6 3/8 4 3/8 18 3/4 15 1/4 -
Fourth Quarter 7 1/8 3 3/4 17 7/8 14 -
1995
First Quarter 6 5/8 4 1/2 19 14 1/4 .53125
Second Quarter 5 3/8 4 1/4 14 3/4 12 .53125
Third Quarter 4 1/2 2 1/2 13 1/2 9 -
Fourth Quarter 3 5/8 2 1/2 10 1/4 6 -
<Page A-43>
1996
First Quarter 3 5/8 2 1/2 7 7/8 6 -
Second Quarter 4 1/4 2 3/4 12 7/8 7 1/2 -
Third Quarter 2 1/2 2 3/4 9 7/8 8 3/4 -
Fourth Quarter 3 3/8 1 10 6 3/8 -
(through December 23)
1997
First Quarter 7/8 1/2 5 3/4 2 -
(after February 6)
Second Quarter 15/16 17/32 5 1/2 5 -
Third Quarter 1 15/16 5 1/4 5 1/8 -
(through July 28)
On July 28, 1997, the closing bid price for the Company's Common
Stock was $1 and the closing bid price for the Company's
Depository Shares was $ 5-1/8. As with other stocks, the value
of the Company Stock can fluctuate and your investment can
increase or decrease in value depending upon the market
performance of Company Stock.
DIVIDENDS
The Company has not paid cash dividends on its Common Stock since
the fourth quarter of 1992. Future payments of cash dividends, if
any, will be determined by the Board of Directors based upon
circumstances then existing, including, without limitation,
contractual restrictions and the financial condition, capital
requirements, cash flow, profitability and business outlook of
the Company. Common Stock dividends may not be declared until
the Preferred Stock dividends that are in arrears are made
current.
Preferred Stock dividends at the annual rate of $2.125 per
Depositary Share were paid quarterly from the third quarter of
1992 through the first quarter of 1994. The declaration and
payment of Preferred Stock dividends was suspended in the second
quarter of 1994 in connection with extension agreements of the
Company's principal lenders. Upon the expiration of these
extension agreements, the Company paid a quarterly dividend on
April 1, 1995 and July 1, 1995. Pursuant to the requirements of
Delaware law, the Preferred Stock dividend was suspended in the
third quarter of 1995 as a result of recognition of losses and
the subsequent shareholders' deficit. As of the date of this
Prospectus, there are ten quarterly dividends in arrears
(dividend payment dates July 1, 1994, October 1, 1994, January
1, 1995, October 1, 1995, January 1, 1996, April 1, 1996, July
1, 1996, October 1, 1996, January 1, 1997 and April 1, 1997 and
July 1, 1997) in the total amount of $13,441,000 in the aggregate
($5.84375 per Depositary Share).
There are statutory restrictions limiting the payment of
Preferred Stock dividends under Delaware law, the state in which
the Company is incorporated. Under Delaware law, the Company is
permitted to pay Preferred Stock dividends only: (1) out of
surplus, surplus being the amount of shareholders' equity in
excess of the par value of the Company's two classes of stock; or
(2) in the event there is no surplus, out of net profits for the
fiscal year in which a Preferred Stock dividend is declared
(and/or out of net profits from the preceding fiscal year), but
only to the extent that shareholders' equity exceeds the par
value of the Preferred Stock ($575,000).
<Page A-44>
As a result of the filing by the Company of a voluntary petition
for reorganization under Chapter 11 of the United States
Bankruptcy Code, the Company is prohibited from paying dividends,
either on the Common Stock or the Preferred Stock.
July 30, 1997
* * *
This document constitutes part of a prospectus covering
securities that have been registered under the
Securities Act of 1933.
<Page B-1>
APPENDIX B TO
SUMMARY PLAN DESCRIPTION AND PROSPECTUS
DATED JULY 30, 1997
DESCRIPTION OF THE PREFERRED STOCK
The statements under this caption relating to the Preferred
Stock are summaries and do not purport to be complete. Such
summaries make use of certain terms defined in the Certificate of
Designation for the Series A Convertible Exchangeable Preferred
Stock (the "Certificate of Designation") and are qualified in
their entirety by express reference to the Certificate of
Designation, a copy of which is incorporated by reference as an
exhibit to the Registration Statement of which this Prospectus is
a part. Summaries herein of certain provisions of the Company's
Certificate of Incorporation, as amended (the "Certificate of
Incorporation"), do not purport to be complete and are subject
and qualified in their entirety by reference to all provisions
of the Certificate of Incorporation. As used under this caption,
the term "Company" refers only to Westmoreland Coal Company and
not to its subsidiaries.
GENERAL
The authorized capital stock of the Company includes 5,000,000
shares of preferred stock, par value $1.00 per share, of which
575,000 shares, represented by 2,300,000 Depositary Shares, are
currently outstanding.
RANKING
The Preferred Stock ranks prior to the Company's Common Stock.
Without the requisite vote of holders of the Preferred Stock as
described below under "Limitations," no class or series of
capital stock can be created ranking pari passu with or senior
to the Preferred Stock as to dividend rights or liquidation
preference.
DIVIDEND RIGHTS
The holders of the Preferred Stock are entitled to receive,
when, as and if declared by the Company's Board of Directors out
of funds of the Company legally available therefor (and subject
to the limitation described in the last sentence of this
paragraph), cumulative cash dividends at the rate of 8-1/2% per
annum per share (equivalent to $2.125 per annum per Depositary
Share), payable quarterly on April 1, July 1, October 1 and
January 1 in each year. Such dividends shall be cumulative from
the date of original issuance. The Company will pay each such
dividend to the holders of record of the Preferred Stock as they
appear on its stock register on the record date, which shall not
be more than 30 days nor less than 10 days preceding the dividend
payment date. If a holder converts shares of Preferred Stock
after the close of business on the record date for a dividend and
before the opening of business on the payment date for such
dividend, the holder will be required to pay to the Company at
the time of such conversion the amount of such dividend. See
"Conversion" below.
<Page B-2>
THE COMPANY HAS NOT PAID DIVIDENDS ON THE PREFERRED STOCK SINCE
JULY 1, 1995 AND AT THE DATE OF THIS PROSPECTUS IS ELEVEN
QUARTERLY DIVIDENDS IN ARREARS (INCLUDING UNPAID DIVIDENDS PRIOR
TO JULY 1, 1997). SEE "APPENDIX A, AVAILABLE INVESTMENT OPTIONS
- - COMPANY STOCK DIVIDENDS."
If dividends are not paid in full, or declared in full and
sums set apart for the payment thereof, upon the Preferred Stock
and any other preferred stock ranking on a parity as to dividends
with the Preferred Stock, all dividends declared upon the
Preferred Stock and any other preferred stock ranking on a parity
as to dividends will be paid or declared pro rata so that in all
cases the amount of dividends paid or declared per share on the
Preferred Stock and such other preferred stock will bear to each
other the same ratio that accumulated dividends per share,
including dividends accrued or in arrears, if any, on the
Preferred Stock and such other preferred stock bear to each
other. Except as provided in the preceding sentence, unless full
cumulative dividends on the Preferred Stock have been paid or
declared in full and sums set aside for the payment thereof, no
dividends (other than dividends in Common Stock or other shares
of the Company's capital stock ranking junior to the Preferred
Stock as to dividends) may be paid or declared and set aside for
the payment or other distribution made upon the Common Stock or,
except as provided above, on any other capital stock of the
Company ranking junior to or on a parity with the Preferred Stock
as to dividends, nor may any Common Stock or any other capital
stock ranking junior to or on a parity with the Preferred Stock
as to dividends be redeemed, purchased or otherwise acquired for
any consideration (or any payment made to or available for a
sinking fund for the redemption of any shares of such stock) by
the Company or any subsidiary of the Company (except by
conversion into or exchange for capital stock of the Company
ranking junior to the Preferred Stock as to dividends).
Dividends payable on the Preferred Stock for any period less
than a full quarterly dividend period will be computed on the
basis of a 360-day year of twelve 30-day months and the actual
number of days elapsed in the period for which payable.
CONVERSION RIGHTS
Holders of the Preferred Stock will have the right,
exercisable at any time and from time to time, except in the case
of Preferred Stock called for redemption or to be exchanged for 8-
1/4% Convertible Subordinated Debentures due June 15, 2002 (the
"Exchange Debentures"), to convert all or any such Preferred
Stock into shares of the Common Stock at the conversion price of
$14.64 per share of Common Stock (equivalent to a conversion
ratio of 1.708 shares of Common Stock for each Depositary Share),
subject to adjustment as described below. In the case of the
Preferred Stock called for redemption or to be exchanged for
Exchange Debentures, conversion rights will expire at the close
of business on the business day immediately preceding the date
fixed for redemption or on the business day immediately preceding
the exchange date, as the case may be. Notice of an optional
redemption must be mailed not less than 30 days and not more than
60 days prior to the redemption date. Upon conversion, no
adjustment or repayment will be made for dividends, but if any
holder surrenders a share of Preferred Stock for conversion after
the close of business on the record date for the payment of a
dividend and prior to the opening of business on the next
dividend payment date, then, notwithstanding such conversion, the
dividend payable on such dividend payment date will be paid to
the registered holder of such share on such record date. In such
event, such share, when surrendered for conversion, must be
accompanied by payment of an amount equal to the dividend payable
on such dividend payment date on the share so converted. No
fractional shares of the Common Stock will be issued upon
conversion and, if the conversion results in a fractional
interest, an amount will be paid in cash equal to the value of
such fractional interest based on the market price of the Common
Stock on the last trading day prior to the date of conversion.
<Page B-3>
The conversion price is subject to adjustment upon the occurr
ence of certain events, including (i) the issuance of shares of
Common Stock as a dividend or distribution on the Common Stock;
(ii) the subdivision or combination of the outstanding Common
Stock; (iii) the issuance to substantially all holders of Common
Stock of rights or warrants to subscribe for or purchase Common
Stock (or securities convertible into Common Stock) at a price
per share less than the then current market price per share, as
defined in the Certificate of Designation; (iv) the distribution
to all holders of Common Stock of shares of capital stock of the
Company (other than Common Stock), evidences of indebtedness or
other assets (excluding dividends in cash out of current or
retained earnings); and (v) the distribution to substantially all
holders of Common Stock of rights or warrants to subscribe for
securities (other than those referred to in clause (iii) above).
In the event of a distribution to substantially all holders of
Common Stock of rights to subscribe for additional shares of the
Company's capital stock (other than those referred to in clause
(iii) above), the Company may, instead of making an adjustment in
the conversion price, make proper provision so that each holder
of a share of Preferred Stock who converts such Preferred Stock
shall be entitled to receive upon such conversion, in addition to
shares of Common Stock, an appropriate number of such rights or
warrants. No adjustment of the conversion price will be made
until cumulative adjustments amount to one percent or more of the
conversion price as last adjusted. No adjustment of the
conversion price will be made for cash dividends.
If the Company reclassifies or changes its outstanding Common
Stock, or consolidates with or merges into or transfers or leases
all or substantially all its assets to any person, or is a party
to a merger that reclassifies or changes its outstanding Common
Stock, the Preferred Stock will become convertible into the kind
and amount of securities, cash or other assets which the holders
of the Preferred Stock would have owned immediately after the
transaction if the holders had converted the Preferred Stock
immediately before the effective date of the transaction.
Conversion of shares of the Preferred Stock may be effected by
delivering certificates evidencing such shares, together with
written notice of conversion and a proper assignment of such
certificates to the Company or in blank, to the office or agency
to be maintained by the Company for that purpose. Initially such
office will be the principal corporate office of First Chicago
Trust Company of New York located at 30 West Broadway, New York,
New York, 10007.
<Page B-4>
LIQUIDATION PREFERENCE
In the event of any liquidation, dissolution, or winding up of
the affairs of the Company, whether voluntary or otherwise, after
payment or provision for payment of the Company's debts and other
liabilities, the holders of the Preferred Stock will be entitled
to receive, out of the remaining net assets of the Company, the
amount of $100 in cash for each share of the Preferred Stock
(equivalent to $25 per Depositary Share), plus an amount in cash
equal to all dividends accrued and unpaid on each such share up
to the date fixed for distribution, before any distribution is
made to the holders of the Common Stock or any other capital
stock of the Company ranking (as to any such distribution) junior
to the Preferred Stock. If upon any liquidation, dissolution or
winding up of the Company, the assets distributable among the
holders of shares of Preferred Stock and all other classes and
series of preferred stock ranking (as to any such distribution)
on a parity with the Preferred Stock are insufficient to permit
the payment in full to the holders of all such shares of all
preferential amounts payable to all such holders, then the entire
assets of the Company thus distributable will be distributed
ratably among the holders of the Preferred Stock and of all
classes and series of preferred stock ranking (as to any such
distribution) on a parity with the Preferred Stock in proportion
to the respective amounts that would be payable per share if such
assets were sufficient to permit payment in full.
For purposes of this section, a distribution of assets in any
dissolution, winding up or liquidation will not include (i) any
consolidation or merger of the Company with or into any other
corporation, (ii) any dissolution, liquidation, winding up, or
reorganization of the Company immediately followed by
reincorporation of another corporation or (iii) a sale or other
disposition of all or substantially all of the Company's assets
to another corporation; provided that, in each case, effective
provision is made in the certificate of incorporation of the
resulting and surviving corporation or otherwise for the protec
tion of the rights of the holders of Preferred Stock.
OPTIONAL REDEMPTION
The Preferred Stock may be redeemed at the option of the Company,
in whole or from time to time in part, at any time on and after
July 1, 1996, at the following redemption prices per share if
redeemed during the twelve-month period beginning July 1 of the
year indicated below, plus, in each case, all dividends accrued
and unpaid on the Preferred Stock up to the date fixed for
redemption, upon giving notice as provided below:
Redemption Price
(Per Share of Dollar Equivalent
Year Preferred Stock) Per Depositary Share
1996 $105.10 $26.28
1997 104.25 26.06
1998 103.40 25.85
1999 102.55 25.64
2000 101.70 25.43
2001 100.85 25.21
2002
and thereafter 100.00 25.00
<Page B-5>
If fewer than all of the outstanding shares of the Preferred
Stock are to be redeemed, the shares to be redeemed will be
determined pro rata or by lot or in such other manner as
prescribed by the Company's Board of Directors.
At least 30 days but not more than 60 days prior to the date
fixed for the redemption of the Preferred Stock, a written notice
will be mailed to each holder of record of Preferred Stock to be
redeemed, notifying such holder of the Company's election to
redeem such shares, stating the date fixed for redemption thereof
(the "Preferred Stock Redemption Date"), and calling upon such
holder to surrender to the Company on the Preferred Stock
Redemption Date at the place designated in such notice the
certificate or certificates representing the number of shares
specified therein. On or after the Preferred Stock Redemption
Date, each holder of Preferred Stock to be redeemed must present
and surrender his certificate or certificates for such shares to
the Company at the place designated in such notice and thereupon
the redemption price of such shares will be paid to or on the
order of the person whose name appears on such certificate or
certificates as the owner thereof and each surrendered
certificate will be canceled. Should fewer than all the shares
represented by any such certificate be redeemed, a new
certificate will be issued representing the unredeemed shares.
From and after the Preferred Stock Redemption Date (unless the
Company defaults in payment of the redemption price), all
dividends on the shares of the Preferred Stock designated for
redemption in such notice will cease to accrue and all rights of
the holders thereof as shareholders of the Company, except the
right to receive the redemption price thereof (including all
accrued and unpaid dividends up to the Preferred Stock Redemption
Date), will cease and terminate and such shares will not
thereafter be transferred (except with the consent of the
Company) on the Company's books, and such shares shall not be
deemed to be outstanding for any purpose whatsoever. At its
election, the Company, prior to the Preferred Stock Redemption
Date, may deposit the redemption price of the shares of the
Preferred Stock so called for redemption in trust for the holders
thereof with a bank or trust company, in which case such notice
to holders of the shares of the Preferred Stock to be redeemed
will (i) state the date of such deposit, (ii) specify the office
of such bank or trust company as the place of payment of the
redemption price and (iii) call upon such holders to surrender
the certificates representing such shares at such place on or
after the date fixed in such redemption notice (which may not be
later than the Preferred Stock Redemption Date), against payment
of the redemption price (including all accrued and unpaid divi
dends up to the Preferred Stock Redemption Date). Any moneys so
deposited which remain unclaimed by the holders of the Preferred
Stock at the end of two years after the Preferred Stock
Redemption Date will be returned by such bank or trust company to
the Company.
EXCHANGE
At the Company's option, all, but not less than all, of the
then outstanding shares of the Preferred Stock may be exchanged
on any dividend payment date commencing July 1, 1996, subject to
certain conditions stated below, for the Company's Exchange
Debentures on not less than 30 days nor more than 60 days notice,
at an exchange rate of $100 principal amount of Exchange
Debentures for each share of the Preferred Stock (equivalent to
$25 principal amount of Exchange Debentures for each Depositary
Share). Such exchange may be made only if, at the time of
exchange (i) the Exchange Indenture (as defined under
"Description of the Exchange Debentures") shall have been
qualified under the Trust Indenture Act of 1939, (ii) there shall
be no dividend arrearage on the Preferred Stock (including the
dividend payable on the date of exchange) and (iii) no Event of
Default under the Exchange Indenture shall have occurred and be
continuing. The Exchange Indenture may not be amended or
supplemented before the date of exchange without the affirmative
vote or consent of the holders of two-thirds of outstanding
shares of the Preferred Stock, except that no amendment that
would adversely affect the legal rights of the holders of
Exchange Debentures may be taken without the affirmative vote or
consent of all the holders of the outstanding shares of Preferred
Stock. At the exchange date, the rights of holders of the
Preferred Stock shall cease and the person or persons entitled to
receive Exchange Debentures issuable upon such exchange shall be
treated as the registered holder or holders of such Exchange
Debentures. Interest will accrue on the Exchange Debentures from
the date of exchange.
<Page B-6>
VOTING RIGHTS
Each share of Preferred Stock shall entitle the holder thereof
to four votes on any matter on which the holders of the Company's
capital stock have the right to vote, including the election of
directors. In addition, holders of the Preferred Stock will have
voting rights (i) as provided under "Limitations" below, (ii) in
the event the Company shall have failed to declare and pay or set
apart for payment in full the preferential dividends accumulated
on the outstanding Preferred Stock for any six quarterly dividend
payment periods, whether or not consecutive (a "Dividend
Non-Payment"), and (iii) as required by law. In the event of a
Dividend Non-Payment, the number of directors of the Company will
be increased by two and the holders of the outstanding Preferred
Stock, voting together as a class with all other classes or
series of preferred stock ranking on a parity with the Preferred
Stock with respect to dividends or distribution of assets upon
liquidation and then entitled to vote on the election of such
additional directors, will be entitled to elect such two
additional directors until the full dividends accumulated on all
outstanding Preferred Stock shall have been declared and paid or
set apart for payment. Pursuant to this provision, Robert E.
Killen and James W. Sight were elected as directors at a special
meeting of holders of the Depositary Shares held in September
1996.
LIMITATIONS
In addition to any other rights provided by applicable law, so
long as any shares of the Preferred Stock are outstanding, the
Company will not, without the affirmative vote, or the written
consent as provided by law, of the holders of at least two-thirds
of the outstanding shares of the Preferred Stock, voting as a
class:
(a) authorize or issue any class or series of, or rights to
subscribe to or any security convertible into, capital stock
ranking pari passu with or senior to the Preferred Stock as
to payment of
dividends, in distribution of assets upon liquidation or
voting rights; or
(b) change the preferences, rights or powers with respect to
the Preferred Stock so as to affect such capital stock
adversely.
Except as may otherwise be required by applicable law, such a
class vote or consent is not required (i) in connection with any
increase in the total number of authorized shares of Common
Stock, or (ii) in connection with the authorization or increase
of any class or series of shares ranking, as to dividends and
distribution of assets upon liquidation, junior to the Preferred
Stock. No such vote or written consent of the holders of the
Preferred Stock is required if, at or prior to the time when the
issuance of any such stock ranking prior to the Preferred Stock
is to be made or any such change is to take effect, as the case
may be, provision is made for the redemption of all of the
Preferred Stock at the time outstanding. The Company may issue
its presently authorized but unissued shares of its capital
stock, or bonds, notes, mortgages, debentures, and other
obligations, and incur indebtedness to banks and to other
lenders. Certain changes in the Exchange Indenture (as defined
below) may not be effected without the affirmative vote or
consent of the holders of two-thirds of the outstanding shares of
the Preferred Stock. See "Description of the Exchange
Debentures-General."
<Page B-7>
PREEMPTIVE RIGHTS
No holder of the Preferred Stock will have preemptive rights
to subscribe for or acquire any unissued shares of the Company or
securities of the Company convertible into or carrying a right to
subscribe to or acquire shares.
TRANSFER AGENT
The Registrar, Transfer Agent and Conversion Agent for the
Preferred Stock is First Chicago Trust Company of New York. The
Company will act as Paying Agent for the Preferred Stock.
DESCRIPTION OF THE DEPOSITARY SHARES
GENERAL
The Company has issued receipts ("Depositary Receipts") for
Depositary Shares, each of which represents one quarter of a
share of Preferred Stock. The shares of Preferred Stock
represented by Depositary Shares are deposited under a Deposit
Agreement (the "Deposit Agreement") among the Company, First
Chicago Trust Company of New York (the "Depositary") and the
holders from time to time of the Depositary Receipts. Subject to
the terms of the Deposit Agreement, each owner of a Depositary
Share is entitled, in proportion to the applicable fraction of a
share of Preferred Stock represented by such Depositary Share, to
all the rights and preferences of the Preferred Stock represented
thereby (including dividend, voting, conversion, redemption and
liquidation rights).
The Depositary Shares are evidenced by Depositary Receipts
issued pursuant to the Deposit Agreement. Copies of the forms of
Deposit Agreement and Depositary Receipt may be obtained from the
Company upon request, and the following summary is qualified in
its entirety by reference thereto.
<Page B-8>
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary distributes all dividends or other cash
distributions received in respect of the Preferred Stock to the
record holders of Depositary Shares in proportion to the number
of such Depositary Shares owned by such holders, subject to
certain obligations of holders to file proofs, certificates and
other information and to pay certain charges and expenses to the
Depositary.
In the event of a distribution other than in cash, the
Depositary would distribute property received by it to the record
holders of Depositary Shares entitled thereto, subject to certain
obligations of holders to file proofs, certificates and other
information and to pay certain charges and expenses to the
Depositary, unless the Depositary determines that it is not
feasible to make such distribution, in which case the Depositary
may, with the approval of the Company, sell such property and
distribute the net proceeds from such sale to such holders.
WITHDRAWAL OF STOCK
Upon surrender of the Depositary Receipts at the corporate tr
ust office of the Depositary (unless the related Depositary
Shares have previously been called for redemption), the holder of
the Depositary Shares evidenced thereby is entitled to delivery,
at such office to or upon his order, of the number of whole
shares of the Preferred Stock and any money or other property
represented by such Depositary Shares. Holders of Depositary
Shares will be entitled to receive whole shares of the Preferred
Stock on the basis of one share of Preferred Stock for each four
Depositary Shares, but holders of such whole shares of Preferred
Stock will not thereafter be entitled to receive Depositary
Shares therefor. If the Depositary Receipts delivered by the
holder evidence a number of Depositary Shares in excess of the
number of Depositary Shares representing the number of whole
shares of Preferred Stock to be withdrawn, the Depositary will
deliver to such holder at the same time a new Depositary Receipt
evidencing such excess number of Depositary Shares.
REDEMPTION OF DEPOSITARY SHARES
Whenever the Company redeems shares of Preferred Stock held by
the Depositary, the Depositary will redeem as of the same
redemption date the number of Depositary Shares representing
shares of the referred Stock so redeemed, provided the Company
shall have paid in full to the Depositary the redemption price of
the Preferred Stock to be redeemed plus an amount equal to any
accrued and unpaid dividends thereon to the date fixed for
redemption. The redemption price per Depositary Share will be
equal to the redemption price and any other amounts per share
payable with respect to the Preferred Stock. If less than all the
Depositary Shares are to be redeemed, the Depositary Shares to be
redeemed will be selected by the Depositary by lot or pro rata or
other equitable method, in each case as may be determined by the
Company.
<Page B-9>
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of
the Preferred Stock are entitled to vote, the Depositary will
mail the information contained in such notice of meeting to the
record holders of the Depositary Shares relating to Preferred
Stock. Each record holder of such Depositary Shares on the record
date (which will be the same date as the record date for the
Preferred Stock) is entitled to instruct the Depositary as to the
exercise of the voting rights pertaining to the amount of
Preferred Stock represented by such holder's Depositary Shares.
The Depositary will endeavor, insofar as practicable, to vote the
amount of Preferred Stock represented by such Depositary Shares
in accordance with such instructions, and the Company is
obligated to take all reasonable action which may be deemed
necessary by the Depositary in order to enable the Depositary to
do so. The Depositary will abstain from voting shares of
Preferred Stock to the extent it does not receive specific
instructions from the holders of Depositary Shares representing
Preferred Stock.
CONVERSION OF PREFERRED STOCK
The Depositary Shares, as such, are not convertible into Common
Stock or any other securities or property of the Company.
Nevertheless, the Depositary Receipts may be surrendered by
holders thereof to the Depositary with written instructions to
the Depositary to instruct the Company to cause conversion of the
Preferred Stock represented by the Depositary Shares evidenced by
such receipts into whole shares of Common Stock, and the Company
has agreed that upon receipt of such instructions and any amounts
payable in respect thereof, it will cause the conversion thereof
utilizing the same procedures as those provided for delivery of
Preferred Stock to effect such conversions. If the Depositary
Shares represented by a Depositary Receipt are to be converted in
part only, a new Depositary Receipt or Receipts will be issued
for any Depositary Shares not to be converted. See "Description
of Preferred Stock-Conversion Rights."
EXCHANGE OF PREFERRED STOCK
Whenever the Company exchanges all of the shares of Preferred
Stock held by the Depositary for Exchange Debentures, the
Depositary will exchange as of the same exchange date all
Depositary Shares representing all of the shares of the Preferred
Stock so exchanged for Exchange Debentures, provided the Company
shall have issued and deposited with the Depositary Exchange
Debentures for all of the shares of the Preferred Stock to be
exchanged. The exchange rate per Depositary Share shall be equal
to one quarter of the exchange rate per share of Preferred Stock,
plus all money and other property, if any, represented by such
Depositary Shares, including all amounts paid by the Company in
respect of dividends which on the exchange date have accrued on
the shares of Preferred Stock to be so exchanged and have not
theretofore been paid.
<Page B-10>
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary
Shares and any provision of the Deposit Agreement may at any time
be amended by agreement between the Company and the Depositary.
However, any amendment that materially and adversely alters the
rights of the holders of Depositary Shares will not be effective
unless such amendment has been approved by the holders of at
least a majority (or, in the case of amendments relating to or
affecting rights to receive dividends or distributions or voting,
redemption or conversion rights, two-thirds) of the Depositary
Shares then outstanding.
The Deposit Agreement may be terminated by the Company upon
not less than 60 days' notice whereupon the Depositary shall
deliver or make available to each holder of Depositary Receipts,
upon surrender of the Depositary Receipts held by such holder,
such number of whole or fractional shares of Preferred Stock
represented by such receipts. The Deposit Agreement will
automatically terminate if (i) all outstanding Depositary Shares
have been redeemed, (ii) there has been a final distribution in
respect of the Preferred Stock in connection with any
liquidation, dissolution or winding up of the Company and such
distribution has been distributed to the holders of Depositary
Receipts or (iii) each share of Preferred Stock shall have been
converted into shares of Common Stock.
CHARGES OF DEPOSITARY
The Company will pay all transfer and other taxes and
governmental charges arising solely from the existence of the
Depositary arrangements. The Company will pay the fees and
expenses of the Depositary in connection with the performance of
its duties under the Deposit Agreement. Holders of Depositary
Receipts must pay transfer and other taxes and governmental
charges and such other charges as are expressly provided in the
Deposit Agreement to be for their accounts.
MISCELLANEOUS
The Depositary will forward to holders of Depositary Shares
any reports and communications from the Company which are
received by the Depositary.
Neither the Depositary nor the Company will be liable if it is
prevented from or delayed in, by law or any circumstances beyond
its control, performing its obligations under the Deposit
Agreement. The obligations of the Company and the Depositary
under the Deposit Agreement are limited to performing their
duties thereunder without negligence or willful misconduct, and
the Company and the Depositary are not obligated to prosecute or
defend any legal proceeding in respect of any Depositary Shares
or any Preferred Stock unless satisfactory indemnity is
furnished. The Company and the Depositary may rely on advice of
counsel or accountants, or information provided by persons
presenting Preferred Stock for deposit, holders of Depositary
Shares or other persons believed to be authorized or competent
and on documents believed to be genuine.
In the event the Depositary shall receive conflicting claims,
requests or instructions from any holders of Depositary Receipts,
on the one hand, and the Company, on the other hand, the
Depositary shall be entitled to act on such claims, requests or
instructions received from the Company.
<Page B-11>
RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering to the
Company notice of its election to do so, and the Company may at
any time remove the Depositary, any such resignation or removal
to take, effect upon the appointment of a successor Depositary,
which successor Depositary must be appointed within 60 days after
delivery of the notice of resignation or removal and must be a
bank or trust company having its principal office in the United
States and having a combined capital and surplus of at least
$50,000,000.
DESCRIPTION OF THE EXCHANGE DEBENTURES
GENERAL
The Exchange Debentures will, if and when issued, be issued
under an indenture (the "Exchange Indenture") to be dated as of
the date of issuance (the "Exchange Date") of the Exchange
Debentures, between the Company and Fidelity Bank, National
Association (the "Exchange Trustee"). A copy of the proposed
form of the Exchange Indenture is incorporated by reference as an
exhibit to the Registration Statement of which this Prospectus is
a part. The Exchange Indenture may not be amended or supplemented
before the Exchange Date without the affirmative vote or consent
of the holders of two-thirds of the outstanding shares of the
Preferred Stock, except that no amendment that would adversely
affect the legal rights of the holders of Exchange Debentures may
be taken without the affirmative vote or consent of all the
holders of the Preferred Stock. The summaries of certain
provisions of the Exchange Indenture hereunder do not purport to
be complete and are subject to, and are qualified in their
entirety by reference to, all of the provisions of the Exchange
Indenture, including the definitions therein of certain terms and
those terms made part of the Exchange Indenture by reference to
the Trust Indenture Act of 1939 as in effect on the date of the
Exchange Indenture.
The Exchange Debentures will bear interest from the Exchange
Date at the rate of 8-1/2% per annum payable on April 1, July 1,
October 1 and January 1 in each year, commencing on the first
such interest payment date next succeeding the Exchange Date, to
holders of record ("Holders") at the close of business on the
first day of the month of such interest payment date. The
Exchange Debentures will be due on July 1, 2012, will be issued in
registered form, without coupons, only in denominations of $25
and integral multiples of $25 and will be unsecured obligations
of the Company which will be subordinated to the Senior
Indebtedness of the Company. The Indenture authorizes an
aggregate principal amount of $57,500,000 of the Exchange
Debentures.
<Page B-12>
CONVERSION
The holder of any Exchange Debenture will have the right,
exercisable at any time prior to maturity, to convert the
principal amount thereof (or any portion thereof that is an
integral multiple of $25) into shares of Common Stock at the
conversion price set forth on the cover page of this Prospectus,
subject to adjustment as described below (the "Conversion
Price"), except that if an Exchange Debenture is called for
redemption, the conversion right will terminate at the close of
business on the business day immediately preceding the date fixed
for redemption. Upon conversion, no adjustment or payment will be
made for interest or dividends, but if any holder surrenders an
Exchange Debenture for conversion after the close of business on
the record date for the payment of an installment of interest and
prior to the opening of business on the next interest payment
date, then, notwithstanding such conversion, the interest payable
on such interest payment date will be paid to the registered
holder of such Exchange Debenture on such record date. In such
event, such an Exchange Debenture, when surrendered for
conversion, must be accompanied by payment of an amount equal to
the interest payable on such interest payment date on the portion
so converted. No fractional shares will be issued upon conversion
but a cash adjustment will be made for any fractional interest.
The Conversion Price is subject to adjustment in a manner
substantially identical to that provided with respect to the
Preferred Stock. See "Description of the Preferred
Stock-Conversion."
OPTIONAL REDEMPTION
The Exchange Debentures may be redeemed at the option of the
Company, in whole or from time to time in part, on and after July
1, 1996, on not less than 30 nor more than 60 days' notice by
first class mail, at the following redemption prices (expressed
as percentages of the principal amount) if redeemed during the
twelve-month period beginning July 1 of the year indicated below,
in each case, together with accrued and unpaid interest thereon
to the redemption date:
Year Price
1996 105.10%
1997 104.25
1998 103.40
1999 102.55
2000 101.70
2001 100.85
2002 and thereafter 100.00
If less than all the Exchange Debentures are to be redeemed,
the Trustee will select Exchange Debentures for redemption pro
rata or by lot. If any Exchange Debenture is to be redeemed in
part only, a new Exchange Debenture or Exchange Debentures in
principal amount equal to the unredeemed principal portion
thereof will be issued.
<Page B-13>
PURCHASE OF EXCHANGE DEBENTURES AT THE OPTION OF THE HOLDER UPON
A CHANGE IN CONTROL
If any Change in Control (as defined below) of the Company
occurs on or prior to maturity, each holder of Exchange
Debentures will have the right, at the holder's option, subject
to the terms and conditions of the Indenture, to require the
Company to purchase all or any part (equal to $25 or an integral
multiple thereof) of the holder's Exchange Debentures on the date
that is 35 business days after the occurrence of such Change in
Control (the "Change in Control Purchase Date") at a cash price
equal to principal amount plus accrued and unpaid interest to the
Change in Control Purchase Date (the "Change in Control Purchase
Price").
Within 15 business days after the Change in Control, the
Company is obligated to mail to the Trustee and each holder of
Exchange Debentures (and to beneficial owners as required by
applicable law) a written notice of the Change in Control, which
notice shall state, among other things (i) the events causing a
Change in Control and the date of such Change in Control, (ii)
the last date on which the purchase right may be exercised, (iii)
the Change in Control Purchase Price, (iv) the Change in Control
Purchase Date, (v) the name and address of the Trustee and of any
other office or agency maintained for the purpose of the
surrender of Exchange Debentures for purchase, and (vi) the
procedures that holders of Exchange Debentures must follow to
exercise these rights. The Company will cause a copy of such
notice to be published in the national edition of The Wall Street
Journal.
To exercise this right, the holder must deliver written notice
(a "Change in Control Purchase Notice") to the Trustee, or to any
other office or agency designated by the Company, of the exercise
of such right prior to the close of business on the Change in
Control Purchase Date. The Change in Control Purchase Notice must
state (i) the certificate numbers of the Exchange Debentures to
be delivered by the holder thereof for purchase by the Company,
(ii) the portion of the principal amount of Exchange Debentures
to be purchased, which portion must be $25 or an integral
multiple thereof, and (iii) that such Exchange Debentures are to
be purchased by the Company on the Change in Control Purchase
Date pursuant to the applicable provisions of the Exchange
Debentures.
Any Change in Control Purchase Notice may be withdrawn by the
holder by a written notice of withdrawal delivered to the
Trustee, or to any other office or agency designated by the
Company, prior to the close of business on the Change in Control
Purchase Date. The notice of withdrawal shall state the principal
amount and the certificate numbers of the Exchange Debentures to
which the withdrawal notice relates and the principal amount, if
any, which remains subject to the original Change in Control
Purchase Notice and which has been or will be delivered for
purchase by the Company.
Payment of the Change in Control Purchase Price for an Exchange
Debenture for which a Change in Control Purchase Notice has been
delivered and not withdrawn is conditioned upon delivery of such
Exchange Debenture (together with necessary endorsements) to the
Trustee, or to any other office or agency designated by the
Company, at any time (whether prior to, on or after the Change in
Control Purchase Date) after delivery of such Change in Control
Purchase Notice. Payment of the Change in Control Purchase Price
for such Exchange Debenture will be made promptly following the
later of the Change in Control Purchase Date or the time of
delivery of such Exchange Debenture. If the Trustee holds, in
accordance with the Indenture, money sufficient to pay the Change
in Control Purchase Price of such Exchange Debenture on the
Change in Control Purchase Date, then, as of the business day
following the Change in Control Purchase Date, such Exchange
Debenture shall cease to be outstanding and interest on such
Exchange Debenture will cease to accrue, whether or not such
Exchange Debenture is delivered to the Trustee or to any other
office or agency maintained for such purpose, and all other
rights of the holder shall terminate (other than the right to
receive the Change in Control Purchase Price upon delivery of the
Exchange Debenture).
Under the Indenture, a "Change in Control" of the Company
means the occurrence after the date thereof of any of the
following events: (i) any person (within the meaning of Sections
13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), including a group (within the
meaning of Rule 13d-5(b)(1) under the Exchange Act), together
with any affiliates and associates thereof, filing a report of
Schedule 13D or 14D-1 pursuant to the Exchange Act disclosing
that such person has become the beneficial owner of either (a)
50% or more of the shares of Common Stock then outstanding or (b)
securities representing 50% or more of the combined voting power
of the Company's Voting Stock (as defined below) then
outstanding; (ii) any sale, transfer, lease or conveyance of all
or substantially all of the properties and assets of the Company
to any person (other than a subsidiary of the Company); or (iii)
any consolidation or merger of the Company in which the Company
is not the sole surviving or continuing corporation or pursuant
to which the Common Stock is converted into cash, securities or
other property, other than a consolidation or merger in which the
holders of the Common Stock immediately prior to such transaction
receive, directly or indirectly, (a) 75% or more of the common
stock of the sole surviving or continuing corporation outstanding
immediately after such consolidation or merger and (b) securities
representing 75% or more of the combined voting power of the
surviving or continuing corporation's Voting Stock outstanding
immediately after such consolidation or merger. "Voting Stock"
means, with respect to any person, the capital stock of such
person having general voting power under ordinary circumstances
to elect at least a majority of the board of directors, managers
or trustees of such person (irrespective of whether or not at the
time capital stock of any other class or classes shall have or
might have voting power by reason of the happening of any
contingency).
The Company will comply with the provisions of Rule 13e-4 and
any other tender offer rules under the Exchange Act that may then
be applicable and will file a Schedule 13E-4 or any other
schedule required thereunder in connection with any offer by the
Company to purchase Exchange Debentures at the option of holders
upon a Change in Control. The Change in Control purchase feature
of the Exchange Debentures may in certain circumstances make more
difficult or discourage a takeover of the Company and, thus, the
removal of incumbent management. The Change in Control purchase
feature is not, however, the result of management's knowledge of
any specific efforts to accumulate shares of Common Stock or to
obtain control of the Company by means of a merger, tender offer,
solicitation of proxies or consents or otherwise, or part of a
plan to implement a series of anti-takeover measures. Instead,
the Change in Control purchase feature is a commonly used
provision designed to facilitate the marketing of the Exchange
Debentures, and the specific terms of such purchase feature are
the result of negotiations between the Company and the
Underwriter.
The Company could, in the future, enter into certain
transactions, including certain recapitalizations of the Company,
that would not constitute a Change in Control under the
Indenture, but that would increase the amount of Senior
Indebtedness (or any other indebtedness) outstanding at such
time. There are no restrictions in the Indenture on the creation
of additional Senior Indebtedness (or any other indebtedness),
and, under certain circumstances, the incurrence of significant
amounts of additional indebtedness could have an adverse effect
on the Company's ability to service its indebtedness, including
the Exchange Debentures. If such a Change in Control were to
occur, there can be no assurance that the Company would have
sufficient funds to pay the Change in Control Purchase Price for
all Exchange Debentures tendered by the holders thereof. A
default by the Company on its obligation to pay the Change in
Control Purchase Price could, pursuant to cross-default
provisions, result in acceleration of the payment of other
indebtedness of the Company outstanding at that time. Payment by
the Company of the Change in Control Purchase Price is
subordinated to the prior payment of Senior Indebtedness as
described below under "Subordination of Exchange Debentures."
The Indenture does not give the Board authority to waive any
of the provisions of the Indenture in the event of a highly
leveraged transaction. None of the Company's Senior Indebtedness
has a covenant that would afford the holders of such indebtedness
protection in the event of a change in control.
In accordance with the Indenture, no Exchange Debentures may
be purchased if there has occurred and is continuing an Event of
Default described below under "Events of Default and Notice
Thereof."
<Page B-16>
SUBORDINATION OF EXCHANGE DEBENTURES
The Exchange Debentures will be subordinate in right of
payment to the extent set forth in the Indenture to all existing
and future Senior Indebtedness (as defined in the Indenture) of
the Company, whether outstanding on the date of the Indenture or
thereafter created, incurred, assumed or guaranteed. Upon any
distribution of assets of the Company in any dissolution, winding
up, liquidation or reorganization of the Company (whether in an
insolvency or bankruptcy proceeding or otherwise), payment in
full must be made on such Senior Indebtedness before any payment
is made on or in respect of the Exchange Debentures. Upon the
happening and during the continuance of a default in payment of
interest on or principal of Senior Indebtedness, or any other
default with respect to such Senior Indebtedness permitting the
holders thereof to accelerate the maturity thereof, no payment
may be made by the Company on or in respect of the Exchange
Debentures. No such subordination will prevent the occurrence of
any Event of Default (as defined in the Indenture).
"Senior Indebtedness" means the principal of and interest
(including, without limitation, any interest accruing subsequent
to the filing of a petition or other action concerning bankruptcy
or other similar proceeding, penalties, reimbursements or
indemnification amounts, fees, expenses or other amounts relating
to any indebtedness) on the following, whether presently
outstanding or hereafter incurred: (a) all indebtedness of the
Company (i) for money borrowed (other than that evidenced by the
Exchange Debentures), (ii) which is evidenced by a note,
debenture or similar instrument (including a purchase money
mortgage) given in connection with the acquisition of any
property or assets (other than inventory or other similar
property acquired in the ordinary course of business), including
securities, or (iii) for the payment of money relating to a
Capitalized Lease Obligation; (b) any liabilities of others
described in the preceding clause (a) which the Company has
guaranteed or which is otherwise its legal liability; (c)
indebtedness of the Company under interest rate swaps, caps or
similar hedging agreements and foreign exchange contracts,
currency swaps or similar agreements; and (d) renewals,
extensions, refundings, restructurings, amendments and
modifications of any such indebtedness or guarantee.
Notwithstanding anything to the contrary in the Indenture or the
Exchange Debentures, "Senior Indebtedness" shall not include (x)
any indebtedness of the Company to a subsidiary, or (y) any
indebtedness or guarantee of the Company which by its terms or
the terms of the instrument creating or evidencing it is not
superior in right of payment to the Exchange Debentures.
At March 31, 1997, there was no Senior Indebtedness
outstanding. Also, at that date, subsidiaries of the Company had
indebtedness of approximately $2,868,000, to which the Exchange
Debentures are effectively subordinate. The Indenture will not
limit the amount of additional indebtedness, including Senior
Indebtedness, which the Company can create, incur, assume or
guarantee, nor will the Indenture limit the amount of
indebtedness which any subsidiary can incur. As a result of these
subordination provisions, in the event of insolvency, holders of
the Exchange Debentures may recover less ratably than holders of
Senior Indebtedness and general creditors of the Company.
EVENTS OF DEFAULT AND NOTICE THEREOF
The term "Event of Default" when used in the Indenture will
mean any one of the following: (i) failure of the Company to pay
interest for 30 days or principal when due; (ii) failure of the
Company to comply with any other covenant in the Indenture for
60 days after notice; (iii) default by the Company with respect
to indebtedness aggregating more than $10,000,000, and the
acceleration of such indebtedness under the terms of the
instruments evidencing such indebtedness or a default in any
payment when due at final maturity of any such indebtedness; and
(iv) certain events of bankruptcy or reorganization of the
Company or any subsidiary.
<Page B-17>
The Indenture will provide that the Trustee shall, within 90
days after the occurrence of any default (the term "default" to
include the events specified above without grace or notice) known
to it, give to the holders of Exchange Debentures notice of such
default; provided that, except in the case of a default in the
payment of principal of or interest on any of the Exchange
Debentures, the Trustee shall be protected in the withholding of
such notice if it in good faith determines that the withholding
of such notice is in the interest of the holders of Exchange
Debentures. The Indenture will require the Company to certify to
the Trustee annually as to whether any default occurred during
such year.
In case an Event of Default (other than an Event of Default
resulting from bankruptcy, insolvency or reorganization) shall
occur and be continuing, the Trustee or the holders of at least
25% in aggregate principal amount of the Exchange Debentures
then outstanding, by notice in writing to the Company (and to
the Trustee if given by the holders of the Exchange Debentures),
may, and the Trustee shall, upon the request of such holders,
declare all unpaid principal and accrued interest on the Exchange
Debentures then outstanding to be due and payable immediately.
In case an Event of Default resulting from certain events of
bankruptcy, insolvency or reorganization shall occur, all unpaid
principal of and accrued interest on the Exchange Debentures
then outstanding shall be due and payable immediately without any
declaration or other act on the part of the Trustee or the
holders of Exchange Debentures. Such acceleration may be
annulled and past defaults may be waived by the holders of a
majority in principal amount of the Exchange Debentures then
outstanding, upon the conditions provided in the Indenture.
The Indenture will provide that no holder of an Exchange
Debenture may pursue any remedy under the Indenture unless the
Trustee shall have failed to act after notice of an Event of
Default and request by holders of at least 25% in principal
amount of the Exchange Debentures and the offer to the Trustee
of indemnity satisfactory to it; provided, however, that such
provision does not affect the right to sue for enforcement of
any overdue payment on the Exchange Debentures.
The holders of a majority in principal amount of all
outstanding Exchange Debentures will have the right to direct
the time, method and place of conducting any proceeding for
exercising any remedy or power available to the Trustee,
provided that such direction does not conflict with any rule of
law or with the Indenture.
MODIFICATION AND WAIVER
Modification and amendment of the Indenture may be made by the
Company and the Trustee with the consent of the holders of not
less than a majority in principal amount of the outstanding
Exchange Debentures, provided that no such modification or
amendment may, without the consent of the holder of each
Exchange Debenture affected thereby, (i) reduce the amount of
Exchange Debentures whose holders must consent to an amendment,
supplement or waiver; (ii) reduce the rate of or change the time
for payment of interest on any Exchange Debenture; (iii) reduce
the principal of or change the fixed maturity of any Exchange
Debenture or alter the redemption provisions with respect
thereto; (iv) modify the conversion provisions with respect to
any Exchange Debenture in a manner adverse to the holder
thereof; (v) waive a default in the payment of the principal of
(and premium, if any) or interest on any Exchange Debenture;
(vi) make any changes to the provisions of the Indenture
governing waiver of defaults and Events of Default and the
rights of holders to receive payment of the principal of (and
premium, if any) and interest on the Exchange Debenture; (vii)
modify the Subordination provisions of the Indenture in a manner
adverse to the holders of the Exchange Debenture; or (viii) make
any Exchange Debenture payable in money other than that stated
in the Exchange Debentures. Holders of not less than a majority
in principal amount of the outstanding Exchange Debentures may
waive certain past defaults. See "Events of Default and Notice
Thereof." An amendment to the Indenture may not adversely affect
the rights under the subordination provisions of the holders of
any issue of Senior Indebtedness without the consent of such
holders.
SATISFACTION AND DISCHARGE
The Indenture will be discharged and canceled upon payment of
all the Exchange Debentures. The Company may terminate all of
its obligations under the Indenture, other than its obligation to
pay the principal of and interest on the Exchange Debentures and
certain other obligations (including its obligation to deliver
shares of Common Stock upon conversion of Exchange Debentures),
at any time, by depositing with the Trustee or a paying agent
other than the Company, money or noncallable U.S. Government
Obligations (as defined in the Indenture) sufficient to pay all
remaining indebtedness on the Exchange Debentures.
<Page B-18>
MERGER AND CONSOLIDATION
The Company may consolidate or merge with any other
corporation and the Company may transfer its property and assets
substantially as an entirety to any persons; provided that (i)
the Company is the resulting or surviving corporation, or the
successor corporation is a domestic corporation and it assumes,
by supplemental indenture, payment of the principal of and
interest on the Exchange Debentures and performance and
observance of every covenant of the Indenture, and (ii)
immediately before and immediately after giving effect to such
transaction, no default or Event of Default shall have occurred
and be continuing. Thereafter, all obligations of the Company
under the Indenture and the Exchange Debentures will terminate.
CONCERNING THE TRUSTEE
Fidelity Bank, National Association, a national banking
association, will be the Trustee under the Indenture. The
Indenture will contain certain limitations on the rights of the
Trustee, should it become a creditor of the Company, to obtain
payment of claims in certain cases, or to realize on certain
property received in respect of any such claim as security or
otherwise. The Trustee will be permitted to engage in other
transactions; provided, however, if it acquires any conflicting
interest (as defined) and there exists a default with respect to
the Exchange Debentures, it must eliminate such conflict or
resign.
In case an Event of Default shall occur (and shall not be
cured) and holders have notified the Trustee, the Trustee will
be required to exercise its powers with the degree of care and
skill of a prudent person in the conduct of his own affairs.
Subject to such provisions, the Trustee will be under no
obligation to exercise any of its rights or powers under the
Indenture at the request of any of the holders of Exchange
Debentures, unless they shall have offered to the Trustee
security and indemnity satisfactory to it.
* * *
This document constitutes part of a prospectus covering
securities that have been registered under the
Securities Act of 1933.
<Page II-1>
PART I - INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I
of this Registration Statement will be given or sent to all employees
who participate in the Westmoreland Coal Company and Affiliated
Companies' Employees' Savings/Retirement Plan (the "Plan") as
specified by Rule 428.
PART II - INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and
Exchange Commission (the "Commission") pursuant to the Securities
Exchange Act of 1934 (the "Exchange Act") by Westmoreland Coal Company
(the "Company") (File No. 0-752) are incorporated herein by reference:
(i) the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1996;
(ii) the description of the Company's Common Stock
contained in its Registration Statement on Form 8-A,
filed May 22, 1992; and
(vi) the description of the Company's Depository
Shares contained in its Registration Statement on
Form 8-A, filed June 23, 1992.
Each document filed by the Company after the date hereof
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
prior to the filing of a post-effective amendment which indicates that
all securities offered hereby have been sold or which deregisters all
securities remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and shall be part hereof from
the date of filing of such document.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Paul W. Durham, Esquire, the named counsel who prepared the
opinion attached as Exhibit 5.1, is connected with the registrant by
virtue of his position as Assistant General Counsel and Assistant
Secretary of the Company.
<Page II-2>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of Delaware's General Corporation Law authorizes
a corporation to indemnify any present or former director or officer
against certain lawsuits brought by reason of the fact that the person
is or was a director or officer of the corporation. This language is
sufficiently broad that in certain circumstances, it could permit
indemnification for liabilities and expenses incurred arising under
the Securities Act of 1933, as amended. Further, the statute creates
a right of indemnification if the director or officer is successful on
the merits or otherwise in defense of any action for which the
corporation may indemnify the director or officer.
Article V of the Company's By-Laws provide that the Company
shall indemnify its directors and officers for any expenses including
attorney's fees, judgments and other amounts incurred in connection
with a suit, action or proceeding brought by reason of the fact that
he or she is or was a director or officer. The terms of the
indemnification provisions in the Company's By-Laws are substantially
similar to the provisions of Section 145 of Delaware's General
Corporation Law. The Company maintains and pays all premiums on a
liability policy for its liability and that of its directors and
officers and those of its subsidiaries.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4.1 Certificate of Designation of Series A Convertible
Exchangeable Preferred Stock of the Company defining the
rights of holders of such stock, filed July 8, 1992 as an
amendment to the Company's Certificate of Incorporation, and
filed as Exhibit 3(a) to the Company's Form 10-K for 1992,
which Exhibit is incorporated herein by reference;
4.2 Form of Deposit Agreement among the Company, First
Chicago Trust Company of New York, as Depository, and the
holders from time to time of the Depository Receipts, filed
as Exhibit 4.3 to Form S-2, Registration No. 33-47872 filed
May 13, 1992, and Amendments 1 through 4 thereto, which
Exhibit is incorporated herein by reference;
4.3 Specimen certificate representing the common stock of
the Company, filed as Exhibit 4(c) to the Company's
Registration Statement on Form S-2, Registration No.
33-1950, filed December 4, 1985, which Exhibit is
incorporated herein by reference;
4.4 Specimen certificate representing the Preferred
Stock, filed as Exhibit 4.6 to the Company's Registration
Statement on Form S-2, Registration No. 33-47872, filed May
13, 1992, and Amendments 1 through 4 thereto, which Exhibit
is incorporated herein by reference; and
4.5 Form of Depository Receipt, filed as Exhibit 4.7 to
the Company's Registration Statement on Form S-2,
Registration No. 33-47872, filed May 13, 1992, and
Amendments 1 through 4 thereto, which Exhibit is
incorporated herein by reference.
4.6 Form of Exchange Indenture, filed as Exhibit 4.2 to
the Company's Registration Statement on Form S-2,
Registration No. 33-47872, filed May 13, 1992, and
Amendments, 1 through 4 thereto, which Exhibit is
incorporated herein by reference.
5.1 Opinion of Paul W. Durham, Esquire
23.1 Consent of KPMG Peat Marwick LLP
24.1 Power of Attorney (included on signature page)
99.1 Westmoreland Coal Company and Affiliated Companies
Employees' Savings/Retirement Plan
ITEM 9. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(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) that, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective 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, that paragraphs (a)(1)(i) and (a)(1)(ii)
do not apply if the registration statement is on Form S-3 or 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 section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in
the registration statement.
<Page II-4>
(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 of the securities being registered which remain unsold
at the termination of the offering.
The 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
section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Securities Exchange Act of 1934) that
is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
Insofar as 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 and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
<Page II-5>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Colorado Springs, Colorado
on July 30, 1997.
Westmoreland Coal Company
By /s/ Robert J. Jaeger
--------------------------
Robert J. Jaeger
Senior Vice President of
Finance, Treasurer and
Controller
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons
in the capacities and on the dates indicated.
Each person whose signature appears below in so signing also
makes, constitutes and appoints Theodore E. Worcester and Paul W.
Durham and each of them, his true and lawful attorney-in-fact, with
full power of substitution, for him in any and all capacities, to
execute and cause to be filed with the Securities and Exchange
Commission any and all amendments and post-effective amendments to
this Registration Statement, with exhibits thereto and other documents
in connection therewith, and hereby ratifies and confirms all that
said attorney-in-fact or his substitute or substitutes may do or cause
to be done by virtue hereof.
Signature Title Date
Chairman of the Board,
/s/ Christopher K. Seglem President and Cheif July 30, 1997
- --------------------------- Executive Officer
Christopher K. Seglem (principal executive officer)
Senior Vice President
/s/ Robert J. Jaeger of Finance, Treasurer July 30, 1997
- ---------------------- and Controller
Robert J. Jaeger (principal financial and
accounting officer)
Directors:
/s/ Pemberton Hutchinson Director July 28, 1997
- -------------------------
Pemberton Hutchinson
/s/ Robert E. Killen Director July 28, 1997
- -------------------------
Robert E. Killen
/s/ William R. Klaus Director July 28, 1997
- -------------------------
William R. Klaus
/s/ Thomas W. Ostrander Director July 28, 1997
- -------------------------
Thomas W. Ostrander
/s/ James W. Sight Director July 28, 1997
- -------------------------
James W. Sight
/s/ Edwin E. Tuttle Director July 28, 1997
- -------------------------
Edwin E. Tuttle
Pursuant to the requirements of the Securities Act of 1933,
the trustees (or other persons who administer the employee
benefit plan) have duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in Colorado Springs, Colorado on July 30, 1997.
Westmoreland Coal
Company and Affiliated Companies
Employees' Savings/Retirement Plan
By: Westmoreland Coal Company
Savings/Retirement Plan
Administrative Committee
By: /s/ Cheryl M. Sprague
----------------------
Cheryl M. Sprague
<Page II-1>
EXHIBIT INDEX
Exhibit
Number Description Page
4.1 Certificate of Designation of Series A Convertible
Exchangeable Preferred Stock of the Company defining
the rights of holders of such stock, filed July 8, 1992
as an amendment to the Company's Certificate of
Incorporation, and filed as Exhibit 3(a) to the
Company's Form 10-K for 1992, which Exhibit is
incorporated herein by reference;
4.2 Form of Deposit Agreement among the Company, First
Chicago Trust Company of New York, as Depository, and
the holders from time to time of the Depository
Receipts, filed as Exhibit 4.3 to Form S-2,
Registration No. 33-47872 filed May 13, 1992, and
Amendments 1 through 4 thereto, which Exhibit is
incorporated herein by reference;
4.3 Specimen certificate representing the common stock
of the Company, filed as Exhibit 4(c) to the Company's
Registration Statement on Form S-2, Registration No.
33-1950, filed December 4, 1985, which Exhibit is
incorporated herein by reference;
4.4 Specimen certificate representing the Preferred
Stock, filed as Exhibit 4.6 to the Company's
Registration Statement on Form S-2, Registration No.
33-47872, filed May 13, 1992, and Amendments 1 through
4 thereto, which Exhibit is incorporated herein by
reference; and
4.5 Form of Depository Receipt, filed as Exhibit 4.7
to the Company's Registration Statement on Form S-2,
Registration No. 33-47872, filed May 13, 1992, and
Amendments 1 through 4 thereto, which Exhibit is
incorporated herein by reference.
4.6 Form of Exchange Indenture, filed as Exhibit 4.2
to the Company's Registration Statement on Form S-2,
Registration No. 33-47872, filed May 13, 1992, and
Amendments, 1 through 4 thereto, which Exhibit is
incorporated herein by reference.
5.1 Opinion of Paul W. Durham, Esquire
23.1 Consent of KPMG Peat Marwick LLP
24.1 Power of Attorney (included on signature page)
99.1 Westmoreland Coal Company and Affiliated Companies
Employees' Savings/Retirement Plan
<PAGE>
Exhibit 5.1
July 30, 1997
Board of Directors
Westmoreland Coal Company
2 North Cascade Avenue
Colorado Springs, CO 80903
Gentlemen:
This opinion is provided to Westmoreland Coal Company,
a Delaware corporation (the "Company"), in connection with its
registration statement on Form S-8 (the "Registration Statement")
filed with the Securities and Exchange Commission relating to the
proposed purchase and sale pursuant to the terms of the
Westmoreland Coal Company And Affiliated Companies Employees'
Savings/Retirement Plan (the "Plan") of up to 325,000 shares of
the Company's common stock, par value $2.50 per share and up to
7,000 shares of the Company's Depositary Shares. This opinion
letter is furnished to you at your request to enable you to
fulfill the requirements of Item 601(b)(5) of Regulation S-K,
17 C.F.R. Section 229.601(b)(5), in connection with the Registration
Statement.
For purposes of this opinion letter, I have examined
copies of documents deemed necessary for this opinion, and in my
examination of such documents, have assumed the genuineness of
all signatures, the legal capacity of natural persons, the
authenticity, accuracy and completeness of all such documents,
and the conformity with the original documents of all documents
submitted to me as certified, telecopied, photostatic, or
reproduced copies. This opinion letter is given, and all
statements herein are made, in the context of the foregoing.
This opinion letter is based as to matters of law
solely on the General Corporation Law of the State of Delaware.
I express no opinion herein as to any other laws, statutes,
regulations, or ordinances.
Based upon, subject to and limited by the foregoing, I
am of the opinion that the Shares are validly issued, fully paid
and nonassessable under the General Corporation Law of the State
of Delaware. A copy of the Internal Revenue Service
determination letter that the Plan is qualified under Section 401
of the Internal Revenue Code is attached hereto.
<PAGE>
I assume no obligation to advise you of any changes in
the foregoing subsequent to the delivery of this opinion letter.
This opinion letter has been prepared solely for your use in
connection with the filing of the Registration Statement on the
date of this opinion letter and should not be quoted in whole or
in part or otherwise be referred to, nor filed with or furnished
to any governmental agency or other person or entity, without the
prior written consent of this firm.
I hereby consent to the filing of this opinion letter
as Exhibit 5.1 to the Registration Statement. In giving this
consent, I do not thereby admit that I am an "expert" within the
meaning of the Securities Act of 1933, as amended.
Very truly yours,
/s/ Paul W. Durham
--------------------------
Paul W. Durham
Assistant General Counsel
Westmoreland Coal Company
<PAGE>
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
31 HOPKINS PLAZA
BALTIMORE, MD 21201-0000
Date: Feb 02 1996
WESTMORELAND RESOURCES, INC.
C/O ANDREW J. RUDOLPH, ESQUIRE
BALLARD SPAHR ANDREWS & INGERSOLL
1735 MARKET STREET, 51ST FLOOR
PHILADELPHIA, PA 19103-7599
Employer Identification Number: 81-0364990
File Folder Number: 521054602
Person to Contact: AUDREY PETIT
Contact Telephone Number: (215) 597-8958
Plan Name: WESTMORELAND COAL COMPANY AND AFFILIATED COMPANIES
EMPLOYEES SAV
Plan Number: 001
Dear Applicant:
We have made a favorable determination on your plan,
identified above, based on the information supplied. Please keep
this letter in your permanent records.
Continued qualification of the plan under its present form
will depend on its effect in operation. (See section 1.401-
1(b)(3) of the Income Tax Regulations.) We will review the
status of the plan in operation periodically.
The enclosed document explains the significance of this
favorable determination letter, points out some features that may
affect the qualified status of your employee retirement plan, and
provides information on the reporting requirements for your plan.
It also describes some events that automatically nullify it. It
is very important that you read the publication.
This letter relates only to the status of your plan under
the Internal Revenue Code. It is not a determination regarding
the effect of other federal or local statues.
This determination is subject to your adoption of the
proposed amendments submitted in your letter dated 8/31/95 and
11/2/95. The proposed amendments should be adopted on or before
the date prescribed by the regulations under code section 401(b).
This plan has been mandatorily disaggregated, permissively
aggregated, or restructured to satisfy the nondiscrimination
requirements.
This letter is issued under Rev. Proc. 93-39 and considers
the amendments required by the Tax Reform Act of 19867 except as
otherwise specified in this letter.
This plan satisfies the nondiscriminatory current
availability requirements of section 1.401(a)(4)-(4)(b) of the
regulations with respect to those benefits, rights, and features
that are currently available to all employees in the plan's
coverage group. For this purpose, the plan's coverage group
consists of those employees treated as currently benefiting for
purposes of demonstrating that the plan satisfies the minimum
coverage requirements of section 410(b) of the Code.
<PAGE>
This leter may not be relied upon with respect to whether
the plan satisfies the qualification requirements as amended by
the Uruguay Round Agreements Act, Pub. L. 103-465.
We have sent a copy of this letter to your representative as
indicated in the power of attorney.
If you have questions concerning this matter, please contact
the person whose name and telephone number are shown above.
Sincerely yours,
/s/ Paul M. Hunsington
District Director
Enclosure(s)
Publication 794
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Westmoreland Coal Company:
We consent to the incorporation by reference in the registration
statement on Form S-8 of Westmoreland Coal Company of our report
dated March 17, 1997, relating to the consolidated balance sheets
of Westmoreland Coal Company and subsidiaries as of December 31,
1996 and 1995, and the related consolidated statements of
opertaions, shareholders' equity (deficit), and cash flows for
each of the years in the three-year period ended December 31,
1996, which report appears in the December 31, 1996 annual report
on Form 10-K of Westmoreland Coal Company.
Our report dated March 17, 1997 contains an explanatory paragraph
that states that the Company's bankruptcy filing under Chapter 11
of the United States Bankruptcy Code raises substantial doubt
about its ability to continue as a going concern. The
consolidated financial statements do not include any adjustments
that might result from the outcome of that uncertainty.
KPMG Peat Marwick LLP
Denver, Colorado
July 25, 1997
<PAGE>
Exhibit 99.1
WESTMORELAND COAL COMPANY
AND
AFFILIATED COMPANIES EMPLOYEES' SAVINGS/RETIREMENT PLAN
AMENDED AND RESTATED
EFFECTIVE SEPTEMBER 1, 1987
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
"Account" 2
"Matching Contribution Account" 2
"Pre-1994 Matching Contribution Subaccount" 2
"Post-1993 Matching Contribution Subaccount" 2
"Rollover Account" 3
"Salary Reduction Account" 3
"Pre-1990 Salary Reduction Subaccount" 3
"Post-1989 Salary Reduction Subaccount" 3
"Voluntary Contribution Account" 4
"Active Participant" 4
"Actual Deferral Percentage" 4
"Affiliated Company" 4
"Age" 5
"Age 55 Shares" 5
"Alternate Payee" 6
"Average Actual Deferral Percentage" 6
"Average Contribution Percentage" 6
"Benefit Commencement Date" 6
"Board of Directors" 6
"Code" 6
"Committee" 7
"Company" 7
"Company Stock" 7
"Compensation" 7
"Covered Employee" 10
"Effective Date" 11
"Eligible Employee" 11
"Employee" 11
"Employment Commencement Date" 11
"ERISA" 11
"Fixed Income Fund" 11
"Fund" 12
"Highly Compensated Eligible Employee" 12
"Highly Compensated Employee" 12
"Hour of Service" 14
"Investment Medium" 16
"Limitation Year" 16
"Matching Contributions" 16
"Normal Retirement Age" 16
"Normal Retirement Date" 16
"Participant" 16
"Participating Company" 17
"Payroll Period" 17
"Plan" 17
"Plan Year" 17
"Post-1989 Rollover Contributions" 17
"Post-1993 Matching Contributions" 17
"Post-1989 Salary Reduction Contributions" 17
"Pre-1994 Matching Contributions" 18
"Pre-1990 Rollover Contributions" 18
"Pre-1990 Salary Reduction Contributions" 18
"Qualified Domestic Relations Order" 18
"Quarterly Status Date" 18
"Required Beginning Date" 18
"Rollover Contributions" 19
"Salary Reduction Contributions" 19
"Separation from Service" 20
"Spouse" 20
"Total Disability" 20
"Trust Agreement" 20
"Trustee" 21
"Valuation Date" 21
"Voluntary Contributions" 21
ARTICLE II
TRANSITION AND ELIGIBILITY TO PARTICIPATE
2.1 Rights Affected and Preservation of Accrued Benefit 22
2.2 Eligibility to Participate - Salary Reduction
Contributions 22
2.3 Election to Make Salary Reduction Contributions 23
2.4 Participation in Matching Contributions 23
2.5 Data 23
ARTICLE III
CONTRIBUTIONS TO THE PLAN
3.1 Salary Reduction Contributions 25
3.2 Change of Percentage Rate 26
3.3 Discontinuance of Salary Reduction Contributions 27
3.4 Matching Contribution 28
3.5 Timing and Deductibility of Contributions 30
3.6 Fund 31
3.7 Limitation on Salary Reduction Contributions and
Matching Contributions 31
3.8 Prevention of Violation of Limitation on Salary
Reduction Contributions and Matching Contributions 35
3.9 Maximum Allocation 40
ARTICLE IV
PARTICIPANTS' ACCOUNTS
4.1 Accounts 46
4.2 Valuation 46
4.3 Apportionment of Gain or Loss 46
4.4 Accounting for Allocations 47
4.5 Statement of Account. 47
ARTICLE V
DISTRIBUTION
5.1 General 48
5.2 Separation from Service 48
5.3 Death 48
5.4 Total Disability 48
5.5 Valuation for Distribution 49
5.6 Timing of Distribution 50
5.7 Mode of Distribution 52
5.8 Beneficiary Designation 54
5.9 Transfer of Account to Other Plan 56
5.10 Sale of Company Stock Upon Distribution. 59
ARTICLE VI
VESTING
6.1 Nonforfeitable Amounts 60
ARTICLE VII
PURCHASE AND VOTING OF COMPANY STOCK
7.1 Purchase of Company Stock 61
7.2 Participant Voting Direction 61
7.3 Voting Procedures 62
7.4 Absence of Participant Voting Direction 62
ARTICLE VIII
WITHDRAWALS
8.1 Withdrawals Not Subject to Section 401(k)
Restrictions. 63
8.2 Withdrawals Subject to Section 401(k) Restrictions 64
8.3 Withdrawals On and After Attainment of Age 59-1/2 67
8.4 Amount and Payment of Withdrawals 67
8.5 Pledged Amounts 67
8.6 Investment Medium to be Charged with Withdrawal 68
ARTICLE IX
LOANS TO PARTICIPANTS
9.1 Loan Application 69
9.2 Loan Approval 69
9.3 Amount of Loan 69
9.4 Terms of Loan 70
9.5 Enforcement 73
9.6 Investment Medium to be charged with Loan 74
9.7 Additional Rules 75
ARTICLE X
ADMINISTRATION
10.1 Committee 76
10.2 Duties and Powers of Committee 76
10.3 Functioning of Committee 78
10.4 Disputes 78
10.5 Indemnification 79
ARTICLE XI
THE FUND
11.1 Designation of Trustee 81
11.2 Exclusive Benefit 81
11.3 No Interest in Fund 81
11.4 Trustee 81
ARTICLE XII
INVESTMENTS
12.1 Investment of Pre-1994 Matching Contributions,
Voluntary Contributions, Pre-1990 Salary Reduction
Contributions and Pre-1990 Rollover Contributions 83
12.2 Investment of Post-1989 Salary Reduction Contributions,
Post-1989 Rollover Contributions and Post-1993 Matching
Contributions 85
12.3 Investment Media. 87
12.4 Additional Rules 87
ARTICLE XIII
AMENDMENT OR TERMINATION OF THE PLAN
13.1 Power of Amendment and Termination 89
13.2 Merger 90
ARTICLE XIV
TOP-HEAVY PROVISIONS
14.1 General 91
14.2 Definitions 91
14.3 Minimum Contribution for Non-Key Employees 97
14.4 Social Security 98
14.5 Adjustment to Maximum Benefit Limitation 98
ARTICLE XV
ROLLOVER CONTRIBUTIONS
15.1 Rollover Contributions. 101
15.2 Vesting and Distribution of Rollover Account 102
ARTICLE XVI
GENERAL PROVISIONS
16.1 No Employment Rights 103
16.2 Governing Law 103
16.3 Severability of Provisions 103
16.4 No Interest in Fund 103
16.5 Spendthrift Clause 104
16.6 Incapacity 104
16.7 Withholding 104
16.8 Missing Persons 105
WHEREAS, Westmoreland Coal Company (the "Company")
adopted the Westmoreland Coal Company and Affiliated Companies
Employees' Stock Purchase Plan, effective October 1, 1957, for
certain of its Employees and the Employees of any Participating
Companies; and
WHEREAS, the Company amended and restated the
Westmoreland Coal Company and Affiliated Companies Employees'
Stock Purchase Plan, effective June 1, 1984; and
WHEREAS, the Company desires to amend and restate the
Westmoreland Coal Company and Affiliated Companies Employees'
Stock Purchase Plan to comply with the requirements of the
Employee Retirement Income Security Act of 1974 and with the
Internal Revenue Code of 1986, as amended; and
WHEREAS, the Company desires to rename the Westmoreland
Coal Company and Affiliated Companies Employees' Stock Purchase
Plan, effective March 1, 1990;
NOW, THEREFORE, effective September 1, 1987, the
Westmoreland Coal Company and Affiliated Companies Employees'
Stock Purchase Plan is continued, amended and restated as
hereinafter set forth and, effective March 1, 1990, renamed the
Westmoreland Coal Company and Affiliated Companies Employees'
Savings/Retirement Plan:
ARTICLE I
DEFINITIONS
Except where otherwise clearly indicated by context,
the masculine shall include the feminine and the singular shall
include the plural, and vice-versa. Any term used herein without
an initial capital letter that is used in a provision of the Code
with which this Plan must comply to meet the requirements of
section 401(a) of the Code shall be interpreted as having the
meaning used in such provision of the Code, if necessary for the
Plan to comply with such provision.
"Account" means the entries maintained in the records
of the Trustee which represent the Participant's interest in the
Fund. The term "Account" shall refer, as the context indicates,
to any or all of the following:
"Matching Contribution Account" -- the Account
which consists of the following two Subaccounts:
(a) "Pre-1994 Matching Contribution Subaccount"
- --- the subaccount to which are credited Pre-1994 Matching
Contributions, and all other contributions made by a
Participating Company prior to June 1, 1984, allocated to a
Participant, adjustments for withdrawals and distributions, and
the earnings, losses and expenses attributable thereto; and
(b) "Post-1993 Matching Contribution Subaccount"
- --- the subaccount to which are credited Post-1993 Matching
Contributions, allocated to a Participant, adjustments for
withdrawals and distributions, and the earnings, losses and
expenses attributable thereto.
"Rollover Account" -- the Account which consists
of the following two Subaccounts:
(a) "Pre-1990 Rollover Subaccount" --- the
subaccount to which are credited a Participant's Pre-1990
Rollover Contributions that are not subject to the joint and
survivor annuity requirements of sections 401(a)(11) and 417 of
the Code, adjustments for withdrawals and distributions, and the
earnings, losses and expenses attributable thereto; and
(b) "Post-1989 Rollover Subaccount" --- the
subaccount to which are credited a Participant's Post-1989
Rollover Contributions that are not subject to the joint and
survivor annuity requirements of sections 401(a)(11) and 417 of
the Code, adjustments for withdrawals and distributions, and the
earnings, losses and expenses attributable thereto.
"Salary Reduction Account" -- the Account which
consists of the following two Subaccounts:
(a) "Pre-1990 Salary Reduction Subaccount" ---
the subaccount to which are credited a Participant's Pre-1990
Salary Reduction Contributions, adjustments for withdrawals and
distributions, and the earnings, losses and expenses attributable
thereto; and
(b) "Post-1989 Salary Reduction Subaccount" ---
the subaccount to which are credited a Participant's Post-1989
Salary Reduction Contributions, adjustments for withdrawals and
distributions, and the earnings, losses and expenses attributable
thereto.
"Voluntary Contribution Account" -- the Account to
which are credited a Participant's Voluntary Contributions made
prior to June 1, 1984, adjustments for withdrawals and
distributions, and the earnings, losses and expenses attributable
thereto.
"Active Participant" means an individual who has become
an Active Participant as provided in Article II and has remained
a Covered Employee at all times thereafter.
"Actual Deferral Percentage" means, for any Eligible
Employee for a given Plan Year, the ratio of:
(a) the sum of:
(1) such Eligible Employee's Salary
Reduction Contributions for the Plan Year, plus
(2) in the case of any Highly Compensated
Eligible Employee, his elective deferrals for the year under any
other qualified retirement plan, other than an employee stock
ownership plan as defined in section 4975(e)(7) of the Code or a
tax credit employee stock ownership plan as defined in section
409(a) of the Code, maintained by the Participating Company or
any Affiliated Company; to
(b) the Eligible Employee's Compensation for the
Plan Year or the calendar year ending within the Plan Year.
"Affiliated Company" means, with respect to any
Participating Company, (a) any corporation that is a member of a
controlled group of corporations, as determined under section
414(b) of the Code, which includes such Participating Company;
(b) any member of an affiliated service group, as determined
under section 414(m) of the Code, of which such Participating
Company is a member; (c) any trade or business (whether or not
incorporated) that is under common control with such
Participating Company, as determined under section 414(c) of the
Code; and (d) any other organization or entity which is required
to be aggregated with the Participating Company under section
414(o) of the Code and regulations issued thereunder. "50%
Affiliated Company" means an Affiliated Company, but determined
with "more than 50%" substituted for the phrase "at least 80%" in
section 1563(a) of the Code, when applying sections 414(b) and
(c) of the Code.
"Age" means, for any individual, his age on his last
birthday, except that an individual attains Age 59-1/2 or Age
70-1/2 on the corresponding date in the sixth calendar month
following the month in which his 59th or 70th (respectively)
birthday falls (or the last day of such sixth month if there is
no such corresponding date therein).
"Age 55 Shares" means, with respect to any Participant,
the Company Stock allocated to his Pre-1994 Matching Contribution
Subaccount, Voluntary Contribution Account, and Pre-1990 Salary
Reduction Subaccount as of the later of (a) the Quarterly Status
Date coincident with or next following the date the Participant
attains Age 55 or (b) June 30, 1976, plus any Company Stock
allocated to such Account and Subaccounts after such date.
"Alternate Payee" shall mean any Spouse, former Spouse,
child or other dependent of a Participant who is recognized by a
domestic relations order (within the meaning of
section 414(p)(1)(B) of the Code) as having a right to receive
all, or a portion of, the benefits payable under the Plan with
respect to such Participant.
"Average Actual Deferral Percentage" means, for a
specified group of Eligible Employees for a Plan Year, the
average of the Actual Deferral Percentages for such Eligible
Employees for the Plan Year.
"Average Contribution Percentage" means, for a
specified group of Eligible Employees for a Plan Year, the
average of the Contribution Percentages for such Eligible
Employees for the Plan Year.
"Benefit Commencement Date" means, for any Participant
or beneficiary, the date as of which the first benefit payment,
including a single sum, from the Participant's Account is due,
other than pursuant to a withdrawal under Article VIII.
"Board of Directors" means the board of directors (or
other governing body) of the Company.
"Code" means the Internal Revenue Code of 1986, as
amended, and any regulations issued thereunder.
"Committee" means the individuals appointed by the
Board of Directors (if any) or by the Company to supervise the
administration of the Plan, as provided in Article X.
"Company" means Westmoreland Coal Company, and its
successors.
"Company Stock" means:
(a) prior to March 1, 1993, shares of common
stock of the Company; and
(b) after February 28, 1993, shares of common
stock or preferred stock (the latter represented by and held in
the form of depository shares) of the Company.
"Compensation" means, for any Eligible Employee, for
any applicable period:
(a) For purposes of Sections 3.1 and 3.4, subject
to the limitations set forth in Subsection (e) of this
definition, his base monthly rate of pay from a Participating
Company (including Salary Reduction Contributions and salary
deferrals under a plan described in section 125 of the Code).
Compensation shall not include bonuses, commissions, other
incentive or special payments, overtime pay, all amounts
identified by a Participating Company as expense allowances or
reimbursements, and all Matching Contributions, or any
contributions made by a Participating Company under any other
employee pension benefit or welfare benefit plan to which the
Participating Company contributes on behalf of the Employee.
(b) for the purposes of Article XIV and Section 3.9,
subject to the limitations set forth in Subsection (e) of this
definition, the Employee's "compensation" as such word is
defined in Treas. Reg. Section 1.415-2(d)(10).
(c) for the purposes of the definitions of
"Actual Deferral Percentage" and "Contribution Percentage" in
this Article (except as otherwise provided in such definitions,
and subject to the limitations set forth in Subsection (e) of
this definition, the Employee's "compensation" as such word is
defined in Treas. Reg. Section 1.415-2(d)(10) provided that, in the sole
discretion of the Committee, Compensation may include:
(1) Salary Reduction Contributions and other
amounts excluded from gross income under section 125, 402(a)(8),
402(h) or 403(b) of the Code; and
(2) compensation deferred under an eligible
deferred compensation plan within the meaning of section 457(b)
of the Code; and
(3) employee contributions described in
section 414(h)(2) that are picked up by the employing unit and
thus are treated as employer contributions.
For the purpose of this Subsection (c), the Company may
elect to consider only compensation as defined above for that
portion of the Plan Year or the calendar year ending within the
Plan Year during which the Employee was an Eligible Employee,
provided that this election is applied uniformly to all Eligible
Employees for the Plan Year.
(d) for the purpose of the definition of "Highly
Compensated Employee" in this Article (except as otherwise
provided in such definition), the Employee's "compensation" as
such word is defined in Treas. Reg. Section 1.415-2(d)(10) but including
amounts that are excluded from gross income under section 125,
402(a)(8), 402(h) or 403(b) of the Code.
(e) effective September 1, 1989, with respect to
any Plan Year, only compensation not in excess of the amount to
which the dollar limit of Code section 401(a)(17), as amended,
has been indexed shall be taken into account for purposes of
Subsections (a), (b) and (c) of this definition, except that this
Subsection (e) shall not apply for purposes of Section 3.9. In
determining Compensation for purposes of this limitation, the
rules of section 414(q)(6) of the Code shall apply, except in
applying such rules, the term "family" shall include only the
spouse of the Employee and any lineal descendants who have not
attained Age 19 before the close of the Plan Year. In applying
the rules of section 414(q)(6) of the Code, the limit of this
Subsection (e) shall be allocated among family members in
proportion to their Compensation as defined in Subsection (a)
without regard to this Subsection (e).
"Contribution Percentage" means for any Eligible
Employee for a given Plan Year, the ratio of:
(a) the sum of
(1) such Eligible Employee's Matching
Contributions for the Plan Year (to the extent not included in
such Eligible Employee's Actual Deferral Percentage for such Plan
Year), plus
(2) in the case of any Highly Compensated
Eligible Employee, any employee contributions and employer
matching contributions, including any elective deferrals
recharacterized as employee contributions, under any other
qualified retirement plan, other than an employee stock ownership
plan as defined in section 4975(e)(7) of the Code or a tax credit
employee stock ownership plan as defined in section 409(a) of the
Code, maintained by the Participating Company or any Affiliated
Company, plus
(3) at the election of the Committee, any
portion of the Eligible Employee's Salary Reduction Contributions
for the Plan Year or elective deferrals under any other qualified
retirement plan maintained by a Participating Company or any
Affiliated Company that may be disregarded without causing this
Plan or such other qualified retirement plan to fail to satisfy
the requirements of section 401(k)(3) of the Code and the
regulations issued thereunder; to
(b) The Eligible Employee's Compensation for the
Plan Year or the calendar year ending within the Plan Year.
"Covered Employee" means any Employee who (a) is
employed by a Participating Company, and (b) is not covered by a
collective bargaining agreement, unless such agreement
specifically provides for participation hereunder. An Employee
who is such solely by reason of being a leased employee shall not
be a Covered Employee.
"Effective Date" means September 1, 1987, the effective
date of this amended and restated Plan.
"Eligible Employee" means an Employee who has become an
Eligible Employee as set forth in Section 2.2, and who has
remained a Covered Employee at all times thereafter.
"Employee" means an individual who is employed by a
Participating Company or an Affiliated Company. An individual
who is not otherwise employed by a Participating Company or
Affiliated Company shall be deemed to be employed by such Company
if he is a leased employee with respect to whose services such
Participating Company or Affiliated Company is the recipient
within the meaning of Code section 414(n) or 414(o), but to whom
Code section 414(n)(5) does not apply.
"Employment Commencement Date" means, for any Employee,
the date on which he is first entitled to be credited with an
"Hour of Service" described in Paragraph (a)(1) of the definition
of Hour of Service in this Article.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
"Fixed Income Fund" means a separate fund maintained by
the Trustee prior to March 1, 1990 which provides a fixed rate of
income on amounts transferred by Participants pursuant to Section
12.1.
"Fund" means the fund established for this Plan,
administered under the Trust Agreement, out of which benefits
payable under this Plan shall be paid.
"Highly Compensated Eligible Employee" means an
Eligible Employee who is (or is treated as) a Highly Compensated
Employee.
"Highly Compensated Employee" means an Employee who
during the current Plan Year or the immediately preceding Plan
Year:
(a) was a five-percent owner, as defined in
section 416(i) of the Code;
(b) received more than $75,000 (as indexed) in
Compensation from a Participating Company or an Affiliated
Company;
(c) received more than $50,000 (as indexed) in
Compensation from a Participating Company or an Affiliated
Company and was among the top 20% of Employees of all
Participating Companies and Affiliated Companies ranked by
Compensation (excluding Employees described in section 414(q)(8)
of the Code to the extent (1) permitted under the Code and
regulations thereunder and (2) elected by the Committee, for
purposes of identifying the number of Employees in the top 20%);
or
(d) was among the 50 officers of a Participating
Company or an Affiliated Company (or, if lesser, the greater of 3
or 10% of all Employees, excluding Employees described in section
414(q)(8) of the Code, to the extent (1) permitted under the Code
and regulations thereunder and (2) elected by the Committee for
purposes of identifying the top 20%) and received Compensation of
more than $45,000 (as indexed); provided, however, that, if no
officer has satisfied the compensation requirement described
above during either the current Plan Year or the immediately
preceding Plan Year, the highest paid officer for such year shall
be treated as a Highly Compensated Employee.
Notwithstanding Subsections (b)-(d) of this definition, an
Employee, other than a five-percent owner, who was not a Highly
Compensated Employee in the preceding Plan Year is a Highly
Compensated Employee for the current Plan Year only if he is
among the top 100 Employees of all Participating Companies and
Affiliated Companies ranked by Compensation for the current Plan
Year.
If an Employee is, during the current Plan Year or the
immediately preceding Plan Year, a family member of either a 5
percent owner who is an Employee or a former Employee or a Highly
Compensated Employee who is one of the 10 most highly compensated
Employees ranked by compensation during such year, then the
family member and the 5 percent owner or Highly Compensated
Employee shall be treated as a single Highly Compensated
Employee, and the Compensation and elective deferrals, employee
contributions and employer matching contributions of such family
member and 5 percent owner or Highly Compensated Employee shall
be aggregated in determining the Actual Deferral Percentage and
Contribution Percentage of such "single" Highly Compensated
Employee. For purposes of this definition, "family member" shall
include the spouse, lineal ascendants and descendants of the
Employee or former Employee and the spouse of such lineal
ascendants and descendants.
"Hour of Service" means, for any Employee, a credit
awarded with respect to:
(a) except as provided in (b) or (c),
(1) each hour for which he is directly or
indirectly paid or entitled to payment by a Participating Company
or an Affiliated Company for the performance of employment
duties; or
(2) each hour for which he is entitled,
either by award or agreement, to back pay from a Participating
Company or an Affiliated Company, irrespective of mitigation of
damages; or
(3) each hour for which he is directly or
indirectly paid or entitled to payment by a Participating Company
or an Affiliated Company on account of a period of time during
which no duties are performed due to vacation, holiday, illness,
incapacity (including disability), jury duty, layoff, leave of
absence, or military duty; or
(b) For any period that includes any hours for
which an Hour of Service would otherwise be credited to an
Employee under (a), above, the Committee may, in accordance with
rules applied in a uniform and non-discriminatory manner, elect
instead to credit Hours of Service using one or more of the
following equivalencies:
Basis Upon Which Records Credit Granted to Individual
Are Maintained For Period
shift actual hours for full shift
day 10 Hours of Service
week 45 Hours of Service
semi-monthly period 95 Hours of Service
month 190 Hours of Service
(c) Anything to the contrary in Subsection (a) or
(b) notwithstanding:
(1) No Hours of Service shall be credited to
an Employee for any period merely because, during such period,
payments are made or due him under a plan maintained solely for
the purpose of complying with applicable workers' compensation,
unemployment compensation, or disability insurance laws.
(2) No more than 501 Hours of Service shall
be credited to an Employee under Paragraph (a)(3) of this
definition on account of any single continuous period during
which no duties are performed by him, except to the extent
otherwise provided in the Plan.
(3) No Hours of Service shall be credited to
an Employee with respect to payments solely to reimburse for
medical or medically related expenses.
(4) No Hours of Service shall be credited
twice.
(5) Hours of Service shall be credited at
least as liberally as required by the rules set forth in U.S.
Department of Labor Reg. Section 2530.200b-2(b) and (c).
(6) In the case of an Employee who is such
solely by reason of service as a leased employee within the
meaning of section 414(n) or 414(o) of the Code, Hours of Service
shall be credited as if such Employee were employed and paid with
respect to such service (or with respect to any related absences
or entitlements) by the Participating Company or Affiliated
Company that is the recipient thereof.
"Investment Medium" means any fund, contract,
obligation, or other mode of investment selected by the Committee
to which a Participant may direct the investment of the assets of
his Account.
"Limitation Year" means the Plan Year or such other
12-consecutive-month period as may be designated by the Company.
"Matching Contributions" means, for any Participant,
the sum of his Pre-1994 Matching Contributions and Post-1993
Matching Contributions.
"Normal Retirement Age" means, for any Participant, the
date on which he attains Age 65.
"Normal Retirement Date" means, for any Participant,
the first day of the month coincident with or next following his
attainment of Normal Retirement Age.
"Participant" means an individual for whom one or more
Accounts are maintained under the Plan.
"Participating Company" means the Company and each
other organization which is authorized by the Board of Directors
to adopt this Plan by action of its board of directors or other
governing body.
"Payroll Period" means a weekly, bi-weekly,
semi-monthly, or monthly pay period or such other standard pay
period of the Participating Company applicable to the class of
Employees of which the Eligible Employee is a part.
"Plan" means the Westmoreland Coal Company and
Affiliated Companies Employees' Savings/Retirement Plan, as
renamed effective March 1, 1990 and as formerly known as the
Westmoreland Coal Company and Affiliated Companies Employees'
Stock Purchase Plan, a profit sharing plan, as set forth herein.
"Plan Year" means each 12-consecutive month period that
begins on September 1 and ends on the next following August 31.
"Post-1989 Rollover Contributions" means, for any
Participant, his rollover contributions made after
February 28, 1990 as provided in Section 15.1.
"Post-1993 Matching Contributions" means, for any
Participant, the contributions made by the Company after
November 30, 1993 pursuant to Section 3.4.
"Post-1989 Salary Reduction Contributions" means, for
any Participant, contributions made on his behalf after
February 28, 1990 as provided in Section 3.1(a).
"Pre-1994 Matching Contributions" means, for any
Participant, the Company Stock contributed by the Company prior
to December 1, 1993 pursuant to Section 3.4.
"Pre-1990 Rollover Contributions" means, for any
Participant, his rollover contributions made prior to
March 1, 1990 as provided in Section 15.1.
"Pre-1990 Salary Reduction Contributions" means, for
any Participant, contributions made on his behalf prior to
March 1, 1990 as provided in Section 3.1(a).
"Qualified Domestic Relations Order" means a domestic
relations order (within the meaning of section 414(p)(1)(B) of
the Code) which creates or recognizes the existence of an
Alternate Payee's rights to, or assigns to an Alternate Payee the
right to receive all or a portion of the benefits payable with
respect to a Participant under the Plan, and is determined by the
Committee to satisfy the requirements of section 414(p) of the
Code.
"Quarterly Status Date" means each November 30, last
day of February, May 31, August 31 of any year.
"Required Beginning Date" means, for any Participant,
(a) if he attained Age 70-1/2 before
January 1, 1988, and is not a 5-percent owner (within the meaning
of section 416 of the Code) of a Participating Company at any
time during the five-Plan-Year period ending in the calendar year
in which he attained Age 70-1/2, or thereafter, April 1 of the
calendar year following the later of the calendar year in which
he has a Separation from Service or the calendar year in which he
attained Age 70-1/2;
(b) if he attained Age 70-1/2 before
January 1, 1988, and is a 5-percent owner (within the meaning of
section 416 of the Code) of a Participating Company at any time
during the five-Plan-Year period ending in the calendar year in
which he attained Age 70-1/2, or thereafter, the later of (1)
December 31, 1987 (2) April 1 of the calendar year following the
calendar year in which he attained Age 70-1/2 or (3) April 1 of
the calendar year in which he becomes a 5-percent owner.
(c) if he attained Age 70-1/2 before
January 1, 1989 and after December 31, 1987, is not a 5-percent
owner (within the meaning of section 416 of the Code) of a
Participating Company and has not had a Separation from Service
before January 1, 1989, April 1, 1990;
(d) except as otherwise provided in Subsection
(c), if he attains Age 70-1/2 on or after January 1, 1988,
April 1 of the calendar year next following the calendar year in
which he attains Age 70-1/2.
"Rollover Contributions" means, for any Participant,
the sum of his Pre-1990 Rollover Contributions and his Post-1989
Rollover Contributions.
"Salary Reduction Contributions" means, for any
Participant, the sum of his Pre-1990 Salary Reduction
Contributions and his Post-1989 Salary Reduction Contributions.
"Separation from Service" means, for any Employee, his
death, retirement, resignation, discharge or any absence that
causes him to cease to be an Employee.
"Spouse" means the person to whom a Participant is
married on any date of reference.
"Total Disability" means, with respect to any
Participant:
(a) effective prior to September 1, 1995, a
disability with respect to which he is eligible for and receiving
disability benefits under the Federal Social Security Act and
which: (1) prevents the Participant from engaging in any
substantial gainful activity, (2) can be expected to result in
death or to be of long-continued and indefinite duration, and (3)
is not self-inflicted, including a physical or mental impairment
from the voluntary use of alcohol or narcotics, or the result of
the commission of a crime by the Participant; and
(b) effective after August 31, 1995, a disability
with respect to which he is eligible for and receiving benefits
under a long-term disability program sponsored by a Participating
Company or an Affiliated Company and which can reasonably be
expected to be of long-continued and indefinite duration
rendering him unable to return to work.
"Trust Agreement" means any agreement and declaration
of trust executed under this Plan.
"Trustee" means the corporate trustee or one or more
individuals collectively appointed and acting under the Trust
Agreement.
"Valuation Date" means, prior to March 1, 1995, each
Quarterly Status Date and each interim date on which the
Committee determines that a valuation of the Fund shall be made.
Effective after February 28, 1995, "Valuation Date" means, for
any Investment Medium, each business day, except for such
business days on which Dreyfus Retirement Services, or its
successor, determines that a valuation of such Investment Medium
shall not be made.
"Voluntary Contributions" means a Participant's
voluntary contributions made prior to June 1, 1984 pursuant to
the Plan as in effect at such time.
ARTICLE II
TRANSITION AND ELIGIBILITY TO PARTICIPATE
.1 Rights Affected and Preservation of Accrued Benefit. Except
as provided to the contrary herein, the provisions of this
amended and restated Plan shall apply only to Employees who
complete an Hour of Service on or after the Effective Date. The
rights of any other individual shall be governed by the Plan as
in effect upon his Separation from Service, except to the extent
expressly provided in any amendment adopted subsequently thereto.
.2 Eligibility to Participate - Salary Reduction
Contributions.
(a) Each Covered Employee as of the Effective
Date who was eligible to participate in the Plan immediately
prior to the Effective Date shall continue to be an Eligible
Employee as of the Effective Date.
(b) Each Covered Employee who was not eligible to
participate immediately prior to the Effective Date shall become
an Eligible Employee upon the first day of the month following
the date he is credited with 1,000 or more Hours of Service if he
is then a Covered Employee.
(c) If an individual is not a Covered Employee on
the date he would otherwise become an Eligible Employee pursuant
to Subsection (b) of this Section, he shall become an Eligible
Employee as of the first date thereafter on which he is a Covered
Employee.
(d) An Eligible Employee who ceases to be a
Covered Employee, by Separation from Service or otherwise, and
who later becomes a Covered Employee, shall become an Eligible
Employee as of the date on which he first again completes an Hour
of Service as a Covered Employee.
.1 Election to Make Salary Reduction Contributions. Each
Eligible Employee may elect to make Salary Reduction
Contributions and become an Active Participant by filing a
written notice of such election with the Committee on such form
provided for that purpose. Such notice shall authorize the
Participating Company to reduce such Eligible Employee's
Compensation by an amount determined in accordance with Section
3.1 and to make Salary Reduction Contributions on such Eligible
Employee's behalf in the amount of such reduction. Such election
shall become effective as soon as administratively possible, but
no sooner than the first day of the Payroll Period next following
receipt of the election by the Committee.
.2 Participation in Matching Contributions. An Eligible
Employee shall share in Matching Contributions under Section 3.4
for any Plan Year if Salary Reduction Contributions are made on
his behalf in such Plan Year.
.3 Data. Each Employee shall furnish to the Committee
such data as the Committee may consider necessary for the
determination of the Employee's rights and benefits under the
Plan and shall otherwise cooperate fully with the Committee in
the administration of the Plan.
ARTICLE III
CONTRIBUTIONS TO THE PLAN
.3 Salary Reduction Contributions.
(a) When an Eligible Employee files an election
under Section 2.3 to have Salary Reduction Contributions made on
his behalf, he shall elect the percentage by which his
Compensation shall be reduced on account of such Salary Reduction
Contributions. Effective prior to March 1, 1995, subject to
Section 3.9, this percentage may be between one percent (1%) and
ten percent (10%) of such Compensation, rounded to the nearer
whole percent. Effective after February 28, 1995, subject to
Section 3.9, this percentage may be between one percent (1%) and
fifteen percent (15%) of such Compensation, rounded to the nearer
whole percent. The Participating Company shall contribute an
amount equal to such percentage of the Eligible Employee's
Compensation to the Fund for credit to the Eligible Employee's
Salary Reduction Account provided that such contributions may be
prospectively limited as provided in Section 3.8.
(b) Salary Reduction Contributions made on behalf
of an Eligible Employee under this Plan together with elective
deferrals under any other plan or arrangement maintained by any
Participating Company or Affiliated Company shall not exceed
$7,000 (as indexed) (as adjusted in accordance with section
402(g) of the Code and regulations thereunder) for any calendar
year. To the extent necessary to satisfy this limitation for any
year:
(1) elections under Subsection (a) of this
Section shall be prospectively restricted; and,
(2) after application of Subparagraph (1),
the excess Salary Reduction Contributions and excess elective
deferrals under any other plan or arrangement maintained by any
Participating Company or Affiliated Company (with earnings
thereon, but reduced by any amounts previously distributed under
Subsection (a) of Section 3.8 for the year) shall be paid to the
Participant on or before the April 15 first following the
calendar year in which such contributions were made.
If the Salary Reduction Contributions plus elective deferrals
described above do not exceed such limitation, but Salary
Reduction Contributions, plus the elective deferrals, as defined
in section 402(g)(3) of the Code, under any other plan for any
Participant exceed such limitation for any calendar year, upon
the written request of the Participant made on or before the
March 1 first following such calendar year, the excess, including
any earnings attributable thereto, designated by the Participant
to be distributed from the Plan shall be paid to the Participant
on or before the April 15 first following such calendar year.
.4 Change of Percentage Rate. A Participant may without
penalty change the percentage of Compensation designated by him
as his contribution rate under Subsection (a) of Section 3.1, to
any percentage permitted by such Subsection, and such percentage
shall remain in effect until so changed. Effective prior to
March 1, 1995, any such change shall become effective as of the
September 1, December 1, March 1 or June 1 next following receipt
of the change by the Committee, provided that the Committee
receives written notice of such change by the fifteenth day of
the month prior to the effective date of the change. Effective
after February 28, 1995, a Participant may change the percentage
of Compensation designated by him as his contribution rate under
Subsection (a) of Section 3.1 on any day of a calendar month,
provided that only one change may be made in any calendar month.
Such change shall become effective as soon as administratively
possible, but no sooner than the first day of the Payroll Period
next following receipt of notice of the change by the Committee.
.5 Discontinuance of Salary Reduction Contributions. A
Participant may discontinue his Salary Reduction Contributions at
any time.
(a) Effective prior to March 1, 1995,
such discontinuance shall become effective as of the first day of
the Payroll Period next following receipt of the discontinuance
by the Committee, provided that the Committee receives written
notice of the discontinuance at least 15 days prior to the first
day of such Payroll Period. A Participant who discontinues his
Salary Reduction Contributions prior to March 1, 1995 may not
resume his Salary Reduction Contributions until the first day of
the Payroll Period after any Quarterly Status Date that follows a
3-month period of suspension of Salary Reduction Contributions.
(b) Effective after February 28, 1995, a
discontinuance of Salary Reduction Contributions shall become
effective as soon as administratively feasible but no sooner than
the first day of the Payroll Period next following receipt of
notice of the change by the Committee. A Participant who
discontinues his Salary Reduction Contributions after
February 28, 1995 may not resume his Salary Reduction
Contributions until the first day of the Payroll Period following
the first day of any calendar month.
.6 Matching Contribution.
(a) Subject to Sections 3.7 and 3.9, the
Participating Company shall contribute the following amounts to
the Fund which shall be invested as provided in Subsections (b)
and (c) of this Section:
(1) for any Payroll Period beginning before
September 1, 1988, an amount equal to one hundred percent (100%)
of all Participants' Salary Reduction Contributions for such Plan
Year, offset by the amount, if any, of Matching Contributions
forfeited during such Plan Year, provided that such contributions
may be prospectively limited as provided in Section 3.8 and
provided further that the contribution under this Section for any
Plan Year shall not cause the total contributions by the
Participating Company to exceed the maximum allowable current
deduction under the applicable provisions of the Code. Matching
Contributions shall be credited to the Matching Contribution
Accounts of Participants in proportion to their Salary Reduction
Contributions for the Plan Year; and
(2) for any Payroll Period beginning on or
after September 1, 1988, an amount equal to fifty percent (50%)
of all Participants' Salary Reduction Contributions for such Plan
Year not in excess of five percent (5%) of each Eligible
Employee's Compensation, offset by the amount, if any, of
Matching Contributions forfeited during such Plan Year, provided
that such contributions may be prospectively limited as provided
in Section 3.8 and provided further that the contribution under
this Section for any Plan Year shall not cause the total
contributions by the Participating Company to exceed the maximum
allowable current deduction under the applicable provisions of
the Code. Matching Contributions shall be credited to the
Matching Contribution Accounts of Participants in proportion to
their Salary Reduction Contributions for the Plan Year not in
excess of five percent (5%) of each Eligible Employee's
Compensation.
(b) Pre-1994 Matching Contributions shall be
invested in common stock of the Company; except that, effective
with respect to Pre-1994 Matching Contributions allocated to a
Participant's Account after February 28, 1993, a Participant may
elect, effective as of any March 1, June 1, September 1 or
December 1, in such manner as the Committee may prescribe for
this purpose, to have Pre-1994 Matching Contributions allocated
to his Account in any Plan Year quarter invested in either common
or preferred stock of the Company; provided, that, (1) the
Participant elects to have the entire amount of Pre-1994 Matching
Contributions allocated to his Account in any Plan Year quarter
invested in either common or preferred stock of the Company, and
(2) such election may not be subsequently modified or revoked by
the Participant until the Participant attains Age 55 and directs
the investment of Company Stock in accordance with Section 12.1
and (3) the Committee receives such election on or before the
fifteenth day of the month preceding such March 1, June 1,
September 1 or December 1.
(c) Post-1993 Matching Contributions allocated to
a Participant's Account shall be invested in any Investment
Medium selected by the Participant in accordance with Section
12.2.
.1 Timing and Deductibility of Contributions. Matching
Contributions for any Plan Year under this Article shall be made
no later than the last date on which amounts so paid may be
deducted for Federal income tax purposes for the taxable year of
the employer in which the Plan Year ends. All Participating
Company contributions are expressly conditioned upon their
deductibility for Federal income tax purposes. Amounts
contributed as Salary Reduction Contributions or Rollover
Contributions will be remitted to the Trustee as soon as
practicable, but no later than 90 days after the date on which
such contributions were received or withheld from the
Participant's Compensation.
.2 Fund. The contributions deposited by the Participating
Company in the Fund in accordance with this Article shall
constitute a fund held for the benefit of Participants and their
eligible beneficiaries under and in accordance with this Plan.
No part of the principal or income of the Fund shall be used for,
or diverted to, purposes other than for the exclusive benefit of
such Participants and their eligible beneficiaries (including
necessary administrative costs); provided, that in the case of a
contribution made by the Participating Company as a mistake of
fact, or for which a tax deduction is disallowed, in whole or in
part, by the Internal Revenue Service, the Participating Company
shall be entitled to a refund of said contributions, which must
be made within one year after payment of a contribution made as a
mistake of fact, or within one year after disallowance.
.3 Limitation on Salary Reduction Contributions and
Matching Contributions.
(a) For any Plan Year, the Average Actual
Deferral Percentage for the Highly Compensated Eligible Employees
shall not exceed the greater of:
(1) one hundred twenty-five percent (125%)
of the Average Actual Deferral Percentage for all other Eligible
Employees; or
(2) the lesser of:
(A) two hundred percent (200%) of the
Average Actual Deferral Percentage for all other Eligible
Employees; or
(B) two percent (2%) plus the Average
Actual Deferral Percentage for all other Eligible Employees.
(b) For any Plan Year, the Average Contribution
Percentage for the Highly Compensated Eligible Employees shall not
exceed the greater of:
(1) one hundred twenty-five (125%) of the
Average Contribution Percentage for all other Eligible Employees;
or
(2) the lesser of:
(A) two hundred percent (200%) of the
Average Contribution Percentage for all other Eligible Employees;
or
(B) two percent (2%) plus the Average
Contribution Percentage for all other Eligible Employees.
(c) For any Plan Year beginning after
December 31, 1988, the sum of the Average Actual Deferral
Percentage and the Average Contribution Percentage for the Highly
Compensated Eligible Employees shall not exceed the greater of:
(1) the sum of:
(A) one hundred twenty-five percent
(125%) of the greater of the Average Actual Deferral Percentage
or the Average Contribution Percentage for all other Eligible
Employees; plus
(B) the lesser of:
(i) two hundred percent (200%) of
the lesser of the Average Actual Deferral Percentage or the
Average Contribution Percentage for all other Eligible Employees;
or
(ii) two percent (2%) plus the
lesser of the Average Actual Deferral Percentage or the Average
Contribution Percentage for all other Eligible Employees; or
(2) the sum of:
(A) one hundred twenty-five percent
(125%) of the lesser of the Average Actual Deferral Percentage or
the Average Contribution Percentage for all other Eligible
Employees; plus
(B) the lesser of:
(i) two hundred percent (200%) of
the greater of the Average Actual Deferral Percentage or the
Average Contribution Percentage for all other Eligible Employees;
or
(ii) two percent (2%) plus the
greater of the Average Actual Deferral Percentage or the Average
Contribution Percentage for all other Eligible Employees.
(d) For purposes of this Section, the Salary
Reduction Contributions and Matching Contributions, respectively,
of any 5% owner or other Highly Compensated Employee who is one
of the top 10 Employees ranked by pay (without regard to this
sentence) for the Plan Year or the preceding Plan Year shall be
increased by the amount of the Salary Reduction Contributions and
Matching Contributions, respectively of any Employee who is a
spouse or lineal ascendant or descendant (or a spouse thereof)
("family member") of such Highly Compensated Employee, and the
Compensation of the former shall be increased by the Compensation
of the latter, and such family member and such Highly Compensated
Employee shall be treated as a single Highly Compensated Eligible
Employee and such family member shall not be treated as a
separate Eligible Employee for purposes of applying this Section.
The application of this Subsection (d) and the determination of
the Actual Deferral Percentage and Contribution Percentage of
such single Highly Compensated Eligible Employee shall be made in
accordance with sections 414(q), 401(k) and 401(m) of the Code
and regulations thereunder.
(e) If the Plan and any other plan(s) maintained
by a Participating Company or an Affiliated Company are treated
as a single plan for purposes of section 401(a)(4) or section
410(b) of the Code, the limitations in Subsections (a) through
(d) of this Section shall be applied by treating the Plan and
such other plan(s) as a single plan.
(f) The application of this Section shall satisfy
sections 401(k) and 401(m) of the Code and regulations thereunder
and such other requirements as may be prescribed by the Secretary
of the Treasury.
.7 Prevention of Violation of Limitation on Salary Reduction
Contributions and Matching Contributions. The Committee shall
monitor the level of Participants' Salary Reduction Contributions
and Matching Contributions and elective deferrals, employee
contributions, and employer matching contributions under any
other qualified retirement plan maintained by a Participating
Company or any Affiliated Company to insure against exceeding the
limits of Section 3.7. To the extent practicable, the Plan
Administrator may prospectively limit (i) some or all of the
Highly Compensated Eligible Employees' Salary Reduction
Contributions to reduce the Average Actual Deferral Percentage of
the Highly Compensated Eligible Employees to the extent necessary
to satisfy subsection (a) of Section 3.7 and/or (ii) some or all
of the Highly Compensated Eligible Employees' Matching
Contributions to reduce the Average Contribution Percentage of
the Highly Compensated Eligible Employees to the extent necessary
to satisfy subsection (b) of Section 3.7 and/or (iii) some or all
of the Highly Compensated Eligible Employees' Salary Reduction
Contributions, and Matching Contributions to the extent necessary
to satisfy subsection (c) of Section 3.7. If the Committee
determines after the end of the Plan Year that the limits of
Section 3.7 may be or have been exceeded, it shall take the
appropriate following action for such Plan Year:
(a) (1) The Average Actual Deferral Percentage
for the Highly Compensated Eligible Employees shall be reduced to
the extent necessary to satisfy Subsection (a) of Section 3.7.
(2) The reduction shall be accomplished by reducing
the maximum Actual Deferral Percentage for any Highly Compensated
Eligible Employee to an adjusted maximum Actual Deferral Percentage,
which shall be the highest Actual Deferral Percentage that would
cause one of the tests in Subsection 3.7(a) to be satisfied, if each Highly
Compensated Eligible Employee with a higher Actual Deferral Percentage
had instead the adjusted maximum Actual Deferral Percentage, reducing
the Highly Compensated Eligible Employee's Salary Reduction Contributions
and elective deferrals under any other qualified retirement plan
maintained by the Participating Company or any Affiliated Company
(less any amounts previously distributed under Section 3.1 for the
year) in order, beginning with the Highly Compensated Eligible Employee(s)
with the highest Actual Deferral Percentage; provided, however,
that excess contributions shall be allocated to Eligible Employees
who are subject to the family member aggregation rules of section
414(q)(6) of the Code in the manner prescribed by regulations.
(3) Not later than the end of the Plan Year
following the close of the Plan Year for which the Salary
Reduction Contributions were made, the difference between a
Highly Compensated Eligible Employee's Actual Deferral Percentage
and the Highly Compensated Eligible Employee's adjusted maximum
Actual Deferral Percentage, at the Committee's direction, shall
be paid to the Highly Compensated Eligible Employee, with
earnings attributable thereto (as determined in accordance with
applicable Treasury Regulations); provided, however, that for any
Participant who is also a participant in any other qualified
retirement plan maintained by the Participating Company or any
Affiliated Company under which the Participant makes elective
deferrals for such year, the Committee shall coordinate
corrective actions under this Plan and such other plan for the
year.
(b) (1) The Average Contribution Percentage for
the Highly Compensated Eligible Employees shall be reduced to the
extent necessary to satisfy at least one of the tests in
Subsection (b) of Section 3.7.
(2) The reduction shall be accomplished by
reducing the maximum Contribution Percentage for any Highly
Compensated Eligible Employee to an adjusted maximum Contribution
Percentage, which shall be the highest Contribution Percentage
that would cause one of the tests in Section 3.7(b) to be
satisfied, if each Highly Compensated Eligible Employee with a
higher Contribution Percentage had instead the adjusted maximum
Contribution Percentage, reducing, in the following order of
priority, the Highly Compensated Eligible Employees' Matching
Contributions and employee contributions and employer matching
contributions under any other qualified retirement plan
maintained by the Participating Company or an Affiliated Company,
in order beginning with the Highly Compensated Eligible
Employee(s) with the highest Contribution Percentage; provided,
however, that excess contributions shall be allocated to Eligible
Employees who are subject to the family member aggregation rules
of section 414(q)(6) of the Code in the manner prescribed in
regulations.
(3) Not later than the end of the Plan Year
following the close of the Plan Year for which such contributions
were made, the difference between a Highly Compensated Eligible
Employee's Contribution Percentage and the Highly Compensated
Eligible Employee's adjusted maximum Contribution Percentage,
with earnings attributable thereto (as determined in accordance
with applicable Treasury Regulations), at the Committee's
direction, shall be paid to the Highly Compensated Eligible
Employee;
provided, however, that, for any Participant who is also a
participant in any other qualified retirement plan maintained by
the Participating Company or any Affiliated Company under which
the Participant makes employee contributions or is credited with
employer matching contributions for the year, the Committee shall
coordinate corrective actions under this Plan and such other plan
for the year.
(c) (1) The Average Contribution Percentage
and/or the Average Actual Deferral Percentage (as determined
under Subparagraph (2) below) for the Highly Compensated Eligible
Employees shall be reduced to satisfy the test in Subsection (c)
of Section 3.7 in a manner and to the extent determined by the
Committee.
(2) The reductions shall be accomplished in
the same manner as is set forth in Subsections (a) and (b) of
Section 3.8, whichever is appropriate. A reduction to the
Average Actual Deferral Percentage shall be charged against the
appropriate Highly Compensated Eligible Employees' Salary
Reduction Accounts. A reduction to the Average Contribution
Percentage shall be charged against the appropriate Highly
Compensated Eligible Employees' Matching Contribution Accounts.
Notwithstanding the foregoing, for any Participant who is also a
participant in any other qualified retirement plan maintained by
a Participating Company or any Affiliated Company under which the
Participant makes employee contributions or elective deferrals or
is credited with employer matching contributions for such year,
the Committee shall coordinate corrective actions under this Plan
and such other plan for the year.
(d) Effective September 1, 1988, if the
corrective payment to a Highly Compensated Eligible Employee of
his Salary Reduction Contributions pursuant to Paragraph (a)(3)
causes Matching Contributions made on his behalf for the Plan
Year (excluding such Matching Contributions that were paid to the
Participant pursuant to Subsection (b)(2) or Subsection (c) of
this Section) to exceed five percent (5%) of his remaining Salary
Reduction Contributions for the Plan Year, the Matching
Contributions in excess of five percent (5%) of his Salary
Reduction Contributions for the Plan Year that were not
distributed to him shall be forfeited, and used to offset future
Matching Contributions.
(e) If the Plan and any other plan maintained by
a Participating Company or an Affiliated Company are treated as a
single plan pursuant to Subsection (e) of Section 3.7, the
Committee shall coordinate corrective actions under the Plan and
such other plan for the year.
.8 Maximum Allocation. The provisions of this Section shall be
construed to comply with section 415 of the Code.
(a) Notwithstanding anything in this Plan to the
contrary, in no event shall the sum of:
(1) any Matching Contributions, Salary
Reduction Contributions and other employer contributions; any
forfeitures, and any employee contributions allocated for any
Limitation Year to any Participant (including any such amounts
distributed pursuant to Section 3.8 but not amounts distributed
pursuant to Subsection (b) (c) of Section 3.1) under this and any
other defined contribution plan maintained by the Participating
Company or any 50% Affiliated Company; and
(2) all amounts allocated to any Participant
after March 31, 1984 to an individual medical account (within the
meaning of Code section 415(l)(2)) which is part of a pension or
annuity plan maintained by a Participating Company or any 50%
Affiliated Company; and
(3) all amounts derived from contributions
paid or accrued after December 31, 1985, in taxable years ending
after such date which are attributable to post-retirement medical
benefits allocated to a separate account of a Participant who is
a key employee, as defined in section 419A(d)(3) of the Code,
under a welfare benefit fund maintained by a Participating
Company or any 50% Affiliated Company;
exceed the lesser of $30,000, (or such other dollar limitation in
effect for the Limitation Year under section 415(c)(1)(A) of the
Code) or twenty-five percent (25%) of such Participant's
Compensation for the Limitation Year. The 25% Compensation
limitation shall not apply to any contribution for medical
benefits (within the meaning of section 401(h) or 419A(f)(2) of
the Code) which is otherwise treated as an annual addition under
section 415(l)(1) or 419A(d)(2) of the Code.
(b) If the amount otherwise allocable to the
Account of a Participant would exceed the amount described in
Subsection (a) of this Section as a result of the reallocation of
forfeitures, a reasonable error in estimating the Participant's
Compensation, a reasonable error in determining the amount of
Salary Reduction Contributions that may be made with respect to a
Participant under the limits of this Section or such other
circumstances as permitted by law, the Committee shall determine
which portion, if any, of such excess amount is attributable to
the Participant's Salary Reduction Contributions, and/or Matching
Contributions until such amount has been exhausted, and shall
take the following appropriate steps to correct such violation:
(1) Excess Salary Reduction Contributions
and earnings thereon shall be paid to the Participant as soon as
is administratively feasible.
(2) (A) While the Participant remains a
Covered Employee, his excess Matching Contributions shall be held
in a suspense account (which shall share in investment gains and
losses of the Fund) by the Trustee until the following Plan Year
(or any succeeding Plan Years), at which time such amounts shall
be allocated to the Participant's Account before any Matching
Contributions are made on his behalf for such Plan Year; and
(B) When the Participant ceases to be a
Covered Employee, his excess Matching Contributions, along with
earnings thereon, held in the suspense account shall be allocated
in the following Plan Year (or any succeeding Plan Years) to the
Accounts of other Participants in the Plan.
(c) If, in any Limitation Year, a Participant in
this Plan is also a participant in one or more defined benefit
plans maintained by the Participating Company or any 50%
Affiliated Company, the projected annual benefit referred to in
Paragraph (c)(1) shall be reduced, if necessary, so that the sum
of the fractions described in (1) and (2) does not exceed 1.0 for
such Limitation Year.
(1) Defined Benefit Fraction - a fraction,
the numerator of which is the Participant's projected annual
benefit under all such defined benefit pension plans determined
as of the close of the limitation years of such plans, and the
denominator of which is the lesser of:
(A) 1.25 x $90,000 (or such other
dollar limitation determined for the Limitation Year under
section 415(b)(1)(A) of the Code); or
(B) one hundred forty percent (140%) of
the Participant's highest average Compensation over any three
consecutive calendar years;
provided, however, that the denominator of the defined benefit
fraction shall be determined after taking into account any
adjustments to the dollar limit described in Subparagraph (A) or
to the compensation limit described in Subparagraph (B)
prescribed by sections 415(b) or 415(d) of the Code, as
appropriate. For the purpose of this Paragraph (1), "projected
annual benefit" means the annual benefit to which a Participant
would be entitled under the terms of a defined benefit plan if he
had continued employment until his normal retirement date under
such plan and if his compensation counted for the purpose of such
plan had continued at the same rate.
(2) Defined Contribution Fraction - a
fraction, the numerator of which is the sum of the annual
additions to the Participant's accounts under all defined
contribution plans sponsored by the Participating Company or any
50% Affiliated Company for all limitation years, and the
denominator of which is the sum of the lesser of the following
amounts, determined for each of such limitation years and for
each prior limitation year of service with the Participating
Company or 50% Affiliated Company:
(A) 1.25 x $30,000 (or such other
dollar limitation in effect for the Limitation Year under section
415(c)(1)(A) of the Code); or
(B) thirty-five percent (35%) of the
Participant's Compensation for such limitation year.
(d) If the Plan and the defined benefit plan
referred to in Paragraph (c)(1) satisfied section 415 of the Code
for the Plan Year ending December 31, 1986, an amount shall be
subtracted from the numerator of the fraction described in
Paragraph (c)(2) (not exceeding such numerator). The amount to
be subtracted shall be the product of:
(1) the sum of the defined contribution
fraction under Paragraph (c)(2) plus the defined benefit fraction
under Paragraph (c)(1) as of December 31, 1986 minus one,
multiplied by
(2) the denominator of the defined
contribution fraction under Paragraph (c)(2) as of
December 31, 1986.
(e) To the extent that any qualified defined
contribution plan was in existence on July 1, 1982, the Committee
may elect to apply Paragraph (c)(2) of this Section with respect
to any Limitation Year ending after December 31, 1982 by
calculating the denominator under Paragraph (c)(2) using an
alternate amount for all Limitation Years ending before
January 1, 1983. The alternate amount shall be equal to the
amount determined for the denominator under Paragraph (c)(2) as
in effect for the Limitation Year ending in 1982 multiplied by a
fraction, the numerator of which is the lesser of $51,875 or
thirty-five percent (35%) of the Participant's Compensation for
the Limitation Year ending in 1981, and the denominator of which
is the lesser of $41,500 or twenty-five percent (25%) of the
Participant's Compensation for the Plan Year ending in 1981.
ARTICLE IV
PARTICIPANTS' ACCOUNTS
.1 Accounts. All contributions and earnings thereon may be
invested in one commingled Fund for the benefit of all
Participants. However, in order that the interest of each
Participant may be accurately determined and computed, separate
Accounts shall be maintained for each Participant and each
Participant's Accounts shall be made up of subaccounts reflecting
his investment elections pursuant to Article XII. These Accounts
shall represent the Participant's individual interest in the
Fund. All contributions shall be credited to Participants'
Accounts as set forth in Article III.
.2 Valuation. The value of each Investment Medium in the
Fund shall be computed by the Trustee as of the close of business
on each Valuation Date on the basis of the fair market value of
the assets of the Fund.
.3 Apportionment of Gain or Loss. The value of the Fund
each Investment Medium in the Fund, as computed pursuant to
Section 4.2, shall be compared with the value of such Investment
Medium in the Fund as of the preceding Valuation Date. Any
difference in the value, not including contributions or
distributions made since the preceding Valuation Date, shall be
the net increase or decrease of such Investment Medium in the
Fund, and such amount shall be ratably apportioned by the Trustee
on its books, among the Participants' Accounts which are invested
in such Investment Medium at the current Valuation Date.
.4 Accounting for Allocations. The Committee shall
establish or provide for the establishment of accounting
procedures for the purpose of making the allocations, valuations
and adjustments to Participants' Accounts provided for in this
Article. From time to time such procedures may be modified for
the purpose of achieving equitable and non-discriminatory
allocations among the Accounts of Participants in accordance with
the general concepts of the Plan and the provisions of this
Article.
4.5 Statement of Account. As soon as reasonably
practicable following each Quarterly Status Date, the Trustee
shall provide each Participant with a statement of his Account
for the preceding Plan Year quarter.
ARTICLE V
DISTRIBUTION
.1 General. The interest of each Participant in the Fund shall
be distributed in the manner, in the amount, and at the time
provided in this Article, except as provided in Article VIII and
except in the event of the termination of the Plan. The
provisions of this Article shall be construed in accordance with
section 401(a)(9) of the Code and regulations thereunder,
including, effective for distributions that commence on or after
January 1, 1989, the incidental death benefit requirements of
section 401(a)(9)(G) of the Code.
.2 Separation from Service. A Participant who has a
Separation from Service for reasons other than death or Total
Disability shall have his interest in his Account paid to him or
applied for his benefit in accordance with the provisions of this
Article.
.3 Death. If a Participant dies before his entire interest in
his Account has been paid to him, his remaining interest shall be
paid to, or applied for the benefit of, his beneficiary in
accordance with the provisions of this Article.
.4 Total Disability.
(a) Effective prior to September 1, 1995, if a
Participant who is an Employee suffers a Total Disability, has a
Separation from Service due to his Total Disability, and remains
Totally Disabled for a period of 6 consecutive months, his
Account shall be paid to him or applied for his benefit in
accordance with the provisions of this Article following the
determination of his Total Disability and his Separation from
Service.
(b) Effective after August 31, 1995, if a
Participant who is an Employee suffers a Total Disability, his
Account shall be paid to him or applied for his benefit in
accordance with the provisions of this Article following the
determination of his Total Disability.
(c) Total Disability shall be determined by the
Committee, which may consult with a medical examiner selected by
it. The medical examiner shall have the right to make such
physical examinations and other investigations as may be
reasonably required to determine Total Disability.
.1 Valuation for Distribution. For the purposes of paying the
amounts to be distributed to a Participant or his beneficiaries
under the provisions of this Article, the value of the Fund and
the amount of the Participant's interest shall be determined in
accordance with the provisions of Article IV as of the Valuation
Date coincident with or immediately preceding the date of any
payment under this Article. Such amount shall be adjusted to
take into account any additional contributions and forfeitures,
if any, which have been or are to be allocated to the
Participant's Account since that Valuation Date, and any
distributions or withdrawals made since that date.
Notwithstanding the above, the Participants' Account shall
be reduced by the amount necessary to repay any outstanding loan
from the Plan and interest thereon to the date the Committee
declares such loan satisfied, unless such loan is repaid as
provided in Section 9.4(e).
.2 Timing of Distribution.
(a) Any Participant who has a Separation from
Service for any reason other than death shall be entitled to
receive his interest in his Account, pursuant to the following
rules:
(1) Except as provided in Paragraph (a)(2),
if the Participant's interest in his Account is $3,500 or less,
or the Participant has attained Normal Retirement Age, the
Participant's Benefit Commencement Date shall be the earliest
practicable date following the Valuation Date coincident with or
next following his Separation from Service.
(2) If the Participant has not attained
Normal Retirement Age and his interest exceeds, or has ever
exceeded at the time of any prior distribution, $3,500, his
Benefit Commencement Date shall be the earliest practicable date
following the Valuation Date coincident with or next following
his Separation from Service, except that, if the Participant does
not consent to such distribution, distribution of his benefits
shall commence on any later date elected by the Participant, that
is not later than his Normal Retirement Date, at which time his
interest shall be automatically paid to him, unless the
Participant elects to defer payment to a date not later than his
Required Beginning Date in accordance with Paragraph (a)(4). A
Participant's election to receive payment prior to his Normal
Retirement Date may be made no earlier than 90 days prior to the
Benefit Commencement Date elected by the Participant.
(3) The Committee shall inform each
Participant who is subject to this Paragraph (a)(2) of his right
to defer distribution. Such notice shall be furnished not less
than 30 days nor more than 90 days prior to the date of any
distribution that occurs prior his Normal Retirement Date, except
that such notice may be furnished less than 30 days prior to the
date of distribution if (A) the Committee informs the Participant
that the Participant has the right to a period of at least 30
days after receiving such notice to consider the decision whether
to elect a distribution and the mode in which he desires such
distribution to be made, and (B) the Participant, after receiving
such notice, affirmatively elects a distribution.
(4) Notwithstanding the foregoing, the
Participant's Benefit Commencement Date shall be no later than
the 60th day following the close of the Plan Year in which the
Participant attains his Normal Retirement Age or has a Separation
from Service, whichever occurs last, unless the Participant
elects in writing on a form supplied by the Committee to defer
his Benefit Commencement Date to a later date. In no event,
however, shall a Participant's Benefit Commencement Date be later
than his Required Beginning Date, except pursuant to a valid
deferral election filed by the Participant with the Committee
before January 1, 1984. In the event the Participant defaults on
an outstanding loan such that the unpaid balance becomes due and
payable pursuant to Article IX and the Participant fails to repay
the loan in accordance with Section 9.4(e), that portion of the
Participant's Account pledged as security for the loan shall be
applied to repay the loan and shall be deemed distributed to the
Participant within 60 days of the default; in which case, the
Participant may defer commencement of the balance of his Account
as described above.
(b) If a Participant dies before his entire
interest in his Account has been paid to him, his remaining
interest shall be distributed to his beneficiary commencing as
soon as practicable following the Participant's death.
(c) This Section shall apply to all Participants,
including Participants who had a Separation from Service or
ceased to be Covered Employees prior to January 1, 1989.
.1 Mode of Distribution.
(a) If a Participant's interest under the Plan as
of his Separation from Service or death, whichever applies, does
not exceed $3,500, his interest shall be paid to him, or benefits
payable under Section 5.3 upon the death of a Participant shall
be distributed to his beneficiary, in a single sum.
(b) Except as provided to the contrary in
Subsection (a), a Participant or a beneficiary entitled to
benefits under Section 5.3 upon the death of a Participant may
elect in writing to have the Participant's interest paid in
accordance with either of the following modes of payment;
(1) a single sum payment; or
(2) an annuity contract meeting the
requirements of section 401(g) of the Code, purchased by the
Trustee at the direction of the Committee from an insurance
company licensed to do business in the state in which the
principal place of business of the Company is located, providing
payments for a term of five years, 10 years or 15 years, as
elected by the Participant or beneficiary in accordance with
rules established by the Committee for this purpose. A
Participant may not elect a term which is longer than his life
expectancy at the date distributions begin. All payment of
benefits under the annuity contract to a beneficiary shall be
completed within five years from the Participant's date of death.
(c) Benefits payable in a single sum under this
Section 5.7 shall be made in cash; except, to the extent that any
portion of the Participant's Account is invested in Company
Stock, distribution of that portion of his Account shall be made
as follows:
(1) distribution with respect to a
Participant who has fewer than 10 shares of Company Stock
allocated to his Account shall be made in cash unless the
Participant files a written request with the Committee directing
that the distribution be made in Company Stock, in which event
such request shall be honored; and
(2) distribution with respect to a
Participant who has 10 or more shares of Company Stock allocated
to his Account shall be made in shares of Company Stock or in
cash as elected by the Participant or beneficiary pursuant to a
procedure established by the Committee.
(d) If a Participant or beneficiary fails to make
an election under Subsection (b), the value of his or her Account
shall be distributed as a single sum payment.
.1 Beneficiary Designation.
(a) Except as provided in this Section, a
Participant may designate the beneficiary or beneficiaries who
shall receive, on or after his death, his interest in the Fund.
Such designation shall be made by executing and filing with the
Committee a written instrument in such form as may be prescribed
by the Committee for that purpose. Except as provided in this
Section, the Participant may also revoke or change, at any time
and from time to time, any beneficiary designations previously
made. Such revocations and/or changes shall be made by executing
and filing with the Committee a written instrument in such form
as may be prescribed by the Committee for that purpose. If a
Participant names a trust as beneficiary, a change in the
identity of the trustees or in the instrument governing such
trust shall not be deemed a change in beneficiary.
(b) No designation, revocation, or change of
beneficiaries shall be valid and effective unless and until filed
with the Committee.
(c) A Participant who does not establish to the
satisfaction of the Committee that he has no spouse may not
designate someone other than his spouse to be his beneficiary
unless:
(1) (A) such spouse (or the spouse's legal
guardian if the spouse is legally incompetent) executes a written
instrument whereby such spouse consents not to receive such
benefit and consents either:
(i) to the specific beneficiary or
beneficiaries designated by the Participant; or
(ii) to the Participant's right to
designate any beneficiary without further consent by the spouse;
(B) such instrument acknowledges the
effect of the election to which the spouse's consent is being
given; and
(C) such instrument is witnessed by a
Plan representative or notary public;
(2) the Participant:
(A) establishes to the satisfaction of
the Committee that his spouse cannot be located; or
(B) furnishes a court order to the
Committee establishing that the Participant is legally separated
or has been abandoned (within the meaning of local law), unless a
qualified domestic relations order pertaining to such Participant
provides that the spouse's consent must be obtained; or
(3) the spouse has previously given consent
in accordance with this Subsection and consented to the
Participant's right to designate any beneficiary without further
consent by the spouse.
The consent of a spouse in accordance with this Subsection (c)
shall not be effective with respect to other spouses of the
Participant prior to the Participant's Benefit Commencement Date,
and an election to which Paragraph (2) of this Subsection (c)
applies shall become void if the circumstances causing the
consent of the spouse not to be required no longer exist prior to
the Participant's Benefit Commencement Date.
(d) If a Participant has no beneficiary under
Subsection (a) of this Section, if the Participant's
beneficiary(ies) predecease the Participant, or if the
beneficiary(ies) cannot be located by the Committee, the interest
of the deceased Participant shall be paid to the Participant's
estate.
.1 Transfer of Account to Other Plan.
(a) Effective January 1, 1993, if (1) a
Participant entitled to receive a distribution from the Plan,
either pursuant to this Article or pursuant to Article VIII, or
(2) the spouse or former spouse of a Participant who is entitled
to receive a distribution from the Plan pursuant to a qualified
domestic relations order, directs the Committee to have the
Trustee transfer all or a portion (not less than $500) of the
amount to be distributed directly to:
(1) an individual retirement account
described in section 408(a) of the Code,
(2) an individual retirement annuity
described in section 408(b) of the Code (other than an endowment
contract),
(3) a qualified defined contribution
retirement plan described in section 401(a) of the Code the terms
of which permit the acceptance of rollover contributions, or
(4) an annuity plan described in section
403(a),
all or a portion (not less than $500) of the amount to be
distributed shall be so transferred.
(b) In addition, if a Participant's surviving
spouse is entitled to receive a distribution from the Plan under
Section 5.3, and such surviving spouse directs the Committee to
have the Trustee transfer all or a portion (not less than $500)
of the amount to be distributed directly to:
(1) an individual retirement account
described in section 408(a) of the Code, or
(2) an individual retirement annuity
described in section 408(b) of the Code (other than an endowment
contract),
all or a portion (not less than $500) of the amount to be
distributed shall be so transferred.
(c) The Participant, spouse or former spouse must
specify the name of the plan to which the Participant, spouse or
former spouse wishes to have the amount transferred, plus such
other information as may be requested by the Committee, on a form
and in a manner prescribed by the Committee.
(d) Subsections (a) and (b) shall not apply to
the following distributions:
(1) any distribution of Voluntary
Contributions,
(2) any distribution if the total
distributions paid or payable from the Plan to the same
individual during the same calendar year are reasonably expected
by the Committee to be less than $200,
(3) that portion of any distribution after
the Participant's Required Beginning Date that is required to be
distributed to the Participant by the minimum distribution rules
of section 401(a)(9) of the Code, or
(4) such other distributions as may be
exempted by applicable statute or regulation from the
requirements of section 401(a)(31) of the Code.
(e) In the event a Participant, spouse or former
spouse fails to specify whether or not all or a portion of the
amount to be distributed should be transferred under this
Section, the amount to be distributed shall be paid to such
Participant, spouse or former spouse.
.1 Sale of Company Stock Upon Distribution.
(a) If a Participant or beneficiary is entitled
to receive a distribution in cash, the Trustee shall (1) purchase
the Participant's or beneficiary's shares of Company Stock at
their fair market value, on the day they are to be delivered, for
the Fund by applying cash not then invested in Company stock, or
(2) effective prior to June 17, 1992, sell such shares on the
over-the-counter market and, effective after June 16, 1992, sell
such shares on the New York Stock Exchange or (3) both.
(b) Before any distribution of a Participant's
Account is made pursuant to this Article, any fractional share of
Company Stock allocated to such Account shall be converted to
cash, on the basis of its pro rata share of the price of a whole
share of Company Stock on the Quarterly Status Date coincident
with or next preceding the date of the distribution.
(c) Any shares of Company Stock distributed
pursuant to the terms of the Plan shall be subject to such
restrictions on their subsequent transfer as shall be necessary
or appropriate, in the opinion of counsel for the Company and the
Fund, to comply with applicable federal and state securities laws
and may bear appropriate legends evidencing such restrictions.
ARTICLE VI
VESTING
.9 Nonforfeitable Amounts. A Participant shall have a 100%
nonforfeitable interest at all times in his entire Account.
ARTICLE VII
PURCHASE AND VOTING OF COMPANY STOCK
.1 Purchase of Company Stock. As soon as practicable following
the close of each month, the Trustee shall place an order with a
broker to purchase, effective prior to June 17, 1992, on the
over-the-counter market, and effective after June 16, 1992, on
the New York Stock Exchange, at prevailing fair market prices, as
many full shares of Company Stock as may be purchased with the
sum of the contributions allocated to the Participants' Accounts
which are to be invested in Company Stock pursuant to Article
XII, less any amount required to meet current expenses of the
Plan, unless, at the Company's direction, such expenses are paid
by one or more of the Participating Companies. Any cash
remaining after completion of each purchase shall be held by the
Trustee for future purchases. Purchases shall be made in the
name of the Trustee for the account of the Plan. Certificates
for shares of Company Stock shall be issued in the Trustee's name
or in the name of the Trustee's nominee, and shall be delivered
to and held by the Trustee or by a recognized depository.
.2 Participant Voting Direction. The Trustee shall vote all
shares of Company Stock, including fractional shares, allocated
to a Participant's Account, in the manner directed by the
Participant to whose Account those shares are allocated.
.3 Voting Procedures. The Committee shall establish and
maintain a procedure by which Participants shall be timely
notified of their right to direct the voting of Company Stock
allocated to their Account and the manner in which any such
directions are to be conveyed to the Trustee.
.4 Absence of Participant Voting Direction. In the absence of
specific instructions from a Participant, the Trustee may vote
Company Stock in its sole discretion, provided that the Trustee
shall not tender Company Stock pursuant to any offering for such
Company Stock unless specifically directed to do so by the
Participant to whose Account the Company Stock is allocated.
ARTICLE VIII
WITHDRAWALS
.10 Withdrawals Not Subject to Section 401(k) Restrictions.
(a) An Employee or Participant may withdraw, not
more than once during any Plan Year, up to the total value of the
amount in the following Accounts:
(1) his Voluntary Contribution Account; and
(2) his Rollover Account.
(b) Withdrawals under this Section shall be
charged against a Participant's Accounts in the following order
of priority:
(1) (A) the portion of the Participant's
Rollover Account, if any, that consists of the Participant's
employee contributions made before January 1, 1987, if any, less
any amounts previously withdrawn therefrom;
(B) the balance of the Participant's
Rollover Account after the application of Subparagraph (A) of
this Paragraph, if any, less any amounts previously withdrawn
therefrom;
(2) the Participant's Voluntary Contribution
Account, less any amounts previously withdrawn therefrom.
.11 Withdrawals Subject to Section 401(k) Restrictions.
(a) A Participant may withdraw, not more than
once during any Plan Year, under the rules set forth in
Subsections (b) through (e) of this Section, the following
amounts:
(1) his Salary Reduction Account as of
December 31, 1988; plus
(2) the sum of his Salary Reduction
Contributions made after December 31, 1988.
(b) A withdrawal under Subsection (a) of this
Section shall be permitted only if the Committee finds that:
(1) it is made on account of immediate and
heavy financial need (as defined in Subsection (c) of this
Section) of the Participant; and
(2) it is necessary (as defined in
Subsection (d) of this Section) to satisfy such immediate and
heavy financial need.
(c) A withdrawal under Subsection (a) will be
deemed to be on account of an immediate and heavy financial need
if the Participant requests such withdrawal on account of:
(1) expenses for medical care described in
section 213(d) of the Code and previously incurred by the
Participant, his spouse, or any of the Participant's dependents
(as defined in section 152 of the Code) or necessary for such
individuals to obtain such medical care;
(2) costs directly related to the purchase
(excluding mortgage payments) of a principal residence of the
Participant;
(3) the payment of tuition and related
educational fees for the next 12 months of post-secondary
education for the Participant, his spouse, children, or
dependents (as defined in section 152 of the Code);
(4) the need to prevent the eviction of the
Participant from his principal residence or foreclosure on the
mortgage of his principal residence; or
(5) such other circumstances or events as
may be prescribed by the Secretary of the Treasury or his
delegate.
(d) A withdrawal under Subsection (a) shall be
deemed to be necessary if:
(1) the amount of the withdrawal does not
exceed the amount of the Participant's immediate and heavy
financial need, including any amounts necessary to pay any
federal, state or local income taxes or penalties reasonably
anticipated to result from the withdrawal;
(2) the Participant has obtained all
currently permissible distributions (other than hardship
distributions) and non-taxable loans, if any, under this and all
other plans maintained by the Participating Company and all
Affiliated Companies; and
(3) the Participant agrees in writing to be
bound by the rules of Subsection (e).
(e) If a Participant withdraws any amount from
his Salary Reduction Account pursuant to Subsection (a), or
withdraws any elective deferrals under any other qualified
retirement plan maintained by the Participating Company or any
Affiliated Company, which other plan conditions such withdrawal
upon the Participant's being subject to rules similar to those
stated in this Subsection and Subsection (d), such Participant:
(1) may not make Salary Reduction
Contributions under this Plan or employee contributions (other
than mandatory contributions under a defined benefit plan) or
elective deferrals under any other qualified or non-qualified
plan of deferred compensation (which does not include any health
or welfare plan, including a health or welfare plan that is part
of a cafeteria plan described in section 125 of the Code)
maintained by the Participating Company or an Affiliated Company
for a period of 12 months commencing on the date of his receipt
of the withdrawal; and
(2) in the calendar year next following the
calendar year of such withdrawal, may not make Salary Reduction
Contributions or elective deferrals under any other qualified
retirement plan maintained by the Participating Company or an
Affiliated Company in excess of:
(A) the dollar amount described in
Subsection (b) of Section 3.1 for such year, minus
(B) the total Salary Reduction
Contributions under this Plan and elective deferrals under any
other qualified plan made by the Participant during the calendar
year of the withdrawal.
.1 Withdrawals On and After Attainment of Age 59-1/2. Upon his
attainment of Age 59-1/2, a Participant may withdraw, up to the
total value in his Account, less amounts previously withdrawn
therefrom, by submitting his written request to the Committee.
.2 Amount and Payment of Withdrawals. The amount of any
withdrawal will be determined on the basis of the value of the
Participant's Account and the sum of the Participant's Salary
Reduction Contributions valued as of the Valuation Date
coincident with or immediately preceding the date of the
withdrawal. Payment will be made in cash in a single sum. If,
in order to make such a cash payment, the Trustee is required to
convert any portion of the Company Stock allocated to a
Participant's Account to cash, the Trustee shall comply with the
procedures set forth in Section 5.10. Any withdrawal requested
under this Section shall be paid as soon as practicable following
the Committee's determination that the requested withdrawal
complies with the terms and conditions set forth in this Section.
.3 Pledged Amounts. No amount that has been pledged as
security for a loan under Article IX may be withdrawn under this
Article.
.4 Investment Medium to be Charged with Withdrawal.
(a) Prior to July 1, 1991, a withdrawal made
pursuant to this Article shall be charged against a Participant's
interest in the various Investment Media in proportion to his
share in such Investment Media.
(b) Effective after June 30, 1991 and before
March 1, 1995, except with respect to a Participant's interest in
the Fixed Income Fund, a Participant may specify, in increments
of 25%, to which Investment Medium or Investment Media any
withdrawal under this Article is to be charged. Unless so
specified, distribution will be made out of the Participant's
interest in the various Investment Media in proportion to the
Participant's share in such Investment Media.
(c) Effective after February 28, 1995, a
withdrawal made pursuant to this Article shall be charged against
a Participant's interest in the various Investment Media in
proportion to his share in such Investment Media.
ARTICLE IX
LOANS TO PARTICIPANTS
.1 Loan Application. Each Participant who is an Employee of a
Participating Company may apply for a loan from the Plan. All
applications shall be made to the Committee on forms which it
prescribes, and the Committee shall rule upon such applications
in a uniform and nondiscriminatory manner in accordance with the
rules and guidelines established in this Article.
.2 Loan Approval. A loan shall be made effective as soon as
administratively possible after the date a Participant's loan
request is approved by the Committee. No more than one
application by a Participant for a loan shall be approved during
any calendar year.
.3 Amount of Loan.
(a) In no event shall a Participant be permitted
to have more than one loan outstanding at any time from this
Plan. Effective prior to March 1, 1990, the minimum amount of
any loan shall be $500. Effective after February 28, 1990, the
minimum loan amount shall be $1,000. In no event shall the loan
amount exceed 50 percent (50%) of the value of the Participant's
Account, to a maximum of $50,000, determined as of the Valuation
Date immediately preceding the date on which the loan application
is received by the Committee; provided however, that the loan
amount shall not exceed the total value of the Participant's
Salary Reduction Account plus the value of his Voluntary
Contribution Account.
(b) The amount of any loan, when added to the
amount of a Participant's outstanding loans under the Plan and
all other plans qualified under section 401(a) of the Code which
are sponsored by the Participating Company or any Affiliated
Company shall not exceed the lesser of:
(1) $50,000, reduced by the excess (if any)
of:
(A) the Participant's highest
outstanding balance of loans during the one-year period ending on
the day before the date on which such loan is made to the
Participant, over
(B) the outstanding balance of loans
made to the Participant on the date such loan is made to the
Participant; or
(2) fifty percent (50%) of the value of the
Participant's Account.
(c) Loan distributions shall be made in cash.
The Trustee shall follow the procedures provided in Section 5.10
to the extent necessary to convert shares of Company Stock to
cash.
.12 Terms of Loan.
(a) Effective prior to March 1, 1995, the
interest rate on loans shall be equal to the Trustee bank's fixed
rate for direct unsecured loans as of the date of the loan
application. Effective after February 28, 1995, the interest
rate on loans shall be equal to the prime rate plus one percent
(1%) as of the date of the loan application. Security for each
loan granted pursuant to this Article shall be, to the extent
necessary, the currently unpledged portion of, first, the
Participant's Voluntary Contribution Account, next, the
Participant's Rollover Account, and, next, the Participant's
Salary Reduction Account. In no event shall more than fifty
percent (50%) of the Participant's vested Account as of the date
the loan is made be used as security for the loan. In its sole
discretion, the Committee may require such additional security as
it deems necessary.
(b) Each loan shall be evidenced by the
Participant's execution of a personal demand note on such form as
shall be supplied by the Committee. Each such note shall specify
that, to the extent repayment is not demanded sooner, repayment
shall be included in installments over 12, 24, 36, 48, or 60
months from the date on which the loan is distributed; however,
if the purpose of the loan is to acquire any dwelling unit which
is to be used within a reasonable period of time as the principal
residence of the Participant, the period of repayment may be as
long as, but shall not exceed, 180 months. All loans from the
Plan shall be non-renewable. Each note shall also specify the
interest rate as determined by the Committee at the time the loan
is approved.
(c) All loans shall be repaid in approximately
equal installments (not less frequently than quarterly) through
payroll deductions or in such other manner as the Committee may
determine. A Participant may repay the outstanding balance of
any loan in one lump sum at any time by notifying the Committee
of his intent to do so and by forwarding to the Committee payment
in full of the then outstanding balance, plus interest accrued to
the date of payment; provided that a Participant who makes such a
lump sum payment may not apply for another loan from the Plan
until 12 months from the date of his lump sum payment. The
amount of principal and interest repaid by a Participant shall be
credited to a Participant's Account as each repayment is made.
(d) If, and only if:
(1) the Participant dies;
(2) the Participant (other than a
Participant who continues to be a party in interest) has a
Separation from Service;
(3) the Compensation of a Participant who is
an Employee of a Participating Company is discontinued or
decreased below the amount necessary to amortize the loan;
(4) the loan is not repaid by the time the
note matures;
(5) the Participant attempts to revoke any
payroll deduction authorization for repayment of the loan without
the consent of the Committee;
(6) the Participant fails to pay any
installment of the loan when due and the Committee elects to
treat such failure as default;
(7) any other event occurs which the
Committee, in its sole discretion, believes may jeopardize the
repayment of the loan;
before a loan is repaid in full, the unpaid balance thereof, with
interest due thereon, shall become immediately due and payable.
The Participant (or his beneficiary, in the event of the
Participant's death) may satisfy the loan by paying the
outstanding balance of the loan within such time as may be
specified in the note. If the loan and interest are not repaid
within the time specified, the Committee shall satisfy the
indebtedness from the amount of the Participant's vested interest
in his Account as provided in Section 9.5 before making any
payments otherwise due hereunder to the Participant or his
beneficiary.
.13 Enforcement. The Committee shall give written notice to the
Participant (or his beneficiary in the event of the Participant's
death) of an event of default described in Subsection (d) of
Section 9.4. If the loan and interest are not paid within the
time period specified in the notice, the amount of the
Participant's Voluntary Contribution Account, to the extent such
Account is security for the loan, shall be reduced by the amount
of the unpaid balance of the loan, with interest due thereon, and
the Participant's indebtedness shall thereupon be discharged to
the extent of the reduction. In addition, if the value of the
Participant's Voluntary Contribution Account pledged as security
for the loan is insufficient to discharge fully the Participant's
indebtedness, the Participant's Salary Reduction Account shall be
used to reduce the Participant's indebtedness at such time as the
Participant is entitled to a distribution under Article V or a
withdrawal under Article VIII from his Salary Reduction Account.
Such action shall not operate as a waiver of the rights of the
Company, the Committee, the Trustee, or the Plan under applicable
law. The Committee also shall be entitled to take any and all
other actions necessary and appropriate to foreclose upon any
property other than the Participant's Account pledged as security
for the loan or to otherwise enforce collection of the
outstanding balance of the loan.
.14 Investment Medium to be charged with Loan.
(a) Prior to July 1, 1991, a loan made pursuant
to this Article shall be charged against a Participant's interest
in the various Investment Media in proportion to his share in
such Investment Media.
(b) Effective after June 30, 1991 and before
March 1, 1995, except with respect to a Participant's interest in
the Fixed Income Fund, a Participant may specify, in increments
of 25%, to which Investment Medium or Investment Media any loan
under this Article is to be charged. Unless so specified,
distribution will be made out of the Participant's interest in
the various Investment Media in proportion to the Participant's
share in such Investment Media. At the time a Participant
applies for a loan from the Plan, he shall elect the Investment
Media into which the amount of his loan repayments shall be
deposited. Such election shall be irrevocable.
(c) Effective after February 28, 1995, a loan
made pursuant to this Article shall be charged against a
Participant's interest in the various Investment Media in
proportion to his share in such Investment Media.
.15 Additional Rules. The Committee may establish additional
rules relating to Participant loans under the Plan, which rules
shall be applied on a uniform and non-discriminatory basis.
ARTICLE X
ADMINISTRATION
.16 Committee. If the Company designates one or more
individuals as the Committee, the powers and duties of the
Committee under the Plan shall be exercised by the Committee;
otherwise all such powers and duties shall be exercised by the
Company. The Committee shall be the named fiduciary which shall
control and manage the operation of the Plan and shall administer
the Plan. The Committee members may, but need not, be Employees,
and they shall serve at the pleasure of the Company. They shall
be entitled to reimbursement of expenses, but those members of
the Committee who are also Employees of a Participating Company
shall receive no compensation for their service on the Committee.
Any reimbursement of expenses of the Committee members shall be
paid directly by the Company. The Committee shall be responsible
for the general administration of the Plan under the policy
guidance of the Company.
.17 Duties and Powers of Committee. In addition to the duties
and powers described elsewhere hereunder, the Committee shall
have the following specific duties and powers:
(a) to retain such consultants, accountants and
attorneys as may be deemed necessary or desirable to render
statements, reports, and advice with respect to the Plan and to
assist the Committee in complying with all applicable rules and
regulations affecting the Plan; any consultants, accountants and
attorneys may be the same as those retained by the Company;
(b) to decide appeals under this Article;
(c) to enact uniform and nondiscriminatory rules
and regulations to carry out the provisions of the Plan;
(d) to resolve questions or disputes relating to
eligibility for benefits or the amount of benefits under the
Plan;
(e) to construe and interpret and supply
omissions with respect to the provisions of the Plan;
(f) to determine whether any domestic relations
order received by the Plan is a qualified domestic relations
order as provided in section 414(p) of the Code;
(g) to evaluate administrative procedures; and
(h) to delegate such duties and powers as the
Committee shall determine from time to time to any person or
persons. To the extent of any such delegation, the delegate
shall have the duties, powers, authority and discretion of the
Committee.
Any decisions and determinations made by the Committee pursuant
to its duties and powers described in the Plan shall be
conclusive and binding upon all parties. The Committee shall
have sole discretion in carrying out its responsibilities. The
expenses incurred by the Committee in connection with the
operation of the Plan, including, but not limited to, the
expenses incurred by reason of the engagement of professional
assistants and consultants, shall be expenses of the Plan and
shall be payable from the Fund at the direction of the Committee.
The Participating Companies shall have the option, but not the
obligation, to pay any such expenses, in whole or in part, and,
by so doing, to relieve the Fund from the obligation of bearing
such expenses. Payment of any such expenses by a Participating
Company on one occasion shall not bind that Participating Company
to pay any similar expenses on any subsequent occasion.
.18 Functioning of Committee. The Committee and those persons
or entities to whom the Committee has delegated responsibilities
shall keep accurate records and minutes of meetings,
interpretations, and decisions. The Committee shall act by
majority vote of the members, and such action shall be evidenced
by a written document.
.19 Disputes.
(a) If the Committee denies, in whole or in part,
a claim for benefits by a Participant or his beneficiary, the
Committee shall furnish notice of the denial to the claimant,
setting forth:
(1) the specific reasons for the denial;
(2) specific reference to the pertinent Plan
provisions on which the denial is based;
(3) a description of any additional
information necessary for the claimant to perfect the claim and
an explanation of why such information is necessary; and
(4) appropriate information as to the steps
to be taken if the claimant wishes to submit his claim for
review.
Such notice shall be forwarded to the claimant within 90 days of
the Committee's receipt of the claim; provided, however, that in
special circumstances the Committee may extend the response
period for up to an additional 90 days, in which event it shall
notify the claimant in writing of the extension, and shall
specify the reason or reasons for the extension.
(b) Within 60 days of receipt of a notice of
claim denial, a claimant or his duly authorized representative
may petition the Committee in writing for a full and fair review
of the denial. The claimant or his duly authorized
representative shall have the opportunity to review pertinent
documents and to submit issues and comments in writing to the
Committee. The Committee shall review the denial and shall
communicate its decision and the reasons therefor to the claimant
in writing within 60 days of receipt of the petition; provided,
however, that in special circumstances the Committee may extend
the response period for up to an additional 60 days, in which
event it shall notify the claimant in writing prior to the
commencement of the extension. The appeals procedure set forth
in this Subsection (b) shall be the exclusive means for
contesting a decision denying benefits under the Plan.
.20 Indemnification. Each member of the Committee, and any
other person who is an Employee or director of a Participating
Company or an Affiliated Company shall be indemnified and held
harmless by the Company against and with respect to all damages,
losses, obligations, liabilities, liens, deficiencies, costs and
expenses, including without limitation, reasonable attorney's
fees and other costs incident to any suit, action, investigation,
claim or proceedings to which he may be a party by reason of his
performance of administrative functions and duties under the
Plan. The foregoing right to indemnification shall be in
addition to such other rights as the Committee member or other
person may enjoy as a matter of law or by reason of insurance
coverage of any kind. Rights granted hereunder shall be in
addition to and not in lieu of any rights to indemnification to
which the Committee member or other person may be entitled
pursuant to the by-laws of the Participating Company.
ARTICLE XI
THE FUND
.1 Designation of Trustee. The Company, by appropriate
resolution of its Board of Directors, if any, shall name and
designate a Trustee and shall enter into a Trust Agreement. The
Company shall have the power, by appropriate resolution of its
Board of Directors, to amend the Trust Agreement, remove the
Trustee, and designate a successor Trustee, as provided in the
Trust Agreement. All of the assets of the Plan shall be held by
the Trustee for use in accordance with the Plan.
.2 Exclusive Benefit. Prior to the satisfaction of all
liabilities under the Plan in the event of termination of the
Plan, no part of the corpus or income of the Fund shall be used
for or diverted to purposes other than for the exclusive benefit
of Participants and their beneficiaries except as expressly
provided in this Plan and in the Trust Agreement.
.3 No Interest in Fund. No person shall have any interest in
or right to any part of the assets or income of the Fund, except
to the extent expressly provided in this Plan and in the Trust
Agreement.
.4 Trustee. The Trustee shall be the named fiduciary with
respect to management and control of Plan assets held by it and,
except as provided in Article XII, shall have exclusive and sole
responsibility for the custody and investment thereof in
accordance with the Trust Agreement.
ARTICLE XII
INVESTMENTS
.21 Investment of Pre-1994 Matching Contributions, Voluntary
Contributions, Pre-1990 Salary Reduction Contributions and
Pre-1990 Rollover Contributions.
(a) All Pre-1994 Matching Contributions,
Voluntary Contributions, Pre-1990 Salary Reduction Contributions
and Pre-1990 Rollover Contributions allocated to a Participant's
Account shall be invested in Company Stock. Notwithstanding the
foregoing, a Participant who attains Age 55 may, not more than
once during any Plan Year, direct the Trustee to sell a portion
of the Age 55 Shares allocated to his Voluntary Contribution
Account, Pre-1994 Matching Contribution Subaccount, Pre-1990
Salary Reduction Subaccount and Pre-1990 Rollover Subaccount and
transfer the proceeds to any other Investment Medium selected by
the Participant. The portion transferred shall be expressed in
whole percentages of his Age 55 Shares and shall be transferred
in equal portions from his Pre-1994 Matching Contribution
Subaccount, Voluntary Contribution Account, Pre-1990 Salary
Reduction Subaccount and Pre-1990 Rollover Subaccount. The
cumulative number of Age 55 Shares transferred shall not exceed
the following percentages during the Plan Years in which the
Participant attains the following ages:
Age Attained Percentage of
in Plan Year Age 55 Shares
55 40%
56 60%
57 80%
58 100%
(b) Prior to March 1, 1995, a direction to the
Trustee pursuant to Subsection (a) of this Section shall be
effective as of any Quarterly Status Date if made in writing at
least 15 days prior to such Quarterly Status Date, and the
Trustee shall sell the affected Company Stock and transfer the
proceeds as of such Quarterly Status Date. After
February 28, 1995, such investment direction may be made on any
day of any calendar month and shall become effective as soon as
administratively possible after receipt of the direction by the
Committee, in accordance with rules established by the Committee
for this purpose.
(c) Effective as of any Payroll Period beginning
after a Participant attains Age 55, a Participant may elect, in
the manner prescribed by the Committee, to have any portion of
Pre-1990 Salary Reduction Contributions and Pre-1994 Matching
Contributions that will be allocated to his Account after he
attains Age 55 invested in any other Investment Medium selected
by the Participant. Such an election shall be irrevocable.
(d) Notwithstanding Subsections (a) - (c) of this
Section, effective on each June 1, September 1, January 1 and
March 1, commencing on June 1, 1990 and ending on
September 1, 1994, a Participant may elect to transfer up to 20%
of the value of the Company Stock allocated to his Voluntary
Contribution Account, Pre-1990 Salary Reduction Subaccount and
Pre-1990 Rollover Subaccount to any Investment Medium selected by
the Participant; provided, that, such election is made at least
15 days prior to the effective date of the transfer and no more
than one transfer may be made in any Plan Year. The Company
Stock remaining in a Participant's Voluntary Contribution
Account, Pre-1990 Salary Reduction Subaccount and Pre-1990
Rollover Subaccount after August 31, 1994 may not be transferred
to any other Investment Medium until the Participant attains Age
55 and makes a transfer of Age 55 Shares pursuant to Subsection
(a) of this Section 12.1.
(e) A Participant may elect to invest Pre-1994
Matching Contributions allocated to his Account after
February 28, 1993 in Company common or preferred stock, as
provided in Subsection (b) of Section 3.4.
.22 Investment of Post-1989 Salary Reduction Contributions,
Post-1989 Rollover Contributions and Post-1993 Matching
Contributions.
(a) The Trustee shall invest Post-1989 Salary
Reduction Contributions, Post-1989 Rollover Contributions and
Post-1993 Matching Contributions paid to it and income thereon in
such Investment Media as each Participant may select in
accordance with this Section. Such investments acquired in the
manner prescribed by the Plan shall be held by or for the
Trustee. Prior to March 1, 1995, a Participant may select the
Investment Media in which his Post-1989 Salary Reduction
Contributions, Post-1989 Rollover Contributions and Post-1993
Matching Contributions shall be deposited, effective on any
September 1, December 1, March 1 or June 1; provided, that, the
Committee receives notice of such investment selection by the
fifteenth day of the month prior to the effective date of the
selection. Effective after February 28, 1995, a Participant may
select the Investment Media in which his Post-1989 Salary
Reduction Contributions, Post-1989 Rollover Contributions and
Post-1993 Matching Contributions shall be deposited on any day of
any calendar month, provided that a Participant may make only one
selection in any calendar month. Such selection shall be
effective as soon as administratively possible after receipt of
notice of the selection by the Committee.
(b) A Participant shall select one or more of the
Investment Media in which his Account shall be invested, and the
percentage thereof, that shall be invested in each Investment
Medium selected, provided that prior to March 1, 1995, such
percentage shall be selected in multiples of 25%. In the event a
Participant fails to make an election pursuant to this Section,
amounts allocated to his Account shall be invested in the most
conservative of the Investment Media as determined by the
Committee. A Participant may amend such selection by prior
notice to the Committee, effective as of such dates determined by
the Committee, by giving prior notice to the Committee. Such
amendments will be subject to the other requirements of this
Section.
(c) Prior to March 1, 1995, a Participant may
transfer such portion of the value of his existing interest in
any Investment Medium to another Investment Medium effective on
any Quarterly Status Date, provided that the Committee receives
notice of such transfer by the fifteenth day of the month prior
to the Quarterly Status Date.
(d) After February 28, 1995, a Participant may
transfer such portion of the value of his existing interest in
any Investment Medium to another Investment Medium effective on
any day of any calendar month, provided that a Participant may
make only one such transfer in a calendar month.
.23 Investment Media. Prior to March 1, 1990, the only
Investment Media available under the Plan shall be (a) Company
Stock, and (b) the Fixed Income Fund in which only Age 55 Shares
may be invested. After February 28, 1990, the Plan shall make
available such Investment Media as the Committee shall, from time
to time, determine and communicate to Participants.
.24 Additional Rules.
(a) The amounts contributed by all Participants
to each Investment Medium shall be commingled for investment
purposes.
(b) The Trustee may hold assets of the Fund and
make distributions therefrom in the form of cash without
liability for interest, if for administrative purposes it becomes
necessary or practical to do so.
ARTICLE XIII
AMENDMENT OR TERMINATION OF THE PLAN
.25 Power of Amendment and Termination.
(a) It is the intention of each Participating
Company that this Plan will be permanent. However, each
Participating Company reserves the right to terminate its
participation in this Plan at any time by or pursuant to action
of its board of directors or other governing body. Furthermore,
the Company reserves the power to amend or terminate the Plan at
any time by or pursuant to action of the Board of Directors.
(b) Each amendment to the Plan shall be binding
on each Participating Company if such Participating Company, by
or pursuant to action of its board of directors or other
governing body:
(1) consents to such amendment at any time;
or
(2) fails to object thereto within thirty
days after receiving notice thereof.
(c) Any amendment or termination of the Plan
shall become effective as of the date designated by the Board of
Directors or its delegate. Except as expressly provided
elsewhere in the Plan, prior to the satisfaction of all
liabilities with respect to the benefits provided under this
Plan, no amendment or termination shall cause any part of the
monies contributed hereunder to revert to the Participating
Companies or to be diverted to any purpose other than for the
exclusive benefit of Participants and their beneficiaries. Upon
termination of the plan without establishment or maintenance of
another defined contribution plan (other than an employee stock
ownership plan as defined in section 4975(e)(7) of the Code or a
simplified employee pension plan as defined in section 408(k) of
the Code), Accounts shall be distributed in accordance with
applicable law.
.26 Merger. The Plan shall not be merged with or consolidated
with, nor shall its assets be transferred to, any other qualified
retirement plan unless each Participant would receive a benefit
after such merger, consolidation, or transfer (assuming the Plan
then terminated) which is of actuarial value equal to or greater
than the benefit he would have received from his Account if the
Plan had been terminated on the day before such merger,
consolidation, or transfer. No amounts shall be transferred to
this Plan which would cause the Plan to be a direct or indirect
transferee of a plan to which the joint and survivor annuity and
pre-retirement survivor annuity requirements of sections
401(a)(11) and 417 of the Code apply.
ARTICLE XIV
TOP-HEAVY PROVISIONS
.27 General. The following provisions shall apply automatically
to the Plan and shall supersede any contrary provisions for each
Plan Year in which the Plan is a Top-Heavy Plan (as defined
below). It is intended that this Article shall be construed in
accordance with the provisions of section 416 of the Code.
.28 Definitions. The following definitions shall supplement
those set forth in Article I of the Plan:
(a) "Aggregation Group" means this plan and each
other qualified retirement plan (including a frozen plan or a
plan which has been terminated during the 60-month period ending
on the Determination Date) of a Participating Company or an
Affiliated Company:
(1) in which a Key Employee is a
participant; or
(2) which enables any plan in which a Key
Employee participates to meet the requirements of sections
401(a)(4) or 410 of the Code; or
(3) without the inclusion of which, the
plans in the Aggregation Group would be Top-Heavy Plans, but,
with the inclusion of which, the plans in the Aggregation Group
are not Top-Heavy Plans and, taken together, meet the
requirements of sections 401(a)(4) and 410 of the Code.
(b) "Determination Date" means, for any Plan
Year, the last day of the preceding Plan Year.
(c) "Key Employee" means, with respect to any
Plan Year:
(1) any Employee or former Employee who at
any time during the 60-month period ending on the Determination
Date was:
(A) an officer of a Participating
Company having Compensation for a Plan Year during such period
greater than fifty percent (50%) of the amount in effect under
section 415(b)(1)(A) of the Code for the calendar year in which
such Plan Year ends; provided, that no more than 50 Employees
(or, if less, the greater of three Employees or ten percent (10%)
of the greatest number of Employees employed by all Participating
Companies and all Affiliated Companies during such 60-month
period, but excluding employees described in section 414(q)(8) of
the Code) shall be treated as officers; or
(B) one of the 10 Employees having
Compensation greater than the amount described in section
415(c)(1)(A) of the Code and owning (or are considered as owning,
within the meaning of section 318 of the Code) the largest
interests in any Participating Company or Affiliated Company,
provided that such interest exceeds one-half of one percent
(0.5%) of the total share ownership of the Participating Company
or Affiliated Company, the total number of individuals described
in this Subparagraph (B) being limited to 10 for the entire
60-month period; or
(C) a five-percent (5%) owner of a
Participating Company; or
(D) a one-percent (1%) owner of a
Participating Company having Compensation in excess of $150,000;
or
(2) a beneficiary of an individual described
in Paragraph (1) of this Subsection.
For purposes of this Subsection, Compensation shall include
elective deferrals under sections 125, 402(a)(8), 402(h) and
403(b) of the Code. Determinations under this Subsection shall
be made in accordance with section 416(i) of the Code.
(d) "Key Employee Ratio" means, for any
Determination Date, the ratio of the amount described in
Paragraph (1) of this Subsection to the amount described in
Paragraph (2) of this Subsection, after deducting from each such
amount any portion thereof described in Paragraph (3) of this
Subsection, where:
(1) the amount described in this Paragraph
is the sum of:
(A) the present value of all accrued
benefits of Key Employees under all qualified defined benefit
plans included in the Aggregation Group;
(B) the balances in all of the
accounts of Key Employees under all qualified defined
contribution plans included in the Aggregation Group; and
(C) the amounts distributed from all
plans in such Aggregation Group to or on behalf of any Key
Employee during the period of five Plan Years ending on the
Determination Date, except any benefit paid on account of death
to the extent it exceeds the accrued benefits or account balances
immediately prior to death;
(2) the amount described in this Paragraph
is the sum of:
(A) the present value of all accrued
benefits of all participants under all qualified defined benefit
plans included in the Aggregation Group;
(B) the balances in all of the accounts
of all participants under all qualified defined contribution
plans included in the Aggregation Group; and
(C) the amounts distributed from all
plans in such Aggregation Group to or on behalf of any
participant during the period of five Plan Years ending on the
Determination Date; and
(3) the amount described in this Paragraph
is the sum of:
(A) all rollover contributions (or fund
to fund transfers) to the Plan by an Employee after
December 31, 1983 from a plan sponsored by an employer which is
not a Participating Company or an Affiliated Company;
(B) any amount that is included in
Paragraphs (1) and (2) of this Subsection for a person who is a
Non-Key Employee as to the Plan Year of reference but who was a
Key Employee as to any earlier Plan Year; and
(C) for Plan Years beginning after
December 31, 1984, any amount that is included in Paragraphs (1)
and (2) of this Subsection for a person who has not performed any
services for any Participating Company during the five-year
period ending on the Determination Date.
The present value of accrued benefits under any defined benefit
plan shall be determined on the basis of the actuarial
assumptions used by such defined benefit plan under the method
used for accrual purposes for all plans maintained by all
Participating Companies and Affiliated Companies if a single
method is used by all such plans, or, otherwise, the slowest
accrual method permitted under section 411(b)(1)(C) of the Code.
(e) "Non-Key Employee" means, for any Plan Year:
(1) an Employee or former Employee who is
not a Key Employee with respect to such Plan Year; or
(2) a beneficiary of an individual described
in Paragraph (1) of this Subsection.
(f) "Super Top-Heavy Plan" means, for any Plan
Year, each plan in the Aggregation Group for such Plan Year if,
as of the applicable Determination Date, the Key Employee Ratio
exceeds ninety percent (90%).
(g) "Top-Heavy Compensation" means, for any
Participant for any Plan Year, the average of his annual
Compensation over the period of five consecutive Plan Years (or,
if shorter, the longest period of consecutive Plan Years during
which the Participant was in the employ of any Participating
Company) yielding the highest average, disregarding:
(1) Compensation for Plan Years ending prior
to January 1, 1984; and
(2) Compensation for Plan Years after the
close of the last Plan Year in which the Plan was a Top-Heavy
Plan.
(h) "Top-Heavy Plan" means, for any Plan Year,
each plan in the Aggregation Group for such Plan Year if, as of
the applicable Determination Date, the Key Employee Ratio exceeds
sixty percent (60%).
(i) "Year of Top-Heavy Service" means, for any
Participant, a Plan Year in which he completes 1,000 or more
Hours of Service, excluding:
(1) Plan Years commencing prior to
January 1, 1984; and
(2) Plan Years in which the Plan is not a
Top-Heavy Plan.
.29 Minimum Contribution for Non-Key Employees.
(a) In each Plan Year in which the Plan is a
Top-Heavy Plan, each Eligible Employee who is a Non-Key Employee
(except an Eligible Employee who is a Non-Key Employee as to the
Plan Year of reference but who was a Key Employee as to any
earlier Plan Year) and who is an Employee on the last day of such
Plan Year will receive a total minimum Participating Company or
Affiliated Company contribution (including forfeitures) under all
plans described in Paragraphs (a)(1) and (a)(2) of Section 14.2
of not less than three percent (3%) of the Eligible Employee's
Compensation for the Plan Year. Elective deferrals to such plans
made on behalf of a Participant in plan years beginning after
December 31, 1984 but before January 1, 1989 shall be deemed to
be Company contributions for the purpose of this Subsection.
Elective deferrals and employer matching contributions to such
plans in plan years beginning on or after January 1, 1989 shall
not be used to meet the minimum contribution requirements of this
Subsection.
(b) The percentage set forth in Subsection (a)
shall be reduced to the percentage at which contributions,
including forfeitures, are made (or are required to be made) for
a Plan Year for the Key Employee for whom such percentage is the
highest for that Plan Year. This percentage shall be determined
for each Key Employee by dividing the contribution for such Key
Employee by his Compensation for the Plan Year. All defined
contribution plans required to be included in an Aggregation
Group shall be treated as one plan for the purpose of this
Section; however, this Section shall not apply to any plan which
is required to be included in the Aggregation Group if such plan
enables a defined benefit plan in the group to meet the
requirements of section 401(a)(4) or section 410 of the Code.
(c) If a Non-Key Employee described in
Subsection (a) participates in both a defined benefit plan and a
defined contribution plan described in Paragraphs (a)(1) and
(a)(2) of Section 14.2, the Participating Company is not required
to provide such Employee with both the minimum benefit under the
defined benefit plan and the minimum contribution. In such
event, the Non-Key Employee shall not receive the minimum
contribution described in this Section if he has the minimum
benefit required by section 416 of the Code under the defined
benefit Top-Heavy Plan.
.30 Social Security. The Plan, for each Plan Year in which it
is a Top-Heavy Plan, must meet the requirements of this Article
without regard to any Social Security or similar contributions or
benefits.
.31 Adjustment to Maximum Benefit Limitation.
(a) For each Plan Year in which the Plan is (1) a
Super Top-Heavy Plan or (2) a Top-Heavy Plan and the Board of
Directors does not make the election to amend the Plan to provide
the minimum contribution described in Subsection (c), the 1.25
factor in the defined benefit and defined contribution fractions
described in Subsection (c) of Section 3.9 shall be reduced to
1.0. The adjustment described in this Subsection shall not apply
to a Participant during any period in which the Participant earns
no additional accrued benefit under any defined benefit plan and
has no employer contributions, forfeitures, or voluntary
nondeductible contributions allocated to his accounts under any
defined contribution plan.
(b) In the case of any Top-Heavy Plan to which
Subsection (e) of Section 3.9 applies, "$41,500" shall be
substituted for "$51,875" in the calculation of the numerator of
the transition fraction.
(c) If, in any Plan Year in which the Plan is a
Top-Heavy Plan but not a Super Top-Heavy Plan, the Aggregation
Group also includes a defined benefit plan, the Board of
Directors may elect to use a factor of 1.25 in computing the
denominator of the defined benefit and defined contribution
fractions described in Section 3.9. In the event of such
election, the minimum contribution described in Section 14.3(a)
for each Non-Key Employee who is not covered under a defined
benefit plan shall be increased to four percent (4%), and the
minimum Company contribution described in Section 14.3(c) for
each Non-Key Employee who is covered under a defined benefit plan
(but who does not have a minimum benefit under the defined
benefit plan equal to the lesser of (1) three percent (3%) of his
Top-Heavy Compensation multiplied by his Years of Top-Heavy
Service or (2) thirty-percent (30%) of his Top-Heavy
Compensation) shall be increased to seven and one-half percent
(7-1/2%).
ARTICLE XV
ROLLOVER CONTRIBUTIONS
.32 Rollover Contributions.
(a) Subject to the restrictions set forth in
Subsection (b), a Covered Employee may transfer or have
transferred directly to the Fund, from any qualified retirement
plan of a former employer, all or a portion of his interest in
the distributing plan. In addition, a Covered Employee who has
established an individual retirement account to hold
distributions received from qualified retirement plans of former
employers may transfer all of the assets of such individual
retirement account to the Fund. Such individual retirement
account shall not contain nondeductible contributions made by the
Employee while he was a participant in such plans.
(b) The Trustee shall not accept a distribution
from any other qualified retirement plan or from an individual
retirement account unless the following conditions are met:
(1) (A) the distribution being transferred
must come directly from the fiduciary of the plan of the former
employer, or
(B) it must come from the Employee
within 60 days after the Employee receives a distribution from
such other qualified retirement plan or individual retirement
account and must comply with the provisions of section 402(c),
403(a)(4), or 408(d)(3) of the Code, whichever applies;
(2) distributions from a plan for a
self-employed person shall not be transferred to this Plan,
unless the transfer is directly to the Fund from the funding
agent of the distributing plan;
(3) the interest being transferred shall not
include assets from any plan to the extent that the Committee
determines that the transfer of such interest (A) would impose
upon this Plan requirements as to form of distribution that would
not otherwise apply hereunder, (B) would otherwise result in the
elimination of Code section 411(d)(6) protected benefits, or (C)
would cause the Plan to be a direct or indirect transferee of a
plan to which the joint and survivor annuity requirements of
sections 401(a)(11) and 417 of the Code apply; and
(4) the interest being transferred shall not
contain nondeductible contributions made to the distributing plan
by the Employee unless the transfer to the Fund is directly from
the funding agent of the distributing plan.
.33 Vesting and Distribution of Rollover Account.
(a) The distributions transferred by or for a
Covered Employee from another qualified retirement plan or from
an individual retirement account shall be credited to the
Employee's Rollover Account. An Employee shall be fully vested
at all times in his Rollover Account
(b) An Employee's Rollover Account shall be
distributed as otherwise provided under the Plan.
ARTICLE XVI
GENERAL PROVISIONS
.1 No Employment Rights. Neither the action of the Company in
establishing the Plan, nor of any Participating Company in
adopting the Plan, nor any provisions of the Plan, nor any action
taken by the Company, any Participating Company or the Committee
shall be construed as giving to any Employee the right to be
retained in the employ of the Company or any Participating
Company, or any right to payment except to the extent of the
benefits provided in the Plan to be paid from the Fund.
.2 Governing Law. Except to the extent superseded by ERISA,
all questions pertaining to the validity, construction, and
operation of the Plan shall be determined in accordance with the
laws of the state in which the principal place of business of the
Company is located.
.3 Severability of Provisions. If any provision of this Plan
is determined to be void by any court of competent jurisdiction,
the Plan shall continue to operate and, for the purposes of the
jurisdiction of that court only, shall be deemed not to include
the provisions determined to be void.
.4 No Interest in Fund. No person shall have any interest in,
or right to, any part of the principal or income of the Fund,
except as and to the extent expressly provided in this Plan and
in the Trust Agreement.
.5 Spendthrift Clause. No benefit payable at any time under
this Plan and no interest or expectancy herein shall be
anticipated, assigned, or alienated by any Participant or
beneficiary, or subject to attachment, garnishment, levy,
execution, or other legal or equitable process, except for (1) a
Federal tax levy made pursuant to section 6331 of the Code and
(2) any benefit payable pursuant to a qualified domestic
relations order. Any attempt to alienate or assign a benefit
hereunder, whether currently or hereafter payable, shall be void.
.6 Incapacity. If the Committee deems any Participant who is
entitled to receive payments hereunder incapable of receiving or
disbursing the same by reason of Age, illness, infirmity, or
incapacity of any kind, the Committee may direct the Trustee to
apply such payments directly for the comfort, support, and
maintenance of such Participant, or to pay the same to any
responsible person caring for the Participant who is determined
by the Committee to be qualified to receive and disburse such
payments for the Participant's benefit; and the receipt of such
person shall be a complete acquittance for the payment of the
benefit. Payments pursuant to this Section shall be complete
discharge to the extent thereof of any and all liability of the
Participating Companies, the Committee, the Trustee and the Fund.
.7 Withholding. The Committee and the Trustee the shall have
the right to withhold any and all state, local, and Federal taxes
which may be withheld in accordance with applicable law.
.8 Missing Persons. Neither the Trustee nor any Participating
Company shall be obliged to search for or ascertain the
whereabouts of any individual entitled to benefits under the
Plan. Any individual entitled to benefits under the Plan who
does not file a timely claim for his benefits will be allowed to
file a claim at any later date, and payment of his benefits will
commence after that later date, except that, in the event the
Participating Company is satisfied that a Participant has no
spouse or that a Participant's spouse cannot be located (as
described in Section 5.8), and the Participant is in fact married
or the spouse is later located, whichever is applicable, such
spouse shall not be deemed an individual entitled to benefits
under the Plan.
Executed this ____ day of _________________, 1996.
WESTMORELAND COAL COMPANY
[SEAL] By:___________________________
[Title]
Attest:________________________
Secretary
WESTMORELAND RESOURCES, INC.
[SEAL] By:___________________________
[Title]
Attest:________________________
Secretary
<PAGE>
AMENDMENT NO. 1
TO THE
WESTMORELAND COAL COMPANY AND
AFFILIATED COMPANIES EMPLOYEES SAVINGS/RETIREMENT PLAN
Resolutions of the Board of Directors
of Westmoreland Coal Company
WHEREAS, Westmoreland Coal Company (the "Company") adopted
the Westmoreland Coal Company and Affiliated Companies Employees'
Stock Purchase Plan, Effective October 1, 1957, and renamed such
plan the Westmoreland coal Company and Affiliated Companies
Employees' Savings/Retirement Plan ( the "Plan"), effective March
1, 1990; and
WHEREAS, the Plan has been amended from time to time and
was most recently amended and restated effective September 1,
1987; and
WHEREAS, Westmoreland Energy, Inc. is a Participating
Company under the Plan; and
WHEREAS, Westmoreland Energy, Inc. acquired the Corona
Engineering and Consulting Division of OESI Power Corporation,
effective October 1, 1995; and
WHEREAS, the Company desires to amend the Plan to provide
for the participation of employees of the Corona Engineering and
Consulting Division of OESI Power Corporation who, as a result of
the acquisition, became employees of the Corona
Division of Westmoreland Energy, Inc. on October 1, 1995;
NOW, THEREFORE, BE IT RESOLVED, that effective October 1,
1995, the Plan is amended to read as follows:
1. The following definition shall be added to Article I of
the Plan:
""Corona Participant" means any Participant who was an
employee of the Corona Engineering and Consulting
Division of OESI Power Corporation on September 30,
1995 and became an employee of the Corona Division of
Westmoreland Energy, Inc. on October 1, 1995."
2. The following Paragraph (3) shall be added to the end
of Section 3.4 (a) of the Plan:
"(3) Notwithstanding Paragraph (2) of this Section 3.4 (a),
effective October 1, 1995, a Participating Company shall
contribute to the Fund for each Plan year an amount equal to
100% of Corona Participants' Salary Reduction Contributions for
such Plan Year not in excess of seven percent (7%) of each Corona
Participant's Compensation, offset by the amount, if any, of
Matching Contributions forfeited during such Plan Year,
provided that such contributions may be prospectively limited as
provieded in Section 3.8 and provided further that the
contribution under this Section for any Plan year shall not
cause the total contributions by the Participating Company to
exceed the maximum allowable current deduction Matching
contributions shall be credited to the Participants in proportion
to their Salary Reduction contributions for the Plan Year not
in Employee's Compensation."
3. The following Subsection (e) shall be added to the end
of Section 2.2 of the Plan:
"(e) Notwithstanding any provision of the Plan to the
contrary, each Covered Employee who was an employee of the
Corona Engineering and Consulting Division of OESI Power
Corporation on September 30, 1995 and became an employee of the
Corona Division of Westmoreland Energy, Inc. on October 1,
1995 shall be credited with Hours of Service for purposes of
Subsection (b) of this Section by taking into account his
service with the Corona Engineering and Consulting Division
of OESI Power Corporation prior to October 1, 1995."
