SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 28)
Woodward Governor Company
(Name of Issuer)
Common Stock
(Title of Class of Securities)
980745 10 3
(CUSIP Number)
Vern H. Cassens, 5001 North Second Street,
Rockford, IL 61125-7001 (815 877-7441)
(Name, Address and Telephone Number of
Person Authorized to Receive Notices and Communications)
May 31, 1995
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b) (3) or (4), check the following
box .
Check the following box if a fee is being paid with this statement . (A
fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent or less of
such class. (See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to
whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
CUSIP No. 980745 10 3
__________________________________________________________________
|
1) Name of Reporting Persons S.S. or | WOODWARD GOVERNOR COMPANY
I.R.S. Identification Nos. of Above | Deferred Profit Sharing Plan
Persons | 36-1984010
|
|
2) Check the Appropriate Box if a Member | (a)
of a Group (See Instructions) | (b) X
|
|
3) SEC Use Only |
|
|
4) Source of Funds (See Instructions) | 00
|
|
5) Check if Disclosure of Legal Proceed- |
ings is Required Pursuant to Items |
2(d) or 2(e) |
|
|
6) Citizenship or Place of Organization | Rockford, Illinois
|
| |
Number of | 7) Sole Voting Power | 700,384
Shares | |
Beneficially | |
Owned by Each | 8) Shared Voting Power|
Reporting Person | |
With | |
| 9) Sole Dispositive | 700,384
| Power |
| |
| |
| |
|10) Shared Dispositive |
| Power |
|
11) Aggregate Amount Beneficially Owned | 700,384
By Each Reporting Person |
|
|
12) Check if the Aggregate Amount in Row |
(11) Excludes Certain Shares (See |
Instructions) |
|
|
13) Percent of Class Represented by Amount|
in Row (11) | 24.2
|
|
14) Type of Reporting Person (See | EP
Instructions) |
|
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NUMBER 28 TO SCHEDULE 13D
Filed pursuant to Rule 13d-1 as promulgated under Section 13(d) of the
Securities Exchange Act of 1934 by the Securities and Exchange Commission.
This amendment incorporates a restatement of Schedule 13D as amended through
Amendment Number 27 and the following changes that have occurred since the
last filing:
Change in ownership of Company stock by the Woodward Stock Plan portion
of the Woodward Governor Company Deferred Profit Sharing Plan.
Amendments to Exhibit A to reflect changes in Company executive officers
and directors and changes to the Plan Administrative and Investment
Committees.
Exhibit B is the Woodward Governor Company Deferred Profit Sharing Plan
as amended.
Item 1. Security and Issuer.
This statement relates to the Common Stock, $0.0625 par value, of
Woodward Governor Company (the "Company"), 5001 North Second Street,
Rockford, Illinois 61125-7001, 2,914,706 shares of which are outstanding
as of May 31, 1995.
Information relating to executive officers of Woodward Governor Company
as of May 31, 1995 is included in Exhibit A.
Item 2. Identity and Background.
This statement is being filed with respect to the Woodward Governor
Company Deferred Profit Sharing Plan (the "Plan"), 5001 North Second
Street, Rockford, Illinois 61125-7001, which is a profit sharing plan
qualified under the provisions of Section 401(a) of the Internal Revenue
Code. The assets of the Plan are held by the Woodward Governor Company
Profit Sharing Trust (the "Trust"), established by agreement between the
Company and AMCORE Bank N.A. Rockford, of Rockford, Illinois (the
Trustee"). The Plan has been in operation since 1952 and neither the
Plan nor the Trust has been convicted in any criminal proceeding
(excluding traffic violations or similar misdemeanors), nor has been a
party to a civil proceeding of a judicial or administrative body of
competent jurisdiction which would result in a judgment, decree, or
final order enjoining future violations of, or prohibiting activities
subject to, federal or state securities laws or finding liability with
respect to such laws.
The Woodward Stock Plan (the "Stock Plan") is incorporated as part of
the Plan and is an employee stock ownership plan under Section
4975(e)(7) of the Internal Revenue Code and Section 407(d)(6) of ERISA.
Information as to members of the Investment Committee and Administrative
Committee of the Plan and as to executive officers and directors of the
Company is included in Exhibit A, hereto.
Item 3. Source and Amount of Funds or Other Consideration.
The sources of funds for the Plan are annual contributions by the
Company and earnings on or sales of the investments held by the Trust.
Item 4. Purpose of Transaction.
From time to time, the Trust has purchased shares of the Company's
Common Stock ("Shares") in the over-the-counter market and in private
transactions (See Item 5.) The Trust may continue to effect purchases
of Shares in the over-the-counter market or in private transactions from
time to time if and when opportunities arise which permit the Trust to
make such purchases on terms which are deemed advisable.
Purchases of Shares by the Trust are made for investment. The Plan and
the Trust have provisions designed to enable the participants in the
Plan (or their representatives) to control the voting of Shares held by
the Trust and any sale, exchange, or other disposition of such Shares
(See Item 6). Purchases of Shares by the Trust have the effect of
increasing the percentage of outstanding Shares controlled by the
Company's worker members (employees).
Item 5. Interest in Securities of the Issuer.
At May 31, 1995, the Plan owned 700,384 shares of Common Stock. This
represents 24.2 percent of the total outstanding shares. In addition,
there are shares held by related parties. The Woodward Governor Company
Charitable Trust owned 48,634 shares (1.7%) at April 30, 1995. Voting
control of this stock is by an investment committee for the Charitable
Trust. Vern Cassens is an Investment Committee member for the
Charitable Trust and also on the Investment Committee of the Plan.
Item 6. Contracts, Arrangements or Understandings with Respect to Securities of
the Issuer.
The Shares, like other securities owned by the Trust, are held for the
benefit of the worker member participants in the Plan pursuant to the
Woodward Governor Company Deferred Profit Sharing Plan adopted September
30, 1952, as amended, and the related Woodward Governor Company Profit
Sharing Trust dated September 30, 1952, as amended. There are no other
contracts, arrangements, or understandings of the kind required to be
disclosed by Item 6 of Schedule 13D.
Item 7. Material to be Filed as Exhibits.
Exhibit A - Investment Committee and Administrative Committee members of
the Woodward Governor Company Deferred Profit Sharing Plan, Directors
and Executive Officers of Woodward Governor Company;
Exhibit B - Woodward Governor Company Deferred Profit Sharing Plan, as
amended;
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true,
complete, and correct.
Woodward Governor Company Profit Sharing Trust
Vern H. Cassens
Signature
Vern H. Cassens
Investment Committee Member
Woodward Governor Company
Deferred Profit Sharing Plan
June 6, 1995
Date
Exhibits to Schedule 13D
Exhibit A - Investment Committee and Administrative
Committee members of the Woodward
Governor Company Deferred Profit
Sharing Plan Directors and Executive
Officers of Woodward Governor Company
Exhibit B - Woodward Governor Company Deferred Profit
Sharing Plan, as amended.
EXHIBIT A
Investment Committee
The purchase of securities by the Plan is at the discretion of the Investment
Committee of the Plan. None of the Committee members has, during the past
five years, been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) nor has been a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction which would
result in a judgment, decree, or final order enjoining future violations of,
or prohibiting activities subject to, federal or state securities laws or
finding liability with respect to such laws. No committee member has
purchased or sold any Company stock within the last 60 days. All members are
citizens of the United States. Certain information as to the present members
of the Investment Committee is as follows [(a) name, (b) business address, (c)
present employment and relationship with Woodward Governor Company, (d)
principal occupations for the past 5 years, (e) shares of Company stock owned
at date hereof]:
Investment Committee Member
(a) J. Peter Jeffrey
(b) Father Flanagans Boy's Home
14100 Crawford
Boys Town, NE 68010
(c) Vice President of Development
Father Flanagans Boy's Home
Director of Woodward Governor Company (1981 through present)
(d) Executive management position with Father Flanagans Boy's Home since
February 1993. Prior to that he held management positions with Amcore
Bank, N.A., Rockford.
(e) Shares: 1,631
Investment Committee Member
(a) Vern H. Cassens
(b) Woodward Governor Company
5001 North Second Street
Rockford, Illinois 61125-7001
(c) Senior Vice President and Treasurer and Chief Financial
Officer and Director Woodward Governor Company
(d) During the past five years, employed by the Woodward Governor Company
in management positions.
(e) Shares: 10,270
In addition, N. Jean Cassens, wife, is the beneficial owner of 880
shares.
Vern H. Cassens is one of two trustees of the Casler Foundation
organized under Section 501(a)(3) of the Internal Revenue Code. This
trust holds 400 shares of Company stock. Mr. Cassens has no income or
remainder rights under this trust. Mr. Cassens also disclaims
beneficial ownership of the shares under this trust.
Vern H. Cassens is one of three trustees of the Gilbert-Avery
Foundation organized under Section 501(a)(3) of the Internal Revenue
Code. This trust holds 1,192 shares of Company stock. Mr. Cassens
has no income or remainder rights under this trust. Mr. Cassens also
disclaims beneficial ownership of the shares under this trust.
Investment Committee Member
(a) Mark E. Leum
(b) Woodward Governor Company
5001 North Second Street
Rockford, Illinois 61125-7001
(c) Retired Vice Chairman of the Board and Director
Woodward Governor Company
(d) Prior to retiring in January 1993, employed by Woodward Governor
Company in management positions.
(e) Shares: 2,001
In addition, Lois G. Leum, wife, is the beneficial owner of 2000
shares.
Investment Committee Member
(a) Jay Evans
(b) Amcore Financial, Inc.
501 Seventh Street
Rockford, IL 61104
(c) President and Chief Investment Officer
Amcore Capitol Management, Inc.
Member of the Woodward Governor Company Investment Committee since
June 22, 1994
(d) During the past five years, employed by Amcore Financial in the
following capacities:
1990 through 1992:
Senior Vice President and Manager of Investments for Amcore Bank,
N.A., Rockford
1992 through present:
President and Chief Investment Officer of Amcore Capitol
Management, Inc.
(e) Shares: 0
Administrative Committee
The Administrative Committee of the Plan has the power to direct the trustee
as to the manner of exercising voting rights with respect to the Company stock
held by the Plan. Since the power of the Committee is limited to voting
power, all members disclaim beneficial ownership in the stock held by the
Plan. As far as the Company knows, none of the committee members has, during
the past five years, been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors), nor has been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction
which would result in a judgment, decree, or final order enjoining future
violations of, or prohibiting activities subject to, federal or state
securities laws or finding liability with respect to such laws. As far as the
Company knows, no Committee member has purchased or sold any Company stock
within the last 60 days. All members are citizens of the United States and
are employed by Woodward Governor Company. Certain information as to the
present members of the Administrative Committee is as follows [(a) name, (b)
shares of Company stock owned at date hereof]:
Administrative Committee Members
1. (a) Jean Busjahn
(b) Shares: 730
2. (a) Lloyd D. Carlson
(b) Shares: 657
3. (a) David Clay
(b) Shares: 655
4. (a) Bob Flatebo
(b) Shares: 1,253
5. (a) Gary Gray
(b) Shares: 397
6. (a) Jeff Huber
(b) Shares: 58
7. (a) Robert Johnson
(b) Shares: 302
8. (a) Laurie Lockwood
(b) Shares: 643
9. (a) Mike Matheson
(b) Shares: 522
10. (a) Al Santos
(b) Shares: 265
11. (a) Harvey Schmidt
(b) Shares: 536
12. (a) Leroy Shaffer
(b) Shares: 617
13. (a) Doug Streed
(b) Shares: 778
14. (a) Harry Tallacksen
(b) Shares: 1,715
Directors and Executive Officers
Without conceding that such information is required to be included in Schedule
13D, certain information as to the present executive officers and directors of
the Company is submitted. None of the executive officers and directors has,
during the past five years, been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors) nor has been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction
which would result in a judgment, decree, or final order enjoining future
violations of, or prohibiting activities subject to, federal or state
securities laws or finding liability with respect to such laws. No executive
officer or director has purchased or sold any Company stock within the last 60
days. All executive officers and directors are citizens of the United States.
Certain information as to the executive officers and directors is as follows
[(a) name, (b) business address, (c) present position, (d) principal
occupation for the past five years, (e) shares of Company stock owned at date
hereof]:
Chairman of the Board, Chief Executive Officer and Director
(a) John A. Halbrook
(b) Woodward Governor Company
5001 North Second Street
Rockford, Illinois 61125-7001
(c) Chairman of the Board and Chief Executive Officer
Woodward Governor Company
(d) During the past five years, employed by the Woodward Governor Company
in management positions.
(e) Shares 1,656
Vice Chairman of the Board and Director
(a) Mark E. Leum (See Investment Committee)
Senior Vice President and Treasurer and Chief Financial Officer
and Director
(a) Vern H. Cassens (See Investment Committee)
Vice President
(a) Peter A. Gomm
(b) Woodward Governor Company
5001 North Second Street
Rockford, Illinois 61125-7001
(c) Vice President
Woodward Governor Company
(d) During the past five years employed by the Woodward Governor Company
in management positions.
(e) Shares: 1,848
In addition, Beryl Gomm, wife, is the beneficial owner of 170 shares.
Vice President
(a) Duane Miller
(b) Woodward Governor Company
5001 North Second Street
Rockford, Illinois 61125-7001
(c) Vice President
Woodward Governor Company
(d) During the past five years employed by the Woodward Governor Company
in management positions.
(e) Shares: 744
Vice President
(a) C. Phillip Turner
(b) Woodward Governor Company
5001 North Second Street
Rockford, Illinois 61125-7001
(c) Vice President
Woodward Governor Company
(d) During the past five years, employed by the Woodward Governor Company
in management positions.
(e) Shares: 3,413
Vice President
(a) Ronald E. Fulkrod
(b) Woodward Governor Company
1000 East Drake Street
Ft. Collins, CO 80522-1519
(c) Vice President-Facilities/Planning
Woodward Governor Company
(d) During the past five years, employed by Woodward Governor Company in
management positions.
(e) Shares: 187
Corporate Secretary
(a) Carol J. Manning
(b) Woodward Governor Company
5001 North Second Street
Rockford, Illinois 61125-7001
(c) Corporate Secretary
Woodward Governor Company
(d) During the past five years, employed by Woodward Governor Company in the
following capacities:
September 1978 through June 1991:
Administrative Assistant
June 1991 through present:
Corporate Secretary
(e) Shares: 653
In addition, David W. Manning, husband, is the beneficial owner of an
IRA account with 320 shares.
Director
(a) J. Grant Beadle
(b) 1432 Scott Ave.
Winnetka, Illinois 60093
(c) Retired Chairman of the Board and Cheif Executive Officer
Union Special Corporation
Director of Woodward Governor Company (May 1988 through present)
(d) December 1984 through May 1991:
Chairman of the Board and Chief Executive Officer
of Union Special Corporation
(e) Shares: 1,509
Director
(a) Thomas W. Heenan
(b) Chapman and Cutler
111 W. Monroe Street
Chicago, Illinois 60603
(c) Partner, Chapman and Cutler Law Firm
Director of Woodward Governor Company
(January 1986 through present)
(d) During the past five years, employed as partner in
Chapman and Cutler Law Firm, Chicago, Illinois
(e) Shares: as noted below
The Jessie W. Hamilton Trust dated September 11, 1970, as amended (trust
established by the deceased mother of Thomas W. Heenan of which Thomas
W. Heenan is one of two trustees) 2,000 Shares
The Charles Hamilton Heenan Trust dated May 28, 1974 (trust established
for the benefit of son of Thomas W. Heenan of which Thomas W. Heenan is
one of two trustees) 200 Shares
The Lydia Baldwin Heenan Trust dated February 16, 1977, (trust
established for the benefit of daughter of Thomas W. Heenan of which
Thomas W. Heenan is one of two trustees) 200 Shares
Chapman and Cutler Retirement Trust for the benefit of Thomas W. Heenan
(Thomas W. Heenan has sole investment authority) 1,000 Shares
Thomas W. Heenan has sole investment authority of 1,309 shares.
Director
(a) J. Peter Jeffrey (See Investment Committee)
Director
(a) Lawrence E. Gloyd
(b) Clarcor
2323 Sixth Street
Rockford, IL 61104
(c) Chairman, President and Cheif Operating Officer
Clarcor
Director Woodward Governor Company (June 1994 through present)
(d) During the past five years, employed by Clarcor in the following
capacities:
February 1988 through March 1991:
President and Chief Operating Officer
March 1991 through present:
Chairman, President and Chief Operating Officer
(e) Shares: 1,523
Director
(a) Carl J. Dargene
(b) AMCORE Financial, Inc.
501 Seventh Street
Rockford, Illinois 61104
(c) President and Chief Executive Officer
AMCORE Financial, Inc.
Director of Woodward Governor Company (1990 through present)
(d) During the past five years, employed by AMCORE Financial, Inc. as
President and Chief Executive Officer
(e) Shares: 2,109
Director
(a) Michael T. Yonker
(b) Portec, Inc.
100 Field Drive; Suite 120
Lake Forest, IL 60045
(c) President and CEO
Portec, Inc.
Director Woodward Governor Company
(1993 through present)
(d) During the past five years, employed as President & CEO at
Portec, Inc., Lake Forest, Illinois
(e) Shares: 1,509
CONFORMED COPY
May 16, 1994
WOODWARD GOVERNOR COMPANY
DEFERRED PROFIT SHARING PLAN
(As Amended and Restated
Effective as of October 1, 1991)
Chapman and Cutler
Chicago, Illinois
TABLE OF CONTENTS
Section 1 General
Section 1.1. History, Purpose and Effective Date
Section 1.2. Related Companies
Section 1.3. Plan Administration, Trust Agreement
Section 1.4. Plan Year
Section 1.5. Applicable Laws
Section 1.6. Gender and Number
Section 1.7. Notices
Section 1.8. Evidence
Section 1.9. Action by the Company
Section 1.10. Reversion to the Company
Section 1.11. Prior Elections
Section 1.12. Restrictions on Participant Elections
Section 2 Participation
Section 2.1. Participation
Section 2.2. Participation Upon Reemployment
Section 2.3. Participation Not Contract of Employment
Section 3 Service
Section 3.1. Year of Service
Section 3.2. Hour of Service
Section 3.3. One-Year Break-in-Service
Section 3.4. Leased Worker Members
Section 4 Payroll Deferrals
Section 4.1. Payroll Deferrals
Section 4.2. Eligible Biweekly Pay Adjustments and Payment of Payroll
Deferrals
Section 4.3. Election to Vary, Suspend or Change Tax Treatment of Payroll
Deferrals
Section 5 Contributions
Section 5.1. Payroll Deferral Contributions
Section 5.2. Profit Sharing Contributions
Section 5.3. Cash Profit Sharing Contributions
Section 5.4. Deferred Profit Sharing Contributions
Section 5.5. Company Contribution Limitation
Section 5.6. Treatment as Deferral Contribution
Section 5.7 Allocation of Profit Sharing Contributions
Section 6 Rollovers and Transfers From Related Plans
Section 6.1. Rollover Contributions
Section 6.2. Transfers From Other Plans
Section 6.3. Interest in Plan
Section 7 Plan Accounting
Section 8 Investment Funds Under the Member Investment Plan
Section 8.1. Prior Investments and New Member Investment Plan
Section 8.2. Investment Directions
Section 8.3. Transfers Between Investment Funds
Section 8.4. Loan Fund
Section 8.5. Statement of Accounts
Section 9 Woodward Stock Plan
Section 9.1. Establishment of Woodward Stock Plan
Section 9.2. Dividends on Allocated Company Stock
Section 9.3. Acquisitions Loans
Section 9.4. Transfer from the Woodward Stock Plan
Section 9.5 Fair Market Value
Section 10 Limitations on Compensation, Contributions and Allocations
Section 10.1. Compensation
Section 10.2. Limitations on Annual Additions
Section 10.3. Combined Plan Limitation
Section 10.4. Reduction of Contribution Rates
Section 10.5. Excess Annual Additions
Section 10.6. Limitations Under Section 402(g) of the Code
Section 10.7. Disposition of Excess Elective Deferrals
Section 10.8. Limitations Under Section 401(k)(3) of the Code
Section 10.9. Disposition of Excess Deferral Contributions
Section 10.10. Highly Compensated Worker Member
Section 11 Pre-Termination Withdrawals and Loans
Section 11.1. Pre-Termination Withdrawals
Section 11.2. Hardship
Section 11.3. Loans to Participants
Section 12 Distribution on Termination
Section 12.1. Vesting of Account Balances
Section 12.2. Distribution Date
Section 12.3. Limits on Commencement and Duration of Distributions
Section 12.4. Form of Distribution on Termination of Employment
Section 12.5. Distributions to Persons Under Disability
Section 12.6. Interests Not Transferable
Section 12.7. Absence of Guaranty
Section 12.8. Designation of Beneficiary
Section 12.9. Missing Recipients
Section 12.10. Put Option
Section 13 Voting of Company Stock
Section 14 The Administrative Committee
Section 14.1. Membership
Section 14.2. Majority Action
Section 14.3. Rights, Powers and Duties
Section 14.4. Application of Rules
Section 14.5. Remuneration and Expenses
Section 14.6. Indemnification of the Committee
Section 14.7. Exercise of Committee's Duties
Section 14.8. Information to be Furnished to Committee
Section 14.9. Resignation or Removal of Committee Member
Section 14.10. Appointment of Successor Committee Members
Section 15 The Investment Committee
Section 15.1. Establishment of Investment Committee
Section 15.2. Majority Action
Section 15.3. Powers of the Investment Committee
Section 15.4. Duties of the Investment Committee
Section 16 Frequently Used Definitions
Section 17 Amendment and Termination
Section 17.1. Amendment
Section 17.2. Termination
Section 17.3. Merger and Consolidation of Plan, Transfer of Plan Assets
Section 17.4. Notice of Amendment, Termination or Partial Termination
Section 17.5. Vesting and Distribution on Termination and Partial Termination
Section 17.6. Limitation on Right to Amend
Signature
SUPPLEMENT A _ Top-Heavy Status
SUPPLEMENT B _ FOR WORKER MEMBERS WHO, ON JANUARY 31, 1991,
WERE EMPLOYED BY BAUER AEROSPACE, INC
WOODWARD GOVERNOR COMPANY DEFERRED PROFIT SHARING PLAN
(AS AMENDED AND RESTATED EFFECTIVE AS OF OCTOBER 1, 1991)
SECTION 1
GENERAL
Section 1.1. History, Purpose and Effective Date. The Woodward
Governor Company Deferred Profit Sharing Plan (the "Plan") was first
established by Woodward Governor Company (the "Company") effective as of
September 30, 1952. The name of the Plan, which had been changed effective
October 1, 1990 to become the Member Investment Plan, is hereby renamed the
Deferred Profit Sharing Plan. The following provisions constitute an
amendment, restatement and continuation of the Plan as in effect immediately
prior to October 1, 1991, the "Effective Date" of the Plan (unless otherwise
indicated), as set forth herein. On and after the Effective Date, the Plan
shall consist of a deferred profit sharing plan which is intended to qualify
under sections 401(a) and 401(k) of the Internal Revenue Code of 1986, as
amended (the "Code") and an employee stock ownership plan ("Woodward Stock
Plan") which is intended to qualify under sections 401(a) and 4975(e)(7) of
the Code. The assets of the Woodward Stock Plan shall be invested primarily
in shares of common stock of the Company which qualify as "employer
securities" within the meaning of section 409(1) of the Code. The purpose of
the Plan is to promote the mutual interests of the Company, its shareholders,
and its eligible Worker Members (i) by providing such Worker Members with a
systematic savings program to supplement their retirement incomes, and an
opportunity to acquire an equity interest in the Company and to exercise
shareholder rights with respect thereto, (ii) by causing the Plan to be a
long-term investor in common stock of the Company, and (iii) by providing the
Company and its eligible Worker Members with the tax benefits and other
benefits provided under applicable laws to employee stock ownership plans.
The provisions of the Plan as applied to any group of Worker Members, with the
consent of the Company, may be modified or supplemented from time to time by
the adoption of one or more Supplements. Each such Supplement shall form a
part of the Plan as of the Supplement's effective date.
Section 1.2. Related Companies. The term "Related Company" means any
corporation or trade or business during any period that it is, along with the
Company, a member of a controlled group of corporations or a controlled group
of trades or businesses (as described in sections 414(b) and 414(c),
respectively, of the Code) and, if so designated by the Company, any other
corporation during any period that 50% or more of its voting stock is owned
directly or indirectly by the Company.
Section 1.3. Plan Administration, Trust Agreement. The authority to
administer the Plan shall continue to be vested in the Company and the
Administrative Committee ("Committee") described in Section 14. The authority
to control the investment policies under the Plan shall be vested in the
Investment Committee described in Section 15. The Company shall be the
Administrator of the Plan, and shall have the rights, duties and obligations
of an "administrator" as that term is defined in section 3(16)(A) of the
Employee Retirement Income Security Act of 1974 ("ERISA"), of a "plan
administrator" as that term is defined in section 414(g) of the Code and
shall be the "named fiduciaries" (as described in section 402 of ERISA). Each
of the Administrative Committee, the Investment Committee and the Company
shall have discretionary authority to determine eligibility for benefits or to
construe the Plan's terms; provided, however, that the scope of each
Committee's authority shall be determined by the Company. All contributions
made under the Plan will be held, managed and controlled by one or more
trustees (the "Trustee") acting under one or more trusts (the "Trust") which
form a part of the Plan and, to the extent provided by the Investment
Committee, by one or more investment managers. The terms of each Trust shall
be set forth in a Trust Agreement between the Trustee and the Company. Copies
of the Trust Agreement and the Plan are on file at the principal offices of
the Company, where they may be examined by any Worker Member of the Company
who is eligible to participate in the Plan. The provisions of and benefits
under the Plan are subject to the terms and provisions of the Trust Agreement.
Section 1.4. Plan Year. The term "Plan Year" means the 12 consecutive
month period beginning on each October 1 and ending on each September 30.
Section 1.5. Applicable Laws. The Plan shall be construed and
administered according to the internal laws of the State of Illinois to the
extent that such laws are not preempted by the laws of the United States of
America.
Section 1.6. Gender and Number. Where the context admits, words in any
gender shall include all other genders, words in the singular shall include
the plural and the plural shall include the singular.
Section 1.7. Notices. Except as otherwise provided, any notice or
document required to be filed with any committee under the Plan will be
properly filed if delivered or mailed by registered mail, postage prepaid, to
such committee, in care of the Company either at its principal business
offices or, if filed in person, at the payroll, member benefits, personnel or
other office, as designated by the Company. Any notice required under the
Plan may be waived by the person entitled to notice.
Section 1.8. Evidence. Evidence required of anyone under the Plan may
be by certificate, affidavit, document or other information which the person
acting on it considers pertinent and reliable, and signed, made or presented
by the proper parties.
Section 1.9. Action by the Company. Any action required or permitted
to be taken by the Company under the Plan shall be by resolution of its Board
of Directors or by a person or persons authorized by resolution of its Board
of Directors.
Section 1.10. Reversion to the Company. Except as otherwise
specifically provided by the provisions of the Trust, no part of the corpus or
income of the Trust Fund shall revert to the Company or be used for, or
diverted to, purposes other than for the exclusive benefit of Participants and
other persons entitled to benefits under the Plan.
Section 1.11. Prior Elections. Except to the extent otherwise provided,
all elections and designations in effect under the Plan immediately prior to
the Effective Date shall continue in effect thereafter until changed by the
person making the election.
Section 1.12. Restrictions on Participant Elections. Any election by a
Participant under the Plan to vary or suspend Payroll Deferrals or Profit
Sharing Deferrals, to make transfers to or from the Plan or any Investment
Fund under the Plan or to make a withdrawal or receive a loan or distribution
shall be subject to such limitations (and the effective date of the elections
shall be subject to such deferrals) as may be reasonably required from time to
time with respect to the administration of the Plan.
SECTION 2
PARTICIPATION
Section 2.1. Participation. Each Worker Member of the Company who was
a Participant under the Plan immediately prior to the Effective Date shall
continue as such on and after that date, subject to the conditions and
limitations of the Plan. For Plan Years beginning prior to July 1, 1991, each
other Worker Member of the Company hired prior to July 3 of any Plan Year
shall become a Participant in the Plan as of the first day of the Plan Year
following the date he commences employment. Each other Worker Member hired
after July 2 of any Plan Year shall become a Participant in the Plan as of the
first day of the Plan Year coinciding with or next following the one year
anniversary of the date he commences employment.
For Plan Years beginning on or after July 1, 1991, each Worker Member of
the Company hired prior to July 1 of any Plan Year shall become a Participant
in the Plan as of the first day of the Plan Year following the date he
commences employment. Each Worker Member hired after June 30 of any Plan Year
shall become a Participant in the Plan as of the first day of the Plan Year
coinciding with or next following the one year anniversary of the date he
commences employment.
Notwithstanding the above, Worker Members employed as Recruits in the
Woodward Governor Company Recruit Program or as regular part-time workers in
the Irl C. Martin Academy of Industrial Science, any other Worker Member hired
on a part-time basis, and any Worker Members who reside outside the United
States and are not United States citizens shall not be eligible to participate
in the Plan unless otherwise permitted by the Company.
Section 2.2. Participation Upon Reemployment. A Participant whose
employment terminates and who is subsequently reemployed shall re-enter the
Plan as a Participant on the date of his reemployment. In the event that a
Worker Member completes the eligibility requirements set forth in subsection
2.1 above, his employment terminates prior to becoming a Participant and he is
subsequently reemployed, such Worker Member shall be deemed to have met said
eligibility requirements as of the date of his reemployment and shall become a
Participant on the date of his reemployment; provided, however, that if he is
reemployed prior to the date he would have become a Participant if his
employment had not terminated, he shall become a Participant as of the date he
would have become a Participant if his employment had not terminated. Any
other Worker Member whose employment terminates and who is subsequently
reemployed shall become a Participant in accordance with the provisions of
said subsection 2.1. Notwithstanding the foregoing, a Worker Member who
terminated service on or before September 30, 1976 shall not receive credit
for any prior service under the Plan and shall be treated as a new Worker
Member.
Section 2.3. Participation Not Contract of Employment. The Plan does
not constitute a contract of employment, and participation in the Plan will
not give any Worker Member the right to be retained in the employ of the
Company or a Related Company nor any right or claim to any benefit under the
terms of the Plan unless such right or claim is specifically accrued under the
terms of the Plan.
SECTION 3
SERVICE
Section 3.1. Year of Service. The term "Year of Service" means, with
respect to any Worker Member or Participant, any Plan Year during which he
completes at least 1,000 Hours of Service (as defined in subsection 3.2
below); provided that the twelve-consecutive-month period commencing on the
date on which the Worker Member first completes an Hour of Service shall be
deemed to be a Year of Service if he completes at least 1,000 Hours of Service
during such twelve-consecutive-month period. Notwithstanding the above, a
Worker Member in the Woodward Governor Recruit Program shall receive credit
for one Year of Service if he completes at least 250 Hours of Service and not
more than 999 Hours of Service in each of four Plan Years. A Worker Member
who is a student in the Irl C. Martin Academy of Industrial Science for a
period of six months or more during any Plan Year (or during his first twelve
months of employment and successive periods commencing on the anniversary of
the date he was hired) shall receive credit for a Year of Service if he did
not otherwise receive credit during such period.
Section 3.2. Hour of Service. The term "Hour of Service" means, with
respect to any Worker Member or Participant, each hour for which he is paid or
entitled to payment for the performance of duties for the Company or a Related
Company or for which back pay, irrespective of mitigation of damages, has been
awarded to the Worker Member or Participant or agreed to by the Company or a
Related Company, subject to the following:
(a) A Worker Member or Participant shall be credited with 8
Hours of Service per day (to a maximum of 40 Hours of Service per week)
for any period during which he performs no duties for the Company or a
Related Company (irrespective of whether the employment relationship has
terminated) by reason of a vacation, holiday, illness, incapacity
(including disability), layoff, jury duty, military duty or leave of
absence but for which he is directly or indirectly paid or entitled to
payment by the Company or a Related Company; provided, however, that a
Worker Member or Participant shall not be credited with more than 501
Hours of Service under this paragraph (a) for any single continuous
period during which he performs no duties for the Company or a Related
Company. Payments considered for purposes of the foregoing sentence
shall include payments unrelated to the length of the period during
which no duties are performed but shall not include payments made solely
as reimbursement for medically related expenses or solely for the
purpose of complying with the applicable workmen's compensation,
unemployment compensation or disability insurance laws.
(b) Solely for purposes of determining whether a Worker Member
or Participant has incurred a One-Year Break-in-Service (as defined in
subsection 3.3), the Worker Member or Participant shall be credited, to
the extent not otherwise credited in accordance with the foregoing
provisions of this subsection 3.2, with 8 Hours of Service for each day
(to a maximum of 40 Hours of Service for each calendar week) for any
period during which a Worker Member is absent from active employment
with the Company or Related Company by reason of the Worker Member's
pregnancy, the birth of a child of the Worker Member, or the placement
of a child with the Worker Member in connection with the Worker Member's
adoption of such child, and, in each case, the care of such child
immediately after its birth or placement; provided that in no event
shall more than 501 Hours of Service be credited under this paragraph
(b). Hours of Service credited in accordance with the foregoing
sentence shall be credited for the Plan Year during which the absence
begins to the extent that such crediting would prevent the Worker Member
from incurring a One-Year Break-in-Service during that year and, in each
other case, shall be credited in the immediately following Plan Year.
(c) Solely for purposes of determining whether he has incurred a
One-Year Break-in-Service, a Worker Member or Participant shall be
credited, to the extent not credited in accordance with the foregoing
provisions of this subsection 3.2, with 8 Hours of Service per day (to a
maximum of 40 Hours of Service per week) that he is absent from active
employment with the Company or a Related Company by reason of a leave of
absence approved or granted by the Company or the Related Company in
accordance with rules uniformly applied by it.
Section 3.3. One-Year Break-in-Service. The term "One-Year Break-in-
Service" means, with respect to any Worker Member or Participant, any Plan
Year during which he completes less than 501 Hours of Service.
Section 3.4. Leased Worker Members. If, pursuant to one or more
agreements between the Company or a Related Company and one or more leasing
organizations (within the meaning of section 414(n) of the Code); a person
provides services to the Company or Related Company, in a capacity other than
as a Worker Member, on a substantially full-time basis for a period of at
least one year, and such services are of a type historically performed by
Worker Members in the business field of the Company or Related Company, such
person shall be a "Leased Worker Member". Leased Worker Members shall not be
eligible to participate in this Plan or in any other plan maintained by the
Company or Related Company which is qualified under section 401(a) of the
Code. A Leased Worker Member shall be treated as if the services performed by
him in such capacity (including service performed during such initial one-year
period) were performed by him as a Worker Member of a Related Company which
has not adopted the Plan; provided, however, that no such service shall be
credited:
(a) for any period during which less than 20% of the workforce
of the Company and the Related Companies consists of Leased Worker
Members and the Leased Worker Member is a participant in a money
purchase pension plan maintained by the leasing organization which (i)
provides for a nonintegrated employer contribution of at least 10
percent of compensation, (ii) provides for full and immediate vesting,
and (iii) covers all employees of the leasing organization (beginning
with the date they become employees), other than those employees
excluded under section 414(n)(5) of the Code; or
(b) for any other period unless the Leased Worker Member
provides satisfactory evidence to the Company or Related Company that he
meets all of the conditions of this subsection 3.4 and applicable law
required for treatment as a Leased Worker Member.
SECTION 4
PAYROLL DEFERRALS
Section 4.1. Payroll Deferrals. A Participant who is employed on a
full-time basis may authorize deferrals for any payroll period of not less
than 1% of his Eligible Biweekly Pay nor more than an amount as determined
each Plan Year by the Committee (in all cases in multiples of 1%). Payroll
Deferral authorizations may be made at such times and in such manner as the
Committee may determine. To the extent that it is necessary or appropriate in
order to conform the operations of the Plan to the limitations set forth in
Section 10, uniform limitations on Payroll Deferrals may be established from
time to time, and, in accordance with such limitations, any Payroll Deferral
authorized by a Participant may be reduced.
Section 4.2. Eligible Biweekly Pay Adjustments and Payment of Payroll
Deferrals. A Participant's Eligible Biweekly Pay shall be reduced by the
amount, if any, of his Payroll Deferrals for that period and the Company shall
deposit that amount in the Plan in accordance with subsection 5.1.
Section 4.3. Election to Vary, Suspend or Change Tax Treatment of
Payroll Deferrals. Subject to such conditions, requirements and limitations
as may be established from time to time, a Participant may elect to vary
within the limits set forth in subsection 4.1 or to suspend Payroll Deferrals.
Any modification or suspension of Payroll Deferrals shall be effective the
first day of the first full pay period following the execution of such
modification or on such other date as may be selected by the Company.
SECTION 5
CONTRIBUTIONS
Section 5.1. Payroll Deferral Contributions. Subject to the provisions
of Section 10, as soon as practicable, the Company shall deposit with the
Trustee on behalf of each of its Participants, an amount equal to the amount
of the Participant's Payroll Deferrals for each payroll period, which amount
shall be credited to the member investment portion of the Plan in accordance
with Section 8 below.
Section 5.2. Profit Sharing Contributions. The Company may contribute
for each Plan Year such amount as it shall determine from time to time
("Profit Sharing Contribution"). The types of Profit Sharing Contributions
under the Plan shall be Deferred Profit Sharing Contributions and Cash Profit
Sharing Contributions (each as more fully described below). The Company shall
also determine the portion of its contribution, if any, which is to be
considered the Deferred Profit Sharing Contribution and the portion which is
to be considered the Cash Profit Sharing Contribution. All Profit Sharing
Contributions shall be remitted by the Company either during the Plan Year or
as soon as practicable following the close of the Plan Year, and in no event
later than the time prescribed by law (including extensions thereof) for
filing the Company's Federal income tax return for its taxable year in or with
which such Plan year ends.
Section 5.3. Cash Profit Sharing Contributions. A Participant will be
eligible to defer his share of the Company's Cash Profit Sharing Contribution
for the Plan Year, if any. Prior to the payment of the Cash Profit Sharing
Contribution made by the Company in April and September, a Participant may
make an irrevocable election to have the Company pay to the Trustee an amount
equal to not less than ten percent (10%) and not more than one hundred percent
(100%) (in 10% increments) of his share of the Cash Profit Sharing
Contribution for the Plan Year. If a Participant elects to pay to the Trustee
one hundred percent (100%) of the Cash Profit Sharing Contribution, such
amount will be reduced by the amount necessary to cover any social security
taxes and any Federal or state income taxes thereon. The amount of the
Participant's Cash Profit Sharing Contribution, which the Participant does not
defer (or with respect to the November payment, is not permitted to defer),
will be paid to the Participant in cash in April, September and November of
the Plan Year for which the election was effective. The portion of the Cash
Profit Sharing Contributions which the Participant elects to defer will be
credited to the Member Investment portion of the Plan in accordance with
Section 8 below.
Section 5.4. Deferred Profit Sharing Contributions. A Participant who
has completed an Initial Period of Service will be eligible to share in the
Deferred Profit Sharing Contribution for the Plan Year. Effective for Plan
Years ending on or after September 30, 1991, one-half of the Deferred Profit
Sharing Contribution shall consist of a Cash Option Portion and the other half
a Non-Cash Option Portion. The Non-Cash Option Portion of the Deferred Profit
Sharing Contribution will be contributed to the Woodward Stock Plan. With
respect to the Cash Option Portion, the Participant may make an annual
irrevocable election to have the Company pay to the Trustee an amount equal to
any of: (i) all of the Cash Option Portion; (ii) one-half of the Cash Option
Portion; or (iii) all of the Cash Option Portion less the amount necessary to
cover any social security taxes and any Federal or state income taxes thereon,
due to the payment of the Cash Option Portion. Notwithstanding this
subsection 5.4, a Participant who is on an authorized leave of absence and has
failed to make an election or has elected (i) above, will be treated as if he
elected (iii) above. The deferred Cash Option Portion shall be credited to
the Member Investment portion of the Plan in accordance with Section 8 below.
Section 5.5. Company Contribution Limitation. The contributions made
by the Company for any Plan Year to this Plan and the Woodward Governor
Company Retirement Income Plan shall not exceed the lesser of (a) and (b)
where (a) is the amount which would be required to be contributed hereunder so
that after such contribution is made to this Plan and any other plan
maintained by the Company or a Related Company, deducted from Net Profit, and
all applicable income taxes are computed with respect to, and deducted from
such reduced Net Profit, the Net Profit which remains would equal five percent
(5%) of the "net worth" of the Company (such "net worth" to be determined as
of the Plan Year next preceding the Plan Year with respect to which the
contributions are to be made and shall be the dollar amount as shown on the
Company's balance sheet as published in its annual report to stockholders and
Worker Members), and (b) is the maximum amount of contributions which are
deductible from gross income for the Plan Year of reference for Federal income
tax purposes. Notwithstanding the foregoing, so long as any Acquisition Loan,
as defined in subsection 9.3 hereof, remains outstanding, the Company will
make contributions to the Plan which, together with dividends paid with
respect to Company Stock held in the Plan, are sufficient to enable the Trust
to make the payments, prepayments and other amounts due and payable under such
Acquisition Loan. Notwithstanding the Company contribution limitation imposed
by this subsection 5.5, the Company may contribute to the Plan such additional
amount as may be required to pay principal and interest on any outstanding
Acquisition Loan in accordance with subsection 9.3.
Section 5.6. Treatment as Deferral Contribution. The Cash option
Portion of the Deferred Profit Sharing Contribution which a Participant elects
to defer, the Cash Profit Sharing Contribution a Participant elects to defer
and Payroll Deferrals shall all be treated as and collectively referred to as
either "Deferral Contributions" or "Deferrals."
Section 5.7 Allocation of Profit Sharing Contributions. A
participant's share of the Cash Profit Sharing Contribution and the Deferred
Profit Sharing Contribution will be separately determined by applying the
ratio that the Participant's Eligible Wages for the Plan Year bears to the
total Eligible Wages of all Participants eligible to share in each of the Cash
Profit Sharing Contribution and the Deferred Profit Sharing Contribution. A
Participant shall be eligible to share in the Deferred Profit Sharing
Contribution for a Plan Year if he is actively employed on the last day of the
second month of the Plan Year, or if he was a Participant during such Plan
Year and shall have terminated employment by reason of death or disability;
provided, however, that a Participant who terminates employment with the
Company prior to reaching Normal Retirement Age and elects to receive a total
distribution prior to the end of the Plan Year shall not share in the
Company's Deferred Profit Sharing Contribution for such Plan Year.
SECTION 6
ROLLOVERS AND TRANSFERS FROM RELATED PLANS
Section 6.1. Rollover Contributions. A Worker Member may make a
Rollover Contribution (as defined below) to the Plan. The term "Rollover
Contribution" means a rollover contribution of a qualified total distribution
(as defined in section 402(a)(5)(E) of the Code) or a rollover contribution
(as described in section 408(d)(3) of the Code) which, under the applicable
provisions of the Code, is permitted to be rolled over to an eligible
retirement plan. In no event shall a Worker Member be permitted to make a
rollover contribution of amounts that constitute a partial distribution (as
defined in section 402(a)(5)(E) of the Code), any amounts previously
contributed to another plan by the Worker Member on an after-tax basis or any
amounts which were received by the Worker Member from a qualified plan subject
to sections 401(a)(11) and 417 of the Code. Such rollover contribution shall
be allocated to the Investment Funds under the member investment portion of
the Plan in 25% multiples as the Worker Member directs.
Section 6.2. Transfers From Other Plans. Subject to the approval of
the Company, any Worker Member who becomes a Worker Member of the Company by
reason of a transfer from any Related Company may elect to have the Plan
accept a transfer of his fully vested interest under any Related Plan (as
defined below), in accordance with the provisions of that plan. Any such
transferred amount shall be allocated to the Investment Funds under the member
investment portion of the Plan as the Worker Member directs. The term
"Related Plan" means any defined contribution plan maintained by the Company
or Related Company, qualified under section 401(a) of the Code and not subject
to sections 401(a)(11) and 417 of the Code.
Section 6.3. Interest in Plan. Upon such rollover or transfer by a
Worker Member who is otherwise eligible to participate in the Plan, but who
has not yet completed the participation requirements of Section 2, the amount
of his rollover or transfer shall represent his sole interest in the Plan
until he becomes a Participant.
SECTION 7
PLAN ACCOUNTING
As of each Accounting Date, Participant Account balances will be
adjusted as follows:
(a) First, charge to the proper Fund Accounts of each
Participant all withdrawals, loans and distributions made during that
period ending on that Accounting Date to or on behalf of the Participant
in accordance with Sections 11 and 12;
(b) Second, credit each Participant's applicable Fund Accounts
with payments during that period of principal and interest under any
loan made in accordance with Section 11, with
Payroll Deferral Contributions made by or on behalf of that Participant
during that period ending on that Accounting Date and with the April
Cash Profit Sharing Contribution if contributed during that period
ending on that Accounting Date;
(c) Third, adjust the balances in the proper Fund Accounts of
all Participants upward or downward, pro rata, according to the credit
balances so that the total of the balances of the Fund Accounts
maintained with respect to each Fund will equal the "Adjusted Net Worth"
(as defined below) of that Investment Fund;
(d) Fourth, charge to the proper Fund Accounts of each
Participant all transfers to be made as of that date in accordance with
subsections 8.3, 8.4 or 9.4;
(e) Fifth, credit each Participant's applicable Fund Accounts
with Cash and Deferred Profit Sharing Contributions made by or on behalf
of the Participant effective as of the last day of that period ending on
that Accounting Date; and
(f) Finally, credit each Participant's stock account with the
Participant's allocable share of Company Stock (including fractional
shares) purchased or contributed in kind to the Trust and any stock
dividends on Company Stock allocated to his account in the Woodward
Stock Plan.
The "Adjusted Net Worth" of an Investment Fund as of any date means an
amount determined by the Trustee to be equal to the fair market value of all
assets then held with respect to that Investment Fund, net of liabilities and
of any investments in such Fund attributable to amounts not yet credited in
accordance with subparagraphs (d)-(f) above.
SECTION 8
INVESTMENT FUNDS UNDER THE
MEMBER INVESTMENT PLAN
Section 8.1. Prior Investments and New Member Investment Plan. Prior
to October 1, 1991, all Deferral Contributions were deposited in the Loan and
Withdrawal Fund (herein referred to as the "Loan Fund"), Fixed Value Fund or
Balanced Fund. One-half of the remaining Deferred Profit Sharing
Contributions were deposited in the "Balanced Fund" and the other half was
deposited into the Balanced Fund or Woodward Stock Fund, based on the
Participant's election. In addition, the Plan had and continues to maintain
Member Savings Accounts to reflect voluntary after-tax contributions made
prior to January 1, 1987. Woodward Stock was among the investments in both
the Loan Fund and the Balanced Fund. At age 50, Participants had the option
to transfer amounts from either the Loan or Balanced Fund to a Fixed Value
Fund.
As of October 1, 1991, the Woodward Stock Fund shall become the Woodward
Stock Plan and all Woodward Stock held in the Balanced Fund shall be
transferred to the Woodward Stock Plan. As of October 1, 1991, and subject to
the restrictions of this Section 8, the Plan shall make available the
following three investment funds into which Participants may elect to have
amounts attributable to the non-Woodward Stock portion of the Balanced Fund,
the original Fixed Value Fund and all future Deferral Contributions deposited:
(a) Equity Fund. The assets of the Equity Fund shall be
invested primarily in common stocks and other securities, which are
convertible into common stocks, of issuers other than the Company.
(b) Fixed Value Fund. The assets of the Fixed Value Fund shall
be invested in assets that offer a low risk of principal and consistent
rates of return.
(c) Balanced Fund. The Balanced Fund shall be invested in
equities, bonds and short-term fixed income instruments.
The authority to control and manage the operation of the Investment
Funds shall be the responsibility of the Investment Committee as provided for
in Section 15 which may, from time to time, eliminate or modify Investment
Funds or establish additional Investment Funds. A separate "Fund Account"
will be established to reflect the portion, if any, of each Participant's
balances which are invested in each Investment Fund. Pending more permanent
investment of available funds, the Trustee and, to the extent provided by the
Investment Committee, one or more investment managers may retain any
reasonable portion of any Investment Fund in cash and short-term investments,
such as short-term government obligations or commercial paper and bank
deposits, including deposits with a fiduciary of the Plan to the extent not
prohibited by ERISA. The three Investment Funds described above shall not
include any Company Stock or Company debt.
Section 8.2. Investment Directions. Subject to the following
provisions of this subsection 8.2 and any requirements as may be established
from time to time, each Participant shall direct, when electing to participate
in the Plan, the percentages (in multiples of 25%) of all contributions made
by him or on his behalf which are to be invested in each of the Investment
Funds, and may prospectively change any such direction (but not more than once
during any month) by a writing filed with the Administrator at such time and
in such manner as the Administrator may require. Such investment direction
will be effective for the month immediately following the month in which the
change was filed. During any period as to which a Participant has failed to
properly file a new investment direction, contributions made by him or on his
behalf shall be invested in a manner consistent with his most recent
investment direction. If a Participant has failed to properly file any
investment direction such that the Company has no directions on file,
contributions made by him or on his behalf shall be invested in the Balanced
Fund.
Section 8.3. Transfers Between Investment Funds. As of the last day of
December, March, June or September, a Participant may elect, in writing, to
have all or a portion of the balance of his Account invested under any
Investment Fund transferred to any other Investment Fund, provided that, after
such transfer, the percentage of his Account invested under each of the
Investment Funds is a multiple of 25% of the total value of his Account
invested in such Investment Funds, and further provided, that no transfers may
be made into the Loan Fund. All transfers will be effective on the first day
of the next following quarter or as soon as practicable thereafter.
Notwithstanding the foregoing provisions of this subsection 8.3, and except as
provided below, if a Participant's employment terminates for any reason then,
unless he elects within ninety days after the end of the Plan Year in which
his employment terminates to have distribution of his Plan interest commence
as of the first permissible date thereafter, his entire Plan interest shall be
transferred to the Fixed Value Fund as of the last day of the month in which
such ninetieth day occurs and shall continue to be held under that Fund until
distributed in accordance with the provisions of Section 12; provided however,
such automatic transfer shall not apply to Participants who elect to receive
their distribution in installments.
Section 8.4. Loan Fund. The Loan Fund is invested in equities, bonds,
short term fixed instruments and Company Stock. As of the Effective Date, no
new contributions or transfers may be made to the Loan Fund. At the end of
the Plan Year following attainment of age 50 and each subsequent Plan Year
thereafter, a Participant may transfer one half or all of his balance in the
Loan Fund to the Member Investment Plan, which amount shall be invested in
accordance with the Participant's most recent investment election under
Section 8.2. If a Participant has failed to properly file any investment
direction such that the Company has no directions on file, transfers made by
him from the Loan Fund to the Member Investment Plan shall be invested in the
Balanced Fund. Once a Participant has made a transfer, any subsequent
transfer election shall include his entire balance in the Loan Fund.
Section 8.5. Statement of Accounts. As soon as practicable after the
last day of each Plan Year each Participant shall receive a statement of his
Account balances as of that day.
SECTION 9
WOODWARD STOCK PLAN
Section 9.1. Establishment of Woodward Stock Plan. The Woodward Stock
Plan, which is incorporated as part of the Plan is intended to be an employee
stock ownership plan under section 4975(e)(7) of the Code and section
407(d)(6) of ERISA. The purposes of the Woodward Stock Plan are to enable
Worker Members to share in the growth and prosperity of the Company and to
provide such Worker Members with an additional opportunity to accumulate
capital for their future economic security. For each Plan Year the Company
shall contribute to the Woodward Stock Plan cash equal to, or Company Stock
having an aggregate fair market value equal to, the Non-Cash Option Portion of
the Deferred Profit Sharing Contribution. If any portion of the Company's
contribution to the Woodward Stock Plan is in cash for purposes other than
discharging indebtedness in connection with an Acquisition Loan (as described
below), such cash shall be applied as soon as practicable to the purchase of
Company Stock. In addition, as of the Effective Date, Company Stock from the
following sources shall be credited to each Participant's Woodward Stock Plan
account balance: (i) Company Stock from the original Woodward Governor
Company Stock Ownership Plan which shall be merged into the Plan; (ii) Company
Stock from the Balanced Fund; and (iii) Company Stock in the Woodward Stock
Fund under the Plan prior to Effective Date.
Section 9.2. Dividends on Allocated Company Stock. All cash dividends
paid for Company Stock held in the Woodward Stock Plan and allocated to
Participants shall be credited to such Participants' account balances.
Notwithstanding the preceding sentence, the Trustee, if directed in writing by
the Company, will pay, in cash, any cash dividends on the Company Stock
allocated, or allocable to Participants. The Company's direction must state
whether the Trustee is to pay the cash dividend distributions currently, or
within the 90-day period following the close of the Plan Year in which the
Company pays the dividends to the Trust.
Section 9.3. Acquisitions Loans. An installment obligation incurred by
the Trustee in connection with the purchase of Company Stock shall constitute
an "Acquisition Loan". The Investment Committee may direct the Trustee to
incur Acquisition Loans from time to time to finance the acquisition of
Company Stock for the Trust or to repay a prior Acquisition Loan. Shares of
Company Stock acquired by the Trustee with the proceeds of an Acquisition Loan
shall be described as "Financed Shares." An Acquisition 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. An Acquisition Loan may be
secured by a collateral pledge of the Financed Shares so acquired and any
other Plan assets which are a permissible security within the provisions of
Treas. Reg. 54.4975-7(b). Any pledge of Financed Shares must provide for the
release of shares so pledged on a basis equal to the principal and interest
paid by the Trustee on the Acquisition Loan. Subject to the provisions of
subsection 5.7, the Financed Shares released due to payment of Company
Contributions must be allocated to each Participant's account balance by
applying the ratio that the Participant's Eligible Wages bears to the total
Eligible Wages of all Participants eligible to share in the Deferred Profit
Sharing Contributions for the Plan Year. Repayment of principal and interest
on any Acquisition Loan shall be made by the Trustee only from Company
contributions paid in cash to enable the Trustee to repay such loan, and from
earnings attributable to such contributions. To the extent the Trustee is so
directed by the Company, cash dividends received by the Trustee with respect
to Financed Shares shall be applied by the Trustee as soon as practicable
thereafter to make payments on such Acquisition Loan. Financed Shares shall
initially be credited to a "Loan Suspense Account" and shall be transferred
for allocation to Participants only as payments of principal and interest on
the Acquisition Loan are made by the Trustee. The number of Financed Shares
to be released from the Loan Suspense Account for allocation to Participants
shall be based upon the ratio that the payments of principal and interest (or,
if the requirements of Treas. Reg 54.4975-7(b)(8)(ii) are met, principal
payments only) on the Acquisition Loan bears to the total projected payments
of principal and interest (or, if the requirements of Treas. Reg 54.4975-
7(b)(8)(ii) are met, principal payments only) on the Acquisition Loan over the
duration of the Acquisition Loan repayment period. Any Financed Shares
released from the Loan Suspense Account by reason of dividends paid with
respect to Company Stock held in the Loan Suspense Account shall be allocated
in the same manner as Financed Shares discussed above. Any Financed Shares
released from the Loan Suspense Account by reason of dividends paid with
respect to Company Stock allocated to Participants' Woodward Stock Plan
Accounts shall be allocated among and credited to the Woodward Stock Plan
Accounts of Participants, pro rata, according to the number of shares of
Company Stock held in such Accounts on the date the dividends are paid.
Section 9.4. Transfer from the Woodward Stock Plan. Notwithstanding any
other provision of the Plan to the contrary, effective April 1, 1991, a
Qualified Participant (as defined below) may make the elections as set forth
in this subsection 9.4.
(a) A Qualified Participant, during each of his Qualified
Election Periods (as defined below), may elect to transfer to the member
investment portion of the Plan up to 10 percent for each year the age of
the Participant exceeds forty-nine (49), times the sum of (i) his
balance in the Woodward Stock Plan as of the end of the immediately
preceding Plan Year and (ii) prior withdrawals, transfers or
distributions from his account in the Woodward Stock Plan; provided,
however, that the portion of a Participant's balance in the Woodward
Stock Plan that is subject to this election under this paragraph for any
Qualified Election Period shall be reduced by the portion of his Account
balance that was previously transferred pursuant to this subsection 9.4.
No more than 25% of such amount eligible to be transferred may be
transferred to the member investment portion of the Plan in any single
Plan Year, provided, however, 50% shall be substituted for 25% beginning
with the Plan Year during which the Participant attains age 60. For
purposes of this subparagraph (a), in the case of transfers of Company
Stock, only whole shares may be transferred.
(b) Any election made in accordance with the provisions of
paragraph (a) next above with respect to any Qualified Election Period
shall be given effect not later than 90 days after the end of that
Qualified Election Period.
(c) Any Participant election required under this subsection 9.4
shall be filed in writing.
(d) For purposes of this subsection, the term "Qualified
Participant" means any Worker Member who has attained at least age 50.
(e) For purposes of this subsection, the "Qualified Election
Period" shall end no later than the 90th day immediately following the
last day of the first Plan Year in which the Participant becomes a
Qualified Participant, and the 90th day following each subsequent Plan
Year.
Section 9.5 Fair Market Value. For purposes of this Section 9, the
"Fair Market Value" of a share of Company Stock, as of any date, means the bid
price of such share, as established by the current prices quoted by
independent dealers of such stock on the most recent trading day for which
records are available. In the event that the bid price of shares of Company
Stock varies between dealers of such stock, the Fair Market Value will be the
median of the bid prices reported.
SECTION 10
LIMITATIONS ON COMPENSATION,
CONTRIBUTIONS AND ALLOCATIONS
Section 10.1. Compensation. Except as otherwise specifically provided,
a Participant's "Compensation" for purposes of this Section 10 shall mean the
sum of:
(a) the compensation (as described in Treas. Reg. 1.415-
2(d)(1)) paid to him during the Plan Year for personal services actually
rendered in the course of his employment with the Company or Section 415
Affiliate (as defined below), excluding deferred compensation and other
amounts that receive special tax treatment (as described in Treas. Reg.
1.415-2(d)(2)); plus
(b) any Deferral Contributions and payroll reduction
contributions made on his behalf for the year to the Plan or a cafeteria
plan within the meaning of section 125 of the Code.
Notwithstanding the foregoing provisions of this subsection 10.1,
"Compensation" for purposes of subsection 10.2 shall be calculated without
regard to clause (b) above and for all purposes of this Section 10 except
clause 10.2(a)(i) shall be limited to $200,000 or such larger amount as may be
permitted for any Plan Year under section 401(a)(17) of the Code. "Section 415
Affiliate" means any trade or business (whether or not incorporated) that is,
along with the Company, a member of a controlled group of corporations or
trades or businesses within the meaning of sections 414(b) and (c) of the
Code, as modified by section 415(h) of the Code.
Section 10.2. Limitations on Annual Additions. Notwithstanding any
other provisions of the Plan to the contrary, a Participant's Annual Additions
(as defined below) for any Plan Year shall not exceed an amount equal to the
lesser of:
(a) $30,000 (or, if greater, 1/4 of the dollar limitation in
effect for that Plan Year under section 415(b)(1)(A) of the Code); or
(b) 25 percent of the Participant's Compensation for that Plan
Year.
The term "Annual Additions" means, with respect to any Participant for the
Plan Year, the sum of all contributions (including Deferral Contributions but
excluding Contributions related to a rollover or transfer as provided for in
Section 6 of the Plan) and all forfeitures allocated to his Accounts for that
Plan Year under this Plan and all Related Defined Contribution Plans, subject
to the following:
(i) a Participant's Annual Additions with respect to the
Woodward Stock Plan or other employee stock ownership plans shall be
determined, subject to paragraphs (ii) and (iii) below, solely on the
basis of contributions thereto and forfeitures, without regard to the
value of Company Stock released from the Loan Suspense Account and
credited to the Participant Accounts;
(ii) if no more than one third of the Company Contributions to
the Woodward Stock Plan and any other Related Defined Contribution Plans
which qualify as an employee stock ownership plan (within the meaning of
section 4975(e)(7) of the Code) which are deductible under section
404(a)(9) of the Code by reason of their application to make payments on
an Acquisition Loan are allocated to Highly Compensated Worker Members
(as defined, in subsection 10.10), a Participant's Annual Additions
shall not include forfeitures of Company Stock acquired with the
proceeds of an Acquisition Loan or Company Contributions which are
deductible under section 404(a)(9)(B) of the Code by reason of their
applications to the payment of interest on an Acquisition Loan; and
(iii) for purposes of paragraph (i) above, the term Annual
Additions shall include any amount credited to an individual medical
account (as defined in section 415(1) of the Code) or a separate account
for post-retirement medical or life insurance benefits (as described in
section 419A(d) of the Code).
The term "Related Defined Contribution Plan" means any other defined
contribution plan (as defined in section 415(k) of the Code) maintained by the
Company or any other trade or business which, together with the Company, is a
member of a controlled group of corporations or a controlled group of trades
or businesses as described in sections 415(b) and (c) of the Code, as modified
by section 415(h) of the Code.
Section 10.3. Combined Plan Limitation. If a Participant also
participates in any defined benefit plan (as defined in section 415(k) of the
Code) maintained by the Company or a Related Company, the aggregate benefits
payable to, or on account of, the Participant under such plan together with
this Plan shall be determined in a manner consistent with section 415(e) of
the Code. The benefit provided for the Participant under the defined benefit
plan shall be adjusted to the extent necessary so that the sum of the "defined
benefit fraction" and the "defined contribution fraction" (as such terms are
defined in section 415(e) of the Code and applicable regulations thereunder)
calculated with regard to such Participant does not exceed 1.0. For purposes
of this subsection 10.3, all qualified defined benefit plans (whether or not
terminated) of the Company and Related Companies shall be treated as one
defined benefit plan.
Section 10.4. Reduction of Contribution Rates. To conform the operation
of the Plan to sections 401(k)(3), 402(g) and 415(c) of the Code, any election
of Payroll Deferrals made by a Participant pursuant to subsection 4.1 or, 4.2
may be modified or revoked regardless of such Participant's prior elections;
provided that the contribution reductions effected under this subsection 10.4
shall be made in the following order: Deferred Profit Sharing deferrals, Cash
Profit Sharing deferrals and Payroll Deferrals.
Section 10.5. Excess Annual Additions. If a Participant's Annual
Additions for any Plan Year would otherwise exceed the limitations imposed by
the foregoing provisions of subsection 10.2, the amount of the contributions
and forfeitures which would otherwise be credited to the Participant's
Accounts under this Plan and any Related Defined Contribution Plan shall be
reduced to the extent necessary to comply with such limitations. To the
extent permitted under a Related Defined Contribution Plan, Annual Additions
under this Plan shall be reduced prior to any reduction under the Related
Defined Contribution Plan. Reductions under this Plan shall be made in the
order set forth in subsection 10.4. Subject to the following provisions of
this subsection 10.5, amounts attributable to Deferral Contributions
(including forfeitures thereof) shall be credited to a 415 Suspense Account
maintained in the Participant's name. Amounts attributable to Company
Contributions to the Woodward Stock Plan (including forfeitures thereof) shall
be reallocated to other Participants in the same proportions as Company
Contributions to the Woodward Stock Plan are allocated for that year. Each
415 Suspense Account shall be invested in the Fixed Value Fund and treated
for purposes of Section 7 as a Fund Account. Amounts credited to a
Participant's 415 Suspense Account shall be credited to his Accounts in the
following Plan Year or Plan Years, to the extent permitted by the foregoing
provisions of this Section 10, and shall be used to reduce Company
Contributions otherwise required for such Plan Years with respect to that
Participant. If any amount remains in a Participant's section 415 Suspense
Account after the Plan Year in which he ceases to participate in the Plan,
such amount shall be used to reduce Company Contributions in the following
Plan Year or Plan Years.
Section 10.6. Limitations Under Section 402(g) of the Code. In no event
shall the Deferral Contributions for a Participant under the Plan (together
with elective deferrals, as defined in section 402(g)(3) of the Code, under
any other cash-or-deferred arrangement maintained by the Company or a Related
Company) for any taxable year exceed $7,000 or such larger amount as may be
permitted for that year under section 402(g) of the Code.
Section 10.7. Disposition of Excess Elective Deferrals. No distribution
of Deferral Contributions shall be made to such Participant because during any
taxable year in which a Participant is also a participant in any other payroll
reduction or cash or deferred arrangement, his elective deferrals (as defined
in section 402(g)(3) of the Code) under such other arrangement together with
Deferral Contributions made on his behalf exceed the maximum amount permitted
for the Participant for that year under section 402(g) of the Code.
Section 10.8. Limitations Under Section 401(k)(3) of the Code. For any
Plan Year, the difference between (a) the average of the Deferral Percentages
(as defined below) of each eligible Worker Member who is Highly Compensated
(as defined in subsection 10.10), referred to hereinafter as the "Highly
Compensated Group Deferral Percentage" and (b) the average of the Deferral
Percentages of each eligible Worker Member who is not Highly Compensated,
referred to hereinafter as the "Non-highly Compensated Group Deferral
Percentage", must satisfy one of the following:
(a) the Highly Compensated Group Deferral Percentage does not
exceed the Non-highly Compensated Group Deferral Percentage by more than
a factor of 1.25; or
(b) the Highly Compensated Group Deferral Percentage does not
exceed the Non-highly Compensated Group Deferral Percentage by more than
both 2 percentage points and a factor of 2.
"Deferral Percentage" for any eligible Worker Member for a Plan Year
shall be determined by dividing the Deferral Contributions made on his behalf
for such year by his Compensation (as defined in subsection 10.1) for the
year, subject to the following special rules:
(i) any Worker Member eligible to participate in the Plan at any
time during a Plan Year pursuant to subsection 2.1 shall be counted,
regardless of whether any Deferral Contributions are made on his behalf
for the year;
(ii) the Deferral Percentage for any Highly Compensated
Participant who is eligible to participate in the Plan and who is also
eligible to make other elective deferrals under one or more other
arrangements (described in section 401(k) of the Code) maintained by the
Company or a Related Company shall be determined as if all such elective
deferrals were made on his behalf under the Plan;
(iii) for purposes of determining the Deferral Percentage of a
Highly Compensated Participant who is a 5-percent owner of the Company
or a Related Company or one of the ten most highly-paid Worker Members
of all the Company and Related Companies, the Deferral Contributions and
Compensation of such Participant shall include the Deferral
Contributions and Compensation for the Plan Year of his family members
(as defined in section 414(q)(6) of the Code), and any such family
members shall be disregarded as separate Worker Members in determining
the Highly Compensated and Non-highly Compensated Group Deferral
Percentages;
(iv) in the event that this Plan satisfies the requirements of
sections 401(k), 401(a)(4) or 410(b) of the Code only if aggregated with
one or more other plans, or if one or more other plans satisfy the
requirements of such sections of the Code only if aggregated with this
Plan, then this subsection 10.8 shall be applied as if all such plans
were a single plan; provided, however, that such plans may be aggregated
in order to satisfy section 401(k) of the Code only if they have the
same Plan Year; and
(v) in the case of any Participant who is not Highly
Compensated, Deferral Contributions (and elective deferrals under any
other plan of the Company or a Related Company) that exceed the
applicable limit under section 402(g) of the Code shall not be counted
in calculating such Participant's Deferral Percentage.
Application of the provisions of this subsection 10.8 shall be made in
accordance with the requirements of section 401(k)(3) of the Code and the
regulations thereunder.
Section 10.9. Disposition of Excess Deferral Contributions. In the
event that the Highly Compensated Group Deferral Percentage for any Plan Year
does not initially satisfy one of the tests set forth in subsection 10.8, then
the amount of excess (hereinafter referred to as Excess Contributions and
determined by reducing the Deferral Contributions on behalf of Highly
Compensated Participants in order of the Participants with the highest
Deferral Percentages), plus any income and minus any loss allocable thereto,
shall be distributed to Participants to whose accounts Excess Contributions
were allocated. The income or loss allocable to Excess Contributions shall be
determined by the Committee in accordance with applicable rules and
regulations.
Section 10.10. Highly Compensated Worker Member. A Worker Member shall
be "Highly Compensated" for any Plan Year if during the coincident calendar
year he:
(a) was at any time a 5 percent owner of the Company or a
Related Company;
(b) received Compensation (as defined in subsection 10.1) from
the Company or Related Companies in excess of $75,000 (indexed for cost-
of-living adjustments under Section 415(d) of the Code);
(c) received Compensation in excess of $50,000 (indexed for
cost-of-living adjustments under section 415(d) of the Code) and is part
of the top-paid 20% group of Worker Members; or
(d) was at any time an officer and received Compensation greater
than 50 percent of the amount in effect under section 415(b)(1)(A) of
the Code for such year, provided that the officers taken into account
under this paragraph (iv) shall be limited to 50, or if less, the
greater of 3 or 10% of the Worker Members of the Company and Related
Companies;
provided, however, that Worker Member in category (b), (c) or (d) above for
the current Plan Year who does not fall within at least one such category for
the preceding Plan Year shall not be considered Highly Compensated for the
current Plan Year unless he is also among the 100 most highly-paid Worker
Members of the Company and Related Companies for such current year.
For purposes of this subsection 10.10, a family member of one of the 10
most highly-compensated Worker Members of the Company and Related Companies
shall not be treated as a separate Worker Member, and any Compensation paid to
such family member shall be deemed to be paid instead to the related Highly-
Compensated Worker Member.
SECTION 11
PRE-TERMINATION WITHDRAWALS AND LOANS
Section 11.1. Pre-Termination Withdrawals. Subject to the Committee's
approval, in accordance with the written withdrawal policy, as of the last day
of any month, a Participant may elect to
withdraw all or any portion of the value of his interest in any Investment
Fund other than the account in the Woodward Stock Plan which is credited to
any one or more of his Accounts, subject to the following:
(a) Once each year, upon filing a written request with the
Committee, a Participant may elect to withdraw, as of the last day of
the month in which the request is made, either (i) all of the balance
credited to his Member Savings Account (including contributions and
earnings) or (ii) all or a portion of the Participant's contributions
(excluding any earnings thereon) credited to his Member Savings Account.
(b) A Participant may withdraw all or any portion of his
unwithdrawn Deferral Contributions and Loan Fund after attaining age 65.
(c) A Participant may withdraw all or any portion of his
unwithdrawn Deferral Contributions and Loan Fund which are necessary to
meet a Hardship (as defined in subsection 11.2).
(d) The portion of any Deferral Contribution or of the Loan Fund
which is attributable to earnings thereon accrued after September 30,
1989 may not be withdrawn under this Section 11.
(e) No withdrawal may be made from a Participant's Woodward
Stock Plan Account.
(f) Withdrawals can be made in accordance with any one or more
of the foregoing paragraphs, provided that no withdrawals may be made by
any Participant after the date on which his employment terminates.
(g) Withdrawals from any Accounts shall be charged against the
Participant's balance under each Investment Fund as elected by the
Participant.
(h) Conditions and limitations may be imposed by the Committee,
from time to time, with respect to the withdrawal of amounts, including
the imposition of minimum withdrawal amounts.
Section 11.2. Hardship. A withdrawal will be considered to be on
account of "Hardship" if it meets the following requirements:
(a) The withdrawal is requested because of an immediate and
heavy financial need of the Participant, and will be so deemed if the
Participant represents that the withdrawal is made on account of:
(i) medical expenses incurred by the Participant, the
Participant's spouse or any dependent of the Participant (as
defined in section 152 of the Code);
(ii) the purchase (excluding mortgage payments) of a
principal residence of the Participant;
(iii) payment of tuition for the next semester or quarter of
post-secondary education for the Participant, or his spouse,
children or dependents;
(iv) the need to prevent the eviction of the Participant
from his principal residence or foreclosure on the mortgage of the
Participant's residence;
(v) funeral expenses; or
(vi) the permanent and total disability of the Participant.
(b) The withdrawal must also be necessary to satisfy the
immediate and heavy financial need of the Participant. It will be
considered necessary if the Committee determines that the amount of the
distribution does not exceed the amount required to relieve the
financial need and if the need cannot be satisfied from other resources
that are reasonably available to the Participant. In making this
determination, the Committee may reasonably rely on the Participant's
representation that the need cannot be relieved:
(i) through reimbursement or compensation by insurance or
otherwise;
(ii) by reasonable liquidation of the Participant's assets,
to the extent such liquidation would not itself constitute a
hardship;
(iii) by ceasing to make Deferral Contributions (or any
contributions to any other plan of the Company or Related
Companies permitting deferral of compensation); or
(iv) by a loan pursuant to subsection 11.3 or by borrowing
from commercial sources on reasonable commercial terms, to the
extent that repayment of such obligation would not itself
constitute a hardship.
(c) The withdrawal must be made pursuant to a written request to
the Committee, which request shall include any representation required
by this subsection 11.2 and adequate proof thereof.
Section 11.3. Loans to Participants. The Committee may, in its
discretion and upon written request by a Participant, authorize a loan to be
made from the Trust Fund to the Participant, in accordance with the terms of a
written loan policy which is hereby incorporated as part of the Plan, which
shall include loan application and approval guidelines, subject to the
following:
(a) Except as provided in the following sentence, no loan shall
be made to a Participant if, after such loan, the sum of the outstanding
balances (including principal and interest) of all loans made to him
under this Plan and all other qualified retirement plans maintained by
the Company and the Related Companies would exceed the lesser of $50,000
(adjusted as provided below) or one-half of the amount which is vested
in accordance with subsection 12.1. To the extent provided by the
Committee, the preceding limitations shall not be applicable if the sum
of the loan and such outstanding balances is not in excess of $10,000.
The foregoing $50,000 limitation shall be adjusted by subtracting
therefrom the amount, if any, by which the highest outstanding loan
balances of the Participant at any time during the one-year period
ending on the day preceding the date of such loan exceeds such
outstanding balances on the date of the loan.
(b) Each loan to a Participant shall be made first from the Loan
Fund and then from the Investment Funds under the member investment
portion of the Plan; and shall be charged against each Investment Fund
as the Participant elects. No loan may be made from a Participant's
Woodward Stock Plan or Member Savings Account.
(c) Each loan shall be evidenced by a written note providing
for:
(i) a reasonable repayment period of not less than one
year and not more than 5 years from the date of the loan (7 years
if such loan is used to acquire any dwelling unit which within a
reasonable time is to be used as the principal residence of the
Participant);
(ii) a reasonable rate of interest; and
(iii) such other terms and conditions as the Committee shall
determine.
(d) Payments of principal and interest to the Trustee with
respect to any loan or portion thereof shall be credited to each
Investment Fund in accordance with the Participant's current investment
direction (notwithstanding that the loan originated from the Loan Fund).
Any portion or all of the loan may be prepaid at any time without
penalty.
(e) At the Committee's discretion, if the outstanding balance of
principal and interest on any loan is not paid at the expiration of its
term, such outstanding balance shall be treated as distributed in
accordance with subsection 12.1 and 12.2 but only to the extent such
balance (or portion thereof) is then distributable under the terms of
the Plan.
(f) Each outstanding promissory note of a Participant shall be
canceled and the unpaid balance of the loan, together with any accrued
interest thereon, shall be treated as a distribution to or on behalf of
the Participant as of the last day of the month in which his termination
of employment occurs.
(g) In no event shall a loan be made to a Participant after his
employment with the Company terminates.
SECTION 12
DISTRIBUTION ON TERMINATION
OR TRANSFER OF EMPLOYMENT
Section 12.1. Vesting of Account Balances. All amounts credited to a
Participant's Account shall at all times be nonforfeitable.
Section 12.2. Distribution Date. Subject to the following provisions of
this subsection, the term "Distribution Date" with respect to any Participant
means the last day of the month in which he attains age 65 years or, if later,
in which his termination of employment occurs. A Participant (or his
Beneficiary in the event of his death) may elect to have his Distribution Date
be the last day of the month, provided proper forms have been completed in a
timely manner, which includes the earliest of:
(a) the date as of which his employment with the Company and the
Related Companies terminates;
(b) the last day of the twelve consecutive-month period
beginning on the date on which he is laid off if he does not return to
active employment as a Worker Member prior to the last day of that
period; or
(c) the last day for which the Participant receives disability
pay from the Company or a Related Company if he is neither a Worker
Member in active service nor on leave of absence on that date.
Section 12.3. Limits on Commencement and Duration of Distributions. The
following distribution rules shall be applied in accordance with sections
401(a)(9) and 401(a)(14) of the Code and applicable regulations thereunder,
including the minimum distribution incidental benefit requirement of Treas.
Reg. 1.401(a)(9)-2, and shall supersede any other provision of the Plan to
the contrary:
(a) Unless the Participant elects otherwise pursuant to
subsection 12.2, in no event shall distribution commence later than 60
days after the close of the Plan Year in which the Participant attains
age 65 or, if later, in which his Distribution Date occurs.
(b) Notwithstanding any other provision herein to the contrary,
the Participant's Accounts shall be distributed no later than his
"Required Beginning Date", that is, April 1 of the calendar year
following the calendar year in which he attains age 70-1/2, unless the
Participant attained age 70-1/2 prior to January 1, 1988, in which case
his Required Beginning Date will be delayed until his termination of
employment.
(c) Distribution payments shall be made over the life of the
Participant or over the lives of such Participant and his Beneficiary
(or over a period not extending beyond the life expectancy of such
Participant or the life expectancy of such Participant and his
Beneficiary).
(d) If a Participant dies after distribution of his vested
interest in the Plan has begun, the remaining portion of such vested
interest, if any, shall be distributed to his Beneficiary at least as
rapidly as under the method of distribution used prior to the
Participant's death.
(e) If a Participant dies before distribution of his vested
interest in the Plan has begun, distribution of such vested interest to
his Beneficiary shall be completed by December 31 of the calendar year
in which the fifth anniversary of the Participant's death occurs;
provided, however, that this five-year rule shall not apply to an
individual designated as Beneficiary by the Participant or under the
specific terms of the Plan, if
(i) such vested interest will be distributed over the life
of such designated Beneficiary (or over a period not extending
beyond the life expectancy of such Beneficiary), and
(ii) such distribution to the Beneficiary begins not later
than December 31 of the calendar year following the calendar year
in which the Participant died or, if such Beneficiary is the
Participant's surviving spouse, not later than December 31 of the
calendar year following the calendar year in which the Participant
would have attained age 70-1/2.
(f) If the Participant's surviving spouse is his Beneficiary and
such spouse dies before the distributions to such spouse begins,
paragraph (e) shall be applied as if the surviving spouse were the
Participant.
(g) For purposes of paragraphs (d) and (e), distribution of a
Participant's vested interest in the Plan is considered to begin on his
Required Beginning Date; provided, however, that distribution
irrevocably begun in the form of an annuity shall be considered to begin
on the date it actually commences.
(h) For purposes of this subsection 12.3, the life expectancy of
a Participant or a Beneficiary will be determined in accordance with
Tables V and VI of Treas. Reg. 1.72-9, and will not be recalculated.
Section 12.4. Form of Distribution on Termination of Employment. The
entire value of all vested amounts credited to a Participant as of his
Distribution Date (together with any contributions made to the Plan after his
Distribution Date but attributable to employment prior to that date) will be
distributable to him or, in the event of his death, to his Beneficiary in a
lump sum, subject to the following:
(a) Installments. A Participant may elect to have his benefits
paid in approximately equal annual installments over a period not
exceeding the lesser of 30 years or his life expectancy or, if
applicable, the joint life expectancies of the Participant and his
Beneficiary. Prior to receiving payment in the form of installments, a
Participant's outstanding loans under the Plan, together with any
accrued interest thereon, shall be treated as a distribution. Subject
to the provisions of subsection 12.3, a Participant may elect that, in
the event of his death, his benefits will be paid to his Beneficiary or
Beneficiaries in annual installments over the remaining period of his
original election. Each installment shall be charged pro-rata to the
Participant's Accounts.
(b) Small Account Balances. Notwithstanding any other provision
of the Plan to the contrary, if a Participant's vested Account balances
are less than $3,500, such balances shall be distributed as soon as
practicable after his termination of employment in a lump sum payment.
(c) Assets Distributable. Generally, subject to paragraph (b)
next above, all distributions shall be paid in cash. However,
distributions attributable to amounts in the Woodward Stock Plan shall
be paid in Company Stock.
(d) Interest on Lump Sum Distributions. Lump sum distributions
made to Retired Participants in accordance with this subsection 12.4,
based on valuations as of the end of the Plan Year, will be credited
with a reasonable money market rate of return for the period between the
next preceding Plan Year end and the end of the month next preceding the
date such amounts are distributed.
Section 12.5. Distributions to Persons Under Disability.
Notwithstanding the foregoing provisions of this Section 12, in the event that
a Participant or Beneficiary is declared incompetent and a conservator or
other person legally charged with the care of his person or of his estate has
been appointed, the amount of any benefit to which such Participant or
Beneficiary is then entitled from the Trust Fund shall be paid to such
conservator or other person legally charged with the care of his person or
estate.
Section 12.6. Interests Not Transferable. The interests of Participants
and their Beneficiaries under the Plan and Trust Agreement are not subject to
the claims of their creditors and may not be voluntarily or involuntarily
assigned, alienated or encumbered, except in the case of certain qualified
domestic relations orders which relate to the provision of child support,
alimony or marital rights of a spouse, child or other dependent and which meet
such other requirements as may be imposed by section 414(p) of the Code or
regulations issued thereunder. The Company shall establish reasonable
procedures to determine the status of domestic relations orders and to
administer distributions under domestic relations orders which are deemed to
be qualified orders. Such procedures shall be in writing and shall comply
with the provisions of section 414(p) of the Code and regulations issued
thereunder. Distributions to an alternate payee (as defined under Section
414(p)(8) of the Code) under a qualified domestic relations order are
permitted at any time, irrespective of whether the Participant has attained
his earliest retirement age (as defined under Section 414(p)(4)(B) of the
Code) under the Plan. A distribution to an alternate payee prior to the
Participant's attainment of earliest retirement age is available only if: (1)
the order specifies distribution at that time or permits an agreement between
the Plan and the alternate payee to authorize an earlier distribution and (2)
the alternate payee consents to any distribution occurring prior to the
Participant's attainment of earliest retirement age, if the present value of
the alternate payee's benefits under the Plan exceeds $3,500.
Section 12.7. Absence of Guaranty. There is no guarantee, by any
person, that the Trust Fund will not suffer losses or depreciation. The
Company does not guarantee any payment to any person. The liability of the
Trustee to make any payment is limited to the available assets of the Trust
Fund.
Section 12.8. Designation of Beneficiary. Subject to the provisions of
subsection 12.7, each Participant, from time to time, in writing, may
designate any person or persons (who may be designated contingently or
successively) to whom his benefits are to be paid if he dies before he
receives all of his benefits; provided, however, that if a Participant is
married on the date of his death, any designation as Beneficiary of a person
other than his spouse shall be effective only if:
(a) his spouse acknowledges the effect of that designation and
consents to it and to the specific person or persons or class of persons
so designated in a writing in such form as may be established from time
to time, which writing is witnessed by a notary; or
(b) it is established to the satisfaction of an authorized Plan
representative that the consent required under paragraph (a) next above
cannot be obtained because there is no spouse, because the spouse cannot
be located or because of such other circumstances as the Secretary of
the Treasury may prescribe in regulations.
A Beneficiary designation form will be effective only when the signed
form is filed while the Participant is alive and will cancel all Beneficiary
designation forms signed earlier. Except as otherwise specifically provided
in this Section 12, if a deceased Participant failed to designate a
Beneficiary as provided above, or if the designated Beneficiary of a deceased
Participant dies before him or before complete payment of the Participant's
benefits, benefits shall be paid to the Participant's surviving spouse or, if
there is no surviving spouse or if the Participant and the surviving spouse
had been married for less than one year, to the legal representative or
representatives of the estate of the last to die of the Participant and his
Beneficiary. If there is any question as to the right of any Beneficiary to
receive a distribution under the Plan, a representative of the Company may
exercise discretion in a manner that permits the Trustee to make payment to
the legal representative of the Participant's estate. The term "Beneficiary"
as used in the Plan means the person or persons to whom a deceased
Participant's benefits are payable under this subsection 12.8.
Section 12.9. Missing Recipients. Each Participant and each Beneficiary
must file in writing his post office address from time to time and file in
writing each change of post office address. Any communication, statement or
notice addressed to a Participant or Beneficiary at his last known post office
address, or if no address is known then at the Participant's last post office
address as shown on the Company's records, will be binding on the Participant
and his Beneficiary for all purposes of the Plan. The Administrator will make
a reasonable effort to find the Participant, however, no person will be
required to search for or locate a Participant or Beneficiary. If a
Participant or Beneficiary entitled to benefits under the Plan fails to claim
such benefits and it is not possible to reasonably find his whereabouts, such
benefits shall be forfeited and shall be used until exhausted to reduce the
Company contributions otherwise required under Section 5 of the Company or
Related Company which last employed the Participant. If the whereabouts of
the Participant or Beneficiary is subsequently determined, such forfeiture
shall be restored by the Company and such restoration shall not be treated as
an Annual Addition for purposes of Section 10.
Section 12.10. Put Option. Shares of Company Stock acquired by the Trust
shall be subject to a put option if the shares are not readily tradable on an
established securities market within the meaning of Section 409(h)(1)(B) of
the Code when distributed (or cease to be readily tradable on an established
securities market after distribution). The put option shall be exercisable by
the Participant or his Beneficiary. The put option shall be exercisable
during a 15-month period which begins on the date the shares subject to the
put option are distributed by the Plan. During this period, the holder of the
put option shall have the right to cause the Company, by notifying it in
writing, to purchase such shares at their fair market value, as determined
pursuant to Section 9.5. The put option shall continue to apply to shares of
the Company Stock distributed by the Plan even if the Woodward Stock Plan
should at any time cease to be an employee stock ownership plan under Section
4975(c)(7) of the Code. The Committee may give the Trustee the option to
assume the rights and obligations of the Company, at the time the put option
is exercised, with respect to the repurchase of Company Stock.
If the entire value of all nonforfeitable amounts credited to a
Participant is distributed to the Participant within one taxable year, payment
of the price of the Company Stock purchased pursuant to an exercised put
option shall be made in no more than five substantially equal annual payments,
and the first installment shall be paid not later than thirty days after the
Participant exercises the put option. The Plan shall provide adequate
security and pay a reasonable rate of interest on amounts not paid after
thirty days. If the entire value of all nonforfeitable amounts credited to a
Participant is not distributed to the Participant within one taxable year,
payment of the price of the Company Stock purchased pursuant to an exercised
put option shall be made in a single sum not later than thirty days after the
Participant exercises the put option.
SECTION 13
VOTING OF COMPANY STOCK
All Company Stock held in the Trust shall generally be voted by the
Trustee as directed by the Administrative Committee. Each Participant, or if
applicable, his beneficiary, shall be entitled to direct the Trustee as to the
exercise of all voting rights attributable to shares of Company Stock then
allocated to such Participant's account in the Woodward Stock Plan, to the
extent required by sections 401(a)(22) and 409(e)(2) of the Code and the
regulations thereunder. To the extent Participants are entitled to so direct
the Trustee as to the voting of Company Stock allocated to their accounts, all
allocated Company Stock as to which such instructions have been received
(which may include an instruction to abstain) shall be voted in accordance
with such instructions. The Company shall furnish the Trustee and each
Participant with notices and information statements when voting rights are to
be exercised in a time and manner which comply with applicable law. However,
the Trustee shall vote any unallocated Company Stock in such manner as
directed by the Administrative Committee. For purposes of instructing the
Trustee as to the voting or tender of any unallocated Company Stock, the
Administrative Committee shall be deemed a named fiduciary of the Plan as
provided in section 403(a)(1) of ERISA. The Trustee shall vote any allocated
Company Stock as to which no voting instructions have been received in the
same proportion as allocated shares with respect to which it does receive
directions.
In the event of a tender or exchange offer (an "Offer") for shares of
Company Stock, the Company, in conjunction with the Trustee, shall use its
reasonable best efforts to cause all Participants to be furnished with all
information as will be distributed to the stockholders of the Company in
respect to such Offer, and to be provided with forms by which the Participant
may confidentially instruct the Trustee, or revoke such instruction, to tender
or exchange shares of Company Stock allocated to his account, to the extent
permitted under the terms of such Offer. Upon timely receipt of such
instructions, the Trustee shall follow the directions of each Participant as
to the shares of Company Stock allocated to such Participant's account.
Instructions received by the Trustee from Participants in connection with an
Offer shall be held in strict confidence and, except as otherwise required by
law, shall not be divulged or released to any person, including officers and
Worker Members of the Company. The Company and the Trustee shall take all
steps necessary to assure that Participant's directions shall remain
confidential. The Trustee shall tender or exchange any unallocated Company
Stock in such manner as directed by the Administrative Committee. The Trustee
shall tender or exchange any allocated Company Stock as to which no
instructions are received in the same proportion as allocated shares with
respect to which it does receive directions.
SECTION 14
THE ADMINISTRATIVE COMMITTEE
Section 14.1. Membership. The Company shall appoint two members of the
Administrative Committee (the "Committee") as referred to in subsection 1.3,
which shall number not less than six members, from among the officers and
other Worker Members of the Company, designating one as chairman and the other
as assistant chairman of the Committee and defining their terms of office.
Additional members of the Committee shall be elected by the actively employed
Participants in the Plan from those actively employed Participants with ten or
more Years of Service in the following manner:
(a) Each facility in the United States shall elect two members
to the Committee for each 500 Participants in the Plan or fraction
thereof in the Plan as of the beginning of the Plan Year; provided that
a facility must have at least 100 Participants in the Plan before it is
eligible to elect any Committee members.
(b) Members will be elected for a two-year term, half of whom
are to be elected each calendar year.
(c) The Candidates and Election Committee of the Company will
supervise the election and count the ballots.
(d) Forms will be distributed each November on which any
Participant with ten or more years of service may indicate a desire to
serve on the Committee. Names of all eligible Participants indicating a
willingness to serve on the Committee shall be certified to the
personnel department as eligible for the nominating ballot by the
Candidates and Election Committee.
(e) Nominating ballots will be distributed the first week in
December and must be returned to the Candidates and Election Committee
by the end of the second week in December. All Participants with ten or
more Years of Service are eligible for nomination.
(f) The Candidates and Election Committee shall certify as
nominated twice the number of Participants as there are positions to be
filled; and the number of Participants required to fill the slate who
receive the greatest number of votes on the nominating ballots shall be
nominated.
(g) The third week in December a final election ballot shall be
distributed to actively employed Participants and in order to be
considered the election ballots must be completed and returned to the
Candidates and Election Committee by the end of that week.
(h) The winning candidates shall be certified by the Candidates
and Election Committee to the personnel department and their names
posted on the bulletin board of each plant on or before December 31.
(i) Terms of office of elected members shall begin on January
1st.
(j) Elected members may not serve more than two consecutive two-
year terms, and a member who has served two such terms cannot serve
again until one full calendar year has elapsed from the end of his last
term.
Section 14.2. Majority Action. The Committee may act by vote at a
meeting, by telephone conference, or by written consent without a meeting.
Committee meetings shall be held at the discretion of the chairman of the
Committee. Only the chairman of the Committee can call a Committee meeting,
authorize a telephone conference or authorize a written consent without a
meeting. Any matter may be handled by a quorum of two Committee members,
except that a quorum of a majority of the Committee members is necessary to
give direction to the Trustee in voting of stock and to recommend changes in
the Plan to the Company. Any action taken by a majority of the members of the
Committee at a meeting at which a quorum is present, or taken by written
consent of a majority of the Committee without a meeting, shall be binding
upon the Participants and their Beneficiaries. Any action of the Committee
shall be sufficiently evidenced if certified thereto by any two members of the
Committee.
Section 14.3. Rights, Powers and Duties. The Committee shall have such
authority as may be necessary to discharge its responsibilities under the
Plan, including the following powers, rights and duties:
(a) to adopt such rules of procedure and regulations as, in its
opinion, may be necessary for the proper and efficient administration of
the Plan and as are consistent with the provisions of the Plan;
(b) to enforce the Plan in accordance with its terms and with
such rules and regulations as may be adopted by the Committee;
(c) to determine all questions arising under the Plan, including
questions relating to the eligibility, benefits and other Plan rights of
Participants and Beneficiaries and to remedy ambiguities,
inconsistencies or omissions;
(d) to maintain and keep adequate records concerning the Plan
and concerning its proceedings and acts in such form and detail as the
Committee may decide;
(e) to direct all benefit payments under the Plan;
(f) to delegate to Worker Members of the Company and the agents
or counsel employed by the Committee such powers as the Committee
considers desirable; and
(g) to appoint one of its members or any other Worker Member to
act as secretary of the Committee, and to authorize the secretary so
appointed to act for the Committee in all routine matters connected with
its responsibilities hereunder.
(h) to recommend changes in the Plan to the Company. The Board
of Directors can accept or reject such recommendations at its
discretion.
Section 14.4. Application of Rules. In operating and administering the
Plan, the Committee shall apply all rules of procedure and regulations adopted
by it in a uniform and nondiscriminatory manner.
Section 14.5. Remuneration and Expenses. No remuneration shall be paid
to any Committee member as such. However, the reasonable expenses of a
Committee member incurred in the performance of Committee functions shall be
reimbursed by the Company.
Section 14.6. Indemnification of the Committee. The Committee and the
individual members thereof and any Worker Members to whom the Committee has
delegated responsibility in accordance with paragraph 14.3(h) shall be
indemnified by the Company against any and all liabilities, losses, costs and
expenses (including legal fees and expenses) of whatsoever kind and nature
which may be imposed on, incurred by or asserted against the Committee, its
members or such Worker Members by reason of the performance of a Committee
function if the Committee, such members or Worker Members did not act
dishonestly or in willful violation of the law or regulation under which such
liability, loss, cost or expense arises.
Section 14.7. Exercise of Committee's Duties. Notwithstanding any other
provisions of the Plan, the Committee shall discharge its duties hereunder
solely in the interests of the Participants in the Plan and other persons
entitled to benefits thereunder, and
(a) for the exclusive purpose of providing benefits to
Participants and other persons entitled to benefits thereunder; and
(b) with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent man acting in a like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims.
Section 14.8. Information to be Furnished to Committee. The Company
shall furnish the Committee such data and information as may be appropriate.
The records of the Company as to a Participant's period of employment,
termination of employment and the reasons therefor, leave of absence,
reemployment and Eligible Biweekly Pay and Eligible Wages will be conclusive
on all persons unless determined to be incorrect. Participants and other
persons entitled to benefits under the Plan must furnish to the Committee such
evidence, data or information as it considers desirable to carry out the Plan.
Section 14.9. Resignation or Removal of Committee Member. A, Committee
member may resign at any time by giving 30 days advance written notice to the
Company, the Trustee and the other Committee members. The Company may remove
a Committee member by giving advance written notice to him, the Trustee and
the other Committee members.
Section 14.10. Appointment of Successor Committee Members. The Company
may fill any vacancy in the membership of the Committee and shall give prompt
written notice thereof to the other Committee members and the Trustee. While
there is a vacancy in the membership of the Committee, the remaining Committee
members shall have the same powers as the full Committee until the vacancy is
filled.
SECTION 15
THE INVESTMENT COMMITTEE
Section 15.1. Establishment of Investment Committee. The Company shall
appoint an Investment Committee of at least three Members who shall be
selected from among the officers, directors, Worker Members or consultants of
the Company. The Investment Committee shall control the investment policy of
the Fund which is maintained by the Company for the purposes of the Plan. The
members of the Investment Committee shall serve without remuneration and for
so long as it is mutually agreeable to them and to the Company. The members
shall be reimbursed for all expenses incurred by them in the performance of
their duties. Any member may resign by giving his written resignation to the
Company. The Company may remove any member of the Investment Committee by so
notifying the member and the other members of the Investment Committee in
writing.
Section 15.2. Majority Action. Any action taken by the Investment
Committee shall be by a majority of the members thereof. The Investment
Committee may act by voting at a meeting or by writing without a meeting. Any
action of the Investment Committee shall be sufficiently evidenced if it is
certified thereto by any member thereof or by the secretary.
Section 15.3. Powers of the Investment Committee. The Investment
Committee shall have the following powers.
(a) To adopt such by-laws as it shall deem necessary for the
development of an efficient and sound investment program.
(b) To employ advisors (who may, but need not, be advisors to
the Company) with respect to investment, actuarial, legal, accounting
and other matters as it may deem necessary for the proper exercise of
its duties.
(c) to appoint one of its members, or any Worker Member of the
Company, to act as secretary of the Investment Committee. The foregoing
list of express powers is not intended to be either complete or
inclusive, and the Investment Committee shall have such additional
powers as it may reasonably deem to be necessary for the performance of
its duties under the Plan and Trust.
Section 15.4. Duties of the Investment Committee. As a part of its
general duties in supervising the investment policy of a Fund, the Investment
Committee shall:
(a) Review the investment portfolio constituting the Fund at
least annually.
(b) Give the Trustee specific directions in writing with respect
to investment, reinvestments and changing of investments, all as set out
in the Trust Agreement.
(c) the Investment Committee shall report annually to the
Company as to the investment performance of the Fund for the Plan Year
ending on such date.
(d) Provide the Company and the Administrative Committee with
such information, and at such times, as may be required by the Company
or as may be needed by the Administrative Committee to carry out its
duties.
(e) Advise the Administrator with respect to any costs,
expenses, taxes or other charges (excluding any loss as a result of the
sale of assets) incurred solely by reason of a sale or purchase of
assets in order to properly reallocate assets between the separate Funds
established hereunder, and at the request of the Administrative
Committee, to advise the Administrative Committee with respect to the
proper apportionment of said costs, expenses, taxes or other charges, so
as to fairly reflect that portion attributable to the reallocation of
assets on behalf of each Participant.
SECTION 16
FREQUENTLY USED DEFINITIONS
"Account" means the separate account(s) maintained for a Participant
under the Plan.
"Accounting Date" is the last day of each Plan Year, and if elected by
the Company, the last day of any quarter or month.
"Acquisition Loan" shall have the same meaning as is given to such term
in subsection 9.3.
"Beneficiary" is a person described in subsection 12.8.
"Cash Option Portion" shall have the same meaning as is given to such
term in subsection 5.4.
"Code" shall have the same meaning as is given to such term in
subsection 1.1.
"Company" means Woodward Governor Company.
Date of Hire" shall mean the first day on which a Worker Member renders
an Hour of Service; provided, however, that if a Worker Member shall in any
Plan Year terminate his service, which termination continues through the close
of said Plan Year, then it shall refer to the first day subsequent to said
Plan Year on which the Worker Member shall render an Hour of Service.
"Deferral Contribution" shall have the same meaning as given to such
term in subsection 5.6.
"Deferrals" shall have the same meaning as given to such term in
Subsection 5.6
"Distribution Date" shall have the same meaning as is given to such term
in subsection 12.2.
"Effective Date" shall have the same meaning as given to such term in
subsection 1.1.
"Eligible Biweekly Pay" means, for each biweekly payroll period, a
Participant's base wages, salary, overtime pay, shift premium, sick pay,
holiday pay and vacation pay. For purposes of the Plan, Eligible Biweekly Pay
shall not exceed $200,000, as such amount may be adjusted from time to time in
accordance with regulations issued by the Secretary of the Treasury; provided
that, for purposes of such $200,000 limit, a Highly Compensated Worker
Member's spouse and lineal descendants who have not attained age 19 before the
close of the Plan Year, will be treated as a single Worker Member with one
compensation and the $200,000 limit will be allocated among such family
members in proportion to each member's Eligible Biweekly Pay.
"Eligible Wages" means the total straight time pay received during any
biweekly pay period, but not including straight time pay for hours worked in
excess of 80 hours in a biweekly pay period. Eligible Wages shall exclude
reimbursement of medical expenses, premiums on insurance policies, cafeteria
subsidies, sick pay, holiday pay, vacation pay and contributions to any
deferred compensation plan with the exception of contributions made relating
to Deferrals of Eligible Biweekly Pay; provided that with regard to the Plan
Year during which a Participant commences participation, "Eligible Wages"
shall include only Eligible Wages paid by the Company from the date his
participation in the Plan commences. For purposes of the Plan, Eligible Wages
shall not exceed $200,000, as such amount may be adjusted from time to time in
accordance with regulations issued by the Secretary of the Treasury; provided
that, for purposes of such $200,000 limit, a Highly Compensated Worker
Member's spouse and lineal descendants who have not attained age 19 before the
close of the Plan Year, will be treated as a single Worker Member with one
compensation and the $200,000 limit will be allocated among such family
members in proportion to each member's Eligible Wages.
"ERISA" shall have the same meaning as is given to such term in
subsection 1.3.
"Financed Shares" shall have the same meaning as is given to such term
in subsection 9.3.
"Fund Account" shall have the same meaning as is given to such term in
subsection 8.1.
"Highly Compensated Worker Member" shall have the same meaning as given
to such term in subsection 10.10.
"Hour of Service" shall have the same meaning as given to such term in
subsection 3.2.
"Initial Period of Service" shall mean the completion of two 12 month
periods during which 1,000 Hours of Service are completed during each of such
12 month periods. The 12 month periods shall begin on the Worker Member's
Date of Hire and the first anniversary thereof; provided that if a Worker
Member shall not complete 1,000 Hours of Service in either of such 12 month
periods commencing on his Date of Hire, or anniversary thereof, all subsequent
12 month periods shall be calculated based on the Plan Year, the first of
which shall commence in the 12 month period during which the Worker Member
failed to complete 1,000 Hours of Service. In the event of a Termination of
Service after completion of one 12 month period with 1,000 Hours of Service,
but before completion of an Initial Period of Service, the Worker Member shall
receive credit for the 12 month period so completed; and if he shall be
reemployed as a Worker Member, he shall commence the computation of his second
period on his most recent Date of Hire; provided that if he shall not complete
1,000 Hours of Service in such 12 month period, his computation period shall
be based on the Plan Year the first of which shall commence next following
this most recent Date of Hire. A Worker Member in the Woodward Governor
Recruit Program shall receive credit for one such 12 month period if he shall
complete at least 250 Hours of Service in each of four Plan Years. A Worker
Member who is a student in the Irl C. Martin Academy of Industrial Science for
a period of six months or more during any Plan Year (or during his first
12 months of employment and successive periods commencing on the anniversary
of his Date of Hire) shall receive credit for one such 12 month period if he
did not otherwise receive credit during such period.
"Investment Committee" shall have the same meaning as given to such term
in Section 15.
"Investment Fund" shall have the same meaning as given to the term in
subsection 8.1.
"Loan Fund" shall have the same meaning as given to such term in Section
8.4.
"Member Savings Account" shall have the same meaning as given to such
term in Section 8.1
"Net Profit" shall mean the amount earned by the Company for each Plan
Year as certified by the independent auditor employed by the Company (in
accordance with generally accepted accounting principles consistently applied)
after deducting from the Company's gross earnings for such Plan Year all
costs, expenses and charges incurred by the Company, but before any deduction
for the following:
(1) Federal and state income taxes which are based on net rather
than gross income.
(2) The provision for, or payment of, a liability in accordance
with applicable law, the effect of which is to adjust retroactively
profits realized in prior years.
(3) The Company's contribution under this Plan, the Woodward
Governor Company Retirement Income Plan and any other plan maintained by
the Company or a Related Company.
Net Profit shall be calculated before the cumulative effect of accounting
changes.
"Non-Cash Option Portion" shall have the same meaning as is given to
such term in subsection 5.4.
"Normal Retirement Age" shall mean age 65.
"Participant" shall have the same meaning as given to such term in
subsection 2.1
"Payroll Deferral" shall have the same meaning as given to such term in
subsection 4.1.
"Plan" means the Woodward Governor Company Deferred Profit Sharing Plan,
as amended and restated.
"Plan Year" shall have the same meaning as is given to such term in
subsection 1.4.
"Profit Sharing Contributions" shall have the same meaning as is given
to such term in subsection 5.2.
"Related Companies" shall have the same meaning as is given to such
term in subsection 1.2.
"Retired Participants" means those Participants who retired on account
of reaching Normal Retirement Age or reaching age 55 and completing ten (10)
Years of Service.
"Rollover Contribution" shall have the same meaning as given to such
term in subsection 6.1.
"Trust" means the separate Trust created under the Plan by and between
the Company and the Trustee.
"Trustee" means AMCORE Bank, N.A., Rockford, or any successor thereto.
"Worker Member" means any employee of the Company.
"Year of Service" shall have the same meaning as given to such term in
subsection 3.1.
SECTION 17
AMENDMENT AND TERMINATION
Section 17.1. Amendment. While the Company expects and intends to
continue the Plan, the Company reserves the right to amend the Plan at any
time, provided, that no amendment shall reduce a Participant's benefits to
less than the amount he would be entitled to receive if he had resigned from
the employ of all of the Company on the day of the amendment. Notwithstanding
this Section 17.1, with respect to officers of the Company who are subject to
Section 16 of the Securities Exchange Act of 1934, any provisions relating to
their participation in the Plan or the price, timing and amount of
contributions or allocations of Company Stock to their Accounts may not be
amended more frequently than once every six months, other than to comply with
any amendments required under the Code, ERISA or any regulations and rulings
thereunder.
Section 17.2. Termination. The Plan will terminate as to all Worker
Members on any day specified by the Company. The Plan will terminate as to
the Company on the first to occur of the following:
(a) the date it is terminated by the Company;
(b) the date that the Company completely discontinues its
contributions under the Plan;
(c) the date that the Company is judicially declared bankrupt or
insolvent; or
(d) the dissolution, merger, consolidation or reorganization of
the Company, or the sale by the Company of all or substantially all of
its assets, except that, subject to the provisions of subsection 17.3,
in any such event arrangements may be made whereby the Plan will be
continued by any successor to the Company or any purchaser of all or
substantially all of the Company's assets, in which case the successor
or purchaser will be substituted for the Company under the Plan.
Section 17.3. Merger and Consolidation of Plan, Transfer of Plan Assets.
In the case of any merger or consolidation with, or transfer of assets and
liabilities to, any other plan, provisions shall be made so that each affected
Participant in the Plan on the date thereof (if the Plan then terminated)
would receive a benefit immediately after the merger, consolidation or
transfer which is equal to or greater than the benefit he would have been
entitled to receive immediately prior to the merger, consolidation or transfer
if the Plan had then terminated.
Section 17.4. Notice of Amendment, Termination or Partial Termination.
Affected Participants and Beneficiaries will be notified of an amendment,
termination or partial termination of the Plan as required by law.
Section 17.5. Vesting and Distribution on Termination and Partial
Termination. On termination of the Plan in accordance with subsection 17.2,
on partial termination of the Plan by operation of law, or in the event of a
complete discontinuance of Company contributions to the Plan, each affected
Participant's benefits will be nonforfeitable. If, on termination or partial
termination of the Plan, a Participant remains in the employ of an Employer or
a Related Company, the amount of his benefits shall be retained in the Trust
until after his termination or employment with all of the Employers and
Related Companies and shall be paid to him in accordance with the provisions
of Section 12. The benefits payable to an affected Participant whose
employment with all of the Employers and Related Companies is terminated
coincident with the termination or partial termination of the Plan (and the
benefits payable to an affected Participant on partial termination of the
Plan) shall be paid to him in accordance with the provisions of Section 12.
All appropriate accounting provisions of the Plan will continue to apply until
the benefits of all affected Participants have been distributed to them.
Section 17.6. Limitation on Right to Amend. No amendment shall be made
to this Plan which shall:
(a) Change the vesting schedule under the Plan if the
nonforfeitable percentage of the accrued benefit derived from Company
Contributions (determined as of the later of the date such amendment is
adopted or the date such amendment becomes effective) of any Participant
is less than such nonforfeitable percentage computed without regard to
such amendment; or
(b) Reduce the accrued benefit of a Participant within the
meaning of Section 411(d)(6) of the Code, except to the extent permitted
under Section 412(c)(8) of the Code.
EXECUTED at Rockford, Illinois this 4th day of November, 1991 to be
effective as indicated herein.
WOODWARD GOVERNOR COMPANY
By: //Vern H.
Cassens//
Its: Senior Vice President and Treasurer
Attest:
//Marsha A. Gaffney//
SUPPLEMENT A
TO
WOODWARD GOVERNOR COMPANY DEFERRED PROFIT SHARING PLAN
(Top-Heavy Status)
Application
A-1. This Supplement A to Woodward Governor
Company Deferred Profit Sharing Plan (the "Plan")
shall be applicable on and after the date on which
the Plan becomes Top-Heavy (as described in
subsection A-4).
Definitions
A-2. Unless the context clearly implies or
indicates the contrary, a word, term or phrase used
or defined in the Plan is similarly used or defined
for purposes of this Supplement A.
Affected Participant
A-3. For purposes of this Supplement A, the term
"Affected Participant" means each Participant who
is employed by the Company or a Related Company
during any Plan Year for which the Plan is Top-
Heavy, provided that such term shall include any
Worker Member of the Company who is not a
Participant solely because he failed to make the
contributions required under subsection 4.1 for
that year.
Top-Heavy
A-4. The Plan shall be "Top-Heavy" for any Plan
Year if, as of the Determination Date for that year
(as described in paragraph (a) next below), the
present value of the benefits attributable to Key
Worker Members (as defined in subsection A-5) under
all Aggregation Plans (as defined in subsection A-
8) exceeds 60% of the present value of all benefits
under such plans. The foregoing determination
shall be made in accordance with the provisions of
section 416 of the Code. Subject to the preceding
sentence:
(a) The Determination Date with respect to any
plan for purposes of determining Top-Heavy
status for any plan year of that plan shall
be the last day of the preceding plan year
or, in the case of the first plan year of
that plan, the last day of that year. The
present value of benefits as of any
Determination Date shall be determined as of
the accounting date or valuation date
coincident with or next preceding the
Determination Date. If the plan years of all
Aggregation Plans do not coincide, the Top-
Heavy status of the Plan on any Determination
Date shall be determined by aggregating the
present value of Plan benefits on that date
with the present value of the benefits under
each other Aggregation Plan determined as of
the Determination Date of such other
Aggregation Plan which occurs in the same
calendar year as the Plan's Determination
Date.
(b) Benefits under any plan as of any
Determination Date shall include the amount
of any distributions from that plan made
during the plan year which includes the
Determination Date or during any of the
preceding four plan years, but shall not
include any amounts attributable to Worker
Member contributions which are deductible
under section 219 of the Code, any amounts
attributable to Worker Member initiated
rollovers or transfers made after
December 31, 1983 from a plan maintained by
an unrelated company, or, in case of a
defined contribution plan, any amounts
attributable to contributions made after the
Determination Date unless such contributions
are required by section 412 of, the Code or
are made for the plan's first plan year.
(c) Benefits attributable to a participant shall
include benefits paid or payable to a
beneficiary of the participant, but shall not
include benefits paid or payable to any
participant who has not performed services
for the Company or Related Company during any
of the five plan years ending on the
applicable Determination Date.
(d) The accrued benefit of a Non-Key Worker
Member shall be determined under the method
which is used for accrual purposes for all
plans of the Company and Related Companies;
or, if there is not such method, as if the
benefit accrued not more rapidly than the
slowest accrual rate permitted under section
411(b)(1)(c) of the Code.
(e) The present value of benefits under all
defined benefit plans shall be determined on
the basis of a 6% per annum interest factor
and the 1984 Unisex Pension Mortality Table,
with a one-year setback.
Key Worker Member
A-5. The term "Key Worker Member" means a Worker
Member or deceased Worker Member (or beneficiary of
such deceased Worker Member) who is a Key Worker
Member within the meaning ascribed to that term by
section 416(i) of the Code. Subject to the
preceding sentence, the term Key Worker Member
includes any Worker Member or deceased Worker
Member (or beneficiary of such deceased Worker
Member) who at any time during the plan year which
includes the Determination Date or during any of
the four preceding plan years was:
(a) an officer of the Company or Related Company
with Compensation in excess of 50 percent of
the amount in effect under section
415(b)(1)(A) of the Code for the calendar
year in which that year ends; provided,
however, that the maximum number of Worker
Members who shall be considered Key Worker
Members under this paragraph (a) shall be the
lesser of 50 or 10% of the total number of
Worker Members of the Company and the Related
Companies, disregarding excludable Worker
Members under Code section 414(q)(8);
(b) one of the 10 employees owning the largest
interests in the Company or any Related
Company (disregarding any ownership interest
which is less than 1/2 of one percent),
excluding any Worker Member for any plan year
whose Compensation did not exceed the
applicable amount in effect under section
415(c)(1)(A) of the Code for the calendar
year in which that year ends;
(c) a 5% owner of the Company or of any Related
Company; or
(d) a 1% owner of the Company or any Related
Company having Compensation in excess of
$150,000.
Compensation
A-6. The term "Compensation" for purposes of this
Supplement A generally means compensation within
the meaning of section 415(c)(3) for that year.
However, for Plan Years beginning on or after
January 1, 1989, solely for purposes of determining
who is a Key Worker Member, the term "Compensation"
means compensation as defined in Code section
414(q)(7).
Non-Key Worker Member
A-7. The term "Non-Key Worker Member" means
any Worker Member (or beneficiary of a deceased
Worker Member) who is not a Key Worker Member.
Aggregation Plan
A-8. The term "Aggregation Plan" means the Plan
and each other retirement plan maintained by the
Company or Related Company which is qualified under
section 401(a) of the Code and which:
(a) during the plan year which includes the
applicable Determination Date, or during any
of the preceding four plan years, includes a
Key Worker Member as a participant;
(b) during the plan year which includes the
applicable Determination Date or, during any
of the preceding four plan years, enables the
Plan or any plan in which a Key Worker Member
participates to meet the requirements of
section 401(a)(4) or 410 of the Code; or
(c) at the election of the Company, would meet
the requirements of sections 401(a)(4) and
410 if it were considered together with the
Plan and all other plans described in
paragraphs (a) and (b) next above.
Required Aggregation
Plan
A-9. The term "Required Aggregation Plan" means a
plan described in either paragraph (a) or (b) of
subsection A-8.
Permissive Aggregation
Plan
A-10. The term "Permissive Aggregation Plan" means
a plan described in paragraph (c) of subsection A-
8.
Minimum Contribution
A-11. For any Plan Year during which the Plan is
Top-Heavy, the minimum amount of Company
contributions, excluding elective contributions as
defined in Code section 401(k) allocated to the
Accounts of each Affected Participant who is
employed by the Company or Related Company on the
last day of that year, who is not a Key Worker
Member and who is not entitled to a minimum benefit
for that year under any defined benefit Aggregation
Plan which is Top-Heavy shall, when expressed as a
percentage, of the Affected Participant's
Compensation, be equal to the lesser of:
(a) 3%; or
(b) the percentage at which Company contributions
(including Company contributions made
pursuant to a cash or deferred arrangement)
are allocated to the Accounts of the Key
Worker Member for whom such percentage (when
expressed as a percentage of Compensation not
in excess of $200,000) is greatest.
For purposes of the preceding sentence,
compensation earned while a member of a group of
Worker Members to whom the Plan has not been
extended shall be disregarded. Paragraph (b) next
above shall not be applicable for any Plan Year if
the Plan enables a defined benefit plan described
in paragraph A-8(a) or A-8(b) to meet the
requirements of section 401(a)(4) or 410 for that
year. Company contributions for any Plan Year
during which the Plan is Top-Heavy shall be
allocated first to Non-Key Worker Members until the
requirements of this subsection A-11 have been met
and, to the extent necessary to comply with the
provisions of this subsection A-11, additional
contributions shall be required of the Company.
Aggregate Benefit Limit
A-12. (a) Subject to the provisions of
paragraph (b) of this subsection A-12, for any Plan
Year during which the Plan is Top-Heavy, paragraphs
(2)(B) and (3)(B) of section 415(e) of the Code
shall be applied by substituting "1.0" for "1.25".
(b) If for any Plan Year the Plan would not be
Top-Heavy under subsection A-4 if "90%" were
substituted for "60%" as it appears in that
subsection, paragraph A-11 shall be applied
by substituting "4%" for "3%" as it appears
in that subsection, and paragraph (a) of this
subsection A-12 shall not apply.
SUPPLEMENT B
TO THE
WOODWARD GOVERNOR COMPANY
DEFERRED PROFIT SHARING PLAN
(For Worker Members Who, on January 31, 1991,
Were Employed by Bauer Aerospace, Inc.)
With respect to Worker Members who were employed by Bauer Aerospace,
Inc. on January 31, 1991 ("Bauer Worker Members"), Section 16 and subsection
2.1 shall be changed as follows:
1. With respect to Section 16, Frequently Used Definitions, the
following sentence shall be added to the end of the definition of Eligible
Wages:
Notwithstanding the above, for the Plan Years ending September 30,
1991 and 1992, a Bauer Worker Member's Eligible Wages for purposes of
calculating his Cash Profit Sharing contribution shall equal one-third
and two-thirds, respectively, of the amount which would otherwise have
been calculated but for this provision and for purposes of calculating
his Deferred Profit Sharing Contribution, a Bauer Participant's Eligible
Wages shall equal $0 for the Plan Years ending September 30, 1991 and
1992.
2. With respect to participation of Bauer Participants in the Plan,
the following provision shall be added to subsection 2.1:
For purposes of receiving and deferring a Cash Profit Sharing
Contribution, a Bauer Worker Member shall become a Participant in the
Plan on February 1, 1991. For purposes of making Payroll Deferrals, a
Bauer Worker Member shall become a Participant in the Plan on January 1,
1992. For purposes of receiving a Deferred Profit Sharing Contribution,
a Bauer Worker Member shall become a Participant in the Plan on
February 1, 1993.
0000406
A-1