<PAGE>
As filed with the Securities and Exchange Commission on January 14, 1999
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
BERKSHIRE HATHAWAY INC.
(Exact name of Registrant as specified in its charter)
Delaware 47-0813844
(State or Other Jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or Organization)
1440 Kiewit Plaza
Omaha, Nebraska 68131
(Address, including zip code,
of Principal Executive Offices)
Employee Savings and Stock Ownership Plan of
General Re Corporation and its Domestic Subsidiaries
(Full Title of the Plan)
Marc D. Hamburg
Berkshire Hathaway Inc.
1440 Kiewit Plaza
Omaha, Nebraska 68131
(402) 346-1400
(Name, address, including zip code, and telephone
number, including area code, of Agent for Service)
Copy To:
Mary Ann Lyman, Esq.
Munger, Tolles & Olson LLP
355 South Grand Avenue
Los Angeles, California 90071
(213) 683-9100
---------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
============================================================================================================
Proposed Proposed
Title Of Securities Maximum Maximum Amount of
To Be Registered Amount To Be Offering Price Aggregate Offering Registration
Registered(1) Per Share (2) Price (2) Fee(2)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class B Common Stock, par
value $.1667 per share 187,494 shares $2,092.50 $392,331,195 $0
============================================================================================================
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, as
amended (the "Securities Act"), this registration statement also covers an
indeterminate amount of interests to be offered or sold pursuant to the
Employee Savings and Stock Ownership Plan of General Re Corporation and its
Domestic Subsidiaries (the "Plan") described herein.
(2) Pursuant to Rules 457(b) under the Securities Act, no registration fee is
required to be paid in connection with this filing, as a registration fee
with respect to the shares registered hereby was previously paid on July
17, 1998, in connection with the filing by Berkshire Hathaway Inc. and
General Re Corporation of preliminary proxy materials for the transaction
pursuant to which this Registration Statement is filed, which was greater
than the registration fee which would otherwise be payable for such shares
hereunder. The proposed maximum offering price per share and the proposed
maximum aggregate offering price have been calculated, pursuant to Rule
457(c) under the Securities Act, based upon the average of the high and low
prices for a share of Class B Common Stock of Berkshire Hathaway Inc. on
the New York Stock Exchange Composite Tape on January 13, 1999.
================================================================================
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by Berkshire Hathaway Inc. (the "Company" or
"Berkshire") or General Re Corporation with the Securities and Exchange
Commission (the "Commission") are hereby incorporated by reference:
(i) the Company's Annual Report on Form 10-K for the year ended December
31, 1997;
(ii) the Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, June 30 and September 30, 1998;
(iii) the description of the Company's Class B Common Stock included in the
Registration Statement on Form 8-A dated April 1, 1996;
(iv) the Company's Current Report on Form 8-K filed on June 26, 1998;
(v) General Re Corporation's Annual Report on Form 11-K for the Plan for
the year ended December 31, 1997.
All documents subsequently filed by the Company or General Re Corporation
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 then remaining unsold,
shall be deemed incorporated by reference in this Registration Statement and to
be a part hereof from the date of filing of such documents. Any statement
contained herein or in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Registration Statement to the extent that a statement contained herein or
in any subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
Not Applicable.
Item 6. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of Delaware empowers Berkshire
to indemnify, subject to the standards therein prescribed, any person in
connection with any action, suit or proceeding brought or threatened by reason
of the fact that such person is or was a director, officer, employee or agent of
Berkshire or is or was serving as such with respect to another corporation or
other entity at the request of Berkshire. Section 10 of Berkshire's By-Laws
provides that Berkshire shall, to the fullest extent permitted by Section 145 of
the General Corporation Law of Delaware, indemnify directors and officers of
Berkshire from and against any and all of the expenses, liabilities or other
matters referred to in or covered by said Section. Additionally, as permitted
by said Section and Berkshire's By-Laws, Berkshire has entered into
indemnification agreements with each of its directors and officers. The
description of such indemnification agreements under the caption "Summary of the
Indemnification Agreements" on page 9 of Berkshire's definitive proxy statement
for its May 19, 1987 Annual Meeting of Stockholders, Commission File No. 0-7413,
is incorporated herein by reference.
As permitted by Section 102 of the General Corporation Law of Delaware,
Berkshire's Restated Certificate of Incorporation includes as Article Tenth
thereof a provision eliminating, to the extent permitted by Delaware law,
II-1
<PAGE>
the personal liability of each director of Berkshire to Berkshire or any of its
stockholders for monetary damages resulting from breaches of such director's
fiduciary duty of care.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
4.1 Restated Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3.1 of the Registration
Statement on Form S-4 (File No. 333-61129) of NBH, Inc. and
Berkshire Hathaway Inc., as filed on August 10, 1998).
4.2 Certificate of Amendment of Certificate of Incorporation of
the Company
4.3 Bylaws of the Company (incorporated by reference to Exhibit
3.2 of the Registration Statement on Form S-4 (File No. 333-
61129) of NBH, Inc. and Berkshire Hathaway Inc., as filed on
August 10, 1998).
4.4 Employee Savings and Stock Ownership Plan of General Re
Corporation and its Domestic Subsidiaries.
5 Opinion of Winthrop, Stimson, Putnam and Roberts.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Winthrop, Stimson, Putnam and Roberts (contained in
Exhibit 5).
24 Power of Attorney (included on the signature page of this
Registration Statement).
</TABLE>
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;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement.
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
percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement;
II-2
<PAGE>
(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 clauses (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by such
clauses is contained in periodic reports filed with or furnished to the
Securities and Exchange Commission by the Registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") that
are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act, 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; and
(4) That, for purposes of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant to Section 13(a) or
15(d) of the Exchange Act (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) 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
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities 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 Securities Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Omaha, State of Nebraska on this 14th day of January,
1999.
BERKSHIRE HATHAWAY INC.
By: /s/ Marc D. Hamburg
------------------------------------------
Marc D. Hamburg
Vice President and Chief Financial Officer
Each person whose signature appears below hereby constitutes and appoints
each of Warren E. Buffett, Charles T. Munger, and Marc D. Hamburg his true and
lawful attorney-in-fact and agent with full powers of substitution and
resubstitution, for the undersigned and in the name of the undersigned, in any
and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement on Form S-8, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement had been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- ------------------------------- ------------------------------- -------------------------------
<S> <C> <C>
/s/ Warren E. Buffett Chairman of the Board and January 14, 1999
- ------------------------------- Director (principal executive
Warren E. Buffett officer) of Berkshire Hathaway
Inc.
/s/ Marc D. Hamburg Vice President and Chief January 14, 1999
- ------------------------------- Financial Officer (principal
Marc D. Hamburg financial officer) of
Berkshire Hathaway Inc.
/s/ Daniel J. Jaksich Controller (principal January 14, 1999
- ------------------------------- accounting officer) of
Daniel J. Jaksich Berkshire Hathaway Inc.
/s/ Charles T. Munger Vice-Chairman of the Board and January 14, 1999
- ------------------------------- Director of Berkshire Hathaway
Charles T. Munger Inc.
/s/ Susan T. Buffett Director of Berkshire Hathaway January 14, 1999
- ------------------------------- Inc.
Susan T. Buffett
/s/ Malcolm G. Chace Director of Berkshire Hathaway January 14, 1999
- ------------------------------- Inc.
Malcolm G. Chace
/s/ Walter Scott, Jr. Director of Berkshire Hathaway January 14, 1999
- ------------------------------- Inc.
Walter Scott, Jr.
</TABLE>
II-4
<PAGE>
<TABLE>
<S> <C> <C>
/s/ Howard G. Buffett Director of Berkshire Hathaway January 14, 1999
- ------------------------------- Inc.
Howard G. Buffett
/s/ Ronald L. Olson Director of Berkshire Hathaway January 14, 1999
- ------------------------------- Inc.
Ronald L. Olson
</TABLE>
The Plan. Pursuant to the requirements of the Securities Act of 1933, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Stamford, State of
Connecticut, on January 14, 1999.
Employee Savings and Stock Ownership Plan of General
Re Corporation and its Domestic Subsidiaries
By: /s/ Charles Barr
Title: Vice President-General Counsel
ESOP Committee Member
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
4.1 Restated Certificate of Incorporation of the Company (incorporated by
reference to Exhibit 3.1 of the Registration Statement on Form S-4
(File No. 333-61129) of NBH, Inc. and Berkshire Hathaway Inc., filed
on August 10, 1998).
4.2 Certificate of Amendment of Certificate of Incorporation of the
Company.
4.3 Bylaws of the Company (incorporated by reference to Exhibit 3.2 of the
Registration Statement on Form S-4 (File No. 333-61129) of NBH, Inc.
and Berkshire Hathaway Inc., filed on August 10, 1998).
4.4 Employee Savings and Stock Ownership Plan of General Re Corporation
and its Domestic Subsidiaries.
5 Opinion of Winthrop, Stimson, Putnam and Roberts.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Winthrop, Stimson, Putnam and Roberts (contained in Exhibit
5).
24 Power of Attorney (included on the signature page of this Registration
Statement).
</TABLE>
II-6
<PAGE>
EXHIBIT 4.2
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
NBH, INC.
NBH, Inc., a corporation duly organized and existing under the General
Corporation Law of the State of Delaware (the "Corporation"), does hereby
certify that:
I. The amendment to the Corporation's Certificate of Incorporation set
forth below was duly adopted in accordance with the provisions of Section 242
and has been approved by the corporation's stockholders, in accordance with the
notice requirements of Section 222 of the General Corporation Law of the State
of Delaware.
II. Article First of the Corporation's Certificate of Incorporation is
amended to read in its entirety as follows:
"The name of the corporation is Berkshire Hathaway Inc."
In Witness Whereof, the Corporation has caused this Certificate to be
executed by Marc D. Hamburg, its authorized officer, on this 22nd day of
December, 1998.
/s/ Marc D. Hamburg
Marc D. Hamburg
Vice President and Chief Financial Officer
<PAGE>
EXHIBIT 4.4
EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN
OF
GENERAL RE CORPORATION
And Its Domestic Subsidiaries
(Adopted Effective July 1, 1969)
AS AMENDED AND RESTATED
JANUARY 1, 1998
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
PAGE
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<S> <C>
ARTICLE I DEFINITIONS
1.1 "Account"....................................................... 2
1.2 "Actual Contribution Percentage"................................ 2
1.3 "Actual Deferral Percentage".................................... 2
1.4 "Additions"..................................................... 2
1.5 "Affiliated Company"............................................ 2
1.6 "Break-in-Service".............................................. 3
1.7 "Board of Directors" or "Board"................................. 3
1.8 "Code".......................................................... 3
1.9 "Committee"..................................................... 3
1.10 "Compensation".................................................. 3
1.11 "Corporation"................................................... 4
1.12 "Corporation Stock"............................................. 4
1.13 "Disability".................................................... 4
1.14 "Diversification Account"....................................... 5
1.15 "Eligible Employee"............................................. 5
1.16 "Employee"...................................................... 5
1.17 "Employer ESOP Contributions"................................... 5
1.18 "Employer"...................................................... 5
1.19 "Entry Date".................................................... 5
1.20 "ERISA"......................................................... 5
1.21 "ESOP Account".................................................. 6
1.22 "ESOP Matching Percentage"...................................... 6
1.23 "ESOP Trust".................................................... 6
1.24 "ESOP Valuation Date"........................................... 6
1.25 "Exempt Loan"................................................... 6
1.26 "Five Year Break in Service".................................... 6
1.27 "Former Participant"............................................ 6
1.28 "Funds"......................................................... 7
1.29 "Highly Compensated Employee"................................... 7
1.30 "Hour of Service"............................................... 7
1.31 "Matching Contribution"......................................... 8
1.32 "Matching Contributions Account"................................ 8
1.33 "Maternity/Paternity Leave"..................................... 8
1.34 "Participant"................................................... 9
1.35 "Participating Subsidiary"...................................... 9
1.36 "Period of Severance"........................................... 9
1.37 "Plan".......................................................... 9
1.38 "Plan Administrator"............................................ 9
1.39 "Plan Year"..................................................... 9
1.40 "Qualified Employee"............................................ 9
1.41 "Quarter"....................................................... 9
</TABLE>
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<TABLE>
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<S> <C>
1.42 "Reemployment Date"............................................ 10
1.43 "Retirement"................................................... 10
1.44 "Rollover Account"............................................. 10
1.45 "Rollover Contribution"........................................ 10
1.46 "Salary Deferral Account"...................................... 10
1.47 "Salary Deferral Contribution Limit"........................... 11
1.48 "Savings Account".............................................. 11
1.49 "Service"...................................................... 11
1.50 "Severance".................................................... 12
1.51 "Supplemental Additional Contributions"........................ 12
1.52 "Suspense Account"............................................. 12
1.53 "Trustees"..................................................... 12
1.54 "Trust Fund"................................................... 12
1.55 "Valuation Date"............................................... 12
1.56 "Vesting Computation Period"................................... 12
1.57 "Year of Service".............................................. 12
ARTICLE II ELIGIBILITY AND PARTICIPATION
2.1 Voluntary Participation........................................ 13
2.2 Eligibility.................................................... 13
2.3 Reemployment................................................... 13
2.4 Notification and Enrollment.................................... 13
2.5 Transfers to or from Non-Covered Status........................ 13
2.6 Designation of Beneficiary..................................... 13
2.7 Continuance of Participation................................... 14
2.8 ESOP........................................................... 14
ARTICLE III CONTRIBUTIONS
3.1 Savings Contributions.......................................... 15
3.2 Salary Deferral Contributions.................................. 15
3.3 Changes and Suspensions of Savings and Salary Deferral
Contributions.................................................. 16
3.4 Matching Contributions......................................... 16
3.5 Rollover Contributions......................................... 17
3.6 Supplemental Additional Contributions.......................... 18
3.7 Remittance of Participant Contributions........................ 18
3.8 Remittance of Employer Contributions........................... 18
3.9 Maximum Contribution........................................... 19
3.10 Contributions After Qualified Military Service Period.......... 20
</TABLE>
ii
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(CONTINUED)
<TABLE>
<CAPTION>
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<S> <C>
ARTICLE IV INVESTMENTS
4.1 Investment of Contributions.................................... 21
4.2 Change in Investment Election for Future Contributions......... 21
4.3 Change in Investment Election for Prior Contributions.......... 22
4.4 Investment Percentages......................................... 22
4.5 Loans.......................................................... 22
ARTICLE V PARTICIPANTS' ACCOUNTS
5.1 Individual Accounts for Each Participant....................... 23
5.2 Valuation of Funds............................................. 23
5.3 Valuation of Accounts.......................................... 23
5.4 Statement of Participant's Accounts............................ 23
5.5 Allocation of Forfeitures...................................... 23
ARTICLE VI VESTING.......................................................... 25
6.1 Vesting in Savings Accounts, Salary Deferral Accounts and
Rollover Accounts.............................................. 25
6.2 Vesting in Matching Contributions Accounts..................... 25
6.3 Office Closing or Relocation................................... 25
ARTICLE VII TERMINATION OF PARTICIPATION AND DISTRIBUTIONS.................. 26
7.1 Death While Employed or Retirement............................. 26
7.2 Severance...................................................... 26
7.3 Death After Severance or Retirement............................ 26
7.4 Method of Payment.............................................. 26
7.5 Limitations on Payment......................................... 27
7.6 Commencement of Distribution................................... 27
7.7 Limitations on Distributions................................... 28
7.8 Payments Only From Trust Fund.................................. 29
7.9 Procedure...................................................... 29
7.10 Withholding on Distributions................................... 29
7.11 Payment Restrictions........................................... 29
7.12 Direct Rollovers............................................... 30
</TABLE>
iii
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(CONTINUED)
<TABLE>
<CAPTION>
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<S> <C>
ARTICLE VIII WITHDRAWALS AND FORFEITURES
8.1 Withdrawals from the Savings Account........................... 31
8.2 Withdrawals from the Rollover Account.......................... 31
8.3 Withdrawals from the Matching Contributions Account............ 31
8.4 Withdrawals from the Salary Deferral Account After Age 59 1/2.. 31
8.5 Hardship Withdrawals........................................... 31
8.6 Rules Governing Withdrawals.................................... 33
8.7 Penalties and Forfeitures...................................... 33
8.8 Withholding on Withdrawals..................................... 34
8.9 ESOP Accounts.................................................. 34
ARTICLE IX LOANS
9.1 Loans.......................................................... 35
9.2 Home Loans..................................................... 36
9.3 Maximum Loan Amount............................................ 36
ARTICLE X ESTABLISHMENT OF TRUST
10.1 Agreement of Trust............................................. 37
10.2 Trust Fund for Exclusive Benefit of Plan Participants and
Their Beneficiaries............................................ 37
10.3 Operation of the Trust......................................... 37
10.4 Return of Employer Contributions............................... 37
10.5 ESOP Trust..................................................... 37
ARTICLE XI ADMINISTRATION OF THE PLAN
11.1 Plan Administration............................................ 38
11.2 Allocation of Responsibility for Plan and Trust Administration. 38
11.3 Performance of Plan Duties..................................... 38
11.4 Funding Policy................................................. 38
11.5 Appointment of Plan Administrator.............................. 39
11.6 Record Maintenance............................................. 39
11.7 Allocation of Delegation of Duties and Responsibilities........ 39
11.8 Expenses....................................................... 40
11.9 Reliance Upon Others........................................... 40
11.10 Indemnification................................................ 40
11.11 Notifications.................................................. 40
11.12 Multiple Capacities............................................ 41
</TABLE>
iv
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<TABLE>
<CAPTION>
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<S> <C>
ARTICLE XII AMENDMENT OF THE PLAN
12.1 Authority to Amend the Plan.................................... 42
ARTICLE XIII TERMINATION OF THE PLAN
13.1 Discontinuance or Suspension of Employer Contributions and
Termination of the Plan........................................ 43
13.2 Procedure on Termination of Plan or Discontinuance of
Employer Contributions......................................... 43
13.3 Merger......................................................... 43
ARTICLE XIV GENERAL PROVISIONS
14.1 Participation of Subsidiaries.................................. 44
14.2 Alienation of Benefits Prohibited.............................. 44
14.3 No Employment Rights Implied................................... 44
14.4 Number......................................................... 45
14.5 Governing Law.................................................. 45
14.6 Missing Persons................................................ 45
14.7 Incapacity..................................................... 45
14.8 Corrective Actions............................................. 45
ARTICLE XV TOP-HEAVY PROVISIONS............................................. 46
15.1 Applicability.................................................. 46
15.2 Definitions.................................................... 46
15.3 Determination of Top-Heavy Status.............................. 49
15.4 Vesting........................................................ 50
15.5 Minimum Benefits............................................... 51
15.6 Adjustment to the Section 415 Limit............................ 52
ARTICLE XVI EMPLOYEE STOCK OWNERSHIP PLAN................................... 53
16.1 ESOP Contributions............................................. 53
16.2 ESOP Matching Allocations...................................... 53
16.3 ESOP Supplemental Allocations.................................. 53
16.4 Exempt Loan.................................................... 54
16.5 Investment of Trust Fund....................................... 54
16.6 Suspense Account; Dividends on Unallocated Stock............... 54
16.7 Vesting........................................................ 55
</TABLE>
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<TABLE>
<CAPTION>
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<S> <C>
16.8 Distributions of ESOP Account.................................. 56
16.9 Diversification of Account..................................... 56
16.10 Voting......................................................... 57
16.11 Tenders........................................................ 58
16.12 Shares Credited................................................ 60
ARTICLE XVII ESOP Administration............................................ 61
17.1 ESOP Responsibilities.......................................... 61
</TABLE>
APPENDIX A LIST OF PARTICIPATING DOMESTIC SUBSIDIARIES
APPENDIX B SCHEDULES FOR SPECIAL COVERAGE PROVISIONS FOR ACQUIRED
COMPANIES AND SIMILAR SITUATIONS
SCHEDULE I COVERAGE OF CERTAIN FORMER EMPLOYEES OF
CONSTITUTION STATE MANAGEMENT COMPANY
SCHEDULE II COVERAGE OF CERTAIN FORMER EMPLOYEES OF HARTFORD
STEAM BOILER INSPECTION AND INSURANCE COMPANY WHO
BECAME EMPLOYEES OF ENGINEERING INSURANCE GROUP
SCHEDULE III COVERAGE OF CERTAIN FORMER EMPLOYEES OF ROYAL
INDEMNITY COMPANY
SCHEDULE IV COVERAGE OF CERTAIN FORMER EMPLOYEES OF GUY
CARPENTER & COMPANY, INC.
SCHEDULE V COVERAGE OF CERTAIN FORMER EMPLOYEES OF NEW
ENGLAND ASSET MANAGEMENT, INC.
SCHEDULE VI COVERAGE OF CERTAIN FORMER EMPLOYEES OF COLOGNE
REINSURANCE CORPORATION OF AMERICA
vi
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TABLE OF CONTENTS
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(CONTINUED)
SCHEDULE VII COVERAGE OF CERTAIN FORMER EMPLOYEES OF PRMS,
INC.
SCHEDULE VIII COVERAGE OF CERTAIN FORMER EMPLOYEES OF
NATIONAL REINSURANCE CORPORATION
SCHEDULE IX COVERAGE OF CERTAIN FORMER EMPLOYEES OF NATIONAL
REINSURANCE CORPORATION WITH RESPECT TO MERGED
PLAN ASSETS
vii
<PAGE>
EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN
OF
GENERAL RE CORPORATION
And Its Domestic Subsidiaries
AS AMENDED AND RESTATED
JANUARY 1, 1998
PURPOSE
The Employee Savings and Stock Ownership Plan of General Re Corporation and
its Domestic Subsidiaries (the "Plan") was originally adopted effective July 1,
1969. The purposes of the Plan are to encourage and assist employees of General
Re Corporation (the "Corporation") and of its participating domestic
subsidiaries (the "Participating Subsidiaries") to adopt a regular savings
program, to help provide additional security for their retirement and to enable
such employees to obtain a proprietary interest in, and share in the prosperity
of, the Corporation. The Plan was amended effective July 1, 1984 to incorporate
a qualified cash or deferred arrangement under Section 401(k) of the Internal
Revenue Code of 1986 (the "Code") and, accordingly, provides for both before-tax
and after-tax employee contributions. The Plan is carried out through employee
contributions deducted from payroll and additional contributions by the
Corporation and Participating Subsidiaries out of their current or accumulated
profits.
The Plan is a profit sharing plan within the meaning of Section 401(a)(27)
of the Code and is intended to meet the requirements of the Employee Retirement
Income Security Act of 1974 ("ERISA") and to be qualified under Sections 401(a)
and 401(k) of the Code. The ESOP provisions of the Plan are also intended to
satisfy the definition contained in Section 4975(e)(7) of the Code and meet the
applicable requirements of Sections 409(e), 409(h), 409(n) and 409(o) of the
Code. It is also intended that any attendant trust which is part of the Plan be
exempt under Section 501(a) of the Code.
The rights and benefits, if any, of an employee who participated in the
Plan (or any person claiming by, through or under such individual) whose
employment was terminated prior to January 1, 1998 shall be determined in
accordance with the provisions of the Plan document then in effect on the date
of such employment termination unless otherwise provided in this restatement.
1
<PAGE>
ARTICLE I
DEFINITIONS
1.1 "Account"
-------
means the account established in connection with one or more of the Funds
to reflect all contributions made by the Employer on behalf of the Participant
and by the Participant, together with all earnings thereon, and, where
applicable, to reflect all Rollover Contributions made by an Eligible Employee,
together with all earnings thereon.
1.2 "Actual Contribution Percentage"
------------------------------
means, for each Plan Year, the average of the ratios (calculated separately
for each Qualified Employee in a special group) of
(a) the amount of Matching Contributions and savings contributions,
if any, to be paid over to the Trust Fund on behalf of, or by, each Qualified
Employee for each such Plan Year, to
(b) the Qualified Employee's Compensation for such Plan Year.
1.3 "Actual Deferral Percentage"
--------------------------
means, for each Plan Year, the average of the ratios (calculated separately
for each Qualified Employee in a specified group) of
(a) the amount of salary deferral contributions to be paid over to
the Trust Fund on behalf of each Qualified Employee for such Plan Year, to
(b) the Qualified Employee's Compensation for such Plan Year.
1.4 "Additions"
---------
means, with respect to a Plan Year, the total of Matching Contributions,
salary deferral contributions, savings contributions, Employer ESOP
contributions, and forfeitures under Sections 5.5, 8.7 and 16.7 allocated to a
Participant's Account.
1.5 "Affiliated Company"
------------------
means a company which is (a) a member of a controlled group of corporations
of which the Corporation is a member; (b) an unincorporated trade or business
which is under common control with the Corporation, as determined in accordance
with Section 414(c) of the Code and regulations issued thereunder, or (c)
otherwise affiliated with the Corporation and determined by the Board of
Directors to be an Affiliated Company for purposes of the Plan. A "controlled
group of corporations" means a controlled group of corporations, as defined in
Section 1563(a) of the
2
<PAGE>
Code, determined without regard to sections 1563(a)(4) and (e)(3)(c), except
that, with respect to the limitations set forth in Section 3.9 of the Plan,
instead of 80%, the applicable percentage shall be 50% whenever such percentage
appears in Section 1563(a)(1) of the Code.
1.6 "Break-in-Service"
----------------
means a Vesting Computation Period in which a Participant completes no more
than 500 Hours of Service.
1.7 "Board of Directors" or "Board"
------------------ -----
means the Board of Directors of the Corporation or its Executive Committee.
1.8 "Code"
----
means the Internal Revenue Code of 1986, as amended. All citations to
sections of the Code are to such sections as they may from time to time be
amended or renumbered.
1.9 "Committee"
---------
means a panel consisting of three or more officers or employees of the Plan
Administrator appointed by the Plan Administrator to act on its behalf in
administering the Plan.
1.10 "Compensation"
------------
means (a) for salaried Employees, the regular basic salary or wages paid by
an Employer for services performed by such Employees which are computed on a
weekly, monthly, annual or other comparable basis before any payroll deductions
for taxes or any other purposes plus their salary deferral contributions and any
amounts contributed on behalf of such Employees for such period under the
Corporation's cafeteria plan under Section 125 of the Code, and (b) for hourly
Employees, wages paid by an Employer for services performed by such Employees
which are computed on a biweekly or other comparable basis before any payroll
deductions for taxes or any other purposes, plus their salary deferral
contributions and any amounts contributed on behalf of such Employees for such
period under the Corporation's cafeteria plan under Section 125 of the Code.
However, in the case of both (a) and (b), above, Compensation shall not include
overtime, bonuses, commissions, fees, pension, severance pay or any other
extraordinary compensation, nor Matching Contributions or ESOP Contributions by
an Employer under this Plan, or Employer contributions to the Retirement Plan or
any other deferred compensation or employee benefit plan or program of any
Employer. Notwithstanding the foregoing,
(a) for purposes of determining the Actual Contribution Percentage
in Section 1.2, the Actual Deferral Percentage in Section 1.3, and the ESOP
Matching Percentage in Section 1.22 only, Compensation means an Employee's
earnings from an Employer for a calendar year as reported on Form W-2, and
3
<PAGE>
(b) for purposes of Sections 1.4 and 3.9 only, Compensation shall
include the Participant's wages, salaries, fees for professional services and
other amounts for personal services actually rendered in the course of
employment with an Employer (including, but not limited to, commission paid
salesmen, compensation for services on the basis of a percentage of profits,
commissions on insurance premiums, tips and bonuses, and in the case of a
Participant who is an employee within the meaning of Code Section 401(c)(1) and
the regulations thereunder, the Participant's earned income (as described in
Code Section 401(c) (2) and the regulations thereunder) paid for the Plan Year
but shall exclude: (1)(A) contributions made by an Employer to a plan of
deferred compensation to the extent that, before the application of the Code
Section 415 limitations to the Plan, the contributions are not includible in the
gross income of the Employee for the taxable year in which contributed, (B)
Employer contributions made on behalf of an Employee to a simplified employee
pension plan described in Section 408(k) of the Code to the extent such
contributions are deductible by the Employee under Section 219(a) of the Code,
(C) any distributions from a plan of deferred compensation regardless of whether
such amounts are includible in the gross income of the Employee when distributed
except any amounts received by an Employee pursuant to an unfunded non-qualified
plan to the extent such amounts are includible in the gross income of the
Employee; (2) amounts realized from the exercise of a non-qualified stock option
or when restricted stock (or property) held by an Employee either becomes freely
transferable or is no longer subject to a substantial risk of forfeiture; (3)
amounts realized from the sale, exchange or other disposition of stock acquired
under a qualified stock option; and (4) other amounts which receive special tax
benefits, such as premiums for group term insurance (but only to the extent that
the premiums are not includible in the gross income of the Employee). For Plan
Years commencing on and after January 1, 1997, Compensation, for purposes of
Section 1.4 and 3.9 only, shall include any salary deferral contributions made
on behalf of a Participant and any amount which is contributed by an Employer at
the election of a Participant and which is not includible in gross income of
such Participant by reason of Section 125 of the Code.
(c) the amount of Compensation taken into account for a Plan Year
under Section 3.1, 3.2, 3.4, 16.2 and 16.3 shall not exceed the applicable
dollar limitation imposed under Section 401(a)(17) of the Code. The applicable
dollar limitation on Compensation for a Plan Year shall be $160,000 as adjusted
periodically for increases in the cost-of-living in accordance with Section
401(a)(17)(B) of the Code. For all Plan Years ending on or before December 31,
1996, the rules pertaining to family members under Sections 401(a)(17) and
414(q)(6) of the Code shall apply to the determination of a Highly Compensated
Employee Participant's applicable dollar limitation on Compensation for a Plan
Year.
1.11 "Corporation"
-----------
means General Re Corporation.
1.12 "Corporation Stock"
-----------------
means the shares of General Re Preferred Stock that are convertible into
General Re Common Stock, and General Re Common Stock into which such stock may
be converted.
1.13 "Disability"
----------
4
<PAGE>
means any physical or mental condition which renders the Participant
incapable of performing the work for which the Participant was employed or
similar work that qualifies the Participant for benefits under an Employer-
sponsored long-term disability plan.
1.14 "Diversification Account"
-----------------------
means a portion of the ESOP Account offering the investment options
provided in Section 4.1 established pursuant to Section 16.9.
1.15 "Eligible Employee"
-----------------
means an Employee of an Employer. Notwithstanding the foregoing, a person
shall not be considered an Eligible Employee if he (i) is a non-United States
citizen who (a) is regularly employed outside the United States and (b) is
temporarily assigned to an Employer in the United States or (ii) is part of a
unit of Employees covered by a collective bargaining agreement between the
Employer and the representative of such Employees unless such agreement provides
otherwise.
1.16 "Employee"
--------
means any person who is regularly employed by the Corporation or an
Affiliated Company. Employee shall include any leased employee within the
meaning of Section 414(n)(2) of the Code unless such leased employee is covered
by a plan described in Section 414(n)(5) of the Code and unless such leased
employees do not constitute more than 20 % of the Employer's non-Highly
Compensated Employee workforce and, for purposes of determining eligibility for
participation and vesting, all periods of service for the Company including
services performed during a period when such employee would have been a "leased
employee" had he completed a one-year period of substantially full-time service,
shall be counted as service for an Employer.
1.17 "Employer ESOP Contributions"
---------------------------
means contributions made under Section 16.1.
1.18 "Employer"
--------
means the Corporation and any Participating Subsidiary, as hereinafter
provided in Section 14. 1. In the event that an Employee shall at any time be
employed by two or more Employers, the term Employer shall mean and include,
with reference to such Employee each of such companies acting independently of
the others.
1.19 "Entry Date"
----------
means the first day of the Quarter in which an Eligible Employee satisfies
the requirement of Section 2.2 and the first day of any Quarter thereafter
subject to the provisions of Section 8.7.
1.20 "ERISA"
-----
5
<PAGE>
means the Employee Retirement Income Security Act of 1974, as amended. All
citations to sections of ERISA are to such sections as they may from time to
time be amended or renumbered.
1.21 "ESOP Account"
------------
means the sum of the Participant's ESOP Matching Allocations under Section
16.2, ESOP Supplemental Allocations under Section 16.3, forfeitures allocated
under Section 16.7, and earnings thereon.
1.22 "ESOP Matching Percentage"
------------------------
means, for each Plan Year, the average of the ratios (calculated separately
for each Qualified Employee in a special group) of
(a) the amount of ESOP Matching Allocations and savings
contributions, if any, made on behalf of, or by, each Qualified Employee for
such Plan Year, to
(b) the Qualified Employee's Compensation for such Plan Year.
1.23 "ESOP Trust"
----------
means the Trust established pursuant to Article X to hold the ESOP funds
and other Plan assets.
1.24 "ESOP Valuation Date"
-------------------
means the last business day of each calendar quarter.
1.25 "Exempt Loan"
-----------
means any loan to the Plan by the Corporation or any loan to the Plan
which is guaranteed by the Corporation provided such loan is exempt under
Section 4975(d)(3) of the Code.
1.26 "Five Year Break in Service"
--------------------------
means a period of 5 consecutive Vesting Computation Periods, beginning with
the Vesting Computation Period in which the Participant incurs a Severance
during which the Participant is not an Employee on the last day of each Vesting
Computation Period, without regard to Section 1.31.
1.27 "Former Participant"
------------------
means any person who was at one time a Participant but who is no longer a
Participant and who has not yet received a complete distribution from the Plan.
6
<PAGE>
1.28 "Funds"
-----
means the investment funds provided for in Section 4.1 of the Plan.
1.29 "Highly Compensated Employee"
---------------------------
means any Employee who:
(a) was a 5% owner of the Employer at any time during the Plan Year
or the preceding Plan Year; or
(b) for the preceding Plan Year
(i) had Compensation from the Employer in excess of $80,000
(as adjusted from time to time in accordance with regulations of the Secretary
of Treasury) and
(ii) was in the group consisting of the top 20% of Employees
ranked by Compensation for such preceding Plan Year.
For purposes of paragraph (b)(ii) above, an Employer may exclude:
(i) Employees who have not completed 6 months of Service;
(ii) Employees who normally work less than 17.5 hours per week;
(iii) Employees who normally work less than 6 months during a
Plan Year;
(iv) Employees who have not attained age 21;
(v) Collectively bargained Employees; and
(vi) Employees who are non-resident aliens and who receive no
earned income from the Employer that constitutes income from United States
sources.
A former Employee shall be treated as a Highly Compensated Employee
if such Employee was a Highly Compensated Employee when such Employee separated
from Service or such Employee was a Highly Compensated Employee at any time
after attaining age 55.
1.30 "Hour of Service"
---------------
means:
(a) (1) Each hour for which an Employee is paid, or entitled to
payment, by the Corporation or any Affiliated Company, for the performance of
employment duties. For purposes of determining eligibility under Sections 2.2
and 2.7, payment by the Monarch Insurance Company of Ohio to an Employee for the
performance of employment duties on and after April 1,
7
<PAGE>
1985, shall be treated as payment by Affiliated Company. These hours shall be
credited to the Employee for the computation period in which the duties are
performed; and
(2) Each hour for which an Employee is paid or entitled to
payments by the Corporation or any Affiliated Company on account of a period of
time during which no duties are performed (irrespective of whether the
employment relationship has terminated) in accordance with Department of Labor
Regulation Section 2530.200b-2, which is incorporated herein by reference:
provided, however, that no more than 501 Hours of Service are required to be
credited under this paragraph to an Employee on account of any single continuous
period during which the Employee performs no duties (whether such period occurs
in a single compensation period); and
(3) Each hour for which back pay (irrespective of mitigation of
damages) is either awarded or agreed to by the Corporation or any Affiliated
Company; provided, however, that credit shall not be given under this paragraph
(a)(3) if credit is already given for the same hours under paragraphs (a)(1) or
(2), above. These hours shall be credited to the Employee for computation period
or periods to which the award or agreement pertains rather than the computation
period in which the award, agreement or payment is made.
(b) Employees paid on an hourly basis shall be credited with Hours
of Service as provided in paragraphs (a)(1), (2) and (3), above. Employees paid
on a salaried basis and for whom actual time records are not kept shall be
credited with 190 Hours of Service for each calendar month in which they must be
credited with one Hour of Service under paragraphs (a)(1), (2) and (3), above.
1.31 "Matching Contribution"
---------------------
means the Employer's contribution made pursuant to Section 3.4.
1.32 "Matching Contributions Account"
------------------------------
means that portion of a Participant's Account attributable to Matching
Contributions under Section 3.4 and includes the Participant's Company Accounts
as in effect in the Plan on June 30, 1984.
1.33 "Maternity/Paternity Leave"
-------------------------
means a leave of absence granted to an Employee who leaves employment due
to pregnancy of that Employee, birth of a child of the Employee, placement of a
child with the Employee in connection with adoption of such child by the
Employee, or caring for a child of the Employee immediately following such birth
or placement for adoption. Such leave shall not be credited as provided in the
Plan unless the Employee certifies to the Plan Administrator that such leave was
taken for one of the permitted reasons.
For purposes of determining vesting and eligibility purposes whether an
Employee on Maternity/Paternity Leave has incurred a Break-in-Service, an
employee on Maternity/Paternity Leave shall be treated as having completed, but
only for purposes of determining whether a
8
<PAGE>
Break-in-Service has occurred, either (1) the number of hours that would have
been, credited but for the Maternity/Paternity Leave or (2) if such normal work
hours are unknown, 8 Hours of Service for each normal workday during the leave,
such total not to exceed 501 hours for any period. Such credit shall be given
the Employee either in the eligibility computation period or the Vesting
Computation Period in which the absence begins for one of the permitted reasons
(if necessary to prevent a Break in Service in that eligibility computation
period or Vesting Computation Period) or in the following eligibility
computation period or Vesting Computation Period.
1.34 "Participant"
-----------
means an Eligible Employee participating in this Plan in accordance with
its provisions.
1.35 "Participating Subsidiary"
------------------------
means any domestic corporation 50% or more of the voting stock of which is
owned by the Corporation, which adopts this Plan for its Employees with the
approval of its board of directors and of the Board of the Corporation. As a
condition of participating in the Plan a Participating Subsidiary shall
authorize the Board and the Plan Administrator to act for it in matters arising
under or with respect to the Plan and shall comply with such other terms and
conditions as may be imposed by the Board.
1.36 "Period of Severance"
-------------------
means the period of time between an Employee's Severance and Reemployment
Date.
1.37 "Plan"
----
means the Employee Savings and Stock Ownership Plan of General Re
Corporation and its Domestic Subsidiaries as described therein and as amended
from time to time.
1.38 "Plan Administrator"
------------------
means the Corporation.
1.39 "Plan Year"
---------
means the 12-month period commencing each January 1 and ending the
following December 31, provided, however, that the first Plan Year shall be the
6 month period from July 1, 1969 to December 31, 1969.
1.40 "Qualified Employee"
------------------
means an Eligible Employee who at any time has met the requirements of
Article II.
1.41 "Quarter"
-------
9
<PAGE>
means the three-month period beginning January 1, April 1, July 1 and
October 1 of each Plan Year.
1.42 "Reemployment Date"
-----------------
means the first date following a termination of employment with respect to
which an Employee is credited with an Hour of Service.
1.43 "Retirement"
----------
means the retirement of a Participant under the Employee Retirement Plan of
General Re Corporation and its Affiliates (the "Retirement Plan"), or, in the
case of a Participant who is not a Member of the Retirement Plan, the date of
retirement if the Participant were a Member.
1.44 "Rollover Account"
----------------
means that portion of an Eligible Employee's Account credited with Rollover
Contributions under Section 3.5.
1.45 "Rollover Contribution"
---------------------
means:
(a) all or any portion of an "eligible rollover distribution" (as
that term is defined in Section 402(c)(4) of the Code) which is contributed to
the Trust Fund within sixty (60) days of receipt of the distribution from a
trust described in Section 401(a) of the Code and exempt from tax under Section
501(a) of the Code. An eligible rollover distribution shall not include any
amount considered to be contributed by the Participant to the qualified trust
described above; or
(b) an amount (described in Section 408(d)(3)(A)(ii) of the Code),
which is contributed to the Trust Fund and represents all or any portion of the
amount of the Eligible Employee's distribution from an individual retirement
account or individual retirement annuity (defined in Sections 408(a) and 408(b)
of the Code, respectively), the value of which account or annuity is
attributable solely to a rollover distribution received by such Participant from
a trust described in Section 401(a) of the Code and exempt from tax under
Section 501(a) of the Code, and which amount is contributed to the Trust Fund
within sixty (60) days of receipt of the distribution from the Eligible
Employee's individual retirement account or annuity.
(c) an amount of cash which qualifies as an "eligible rollover
distribution" transferred directly from the trustee of a trust described in
Section 401(a) of the Code and exempt from tax under Section 501(a) of the Code
to the Trust Fund pursuant to Section 401(a)(31) of the Code.
1.46 "Salary Deferral Account"
-----------------------
10
<PAGE>
means that portion of a Participant's Account credited with salary deferral
contributions under Section 3.2.
1.47 "Salary Deferral Contribution Limit"
----------------------------------
means, for Plan Years beginning on and after January 1, 1998, $10,000
multiplied by an applicable cost of living adjustment factor prescribed by the
Secretary of the Treasury.
1.48 "Savings Account"
---------------
means that portion of a Participant's Account credited with savings
contributions under Section 3.1 and includes the Participant's Account as in
effect in the Plan on June 30, 1984.
1.49 "Service"
-------
means the period of an Employee's employment used in determining such
Employee's vesting and shall be determined as follows:
(a) Service prior to January 1, 1976, shall be determined in
accordance with the provisions of the Plan as in effect on December 13, 1975.
(b) Service after January 1, 1976, means all Years of Service subject
to paragraph (g) below.
(c) Any Employee who leaves the active service of an Employer to
enter a uniformed service of the United States of America shall be deemed to be
on leave of absence during the period of Service in such uniformed service
including any period after discharge from such uniformed service in which the
Employee's reemployment rights are guaranteed under the Uniformed Services
Employment and Reemployment Rights Act of 1994, provided the Employee applied
for reemployment or is reemployed by the Employer prior to the expiration of the
latter period, and the period of such leave of absence shall be included in
determining Service.
(d) A period of absence from employment (i) during which an Employee
receives Compensation, (ii) during which an Employee receives payments under an
Employer's lone-term disability plan or program, or (iii) which qualifies as
leave under the Family and Medical Leave Act of 1993 shall be included in
determining Service.
(e) After January 1, 1976, a leave or period of absence for which an
Employee receives credit for Service shall be included in computing Hours of
Service for purposes of Sections 1.31 and 2.2.
(f) The personnel records of the Corporation and its Participating
Subsidiaries shall be conclusive evidence for the purpose of determining the
Service of any and all Employees. The foregoing is subject to the provisions of
Section 11.5(c) of the Plan.
11
<PAGE>
(g) If a Participant incurs a Five Year Break-in-Service with respect
to a contribution prior to becoming vested in such contribution pursuant to
Section 6.2(b) and Section 16.7, the Participant shall forfeit all rights to
such contribution, and Service after the Break shall not count for purposes of
Section 6.2(b) and Section 16.7 with respect to that contribution.
(h) Service for vesting and eligibility purposes shall also include
Service with an Affiliated Company.
1.50 "Severance"
---------
means an Employee's termination of employment by an Employer under any
circumstances other than death, Retirement or transfer to an Affiliated Company.
1.51 "Supplemental Additional Contributions"
-------------------------------------
means the unmatched lump sum contributions Participants may make to their
Savings Accounts as provided in Section 3.6.
1.52 "Suspense Account"
----------------
means the account comprised of unallocated shares of Corporation Stock
maintained in accordance with Section 16.6.
1.53 "Trustees"
--------
means the initial Trustees or any successor Trustees appointed and serving
pursuant to the Plan.
1.54 "Trust Fund"
----------
means the assets of the Plan from time to time held by the Trustees.
1.55 "Valuation Date"
--------------
means each business day of the year as of which the Trustees determine the
value of the Funds.
1.56 "Vesting Computation Period"
--------------------------
means the 12 consecutive month period beginning on the date each Employee
commences employment with an Employer and each anniversary of that date.
1.57 "Year of Service"
---------------
means a Vesting Computation Period in which the Employee has 1,000 or more
Hours of Service.
12
<PAGE>
ARTICLE II
ELIGIBILITY AND PARTICIPATION
-----------------------------
2.1 Voluntary Participation. Participation in the Plan by Eligible
-----------------------
Employees shall be entirely voluntary.
2.2 Eligibility. Any Eligible Employee shall be eligible to participate
-----------
in the Plan on the first day of the Quarter during which the Employee will
complete a twelve month period of not less than 1,000 Hours of Service.
2.3 Reemployment. A reemployed Employee, who was formerly a Participant
------------
or who prior to termination of employment was eligible to participate in the
Plan, shall be eligible to participate in the Plan as of his Reemployment Date
but shall not be eligible to make contributions until the first day of the
Quarter following his Reemployment Date. Any other reemployed Employee shall be
eligible to participate in the Plan in accordance with Section 2.2.
2.4 Notification and Enrollment. The Plan Administrator shall notify in
---------------------------
writing each Employee who is eligible to join the Plan and shall explain the
rights, privileges and duties of a Participant in the Plan. Each Eligible
Employee may enroll as a Participant as of any Entry Date by completing and
delivering to the Plan Administrator an application which contains a salary
reduction agreement, an investment option section and a beneficiary designation
on the forms provided therefore by the Plan Administrator.
2.5 Transfers to or from Non-Covered Status. If a Participant ceases to
---------------------------------------
be employed by an Employer but continues to be an Employee of an Affiliated
Company which is not an Employer, such Participant's right to make or have
contributions made on his behalf to the Plan shall be suspended. If during the
period of suspension, the Participant's employment with the Affiliated Company
terminates for any reason, the applicable provisions of Article VII shall be
observed. If and when a suspended Participant again is employed by an Employer
and becomes an Eligible Employee, such Participant may resume making
contributions by filing the appropriate forms in advance. In the event a
collective bargaining agreement is entered into between an Employer and a
representative for any unit of Eligible Employees, unless such agreement
provides otherwise, such Eligible Employees who are not already Participants
shall not be eligible to become Participants and such Eligible Employees who are
already Participants shall be treated as Participants who cease to be employed
by an Employer but continue to be an employee of an Affiliated Company which is
not an Employer.
2.6 Designation of Beneficiary. The Participant may designate one or
--------------------------
more persons (which may be natural persons or trusts) to receive the death
benefit described in Article VII. The beneficiary may be changed by the
Participant at any time by signing and filing with the Plan Administrator a
written notification of change of beneficiary on the form prescribed by the Plan
Administrator. The last designation received by the Plan Administrator, or its
representative, shall be controlling; provided, however, that no designation, or
change thereof, shall be effective unless received by the Plan Administrator or
its representative prior to the Participant's death and, in no event, shall it
be effective as of a date prior to such receipt. If a Participant does not
designate a
13
<PAGE>
beneficiary, or if the designated beneficiary does not survive the Participant,
the Participant's estate shall be deemed the beneficiary.
Notwithstanding the foregoing, if a Participant is married, the spouse
of the Participant shall be the Participant's sole beneficiary unless the spouse
of the Participant consents to the naming of another beneficiary. Such consent
shall be in writing, shall acknowledge the effect of such consent and the
specific non-spouse beneficiary, and shall be witnessed by the Plan
Administrator or a notary public; provided, however, that if it is established
to the satisfaction of the Committee that: (a) the spouse of the Participant
cannot be located, (b) there is no spouse, (c) the Participant is legally
separated or has been abandoned and the Participant has a court order to such
effect, or (d) such other situation as may be prescribed in regulations by the
Secretary of the Treasury, such consent will not be required. If a spouse is
legally incompetent to give such consent, the spouse's legal guardian, even if
the guardian is the Participant, may give such consent. Any such consent by the
spouse shall be irrevocable as long as the Participant does not change such
designation but shall only be effective with respect to the spouse who gives the
consent. Once the spouse has consented, the Participant may change his
beneficiary at any time by filing with the Committee a new proper consent of the
spouse as set forth above. The requirement of the consent of a Participant's
spouse will end in the earlier of the spouse's death or the date of termination
of such marriage by final decree of divorce or annulment unless a qualified
domestic relations order (as defined in Section 414(p)(1) of the Code and
Section 206(d) of ERISA) provides that the Participant's former spouse shall be
treated as a surviving spouse for purposes of determining survivor benefits.
If the Committee is in doubt as to the right of any person to receive
any amount on account of the Participant's death, the Committee may direct the
Trustees to retain such amount without liability for any interest thereon, until
the rights thereto are determined, or the Committee may direct the Trustees to
pay such amount into any court of appropriate jurisdiction as part of an
interpleader action and such payment shall be a complete discharge of the
liability of the Plan and the Trust with respect thereto.
2.7 Continuance of Participation. Other than as provided in Article XIII
----------------------------
of the Plan, each Participant's participation shall continue, subject to Section
3.3 and 8.7, until the first to occur of the following events:
(a) death;
(b) Severance; or
(c) Retirement.
2.8 ESOP. Notwithstanding anything to the contrary contained in this
----
Article II, all full-time Employees and all part-time Employees who complete
more than 1,000 Hours of Service shall be Participants with respect to the ESOP
and, subject to Section 2.5, shall receive allocations on the basis set forth in
Article XVI.
14
<PAGE>
ARTICLE III
CONTRIBUTIONS
-------------
3.1 Savings Contributions. For any Plan Year, each Participant may elect
---------------------
to contribute to such Participant's Account any whole percentage not exceeding
16% of Compensation for such Plan Year. However, in no event shall the total
annual contribution to a Participant's Savings Account and Salary Deferral
Account exceed, in the aggregate, 16 % of Compensation for the Plan Year.
3.2 Salary Deferral Contributions. For any Plan Year, each Participant
-----------------------------
may elect to have allocated to such Participant's Account the lesser of (i) any
whole percentage not exceeding 16% of Compensation for such Plan Year or (ii)
the Salary Deferral Compensation Limit for such Plan Year. Salary deferral
contributions shall be subject to the following rules:
(a) A Participant's Compensation for a Plan Year shall be reduced by
the amount of the allocation which the Participant elects for such Plan Year.
All elections shall be made at the time, in the manner and subject to the
conditions specified by the Plan Administrator which shall prescribe uniform and
nondiscriminatory rules for such elections.
(b) In any Plan Year in which the Actual Deferral Percentage for the
group of Highly Compensated Employees, taking into account Employee elections,
would be more than the greater of:
(1) the Actual Deferral Percentage of all other Qualified
Employees multiplied by 1.25, or
(2) the lesser of 2 % plus the Actual Deferral Percentage of all
other Qualified Employees multiplied by 2, then deferral elections of the
Highly Compensated Employees with the greatest amount of such deferrals
shall be reduced to the extent necessary so that the Actual Deferral
Percentage for the group of Highly Compensated Employees is not more than
the greater of (1) or (2).
For all Plan Years ending on or before December 31, 1996, the Actual
Deferral Percentage for a Highly Compensated Employee, who is either a 5% owner
or one of the 10 highest in terms of Compensation, shall be determined by
including salary deferral contributions and Compensation of family members (as
defined in Code Section 414(q)(6)), and such affected family members shall be
disregarded in determining the Actual Deferral Percentage of Qualified Employees
who are not Highly Compensated Employees. For Plan Years commencing on and
after January 1, 1997, the Committee shall use (unless it elects not to) the
Actual Deferral Percentage for the preceding Plan Year of all Qualified
Employees who are not Highly Compensated Employees to determine the maximum
Actual Deferral Percentage for the current Plan Year for the group of Qualified
Employees who are Highly Compensated Employees.
15
<PAGE>
(c) In no event shall the total annual contribution to a
Participant's Savings Account and Salary Deferral Account exceed, in the
aggregate, 16% of such Participant's Compensation for the Plan Year.
(d) Notwithstanding any other provision of this Plan, amounts held in
the Participant's Salary Deferral Account may not be distributable prior to the
earlier of:
(1) termination of employment, disability or death;
(2) the attainment of age 59 1/2;
(3) termination of the Plan without establishment of a successor
plan by the Employer or an Affiliated Company;
(4) the date of the sale by the Employer to an entity that is not
an Affiliated Company of substantially all of the assets (within the
meaning of Code Section 409(d)(2)) with respect to a Participant who
continues employment with the corporation acquiring such assets;
(5) the date of the sale by the Employer or an Affiliated
Employer of its interest in a subsidiary (within the meaning of Code
Section 409(d)(3)) to an entity which is not an Affiliated Company with
respect to a Participant who continues employment with such subsidiary; or
(6) proven financial hardship as described in Section 8.5.
(e) In the event that the Salary Deferral Contribution Limit is
exceeded, the Plan Administrator shall direct the Trustee to distribute such
excess amount, and any income allocable to such amount, to the Participant not
later than the April 5th following the close of the Plan Year.
3.3 Changes and Suspensions of Savings and Salary Deferral Contributions.
--------------------------------------------------------------------
A Participant may change the rate of savings contributions or salary deferral
contributions at the end of any month. In addition, a Participant may elect to
suspend all savings contributions or salary deferral contributions at the end of
any Quarter. Any election to change or suspend must be accomplished by filing
written notice thereof with the Plan Administrator at least two weeks prior to
the effective date for the change or suspension. In the event a Participant
suspends such contributions, the Participant may not thereafter recommence
contributions until the later of (1) the first day after the expiration of one
month following the effective date of such suspension or (2) the first day of
the month which follows by at least two weeks written notice of revocation of
such suspension filed with the Plan Administrator.
3.4 Matching Contributions. Commencing July 1, 1984, and other than as
----------------------
set forth below, for any Plan Year, the Employer shall contribute to each
Participant's Account an amount equal to 75 % of the amount of savings and
salary deferral contributions, up to 6 % of the Participant's Compensation for
the Plan Year, credited to the Participant's Account for the Plan
16
<PAGE>
Year. All Matching Contributions shall be credited to the Matching Contributions
Account. For the period July 1, 1984 to December 31, 1984, the Employers shall
contribute to each Participant's Account an amount equal to 75 % of the amount
of savings and deferral contributions, up to 6 % of the Participant's
Compensation for such period, credited to the Participant's Account for such
period.
In any Plan Year in which the Actual Contribution Percentage for the
group of Highly Compensated Employees would be more than the greater of:
(a) the Actual Contribution Percentage of all other Qualified
Employees multiplied by 1.25, or
(b) the lesser of 2 % plus the Actual Contribution Percentage of all
other Qualified Employees or the Actual Contribution Percentage of all other
Qualified Employees multiplied by 2, then Matching Contributions and savings
contributions of the Highly Compensated Employees with the greatest amount of
Matching Contributions and savings contributions, if any, shall be reduced to
the extent necessary so that the Actual Contribution Percentage for the group of
Highly Compensated Employees is not more than the greater of (a) or (b). In
addition to the foregoing, the Matching Contributions and savings contributions,
if any, of Highly Compensated Employees shall be limited in each Plan Year in
order to prevent multiple use of the alternative limitation under Treasury
Regulation Section 1.401(m)-2.
For purposes of determining the Actual Contribution Percentage, the
Plan Administrator may elect pursuant to Regulations of the Secretary of the
Treasury to take into account elective deferrals (as defined in Code Section
402(g)(3)(A)) and qualified non-elective contributions (as defined in Code
Section 401(m)(4)(C)) contributed to any plan maintained by the Employer. For
all Plan Years ending on or before December 31, 1996, the Actual Contribution
Percentage for a Highly Compensated Employee, who is either a 5% owner or one of
the 10 highest in terms of Compensation, shall be determined by including
Matching Contributions, savings contributions, and Compensation of family
members (as defined in Code Section 414(q)(6)), and such affected family members
shall be disregarded in determining the Actual Contribution Percentage of
Qualified Employees who are not Highly Compensated Employees. For Plan Years
commencing on and after January 1, 1997, the Committee shall use (unless it
elects not to) the Actual Contribution Percentage for the preceding Plan Year of
all Qualified Employees who are not Highly Compensated Employees to determine
the maximum Actual Contributions Percentage for the current Plan Year for the
group of Qualified Employees who are Highly Compensated Employees.
Notwithstanding the first paragraph of this Section 3.4 and except as
provided in Schedule II of Appendix B to the Plan, the Employer shall not be
obligated to make Matching Contributions with respect to savings and salary
deferral contributions made after December 31, 1989.
3.5 Rollover Contributions.
----------------------
17
<PAGE>
(a) An Employee may, upon commencement of employment and with
permission of the Plan Administrator, without regard to the limitations in
Article II make a Rollover Contribution to the Trust Fund of all or any portion
of the entire amount which is in excess of the Employee's own contributions and
is attributable to a distribution from a qualified plan; provided such Employee
intends to comply with the provisions of Article II when first eligible.
(b) Rollover Contributions shall be treated in the same manner as all
other contributions for purposes of investments under Article IV, for purposes
of distributions under Article VII and for purposes of loans under Article IX.
(c) Rollover Contributions shall not be subject to Section 3.2 nor
shall the limitations of Section 3.2(b) in any way take into account Rollover
Contributions. Rollover Contributions shall be treated along with other amounts
for purposes of valuation under Section 5.2.
(d) Special withdrawal provisions set forth in Section 8.2 shall apply
to Rollover Contributions.
3.6 Supplemental Additional Contributions. Participants who have not made
-------------------------------------
the maximum contributions to their Savings Accounts for all periods they were
eligible to participate in the Plan (including periods they were ineligible to
contribute to the Plan under Section 3.3 but excluding periods they were
ineligible to contribute to the Plan under Section 8.7) may make supplemental
additional contributions to their Savings Accounts, subject to Section 3.4.
Supplemental additional contributions must be made in a lump sum and may not
exceed 16% of a Participant's Compensation for all periods such Participant was
eligible to participate in the Plan (as provided above) less the amount of all
savings contributions, including all Participant contributions such Participant
has previously made to the Plan. Such payment must be made to the Plan
Administrator at least two weeks prior to the beginning of a month, and the Plan
Administrator shall credit Participants with the amount of such supplemental
additional contributions as of the first day of the month following the Plan
Administrator's receipt of such lump sum payment.
3.7 Remittance of Participant Contributions. A Participant's
---------------------------------------
contributions other than supplemental additional contributions and Rollover
Contributions, shall be made by payroll deductions at the regular payroll
periods applicable to the Participant and shall be remitted by the Employer to
the Trustees as soon as such contributions can reasonably be segregated from the
general assets of the Employer but in no event later than the 15th business day
of the month following the month in which such contributions are withheld or
deducted. Such contributions shall be allocated to such Fund(s) as directed by
the Participant in accordance with Section 4.1.
3.8 Remittance of Employer Contributions. Salary deferral contributions
------------------------------------
and Matching Contributions, if any, shall be remitted by the Employer to the
Trustees as soon as such contributions can reasonably be segregated from the
general assets of the Employer but in no event later than the 15th business day
of the month following the month in which the salary
18
<PAGE>
deferral contributions are deducted and they shall be allocated to such Fund(s)
as directed by the Participants in accordance with Section 4.1, subject to the
following:
(a) If any Employer is unable to make all or a portion of the
contributions referred to in this Section 3.8 by reason of having insufficient
current or accumulated profits, the Corporation shall make such contributions,
in an amount equal to the salary deferral contribution and Matching
Contributions, if any, for each Employer, subject to the maximum Matching
Contributions set forth in Section 3.4, above, out of its consolidated current
or accumulated profits.
(b) If a Participant, who has ceased to be an Employee, is reemployed
and becomes a Participant again, the Employer shall contribute to the
Participant's Account the amount of any Matching Contributions forfeited under
Section 8.7 or any Employer ESOP Contributions forfeited under Section 16.7 for
which the Participant does not have a Five Year Break-in-Service, provided that
prior to the earlier of 5 years from the Reemployment Date and the completion of
a Five Year Break-in-Service the Participant refunds to the Participant's
Account the corresponding Participant contributions previously distributed.
3.9 Maximum Contribution. Notwithstanding anything contained herein to
--------------------
the contrary, the maximum Additions that may be contributed or allocated to a
Participant's Account under the Plan for any Plan Year shall not exceed the
lesser of:
(a) the Defined Contribution Dollar Limitation (as defined below); or
(b) 25% of the Participant's Compensation.
For purposes of this Section 3.9, the "Defined Contribution Dollar
Limitation" shall mean $30,000 subject to periodic adjustment under Section
415(d) of the Code. In the event that the Additions for a Participant must be
reduced by reason of the foregoing limitation, such reduction shall be made by
one of the following methods determined by the Plan Administrator, but only to
the extent necessary: (i) the amount of the Participant's savings contributions
and any earnings thereon, may be returned to the Participant; (ii) the amount of
salary deferral contributions and any earnings thereon, may be returned to the
Participant; or (iii) the amount of Matching Contribution, if any, or Employer
ESOP Contribution shall be held unallocated in a separate suspense account and
shall be applied, as directed by the Plan Administrator in accordance with the
provisions of Section 415 of the Code, as a credit to reduce Employer
contributions for the next Plan Year and in the event of termination of the Plan
shall be returned to the Employer.
If in any Plan Year, no more than one-third of the allocations made
under Article XVI are to the ESOP Accounts of Highly Compensated Employees, the
limitations imposed by this Section 3.9 shall not apply to forfeitures under
Section 16.7, or to contributions used to pay interest on an Exempt Loan.
In the case where this Plan and another qualified defined benefit plan
(including the Retirement Plan) or another qualified defined contribution plan
of an Employer cover the same
19
<PAGE>
Participant and reductions in the Additions or the amount of annual benefit (or
both) with repsect to such Participant are necessary in order to comply with
Section 415 of the Code, a reduction in the Participant's benefit under the
Retirement Plan shall be made to the extent necessary to comply with Section 415
of the Code. The combined limits under Section 415(e) of the Code shall not
apply to the Plan for Plan Years beginning on and after January 1, 2000.
3.10 Contributions After Qualified Military Service Period.
-----------------------------------------------------
Notwithstanding any Plan provision to the contrary, a Participant who is
reemployed after a Qualified Military Service Period (as herein defined) shall
be eligible to make additional salary deferral contributions and/or savings
contributions with respect to any Plan Year (or portion thereof) covered by such
Qualified Military Service Period, provided, that, such contributions are made
during a period which begins on the Participant's reemployment date and ends on
the date which is the earlier of (a) 5 years therefrom or (b) the date after
reemployment which is equal to three times the duration of the Qualified
Military Service Period. The maximum amount of such salary deferral
contributions and savings contributions may not exceed the amount that the
Participant would have been permitted to make under Section 3.2 had he remained
in employment during such Qualified Military Service Period. For purposes of
computing the amount of such salary deferral contributions and/or savings
contributions, a Participant's Compensation during such Qualified Military
Service Period shall be deemed to be equal to the rate of Compensation he would
have earned during such Period or, if this is uncertain, his average
Compensation during the 12-month period immediately preceding such Period. Such
Participant shall also be entitled to ESOP Matching Allocations (or Matching
Contributions for a Participant employed by EIG) and ESOP Supplemental
Allocations, if any, for such Period to the extent he actually makes the
additional salary deferral contributions and/or savings contributions upon which
such allocation or contribution, if any, is contingent. Such Participant shall
also be entitled to receive ESOP Supplemental Allocations, if any, which he
would have received had he remained employed during such Qualified Military
Service Period. With respect to any contribution made under this Section 3.10,
(i) or earnings (including dividends on Corporation Stock) shall be credited for
any period before such contribution is actually made, and (ii) such
contributions shall not be subject to any otherwise applicable limitation under
Sections 401(a)(4), 401(k), 401(m), 402(g), 404(a) and 415 of the Code for the
Plan Year in which such contributions are actually made. The Plan Administrator
may establish reasonable rules respecting the timing and manner in which such
Participant may actually make such contributions and allow such Participant to
direct the investment of such contributions as provided in Section 4.1. For
purposes of this Section 3.10, a Qualified Military Service Period shall mean
any time period of service in the uniformed services of the United States by a
Participant if such individual is reemployed by the Employer on or after
December 12, 1994 pursuant to rights under the Uniformed Services Employment and
Reemployment Rights Act of 1994.
20
<PAGE>
ARTICLE IV
INVESTMENTS
-----------
4.1 Investment of Contributions. Subject to Section 4.4, Participants
---------------------------
shall direct, at the time they elect to become Participants in the Plan, that
all contributions, other than Employer ESOP contributions not transferred to a
Diversification Account, made to a Participant's Account shall be invested in
one, or a combination of, the funds then available under the Plan. The Plan
Administrator, in its discretion, is authorized to select Funds to be available
under the Plan, and to offer additional Funds and/or delete existing Funds from
time to time. Funds to be available under the Plan shall be selected from one or
more of the following categories of investment options:
(a) Securities issued by investment companies advised by Fidelity
Management & Research Company ("Mutual Funds");.
(b) Securities issued by investment companies other than Fidelity
Management & Research Company ("Non Fidelity Mutual Funds");
(c) Equity Securities issued by the Corporation which are publicly
traded and which are "qualifying employer securities" within the meaning of
Section 407(d)(5) of ERISA ("Sponsor Stock");
(d) Notes evidencing loans to Participants in accordance with the
terms of the Plan; and
(e) Guaranteed investment contracts chosen by the Trustees.
Investments in Sponsor Stock shall be made via the General Re Common
Stock Fund, which shall consist of shares of the common stock of the Corporation
and such short-term liquid investments as are necessary to satisfy the Fund's
cash needs for transfers and payments.
If any Participant fails to elect an investment vehicle for any
monies, such monies shall be invested in the Fidelity Retirement Money Market
Trust. If the Fidelity Retirement Money Market Trust is not then an available
Fund under the Plan, the Plan Administrator shall select an alternate default
fund from the money market funds then available, with similar investment
objectives and risk and return policies.
4.2 Change in Investment Election for Future Contributions. The
------------------------------------------------------
investment election made by a Participant pursuant to Section 4.1 shall continue
in effect until changed by the Participant. A Participant may change an
investment election in any of the Funds, with respect to all future
contributions made to a Participant's Account (subject to the provisions of
Section 4.4), on any business day by giving telephone instructions to the
Trustees by use of the telephone exchange system maintained for such purposes by
the Trustees or their agents. Telephone instructions received before 4:00 p.m.
eastern time of a business day shall be deemed received on that date and
telephone instructions received on or after that time shall be deemed received
on the
21
<PAGE>
next business day. Such change shall be effective for all monies received by the
Trustees after the receipt of such notice.
Changes in investment election hereunder may be made as often as
desired by the Participant, subject to any reasonable restrictions imposed by
the Plan Administrator on a uniform and non-discretionary basis.
4.3 Change in Investment Election for Prior Contributions. A Participant
-----------------------------------------------------
may change (subject to the provisions of Section 4.4) the investment of the
Participant's interest in any of the Funds to one or more other Funds to be
effective as of any business day by giving telephone instructions to the
Trustees by use of the telephone exchange system maintained for such purposes by
the Trustees or their agents. Instructions received before 4:00 p.m. eastern
time of a business day will be effected on that day. Instructions received on
or after 4:00 p.m. eastern time will be effected on the next business day.
Notwithstanding the foregoing, the following shall apply:
(a) A change in the investment of a Participant's interest in the
General Re Common Stock Fund can be made only twice a month. Any instructions
received between the first and the fifteenth (or the previous business day if
the fifteenth is not a business day) of each month shall be effected on the next
business day following the fifteenth of the month, and any instructions received
between the sixteenth and the second to last business day of each month shall be
effected on the last business day of each month.
(b) A Participant may transfer his interest in a Fund which invests in
guaranteed investment contracts only into one or more of the equity funds
available under the Plan. Any interests so transferred may not be transferred
back into a non-equity fund until they have been invested in one of the equity
funds for at least two Quarters.
Such change in investment may be made by a Participant as often as
desired by the Participant, subject to any reasonable restrictions imposed by
the Plan Administrator on a uniform and non-discriminatory basis.
4.4 Investment Percentages. The investment of future contributions made
----------------------
to a Participant's Account or the changing of the Participant's investment
election with respect to any prior contributions shall be made in multiples of
5%.
4.5 Loans. Participants may receive loans from their Salary Deferral
-----
Accounts under the provisions of Article IX. A loan to a Participant shall be
considered an earmarked investment of such Participant's Account and shall
reduce the amount invested in the Funds. Repayment of a loan shall reduce the
amount of the loan investment and shall be invested in the Funds in accordance
with the Participant's then current investment direction. Loans and loan
repayments shall not be treated as elections or changes under Sections 4.1, 4.2
and/or 4.3.
22
<PAGE>
ARTICLE V
PARTICIPANTS' ACCOUNTS
----------------------
5.1 Individual Accounts for Each Participant. The Plan Administrator or,
----------------------------------------
if the Plan Administrator so determines, the Trustees, shall maintain an Account
for each Participant having an amount to the Participant's credit in the Trust
Fund. Each Account shall be divided into four separate portions subject to this
Article V, the Savings Account, the Salary Deferral Account, the Matching
Contributions Account and the Rollover Account. Such separate portions of such
separate accounts shall be further divided in order to credit thereto
investments elected by the Participant in the various Funds. An additional ESOP
Account shall be maintained for Participants credited with allocations under
Article XVI.
5.2 Valuation of Funds. The Plan Administrator shall cause the Trustees
------------------
to value separately the Funds described in Section 4.1 as of each Valuation Date
by determining the net fair market value of the Trust Fund's assets then held in
each of the Funds. The General Re Common Stock Fund shall be measured in units
of participation, rather than shares of stock. Such units shall represent a
proportionate interest in all of the assets of the Fund, which include shares of
common stock of General Re Corporation, short-term investments and at times,
receivables for dividends and/or stock sold, and payables for stock purchases.
A Net Asset Value ("NAV") per unit will be determined for each Valuation Date
for each unit outstanding of the General Re Common Stock Fund.
5.3 Valuation of Accounts. The difference between the value of each Fund
---------------------
on any Valuation Date and its value as of the last preceding Valuation Date
shall be credited or debited, as the case may be, to the Account of each
Participant. Taxes, if any, of any kind which are levied or assessed on any
assets held, or income received, by the Trustees shall be charged appropriately
against Participant Accounts as determined by the Plan Administrator.
5.4 Statement of Participant's Accounts. The Trustees shall, as soon as
-----------------------------------
practicable after the end of each Plan Year, deliver or mail to each Participant
a statement setting forth the value of the Participant's Account with respect to
investment in the Funds, reflecting separately amounts contributed to the
Participant's Savings Account, Salary Deferral Account, Matching Contributions
Account and Rollover Account as of the end of such Plan Year. To the extent
permitted by law, such statement shall be deemed to have been accepted as
correct unless written notice to the contrary is received by the Trustees within
30 days after its mailing to the Participant. The Trustees shall deliver or
mail to each Participant such additional interim statements as they shall deem,
in their sole discretion, to be appropriate.
5.5 Allocation of Forfeitures. Forfeitures of ESOP Accounts shall be
-------------------------
allocated as provided in Section 16.7. Forfeitures of Matching Contributions
Accounts shall be allocated on the last Valuation Date of any Quarter in which a
Severance occurred among the Matching Contributions Accounts of Participants who
are Participants on such Valuation Date. The allocation shall be in the
proportion that each such Participant's share of savings and salary deferral
contributions up to 6% of such Participant's Compensation for that Quarter bears
to savings and salary deferral contributions up to 6% of Compensation for all
Participants for that
23
<PAGE>
Quarter. Pending such allocation, forfeitures of Matching Contributions Accounts
shall be invested in the Fidelity Retirement Money Market Trust.
24
<PAGE>
ARTICLE VI
VESTING
-------
6.1 Vesting in Savings Accounts, Salary Deferral Accounts and Rollover
------------------------------------------------------------------
Accounts. Participants shall at all times be fully vested in their Savings,
- --------
Salary Deferral and Rollover Accounts.
6.2 Vesting in Matching Contributions Accounts.
------------------------------------------
(a) Participants shall be fully vested in their Matching
Contributions Accounts upon Retirement, death prior to Severance or attainment
of age 65 regardless of the number of Years of Service completed at such time.
(b) Participants shall be vested in their Matching Contribution
Accounts in an amount equal to the greater of (i) the vested percentage of the
Matching Contribution Accounts determined in accordance with the following
schedule:
Years of Service Vested Percentages
-------------------- -----------------------
Less than 2 0%
2 50%
3 75%
4 or more 100%; or
(ii) the vested percentage of the Matching Contributions Accounts determined in
accordance with section 6.2(b) of the Plan as in effect on December 31, 1986. A
Participant who incurs a Severance with a zero vested percentage in his Matching
Contributions Account shall be deemed to have received, on his Severance date, a
distribution from his Matching Contributions Account equal to zero dollars.
6.3 Office Closing or Relocation. In the event that (a) an Employer
----------------------------
closes an office, or relocates an office to a location which is 25 or more miles
distant from the former office location, and (b) a Participant suffers a
Severance which is due to such closure or relocation and which occurs not later
than six months immediately following such closure or relocation, and (c) such
Severance occurs not more than two months immediately prior to such closure or
relocation, the entire balance of the Matching Contributions Account of an
affected Participant, as of the Valuation Date next preceding or coinciding with
the effective date of a Participant's Severance due to such closure or
relocation, shall fully vest.
25
<PAGE>
ARTICLE VII
TERMINATION OF PARTICIPATION AND DISTRIBUTIONS
----------------------------------------------
7.1 Death While Employed or Retirement. A Participant's participation in
----------------------------------
the Plan shall terminate upon the occurrence of any one of the following events:
(a) The Participant's death prior to Severance or Retirement; or
(b) The Participant's Retirement.
In such event, the Participant, or as appropriate, the Participant's
beneficiary, upon proper proof of the Participant's death in a form satisfactory
to the Plan Administrator, shall be paid the entire amount of the Participant's
Account, as set forth in Section 7.4, valued as of the Valuation Date coinciding
with or immediately following the occurrence of such event, including any
amounts subsequently credited to such Participant's Account.
7.2 Severance. In the event of Severance, the Participant shall be paid
---------
the entire amount of the Participant's Savings, Salary Deferral and Rollover
Accounts and the vested portion, if any, of the Matching Contributions Account
and ESOP Account, valued as of the Valuation Date coinciding with or immediately
following the date of Severance, including any amounts subsequently credited to
such Account.
7.3 Death After Severance or Retirement. If a Former Participant shall
-----------------------------------
die after Severance or Retirement, upon receipt of proof of death satisfactory
to the Plan Administrator there shall be paid to such Former Participant's
beneficiary the amount remaining in the Participant's Account as of the date of
death.
7.4 Method of Payment.
-----------------
(a) When the value of a Participant's Account is to be distributed to
the Participant or to such Participant's beneficiary, the Participant shall be
entitled to receive an amount in cash equal to the value, as of the Valuation
Date coinciding with or immediately following the effective date of the events
set forth in Section 7.1, of the Account to be so paid.
(b) All payments required to be made under the Plan shall be made in
one of the following methods, as elected by the Participant in a written notice
filed with the Plan Administrator:
(1) in cash, in a lump sum within 60 days (or later if requested
by the Participant) after the occurrence of the event giving rise to such
payment or of the appropriate Valuation Date, whichever is later; or
(2) other than termination of employment by way of a Severance,
in a series of approximately equal installments, payable at such time and
in such amounts
26
<PAGE>
(subject to such uniform rules as may be established under Section 11.5
(b)) as the Participant shall determine over a period of not more than 15
years.
(c) Upon the death of any Participant who has a balance remaining in
the Participant's Account, other than a Participant then receiving installment
payments, the Trustees, pursuant to directions from the Plan Administrator,
shall pay the balance in such Account to the Participant's beneficiary. Payment
shall be made in a lump sum unless the beneficiary elects to receive payment in
approximately equal monthly or annual installments for a period not to extend
beyond five years from the Participant's death, and if the beneficiary is not
the Participant's spouse, over a period not to extend beyond the life expectancy
of such beneficiary, subject to the limitation set forth in Section 7.4(b)(2).
Upon the death of any Participant who is receiving any installment payments at
the time of such Participant's death, the remaining installments shall be
continued to such Participant's beneficiary, unless the beneficiary elects to
receive such remaining installments in a lump sum. Such elections shall be made
in accordance with procedures prescribed by the Plan Administrator. In the event
the beneficiary dies before full payment has been made, the balance remaining
shall be paid in a lump sum to the beneficiary's estate.
(d) If an installment method of payment is elected, so much of the
aggregate amount payable as may, from time to time, be held in the Participant's
Account shall be invested by the Trustees in the Fidelity Retirement Money
Market Trust.
7.5 Limitations on Payment. Notwithstanding any other provision of this
----------------------
Plan, the Plan Administrator shall direct the settlement of any Participant's
Account having a balance of less than $3,500 ($5,000 on an after January 1 1998)
by the payment of one lump sum. This Section 7.5 shall apply to Former
Participants whose date of Severance is prior to January 1, 1998. In such case,
the lump sum distribution shall be made as soon as practical thereafter.
Notwithstanding the foregoing, no such lump sum distribution may be
made after the commencement of payments from the Participant's Accounts unless
the Participant and his spouse (or, in the case of a deceased Participant, the
surviving spouse) consent in writing to such distribution. Any distribution to a
Participant whose Participant Account exceeds $3,500 ($5,000 on and after
January 1, 1998) shall require such Participant's consent if the distribution
commences prior to the later of his normal retirement age under the Retirement
Plan or age 62. No consent shall be valid unless the Participant has received a
general description of the material features and an explanation of the optional
forms of benefit under the Plan and has been informed of his right to defer
receipt, and such notice is provided no less than 30 days nor more than 90 days
before the "annuity starting date" (i.e. the first day on which all events have
occurred which entitle the Participant to such benefit), provided, however, that
such distribution may commence less than 30 days after such notice is given
provided the Plan Administrator clearly informs the Participant that he has the
right to a period of at least 30 days after receiving the notice to consider his
decision and the Participant, after receiving the notice, affirmatively elects
to receive his distribution.
7.6 Commencement of Distribution. Commencement of distributions shall be
----------------------------
in accordance with the following rules:
27
<PAGE>
(a) Except as provided in Subsection 7.6(b), (c) and (d), and Section
7.7, distributions shall commence not later than the end of the Quarter
following the Quarter in which the following events occur:
(1) For distributions on account of Retirement, the
Participant's Retirement.
(2) For distributions on account of Disability, the Plan
Administrator receives satisfactory evidence of the Participant's
Disability.
(3) For distributions on account of death, the Plan
Administrator receives satisfactory evidence of the death of the
Participant.
(4) For distributions for reasons other than Retirement or death
or Disability, the Participant has a date of Severance.
(b) A Participant may elect to delay commencement of distributions
beyond the time at which distribution would commence in accordance with Section
7.6(a) except as limited by Section 7.7. In the event of such delay, the
Participant's Account will be valued as of the Valuation Date immediately
preceding the date on which distribution is to commence. A Participant may at
any time prior to commencement of distribution modify such election and make a
new election in accordance with this subsection 7.6(b).
(c) Unless a Participant otherwise elects, commencement of
distributions will begin not later than the 60th day after the latest of the
close of the Plan Year in which occurs:
(1) the date on which a Participant attains age 65;
(2) the 10th anniversary of the year in which a Participant
commenced participation in the Plan; or
(3) the Participant's termination of employment with the
Employer.
(d) If the amount of payment required to commence by a certain date
in accordance with the Plan cannot be ascertained by such date, or if it is not
possible to make payment on such date because the Plan Administrator has been
unable to locate the Participant or beneficiary after making reasonable efforts
to do so, a payment retroactive to such date may be made no later than 60 days
after the earliest date on which the amount of such payment can be ascertained
under the Plan, or the date on which the Participant (or beneficiary) is located
(whichever is applicable).
7.7 Limitations on Distributions . Notwithstanding the foregoing, the
----------------------------
payment of benefits must commence prior to the Required Distribution Date. For
Participants who attain age 70 1/2 after December 31, 1998, the "Required
Distribution Date" means the April 1 immediately following the calendar year in
which occurs the later of (i) a Participant's Severance date or (ii) attainment
of age 70 1/2, provided, however, if a Participant is a 5% owner (as defined in
Section
28
<PAGE>
416 of the Code), it means the April 1 immediately following the end of the
calendar year in which he attains age 70 1/2. For Participants who attain age 70
1/2 prior to December 31, 1998, the "Required Distribution Date" means the April
1 immediately following the calendar year in which the Participant attains age
70 1/2.
7.8 Payments Only From Trust Fund. All benefits of the Plan, other than
-----------------------------
benefits provided under the ESOP, shall be payable solely from the Trust Fund
and the Employer shall have no liability or responsibility therefor, other than
its obligation to make contributions to the Trust Fund to the extent provided in
the Plan.
7.9 Procedure. The Plan Administrator may make such reasonable rules or
---------
rulings governing the procedure for payments of benefits, proof or claims to
benefits, and disposition of unclaimed or improperly claimed funds as may be in
the interest of convenient administration, but such rules shall not be contrary
to any provision of the Plan and shall be uniform and non-discriminatory in
their application.
7.10 Withholding on Distributions. Distributions under this Article VII
----------------------------
shall be subject to Federal income tax withholding as prescribed in Section 3405
of the Code and the Regulations thereunder.
7.11 Payment Restrictions. Notwithstanding any provisions of the Plan to
--------------------
the contrary, no option may permit:
(a) Any benefit under the Plan to be payable over a period of time
which is greater than the life expectancy, or lifetime, of the Participant or
the life expectancy, or lifetimes, of such Participant and his designated
beneficiary, or
(b) In the event of the death of the Participant after distribution
has commenced but before complete distribution has been made, the remaining
benefit to be paid under a method of distribution less rapid than the method of
distribution being used prior to such Participant's death, or
(c) In the event of the death of a Participant before the
distribution of his benefit has commenced, any interest of the Participant to be
distributed later than 5 years after the death of such Participant.
The 5-year distribution rule set forth in paragraph (c) above shall
not apply to any portion of the deceased Participant's benefit that is payable
to or for the benefit of a designated Beneficiary. In such event, such portion
may be distributed over the life of such beneficiary (or over a period not
extending beyond the life expectancy of such beneficiary) provided such
distribution begins not later than 1 year after the date of the Participant's
death (or such later date as may be prescribed by Treasury regulations), or, in
the event the Participant's spouse is his designated beneficiary, such
distribution commences on or before the later of (i) the date required for all
designated beneficiaries, or (ii) the date the deceased Participant would have
attained age 70-1/2. If the surviving spouse dies before distribution to such
spouse commences, then the five year distribution requirement of paragraph (c)
shall apply as if the spouse was the Participant.
29
<PAGE>
For purposes of this Section, the life expectancy of a Participant and
a Participant's spouse (other than the case of a life annuity) may be
redetermined but not more frequently than annually, in accordance with such
rules as may be prescribed by Treasury Regulations.
7.12 Direct Rollovers. Notwithstanding any provision of this Plan to the
----------------
contrary, a distributee may elect, at the time and in the manner prescribed by
the Plan Administrator, to have all or part of any amount distributable under
the Plan that qualifies as an "eligible rollover distribution" paid by a direct
rollover to a specified "eligible retirement plan". For purposes of this
Section, an "eligible rollover distribution" is any distribution of all or any
portion of the balance to the credit of the Participant under the plan, other
than (a) a required distribution under Section 7.7, (b) a distribution that is
one of a series of substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the Participant or the
joint lives (or joint life expectancies) of the Participant and his or her
designated beneficiary, or for a specified period of 10 years or more, or (c)
the portion of any distribution that is not includible in gross income
(determined without regard to the exclusion for net unrealized appreciation with
respect to employer securities). Also for purposes of this Section, an
"eligible retirement plan" is (w) a qualified trust described in Section 401(a)
of the Code that accepts eligible rollover distributions, (x) an annuity plan
described in Section 403(b) of the Code, (y) an individual retirement account
described in Section 408 (a) of the Code or (z) an individual retirement annuity
described in Section 408(b) of the Code, provided, however, that in the case of
a surviving spouse who receives an eligible rollover distribution, an eligible
retirement plan shall include only an individual retirement account or
individual retirement annuity. A direct rollover distribution may be made less
than 30 days after the distributee is informed of his right to elect such a
distribution, provided, that, the Committee clearly informs the distributee that
he has a right to a period of at least 30 days after being so notified to make
such election and the distributee affirmatively elects such direct rollover
distribution.
30
<PAGE>
ARTICLE VIII
WITHDRAWALS AND FORFEITURES
---------------------------
8.1 Withdrawals from the Savings Account. A Participant may make
------------------------------------
withdrawals from the Participant's Savings Account of all or a portion of the
balance of such Savings Account upon prior written notice to the Plan
Administrator. Withdrawals can be made only twice a month. In the case of any
request for withdrawal received between the first and the fifteenth day (or the
previous business day if the fifteenth is not a business day), proceeds will be
paid out by the end of such month, and in the case of any request for withdrawal
received between the sixteenth and the last business day of the month, proceeds
will be paid out by the fifteenth day of the following month. Withdrawals under
this Section 8.1 shall be subject to the requirements of Section 8.7.
8.2 Withdrawals from the Rollover Account. A Participant who has made a
-------------------------------------
complete withdrawal from the Participant's Savings Account may, in the manner
prescribed in Section 8.1., make withdrawals from the Participant's Rollover
Account of all or a portion of the balance of such Rollover Accounts.
Withdrawals under this Section 8.2 shall be subject to the requirements of
Section 8.7.
8.3 Withdrawals from the Matching Contributions Account. A Participant
---------------------------------------------------
who has made the maximum withdrawals permitted under Sections 8.1 and 8.2 may,
in the manner prescribed in Section 8.1, make withdrawals of all or a portion of
that part of the Participant's Matching Contributions Account which is vested;
provided, however, that no withdrawals can be made from amounts that have
accumulated under the Plan for fewer than two years. Withdrawals under this
Section 8.3 shall be subject to the requirements of Section 8.7.
8.4 Withdrawals from the Salary Deferral Account After Age 59 1/2. A
-------------------------------------------------------------
Participant who has attained age 59 1/2 and who has made the maximum withdrawals
permitted under Sections 8.1, 8.2 and 8.3, may, in the manner prescribed in
Section 8.1, make withdrawals from the Participant's Salary Deferral Account of
all or a portion of the balance of such Salary Deferral Account. Withdrawals
under this Section 8.4 shall be subject to the requirements of Section 8.7.
8.5 Hardship Withdrawals. Upon the application of any Participant who
--------------------
has made the maximum withdrawals permitted under Sections 8.1, 8.2 and 8.3, the
Plan Administrator, in accordance with a uniform nondiscriminatory policy, may
at any time, in his discretion, permit such Participant to withdraw all or a
portion of such Participant's ESOP Account and, if that has been completely
withdrawn (or has no positive value), all or a portion of such Participant's
Salary Deferral Account (exclusive of any earnings credited to such Salary
Deferral Account), if the withdrawal both (a) is made on account of an immediate
and heavy financial need of the Participant and (b) is necessary to satisfy such
need.
A Participant making an application under this Section 8.5 shall have
the burden of presenting to the Plan Administrator evidence of such immediate
and heavy financial need and of the necessity of such withdrawal to satisfy such
need, and the Plan Administrator shall not permit withdrawal under this Section
without first receiving such evidence.
31
<PAGE>
The following expenses shall be deemed to be on account of an immediate and
heavy financial need of a Participant:
(a) Medical expenses (as described in Code Section 213(d)) of the
Participant, the Participant's spouse or any dependent (as defined in Code
Section 152) of the Participant;
(b) Purchase (excluding mortgage payments) of a principal residence for the
Participant;
(c) Payment of tuition (including room and board) and related educational
fees for the next 12 months of post-secondary education of the Participant. the
Participant's spouse or any child or dependent (as defined in Code Section 152)
of the Participant;
(d) Payment to prevent the eviction of the Participant from his principal
residence or the foreclosure of a mortgage on the Participant's principal
residence; or
(e) Any other expense determined by the Commissioner of Internal Revenue to
be an immediate and heavy financial need by published ruling, notice or other
document of general applicability.
A withdrawal will be deemed to be necessary to satisfy an immediate and
heavy financial need of a Participant if all the following conditions are
satisfied:
(a) The withdrawal is not in excess of the amount of the immediate and
heavy financial need of the Participant, including amounts necessary to pay
taxes or penalties reasonably expected to result from the distribution;
(b) The Participant has made all allocable withdrawals, other than a
hardship withdrawal, and obtained all non-taxable loans then available under the
Plan, and all other plans of the Employer and all Affiliated Companies in which
he participates;
(c) The Participant will be prohibited from making employee or salary
deferral contributions to any plan of the employer or any Affiliated Company for
at least 12 months from the date of the withdrawal; and
(d) The Participant is prohibited under all plans of the Employer and any
Affiliated Company from making salary deferral contributions during the calendar
year following the year of the withdrawal in excess of the amount equal to the
Salary Deferral Contribution Limit reduced by the amount of the salary deferral
contributions made during the year of the withdrawal.
If a Participant's application for hardship withdrawal is approved, the
Plan Administrator shall then instruct the Trustees to make payment of the
approved amount of the hardship withdrawal to the Participant. Such payment to
be made from such Participant's ESOP Account and, if necessary, from such
Participant's Salary Deferral Account. Hardship withdrawals shall also be
governed by the rules of Section 8.7.
32
<PAGE>
8.6 Rules Governing Withdrawals. Withdrawals under Sections 8.1, 8.2,
---------------------------
8.3, 8.4, 8.5 and 8.6 shall be subject to the following requirements:
(a) For purposes of withdrawals under this Article VIII, the
Participant's Account shall be deemed not to include the amount of any
outstanding loan to a Participant under Article IX, and no withdrawal from a
Participant's Savings Account, Rollover Account, or Matching Contributions
Account shall be permitted to the extent that, after the withdrawal, the sum of
the balances in such accounts, to the extent of the Participant's vested
interest therein, would be less than the amount of any outstanding loan to the
Participant under Article IX.
(b) Withdrawals shall be paid in the form of a lump sum.
(c) The Plan Administrator may deny a request for a withdrawal if the
request does not comply with the requirements of this Article VIII.
(d) Withdrawals shall be made from the Funds in which the Participant
has invested on a pro rata basis.
8.7 Penalties and Forfeitures.
-------------------------
(a) Upon any withdrawal pursuant to Sections 8.1, 8.2, and 8.3 (other
than withdrawals from the Salary Deferral Account or withdrawals after the
Participant has attained age 59 1/2), the withdrawing Participant shall be
ineligible to participate in the Plan for a period of 3 months, commencing with
the first day of the month following receipt of any withdrawals or termination
of participation, as the case may be.
(b) Upon any withdrawal from a Salary Deferral Account pursuant to
Section 8.5 (other than withdrawals after the Participant has attained age 59
1/2), the withdrawing Participant shall be ineligible to make savings
contributions or salary deferral contributions for a period of 12 months from
the date of the withdrawal. In addition, for the Plan Year following the year of
the withdrawal the amount of the Salary Deferral Contribution Limit for such
Participant will be reduced by the amount of the salary deferral contributions
made during the Plan Year of the withdrawal.
(c) Participants who incur a Severance shall forfeit the nonvested
portion of their Matching Contributions Accounts. Notwithstanding the foregoing,
a Participant who incurred a Severance and resumes employment under the Plan
shall have the forfeited nonvested portion of the Participant's Matching
Contributions Account restored to him upon the Participant's repayment to the
Plan of the full amount of any distribution. Such repayment shall be made prior
to the earliest of (1) 5 years from his date of reemployment or (2) the
completion of a Five Year Break-in-Service.
(d) The portion of Participant's Matching Contributions Account
forfeited pursuant to any of the foregoing provisions shall be transferred to a
suspense account and allocated as provided in Section 5.5.
33
<PAGE>
8.8 Withholding on Withdrawals. Withdrawals under this Article VIII
--------------------------
shall be subject to Federal Income tax withholding as prescribed by Section 3405
of the Code and the Regulations thereunder.
8.9 ESOP Accounts. Except as otherwise provided in Section 8.5, in-
-------------
service withdrawals shall not be permitted from ESOP Accounts.
34
<PAGE>
ARTICLE IX
LOANS
-----
9.1 Loans. Commencing on July 1, 1985, any Participant who has
-----
participated in the Plan for at least one year may borrow amounts from such
Participant's Salary Deferral Account and any Employee may borrow amounts from
such Employee's Rollover Account, in each case on terms specified by the Plan
Administrator which are consistent with the requirements of Section 4975(d)(1)
of the Code, provided further that:
(a) The minimum loan amount must be $500 and the maximum amount
shall not exceed the maximum loan amount as defined in Section 9.3.
(b) For purposes of Subsections 9.1(a) and 9.3, a Participant's
Account balance shall be value as of the most recent Valuation Date.
(c) No amount may be borrowed until any prior loan has been
repaid, except that a Participant may concurrently have outstanding both (i) not
more than one Home Loan, as described in Section 9.2 and (ii) not more than one
loan which is not a Home Loan as described in Section 9.2.
(d) Any loan, by its terms must be amortized over its term on a
substantially level basis. In addition, any loan, by its terms must be required
to be repaid within 5 Years, other than a Home Loan as described in Section 9.2.
(e) A loan to a Participant shall be considered an earmarked
investment of such Participant's Account and shall also be considered in
connection with the Participant's ability to withdraw Funds from the Account
pursuant to Section 8.6.
(f) A Participant must specify whether the loan is from such
Participant's Salary Deferral Account and/or Rollover Account.
(g) Loan funds shall be withdrawn from the Funds in which the
Participant has invested on a pro rata basis.
(h) The loan program under the Plan shall be administered by the
Plan Administrator in accordance with Article XI in a uniform and
nondiscriminatory manner.
(i) Loans shall be made available to all Participants on a
reasonably equivalent basis. Loans must be adequately secured and bear a
reasonable interest rate. In the event of default, participation in the Plan
shall be suspended immediately, and foreclosure on the note and attachment of
security will not occur until a distributable event occurs under the Plan. Loans
shall not be made available to Highly Compensated Employees in an amount greater
than the amount made available to other Employees. All Participants or Employees
who apply for a Plan loan shall be given the financial disclosures required
under the Federal Truth in Lending Act.
35
<PAGE>
9.2 Home Loans. A Home loan is any loan described in Section 9.1 which is
----------
used to acquire any dwelling unit which within a reasonable period of time is to
be used (determined at the time such loan is made) as the principal residence of
the Participant.
9.3 Maximum Loan Amount. The maximum loan for any loan under the Plan is
-------------------
the least of the following:
(a) $50,000, reduced by the excess (if any) of
(1) The highest outstanding balance of loans from the Plan
during the 1-year period ending on the day before the date the loan was
made, or
(2) the outstanding balance of loans from the Plan on the date
on which such loan was made, or
(b) one-half of the vested portion of the Participant's Account, or
(c) the limit imposed by the Plan Administrator upon the amount of
loans that may be provided under the Plan at any one time.
36
<PAGE>
ARTICLE X
ESTABLISHMENT OF TRUST
----------------------
10.1 Agreement of Trust. In order to implement the Plan, the Corporation
------------------
has entered into one or more Trust Agreements, which are deemed a part of this
Plan, to the end that such funds, as may be irrevocably contributed from time to
time for the payment of all or any part of the benefits under the Plan, shall be
segregated from the Employers' own assets and held in trust by the Trustees for
the exclusive benefit of the Participants or their beneficiaries under the Plan
who may, in accordance with the terms of the Plan and such Trust Agreements, be
entitled to participation thereunder. At least one such Trust Agreement,
referred to as the ESOP Trust, shall hold those funds contributed under Article
XVI.
10.2 Trust Fund for Exclusive Benefit of Plan Participants and Their
---------------------------------------------------------------
Beneficiaries. Except as otherwise provided in Section 10.4, it shall be
- -------------
impossible under any circumstances, at any time, for any part of the corpus or
income of the Trust Fund to be used for, or diverted to, purposes other than for
the exclusive benefit of Participants and their beneficiaries and defraying
reasonable expenses of administering the Plan.
10.3 Operation of the Trust. The Trust Fund shall be administered by the
----------------------
Trustees subject to the instructions and directions of the Plan Administrator as
set forth in the Plan and in the Trust Agreement entered into by the Corporation
with the Trustees which shall be deemed to be part of the Plan. The Trust
Agreement may contain such provisions as to investment and administration of the
Trust Fund and powers, discretions and accountability of the Trustees as the
Board may deem appropriate. The Board may remove any Trustees at any time upon
reasonable notice, and upon such removal or upon the resignation of any Trustee,
the Board shall designate a successor Trustee. The Plan Administrator shall
determine the manner in which the funds of the Plan shall be disbursed in
accordance with the Plan and the provisions of the Trust Agreement, including
the form of voucher to be used in making disbursements and the qualifications of
persons authorized and empowered to sign the same and any other matters
incidental to disbursements from such Trust Fund.
10.4 Return of Employer Contributions. Notwithstanding Section 10.2,
--------------------------------
(a) In the case of contributions made by the Employers by a mistake
of fact, such contributions may be returned to the Employers within one year
after their payment.
(b) If the deduction of any contribution under the Plan which are
conditioned upon deductibility under Section 404 of the Code is disallowed by
the Internal Revenue Service, to the extent of disallowance, the contribution
may be returned to the Employer within one year after the disallowance. All
contributions made under the Plan shall be deemed to be made upon condition of
deductibility under Section 404 of the Code.
10.5 ESOP Trust. Notwithstanding anything to the contrary in Section
----------
10.3, the ESOP Trust shall be administered in accordance with the provisions of
Article XVII.
37
<PAGE>
ARTICLE XI
ADMINISTRATION OF THE PLAN
--------------------------
11.1 Plan Administration. The Plan Administrator shall have
-------------------
responsibility for performing duties of plan administration in accordance with
this Article.
11.2 Allocation of Responsibility for Plan and Trust Administration.
--------------------------------------------------------------
(a) The Plan Administrator will have only those specific powers,
duties, responsibilities and obligations as are specifically provided for under
this Plan. In general, the Employers will have the sole responsibility for
making the contributions provided for under Article III and Article IV. The
Board of Directors will have the sole authority to appoint and remove any
Trustee and Plan Administrator and to amend or terminate, in whole or in part,
this Plan. The Plan Administrator will have the sole responsibility for the
administration and management of the Plan assets under their control. In the
event of any conflict between provisions of this Plan and the terms of any
policy or contract issued hereunder, the Plan Administrator may determine that
the provisions of the Plan shall control.
(b) The Plan Administrator, Trustees and any other fiduciary under
this Plan may rely upon the direction, information or actions of each other as
being proper under this Plan and are not required under this Plan to inquire
into the propriety of any such direction, information or action. It is intended
under this Plan that each fiduciary will be responsible for the proper exercise
of its own powers, duties, responsibilities and obligations under this Plan and
will not be responsible for any act or failure to act of each other. No
fiduciary guarantees the Trust funds in any manner against investment loss or
depreciation in asset value.
(c) Fiduciaries shall have only those specific powers, duties,
responsibilities and obligations as are specifically provided for them under
this Plan or the Trust Agreement. In accordance with Section 405(c)(1) of
ERISA, any fiduciary may allocate in writing a portion of his or her fiduciary
responsibility to another fiduciary under the Plan. When accepted in writing,
such other fiduciary shall be solely responsible for his or her own acts or
omissions in carrying out such responsibility, except as provided in Section 405
(a) of ERISA.
11.3 Performance of Plan Duties. The Plan Administrator may at its
--------------------------
discretion designate any officers or Employees of the Corporation or of its
Affiliated Companies to perform specific plan administration functions,
including any and all responsibilities described in this Article, whether or not
such officers or employees are Participants under the Plan. The Plan
Administrator may designate a committee to perform the functions described in
Article XVII. The Plan Administrator shall be and remain a "named fiduciary" to
the extent permitted by the provisions of ERISA. Except as provided under
ERISA, or other applicable law, no bonds or other security shall be required of
any individual described in this section in any jurisdiction.
11.4 Funding Policy. The Plan Administrator shall adopt a procedure for
--------------
establishing and carrying out a funding policy as required by Section 402(b)(1)
of ERISA.
38
<PAGE>
11.5 Appointment of Plan Administrator.
---------------------------------
(a) The Plan Administrator shall have responsibility for the day to
day administration of the Plan. In addition, the Plan Administrator shall have
all the duties placed on the Plan Administrator by ERISA and by other Sections
of this Article XI.
(b) The Plan Administrator shall determine all matters of fact
necessary to the administration of the Plan, including the eligibility of
Employees to become Participants and the status and rights of Participants and
all other persons hereunder. As a condition of distributing any benefit under
the Plan, the Plan Administrator may prescribe the use of such forms and require
the furnishing of such information as the Plan Administrator may deem
appropriate for administering the Plan. The Plan Administrator shall also have
sole authority to adopt rules and regulations which shall be administered by the
Plan Administrator, and to issue rulings and interpretations concerning the Plan
and all matters arising thereunder, on a uniform and nondiscriminatory basis,
provided the same shall not be contrary to or inconsistent with any provision of
the Plan. Subject to subsection (c) hereof, all interpretations of the Plan will
be final conclusive and binding upon the Employer, Participant and beneficiaries
and all other persons claiming any interest in the Plan.
(c) The Plan Administrator shall make all determinations as to the
right of any person to a benefit. Any denial by the Plan Administrator of a
Participant's or beneficiary's claim for benefits under the Plan shall be stated
in writing by the Plan Administrator and delivered or mailed to the Participant
or beneficiary. Such determination shall set forth the specific reasons for the
denial, written to the best of the Plan Administrator's ability in a manner that
may be understood without legal or actuarial counsel. The Participant or a
beneficiary may request a review of such denial by filing notice in writing with
the Plan Administrator within 60 days after receipt of such denial; the
Participant or such beneficiary may review pertinent documents and may submit
issues and comment in writing. The Plan Administrator, in such Administrator's
discretion, may request a meeting to clarify any immediate matters the Plan
Administrator deems appropriate. All interpretations, determinations and
decisions of the Plan Administrator with respect to any matter will be subject
to review by the Committee, upon the submission by the Participant or
beneficiary of an application for review to the Committee. Such application
shall include the Plan Administrator's written denial, the Participant or
beneficiary's written statement providing the basis for review by the Committee,
and all other relevant materials necessary or helpful to enable the Committee to
perform its review. The Committee's determination and decision, upon review,
will be final, conclusive and binding upon the Employer, Participant and
beneficiaries and all other persons claiming any interest in the Plan.
11.6 Record Maintenance. The Plan Administrator shall maintain records
------------------
showing the fiscal transactions of the Plan and is authorized to retain the
services of an accountant for the Plan to provide such services as the Plan
Administrator deems appropriate.
11.7 Allocation of Delegation of Duties and Responsibilities. In
-------------------------------------------------------
furtherance of their duties and responsibilities under the Plan, the Board and
the Plan Administrator may:
(a) Employ agents to carry out nonfiduciary responsibilities;
39
<PAGE>
(b) Employ agents to carry out fiduciary responsibilities (other
than trustee responsibilities as defined in Section 405(c)(3) of ERISA);
(c) Consult with counsel, who may be counsel to the Corporation; and
(d) Provide for the allocation of fiduciary responsibilities (other
than trustee responsibilities as defined in Section 405(c)(3) of ERISA) and
among members of the Board, in the case of the Board.
11.8 Expenses. Unless otherwise agreed to by the Corporation, no
--------
fiduciary hereunder (who is an Employee) shall receive any compensation for
services as such. Expenses incurred by fiduciaries in connection with the
administration of the Plan shall be paid by the Trustees from the Trust Fund in
accordance with the direction of the Plan Administrator, unless paid by the
Corporation. Brokerage fees, transfer taxes, if any, and other expenses
incident to the purchase or sale of securities, including Sponsor Stock, by the
Trustees shall, for Plan purposes, be deemed to be part of the cost of such
securities, or deducted in computing the sale proceeds therefrom, as the case
may be.
11.9 Reliance Upon Others. The Board, the Plan Administrator, any person
--------------------
to whom they may delegate such of their duties and powers as provided by ERISA
and the officers and directors of the Corporation shall be entitled to rely
conclusively upon and shall be fully protected in any action taken by them in
good faith in reliance upon any tables, valuations, certificates, opinions,
reports or other advice furnished to them by any duly appointed actuary,
accountant, legal counsel (who may be counsel for the Corporation or for the
Trustees, or both) or other specialist.
11.10 Indemnification. The Corporation may indemnify and hold harmless
---------------
each member of the Committee, the Plan Administrator and all other persons (who
are Employees) deemed to be fiduciaries of the Plan against any and all expenses
and liabilities arising out of their action or failure to act in such capacity,
except expenses and liabilities arising out of their willful misconduct or gross
negligence. Expenses against members of the Committee, the Plan Administrator
and other persons (who are Employees) deemed to be fiduciaries of the Plan which
may be indemnified hereunder include, without limitation, the amount of any
settlement, or judgment, costs, counsel fees and related charges reasonably
incurred in connection with a claim asserted or a proceeding brought against
such persons. The Board, at the Corporation's expense, may settle any such
claim asserted or proceeding brought against the Committee, any member thereof,
the Plan Administrator and other persons (who are Employees) deemed to be
fiduciaries of the Plan, when such settlement appears to be in the best interest
of the Corporation. This right of indemnification shall be in addition to any
other rights to which any member of the Committee or any such person may be
entitled as a matter of law.
11.11 Notifications. All notices, reports and statements given, made,
-------------
delivered or transmitted to a Participant shall be deemed duly given, made,
delivered, or transmitted when mailed, by such class as the sender may deem
appropriate, with postage prepaid and addressed to the Participant at the
address last appearing on the records of the Corporation with respect to this
Plan. All notices, directions or other communications given, made, delivered or
transmitted by a
40
<PAGE>
Participant to the Trustees, Corporation, Committee or Plan Administrator shall
not be deemed to have been duly given, made, delivered, transmitted or received
unless and until actually received by the Trustees, Corporation., Committee or
Plan Administrator.
11.12 Multiple Capacities. Any person may serve in more than one
-------------------
fiduciary capacity with respect to the Plan.
41
<PAGE>
ARTICLE XII
AMENDMENT OF THE PLAN
---------------------
12.1 Authority to Amend the Plan. The Corporation reserves the right to
---------------------------
change, modify or otherwise amend the Plan at any time and from time to time and
any such change, modification or amendment shall be accomplished by resolution
duly adopted by the Compensation Committee of the Board; provided,
(a) No amendment or modification may be made at any time which would
vest the Corporation with any right, title or interest in or to the assets of
the Trust, or permit any part of the corpus or income of the Trust Fund to be
used for or diverted to purposes other than for the exclusive benefit of
Participants and their beneficiaries under the Plan and for the payment of the
expenses of the Plan;
(b) No amendment or modification shall have any retroactive effect
as to deprive any person of any benefit already accrued, except that any
amendment may be made retroactive which is necessary to bring the Plan into
conformity with governmental regulations or policies in order to qualify or
maintain qualification of the Plan or the Trust for tax exemption; and
(c) No Plan amendment (or transaction having the effect of a Plan
amendment) shall be effective to the extent it eliminates or reduces any
"Section 411(d)(6) protected benefit" (i.e. benefits described in Code Section
----
411(d)(6)(A), early retirement benefits and retirement-type subsidies, and
optional forms of benefit), or adds or modifies conditions relating to Section
411(d)(6) protected benefits, unless such protected benefits are preserved with
respect to benefits accrued as of the later of the adoption date or effective
date of the amendment; and
(d) No amendment or modification which affects the duties of the
Trustees shall be made without consent of the Trustees.
Any such amendment or modification shall become effective at such
time and in such manner as shall be determined by the Compensation Committee of
the Board.
42
<PAGE>
ARTICLE XIII
TERMINATION OF THE PLAN
-----------------------
13.1 Discontinuance or Suspension of Employer Contributions and
----------------------------------------------------------
Termination of the Plan. The Corporation has established the Plan with the
- -----------------------
bona fide intention and expectation that it will continue indefinitely.
However, the Corporation reserves the right to permanently discontinue or
temporarily suspend Employer contributions under the Plan (completely or with
respect to any Participating Subsidiary) or to terminate the Plan, in whole or
in part, by appropriate resolutions of the Board of Directors. Any such
termination, partial termination, discontinuance or suspension shall be
effective at such date as the Board may determine, but not earlier than the date
on which the Corporation shall have given notice of such modification or
termination to the Trustees, and may be effective as to all Employers, or as to
one or more Employers, and their respective Employees. The Corporation shall
promptly give notice of any such modification or termination to all Employers,
and to its and their respective Participants, beneficiaries and Employees,
affected thereby.
13.2 Procedure on Termination of Plan or Discontinuance of Employer
--------------------------------------------------------------
Contributions. In the event of a termination or partial termination of the
- -------------
Plan or complete discontinuance of Matching Contributions or Employer ESOP
Contributions, Participants' Matching Contributions Accounts or ESOP Accounts
shall be nonforfeitable and fully vested, provided, however, in the event of a
partial termination, the foregoing shall apply only to the portion of the Plan
terminated and the Participants affected thereby. In such event, the Board of
Directors may, in its discretion, authorize any one of the following:
(a) The Plan may be continued in operation until exhaustion of the
assets of the Trust Fund, except that no further Employees shall become
Participants and no further Participant, Matching Contributions or Employer ESOP
Contributions shall be made; or
(b) The Trustees may wind up and liquidate the Trust Fund and
distribute the assets for the benefit of Participants and Former Participants
who have not previously received a full distribution of their benefits, in
accordance with their respective Accounts as then constituted and without regard
to vesting conditions; or
(c) The Trustees may transfer the assets of the Plan to the trustee
of another employee benefit plan or plans maintained by the Corporation for the
benefit of its employees or their beneficiaries, provided that a written
favorable determination with respect to such transfer shall have been received
from the Internal Revenue Service upon such transfer, the Corporation and the
Trustees shall thereupon be discharged from all further liability under the
Plan.
13.3 Merger. In the case of any merger or consolidation of this Plan
------
and/or the Trust Fund with, or any transfer of the assets or liabilities of the
Plan and/or Trust Fund to, any other plan, the terms of such merger,
consolidation or transfer shall be such that each Participant would receive (in
the event of termination of this Plan or its successor immediately thereafter) a
benefit which is no less than the Participant would have received in the event
of termination of this Plan immediately before such merger, consolidation or
transfer.
43
<PAGE>
ARTICLE XIV
GENERAL PROVISIONS
------------------
14.1 Participation of Subsidiaries. Any domestic subsidiary may, by
-----------------------------
action of its Board of Directors, and with the approval of and subject to such
conditions as may be imposed by the regulatory authorities having jurisdiction
and by the Board of Directors of the Corporation, adopt the Plan and thereby
become a Participating Subsidiary. A list of Participating Domestic
Subsidiaries appears in Appendix A to the Plan. Any Participating Subsidiary
may terminate its participation in the Plan by giving the Plan Administrator
written notice. In such event, the assets of the Trust Fund attributable to the
Participants of the terminating Participating Subsidiary shall be transferred to
a successor trustee or dealt with in such other manner as the Participating
Subsidiary and Plan Administrator shall agree upon.
14.2 Alienation of Benefits Prohibited. It is a condition of this Plan,
---------------------------------
and all rights of each Participant shall be subject thereto, that no right or
interest of any Participant under this Plan or in the Participant's Account
shall be subject to anticipation, assignment, pledge or charge in whole or in
part, either directly or by operation of law or otherwise, including, but
without limitation, execution, levy, garnishment, attachment, pledge, bankruptcy
or in any other manner but excluding devolution by death or mental incompetency,
and any attempt to anticipate, assign, pledge or charge any such right or
interest shall be void, and no right or interest of any Participant under this
Plan or in the Participant's Account shall be liable for or subject to any
obligation, liability or tort of such Participant.
The anti-alienation provisions of this Plan shall not apply with
respect to compliance by the Plan with the terms of any "qualified domestic
relations order", as defined Section 206(d) of ERISA and Section 414(p) of the
Code, issued with respect to any Participant. The Plan Administrator shall
establish written procedures to determine the qualified status of a domestic
relations order and for the payment of benefits in accordance with the
applicable requirements of any qualified domestic relations order. Such
procedures shall provide for notification to each person specified in a domestic
relations order as entitled to payment of benefits under the Plan (at the
address included in the domestic relations order) and for the furnishing of a
copy of such procedures promptly upon receipt by the Plan of the domestic
relations order. Such procedures shall permit an "alternate payee", as defined
in Section 414(p)(8) of the Code, to designate a representative for receipt of
copies of notices that are sent to the alternate payee with respect to a
domestic relations order. Benefits assigned to an alternate payee under a
"qualified domestic relations order" may be distributed to such alternate payee
as soon as practical after such order is determined by the Plan to be qualified
if such order so provides. Distributions to an alternate payee under a qualified
domestic relations order shall be subject to the automatic lump sum distribution
provision of Section 7.5.
14.3 No Employment Rights Implied. Nothing in the Plan shall be deemed
----------------------------
or construed to impair or affect in any manner whatsoever the right of the
Corporation or any Employer, in its discretion, to hire Employees and, with or
without cause, to discharge or terminate the services of Employees or
Participants.
44
<PAGE>
14.4 Number. The singular number shall include the plural number unless
------
the context of the Plan requires otherwise. All capitalized terms shall have
the same meaning wherever capitalized. Capitalized terms not specifically
defined in this Article shall be deemed defined by the most descriptive context
of the Plan.
14.5 Governing Law. To the extent not preempted by ERISA, this Plan
-------------
shall be governed and construed in accordance with the laws of the State of
Connecticut (other than the conflict of laws provisions). In all cases, legal
actions claiming Plan benefits may be brought only after exhausting the claim
procedures under Section 11.5 and must be commenced within 3 years of the event
giving rise to the claimed benefit entitlement, irrespective of the jurisdiction
in which such action is filed.
14.6 Missing Persons. If the Committee is unable to make any distribution
---------------
under the Plan because the whereabouts of the person entitled to such
distribution cannot be ascertained after reasonable efforts have been made to
locate such person including mailing of due notice to such person at his last
known address as shown on the records of the Committee or Employer, then, after
passage of at least one year from the date payment of the distribution was due,
the Committee may, in its sole discretion, make such distribution to the
person's spouse or to any other relative. If the Committee is unable or
unwilling to make such distribution to a relative, then such distribution shall
be deemed forfeited (and applied to reduce the Employer's ESOP Contributions)
but subject to reinstatement if a valid claim is subsequently made by such
missing person.
14.7 Incapacity. In the event that any benefit under the Plan is or
----------
becomes payable to a minor or to a person under legal disability, or to a person
not judicially declared incompetent but who is, by reason of illness or mental
or physical disability, in the opinion of the Committee, incapable of personally
receiving and giving valid receipt for such payment, then, unless and until
claim therefor shall have been made by a duly appointed guardian or other legal
representative of such person, the Committee may provide for such payment (or
any part thereof) to be made to any person or institution then contributing
toward or providing for the care and maintenance of such person. Any such
payment shall be for the account of such person and shall constitute, to the
extent made, a complete discharge of liability for the Plan and Trust Fund.
14.8 Corrective Actions. In the event a mistake or error is made in
------------------
administering the Plan, including, without limitation, as to the eligibility,
Service, or the amount of any contributions or distributions made or to be made
to, or on behalf of, a Participant or beneficiary, the Plan Administrator may
take any action, including making such contributions or distributions it deems
appropriate, to place the Participant or beneficiary as nearly as possible in
the position he would have been in, had there been no mistake or error.
45
<PAGE>
ARTICLE XV
TOP-HEAVY PROVISIONS
--------------------
15.1 Applicability. The provisions of this Article XV shall become
-------------
applicable for any Plan Year commencing after December 31, 1983 during which the
Plan is determined to be a Top-Heavy Plan.
15.2 Definitions. For purposes of this Article XV, the following terms
-----------
shall have the meanings set forth below:
(a) "Aggregate Account" means, as of the Determination Date, for an
-----------------
Employee the sum of:
(1) the Employee's Account balance as of the most recent
Valuation Date occurring within a twelve (12) month period ending on the
Determination Date;
(2) an adjustment for any contributions due as of the
Determination Date. Such adjustment shall be the amount of any
contributions actually made after the Valuation Date but before the
Determination Date, except for the first Plan Year when such adjustment
shall also reflect the amount of any contributions made after the
Determination Date that are allocated as of a date in that first Plan Year;
(3) any Employee contributions, whether voluntary or
mandatory; provided, however, amounts attributable to salary reduction or
similar arrangements shall not be considered to be a part of the Employee's
Aggregate Account;
(4) with respect to unreleased rollovers and plan-to-plan
transfers (ones which are both initiated by the Employee and made from a
Plan maintained by one employer to a plan maintained by another employer),
if this Plan provides for rollovers or plan-to-plan transfers, it shall
always consider such rollover or plan-to-plan transfer as a distribution
for the purpose of this Section; if this Plan is the plan accepting such
rollovers or plan-to-plan transfers, it shall not consider such rollovers
or plan-to-plan transfers accepted after December 31, 1983 as part of the
Employee's Aggregate Account balance. However, rollovers or plan-to-plan
transfers accepted prior to January 1, 1984 shall be considered as part of
the Employee's Aggregate Account;
(5) with respect to related rollovers and plan-to-plan
transfers (ones either not initiated by the Employee or made to a plan
maintained by the same employer), if this Plan provides the rollover or
plan-to-plan transfer, it shall not be counted as a distribution for
purposes of this Section. If this Plan is the plan accepting such rollover
or plan-to-plan transfer, it shall consider such rollover or plan-to-plan
transfer as part of the Employee's Aggregate Account, irrespective of the
date on which such rollover or plan-to-plan transfer is accepted; and
46
<PAGE>
(6) any Plan distributions made within the Plan Year that
includes the Determination Date or within the 4 preceding Plan Years.
However, in the case of distributions made after the Valuation Date and
prior to the Determination Date, such distributions are not included as
distributions for top-heavy purposes to the extent that such distributions
are already included in the Participant's Aggregate Account balance as of
the Valuation Date. Notwithstanding anything herein to the contrary, all
distributions, including distributions made prior to January 1, 1984, and
distributions under a terminated plan which if it had not been terminated
would have been required to be included in an Aggregation Group, will be
counted. Further, distributions from the Plan (including the cash value of
life insurance policies) of a Participant's Aggregate Account balance
because of death shall be treated as a distribution for the purposes of
this paragraph.
(b) "Aggregation Group" means either a Required Aggregation Group or
-----------------
a Permissive Aggregation Group.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
----
(d) "Determination Date" means, with respect to any Plan Year, the
------------------
last day of the preceding Plan Year, or, in the case of the first Plan Year of
any plan, the last day of such Plan Year.
(e) "Employee" means any employee of the Employer.
--------
(f) "Employer" means General Re Corporation and any Affiliated
--------
Company, except as otherwise provided in Section 416(i)(1)(c) of the Code.
(g) "Key Employees" shall include any Employee or former Employee
-------------
who, at any time during the Plan Year or any of the preceding 4 Plan Years, is:
(1) an officer of the Employer (as that term is defined within
the meaning of the regulations under Code Section 416) having annual "415
compensation" greater than 50% of the amount in effect under Code Section
415(b)(1)(A) for any such Plan Year.
(2) 1 of the 10 Employees owning (or considered as owning
within the meaning of Code Section 318) the largest interests in all
employers required to be aggregated under Code Sections 414(b), (c), and
(m). However, an Employee will not be considered a top 10 owner for a Plan
Year if the Employee earns less than $30,000 (or such other amount adjusted
in accordance with Code Section 415(c)(1)(A) as in effect for the calendar
year in which the Determination Date falls).
(3) a "5% owner" of the Employer. A "5% owner" means any person
who owns (or is considered as owning within the meaning of Code Section
318) more than 5 % of the outstanding stock of the Employer or stock
possessing more than 5 % of the total combined voting power of all stock of
the Employer. In determining percentage
47
<PAGE>
ownership hereunder, employers that would otherwise be aggregated under
Code Sections 414(b), (c) and (m) shall be treated as separate employers.
(4) a "1% owner" of the Employer having an annual "415
compensation" from the Employer of more than $150,000. "1% owner" means any
person who owns (or is considered as owning within the meaning of Code
Section 318) more than 1% of the outstanding stock of the Employer or stock
possessing more than 1% of the total combined voting power of all stock of
the Employer. In determining percentage ownership, hereunder, employers
that would otherwise be aggregated under Code Section 414(b), (c), and (m)
shall be treated as separate employers. However, in determining whether an
individual has "415 compensation" or more than $150,000, "415 compensation"
from each employer required to be aggregated under Code Section 414(b),
(c), and (m) shall be taken into account.
For purposes of Subparagraph (1), no more than 50 Employees (or, if
lesser, the greater of 3 or 10% of the employees) shall be treated as officers.
For purposes of Subparagraph (2), if 2 Employees have the same interest in the
Employer, the Employee having greater annual compensation from the Employer
shall be treated as having a larger interest.
Determination of Key Employee status is based on the Plan Year
containing the relevant Determination Date.
(h) "Non-Key Employee" means an Employee who is not a Key Employee.
----------------
(i) "Permissive Aggregation Group" means the group resulting where
----------------------------
the Employer elects to treat any plan not required to be included in a Required
Aggregation Group as being part of such Aggregation Group if such Aggregation
Group would continue to meet the requirements of Section 401(a)(4) or 410 of the
Code with such plan being taken into account.
(j) "Present Value of Accrued Benefit" means the present value of the
--------------------------------
accrued benefit of a participant under a defined benefit plan using the
actuarial assumptions of each such plan.
(k) "Required Aggregation Group" means the group which is composed of
--------------------------
(i) each plan of the Employer in which a Key Employee is a participant, and (ii)
each other plan of the Employer which enables any plan described in the
foregoing clause (i) to meet the requirements of Sections 401(a)(4) or 410 of
the Code.
For this purpose, the term plan includes a terminated plan. Such a
plan must be aggregated with other plans of the Employer if it was maintained
within the last 5 years ending on the Determination Date for the Plan Year in
question and would, but for the fact that it terminated, be part of a Required
Aggregation Group for such Plan Year.
(l) "Super Top-Heavy Plan" means a plan which is determined to be a
--------------------
super top-heavy plan pursuant to Section 15.3(b).
48
<PAGE>
(m) "Top-Heavy Group" means any Aggregation Group in which, as of
---------------
the respective Determination Dates which occur in the same calendar year for
each of the plans in such Aggregation Group, the sum of:
(1) the Present Value of the Accrued Benefits for Key Employees
under all defined benefit plans included in such Aggregation Group; and
(2) the Aggregate Accounts of Key Employees under all defined
contribution plans included in such Aggregation Group, exceeds sixty
percent (60 %) of a similar sum determined for all Employees. In
determining such amounts, prior distributions shall be taken into account
to the extent required by Section 15.3(c) of the Plan.
(n) "Top-Heavy Plan" means a plan which is determined to be top-
--------------
heavy pursuant to Section 15.3(a).
(o) "Valuation Date" means the application valuation date as defined
--------------
in each defined contribution plan.
15.3 Determination of Top-Heavy Status.
---------------------------------
(a) Top Heavy Plan. This Plan shall be a Top-Heavy Plan with respect
--------------
to any Plan Year commencing after December 31, 1983 if, as of the Determination
Date for such Plan Year, (1) the Present Value of Accrued Benefits of Key
Employees and (2) the Aggregate Accounts of Key Employees under the Plan and any
plan of an Aggregation Group exceeds sixty percent (60%) of (1) the Present
Value of Accrued Benefits and (2) the Aggregate Accounts of all employees under
the Plan and any plan of an Aggregation Group (including prior distributions to
the extent required by Section 15.3(c) hereof). This Plan shall in any event be
a Top-Heavy Plan with respect to a Plan Year if it is a member of a Required
Aggregation Group and such Aggregation Group is a Top-Heavy Group with respect
to the calendar year in which such Plan Year begins. This Plan shall not be a
Top-Heavy Plan with respect to a Plan Year if it is included in an Aggregation
Group (whether Required or Permissive) and such Aggregation Group is not a Top-
Heavy Group for such Plan Year.
(b) Super Top-Heavy Plan. This Plan shall be a Super Top-Heavy Plan
--------------------
with respect to any Plan Year commencing after December 31, 1983, as of the
Determination Date for such Plan Year, the (1) Present Value of Accrued Benefits
of Key Employees and (2) the Aggregate Accounts of Key Employees under the Plan
and any Plan of an Aggregation Group exceeds ninety percent (90%) of (1) the
Present Value of Accrued Benefits and (2) the Aggregate Accounts of all
Employees under the Plan and any plan of an Aggregation Group (including prior
distributions to the extent required by Section 15.3(c) hereof).
(c) Distributions During Last Five (5) Years Taken Into Account. For
-----------------------------------------------------------
purposes of determining:
(1) the Present Value of the Accrued Benefit for any Employee,
or
49
<PAGE>
(2) the Aggregate Account of any Employee, such Present Value
or Aggregate Account shall be increased by the aggregate distributions made
with respect to such Employee under the plan during the Plan Year which
includes the Determination Date and the preceding four (4) Plan Years.
(d) Self-employed Individuals. In the case of a self-employed
-------------------------
individual described in Section 401(c)(1) of the Code:
(1) Such individual shall be treated as an employee, and
(2) Such individual's earned income (within the meaning of
Section 401(c)(2) of the Code) shall be treated as compensation.
(e) Treatment of Beneficiaries. The terms "Employee" and "Key
--------------------------
Employee" include their beneficiaries.
(f) Former Employees. If an individual has not performed services
----------------
for any Employer maintaining the Plan (other than benefits under the Plan) at
any time during the 5 year period ending on the Determining Date, the Aggregate
Account and/or the Present Value of Accrued Benefits of such individual shall
not be taken into account for purposes of determining whether this Plan is a
Top-Heavy Plan.
(g) Former Key Employees. If an individual is a Non-Key Employee
--------------------
with respect to any plan for a Plan Year, but such individual was a Key Employee
with respect to such plan for any prior Plan Year, such Employee's Present Value
of Accrued Benefits or Aggregate Account shall not be taken into account for
purposes of determining whether this Plan is a Top-Heavy Plan or whether the
Aggregation Group which includes this Plan is a Top-Heavy Group.
(h) Treatment of Simplified Employee Pensions. A simplified employee
-----------------------------------------
pension shall be treated as a defined contribution plan. At the election of the
Employer, Aggregate Account shall take into account aggregate Employer
contributions in lieu of the account balance of an Employee.
15.4 Vesting. Notwithstanding any provisions of the Plan to the contrary,
-------
for any Plan Year in which the Plan is a Top-Heavy Plan, the Employee shall have
a non-forfeitable right to his Matching Contributions Account and ESOP Account
under the Plan in accordance with the following schedule:
<TABLE>
<CAPTION>
Years of Service Percentage
---------------- ----------
<S> <C>
less than 2 0%
2 50%
3 75%
4 or more 100%
</TABLE>
"Years of Service" shall include an Employee's Service for vesting
purposes as determined under the Plan. If in any subsequent Plan Year. the Plan
ceases to be a Top-Heavy
50
<PAGE>
Plan, the Plan Administrator may, in its discretion, elect to (1) continue to
apply this vesting schedule in determining an Employee's right to his Matching
Contributions Account and ESOP Account or (2) revert to the vesting schedule
hereinbefore provided when the Plan was not a Top-Heavy Plan. Any such. revision
shall be treated as a Plan amendment. Notwithstanding any provision herein to
the contrary, where the Plan ceases to be a Top-Heavy Plan, each Employee who
has completed 3 Years of Service with an Employer may elect to have his non-
forfeitable percentage determined under any vesting schedule provided for in the
Plan, before or after any amendments.
15.5 Minimum Benefits. If this Plan is a Top-Heavy Plan with respect to
----------------
a given Plan Year and the Employer and salary deferral contributions made under
Section 3.4 for such year for each Non-Key Employee is less than the lesser of
(a) three percent (3%) of such Non-Key Employee's compensation or (b) the
percentage of compensation constituted by the Employer contributions and salary
deferral made under the Plan for such Plan Year for the Key Employee for whom
such percentage is the highest for the year, a minimum contribution for such
Plan Year, as provided hereunder, shall be made for each Participant who is a
Non-Key Employee who has not separated from Service as of the end of the Plan
Year regardless of:
(i) whether the Non-Key Employee has less than 1,000 Hours of
Service for the Plan Year,
(ii) the amount of such Non-Key Employee's compensation, and
(iii) whether the Non-Key Employee has made a savings or salary
deferral contribution to the Plan for such Plan Year. The portion of a
Participant's account which is attributable to minimum contributions shall
not be forfeited in the event that such Participant makes a withdrawal
under Article VIII.
The minimum contribution will be whatever is necessary to increase all
of the Employer contributions and salary deferral made on behalf of a Non-Key
Employee to the lesser of (a) three percent (3%) of such Non-Key Employee's
compensation or (b) the percentage of compensation at which Employer
contributions made under the Plan for such Plan Year for the Key Employee for
whom such percentage is the highest for the Plan Year. For purposes of this
Section 15.5, a determination of the contributions for a Key Employee shall be
determined by dividing the Employer contributions by the Key Employee's
compensation (within the meaning of Section 415 of the Code) not in excess of
the amount as may be prescribed under Section 401(a)(17) of the Code. Retirement
benefit means a benefit payable annually in the form of a single life annuity
(with no ancillary benefits) at the Normal Retirement Date under the Plan.
No minimum contribution will be required for a Participant under this
Plan for any Plan Year if the Company maintains another qualified plan under
which a minimum benefit or contribution is being accrued or made for such
Participant in accordance with Section 416(c) of the Code.
Notwithstanding any provision of this Section 15.5 to the contrary, in
any Plan Year in which this Plan is a Top-Heavy Plan, each Non-Key Employee
Participant who is also
51
<PAGE>
covered by a defined benefit plan of the Employer, shall accrue a minimum
benefit equal to the minimum benefit provided by the defined benefit plan
including the Retirement Plan. No minimum Employer contribution shall be
credited under this Plan.
15.6 Adjustment to the Section 415 Limit. If the Plan is or becomes a
-----------------------------------
Top-Heavy Plan in any Plan Year and Section 416(h)(2) of the Code does not
apply, the defined contribution plan fraction described in Section 415(e) of the
Code shall be computed by substituting in the denominator a factor of 1.0 for
1.25.
52
<PAGE>
ARTICLE XVI
EMPLOYEE STOCK OWNERSHIP PLAN
-----------------------------
16.1 ESOP Contributions. Effective July 1, 1989, the Employer may make
------------------
Employer ESOP Contributions to the Plan. Such contributions shall not be less
than the amount due under the terms of any Exempt Loan incurred under Section
16.4. At the direction of the Plan Administrator, such contributions shall be
used to make payments on the Exempt Loan. As such payments are made, the Plan
Administrator shall authorize the release of Corporation Stock from the Suspense
Account in accordance with Section 16.6. Corporation Stock released from the
Suspense Account on account of such payment shall be allocated for the Quarter
determined by the Plan Administrator. Such allocation shall be in accordance
with Sections 16.2 and 16.3.
16.2 ESOP Matching Allocations. Corporation Stock released from the
-------------------------
Suspense Account shall first be allocated for the Quarter determined by the Plan
Administrator to the ESOP Account in an amount equal to 100% of the
Participant's Savings and Salary Deferral Contributions, but not to exceed 6% of
the Participant's Compensation for the Plan Year ("ESOP Matching Allocations").
Notwithstanding the previous sentence, ESOP Matching Allocations shall not be
made for Quarters commencing before January 1, 1990. In determining the amount
of shares to be allocated, value shall be the value determined as of the most
recent ESOP Valuation Date. In any Plan Year in which the ESOP Matching
Percentage for the group of Highly Compensated Employees would be more than the
greater of:
(a) the ESOP Matching Percentage of all other Qualified Employees
multiplied by 1.25, or
(b) the lesser of 2% plus the ESOP Matching Percentage of all other
Qualified Employees or the ESOP Matching Percentage for all other Qualified
Employees multiplied by 2, then ESOP Matching Allocations of the Highly
Compensated Employees with the greatest amount of such ESOP Matching Allocations
and Savings Contributions, if any, shall be reduced to the extent necessary so
that the ESOP Matching Percentage for the group of Highly Compensated Employees
is no more than the greater of (a) or (b). For Plan Years commencing on and
after January 1, 1997, the Committee shall use (unless it elects not to) the
ESOP Matching Percentage for the preceding Plan Year of all Qualified Employees
who are not Highly Compensated Employees to determine the maximum ESOP Matching
Percentage for the current Plan Year for the group of Qualified Employees who
are Highly Compensated Employees. In addition to the foregoing, the amount of
ESOP Matching Allocations and savings contributions, if any, of Highly
Compensated Employees shall be limited in each Plan Year in order to prevent the
multiple use of the alternative limitation under Treasury Reguation Section
1.401(m)-2.
16.3 ESOP Supplemental Allocations. If Corporation Stock in excess of
-----------------------------
the amount to be allocated under Section 16.2 is released and directed to be
allocated by the Plan Administrator pursuant to Section 16.2, or Corporation
Stock is released and allocated to a Quarter commencing before January 1, 1990,
an ESOP Supplemental Allocation shall be made and credited to the ESOP Account
of Participants who have not incurred a Severance prior to the
53
<PAGE>
date of such ESOP Supplemental Allocation under one or both of the following
methods as selected by the Plan Administrator:
(a) To the Accounts of Participants in proportion to the ratio which
the Compensation of each Participant for the calendar year within which such
ESOP Supplemental Allocations are made bears to the Compensation of all
Participants for such calendar year; or
(b) Per capita equally to the ESOP Accounts of all Participants who
receive Compensation for the calendar year within which such ESOP Supplemental
Allocations are made.
16.4 Exempt Loan. In accordance with the ESOP Trust Agreement, the
-----------
Trustees, at the direction of the Plan Administrator, may cause the Plan to
incur an Exempt Loan to finance the acquisition of Corporation Stock. An Exempt
Loan shall be for a specific term, shall bear a reasonable rate of interest and
shall not be payable on demand except in the event of default. In the event of
default, the value of Plan assets transferred in satisfaction of the Exempt Loan
shall not exceed the amount of default. An Exempt Loan may be secured by a
collateral pledge of the Corporation Stock acquired with the proceeds of such
loan, contributions (other than contributions of Corporation Stock) that are
made under the Plan to meet its obligations under the Exempt Loan and earnings
attributable to such collateral and the investment of such contributions, but no
other assets of the Trust may be pledged as collateral for the Exempt Loan and
no lender shall have recourse against any assets of the Trust except to the
extent permitted under Section 54.4975-7(b)(5) of the Treasury Regulations. Any
pledge of Corporation Stock shall provide for the release of shares so pledged
in accordance with Section 16.6.
16.5 Investment of Trust Fund. Employer ESOP contributions and earnings
------------------------
thereon not used to repay an Exempt Loan, may be held uninvested in cash as the
Plan Administrator deems advisable for making distributions under the Plan, or
may be invested in short-term investments bearing a reasonable rate of interest,
including without limitation, deposits in, or short-term instruments of the
Trustees, or in one or more short-term collective instruments of the Trustees,
or in one or more short-term collective investment funds administered by the
Trustees as trustee thereof for the collective investment of assets of employee
pension or profit-sharing trusts, as long as each collective investment fund
constitutes a qualified trust under the applicable provisions of the Code.
Dividends, interests, and other distributions received on the assets held by the
Trustees in respect to the Trust Fund shall be invested as provided in the
preceding sentence, except as otherwise may be provided in Section 16.6 with
respect to dividends on Corporation Stock.
16.6 Suspense Account; Dividends on Unallocated Stock.
------------------------------------------------
(a) Corporation Stock acquired with the proceeds of an Exempt Loan
shall be held in the Suspense Account and to the extent released by the Plan
Administrator, shall be allocated to the Participants' Accounts on the basis set
forth in Sections 16.2 and 16.3. During the term of the Exempt Loan, a number of
shares of Corporation Stock shall be released per Plan Year equal to the number
of shares in the Suspense Account multiplied by a fraction, the numerator of
which shall be the amount of principal and interest paid by the Trustees on the
Exempt Loan for the Plan Year, and the denominator of which shall be the sum of
the numerator
54
<PAGE>
and the aggregate principal and interest to be paid by the Trustees on the
Exempt Loan for all future Plan Years; provided, however, that an alternative
method of releasing such Stock from encumbrance may be utilized if the Plan
Administrator so elects, and if permitted by applicable regulations under
Section 4975 of the Code. For this purpose, the number of future years under the
Exempt Loan must be definitely ascertainable and must be determined without
taking into account any possible extensions or renewal periods. If the interest
rate under the Exempt Loan is variable, the interest to be paid in future years
shall be computed by using the interest rate applicable as of the end of the
calendar year.
(b) Any cash dividends received by the Trustees on shares of
Corporation Stock held in the Suspense Account shall be applied to the payment
of any outstanding obligations of the Trust under any Exempt Loan (and shall be
invested in an interest bearing or other fixed income investment pending such
payment) unless, in the sole discretion of the Plan Administrator, the Trustees
are directed to use such dividends to buy additional shares of Corporation
Stock. Any shares of Corporation Stock released from the Suspense Account due to
application of such dividends to the repayment of an Exempt Loan or purchased
using such dividends shall be allocated to Participants' Accounts on the basis
set forth in Sections 16.2 and 16.3.
(c) Unless, in the sole discretion of the Plan Administrator, the
Trustees are directed that dividends that are payable with respect to the
Corporation Stock that is allocated to a Participant's ESOP Account may be (a)
accumulated in the Participant's ESOP Account and used to buy additional
Corporation Stock, (b) paid directly to the Participant in cash (to the extent
such direct payment may be effectuated), or (c) paid to the Trust and
distributed by the Trustees in cash to the Participant not later than 90 days
after the close of the Plan Year in which paid to the Trust, such dividends
shall be applied to the payment of outstanding obligations of the Trust under
any Exempt Loan; provided, however, that this provision shall only be effective
if Corporation Stock with a fair market value not less than the amount of
dividends so applied is allocated to the Participants' ESOP Accounts for the
Plan Year in which the dividends were paid to the Trust. The excess, if any, of
the fair market value of the Corporation Stock released from the Suspense
Account by reason of the application of dividends described in this Section 16.6
over the fair market value of Corporation Stock allocated to a Participant's
Account pursuant to the provision in the immediately preceding sentence shall be
allocated among Participants' ESOP Accounts on the basis set forth in Sections
16.2 and 16.3.
16.7 Vesting. Participants shall be vested in their ESOP Accounts in
-------
accordance with the provisions of Article VI applicable to Matching
Contributions Accounts including a deemed distribution equal to zero dollars for
Participants who incur a Severance with a zero vesting percentage. Forfeitures
of ESOP Accounts shall be allocated to other Participants' ESOP Accounts on the
basis set forth in Sections 16.2 and 16.3. Notwithstanding the foregoing, a
Participant who has incurred a Severance and resumes employment under the Plan
shall have the forfeited nonvested portion of the Participant's ESOP Account
restored to him upon the Participant's repayment to the Plan of the full amount
of any distribution. Such repayment shall be made prior to the earlier of (1) 5
years from his date of Reemployment or (2) the completion of a Five Year Break-
in-Service.
55
<PAGE>
16.8 Distributions of ESOP Account.
-----------------------------
(a) Distribution of a Participant's ESOP Account shall commence at the
time prescribed in Sections 7.6 and 7.7.
(b) Distributions prior to Retirement shall be paid in a single sum.
Distributions made upon or after Retirement may be made on the basis set forth
in Section 7.4(b), as modified by Section 7.11. All distributions from the ESOP
Account shall consist of shares of General Re Common Stock or cash equivalent in
value to the fair market value as of the most recent ESOP Valuation Date of the
Corporation Stock held in the ESOP Account. Unless the Participant or
beneficiary elects to receive the distribution in General Re Common Stock, such
distribution shall be paid entirely in cash. The Participant shall be notified
of his right to receive General Re Common Stock.
(c) Shares of Corporation Stock that at the time of distribution are
not readily tradable on an established market shall be subject to a put option
which shall permit the Participant to sell such stock to the Corporation at any
time during two option periods, at the fair market value of such shares (as of
the most recent ESOP Valuation Date). The first period shall be for at least 60
days beginning on the date of distribution. The second period shall be for at
least 60 days beginning on the first ESOP Valuation Date in the calendar year
following the year in which the distribution was made. The Corporation may
direct the Trustees to purchase shares tendered to the Corporation under a put
option. Payment for any shares sold under a put option shall be made in a lump
sum or in substantially equal annual installments over a period not exceeding
five years, with interest payable at a reasonable rate (as determined by the
Corporation).
16.9 Diversification of Account.
--------------------------
(a) Each Participant who has attained age 55 and completed 10 years of
participation in the Plan may make an annual election to transfer his or her
Account to a Diversified Account, or, at the Plan Administrator's discretion
receive a distribution of a portion of the amounts credited to his or her ESOP
Account, in accordance with such procedures as the Plan Administrator shall
establish. The election to effect such transfer or distribution shall be
granted with respect to a period of six Plan Years (the "Election Period")
commencing with the Plan Year in which the Participant attains age 55 and has
completed 10 years of participation in the Plan. For each Plan Year within the
Election Period, a Participant may elect, within 90 days of the close of such
Plan Year, to transfer or receive, as the case may be, all or a portion of his
or her Account which is subject to this Section 16.9. The amount in the Account
subject to this Section 16.9 shall be the excess of (i) over (b) as follows:
(i) 25% of the sum of (A) the balance of the Participant's ESOP
Account, determined as of the close of such Plan Year, and (B) the
distributions received by and transfers made as a result of his or her
prior elections (provided that "50%" shall be substituted for "25%" for his
or her final election within the Election Period), minus
56
<PAGE>
(ii) the distributions received by and transfers made by the
Participant pursuant to his or her prior elections.
(b) If a Participant elects to receive or have transferred an amount
described in paragraph (a) above, such distribution or transfer shall be made
within 90 days after the close of the applicable annual Election Period.
16.10 Voting
------
(a) Voting of Corporation Stock. Each Participant (or beneficiary of a
---------------------------
deceased Participant) to whose account shares of Corporation Stock have been
allocated shall, as a named fiduciary within the meaning of Section 403(a)(1) of
ERISA, direct the Trustee with respect to the vote of the shares of Corporation
Stock allocated to his or her account, and the Trustee shall follow the
directions of those Participants (and beneficiaries) who provide timely
instructions to the Trustee. Each Participant (or beneficiary) who has been
allocated shares of Corporation Stock is entitled to vote on any matter
presented for a vote by the stockholders, as a named fiduciary, and shall also
direct the Trustee with respect to the vote of a portion of the shares of
Corporation Stock that have not been allocated to any Participant's Account or
for which no instructions were timely received by the Trustee, whether or not
allocated to the Account of any Participant (or beneficiary). Such direction
shall be with respect to such number of votes equal to the total number of votes
attributable to Corporation Stock which is not allocated or with respect to
which no responses were received multiplied by a fraction, the numerator of
which is the number of votes attributable to such shares of Corporation Stock
allocated to the Participant's Account and the denominator of which is the total
number of votes attributable to such shares of Corporation Stock allocated to
the accounts of all such Participants who have provided timely instructions to
the Trustee under this Section 16.10. Such directions shall be held in
confidence and not be divulged or released to any person including an officer or
employee of the Corporation.
In the event Corporation Stock is to be voted before any Corporation
Stock is allocated to Participants' Accounts: (i) the Trustee shall solicit
instructions from Participants concerning the voting of unallocated Corporation
Stock in accordance with rules comparable to those otherwise in effect under
this Section 16.10; (ii) each Participant, as a named fiduciary, shall be given
one vote; and (iii) the Trustee shall vote all Corporation Stock in proportion
to the votes of the Participants under clause (ii).
(b) Voting of Shares in General Re Common Stock Fund. Each Participant
------------------------------------------------
(or beneficiary of a deceased Participant) who has a proportional interest in
the General Re Common Stock Fund shall, as a named fiduciary within the meaning
of Section 403(a)(1) of ERISA, direct the Trustee with respect to voting the
number of shares of common stock of General Re Corporation ("Shares") reflecting
such Participant's proportional interest in the Fund (both vested and unvested),
and the Trustee shall follow the directions of those Participants (and
beneficiaries) who provide timely instructions to the Trustee. Each Participant
(or beneficiary) who has a proportional interest in such Fund is entitled to
vote on any matter presented for a vote by the stockholders, as a named
fiduciary. A Participant (or beneficiary) has the right to direct the Trustee
not to vote with respect to such Shares credited to the Participant's Account.
Such
57
<PAGE>
directions shall be communicated in writing, or by mailgram or similar means,
and shall be held in confidence and not be divulged or released to any person
including an officer or employee of the Corporation. The Trustee shall not vote
Shares reflecting a Participant's proportional interest in the Fund for which it
has received no direction from the Participant (or beneficiary).
Unless the Trustee determines that the applicable authorities under
ERISA require the Trustee to take other action, the Trustee shall vote that
number of Shares not credited to Participants' Accounts in the same proportion
on each issue as it votes those Shares credited to Participants' Accounts for
which it has received voting directions from Participants (or beneficiaries).
16.11 Tenders
-------
(a) Tendering of Corporation Stock. The provisions of this Section
------------------------------
16.11(a) shall apply in the event a tender or exchange offer within the meaning
of the Securities Exchange Act of 1934, as from time to time amended and in
effect (hereinafter, a "tender offer") for Corporation Stock is commenced by a
person or persons.
In the event a tender offer for Corporation Stock is commenced, the
Plan Administrator, promptly after receiving notice of the commencement of any
such tender offer, shall transfer certain of the Plan Administrator's record
keeping functions under the Plan to an independent record keeper (which if the
Trustee consents in writing, may be the Trustee). The functions so transferred
shall be those necessary to preserve the confidentiality of any directions given
by the Participants in connection with the tender offer. The Trustee shall have
no discretion or authority to sell, exchange or transfer any of such shares
pursuant to such tender offer except to the extent, and only to the extent, that
the Trustee is timely directed to do so in writing as follows:
(1) Each Participant to whose Account shares of Corporation Stock
have been allocated, shall, as a named fiduciary within the meaning of
Section 403(a)(1) of ERISA, direct the Trustee with respect to the sale,
exchange or transfer of the shares of Corporation Stock allocated to his or
her Account and the Trustee shall follow the directions of those
Participants who provide timely instructions to the Trustee.
(2) Each such Participant, as a named fiduciary, shall also direct
the Trustee with respect to the sale, exchange or transfer of a portion of
the shares of Corporation Stock that have not been allocated to any
Participant's Account or for which no instructions were timely received by
the Trustee, whether or not allocated to the account of any Participant.
Such direction shall be with respect to such number of shares equal to the
total number of shares which are not allocated or with respect to which no
responses were received multiplied by a fraction, the numerator of which is
the number of shares allocated to the Participant's Account and the
denominator of which is the total number of shares allocated to the
accounts of all such Participants (and beneficiaries) who have provided
timely instructions to the Trustee under this Section 16.11(a).
58
<PAGE>
The independent record keeper shall solicit confidentially from each
Participant the directions described in this Section 16.11(a) as to whether
shares are to be tendered. The independent record keeper, if different from the
Trustee, shall instruct the Trustee as to the amount of shares to be tendered,
in accordance with the above directions.
Following any tender offer that has resulted in the sale or exchange
of any shares of Corporation Stock held in the Trust, the record keeper shall
continue to maintain on a confidential basis the Account of Participants to
whose Accounts shares of Corporation Stock were allocated at any time during
such offer, until complete distribution of such Accounts or such earlier time as
the record keeper determines that the transfer of the record keeping functions
back to the Plan Administrator will not violate the confidentiality of the
directions given by the Participants. In the event that there is no sale or
exchange of any shares of Corporation Stock held in the Trust pursuant to the
tender offer, the record keeper shall transfer back to the Plan Administrator
the record keeping functions; provided, however, the record keeper shall keep
confidential any instructions which it may receive from Participants relating to
the tender offer.
For purposes of allocating the proceeds of any sale or exchange
pursuant to a tender offer, the Plan Administrator or the independent record
keeper, as the case may be, shall determine the portion, expressed as a
percentage, of shares tendered by the Trustee that were actually sold or
exchanged (the "applicable percentage"). The Plan Administrator or the
independent record keeper, as the case may be, shall then treat as having been
sold or exchanged from each of the Participants' Accounts that number of shares
(if any) which is obtained by multiplying (i) the applicable percentage times
(ii) the total number of shares in such Account that were directed to be
tendered or exchanged (or, in the case of an Account for which timely
instructions were not received, the total number of shares in such Account
multiplied by a fraction, the numerator of which is the total number of shares
of Corporation Stock tendered by the Trustee and the denominator of which is the
total number of shares of Corporation Stock held by the Trustee immediately
prior to the tender). Any proceeds remaining after application of the preceding
sentences shall be treated as proceeds from the sale or exchange of unallocated
shares. The adjustments to individual accounts pursuant to the provisions of the
Plan shall be made by the Plan Administrator or the independent record keeper,
as the case may be, on information supplied by the Corporation or the Trustee.
(b) Tendering of Shares in the General Re Stock Fund. The provisions
------------------------------------------------
of this Section 16.11(b) shall apply in the event a tender or exchange offer
within the meaning of the Securities Exchange Act of 1934, as from time to time
amended and in effect (hereinafter, a "tender offer") for Shares of Sponsor
Stock held in the General Re Common Stock Fund is commenced by a person or
persons.
(1) Each Participant (or beneficiary) shall, as a named fiduciary
within the meaning of Section 403(a)(1) of ERISA, have the right to direct
the Trustee to tender or not tender some or all of the Shares reflecting
such Participant's proportional interest in the General Re Common Stock
Fund (both vested and unvested). Directions from a Participant (or
beneficiary) to the Trustee concerning the tender of Shares shall be
communicated in writing, or by mailgram or such similar means as is agreed
upon by the Trustee and the Corporation. These directions shall be held in
confidence by the Trustee
59
<PAGE>
and shall not be divulged to the Corporation, or any officer or employee
thereof, or any other person except to the extent that the consequences of
such directions are reflected in reports regularly communicated to any such
persons in the ordinary course of the performance of the Trustee's services
hereunder. The Trustee shall tender or not tender Shares as directed by the
Participant (or beneficiary). The Trustee shall exercise its fiduciary
discretion, in accordance with the applicable authorities under ERISA, in
determining whether it will tender Shares reflecting a Participant's
proportional interest in the General Re Common Stock Fund for which it has
received no direction from the Participant (or beneficiary).
(2) Unless the Trustee determines that the applicable authorities
under ERISA require the Trustee to take other action, the Trustee shall
tender that number of Shares not credited to Participants' Accounts in the
same proportion as the total number of Shares credited to Participants'
Accounts for which it has received instructions from Participants (or
beneficiaries).
(3) A Participant (or beneficiary) who has directed the Trustee
to tender some or all of the Shares reflecting the Participant's
proportional interest in such Fund may, at any time prior to the tender
offer withdrawal date, direct the Trustee to withdraw some or all of the
tendered Shares reflecting the Participant's proportional interest, and the
Trustee shall withdraw the directed number of Shares from the tender offer
prior to the tender offer withdrawal deadline. Prior to the withdrawal
deadline, if any Shares not credited to Participants' Accounts have been
tendered in accordance with the proportional tendering provision of Section
16.11(b)(2), the Trustee shall redetermine the number of Shares not
credited to Participants' Accounts necessary to reduce the amount of
tendered Shares not credited to Participants' Accounts to the amount so
redetermined. A Participant (or beneficiary) shall not be limited as to the
number of directions to tender or withdraw that a Participant may give to
the Trustee.
(4) A direction by a Participant (or beneficiary) to the Trustee
to tender Shares reflecting the Participant's proportional interest in the
Fund shall not be considered a written election under this Plan by the
Participant to withdraw, or have distributed, any or all of his
withdrawable Shares. The Trustee shall credit to each proportional interest
of the Participant from which the tendered Shares were taken the proceeds
received by the Trustee in exchange for the Shares tendered from that
interest. Pending receipt of directions (through the Administrator) from
the Participant (or beneficiary), as named fiduciary, as to which of the
remaining investment options the proceeds should be invested in, the
Trustee shall invest the proceeds in the Mutual Fund described in Schedule
"C" to the Trustee Agreement.
16.12 Shares Credited . For all purposes of Sections 16.10(b) and
---------------
16.11(b), the number of Shares of Sponsor Stock deemed "credited" or "reflected"
to a Participant's proportional interest shall be determined as of the last
preceding Valuation Date. The trade date is the date the transaction is valued.
60
<PAGE>
ARTICLE XVII
ESOP Administration
-------------------
17.1 ESOP Responsibilities. The Plan Administrator shall be responsible
---------------------
for the administration of the ESOP Trust and ESOP Accounts and shall have all of
the powers set forth below. The Plan Administrator shall:
(a) represent the Corporation in dealing with the ESOP Trustee;
(b) remove and replace the Trustee if required;
(c) direct the Trustee to enter into indebtedness for the purpose of
acquiring qualifying securities or repaying an Exempt Loan;
(d) direct the application of Employer ESOP Contributions to the
payment of principal and interest on an Exempt Loan;
(e) determine the extent to which shares from the Suspense Account are
allocated to Participants' Accounts for any period;
(f) direct the release of collateral for any Exempt Loan;
(g) direct the allocation of released Corporation Stock to
Participants' Accounts;
(h) direct the transfer of the value of Participant Accounts to effect
Participant diversification elections pursuant to Section 16.10; and
(i) take such other actions as authorized by the Plan or Trust, or
appropriate and helpful in the carrying out of its duties under the Plan or
Trust.
61
<PAGE>
IN WITNESS WHEREOF, General Re Corporation has caused this Plan to be
amended and restated, and its corporate seal to be hereunto affixed by its duly
authorized officers this __ day of ______, 1998.
GENERAL RE CORPORATION
By:__________________________
ATTEST:
By:____________________
(Corporate Seal)
62
<PAGE>
APPENDIX A
TO
EMPLOYEE SAVINGS PLAN OF
GENERAL RE CORPORATION
AND ITS DOMESTIC SUBSIDIARIES
LIST OF PARTICIPATING DOMESTIC SUBSIDIARIES
1.
63
<PAGE>
SCHEDULE I
OF
APPENDIX B
TO
EMPLOYEE SAVINGS PLAN OF
GENERAL RE CORPORATION
AND ITS DOMESTIC SUBSIDIARIES
COVERAGE OF CERTAIN FORMER EMPLOYEES OF
CONSTITUTION STATE MANAGEMENT COMPANY
Certain employees ("CSMC Employees") of Constitution State Management
Company ("CSMC") became Eligible Employees as of January 1, 1989 because of the
acquisition of (a) the domestic treaty reinsurance operations of CSMC by North
Star Reinsurance Corporation, an Employer hereunder, and (b) the excess and
surplus lines operations by CSMC by General Star Management Company, an Employer
hereunder. The rights and benefits of CSMC Employees will be determined as
provided under the Plan, except as hereinafter specifically set forth. The
following paragraphs A through D shall apply only to Participants who were CSMC
Employees:
A. Section 1.31: Hours of Service while employed by CSMC shall be
------------
considered as Hours of Service with an Affiliated Company.
B. Section 1.50: The Service of a CSMC Employee shall be determined as if
------------
CSMC was an Affiliated Company during the entire period that person was employed
by CSMC or any member of its former controlled group.
C. Section 2.2: A CSMC Employee who has completed a twelve month period
-----------
of at least 1,000 Hours of Service prior to January 1, 1989 shall be eligible to
participate as of that date. All other CSMC Employees will be eligible to
participate as provided in the Plan.
D. Section 9.1: A CSMC Employee who becomes eligible to participate in
-----------
the Plan as of January 1, 1989 shall not be subject to the one year of
participation requirement for loans.
64
<PAGE>
SCHEDULE II
OF
APPENDIX B
TO
EMPLOYEE SAVINGS PLAN OF
GENERAL RE CORPORATION
AND ITS DOMESTIC SUBSIDIARIES
COVERAGE OF CERTAIN FORMER EMPLOYEES OF
HARTFORD STEAM BOILER INSPECTION AND INSURANCE
COMPANY WHO BECAME EMPLOYEES OF ENGINEERING INSURANCE GROUP
Engineering Insurance Group ("EIG"), which is a joint venture of the
Corporation and Hartford Steam Boiler Inspection and Insurance Company ("HSB"),
became a Participating Subsidiary and an Affiliated Company as of January 1,
1989. Certain employees ("HSB Employees") of EIG were formerly and/or
subsequently employed by HSB. The terms of participation of EIG and the rights
and benefits of HSB Employees will be determined as provided under the Plan,
except as hereinafter specifically set forth. The following paragraphs A
through I shall only apply to EIG and to Participants who are employed by EIG:
A. Section 1.5: EIG has been determined by the Board of Directors to
-----------
become an Affiliated Company as of January 1, 1989.
B. Section 1.23: Hours of Service while employed by HSB shall be
------------
considered as Hours of Service with an Affiliate Company.
C. Section 1.28: EIG shall be considered as qualifying to be a
------------
Participating Subsidiary and any action which would be required of a board of
directors of a corporation shall be taken by the Board of Directors and the
board of directors of HSB.
D. Sections 1.36 and 1.43: A Participant shall not be deemed to have a
----------------------
Retirement for as long as such Participant is employed by an Employer of HSB.
E. Section 1.42: Service of a HSB Employee shall be determined as if HSB
------------
were an Affiliated Company during the entire period that person was or is
employed by HSB or any member of its controlled group.
F. Section 2.2: An employee of EIG who was formerly employed by an
-----------
Employer shall be eligible to participate, or to continue to participate, as
provided in the Plan. A HSB employee who has completed a twelve month period of
at least 1,000 Hours of Service prior to the date of employment by EIG shall be
eligible to participate in the Plan as of the first date of the first pay period
following the date of such employment. All other HSB Employees shall be
eligible to participate as provided in the Plan.
G. Section 5.5: Forfeitures of Matching Accounts of Participants who are
-----------
employed by EIG shall be allocated on the last Valuation Date of any Quarter in
which a Severance
65
<PAGE>
occurred among the Matching Accounts of Participants who are both Participants
and employed by EIG on that Valuation Date. Participants employed by EIG shall
not share in the allocation of forfeitures of the Accounts of any other
Participants. The allocation shall be in the proportion that each such
Participant's share of the Matching Contributions for that Quarter bears to all
Matching Contributions for that Quarter for Participants who were employed by
EIG. Forfeitures of Matching Accounts of Participants who are employed by EIG
shall be invested in the Fidelity Retirement Money Market Trust.
H. Section 14. 1: As provided in Paragraph C above, EIG shall be deemed
-------------
to be a subsidiary and qualify to become a Participating Subsidiary. Any action
required to be taken by EIG shall be taken by the Board of Directors and the
board of directors of HSB.
I. Articles XVI and XVII: The provisions of Articles XVI and XVII shall
---------------------
not apply to Participants who are employed by EIG. The provisions for Matching
Contributions, which end on December 31, 1989, shall continue in effect for
these Participants beyond that date.
66
<PAGE>
SCHEDULE III
OF
APPENDIX B
TO
EMPLOYEE SAVINGS AND STOCK
OWNERSHIP PLAN OF
GENERAL RE CORPORATION
AND ITS DOMESTIC SUBSIDIARIES
COVERAGE OF CERTAIN FORMER EMPLOYEES OF
ROYAL INDEMNITY COMPANY
Certain employees ("Royal Employees") of Royal Indemnity Company
("Royal") became Eligible Employees as of July 1, 1990 because of the
acquisition of the excess and surplus lines operations by Royal by General Star
Management Company, an Employer hereunder. The rights and benefits of Royal
Employees will be determined as provided under the Plan, except as hereinafter
specifically set forth. The following paragraphs A through D shall apply only to
Participants who were Royal Employees:
A. Section 1.23: Hours of Service while employed by Royal shall be
------------
considered as Hours of Service with an Affiliated Company.
B. Section 1.42: The Service of a Royal Employee shall be determined as
------------
if Royal was an Affiliated Company during the entire period that person was
employed by Royal or any member of its former controlled group.
C. Section 2.2: A Royal Employee who has completed a twelve month period
-----------
of at least 1,000 Hours of Service prior to July 1, 1990 shall be eligible to
participate as of that date. All other Royal Employees will be eligible to
participate as provided in the Plan.
D. Section 9.1: A Royal Employee who becomes eligible to participate in
-----------
the Plan as of July 1, 1990 shall not be subject to the one year of
participation requirement for loans.
67
<PAGE>
SCHEDULE IV
OF
APPENDIX B
TO
EMPLOYEE SAVINGS PLAN OF
GENERAL RE CORPORATION
AND ITS DOMESTIC SUBSIDIARIES
COVERAGE OF CERTAIN FORMER EMPLOYEES OF
GUY CARPENTER & COMPANY, INC.
Certain employees ("Carpenter Employees") of Guy Carpenter & Company,
Inc. ("Carpenter") became Eligible Employees as of February 23, 1993 because of
the transfer and assignment of certain facultative accounts previously handled
by Carpenter to General Reinsurance Corporation, an Employer hereunder. The
rights and benefits of Carpenter Employees will be determined as provided under
the Plan, except as hereinafter specifically set forth. The following paragraphs
A through D shall apply only to Participants who were Carpenter Employees:
A. Section 1.31: Hours of Service while employed by Carpenter shall be
------------
considered as Hours of Service with an Affiliated Company.
B. Section 1.50: The service of a Carpenter Employee shall be determined
------------
as if Carpenter was an Affiliated Company during the entire period that person
was employed by Carpenter or any member of its former controlled group.
C. Section 2.2: A Carpenter Employee who has completed a twelve month
-----------
period of at least 1,000 Hours of Service prior to February 23, 1993 shall be
eligible to participate as of that date. All other Carpenter Employees will be
eligible to participate as provided in the Plan.
D. Section 9.1: A Carpenter Employee who becomes eligible to participate
-----------
in the Plan as of February 23, 1993 shall not be subject to the one year of
participation requirement for loans.
68
<PAGE>
SCHEDULE V
OF
APPENDIX B
TO
EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN OF
GENERAL RE CORPORATION
AND ITS DOMESTIC SUBSIDIARIES
COVERAGE OF CERTAIN FORMER EMPLOYEES OF
NEW ENGLAND ASSET MANAGEMENT, INC.
Certain employees ("NEAM Employees") of General Re -- New England
Asset Management, Inc. ("GR-NEAM") became Eligible Employees as of August 4,
1995 because of the acquisition of New England Asset Management, Inc. ("NEAM")
by General Re Corporation. As a result of such acquisition, GR-NEAM became an
employer hereunder. The rights and benefits of NEAM Employees will be determined
as provided under the Plan, except as hereinafter specifically set forth. The
following paragraphs A through D shall apply only to Participants who were NEAM
Employees:
A. Section 1.23: Hours of Service while employed by NEAM shall be
------------
considered as Hours of Service with an Affiliated Company.
B. Section 1.42: The service of a NEAM Employee shall be determined as
------------
if NEAM was an Affiliated Company during the entire period that person was
employed by NEAM or any member of its former controlled group.
C. Section 2.2: A NEAM Employee who has completed a twelve month period
-----------
of at least 1,000 Hours of Service prior to August 4, 1995 shall be eligible to
participate as of that date. All other NEAM Employees will be eligible to
participate as provided in the Plan.
D. Section 9.1: A NEAM Employee who becomes eligible to participate in
-----------
the Plan as of August 4, 1995 shall not be subject to the one year of
participation requirement for loans.
69
<PAGE>
SCHEDULE VI
OF
APPENDIX B
TO
EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN OF
GENERAL RE CORPORATION
AND ITS DOMESTIC SUBSIDIARIES
COVERAGE OF CERTAIN FORMER EMPLOYEES OF
COLOGNE REINSURANCE CORPORATION OF AMERICA
Certain employees (CRA Transfer Employees) of Cologne Reinsurance
Corporation of America ("CRA") have or may become Eligible Employees as a result
of transfer of employment from CRA to an Employer participating in the Plan.
The rights and benefits of CRA Transfer Employees will be determined as provided
under the Plan, except as hereinafter specifically set forth. The following
paragraphs A through D shall apply only to Participants who were Employees of
CRA and subsequently transferred employment from CRA to a participating Employer
("CRA Transfer"):
A. Section 1.23: Hours of Service while employed by CRA shall be
------------
considered as Hours of Service with an Affiliated Company.
B. Section 1.42: The service of a CRA Transfer Employee shall be
------------
determined as if CRA was an Affiliated Company during the entire period that
person was employed by CRA or any member of its former controlled group.
C. Section 2.2: A CRA Transfer Employee who has completed a twelve month
-----------
period of at least 1,000 Hours of Service prior to the effective date of the CRA
Transfer shall be eligible to participate in the Plan as of the first day of the
month following the effective date of the CRA Transfer. All other CRA Transfer
Employees will be eligible to participate as provided in the Plan.
D. Section 9.1: A CRA Transfer Employee who becomes eligible to
-----------
participate in the Plan as a result of a CRA Transfer shall not be subject to
the one year of participation requirement for loans.
70
<PAGE>
SCHEDULE VII
OF
APPENDIX B
TO
EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN OF
GENERAL RE CORPORATION
AND ITS DOMESTIC SUBSIDIARIES
COVERAGE OF CERTAIN FORMER EMPLOYEES OF
PRMS, Inc.
Certain employees ("PRMS Employees") of PRMS, Inc. ("PRMS") became
Eligible Employees as of June 1, 1996 because of the acquisition of PRMS by
General Re Corporation on January 1, 1996 and the action of Board of Directors
of PRMS on May 17, 1996. As a result of such action PRMS became an Employer
hereunder. The rights and benefits of PRMS Employees will be determined as
provided under the Plan except as hereinafter specifically set forth. The
following Paragraphs A through D shall apply only to Participants who were PRMS
Employees as of May 31, 1996:
A. Section 1.31: Hours of Service while employed by PRMS shall be
------------
considered as Hours of Service with an Affiliated Company.
B. Section 1.50: The service of a PRMS Employee shall be determined as
------------
if PRMS was an Affiliated Company during the entire period that person was
employed by PRMS or any member of its former controlled group.
C. Section 2.2: A PRMS Employee who was an Eligible Employee under the
-----------
terms of the PRMS, Inc. 401(k) Plan as of May 31, 1996 shall be eligible to
begin participation in the Plan as of June 1, 1996.
D. Section 9.1: A PRMS Employee who becomes a Participant in the Plan as
-----------
of June 1, 1996 shall not be subject to the one year participation requirements
for loans.
71
<PAGE>
SCHEDULE VIII
OF
APPENDIX B
TO
EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN OF
GENERAL RE CORPORATION
AND ITS DOMESTIC SUBSIDIARIES
COVERAGE OF CERTAIN FORMER EMPLOYEES OF
NATIONAL REINSURANCE CORPORATION
After the merger into National Reinsurance Corporation ("National
Re"), certain employees of National Re were transferred to Participating
Subsidiaries ("Former National Re Employees") and have become Eligible
Employees. The rights and benefits of the Former National Re Employees will be
determined as provided under the Plan, except as hereinafter specifically set
forth. The following paragraphs A through C shall apply only to Participants who
are Former National Re Employees.
A. Section 1.31: Hours of Service while employed by National Re or any
------------
member of its former controlled group shall be considered as Hours of Service
with an Affiliated Company.
B. Section 1.50: The Service of a Former National Re Employee shall be
------------
determined as if National Re was an Affiliated Company during the entire period
that person was employed by National Re or any member of its former controlled
group.
C. Section 9.1: A Former National Re Employee who becomes eligible to
-----------
participate in the Plan shall not be subject to the one year participation
requirement for loans.
72
<PAGE>
SCHEDULE IX
OF
APPENDIX B
TO
EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN OF
GENERAL RE CORPORATION
AND ITS DOMESTIC SUBSIDIARIES
COVERAGE OF CERTAIN FORMER EMPLOYEES OF
NATIONAL REINSURANCE CORPORATION
WITH RESPECT TO MERGED PLAN ASSETS
------------------------------------
Effective as of January 1, 1997, all contributions (both employer and
employee) under the National Reinsurance Corporation 401(k) Savings Plan
("National Re Plan") were completely discontinued and, as of such date, all
participants in the National Re Plan were 100% vested in their respective
account balances. Certain employees of National Re were transferred to
Participating Subsidiaries ("Former National Re Employees") and have become
Participants in the Plan with certain special rights as provided in Schedule
VIII of the Appendix. Effective as of June 30, 1997, the National Re Plan
was merged with and into the Plan in accordance with Section 414(l) of the Code
and all of the assets and liabilities under the National Re Plan were
transferred to the Plan and allocated to accounts established for the Former
National Re Employees. The following paragraphs A through C shall apply only
to Participants who were participants in the National Re Plan and are Former
National Re Employees.
A. Section 1.1: Except as provided in this Schedule IX, Account shall
-----------
include the account balance (or its value at distribution, if less) transferred
to the Plan on behalf of a Former National Re Employee from the National Re Plan
as a result of the merger of the National Re Plan with and into the Plan
("National Re Account").
B. Section 7.4: In addition to the methods of payment contained in the
-----------
Plan, a National Re Employee may elect an installment or an annuity form of
distribution with respect to his National Re Account. Installment payments
shall be made over a period not to exceed the Participant's (or the
Participant's and Spouse's) life expectancy. Annuity payments may be made over
(i) the life of the Participant, (ii) the lives of the Participant and a
designated Beneficiary, (iii) a period certain and continuous not extending
beyond the life expectancy of the Participant, or (iv) a period certain and
continuous not extending beyond the joint and last survivor expectancy of the
Participant and a designated Beneficiary.
73
<PAGE>
If a Participant elects benefits in the form of an annuity, the normal
form of payment for an unmarried Participant shall be a life annuity and for a
married Participant, it shall be an automatic joint and survivor annuity (with
50% survivor annuity payment to the Participant's surviving Spouse). Such
Participants may elect to have their benefits paid in another annuity form
described above and may also subsequently revoke such election. Such election or
revocation must be made on a form approved by the Committee and shall be
effective only if made during the 90-day period ending on the date benefit
payments to the Participant are to commence. An election by a married
Participant to waive an automatic joint and survivor annuity shall be effective
only if accompanied by the written consent of the Participant's Spouse who is
entitled to survivor benefits thereunder. Such written consent must acknowledge
the effect of the waiver election and must be witnessed by a representative of
the Plan or a notary public. The consent of a Participant's Spouse shall not be
required if the Participant establishes to the satisfaction of the Committee
that there exists circumstances that, under applicable regulations, relieve the
Participant from the requirement of obtaining spousal consent. No more than 90
days nor less than 30 days before benefits commence, each such Participant shall
be furnished with a written explanation of the terms and conditions of the
automatic joint and survivor annuity, the rights of the Participant's Spouse,
the Participant's right to make or effect an election to waive the automatic
joint and survivor benefit and the right to make or effect a revocation of a
previous election.
C. Article VIII: A National Re Employee shall have the same withdrawal
------------
rights with respect to his National Re Account as provided in Article VIII of
the Plan except that amounts in his National Re Account attributable to Company
Optional Contributions, if any, under the National Re Plan shall be withdrawable
at the same time as withdrawals from his Matching Contributions Account under
Section 8.3 of Article VIII of the Plan.
74
<PAGE>
EXHIBIT A
AMENDMENT TO THE
EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN OF
GENERAL RE CORPORATION
AND ITS DOMESTIC SUBSIDIARIES
The Employee Savings and Stock Ownership Plan of General Re Corporation and
Its Domestic Subsidiaries, as amended and restated June 1994, and as amended
thereafter (the "Plan") is hereby further amended, effective as of the Effective
Time as defined in the Agreement and Plan of Mergers dated as of June 19, 1998,
between the Company and Berkshire Hathaway Inc. (the `Merger Agreement') as
follows:
1. The phrase "General Re Common Stock Fund" is amended by replacing such
phrase with the phrase "Berkshire Hathaway Class B Stock Fund" wherever it
appears in the Plan.
2. The phrase "shares of common stock of General Re Corporation" is
amended by replacing such phrase with the phrase "shares of Class B common stock
of Berkshire Hathaway Inc." wherever such phrase appears in the Plan.
3. Section 1.12--Corporation Stock is amended in its entirety to read as
follows:
"1.12 "Corporation Stock" means Class B common stock
of Berkshire Hathaway Inc."
4. Paragraph (c) of Section 4.1--Investment of Contributions is amended
in its entirety to read as follows:
"(c) Shares of Class B common stock issued by
Berkshire Hathaway Inc. that are publicly traded and that
are "qualifying employer securities" within the meaning of
section 407(d)(5) of ERISA ("Sponsor Stock")."
5. The phrase "Board of Directors" in Section 1.5, the phrase "Board of
the Corporation" in Section 1.36 and 14.1, and the phrase "Compensation
Committee of the Board of Directors of the Company" in Section 12.1 are amended
to read "Committee".
6. The word "Company" in the second sentence of Section 1.17 is amended
to read "Corporation or an Affiliated Company".
7. Section 12.1 is further amended by replacing the word "Company" in the
first sentence thereof with the word "Corporation" and by replacing the phrase
"Compensation
<PAGE>
Committee" in the last sentence thereof with the word "Committee".
8. Section 12.1 is further amended by adding at the end thereof the
following new Paragraph:
"Notwithstanding the foregoing, any amendment to the
Plan which would substantially increase the cost of the Plan
to the Corporation shall be effective only upon the approval
of the Board of Directors."
9. The Plan is amended by adding to Appendix B the following new Schedule
X.
"SCHEDULE X
OF
APPENDIX B
TO
EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN OF
GENERAL RE CORPORATION
AND ITS DOMESTIC SUBSIDIARIES
Transition Provisions re Berkshire Hathaway Merger
After the Effective Date under the Agreement and Plan of Mergers between
the Corporation and Berkshire Hathaway Inc. dated as of June 19, 1998 (the
"Merger Agreement"), the General Re Common Stock Fund (the "Stock Fund") will
become a Berkshire Hathaway Class B Stock Fund and Corporation Stock held in the
ESOP will become Berkshire Hathaway Class B Stock. In order to effectuate these
changes, the following transition provisions have been adopted:
A. The Committee, in its sole discretion, may determine that for a period
up to three weeks prior to the date the exchange of the Merger Consideration (as
defined in the Merger Agreement) for the shares of the Corporation's common
stock is completed (the "Exchange Effective Date"), in-kind distributions from
the Stock Fund or of Corporation Stock from the ESOP to a Participant or
Beneficiary shall be delayed until as soon a practicable after the Exchange
Effective Date.
B. The Committee, in its sole discretion, may determine that for a period
up to one week prior to the Exchange Effective Date, contributions pursuant to
Article III to the Stock Fund, changes in election for future contributions or
for prior contributions as provided in Sections 4.2 and 4.3, and withdrawals
pursuant to Article VIII and loans pursuant to Article IX which are funded by
assets in the Stock Fund shall be delayed until as soon as practicable after the
Exchange Effective Date."
2
<PAGE>
AMENDMENT TO THE
EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN OF
GENERAL RE CORPORATION
AND ITS DOMESTIC SUBSIDIARIES
The Employee Savings and Stock Ownership Plan of General Re
Corporation and Its Domestic Subsidiaries, as amended and restated January 1,
1998, and as amended thereafter (the "Plan") is hereby further amended,
effective as of January 1, 1999 as follows:
1. Section 4.3--Change in Investment Election for Prior Contributions is
-----------------------------------------------------
amended by adding the phrase "or Former Participant" after the term
"Participant" wherever it appears in the section.
2. Section 4.3 is further amended by adding the following sentence at the
end of paragraph (a) thereof:
"Notwithstanding the foregoing, a Former Participant who ceased
to be an Employee on or before December 21, 1998 may not transfer
his interest in any Fund into the Berkshire Hathaway Class B
Stock Fund unless and until such Former Participant is reemployed
and becomes a Participant again."
3. Section 4.4--Investment Percentages is amended in its entirety to read
----------------------
as follows:
"The investment of future contributions made to a
Participant's Account or the changing of a Participant's or
Former Participant's investment election with respect to any
prior contributions shall be made in multiples of 5%."
4. Section 4.5--Loans is amended in its entirety to read as follows:
-----
"Participants may receive loans from their Salary Deferral
Accounts under the provisions of Article IX. A loan to a
Participant shall be considered an earmarked investment of such
Participant's Account and shall reduce the amount invested in the
Funds. Repayment of a loan shall reduce the amount of the loan
investment and shall be invested in accordance with the
Participant's then current investment election or, in the case of
a Former Participant, in accordance with the Former Participant's
then current investment allocation; except, however, that in the
case of a Former Participant who ceased to be an Employee on or
before December 21, 1998, no loan repayment shall be invested in
the Berkshire Hathaway Class B Stock Fund. Loans and loan
repayments shall not be treated as elections or changes under
Sections 4.1, 4.2 and/or 4.3."
5. Section 5.4--Statement of Participant's Accounts is amended by adding the
-----------------------------------
phrase "and Former Participant" after the term "Participant" wherever it appears
therein.
<PAGE>
[WINTHROP, STIMSON, PUTNAM & ROBERTS LETTERHEAD]
EXHIBIT 5
January 12, 1999
Berkshire Hathaway Inc.
1440 Kiewit Plaza
Omaha, NE 68131
Re: Registration Statement on Form S-8 for the Employee
Savings and Stock Ownership Plan of General Re
Corporation and its Domestic Subsidiaries
--------------------------------------------------------
Gentlemen:
In connection with the Registration Statement which relates,
among other things, to the offerings of participation in the Employee
Savings and Stock Ownership Plan of General Re Corporation and its domestic
Subsidiaries, as amended and restated effective January 1, 1998 and amended
thereafter (the "Plan"), we have examined the Plan and Trust Agreement
thereunder (the "Trust Agreement") (collectively the "Plan Documents") and
such corporate records of General Re Corporation as we consider necessary
for the purpose of this opinion. We have assumed the authenticity of all
documents submitted to us as originals and the conformity to original
documents of all documents submitted to us as certified or photostat
copies.
The "Instructions as to Exhibits" to Form S-8 by reference to
Item 601 of Regulation S-K (17 CFR 229.601), requires that either a copy of
the current determination letter from the Internal Revenue Service ("IRS")
shall be filed with the Securities and Exchange Commission or an opinion of
counsel that the provisions of the written documents constituting the plan
comply with the requirements of the Employee Retirement Income Security Act
of 1974, as amended, ("ERISA"), pertaining to such provisions. Such a
determination letter relates only to a plan's tax status under Section 401
of the Internal Revenue Code of 1986, as amended (the "Code"), and further
relates to a plan's form and not to its operation. Consequently, this
opinion is similarly limited.
We are, on the basis of such review, of the opinion that the
current status of the Plan with respect to compliance of the Plan Documents
with the requirements of Section 401 of the Code and of ERISA is as
follows:
The Company has received a determination letter, dated April 28,
1995, from the IRS stating that the Plan meets the requirements of a
qualified plan under Section 401(a) of the Code, a copy of which is
attached. Subsequent to such determination letter, and to the date
thereof, the Plan was amended and restated as of January 1, 1998. The Plan
has been further amended on November 11, 1998, effective as of the
Effective Date as defined in the Agreement and Plan of Mergers between
Berkshire
<PAGE>
Berkshire Hathaway Inc.
January 12, 1999
Page 2
Hathaway Inc. and General Re Corporation, dated as of June 19,
1998, to provide for the substitution of shares under the Plan and Trust of
Class B common stock of Berkshire Hathaway Inc. in lieu of common stock of
General Re Corporation and to provide for certain plan governance changes.
The Plan is subject to certain requirements of the Code and
ERISA. To date only certain final regulations have been issued by the IRS and
the U.S. Department of Labor with respect to the requirements of the Code and
ERISA. Accordingly, our opinion concerning compliance of the Plan Documents with
Section 401 of the Code and the portion of ERISA not amendatory of the Code is
necessarily based on our present understanding of the applicable requirements of
the Code and ERISA.
Subject to the foregoing, it is our opinion that the Plan
Documents substantially comply with the requirements of Sections 401(a) and
401(k) of the Code and the applicable portions of ERISA which are not amendatory
of the Code. This opinion is limited to the form of the Plan Documents and is
not intended to address the operation of the Plan or the Trust thereunder.
This opinion has been issued to Berkshire Hathaway Inc. in
connection with the filing of the Registration Statement with the Securities and
Exchange Commission and it may not be relied upon by any other party or for any
other purpose.
We hereby consent to the use of this opinion as an Exhibit to the
Registration Statement on Form S-8 and to the reference to us under the caption
"Legal Matters" in the Prospectus, and any amendments thereto, filed in
connection with the Plan.
Very truly yours,
/s/ WINTHROP, STIMSON, PUTNAM & ROBERTS
WINTHROP, STIMSON, PUTNAM & ROBERTS
Attachment
<PAGE>
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
DISTRICT DIRECTOR
G.P.O. BOX 1680
BROOKLYN, NY 11202
DATE: APR 28, 1995 Employer Identification Number:
06-1026471
File Folder Number:
GENERAL RE CORPORATION 063000918
695 EAST MAIN STREET Person to Contact:
STAMFORD, CT 06904 DAVID HARTSTEIN
Contact Telephone Number:
(518) 431-0372
Plan Name:
EE SAVINGS & STOCK OWNERSHIP PLAN
GENERAL RE CORP & DOMESTIC SUBS
Plan Number: 333
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 upon
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 statutes.
This determination is subject to your adoption of the proposed amendments
submitted in your letter dated 3/21 and 4/17/95. The proposed amendments should
be adopted on or before the date described by the regulations under Code section
401(b).
This determination letter is applicable for the amendment(s) adopted on
Nov. 8, 1994.
This plan has been mandatorily disaggregated, permissively aggregated, and
restructured to satisfy the nondiscrimination requirements.
This plan satisfies the nondiscrimination in amount requirement of section
1.401(a)(4)-1(b)(2) of the regulations on the basis of a design-based safe
harbor described in the regulations.
<PAGE>
-2-
GENERAL RE CORPORATION
This letter is issued under rev. proc. 93-39 and considers the amendments
required by the Tax Reform act of 1986 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.
This letter may not be relied upon with respect in whether the plan
satisfies the qualification requirements as amended by the Uruguay Round
Agreements Act, Pub. L. 103-465.
The information on the enclosed addendum is an integral part of this
determination. Please be sure to read and keep it with this letter.
We have sent a copy of this letter to your representative as indicated on
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,
Herbert J. Huff
District Director
Enclosures:
Publication 794
Reporting & Disclosure Guide
for Employee Benefit Plans
Addendum
<PAGE>
-3-
GENERAL RE CORPORATION
This determination letter also applies to Engineering Insurance Group, General
Reinsurance Corporation, General Star Management Company, Genesis Underwriting
Management Company, General Re Financial Products Corporation, North Star
Reinsurance Corporation, General Re Services Corporation and Herbert Clough,
Inc.
This determination letter applies to the plan as restated effective June 1,
1994.
<PAGE>
EXHIBIT 23.1
------------
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Berkshire Hathaway Inc. on Form S-8 of our reports dated March 6, 1998,
appearing in the Annual Report on Form 10-K of Berkshire Hathaway Inc. for the
year ended December 31, 1997.
DELOITTE & TOUCHE LLP
Omaha, Nebraska
January 13, 1999
