SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 29)
Woodward Governor Company
(Name of Issuer)
Common Stock
(Title of Class of Securities)
980745 10 3
(CUSIP Number)
Stephen P. Carter, 5001 North Second Street,
Rockford, IL 61125-7001 (815 877-7441)
(Name, Address and Telephone Number of
Person Authorized to Receive Notices and Communications)
August 31, 1997
(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 .
* The remainder of this cover page shall be filled out for a reporting
person's 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).
<PAGE>
CUSIP No. 980745 10 3
_______________________________________________________________________________
|
1) Name of Reporting Persons S.S. or | WOODWARD GOVERNOR COMPANY
I.R.S. Identification Nos. of Above | Member Investment and Stock
Persons | Ownership Plan
| 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 | 2,056,083
Shares | |
Beneficially | |
Owned by Each | 8) Shared Voting Power|
Reporting Person | |
With | |
| 9) Sole Dispositive | 2,056,083
| Power |
| |
|10) Shared Dispositive |
| Power |
|
11) Aggregate Amount Beneficially Owned | 2,056,083
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) | 18.0
|
|
14) Type of Reporting Person (See | EP
Instructions) |
|
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NUMBER 29 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 28 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 Member Investment and
Stock Ownership Plan.
A four for one stock split took place on February 7, 1997, to
holders of record at the close of business on January 23, 1997.
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 Member Investment and
Stock Ownership Plan as amended.
Item 1. Security and Issuer.
This statement relates to the Common Stock, $0.01563 par value, of
Woodward Governor Company (the "Company"), 5001 North Second
Street, Rockford, Illinois 61125-7001, 11,446,966 shares of which
are outstanding as of August 31, 1997.
Information relating to executive officers of Woodward Governor
Company as of August 31, 1997 is included in Exhibit A.
Item 2. Identity and Background.
This statement is being filed with respect to the Woodward
Governor Company Member Investment and Stock Ownership 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.
<PAGE>
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 August 31, 1997, the Plan owned 2,056,083 shares of Common
Stock. This represents 18.0 percent of the total outstanding
shares. In addition, there are shares held by related parties.
The Woodward Governor Company Charitable Trust owned 193,536
shares (1.7%) at August 31, 1997. Voting control of this stock
is by an investment committee for the Charitable Trust. Mr. Vern
H. Cassens, former Senior Vice President and Chief Financial
Officer of the Company, is an Investment Committee member for the
Charitable Trust and is 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 Member Investment and
Stock Ownership 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 Member Investment and
Stock Ownership Plan, Directors and Executive Officers of
Woodward Governor Company;
Exhibit B - Woodward Governor Company Member Investment and Stock
Ownership 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
Signature
Stephen P. Carter
Vice President, Chief Financial Officer and Treasurer
Woodward Governor Company
_10-14-97______________________________
Date
<PAGE>
Exhibits to Schedule 13D
Exhibit A - Investment Committee and Administrative
Committee members of the Woodward
Governor Company Member Investment
and Stock Ownership Plan, Directors
and Executive Officers of Woodward
Governor Company
Exhibit B - Woodward Governor Company Member
Investment and Stock Ownership Plan,
as amended.
<PAGE>
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) 12035 Douglas Street
Omaha, NE 68154
(c) Retired Vice President of Development
Father Flanagans Boy's Home
Director of Woodward Governor Company (1981 through present)
(d) Prior to retiring in December, 1995 held an executive management
position with Father Flanagans Boy's Home since February 1993.
(e) Shares: 6,524
Investment Committee Member
(a) Vern H. Cassens
(b) Woodward Governor Company
5001 North Second Street
Rockford, Illinois 61125-7001
(c) Retired Senior Vice President, Chief Financial Officer and
Director Woodward Governor Company
(d) Prior to retiring in January, 1997 employed by the Woodward
Governor Company in management positions.
(e) Shares: as noted below
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 1,500 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.
<PAGE>
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 3,576 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 the sole trustee of the Lavern H. Cassens
Trust dated May 14, 1997. This trust holds 7,252 shares of the
company's stock.
N. Jean Cassens, wife, is sole trustee of the N. Jean Cassens
trust dated May 14, 1997. This trust holds 16,000 shares of
the company's stock.
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: 8,002
In addition, Lois G. Leum, wife, is the beneficial owner of
8,000 shares.
Investment Committee Member
(a) Jay Evans
(b) Amcore Financial, Inc.
501 Seventh Street
Rockford, IL 61104
(c) President and Chief Investment Officer
Amcore Capital 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 Capital
Management, Inc.
(e) Shares: 0
<PAGE>
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: 5,500
2. (a) Karen Brown
(b) Shares: 592
3. (a) Rocky Garst
(b) Shares: 2148
4. (a) Wayne Johnson
(b) Shares: 7,272
5. (a) Jeff Huber
(b) Shares: 612
6. (a) Mike Matheson
(b) Shares: 2,500
7. (a) Michael Reitmeir
(b) Shares: 2,044
8. (a) Al Santos
(b) Shares: 1,248
9. (a) Leroy Shaffer
(b) Shares: 1,188
10. (a) Roger Smit
(b) Shares: 1,248
11. (a) Donna J. Spires
(b) Shares: 3,584
12. (a) Rita Versendaal
(b) Shares: 340
<PAGE>
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, Chief Executive Officer and Director
Woodward Governor Company
(d) During the past five years, employed by the Woodward Governor
Company in management positions.
(e) Shares 9,084
Director
(a) Mark E. Leum (See Investment Committee)
Director
(a) Vern H. Cassens (See Investment Committee)
Vice President, Chief Financial Officer and Treasurer
(a) Stephen P. Carter
(b) Woodward Governor Company
5001 North Second Street
Rockford, Illinois 61125-7001
(c) Vice President, Chief Financial Officer and Tresurer
Woodward Governor Company
(d) During the past five years employed by the Woodward Governor
Company in management positions.
(e) Shares: 1,292
<PAGE>
Vice President
(a) Charles F. Kovac
(b) Woodward Governor Company
1000 East Drake Street
Fort Collins, CO 80522-1519
(c) Vice President - Industrial Controls
Woodward Governor Company
(d) During the past five years employed by the Woodward Governor
Company in management positions.
(e) Shares: 1,128
Vice President
(a) C. Phillip Turner
(b) Woodward Governor Company
5001 North Second Street
Rockford, Illinois 61125-7001
(c) Vice President - Aircraft Controls Group
Woodward Governor Company
(d) During the past five years, employed by the Woodward Governor
Company in management positions.
(e) Shares: 24,776
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:
June 1991 through present:
Corporate Secretary
(e) Shares: 5,324
In addition, David W. Manning, husband, is the beneficial owner of
an IRA account with 1,352 shares.
<PAGE>
Director
(a) J. Grant Beadle
(b) 1432 Scott Ave.
Winnetka, Illinois 60093
(c) Retired Chairman of the Board and Chief Executive Officer
Union Special Corporation
Director of Woodward Governor Company (May 1988 through present)
(d) Prior to retiring in May, 1991 was Chairman of the Board and Chief
Executive Officer of Union Special Corporation
(e) Shares: 5,956
Director
(a) Thomas W. Heenan
(b) Chapman and Cutler
111 W. Monroe Street
Chicago, Illinois 60603
(c) Retired Partner, Chapman and Cutler Law Firm
Director of Woodward Governor Company
(January 1986 through present)
(d) Prior to retiring in February, 1996 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) 8,000 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) 800 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) 800 Shares
Chapman and Cutler Retirement Trust for the benefit of Thomas W.
Heenan (Thomas W. Heenan has sole investment authority) 4,000
Shares
Thomas W. Heenan has sole investment authority of 5,236 shares.
Director
(a) J. Peter Jeffrey (See Investment Committee)
<PAGE>
Director
(a) Lawrence E. Gloyd
(b) Clarcor
2323 Sixth Street
Rockford, IL 61104
(c) Chairman and Chief Executive Officer
Clarcor
Director Woodward Governor Company (June 1994 through present)
(d) During the past five years, employed by Clarcor in the following
capacities:
March 1991 through June 30, 1995:
Chairman, President and Chief Executive Officer
June 1995 through Present:
Chairman and Chief Executive Officer
(e) Shares: 6,092
Director
(a) Carl J. Dargene
(b) AMCORE Financial, Inc.
501 Seventh Street
Rockford, Illinois 61104
(c) Chairman of the Board
AMCORE Financial, Inc.
Director of Woodward Governor Company (1990 through present)
(d) During the past five years, employed by AMCORE Financial, Inc. in
the following capacities:
February, 1986 - January, 1996:
President and Chief Executive Officer
January, 1996 through Present:
Chairman of the Board
(e) Shares: 8,436
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: 6,036
<PAGE>
January 4, 1996
WOODWARD GOVERNOR COMPANY
MEMBER INVESTMENT AND STOCK OWNERSHIP PLAN
(As Amended and Restated
Effective as of January 1, 1996)
Chapman and Cutler
Chicago, Illinois
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1 GENERAL 1
Section 1.1. History, Purpose and Effective Date 1
Section 1.2. Related Companies 2
Section 1.3. Plan Administration, Trust Agreement 2
Section 1.4. Plan Year 3
Section 1.5. Applicable Laws 3
Section 1.6. Gender and Number 3
Section 1.7. Notices 3
Section 1.8. Evidence 3
Section 1.9. Action by the Company 3
Section 1.10. Reversion to the Company 3
Section 1.11. Prior Elections 3
Section 1.12. Restrictions on Participant Elections 4
SECTION 2 PARTICIPATION 4
Section 2.1. Participation 4
Section 2.2. Participation upon Reemployment 4
Section 2.3. Participation Not Contract of Employment 5
SECTION 3 SERVICE 5
Section 3.1. Year of Service 5
Section 3.2. Hour of Service 6
Section 3.3. One-Year Break-in-Service 7
Section 3.4. Leased Worker Members 7
SECTION 4 PAYROLL DEFERRALS 8
Section 4.1. Payroll Deferrals 8
Section 4.2. Eligible Biweekly Pay Adjustments and
Payment of Payroll Deferrals 9
<PAGE>
Section 4.3. Election to Vary, Suspend or Change Tax
Treatment of Payroll Deferrals 9
SECTION 5 CONTRIBUTIONS 9
Section 5.1. Payroll Deferral Contributions 9
Section 5.2. Profit Sharing Contributions 9
Section 5.3. Cash Profit Sharing Contributions 10
Section 5.4. Company Matching Contributions 10
Section 5.5. Company Contribution Limitation 10
Section 5.6. Treatment as Deferral Contribution 11
SECTION 6 ROLLOVERS AND TRANSFERS FROM RELATED PLANS 11
Section 6.1. Rollover Contributions 11
Section 6.2. Transfers from Other Plans 11
Section 6.3. Interest in Plan 12
Section 6.4. Direct Rollovers 12
Section 6.5. Definitions 12
SECTION 7 PARTICIPANT ACCOUNTS 13
SECTION 8 INVESTMENT FUNDS UNDER THE MEMBER INVESTMENT PLAN 13
Section 8.1 Investment Accounts 13
Section 8.2. Investment Directions and Transfers
Between Investment Funds 14
Section 8.3. Statement of Accounts 15
SECTION 9 WOODWARD STOCK PLAN 15
Section 9.1. Establishment of Woodward Stock Plan 15
Section 9.2. Dividends on Allocated Company Stock 16
Section 9.3. Acquisitions Loans 16
Section 9.4. Transfer from the Woodward Stock Plan 18
Section 9.5 Fair Market Value 19
<PAGE>
SECTION 10 LIMITATIONS ON COMPENSATION, CONTRIBUTIONS AND
ALLOCATIONS 19
Section 10.1. Compensation 19
Section 10.2. Limitations on Annual Additions 20
Section 10.3. Combined Plan Limitation 22
Section 10.4. Reduction of Contribution Rates 22
Section 10.5. Excess Annual Additions 22
Section 10.6. Limitations under Section 402(g) of the
Code 23
Section 10.7. Disposition of Excess Elective Deferrals 23
Section 10.8. Limitations under Section 401(k)(3) of
the Code 23
Section 10.9. Disposition of Excess Deferral
Contributions 25
Section 10.10. Highly Compensated Worker Member 25
Section 10.11. Limitations under Code Section 401(m)(2) 26
Section 10.12. Disposition of Excess Matching
Contributions 28
Section 10.13. Multiple Use of Alternative Limitation 28
SECTION 11 PRE-TERMINATION WITHDRAWALS AND LOANS 29
Section 11.1. Pre-Termination Withdrawals 29
Section 11.2. Hardship 30
Section 11.3. Loans to Participants 31
SECTION 12 DISTRIBUTION ON TERMINATION 33
Section 12.1. Vesting of Account Balances 33
Section 12.2. Distribution Date 33
Section 12.3. Limits on Commencement and Duration of
Distributions 34
Section 12.4. Form of Distribution on Termination of
Employment 35
Section 12.5. Distributions to Persons under
Disability 36
Section 12.6. Interests Not Transferable 37
Section 12.7. Absence of Guaranty 37
Section 12.8. Designation of Beneficiary 37
Section 12.9. Missing Recipients 38
Section 12.10. Put Option 39
SECTION 13 VOTING OF COMPANY STOCK 40
<PAGE>
SECTION 14 THE ADMINISTRATIVE COMMITTEE 41
Section 14.1. Membership 41
Section 14.2. Majority Action 43
Section 14.3. Rights, Powers and Duties 43
Section 14.4. Application of Rules 44
Section 14.5. Remuneration and Expenses 44
Section 14.6. Indemnification of the Committee 44
Section 14.7. Exercise of Committee's Duties 44
Section 14.8. Information to Be Furnished to Committee 45
Section 14.9. Resignation or Removal of Committee
Member 45
Section 14.10. Appointment of Successor Committee
Members 45
SECTION 15 THE INVESTMENT COMMITTEE 46
Section 15.1. Establishment of Investment Committee 46
Section 15.2. Majority Action 46
Section 15.3. Powers of the Investment Committee 46
Section 15.4. Duties of the Investment Committee 47
SECTION 16 FREQUENTLY USED DEFINITIONS 47
SECTION 17 AMENDMENT AND TERMINATION 54
Section 17.1. Amendment 54
Section 17.2. Termination 54
Section 17.3. Merger and Consolidation of Plan,
Transfer of Plan Assets 55
Section 17.4. Notice of Amendment, Termination or
Partial Termination 55
Section 17.5. Vesting and Distribution on Termination
and Partial Termination 55
Section 17.6. Limitation on Right to Amend 56
Signature 56
SUPPLEMENT A - Top-Heavy Status
<PAGE>
WOODWARD GOVERNOR COMPANY
MEMBER INVESTMENT AND STOCK OWNERSHIP PLAN
(As Amended and Restated Effective as of January 1, 1996)
SECTION 1
GENERAL
Section 1.1. History, Purpose and Effective Date. The Woodward
Governor Company Deferred Profit Sharing Plan which, effective January
1, 1996, has been renamed the Woodward Governor Company Member
Investment and Stock Ownership Plan (the "Plan"), was first established
by Woodward Governor Company (the "Company") effective as of
September 30, 1952. The following provisions constitute an amendment,
restatement and continuation of the Plan as in effect immediately prior
to May 1, 1995, the "Effective Date" of the Plan (unless otherwise
indicated), as set forth herein. The Plan consists of a profit sharing
plan and cash or deferred arrangement ("Member Investment 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.
<PAGE>
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,
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. For periods prior to October 1, 1995,
the term "Plan Year" means the 12-month period beginning on each
October 1 and ending on each September 30. For periods after September
30, 1995, the term "Plan Year" means the period beginning on October 1,
1995 and ending on December 31, 1995, and thereafter, the 12-month
period beginning on each January 1 and ending on the following
December 31.
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.
<PAGE>
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.
<PAGE>
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. As of the Effective Date each
Worker Member, including Worker Members hired on a part-time basis,
shall become a Participant in the Plan upon completion of ninety days of
service.
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, 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
<PAGE>
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.
Notwithstanding any other provisions of this Section 3.1, a Worker
Member or Participant shall be credited with one year of Service for the
Plan Year ending December 31, 1995 if he shall have completed 1,000-
hours of service during the twelve-consecutive month period ending on
December 31, 1995.
<PAGE>
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
<PAGE>
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. Notwithstanding any other provisions of the Plan, a Worker
Member or Participant shall not incur any One Year Break in Service
during the period beginning October 1, 1995 and ending December 31, 1995
if the Worker Member or Participant completes more than 125 Hours of
Service during such period, but will incur a One Year Break in Service
for that period if he completes less than 125 Hours of Service during
such period.
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
<PAGE>
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 work force 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 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.
<PAGE>
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 Fiscal 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 Cash Profit Sharing
Contributions (the term "Cash Profit Sharing Contribution" shall include
incentive compensation for all purposes of the Plan) and Company
Matching Contributions (each as more fully described below). All Profit
Sharing Contributions shall be remitted by the Company either during the
Fiscal Year or as soon as practicable following the close of the Fiscal
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.
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 Fiscal Year, if any. Prior to the payment of the
Cash Profit Sharing Contribution, which will be made by the Company as
soon as practical after the end of the Fiscal Year, 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
<PAGE>
hundred percent (100%) (in 10% increments) of his share of the Cash
Profit Sharing Contribution for the Fiscal 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, will be paid
to the Participant in cash. 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. Company Matching 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 a Company
Matching Contribution equal to fifty percent (50%) of the Participant's
Payroll Deferrals made pursuant to Section 4.1 above (excluding Payroll
Deferrals in excess of six percent (6%) of the Participant's Eligible
Biweekly Pay). The Company Matching Contribution shall be credited to
the member investment portion of the Plan in accordance with Section 8
below and shall be invested in the same proportion that the
Participant's Payroll Deferrals are invested.
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 Fiscal 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 Fiscal 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
<PAGE>
Plan, are sufficient to enable the Trust to make the payments,
prepayments and other amounts due and payable under such Acquisition
Loan.
Section 5.6. Treatment as Deferral Contribution. The Cash Profit
Sharing Contribution that a Participant elects to defer and Payroll
Deferrals shall both be treated as and collectively referred to as
either "Deferral Contributions" or "Deferrals."
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 distribution
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 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 Plan in 10% 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 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,
<PAGE>
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 6.4. Direct Rollovers. Subsections 6.4 and 6.5 apply to
distributions made on or after January 1, 1993. Notwithstanding any
provision of the Plan to the contrary that would otherwise limit a
distributee's election under subsections 6.4 and 6.5, a distributee may
elect, at the time and in the manner prescribed by the plan
administrator, to have any portion of an eligible rollover distribution
paid directly to an eligible retirement plan specified by the
distributee in a direct rollover.
Section 6.5. Definitions. (a) Eligible rollover distribution:
An eligible rollover distribution is any distribution of all or any
portion of the balance to the credit of the distributee, except that an
eligible rollover distribution does not include: any distribution that
is one of a series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of the
distributee and the distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent
such distribution is required under Section 401(a)(9) of the Code; and
the portion of any distribution that is not includible in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
(b) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in Section 408(a) of the Code,
an individual retirement annuity described in Section 408(b) of the
Code, an annuity plan described in Section 403(a) of the Code, or a
qualified trust described in Section 401(a) of the Code, that accepts
the distributee's eligible rollover distribution. However, in the case
of an eligible rollover distribution to the Surviving Spouse, an
eligible retirement plan is an individual retirement account or
individual retirement annuity.
(c) Distributee: A distributee includes a Worker Member or
former Worker Member. In addition, the Worker Member's or former Worker
Member's Surviving Spouse and the Worker Member's or former Worker
Member's Spouse or former Spouse who is the alternate payee under a
<PAGE>
qualified domestic relations order, as defined in Section 414(p) of the
Code, are distributees with regard to the interest of the Spouse or
former Spouse.
(d) Direct rollover: A direct rollover is a payment by the Plan
to the eligible retirement plan specified by the distributee.
SECTION 7
PARTICIPANT ACCOUNTS
All income, profits, recoveries, contributions, and any and all
monies, securities and properties of any kind at any time received or
held by the Trustee shall be held in a single Trust. For accounting
purposes, the Committee shall establish and maintain certain Accounts
for each Participant, to which shall be added the Participant's share of
Profit Sharing Contributions and Payroll Deferrals, together with all
earnings thereon.
SECTION 8
INVESTMENT FUNDS UNDER THE
MEMBER INVESTMENT PLAN
Section 8.1 Investment Accounts. A Participant shall have the right
hereunder to direct the Trustees with respect to the manner in which the
Participant wishes to have his Accounts invested. Subject to the
restrictions set forth in subsection 8.2, a Participant may direct that
investments be made in the following funds:
a. Money Market Fund. Amounts allocated to the Money Market Fund
will be invested in assets with an average maturity ranging
primarily from 30 to 60 days offering low risk of principal.
b. Short-Term Bond Fund. Amounts allocated to the Short-Term Bond
Fund will be invested primarily in investment grade corporate
bonds with a 2 to 3 year average maturity. This fund is oriented
to help preserve principal.
<PAGE>
c. Intermediate-Term Bond Fund. Amounts allocated to the
Intermediate-Term Bond Fund will be invested primarily in
investment grade corporate bonds with a 5 to 10 year average
maturity. This fund will exhibit moderate exposure to the price
volatility caused by changes in interest rates.
d. Balanced Fund. Amounts allocated to the Balanced Fund will be
invested in equities and fixed income securities.
e. S&P 500 Index Fund. Amounts allocated to the S&P 500 Index Fund
will be invested in equities. The Fund attempts to provide
investment results that parallel the performance of the Standard &
Poor's 500 Composite Stock Price Index.
f. International Stock Fund. Amounts allocated to the
International Stock Fund will be invested in common stocks of
companies based outside the United States.
g. Small "CAP" Stock Fund. Amounts allocated to the Small "CAP"
Stock Fund will be invested primarily in common stocks of small
and emerging growth companies.
All charges and expenses incurred in connection with the purchase and
sale of investments for a fund shall be charged to such fund.
Prior to the Effective Date, the Plan had Member Savings Accounts
to reflect voluntary after-tax contributions made prior to January 1,
1987. The Plan also had a Loan and Withdrawal Fund (herein referred to
as the "Loan Fund") into which Participants may have elected to deposit
a portion of their Deferral Contributions. The Investment Committee was
responsible for investing the assets in the Loan Fund, with Woodward
Stock being among the investments selected. At age 50, Participants had
the option to transfer amounts from the Loan Fund to the Member
Investment Plan.
As of April 1, 1995, the Loan Fund shall be eliminated and all
Loan Fund assets will be allocated proportionally to Participant
Accounts. All Woodward Stock held in the Loan Fund shall be transferred
to the Woodward Stock Plan and the remaining assets will be transferred
to the Member Investment Plan. As of February 28, 1995, the Members
<PAGE>
Savings Accounts were eliminated with the voluntary after-tax
contributions distributed to Participants. With respect to the earnings
on such account, Participants had the option of receiving a
distribution, rolling such amounts into an individual retirement account
or transferring such amounts to the Member Investment Plan.
Section 8.2. Investment Directions and Transfers Between
Investment Funds. 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 the percentages (in multiples of
10%) 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 by telephone to Vanguard on any date the New York
Stock Exchange is open for business. Changes will be effective the day
of the telephone call if the call is received prior to 3:00 p.m. Central
Time. Calls received after 3:00 p.m. Central Time will be effective the
next day the New York Stock Exchange is open for business. Such change
shall be limited to the investment choices described in subsection 8.1,
or any other choices as the Trustee at the direction of the Investment
Committee may from time to time permit.
Section 8.3. Statement of Accounts. As soon as practicable after
the last day of each Plan Year quarter, 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.
Subject to Section 5.5 of the Plan, for each Fiscal Year the Company
shall contribute to the Woodward Stock Plan on behalf of each
Participant who has completed an Initial Period of Service cash equal
to, or Company Stock having an aggregate fair market value on the last
<PAGE>
day of the Fiscal Year equal to, five percent (5%) of each Participant's
Eligible Wages or such other amount as determined by the Board of
Directors of the Company. 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 April 1, 1995,
Company Stock from the Loan Fund shall be credited to each Participant's
Woodward Stock Plan account balance.
A Participant who is employed at the Avon, Connecticut facility or
by HSC Controls Inc. (other than those Worker Members transferred to the
Avon, Connecticut facility or HSC Controls Inc. from another Woodward
Governor Company facility) shall not be eligible to receive a
contribution under this Section 9.
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 Fiscal 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
<PAGE>
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 Woodward Stock Plan Contribution for the Fiscal 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, 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 Plan up to 10 percent for each year the age of the
<PAGE>
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 and shall
also be reduced by the amount of Woodward Stock attributable to
transfers from the Loan Fund. 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 Fiscal Year,
provided, however, 50% shall be substituted for 25% beginning with
the Fiscal 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) For purposes of this subsection, the term "Qualified
Participant" means any Worker Member who has attained at least age
50.
(d) 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 Fiscal Year in which the Participant
becomes a Qualified Participant, and the 90th day following each
subsequent Fiscal Year.
(e) Notwithstanding the above, at the end of the Fiscal Year
following attainment of age 50 and each subsequent Fiscal Year
thereafter, a Participant may transfer to the Member Investment
Plan one half or all of the Company Stock attributable to
transfers from the Loan Fund, which amount shall be invested in
accordance with the Participant's most recent investment election
under Section 8.1. If a Participant elects to transfer one half
<PAGE>
of the Company Stock attributable to transfers from the Loan Fund,
then any subsequent transfer election must include the remainder
of the Company Stock attributable to transfers from the Loan Fund.
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 price
quoted by an independent dealer of such stock on the most recent trading
day for which records are available.
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 beginning before January 1,
1994. "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 of the Code, as modified by section
415(h) of the Code.
<PAGE>
In addition to other applicable limitations set forth in the Plan,
and notwithstanding any other provision of the Plan to the contrary, for
Plan Years beginning on or after January 1, 1994, the annual
compensation of each Worker Member taken into account under the Plan
shall not exceed the OBRA '93 annual compensation limit. The OBRA '93
annual compensation limit is $150,000, as adjusted by the Commissioner
for increases in the cost of living in accordance with
section 401(a)(17)(B) of the Internal Revenue Code. The cost-of-living
adjustment in effect for a calendar year applies to any period, not
exceeding 12 months, over which compensation is determined
(determination period) beginning in such calendar year. If a
determination period consists of fewer than 12 months, the OBRA '93
annual compensation limit will be multiplied by a fraction, the
numerator of which is the number of months in the determination period,
and the denominator of which is 12.
For Plan Years beginning on or after January 1, 1994, any
reference in this Plan to the limitation under section 401(a)(17) of the
Code shall mean the OBRA '93 annual compensation limit set forth in this
provision.
If compensation for any prior determination period is taken into
account in determining a Worker Member's benefits accruing in the
current Plan Year, the compensation for that prior determination period
is subject to the OBRA '93 annual compensation limit in effect for that
prior determination period. For this purpose, for determination periods
beginning before the first day of the first Plan Year beginning on or
after January 1, 1994, the OBRA '93 annual compensation limit is
$150,000.
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) ($7,500
for the Plan Year beginning October 1, 1995 and ending
December 31, 1995); or
(b) 25 percent of the Participant's Compensation for that Plan
Year.
<PAGE>
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 of the Code, as modified by section 415(h) of the Code.
<PAGE>
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 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: 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. Amounts attributable to Deferral Contributions shall
be returned to the Participant to the extent they would reduce the
Excess Annual Addition. Amounts attributable to Company Contributions
to the Woodward Stock Plan shall be reallocated to other Participants in
the same proportions as Company Contributions to the Woodward Stock Plan
are allocated for that year.
<PAGE>
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. To the
extent there are excess elective deferrals during any taxable year due
to Deferral Contributions under this Plan, such excess shall be returned
to the Participant to the extent it would reduce the excess elective
deferral.
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
<PAGE>
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
section 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.
<PAGE>
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 (d) 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 a Worker Member in category (b), or (d) above
for the current Plan Year who does not fall within at least one such
<PAGE>
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 10.11. Limitations under Code Section 401(m)(2). For any Plan
Year, the difference between (a) the average of the Contribution
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 Contribution Percentage"
and (b) the average of the Contribution Percentages of each eligible
Worker Member who is not Highly Compensated, referred to hereinafter as
the "Non-highly Compensated Group Contribution Percentage", must satisfy
one of the following:
(a) the Highly Compensated Group Contribution Percentage
does not exceed the Non-highly Compensated Group Contribution
Percentage by more than a factor of 1.25; or
(b) the Highly Compensated Group Contribution Percentage
does not exceed the Non-highly Compensated Group Contribution
Percentage by more than both 2 percentage points and a factor of
2.
"Contribution Percentage" for any eligible Worker Member for a Plan Year
shall be determined by dividing the Matching Contributions (described in
subsection 5.4) made by or for him for such year by his Compensation for
the year, subject to the following special rules:
<PAGE>
(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 Matching Contributions are made by or for him
for the year;
(ii) the Contribution Percentage for any Highly Compensated Participant
who is eligible to participate in the Plan and who is also eligible to
participate in one or more other qualified plans maintained by a Company
or a Related Company under which matching contributions (within the
meaning of Section 401(m) of the Code) can be made by or for him shall
be determined as if all such contributions were made by or for him under
the Plan;
(iii) for purposes of determining the Contribution Percentage of a
Highly Compensated Participant who is a 5-percent owner of a Company or
a Related Company or one of the ten most highly-paid Worker Members of
all the Company and Related Companies, the Matching Contributions and
Compensation of such Participant shall include the Matching
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 Contribution
Percentages; and
(iv) in the event that this Plan satisfies the requirements of
Sections 401(m), 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 10.11 shall be applied as if all such plans
were a single plan; provided, however, such plans may be aggregated in
order to satisfy section 401(m) of the Code only if they have the same
Plan Year.
Application of the provisions of this subsection 10.11 shall be made in
accordance with the requirements of Section 401(m) of the Code and the
regulations thereunder.
Section 10.12. Disposition of Excess Matching Contributions. In
the event that the Highly Compensated Group Contribution Percentage for
any Plan Year does not initially satisfy one of the tests set forth in
subsection 10.11, the Committee, notwithstanding any other provision of
the Plan except subsection 10.13, shall distribute Matching
<PAGE>
Contributions (with income allocable thereto, determined in accordance
with Treas. Reg. 1.401(m)-1(e)(3)(ii) utilizing the safe harbor method
for the period between the end of the Plan Year and the date of
distribution) to Highly Compensated Participants by or for whom such
contributions were made, starting with the Participant with the highest
Contribution Percentage and continuing with the Participant with the
next highest Contribution Percentage (and so forth), under the leveling
method of Treas. Reg. 1.401(m)-1(e)(2). The Committee shall make such
distribution no later than the close of the Plan Year following the Plan
Year in which such contributions were contributed.
Section 10.13. Multiple Use of Alternative Limitation.
Notwithstanding the foregoing provisions of this Section 10, if both the
limitation in subsection 10.8 and the limitation in subsection 10.11 are
exceeded for a Plan Year, the sum of the Highly Compensated Group
Deferral Percentage and the Highly Compensated Group Contribution
Percentage may not exceed:
(a) 125% of the greater of the Non-highly Compensated
Group Deferral Percentage or the Non-highly Compensated Group
Contribution Percentage, plus
(b) the sum of 2 and the lesser of the Non-highly
Compensated Group Deferral Percentage or the Non-highly
Compensated Group Contribution Percentage, up to a maximum of 200%
of the lesser of such percentages.
If the foregoing combined limitation is exceeded, the leveling method of
correction prescribed in subsection 10.12 shall be continued until the
combined limitation set forth in this subsection 10.13 is satisfied.
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, 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
<PAGE>
Stock Plan which is credited to any one or more of his Accounts, subject
to the following:
(a) A Participant may withdraw all or any portion of his
unwithdrawn Deferral Contributions and any amount transferred from
the Loan Fund to the Member Investment Plan after attaining age
65.
(b) A Participant may withdraw all or any portion of his
unwithdrawn Deferral Contributions and any amount transferred from
the Loan Fund to the Member Investment Plan which are necessary to
meet a Hardship (as defined in subsection 11.2).
(c) The portion of any Deferral Contribution or any amount
transferred from the Loan Fund to the Member Investment Plan which
is attributable to earnings thereon accrued after September 30,
1989 may not be withdrawn under this Section 11.
(d) No withdrawal may be made from a Participant's Woodward Stock
Plan Account.
(e) 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.
(f) Withdrawals from any Accounts shall occur as of the date that
authorized withdrawal instructions are received by Vanguard from
the Committee and shall be charged against the Participant's
balance under each investment fund as elected by the Participant.
(g) 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.
<PAGE>
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, related educational fees, and room
and board expenses, for the next 12 months of post-secondary
education for the Participant, the Participant's spouse,
children and 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;
<PAGE>
(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. A Participant may request a loan
from the Trust Fund, in accordance with the terms of a written loan
policy which is hereby incorporated as part of the Plan, which shall
include loan application 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. 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 from the investment
funds under the Member Investment Plan; and shall be charged
<PAGE>
against each investment fund on a pro-rata basis. No loan may be
made from a Participant's Woodward Stock Plan 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 (10
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 investment
direction for future contributions. 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 subsections 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.
(h) A Participant may not have more than three loans outstanding at
any one time.
<PAGE>
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
stemming from his employment with the Company or a Related Company
if he is neither a Worker Member in active service nor on leave of
absence on that date.
Notwithstanding the fact that a Participant has attained age 65 and
terminated employment, he may elect to defer his distribution and have
his Distribution Date be the last day of a month prior to April 1 of the
calendar year following the calendar year in which he attains age 70-
1/2.
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
<PAGE>
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:
<PAGE>
(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 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 monthly, quarterly or annual
installments over a period not exceeding 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,
<PAGE>
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 unless otherwise elected by the
Participant.
(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 from the Member Investment Plan shall be
determined by Vanguard using the net asset values of the
Participant's investment fund accounts as of the date that
authorized distribution directions are received by Vanguard from
the Committee, and shall be paid in cash. Distributions
attributable to amounts in the Woodward Stock Plan shall be paid
in Company Stock; provided, however, a Participant may elect to
receive all or part of his distribution in the form of cash; and
provided, further, if a Participant elects to receive installment
payments, his distribution shall be in cash.
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
<PAGE>
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
<PAGE>
(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
<PAGE>
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(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.
<PAGE>
SECTION 13
VOTING OF COMPANY STOCK
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. 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, unless the
Trustee shall determine that to do so would be inconsistent with the
provisions of Title I of ERISA. 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, unless the Trustee shall determine
that to do so would be inconsistent with the provisions of Title I of
ERISA.
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
<PAGE>
remain confidential. The Trustee shall tender or exchange any
unallocated Company Stock in such manner as directed by the
Administrative Committee, unless the Trustee shall determine that to do
so would be inconsistent with the provisions of Title I of ERISA. 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, unless the Trustee
shall determine that to do so would be inconsistent with the provisions
of Title I of ERISA.
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 (treating the Rockford,
Illinois facility and the Rockton, Illinois facility as a single
facility) 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 Fiscal 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.
<PAGE>
(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 1.
(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
<PAGE>
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;
<PAGE>
(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; and
(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
<PAGE>
(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
<PAGE>
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.
<PAGE>
(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" shall mean each day the New York Stock Exchange
is open for business.
"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.
<PAGE>
"Code" shall have the same meaning as is given to such term in
subsection 1.1.
"Committee" shall have the same meaning as is given to such term
in subsection 14.1.
"Company" means Woodward Governor Company.
"Company Matching Contribution" shall have the same meaning as
given to such term in subsection 5.4.
"Company Stock" means shares of common stock of 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 Fiscal Year terminate his service, which termination
continues through the close of said Fiscal Year, then it shall refer to
the first day subsequent to said Fiscal 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
<PAGE>
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.
In addition to other applicable limitations set forth in the Plan,
and notwithstanding any other provision of the Plan to the contrary, for
Plan Years beginning on or after January 1, 1994, the annual Eligible
Biweekly Pay of each Worker Member taken into account under the Plan
shall not exceed the OBRA '93 annual compensation limit. The OBRA '93
annual compensation limit is $150,000, as adjusted by the Commissioner
for increases in the cost of living in accordance with
section 401(a)(17)(B) of the Internal Revenue Code. The cost-of-living
adjustment in effect for a calendar year applies to any period, not
exceeding 12 months, over which compensation is determined
(determination period) beginning in such calendar year. If a
determination period consists of fewer than 12 months, the OBRA '93
annual compensation limit will be multiplied by a fraction, the
numerator of which is the number of months in the determination period,
and the denominator of which is 12.
For Plan Years beginning on or after January 1, 1994, any
reference in this Plan to the limitation under section 401(a)(17) of the
Code shall mean the OBRA '93 annual compensation limit set forth in this
provision.
If Eligible Biweekly Pay for any prior determination period are
taken into account in determining a Worker Member's benefits accruing in
the current Plan Year, the Eligible Biweekly Pay for that prior
determination period is subject to the OBRA '93 annual compensation
limit in effect for that prior determination period. For this purpose,
for determination periods beginning before the first day of the first
Plan Year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
"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
<PAGE>
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 Fiscal 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.
In addition to other applicable limitations set forth in the Plan,
and notwithstanding any other provision of the Plan to the contrary, for
Plan Years beginning on or after January 1, 1994, the annual Eligible
Wages of each Worker Member taken into account under the Plan shall not
exceed the OBRA '93 annual compensation limit. The OBRA '93 annual
compensation limit is $150,000, as adjusted by the Commissioner for
increases in the cost of living in accordance with section 401(a)(17)(B)
of the Internal Revenue Code. The cost-of-living adjustment in effect
for a calendar year applies to any period, not exceeding 12 months, over
which compensation is determined (determination period) beginning in
such calendar year. If a determination period consists of fewer than
12 months, the OBRA '93 annual compensation limit will be multiplied by
a fraction, the numerator of which is the number of months in the
determination period, and the denominator of which is 12.
For Plan Years beginning on or after January 1, 1994, any
reference in this Plan to the limitation under section 401(a)(17) of the
Code shall mean the OBRA '93 annual compensation limit set forth in this
provision.
If Eligible Wages for any prior determination period are taken
into account in determining a Worker Member's benefits accruing in the
current Plan Year, the Eligible Wages for that prior determination
period is subject to the OBRA '93 annual compensation limit in effect
for that prior determination period. For this purpose, for
<PAGE>
determination periods beginning before the first day of the first Plan
Year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
"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.
"Fiscal Year" shall mean the Company's Fiscal Year, which is the
12 consecutive month period beginning on each October 1, and ending on
each September 30.
"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
<PAGE>
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 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.
"Loan Fund" shall have the same meaning as given to such term in
Section 8.1.
"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
Fiscal 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 Fiscal 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.
"Normal Retirement Age" shall mean age 65.
<PAGE>
"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) full years of employment with the Company.
"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 Vanguard Fiduciary Trust Company or any successor
thereto.
"Vanguard" means the Vanguard Group of Investment Companies.
"Worker Member" means any employee of the Company, or any
successor thereto.
<PAGE>
"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 subsection 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
<PAGE>
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:
<PAGE>
(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(8) of the Code.
EXECUTED at Rockford, Illinois this ____ day of ____________, 1995
to be effective as indicated herein.
WOODWARD GOVERNOR COMPANY
By:
Its:
Attest:
<PAGE>
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.
<PAGE>
(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) 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:
<PAGE>
(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(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(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:
<PAGE>
(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 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.
<PAGE>
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.
<PAGE>
FIRST AMENDMENT TO THE
WOODWARD GOVERNOR COMPANY
MEMBER INVESTMENT AND STOCK OWNERSHIP PLAN
(As Amended and Restated Effective as of January 1, 1996)
Pursuant to Section 17.1 of the Woodward Governor Company Member
Investment and Stock Ownership Plan (the "Plan"), the Plan is hereby
amended effective January 1, 1997 as follows:
1. Amend the last sentence of Section 2.1 of the Plan to read as follows:
As of the Effective Date each Worker Member,
including Worker Members hired on a part-time
basis, shall become a Participant in the Plan
upon completion of thirty days of service.
<PAGE>
SECOND AMENDMENT TO THE
WOODWARD GOVERNOR COMPANY
MEMBER INVESTMENT AND STOCK OWNERSHIP PLAN
(As Amended and Restated Effective as of January 1, 1996)
Pursuant to Section 17.1 of the Woodward Governor Company Member
Investment and Stock Ownership Plan (the "Plan"), the Plan is hereby amended
effective January 1, 1997 as follows:
Amend the Plan by adding the following Supplement B to the end thereof:
SUPPLEMENT B
to the
WOODWARD GOVERNOR COMPANY
MEMBER INVESTMENT AND STOCK OWNERSHIP PLAN
(For Worker Members whose accounts were transferred from
the Thrift Plan of HSC Controls Inc. or the Retirement Plan
of HSC Controls Inc. to the Plan)
With respect to Worker Members, whose accounts were transferred from the
Thrift Plan of HSC Controls Inc. or the Retirement Plan of HSC Controls Inc.
to the Plan, subsection 12.4 shall be revised as follows:
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 in the form of a Joint and Survivor Annuity or Preretirement Survivor
Annuity; provided that if the Participant shall not be married or if the
Participant and his Spouse shall file a Waiver (as defined in
subparagrph 12.4(j)) the distribution may be made in such one or more of the
following forms:
(a) Lump Sum. A Participant may elect to have his benefits paid in one
lump sum in cash.
<PAGE>
(b) Installments. A Participant may elect to have his benefits paid in
approximately equal monthly, quarterly or annual installments over a
period not exceeding 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 unless otherwise elected by the Participant.
(c) 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.
(d) Assets Distributable. Generally, subject to paragraph next above,
all distributions from the Member Investment Plan shall be determined by
Vanguard using the net asset values of the Participant's investment fund
accounts as of the date that authorized distribution directions are
received by Vanguard from the Committee, and shall be paid in cash.
Distributions attributable to amounts in the Woodward Stock Plan shall
be paid in Company Stock; provided, however, a Participant may elect to
receive all or part of his distribution in the form of cash; and
provided, further, if a Participant elects to receive installment
payments, his distribution shall be in cash.
(e) With respect to the filing of a Waiver of the Joint and Survivor
Annuity, "Election Period" shall mean the period commencing not less
than ninety (90) days prior to the Annuity Starting Date (the first day
of the first period for which an amount is payable as an annuity) and
ending on the Annuity Starting Date; provided that if the Participant
shall not be notified of his right to file a Waiver (and to receive
Waiver Information) within the first seven (7) days of said Election
Period or if he shall properly request Waiver Information and such is
not supplied within seven (7) days of his request, the Election Period
shall not end (and shall be extended to the extent, if any, that is
necessary) prior to the ninetieth (90th) day following the later of the
date on which he receives such notice or the date on which he receives
the Waiver Information. With respect to the filing of a Waiver of the
<PAGE>
Preretirement Survivor Annuity, "Election Period" shall mean the period
which begins on the first day of the Plan Year in which the Participant
attains age 35 and ending on the date of the Participant's death;
provided, that if the Participant terminates employment, the "Election
Period" shall begin on the date of termination of employment with respect
to the amount of the Participant's accounts on the Accounting
Date coincident with or next preceding the date of termination of
employment.
(f) "Joint and Survivor Annuity" shall mean an Annuity which shall pay
equal monthly installments to the Participant for life and upon his
death shall provide monthly payments for the life of the Participant's
Surviving Spouse in an amount equal to fifty percent (50%) and not more
than one hundred percent (100%) of the monthly amount payable to the
Participant under such Annuity during the joint lives of the Participant
and the Participant's Surviving Spouse.
(g) "Preretirement Survivor Annuity" shall mean an annuity upon the life
of the Participant's Surviving Spouse that shall be purchased with fifty
percent (50%) of the balance of the Participant's accounts, determined
as of the Accounting Date coincident with or next preceding the date of
the Participant's death.
(h) "Spouse" shall mean the person to whom the Participant was married
(and from whom he was not divorced by decree of court) at the time of
reference, provided that the Committee may, but is not required to, rely
on the Participant's written statement as to the existence and identity
of a Spouse.
(i) "Surviving Spouse" shall mean a Spouse who was married to the
Participant for the twelve-month period immediately preceding the
earlier of the date of the Participant's death, or the Participant's
Annuity Starting Date and who is living on the day following the date of
the Participant's death.
(j) "Waiver" shall mean the written election by both the Participant and
his Spouse; and which is filed with the Committee during the Election
Period and is not revoked at the time of reference, not to receive his
benefit in the form of a Joint and Survivor Annuity or in the form of a
Preretirement Survivor Annuity; provided, that each Participant who has
not been married throughout the twelve (12) month period immediately
preceding his Annuity Starting Date shall be deemed to have filed such a
written election (and not have revoked it) within the Election Period.
<PAGE>
This Waiver need not be executed by the Spouse if there is no Spouse or
if it is established to the Plan representative's satisfaction that the
Spouse cannot be located.
(k) "Waiver Information" shall mean the written explanation from the
Committee to the Participant and his Spouse, prepared in non-technical
language, of the terms and conditions of the Joint and Survivor Annuity
and/or the Preretirement Survivor Annuity, the financial effect of
filing a Waiver upon the Participant's benefit and the Spouse's rights
to such benefit, the right to make, and the effect of, the revocation of
a Waiver if one has been filed and the rights of the Participant's
Spouse to the Joint and Survivor Annuity and the Preretirement Survivor
Annuity hereunder. Such Waiver Information with respect to the
Preretirement Survivor Annuity shall be provided by the Committee to
each Participant within the period beginning on the first day of the
Plan Year in which the Participant attains age 32 and ending on the last
day of the Plan Year in which the Participant attains age 35.
(l) Notwithstanding any provision hereof to the contrary, each
Participant who shall have filed a Waiver may file a written revocation
of such Waiver with the Committee at any time prior to the close of the
Election Period, and may thereafter file a new Waiver prior to the close
of the Election Period in the same manner and to the same extent as
though no prior Waiver(s), or revocation(s) or reelection(s) thereof,
had been filed. Whenever there is reference in this Plan to the filing
of a Waiver, or a revocation or reelection thereof, it shall be deemed
to refer to the status of the Participant with respect to such filing at
the time of reference.
- - -
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