Registration No.
FORM S-8
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Registration Statement Under the Securities Act of 1933
ZURN INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 25-1040754
(State of incorporation) (IRS employer identification no.)
One Zurn Place, Erie, Pennsylvania 16505
(Address of principal executive offices) (Zip code)
ZURN RETIREMENT SAVINGS PLAN
(Full title of the plan)
Dennis Haines, General Counsel and Secretary
One Zurn Place, Erie, Pennsylvania 16505
(Name and address of agent for service)
Telephone number, including area code, of agent for service 814-452-2111
Approximate date of proposed sale to the public:
From time to time after the effective date of this registration statement
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of maximum maximum
securities Amount offering aggregate Amount of
to be to be price per offering registration
registered registered (1) share (2) price fee
Common Stock, 200,000
$.50 Par Value shares $22.50 $4,500,000 $1,551.72
(1) To be acquired by a trustee pursuant to the Plan for the accounts of Plan
participants. The number of shares represents the maximum number issuable
under the Plan that are covered by this registration statement pursuant to
Rule 457(h).
(2) Based on the average of the high and low sales prices of the registrant's
common stock on the New York Stock Exchange on February 5, 1996 solely for the
purpose of calculating the registration fee.
In addition, pursuant to Rule 416(c) under the Securities Act of 1933, as
amended, this registration statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the employee benefit plan
described herein.
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PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I of Form S-8 will
be delivered to the participants in the Zurn Retirement Savings Plan (the
"Plan") as required by Securities Act Rule 428(b). As permitted by the rules
of the Securities and Exchange Commission, such documents are not being filed
as part of this registration statement or as prospectuses or prospectus
supplements pursuant to Securities Act Rule 424.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3 - INCORPORATION OF DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended March 31, 1995
filed pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934,
as amended, is incorporated herein by reference.
The Plan's Annual Report on Form 11-K for the year ended December 31, 1994
filed pursuant to Section 15(d) of the Securities Exchange Act of 1934, as
amended, is incorporated herein by reference.
All documents subsequently filed by the Company and the Plan with the
Securities and Exchange Commission pursuant to Sections 13(a), 13(c), 14, or
15(d) of the Securities Exchange Act of 1934, as amended, prior to the filing
of a post-effective amendment which indicates that all securities offered have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference in this registration statement and to
be a part hereof from the date of filing such documents.
ITEM 4 - DESCRIPTION OF SECURITIES
The Company's Common Stock, $.50 par value, has been registered under Section
12 of the Securities Exchange Act of 1934, as amended.
Not applicable to Plan interests.
ITEM 5 - INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
ITEM 6 - INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Articles of Incorporation and Bylaws provide that, to the
fullest extent that the laws of the Commonwealth of Pennsylvania, as in effect
on January 27, 1987, or as thereafter amended, permit the elimination or
limitation of liability of directors, officers, or employees, no such person
shall be personally liable for monetary damages as such for any action taken
or any failure to take any action on behalf of the Company. Also, the Company
maintains a directors and officers liability insurance policy covering all of
its directors.
The Plan provides that the Board of Directors, the members of the Pension
Committee, its delegates and appointees or any other person who may be
determined to be a Fiduciary, other than persons who are independent of the
Employer and are rendering services to or with respect to the Plan, and any
officer or employee of the Employer shall not incur any liability individually
or on behalf of any other individuals or on behalf of the Employer for any act
or failure to act, made in good faith in relation to the Plan or the funds of
the Plan. However, this limitation shall not act to relieve any such
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individual or the Employer from a responsibility or liability for any
fiduciary responsibility, obligation or duty under Part 4, Title I of ERISA.
(The terms "Board of Directors", "Pension Committee", "Fiduciary", "Employer",
and "ERISA" as used herein have the meanings defined in the Plan.)
ITEM 7 - EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8 - EXHIBITS
The exhibits listed in the Exhibit Index to this registration statement are
incorporated herein by reference.
In lieu of an opinion of counsel concerning compliance with the requirements
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
or an Internal Revenue Service ("IRS") determination letter that the Plan is
qualified under Section 401 of the Internal Revenue Code of 1986, as amended,
the Company has submitted the Plan, and hereby undertakes to submit any
amendments to the Plan, to the IRS in a timely manner and has made, or will
make, all changes required by the IRS in order to qualify the Plan.
ITEM 9 - UNDERTAKINGS
The undersigned registrant hereby undertakes (1) to file, during any period in
which offers or sales are being made, a post-effective amendment to this
registration statement to include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement, (2)
that, for purposes of determining any liability under the Securities Act of
1933, as amended, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof, and (3) to remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, as amended, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934, as amended, and each filing of the Plan's
annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934, as amended, that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act of
1933, as amended, may be permitted to directors, officers, or employees of the
Company pursuant to the provisions set forth in Item 6, or otherwise, the
Company has been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
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Securities Act of 1933, as amended, and is therefore unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the Company of expenses incurred or paid by a director in the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer, or employee in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933, as amended, and will be
governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Erie, Commonwealth of Pennsylvania,
on December 20, 1995.
ZURN INDUSTRIES, INC.
(Registrant)
/s/ Dennis Haines
Dennis Haines
General Counsel and Secretary
Pursuant to the requirements of the Securities Act of 1933, as amended, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
By Dennis Haines for Robert R. Womack, Director, Chairman, and Chief Executive
Officer
/s/ Dennis Haines Attorney In Fact February 7, 1996
Dennis Haines
/s/ John R. Mellett Senior Vice President- February 7, 1996
John R. Mellett Chief Financial Officer
/s/ John E. Rutzler III Vice President-Controller February 7, 1996
John E. Rutzler III
By John E. Rutzler III for the following Directors:
Zoe Baird William E. Butler Edward J. Campbell
Robert D. Neary David W. Wallace
/s/ John E. Rutzler III Attorney In Fact February 7, 1996
John E. Rutzler III
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Pursuant to the requirements of the Securities Act of 1933, as amended, the
Pension Committee of Zurn Industries, Inc. has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Erie, Commonwealth of Pennsylvania, on December 20,
1995.
ZURN RETIREMENT SAVINGS PLAN
(Plan)
/s/ James A. Zurn
James A. Zurn, Chairman
Pension Committee of
Zurn Industries, Inc.
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EXHIBIT INDEX
4 Instruments Defining the Rights of Security Holders,
Including Indentures
Description of Common Stock contained in the prospectus Incorporated
dated July 26, 1972 beginning on page 18 ("Description of by reference
Capital Stock") forming a part of Amendment No. 3 to the
Form S-1 Registration Statement No. 2-44631
Description of Common Stock as set forth in the Restated Incorporated
Articles of Incorporation with Amendments through by reference
August 7, 1987 filed as Exhibit 19A to Form 10-Q for
the quarter ended September 30, 1987
Description of Preferred Share Purchase Rights contained Incorporated
in the Form 8-A/A Registration Statement Amendment No. 1 by reference
dated June 27, 1995
Consents of Experts and Counsel
23.1 Consent of Ernst & Young LLP
23.2 Consent of Pashke Twargowski & Lee
Power of Attorney
24.1 Powers Of Attorney signed on October 30, 1995 by Z. Baird,
W.E. Butler, E.J. Campbell, R.D. Neary, and D.W. Wallace
24.2 Power Of Attorney signed on January 12, 1996 by
Robert R. Womack
99 Additional Exhibits
Annual Report on Form 10-K for the year Incorporated
ended March 31, 1995 by reference
Annual Report on Form 11-K for the year Incorporated
ended December 31, 1994 by reference
Zurn Retirement Savings Plan
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EXHIBIT 23.1 - CONSENT OF ERNST & YOUNG LLP
We consent to the incorporation by reference in this Registration Statement on
Form S-8 of our report dated May 18, 1995 with respect to the consolidated
financial statements and financial statement schedule incorporated by
reference or included in the Annual Report on Form 10-K of Zurn Industries,
Inc. for the year ended March 31, 1995.
/s/ Ernst & Young LLP
Erie, Pennsylvania
February 7, 1996
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EXHIBIT 23.2 - CONSENT OF PASHKE TWARGOWSKI & LEE
We consent to the incorporation by reference in this Registration Statement on
Form S-8 of our report dated October 11, 1995 with respect to the financial
statements and supplemental schedules included in the Annual Report on Form
11-K of the Zurn Retirement Savings Plan for the year ended December 31, 1994.
/s/ Pashke Twargowski & Lee
Erie, Pennsylvania
February 7, 1996
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EXHIBIT 24
POWERS OF ATTORNEY
Each person whose name appears below hereby authorizes Dennis Haines and John
E. Rutzler III, severally, to execute in the name of each such person, and to
file with the Securities and Exchange Commission registration statements on
Form S-8, or amendments to such registration statements which may make such
changes as each of the above named attorneys deems appropriate, with all
exhibits and other related documents, all as necessary or advisable to enable
Zurn Industries, Inc. (the "Registrant") to comply with the Securities Act of
1933, as amended, and any applicable rules, regulations, and requirements of
the Securities and Exchange Commission, in connection with the registration of
securities for the Zurn Industries, Inc. 1995 Directors Stock Option Plan, the
Zurn Retirement Savings Plan, and the Zurn/NEPCO Retirement Savings Plan.
Signed on the 30th day October 1995:
/s/ William E. Butler /s/ Zoe Baird
William E. Butler Zoe Baird
/s/ Edward J. Campbell /s/ Robert D. Neary
Edward J. Campbell Robert D. Neary
/s/ David W. Wallace
David W.Wallace
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EXHIBIT 24.2
POWER OF ATTORNEY
Robert R. Womack authorizes Dennis Haines and John E. Rutzler III, severally,
to execute in his name, and to file with the Securities and Exchange
Commission registration statements on Form S-8, or amendments to such
registration statements which may make such changes as each of the above named
attorneys deems appropriate, with all exhibits and other related documents,
all as necessary or advisable to enable Zurn Industries, Inc. (the
"Registrant") to comply with the Securities Act of 1933, as amended, and any
applicable rules, regulations, and requirements of the Securities and Exchange
Commission, in connection with the registration of securities for the Zurn
Retirement Savings Plan and the Zurn/NEPCO Retirement Savings Plan.
Signed on the 12th day January 1996:
/s/ Robert R. Womack
Robert R. Womack
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Exhibit 99 - ZURN RETIREMENT SAVINGS PLAN
ZURN RETIREMENT SAVINGS PLAN
Amended and Restated as of January 1, 1996
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ZURN RETIREMENT SAVINGS PLAN
The Zurn Retirement Savings Plan (the "Plan"), as herein set forth, is an
amendment and restatement as of January 1, 1996 of the Plan effective March 1,
1991.
This amendment and restatement of the Plan shall constitute an amendment,
restatement and continuation of the Plan. Although this amendment and
restatement is generally effective January 1, 1996, certain provisions of this
amendment and restatement are effective as of some other date. Events
occurring before the applicable effective date of any provision of this
amendment and restatement shall be governed by the applicable provision of the
Plan in effect on the date of the event.
The rights of any person who terminated employment or who retired on or before
the effective date of any particular provision of the Plan, including his
eligibility for benefits, shall be determined solely under the terms of the
Plan as in effect on the date of his termination of employment or retirement,
unless such person is thereafter reemployed and again becomes a Participant;
provided, however, that the time and form in which benefits, if any, will be
paid, shall be determined under the terms of the Plan as in effect on the date
benefits commence.
The Plan is intended to comply with the provisions of the Employee Retirement
Income Security Act of 1974, and to qualify under Section 401(a) of the
Internal Revenue Code of 1986, as amended, and under any rulings or
regulations pursuant thereto adopted by the Department of Labor and/or the
Department of the Treasury.
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ZURN RETIREMENT SAVINGS PLAN
TABLE OF CONTENTS
PAGE
Article 1. Definitions
1.01 Accounts . . . . . . . . . . . . . . . . . . . 1
1.02 Actual Deferral Percentage . . . . . . . . . . 1
1.03 Adjustment Factor. . . . . . . . . . . . . . . 1
1.04 Affiliated Employer. . . . . . . . . . . . . . 1
1.05 Alternate Payee. . . . . . . . . . . . . . . . 1
1.06 Annuity Starting Date. . . . . . . . . . . . . 1
1.07 Beneficiary. . . . . . . . . . . . . . . . . . 2
1.08 Board of Directors . . . . . . . . . . . . . . 2
1.09 Code . . . . . . . . . . . . . . . . . . . . . 2
1.10 Common Stock . . . . . . . . . . . . . . . . . 2
1.11 Company. . . . . . . . . . . . . . . . . . . . 2
1.12 Compensation . . . . . . . . . . . . . . . . . 2
1.13 Contribution Limit . . . . . . . . . . . . . . 3
1.14 Covered Employee . . . . . . . . . . . . . . . 3
1.15 Deferred Account . . . . . . . . . . . . . . . 3
1.16 Deferred Cash Contributions. . . . . . . . . . 3
1.17 Earnings . . . . . . . . . . . . . . . . . . . 3
1.18 Employee . . . . . . . . . . . . . . . . . . . 3
1.19 Employer . . . . . . . . . . . . . . . . . . . 3
1.20 Enrollment Date. . . . . . . . . . . . . . . . 3
1.21 ERISA. . . . . . . . . . . . . . . . . . . . . 4
1.22 Fiduciary. . . . . . . . . . . . . . . . . . . 4
1.23 Fund or Investment Fund. . . . . . . . . . . . 4
1.24 Highly Compensated Employee. . . . . . . . . . 4
1.25 Hour of Service. . . . . . . . . . . . . . . . 5
1.26 Hypothetical Tax Deduction . . . . . . . . . . 5
1.27 International Work Assignment Agreement. . . . 6
1.28 Leased Employee. . . . . . . . . . . . . . . . 6
1.29 Member . . . . . . . . . . . . . . . . . . . 6
1.30 Normal Retirement Age. . . . . . . . . . . . . 6
1.31 Pension Committee. . . . . . . . . . . . . . . 6
1.32 Plan . . . . . . . . . . . . . . . . . . . 6
1.33 Plan Year. . . . . . . . . . . . . . . . . . . 6
1.34 Rollover Account . . . . . . . . . . . . . . . 6
1.35 Rollover Contributions . . . . . . . . . . . . 6
1.36 Spousal Consent. . . . . . . . . . . . . . . . 6
1.37 Statutory Compensation . . . . . . . . . . . . 7
1.38 Trustee. . . . . . . . . . . . . . . . . . . . 7
1.39 Valuation Date . . . . . . . . . . . . . . . . 7
1.40 Vested Portion . . . . . . . . . . . . . . . . 7
1.41 Year of Eligibility Service. . . . . . . . . . 7
1.42 Zurn Stock Fund. . . . . . . . . . . . . . . . 7
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TABLE OF CONTENTS
PAGE
Article 2. Eligibility and Membership
2.01 Eligibility. . . . . . . . . . . . . . . . . . 8
2.02 Membership . . . . . . . . . . . . . . . . . . 8
2.03 Transferred Members. . . . . . . . . . . . . . 8
2.04 Termination of Membership. . . . . . . . . . . 8
Article 3. Contributions
3.01 Deferred Cash Contributions. . . . . . . . . . 8
3.02 Rollover Contributions . . . . . . . . . . . . 11
3.03 Change in Contributions. . . . . . . . . . . . 11
3.04 Suspension of Contributions. . . . . . . . . . 11
3.05 Limitations Affecting Highly
Compensated Employees . . . . . . . . . . . 12
3.06 Maximum Annual Additions . . . . . . . . . . . 13
3.07 Return of Contributions. . . . . . . . . . . . 15
Article 4. Investment of Contributions and Accounts; Valuation
4.01 Investment Funds . . . . . . . . . . . . . . . 16
4.02 Investment of Members' Accounts. . . . . . . . 16
4.03 Responsibility for Investments . . . . . . . . 16
4.04 Change of Election . . . . . . . . . . . . . . 17
4.05 Reallocation of Accounts Among the Funds . . . 17
4.06 Limitation Imposed by Contract . . . . . . . . 17
4.07 Valuation of the Investment Funds. . . . . . . 17
4.08 Discretionary Power of the Pension Committee . 17
4.09 Statement of Accounts. . . . . . . . . . . . . 18
Article 5. Zurn Stock Fund
5.01 Establishment of Zurn Stock Fund . . . . . . . 18
5.02 Restrictions on Transfer and Withdrawal of
Amounts Invested in Zurn Stock Fund. . . . . . 18
5.03 Voting on Common Stock . . . . . . . . . . . . 19
Article 6. Vested Portion of Accounts
6.01 Deferred Account and Rollover Account. . . . . 20
Article 7. Withdrawals While Still Employed
7.01 Withdrawal of Rollover Contributions . . . . . 20
7.02 Withdrawal After Age 59-1/2. . . . . . . . . . 20
7.03 Hardship Withdrawal. . . . . . . . . . . . . . 20
7.04 Procedures and Restrictions. . . . . . . . . . 22
Article 8. Loans to Members
8.01 Amount Available . . . . . . . . . . . . . . . 22
8.02 Terms. . . . . . . . . . . . . . . . . . . . . 23
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TABLE OF CONTENTS
PAGE
Article 9. Distribution of Accounts Upon Termination of Employment
9.01 Eligibility. . . . . . . . . . . . . . . . . . 24
9.02 Form of Distribution . . . . . . . . . . . . . 24
9.03 Date of Payment of Distribution. . . . . . . . 25
9.04 Required Distributions . . . . . . . . . . . . 27
9.05 Distributions Under a Qualified Domestic
Relations Order. . . . . . . . . . . . . . . . 27
9.06 Status of Accounts Pending Distribution. . . . 28
9.07 Proof of Death and Right of Beneficiary
or Other Person . . . . . . . . . . . . . . 28
9.08 Distribution Limitation. . . . . . . . . . . . 28
Article 10. Administration of Plan
10.01 Appointment of Pension Committee . . . . . . . 28
10.02 Powers of Pension Committee. . . . . . . . . . 29
10.03 Individual Accounts. . . . . . . . . . . . . . 30
10.04 Meetings . . . . . . . . . . . . . . . . . . . 30
10.05 Action of Majority . . . . . . . . . . . . . . 30
10.06 Compensation and Bonding . . . . . . . . . . . 31
10.07 Prudent Conduct. . . . . . . . . . . . . . . . 31
10.08 Service in More Than One Fiduciary Capacity. . 31
10.09 Limitation of Liability. . . . . . . . . . . . 31
10.10 Indemnification. . . . . . . . . . . . . . . . 31
10.11 Delegation of Fiduciary Responsibility . . . . 32
Article 11. Management of Funds
11.01 Trust Agreement. . . . . . . . . . . . . . . . 32
11.02 Exclusive Benefit Rule . . . . . . . . . . . . 32
11.03 Appointment of Investment Manager. . . . . . . 32
11.04 Expenses of Plan . . . . . . . . . . . . . . . 33
Article 12. General Provisions
12.01 Nonalienation. . . . . . . . . . . . . . . . . 33
12.02 Conditions of Employment Not Affected by Plan. 33
12.03 Facility of Payment. . . . . . . . . . . . . . 33
12.04 Information. . . . . . . . . . . . . . . . . . 34
12.05 Construction . . . . . . . . . . . . . . . . . 34
12.06 Benefit Claim Appeals. . . . . . . . . . . . . 34
12.07 Severability . . . . . . . . . . . . . . . . . 35
12.08 Employer Records . . . . . . . . . . . . . . . 35
12.09 Application of Plan Provisions . . . . . . . . 35
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TABLE OF CONTENTS
PAGE
Article 13. Amendment, Merger and Termination
13.01 Amendment of Plan. . . . . . . . . . . . . . . 35
13.02 Merger, Consolidation or Transfer. . . . . . . 36
13.03 Additional Participating Employer. . . . . . . 36
13.04 Termination of Plan. . . . . . . . . . . . . . 37
13.05 Distribution of Accounts Upon a Sale of Assets 37
13.06 Distribution of Accounts Upon a Sale of
a Subsidiary . . . . . . . . . . . . . . . . . 37
Article 14. Top-Heavy Provisions
14.01 Top-Heaviness Defined. . . . . . . . . . . . . 38
14.02 Employer Contributions . . . . . . . . . . . . 40
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ZURN RETIREMENT SAVINGS PLAN
As Amended and Restated as of January 1, 1996
Article 1. Definitions
1.01 "Accounts" means accounts held under the Plan for a Member,
consisting of, to the extent applicable, his Deferred Account and
Rollover Account.
1.02 "Actual Deferral Percentage" means, with respect to a specified group
of Employees who during a given Plan Year were Covered Employees, the
average of the ratios, calculated separately for each Covered
Employee in that group, of (a) the amount of Deferred Cash
Contributions made pursuant to Section 3.01 for that Plan Year
(whether or not such Contributions are returned to the Member
pursuant to Section 3.01(c)), to (b) the Covered Employee's Statutory
Compensation for that Plan Year (Statutory Compensation shall only be
counted if received during the period a Covered Employee is a Member
or is eligible to become a Member). The Actual Deferral Percentage
for each group and the ratio determined for each Covered Employee in
the group shall be calculated to the nearest one-hundredth of one
percent.
1.03 "Adjustment Factor" means the cost of living adjustment factor
prescribed by the Secretary of the Treasury under Section 415(d) of
the Code and applied to such items and in such manner as the
Secretary shall provide.
1.04 "Affiliated Employer" means any company not participating in the Plan
which is a member of a controlled group of corporations (as defined
in Section 414(b) of the Code) which also includes as a member the
Employer; any trade or business under common control (as defined in
Section 414(c) of the Code) with the Employer; any organization
(whether or not incorporated) which is a member of an affiliated
service group (as defined in Section 414(m) of the Code) which
includes the Employer; and any other entity required to be aggregated
with the Employer pursuant to regulations under Section 414(o) of the
Code. Notwithstanding the foregoing sentence, for purposes of
Section 3.06, the definitions in Sections 414(b) and (c) of the Code
shall be modified as provided in Section 415(h) of the Code.
1.05 "Alternate Payee" means any spouse, former spouse, child or other
dependent of a Member who is recognized by a qualified domestic
relations order (within the meaning of Section 414(p) of the Code) as
having a right to receive all, or a portion of, the Member's Accounts
under the Plan.
1.06 "Annuity Starting Date" means the first day on which all events have
occurred which entitle a Member to a distribution under Article 9
hereof.
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1.07 "Beneficiary" means any person, persons or entity named by a Member
by written designation filed with the Pension Committee to receive
benefits payable in the event of the Member's death; provided,
however, if the Member is married, his spouse shall be deemed to be
the Beneficiary unless or until he elects another Beneficiary by a
written designation filed with the Pension Committee which
designation shall not be effective without Spousal Consent. If no
such designation is in effect at the time of death of the Member, or
if no person, persons or entity so designated shall survive the
Member, the Member's surviving spouse, if any, shall be deemed to be
the Beneficiary; otherwise, the Beneficiary shall be the estate of
the Member.
1.08 "Board of Directors" means the Board of Directors of the Company.
1.09 "Code" means the Internal Revenue Code of 1986, as amended from time
to time.
1.10 "Common Stock" means the Common Stock, $0.50 par value, of the
Company which are qualifying employer securities within the meaning
of Section 407(d)(5) of ERISA.
1.11 "Company" means Zurn Industries, Inc. or any successor by merger,
purchase or otherwise.
1.12 "Compensation" means the basic cash remuneration paid by an Employer
to an Employee for services rendered to the Employer, determined
prior to any Hypothetical Tax Deduction or any reduction pursuant to
Section 3.01 or pursuant to a cafeteria plan as described in Section
125 of the Code. Compensation shall include overtime pay, vacation
pay, severance pay, sick pay (paid through payroll) and sales
commissions, and shall exclude bonuses, incentive pay and all other
forms of special pay. In no event shall the amount of Compensation
taken into account under the Plan for any Plan Year exceed the
adjusted annual limitation permitted under Section 401(a)(17) of the
Code for such Plan Year. Such adjusted annual limitation shall be,
for each Plan Year beginning on and after the Plan's effective date
of April 1, 1991 and prior to January 1, 1994, $200,000 as adjusted
for such year in the same manner as under Section 415(d) of the Code
and, for each Plan Year beginning on and after January 1, 1994,
$150,000 as adjusted for such year as provided under Section
401(a)(17)(B) of the Code. In applying this limitation, the family
group of a Highly Compensated Employee who is subject to the family
member aggregation rules of Section 414(q)(6) of the Code because
such Member is either a 5% owner of the Employer or one of the top 10
Highly Compensated Employees on the basis of Statutory Compensation,
shall be treated as a single Member. For this purpose, family
members shall include the Member, the Member's spouse and any lineal
descendants who have not attained age 19 before the close of the
year. If, as a result of the application of such rules, the adjusted
annual limitation is exceeded, then the limitation shall be prorated
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among the affected family members in proportion to each such family
member's Compensation as determined prior to the application of the
adjusted annual limitation.
1.13 "Contribution Limit" means the maximum amount, established by the
Pension Committee pursuant to Section 3.05(a), of Deferred Cash
Contributions that Employers may contribute to the Plan with respect
to any calendar year on behalf of some or all Members who are Highly
Compensated Employees.
1.14 "Covered Employee" means any Employee of an Employer who is
classified as an hourly or salaried Employee by the Employer and who
receives stated compensation other than a pension, retainer or fee
under contract; provided, however, that the following classes of
individuals shall not be considered Covered Employees hereunder:
(a) any person who is included in a unit of Employees
covered by a collective bargaining agreement which does
not provide for his membership in the Plan;
(b) any nonresident alien as defined in the Code;
(c) any leased employee including any such individual who is
a Leased Employee;
(d) factory Employees of the Wilkins Regulator division of
the Company; and
(e) Employees of Affiliated Employers.
1.15 "Deferred Account" means the account into which shall be credited the
Deferred Cash Contributions made on a Member's behalf and earnings on
those contributions.
1.16 "Deferred Cash Contributions" means all amounts contributed pursuant
to Section 3.01 of the Plan.
1.17 "Earnings" means the amount of earnings to be returned with any
excess deferrals under Section 3.01 or excess contributions under
Section 3.05 as determined in accordance with regulations prescribed
by the Secretary of the Treasury under the provisions of Sections
401(k) or 402(g) of the Code.
1.18 "Employee" means a person employed by the Employer or an Affiliated
Employer.
1.19 "Employer" means the Company and all majority-owned subsidiaries of
the Company incorporated under the laws of the United States, or any
political subdivision thereof, which are not Affiliated Employers
with respect to their Employees, or any successor by merger, purchase
or otherwise, with respect to their Employees; or any other entity
participating in the Plan as provided in Section 13.03(a) with
respect to its Employees.
1.20 "Enrollment Date" means, with respect to any Covered Employee who had
not satisfied the eligibility requirements of Section 2.01 hereof
prior to October 1, 1993, the first day of the month coincident with
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or next following the date the Covered Employee satisfies the age and
service requirements of Section 2.01 and the first day of any month
thereafter.
1.21 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
1.22 "Fiduciary" means any person who:
(a) exercises any discretionary authority or discretionary
control respecting management of the Plan or the trust
fund or exercises any authority or control respecting
management or disposition of assets of the trust fund;
(b) renders investment advice for a fee or other
compensation, direct or indirect, with respect to any
part of the trust fund, or has any authority or
responsibility to do so; or
(c) has any discretionary authority or discretionary
responsibility in the administration of the Plan or the
trust fund.
Except as otherwise provided, the Pension Committee and the
Trustee shall be named Fiduciaries under ERISA.
Notwithstanding the foregoing, Members, Employees, Alternate
Payees and Beneficiaries with Accounts under the Plan shall be
considered Named Fiduciaries solely to the extent of those
fiduciary duties and responsibilities which are directly
related to the exercise of voting and tender offer rights with
respect to Plan interests invested in the Zurn Stock Fund (and
not to other aspects of Plan operation and/or administration).
1.23 "Fund" or "Investment Fund" means the separate funds in which
contributions to the Plan are invested in accordance with Article 4
and, as applicable, Article 5.
1.24 "Highly Compensated Employee" means any Employee who satisfies one or
more of the following criteria:
(a) During that Plan Year (the "determination year") or the
preceding Plan Year (the "lookback year") the employee:
(i) was at any time a 5% owner of the Employer;
(ii) received Statutory Compensation in excess of
$75,000 multiplied by the Adjustment Factor;
(iii) received Statutory Compensation in excess of
$50,000 multiplied by the Adjustment Factor and
was a member of the Top Paid Group; or
(iv) was at any time an officer of the Employer or an
Affiliated Employer and received Statutory
Compensation greater than 50% of the dollar
limitation on maximum benefits under Section
415(b)(1)(A) of the Code for such Plan Year.
(b) The Statutory Compensation paid to any family member
(spouse, lineal ascendant or descendant, and their
spouses) of a 5% owner or one of the top 10 Highly
Compensated Employees on the basis of Statutory
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Compensation, shall be aggregated with the Statutory
Compensation of such Employee for purposes of this
definition.
(c) Notwithstanding the foregoing, an Employee who meets the
criteria under (ii), (iii) or (iv) of (a) above for the
current Plan Year, but not for the preceding Plan Year,
will not be considered a Highly Compensated Employee for
the current Plan Year unless the Employee is one of the
100 highest paid Employees of the Employer or an
Affiliated Employer and for purposes of (iv) of (a)
above, no more than 50 Employees (or, if lesser, the
greater of 3 or 10% of Employees) shall be treated as
officers.
(d) Notwithstanding the foregoing, Employees who are
nonresident aliens and who receive no earned income from
the Employer or an Affiliated Employer which constitutes
income from sources within the United States shall be
disregarded for all purposes of this Section.
(e) Top Paid Group means all active Employees of the
Employer or an Affiliated Employer who, as of a given
year, are in the top twenty percent (20%) of the work
force of the Employer and all Affiliated Employers on
the basis of Statutory Compensation for such year,
excluding the following:
(i) Employees who have not completed six (6) months of
service by the end of such year;
(ii) Employees who work less than seventeen and one-
half (17-1/2) hours per week for such year;
(iii) Employees who normally do not work more than six
(6) months in a year;
(iv) Employees under age twenty-one (21) at the end of
such year; and
(v) non-resident aliens.
(f) To the extent permitted under regulations or other
guidance issued by the Internal Revenue Service, the
Pension Committee may elect to determine the status of
Highly Compensated Employees on a basis other than that
provided above.
(g) The provisions of this Section shall be further subject
to such additional requirements as shall be described in
Section 414(q) of the Code and its applicable
regulations, which shall override any aspects of this
Section inconsistent therewith.
1.25 "Hour of Service" means each hour for which the Employee is paid or
entitled to payment for the performance of duties for the Employer or
an Affiliated Employer.
1.26 "Hypothetical Tax Deduction" means the amount by which an Employee's
Statutory Compensation paid by the Employer is reduced for taxes
pursuant to an International Work Assignment Agreement.
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1.27 "International Work Assignment Agreement" means an agreement between
the Employee and the Employer or Affiliated Employer made in
connection with the Employee having a work assignment outside the
United States, or a territory or possession that imposes tax on
Statutory Compensation pursuant to the Code, which provides for the
payment to, or on behalf of, the Employee by the Employer or
Affiliated Employer of the Employee's United States and foreign
income tax liabilities.
1.28 "Leased Employee" means any person (other than an Employee of the
Employer or an Affiliated Employer) who pursuant to an agreement
between the recipient and a leasing organization performs services
for the Employer or Affiliated Employer and related person as defined
in Section 414(n)(6) of the Code on a substantially full-time basis
for a period of at least one year, which services are of a type
historically performed by employees in the business field of the
Employer or Affiliated Employer. Contributions or benefits provided
to a Leased Employee by the leasing organization that are
attributable to services performed for the Employer or Affiliated
Employer shall be treated as provided by the Employer or Affiliated
Employer.
1.29 "Member" means any Employee included in the membership of the Plan as
provided in Article 2 and shall include former Employees to the
extent provided under Section 2.04.
1.30 "Normal Retirement Age" means the later of a Member's age 65 or the
fifth anniversary of the date he is first eligible to enter the Plan.
1.31 "Pension Committee" means the persons named to administer and
supervise the Plan as provided in Article 10.
1.32 "Plan" means the Zurn Retirement Savings Plan as set forth in this
document as the same may be amended from time to time. For purposes
of Sections 401(a)(27) and 401(k) of the Code and Section 407(d)(3)
of ERISA, the Plan is a profit sharing plan.
1.33 "Plan Year" means the 12-month period beginning on any January 1.
1.34 "Rollover Account" means the account into which shall be credited
Rollover Contributions and earnings on those contributions.
1.35 "Rollover Contributions" means all amounts contributed pursuant to
Section 3.02 of the Plan.
1.36 "Spousal Consent" means a written consent given by a Member's spouse
to a Member's designation of a specified Beneficiary or Beneficiaries
(including the designation of any class of Beneficiaries or any
contingent Beneficiaries). Any Spousal Consent shall be effective
only with respect to such spouse. Such consent shall be duly
witnessed by a Plan representative or a notary public and shall
acknowledge the effect on the spouse of the Member's election. The
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Member may revoke an election any number of times without Spousal
Consent at any time before the Annuity Starting Date. Any new
election will require a new Spousal Consent. The requirement for
Spousal Consent may be waived by the Pension Committee if it is
established that there is no spouse, the spouse cannot be located,
the Member has a court order evidencing a legal separation from or
abandonment by the spouse, or for such other circumstances as shall
be prescribed by applicable law.
1.37 "Statutory Compensation" means the wages, salaries, and other amounts
paid by an Employer or Affiliated Employer in respect of an Employee
for services actually rendered to an Employer or an Affiliated
Employer, for which the Employer or Affiliated Employer is required
to furnish a written statement under Sections 6041(d) and 6051(a)(3)
of the Code. Statutory Compensation shall include Deferred Cash
Contributions and amounts contributed on a Member's behalf on a
salary reduction basis to a cafeteria plan as described in Section
125 of the Code. Statutory Compensation for Plan purposes in any
given year shall not exceed the adjusted annual limitation in effect
for such year (as set forth in Section 1.12), provided that such
limitation shall not be applied in determining the top 10 Highly
Compensated Employees subject to family aggregation under the Plan,
the status of an Employee as a Highly Compensated Employee under
Section 1.24 and for purposes of the maximum limitations under
Section 3.06.
1.38 "Trustee" means the trustee or trustees by whom the funds of the Plan
are held as provided in Article 11.
1.39 "Valuation Date" means the last business day of each Plan Year and,
where appropriate given the context, the last business day preceding
the date of a Member's withdrawal, distribution, loan or other event
requiring a valuation of a Member's Accounts. Subject to the
provisions of Section 4.08, the fair market value of Investment Funds
on any Valuation Date shall be determined as of the close of trading
on said Valuation Date.
1.40 "Vested Portion" means the portion of the Accounts in which the
Member has a nonforfeitable interest as provided in Article 6.
1.41 "Year of Eligibility Service" means, with respect to any Employee,
the 12-month period of employment with the Employer or an Affiliated
Employer, whether or not as a Covered Employee, beginning on the date
he first completes an Hour of Service.
1.42 "Zurn Stock Fund" means the Investment Fund described in
Section 5.01.
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Article 2. Eligibility and Membership
2.01 Eligibility
Each Covered Employee shall be eligible to become a Member on any
Enrollment Date coinciding with or immediately following the date he
completes the required Year of Eligibility Service or his 21st
birthday, whichever is later. Any person reemployed by the Employer
who was previously a Member or who was previously eligible to become
a Member, shall be eligible to become a Member of the Plan on the
next Enrollment Date.
2.02 Membership
A Covered Employee who is eligible to become a Member under
Section 2.01 shall become a Member on the first Enrollment Date
coinciding with or following the date he properly submits at least
three weeks prior to the Enrollment Date the enrollment form or forms
prescribed by the Pension Committee on which he:
(a) makes the election described in Section 3.01;
(b) authorizes the Employer to reduce his Compensation;
(c) makes an investment election; and
(d) names a Beneficiary.
The Deferred Cash Contributions elected by the Member shall begin
with the first day of the payroll period beginning approximately
three weeks after the date he files the prescribed form or forms;
provided, however, such day shall not precede an Enrollment Date.
2.03 Transferred Members
A Member who remains in the employ of the Employer or an Affiliated
Employer but ceases to be a Covered Employee shall continue to be a
Member of the Plan but shall not be eligible to have Deferred Cash
Contributions made on his behalf while his employment status is other
than as a Covered Employee. In the event the Member again becomes a
Covered Employee, he shall be eligible to have Deferred Cash
Contributions made on his behalf by submitting the enrollment forms
prescribed by Section 2.02.
2.04 Termination of Membership
A Member's membership shall terminate on the date he terminates
employment with the Employer or an Affiliated Employer unless the
Member is entitled to benefits under the Plan, in which event his
membership shall terminate when those benefits are distributed to
him.
Article 3. Contributions
3.01 Deferred Cash Contributions
(a) A Member may elect on the form or forms filed under Section
2.02 to reduce his Compensation payable while a Member by not
less than 1% and not more than 20%, in multiples of 1%, and
have that amount contributed to the Plan by the Employer as
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Deferred Cash Contributions in a manner to be determined by the
Pension Committee. Any Deferred Cash Contributions elected
under this Section 3.01 shall be allocated to the Member within
the Plan Year for which they are contributed and shall be paid
to the Trustees as soon as such amounts can reasonably be
segregated from the Employer's general assets. Deferred Cash
Contributions shall be further limited as provided in Sections
3.01(b), 3.05 and 3.06.
(b) Any provision of this Plan to the contrary notwithstanding, no
Employer shall be permitted:
(i) During any calendar year, to make with respect to such
calendar year, Deferred Cash Contributions on behalf of
a Member under the Plan that, when combined with the
Member's elective deferrals under any other plans,
contracts, or arrangements described in Section
1.402(g)-1(b) of the Income Tax Regulations, will exceed
$7,000, as indexed for such year under Section 402(g)(5)
of the Code; and
(ii) With respect to any given pay period or group of pay
periods as determined by the Pension Committee within a
given calendar year, to make Deferred Cash Contributions
to the Plan on behalf of a Member who is a Highly
Compensated Employee that will exceed the prorated
portion of the Contribution Limit then in effect for
that Member for the given pay period or group of pay
periods.
(c) In the event any amount of Deferred Cash Contributions made on
behalf of a Member for a calendar year exceeds the limitation
specified in Section 3.01(b)(i) for such calendar year, such
excess amount (hereafter described for purposes of this
Section, as "excess deferrals"), as adjusted for any income or
loss allocable thereto in accordance with Income Tax
Regulations shall, to the extent possible, be distributed to
such Member as provided in subparagraphs (i), (ii) and (iii)
below:
(i) At a date not later than the March 1st of the calendar
year immediately following the calendar year to which
such excess deferrals are attributable, any Member to
whom this Section 3.01(c) applies may notify, in
writing, the Pension Committee by submitting a form as
may be provided by the Pension Committee which shall
specify the amount of the Member's excess deferrals for
the given calendar year and shall contain a certified
statement by the Member indicating that if such amount
is not distributed, such excess deferrals will exceed
the limit imposed on the Member by Section 402(g) of the
Code for the year in which the Deferred Cash
Contributions occurred. Notwithstanding the foregoing,
in the event a Member has excess deferrals in a given
year calculated by taking into account Deferred Cash
Contributions made on his behalf and his elective
deferrals under all other plans, contracts or
-27- -9-<PAGE>
arrangements maintained by the Employer or an Affiliated
Employer, the Member will be deemed to have notified the
Pension Committee in the manner provided in this
subparagraph.
(ii) At a date not later than the April 15 of the calendar
year immediately following the calendar year to which
such excess deferrals are attributable, the Plan may
distribute to the Member the amount of the excess
deferrals allocated to the Plan and Earnings. Any
excess deferrals distributed pursuant to this
subparagraph are to be included in the gross income of
the Member for the year to which such excess deferrals
relate. Any Earnings distributed pursuant to this
subparagraph are to be included in the gross income of
the Member for the year in which the Earnings are
distributed. In making a distribution as permitted
under this Section, the Employer shall specifically
designate the distribution as that consisting of excess
deferrals within the meaning of Section 402(g)(1) of the
Code. Any distribution of less than the entire amount
of excess deferrals plus Earnings shall be treated as a
pro rata distribution of such excess deferrals and
Earnings.
(iii) To the extent provided by the Secretary of the Treasury
or his delegate, such excess deferrals distributed
pursuant to this Section 3.01(c) are to be taken into
account for purposes of applying the actual deferral
percentage test specified in Section 3.05 (except if
such excess is both prohibited under Section 401(a)(30)
of the Code and is attributable to an Employee who is
not a Highly Compensated Employee), and for any other
purpose of the Code which may be prescribed by the
Secretary of the Treasury or his delegate. No
corrective distribution under this section shall be
recognized for purposes of determining whether the
minimum distribution requirements of Section 401(a)(9)
of the Code are satisfied with respect to any Member.
(iv) Any distribution in accordance with this Section 3.01(c)
shall be made without regard to any notice or consent
otherwise required under Sections 411(a)(11) or 417 of
the Code.
(d) Deferred Cash Contributions constitute Employer contributions
under the Plan and are intended to qualify as elective
contributions under Section 401(k) of the Code. Deferred Cash
Contributions may be made only with respect to an amount which
the Member could otherwise elect to receive in cash and which
is not currently available to the Member as of the date an
election specified in this Section 3.01 is made. Any Deferred
Cash Contributions made on behalf of a Member in any given Plan
Year that is taken into account for purposes of the actual
deferral percentage limitation described in Section 3.05 shall
be attributable to services performed by the Member in such
-28- -10-<PAGE>
Plan Year and shall relate to Compensation which would have
been paid in such Plan Year (or within 2-1/2 months after such
Plan Year) but for the deferral election.
3.02 Rollover Contributions
With the permission of the Pension Committee and without regard to
any limitations on contributions set forth in Section 3.05 or 3.06,
the Plan may receive from a Member, or a Covered Employee who has not
yet met the eligibility requirements for membership, a check made
payable to the Plan which represents an amount previously received by
the Member or Covered Employee from a qualified plan (either directly
or indirectly), provided that such amount is eligible to be rolled
over to a qualified trust in accordance with Section 402(c) of the
Code and the Member or Covered Employee provides evidence
satisfactory to the Pension Committee that such amount qualifies for
rollover treatment. The Pension Committee may require the Member or
Covered Employee to provide an opinion of counsel satisfactory to the
Pension Committee that amounts to be rolled over meet the
requirements of this section. The Rollover Contributions must be
paid to the Trustee on or before the 60th day after the day the
amounts were received by the Member or the Covered Employee.
3.03 Change in Contributions
The percentage of Compensation designated by a Member under Section
3.01 shall remain in effect, notwithstanding any change in his
Compensation, until the Member elects to change such percentage.
Subject to the provisions of Section 3.01, a Member may change the
percentage of the Deferred Cash Contributions made on his behalf by
giving at least three weeks notice to the Employer on the form
prescribed by the Pension Committee. The changed percentage shall
become effective no later than the first day of the payroll period
after the expiration of the notice period.
3.04 Suspension of Contributions
(a) A Member may suspend the Deferred Cash Contributions made on
his behalf under Section 3.01. To suspend such contributions,
the Member must give at least three weeks prior written notice
to the Employer on the form prescribed by the Pension
Committee. The suspension of Deferred Cash Contributions shall
become effective no later than the first day of the payroll
period beginning after the expiration of the notice period.
(b) A Member who has suspended the Deferred Cash Contributions made
on his behalf may apply to the Pension Committee to again have
his Compensation reduced in accordance with an election
satisfying the requirements under Section 3.01. The election
to have Deferred Cash Contributions resumed shall become
effective no later than the first day of the payroll period
next following three weeks after the election was submitted to
the Pension Committee.
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3.05 Limitations Affecting Highly Compensated Employees
(a) Limitation Based on Actual Deferral Percentage: The Actual
Deferral Percentage for Highly Compensated Employees who are
Members or eligible to become Members shall not exceed the
Actual Deferral Percentage for all other Employees who are
Members or eligible to become Members multiplied by 1.25. If
the Actual Deferral Percentage for Highly Compensated Employees
does not meet the foregoing test, the Actual Deferral
Percentage for Highly Compensated Employees may not exceed the
Actual Deferral Percentage for all other Employees who are
Members or eligible to become Members by more than two
percentage points, and the Actual Deferral Percentage for
Highly Compensated Employees may not be more than 2.0 times the
Actual Deferral Percentage for all other Employees. The
Pension Committee may, from time-to-time, establish a
Contribution Limit and may adopt such rules as it sees fit to
assist the Plan in complying with the requirements of
Section 401(k)(3) of the Code and to equalize the effect of the
Contribution Limit. If the Pension Committee determines that
the limitation under this Section 3.05(a) has been exceeded in
any Plan Year, the following provisions shall apply:
(i) The amount of Deferred Cash Contributions made on behalf
of some or all Highly Compensated Employees for the Plan
Year shall be reduced, until the provisions of this
paragraph are satisfied, by levelling the highest
deferral percentage rates elected by the Highly
Compensated Employees. Such deferral percentage rates
shall be rounded to the nearest one-hundredth of one
percent of the Member's Statutory Compensation.
(ii) Deferred Cash Contributions subject to reduction under
this Section 3.05(a) ("excess contributions") and
Earnings shall be paid to the Member before the close of
the Plan Year following the Plan Year in which the
excess contributions were made and, to the extent
practicable, within 2-1/2 months of the close of the
Plan Year in which the excess contributions were made.
However, any excess contributions for any Plan Year
shall be reduced by any Deferred Cash Contributions
previously returned to the Member under Section 3.01(c)
for that Plan Year.
(b) In making a distribution under this Section, the Pension
Committee shall specifically designate such distribution as a
distribution consisting of excess contributions and Earnings.
Any distribution of less than the entire amount of excess
contributions and Earnings shall be treated as a pro rata
distribution of such excess contribution and Earnings.
(c) Except as otherwise provided by the Secretary of the Treasury
or his delegate, any excess contributions be taken into account
for purposes of determining the Member's annual additions
limitation as provided in Section 3.06 and shall be taken into
account for purposes of Section 404 of the Code,
notwithstanding the correction of such excess amounts by
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distribution. No corrective distribution under this Section
shall be recognized for purposes of determining whether the
minimum distribution requirements of Section 401(a)(9) of the
Code are satisfied with respect to any Member.
(d) Any distribution in accordance with this Section shall be made
without regard to any notice or consent otherwise required
under Sections 411(a)(11) or 417 of the Code.
(e) If any Highly Compensated Employee is either (i) a 5% owner, or
(ii) one of the top 10 Highly Compensated Employees on the
basis of Statutory Compensation, then any benefit or
contribution paid to or made on behalf of any member of his
"family" (spouse, lineal ascendant or descendant and their
spouses) shall be deemed paid to or made on behalf of such
Highly Compensated Employee for purposes of Section 3.05(a), to
the extent required under regulations prescribed by the
Secretary of the Treasury or his delegate under Section 401(k)
of the Code. Any return of excess contributions required under
Section 3.05(a) with respect to the family group shall be made
in accordance with such regulations. The total benefit shall
then be apportioned among the Highly Compensated Employees and
the members of his family in a manner determined by the Pension
Committee, which shall be uniformly applicable to all Employees
similarly situated.
(f) If any Highly Compensated Employee is a member of another
qualified plan of the Employer or an Affiliated Employer under
which Deferred Cash Contributions are made on behalf of the
Highly Compensated Employee, the Committee shall implement
rules, which shall be uniformly applicable to all Employees
similarly situated, to take into account all such contributions
for the Highly Compensated Employee under all such plans in
applying the limitations of this Section.
(g) If two or more plans of the Employer to which cash or deferred
contributions, matching contributions, Employee contributions
or all of them, are made and treated as one plan for the
purposes of Code Section 401(a)(4) of the Code or Section
410(b) (other than for purposes of Code Section
410(b)(2)(A)(ii)), such plans shall be treated as one plan for
the purposes of determining the limitation on Highly
Compensated Employees under Section 3.05.
(h) Any provision of this Article 3 to the contrary
notwithstanding, the provisions of Section 3.05 shall be deemed
to include the provisions of Sections 401(k)(3) of the Code and
Section 1.401(k)-1(b) of the Income Tax Regulations which are
incorporated herein by reference.
3.06 Maximum Annual Additions
(a) The annual addition to a Member's Accounts for any Plan Year,
which shall be considered the "limitation year" for purposes of
Section 415 of the Code, when added to the Member's annual
addition for that Plan Year under any other qualified defined
contribution plan of the Employer or an Affiliated Employer,
shall not exceed an amount which is equal to the lesser of:
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(i) 25% of his remuneration (as hereinafter defined) for that
Plan Year, or (ii) $30,000, as adjusted by applying the
Adjustment Factors to years up to and including the given Plan
Year.
(b) For purposes of this Section, the "annual addition" shall be
the sum of the following amounts to the extent allocated to the
Member's Accounts under the Plan or to his account under such
other plan or plans described below:
(i) The total contributions, including Deferred Cash
Contributions made on the Member's behalf by the
Employer or an Affiliated Employer;
(ii) All Member contributions, exclusive of any Rollover
Contributions;
(iii) Reallocated forfeitures; and
(iv) Amounts allocated to an individual medical account, as
defined in Section 415(l)(2) of the Code, as part of a
pension or annuity plan and amounts derived from
contributions paid or accrued which are attributable to
post-retirement medical benefits described in Section
419A(d) of the Code, under a welfare benefit fund (as
defined in Section 419(e) of the Code) maintained by the
Employer or an Affiliated Employer.
(c) For purposes of this Section, the term "remuneration" with
respect to any Member shall mean Statutory Compensation
determined, however, after any reduction of Compensation
pursuant to Section 3.01 or pursuant to a cafeteria plan as
described in Section 125 of the Code.
(d) In the event that a Member's total annual additions for any
limitation year exceed the limitations of Section 3.06(a)
because of a reasonable error in estimating a Member's
Compensation, a reasonable error in determining the amount of
Deferred Cash Contributions that a Participant may make within
the limitations of Section 3.06(a), or due to such other facts
and circumstances as the Commissioner of Internal Revenue finds
justifiable, his total annual additions shall be reduced in the
following order until such limitations are met:
(i) After-tax Member contributions made in the limitation
year under any other plan maintained by the Employer or
Affiliated Employer shall be returned to the Member in
accordance with the provisions of such plan to the
extent necessary to meet the above limitations;
(ii) The Deferred Cash Contributions made on the Member's
behalf in the limitation year shall be distributed to
the Member.
The Pension Committee may change the order of the reductions
listed above in any manner which, in the judgment of the
Pension Committee, is in the Member's best interest.
(e) If a Member is also a member in a defined benefit plan
maintained by the Employer, the sum of the defined benefit plan
fraction and the defined contribution plan fraction for any
limitation year after 1982 shall not exceed 1.0. The defined
benefit plan fraction for any limitation year is a fraction,
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the numerator of which is the projected annual benefit of the
Member under such plan (determined as of the close of the
limitation year), and the denominator of which is the lesser of
1.25 times the dollar limit in Section 415(b)(1)(A) of the Code
or 1.4 times 100% of the Member's average remuneration over
that period of consecutive calendar years (not more than three)
during which his remuneration was the highest. The defined
contribution plan fraction for any limitation year is a
fraction the numerator of which is the sum of the annual
additions on behalf of the Member under the Plan and any other
defined contribution plan or plans maintained by the Employer
as of the close of the year and the denominator of which is the
sum of 1.25 times the maximum dollar limit or 1.4 times the
maximum percentage limit, whichever is smaller on a year-by-
year basis, which could have been made under Section 415(c) of
the Code for such year and for each prior year of service with
the Employer, subject to any transition adjustments allowed by
law and adopted by the Pension Committee. Any adjustment
necessary to comply with the limitations of Section 3.06(e)
shall be made in the Member's benefit payable under the defined
benefit plan.
3.07 Return of Contributions
(a) Any provision of the Plan to the contrary notwithstanding, the
total contributions made by the Employer with respect to any
Plan Year, when added to any other contributions made by the
Employer to a plan qualified under Section 401(a) of the Code,
shall not exceed such amount which is deductible for such Plan
Year pursuant to Sections 404(a)(3) or 404(a)(7) of the Code.
In any event, all contributions for a Plan Year shall be paid
within the regular or extended time for filing the Employer's
federal income tax return for the fiscal year which includes
the Plan Year end.
(b) The Employer's contributions to the Plan are conditioned upon
their deductibility under Section 404 of the Code. If it is
determined that all or part of the Employer's contributions to
the Plan are not currently deductible under Section 404 of the
Code, the Employer shall direct the Trustee to return the
nondeductible portion of the contribution to the Employer
without interest but reduced by any investment loss
attributable to the nondeductible contribution. The return
shall be made within one year after the contribution is
determined to be nondeductible.
(c) The Employer may recover without interest the amount of its
contributions to the Plan made on account of a mistake of fact,
reduced by any investment loss attributable to those
contributions, if recovery is made within one year after the
date of those contributions.
(d) In the event that the Deferred Cash Contributions made under
Section 3.01 are returned to the Employer in accordance with
the provisions of this Section 3.07, the elections to reduce
Compensation which were made by Members on whose behalf those
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contributions were made, to the extent the elections apply to
amounts returned, shall be void retroactively to the beginning
of the period for which those contributions were made. The
Deferred Cash Contributions so returned shall be distributed in
cash to those Members for whom those contributions were made.
In the event the Pension Committee determines that an amount to
be deferred pursuant to the election provided in Section 3.01
would cause the Employer's contributions under this and/or any
other tax-qualified retirement plan maintained by the Employer
or an Affiliated Employer to exceed the applicable deduction
limits contained in Section 404 of the Code, or to exceed the
maximum annual addition determined with respect to a Member in
accordance with Section 3.06, the Pension Committee may, in its
discretion, authorize a suspension or reduction of Deferred
Cash Contributions in accordance with rules promulgated by the
Pension Committee.
Article 4. Investment of Contributions and Accounts; Valuation
4.01 Investment Funds
(a) Contributions to the Plan shall be invested in one or more
Investment Funds, as authorized by the Pension Committee, from
time to time.
(b) The Trustee may keep such amounts of cash as the Pension
Committee, in its sole discretion, shall deem necessary or
advisable as part of the Funds, all within the limitations, if
any, specified in the trust agreement.
(c) Dividends, interest, and other distributions received on the
assets held by the Trustee in respect to each of the Funds
shall be reinvested in the respective Fund.
4.02 Investment of Members' Accounts
A Member or Covered Employee making a Rollover Contribution shall
make one investment election which shall apply to all contributions
to be made to the Deferred Account and, if there is no separate
election, to the Rollover Account maintained on his behalf under the
Plan. Such investment elections shall be furnished to the Pension
Committee and shall specify, in 10% increments from 0% to 100%, the
percentage of all future contributions to be invested in the
Investment Funds then offered under the Plan. Such elections shall
remain in effect until changed in accordance with Section 4.04.
4.03 Responsibility for Investments
Each Member and Covered Employee is solely responsible for the
selection of his investment option. The Trustee, the Pension
Committee, the Employer, and the directors, officers, supervisors and
other employees of the Employer are not empowered to advise a Member
or Covered Employee as to the manner in which his Accounts shall be
invested. The fact that an Investment Fund is available for
investment under the Plan shall not be construed as a recommendation
for investment in that Investment Fund.
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4.04 Change of Election
A Member may change his investment election with respect to future
Deferred Cash Contributions at any time by giving notice to the
Trustee in the form and manner prescribed by the Pension Committee.
The changed investment election shall be made in the same manner as
elections under Section 4.02 and shall become effective as of the
business day on which the completed election is submitted to the
Trustee or as of the next following business day, in accordance with
procedures established by the Trustee and communicated to Members.
Any election under this Section 4.04 shall remain in effect until
changed by another election under this Section.
4.05 Reallocation of Accounts Among the Funds
A Member or Covered Employee with a Rollover Account maintained on
his behalf may elect to reallocate his Accounts among the Investment
Funds. Such election to reallocate shall specify, in 1% increments
from 0% to 100%, the percentage of his entire Account balance to be
invested in the Investment Funds then offered under the Plan or the
dollar amount to be exchanged out of an Investment Fund and into one
or more Investment Funds then offered under the Plan. The
reallocation election shall be furnished to the Trustee and shall be
effective as of the business day on which the completed election is
submitted to the Trustee or as of the next following business day, in
accordance with procedures established by the Trustee and
communicated to Members and Covered Employees with Accounts
maintained under the Plan. Such election shall remain in effect
until changed by another election under this Section. Subject to
Section 5.02, a Member or Covered Employee may make the reallocation
election at any time by giving notice in the form and manner
prescribed by the Pension Committee and communicated to Members and
Covered Employees with Accounts maintained under the Plan.
4.06 Limitations Imposed by Contract
Notwithstanding anything in Article 4 to the contrary, any
contributions invested in a guaranteed investment contract shall be
subject to any and all terms of such contract, including any
limitations placed on the exercise of any rights otherwise granted to
a Member or Covered Employee under any other provisions of this Plan
with respect to such contributions.
4.07 Valuation of the Investment Funds
The Trustee shall value the Investment Funds on the Valuation Date
and at such other date or dates deemed necessary by the Pension
Committee. On each Valuation Date there shall be allocated to the
Accounts of each Member his proportionate share of the increase or
decrease in the fair market value of his Accounts in each of the
Funds, based on the fair market value of the Funds on said Valuation
Date.
4.08 Discretionary Power of the Pension Committee
The Pension Committee reserves the right to change from time to time
the procedures used in valuing the Accounts or crediting or debiting
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the Accounts if it determines, after due deliberation and upon the
advise of counsel and/or the current recordkeeper, that such an
action is justified in that it results in a more accurate reflection
of the fair market value of the Accounts. In the event of a conflict
between the provisions of Article 4 and such new administrative
procedures, the new administrative procedures shall prevail.
4.09 Statement of Accounts
At least once a year, each Member shall be furnished with a statement
setting forth the value of his Accounts.
Article 5. Zurn Stock Fund
The provisions of this Article shall become applicable to the extent to which
Accounts under the Plan are invested in the Zurn Stock Fund.
5.01 Establishment of Zurn Stock Fund
Effective February 1, 1996 or as soon thereafter as is practicable
and consistent with sound administration, the Pension Committee shall
make available under the Plan an Investment Fund which shall consist
exclusively of Common Stock; provided, however, that a portion not
exceeding ten percent (10%) of the fair market value of the Fund may
be held in short-term interest-bearing investments or cash pending
purchase of Common Stock and to provide sufficient liquidity for
exchanges out of the Fund, withdrawals and loans. Such Investment
Fund shall be referred to as the "Zurn Stock Fund". Except as
otherwise provided in this Article 5, a Member or Covered Employee
shall be permitted to invest all or a portion of the contributions
made on his behalf and/or his Accounts in the Zurn Stock Fund in
accordance with the provisions of Article 4. Unless otherwise
limited under the terms of the trust agreement, the Trustee may
purchase or sell Common Stock on the open market or by privately-
negotiated transaction; provided however, that any such purchase or
sale shall be made only in exchange for fair market value as
determined by the Trustee and, provided further that, except for
purchases or sales of Common Stock on a stock exchange registered
with the Securities and Exchange Commission, no commission shall be
charged or paid with respect to any purchase or sale of Common Stock
by the Trustee. Any distributions, dividends or other income
received by the Trustee with respect to the Zurn Stock Fund shall be
reinvested by the Trustee in the Zurn Stock Fund.
5.02 Restrictions on Transfer and Withdrawal of Amounts Invested in Zurn
Stock Fund
(a) The restrictions in Section 5.02(b) shall apply to that portion
of Accounts maintained on behalf of Members, Covered Employees,
Beneficiaries and Alternate Payees which are invested in the
Zurn Stock Fund and, if and to the extent necessary, any
election made by a Member, Covered Employee, Beneficiary or
Alternate Payee under the Plan shall be deemed modified to be
consistent with this Section 5.02.
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(b) Notwithstanding the provisions of Sections 4.02 and 4.05 and
Articles 7 and 8:
(i) No Member, Covered Employee, Beneficiary or Alternate
Payee shall, on the basis of material nonpublic
information with respect to the Company or its
affiliates, make an election permitted by those Sections
or Articles if (A) such election would result in an
exchange into or out of, loans from, withdrawals from,
or an increase or decrease in the amount of
contributions to the Zurn Stock Fund, and (B) the
transaction resulting from such election is prohibited
by Rule 10b-5.
(ii) No officer shall make an election permitted by those
Sections or Articles if such election would result in a
transaction involving the Zurn Stock Fund which is not
an exempt transaction pursuant to Rule 16b-3.
(c) For purposes of this Section 5.02, the terms "Rule 10b-5" and
Rule 16b-3" shall mean the rules, as amended, having those
designations promulgated by the United States Securities and
Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended, and the terms "affiliate" and "officer" shall
have the meanings set forth in Rule 12b-2 and Rule 16a-1(f),
respectively, both as so promulgated and amended.
5.03 Voting of Common Stock
(a) Each Member, Covered Employee, Beneficiary or Alternate Payee
who has an Account maintained on his behalf with an investment
in the Zurn Stock Fund shall have the following powers and
responsibilities:
(i) Prior to each annual or special meeting of the
shareholders of the Company, the Company shall cause to
be sent to each person described in Section 5.03(a), a
copy of the proxy solicitation material for such
meeting, together with a form requesting confidential
voting instructions for the voting of the Common Stock
held in the Zurn Stock Fund in proportion to the number
of units of the Zurn Stock Fund held by such a person's
Accounts. Upon receipt of such a person's instructions,
the Trustee shall then vote in person, or by proxy, such
Common Stock as so instructed.
(ii) The Company shall cause the Trustee to furnish, as soon
as practicable after receipt by the Trustee, to each
person described in Section 5.03(a) notice of any tender
or exchange offer for, or a request or invitation for
tenders or exchanges of, Common Stock made to the
Trustee. The Trustee shall request from each such
person instructions as to the tendering or exchanging of
Common Stock held in the Zurn Stock Fund in proportion
to the number of units of the Zurn Stock Fund held by
such a person's Accounts. Within the time specified by
the notice of any tender or exchange offer for, or
request or invitation for tenders or exchanges of,
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Common Stock, the Trustee shall tender or exchange such
Common Stock as to which the Trustee has received
instructions to tender or exchange from the persons
described in Section 5.03(a).
(iii) Instructions received from the persons described in
Section 5.03(a) by the Trustee regarding the voting,
tendering, or exchanging of Common Stock held in the
Zurn Stock Fund shall be held in strictest confidence
and shall not be divulged to any other person, including
directors, officers or employees of the Company, except
as otherwise required by law, regulation or lawful
process.
(b) The Trustee shall vote Common Stock for which the Trustee does
not receive affirmative direction in accordance with the
instructions of the Pension Committee. Common Stock for which
the Trustee does not receive affirmative direction to tender or
exchange shall not be tendered or exchanged.
Article 6. Vested Portion of Accounts
6.01 Deferred Account and Rollover Account
Members and Covered Employees having Rollover Accounts maintained on
their behalf shall at all times be 100% vested in, and have a
nonforfeitable right to, their Deferred Accounts and their Rollover
Accounts.
Article 7. Withdrawals While Still Employed
7.01 Withdrawal of Rollover Contributions
Subject to the provisions of Section 7.04, an active Employee who
meets the hardship criteria of Section 7.03 (treating as ineffective
for this purpose the last sentence of Section 7.03(c)) may elect to
make a cash withdrawal from his Rollover Account.
7.02 Withdrawal After Age 59-1/2
Subject to the provisions of Section 7.04, an active Employee who
shall have attained age 59-1/2 as of the effective date of any
withdrawal pursuant to this Section may elect a withdrawal of all or
part of his Rollover Account or his Deferred Account. The withdrawal
may be in cash or, to the extent the Rollover Account or Deferred
Account is invested in the Zurn Stock Fund, in shares of Common Stock
not to exceed the whole number of shares represented by the
proportion of the units of the Zurn Stock Fund in the Employee's
Rollover Account or Deferred Account to the total number of units of
the Zurn Stock Fund then outstanding.
7.03 Hardship Withdrawal
(a) Subject to the provisions of Section 7.04, a Member may elect
to make a cash withdrawal of his Deferred Cash Contributions
(without any earnings) provided that he furnishes proof of
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"hardship" satisfactory to the Pension Committee in accordance
with the provisions of Sections 7.03(b) and (c).
(b) As a condition for hardship there must exist with respect to
the Member an immediate and heavy financial need to draw upon
his Accounts. The Pension Committee shall presume the
existence of such immediate and heavy financial need if the
requested withdrawal is on account of any of the following:
(i) Medical expenses described in Section 213(d) of the Code
incurred by the Member, his spouse or any of his
dependents (as defined in Section 152 of the Code) or
expenses necessary for these persons to obtain medical
care described in Section 213(d) of the Code; or
(ii) Costs directly related to the purchase of a principal
residence of the Member (excluding mortgage payments);
or
(iii) Payment of tuition and related educational fees for a
period not to exceed 12 months of post-secondary school
education of the Member, his spouse, children or
dependents; or
(iv) Payment of amounts necessary to prevent eviction of the
Member from his principal residence or to avoid
foreclosure on the mortgage on his principal residence;
or
(v) The inability of the Member to meet such other expenses,
debts or other obligations recognized by the Internal
Revenue Service as giving rise to immediate and heavy
financial need for purposes of Section 401(k) of the
Code.
In evaluating the relevant facts and circumstances, the Pension
Committee shall act in a nondiscriminatory fashion and shall
treat uniformly those Members who are similarly situated. The
Member shall furnish to the Pension Committee such supporting
documents as the Pension Committee may request in accordance
with uniform and nondiscriminatory rules prescribed by the
Pension Committee.
(c) As a condition for a hardship withdrawal, the Member must
certify (i) that the requested withdrawal is necessary to
satisfy the financial need described in Section 7.03(b) and
(ii) that the need cannot reasonably be relieved (A) through
reimbursement or compensation by insurance or otherwise; (B) by
reasonable liquidation of the Member's assets or the assets of
the Member's spouse and minor children reasonably available to
the Member, (C) by cessation of Deferred Cash Contributions
under the Plan, or (D) by other distributions or nontaxable (at
the time of the loan) loans from the Plan or other plans of the
Employer or by borrowing from commercial sources on reasonable
commercial terms. For purposes of the foregoing, a need shall
not reasonably be relieved by any of the actions described in
(A), (B), (C) or (D) if a Member demonstrates, to the
satisfaction of the Pension Committee, that the effect would be
to increase the amount of the need. The Member shall furnish
to the Pension Committee such supporting documents as the
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Pension Committee may request in accordance with uniform and
nondiscriminatory rules prescribed by the Pension Committee.
If the Member's certification and supporting documents are
satisfactory to the Pension Committee in both form and
substance and the Pension Committee has no actual knowledge
contradicting the Member's certification and supporting
documents, the Pension Committee shall find that the requested
withdrawal is necessary to meet the Member's financial need.
Notwithstanding the foregoing, as a condition of receiving a
hardship withdrawal, a Member's Deferred Cash Contributions
shall be suspended for a period of at least 12 months after the
date the Member receives the hardship distribution.
(d) The Pension Committee shall have full discretionary authority
to modify the provisions of Section 7.03 provided that any
modification shall be evidenced by a writing in the
administrative record of the Pension Committee, shall be
consistently applied and shall not operate so as to reduce or
eliminate any benefit protected under Section 411(d)(6) of the
Code that has accrued as of the date of modification.
7.04 Procedures and Restrictions
To make a withdrawal, at least 30 days' prior written notice shall be
given to the Pension Committee. A withdrawal shall be effective as
of the date specified in the written notice (provided such date
occurs on or after the expiration of the notice period) and shall be
based upon the applicable Account(s) as of the Valuation Date. Not
more than two withdrawals may be made in any Plan Year except that a
withdrawal under Section 7.03 may be made in addition to any other
withdrawal made during the Plan Year. The minimum withdrawal shall
be $500 or the total value of the Vested Portion of the Accounts
maintained on behalf of the person making the withdrawal which are
available for withdrawal, if less. The amount of the withdrawal
shall be allocated among the Investment Funds as determined by the
person making the withdrawal. All payments under this Article shall
be made as of the effective date of the withdrawal.
Article 8. Loans to Members
8.01 Amount Available
(a) Subject to the provisions of Article 8, a Member who is an
Employee (and who is not on leave of absence or layoff) may
borrow an amount from his Accounts which, when added to the
outstanding balance of any other loans to the Member from the
Plan, does not exceed the lesser of: (i) 50% of the Vested
Portion of his Accounts; or (ii) $50,000 reduced by the excess,
if any, of (A) the highest outstanding balance of loans to the
Member from the Plan during the one year period ending on the
day before the day the loan is made, over (B) the outstanding
balance of loans to the Member from the Plan on the date on
which the loan is made. Notwithstanding the foregoing, any
Plan loan is contingent upon the eligible Member making written
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application to the Pension Committee on such forms as may be
provided by the Pension Committee and upon the Pension
Committee's approval of such application under such rules as it
shall adopt. The minimum loan shall be $1,000. Solely for
purposes of Article 8, an Employee who is not a Member but who
has made a Rollover Contribution pursuant to Section 3.03 shall
be considered a "Member" of the Plan.
(b) The interest rate to be charged on loans shall be determined as
of the beginning of the month in which the Member's loan
application is received by the Pension Committee and shall be
1% plus the prime rate of interest charged by persons in the
business of lending money for loans of similar purpose and
duration. The interest rate so determined shall be fixed for
the duration of each loan.
(c) The amount of the loan is to be transferred from the Investment
Funds in which the Member's Accounts are invested to a "Loan
Fund" for the Member under the Plan. The Loan Fund shall
consist solely of the amount transferred to the Loan Fund and
such amount shall be invested solely in the loan made to the
Member. The amount transferred to the Loan Fund shall be held
as security for the loan. Payments of principal on the loan
will reduce the amount held in the Member's Loan Fund. Those
payments, together with the attendant interest payment, will be
reinvested in the Investment Funds in accordance with the
Member's then effective investment election.
8.02 Terms
(a) In addition to such rules as the Pension Committee, in its
discretion, may adopt, all loans shall comply with the
following terms and conditions:
(i) An application for a loan by a Member shall be made in
writing to the Pension Committee, whose action in
approving or disapproving the application shall be
final;
(ii) Each loan shall be evidenced by a promissory note
payable to the Plan;
(iii) The period of repayment for any loan shall be arrived at
by mutual agreement between the Pension Committee and
the Member, but that period shall not exceed five years
unless the loan is to be used in conjunction with the
purchase of the principal residence of the Member, in
which case the period shall not exceed ten years;
(iv) Payments of principal and interest will be made by
payroll deductions implemented by the Employer or
Affiliated Employer or in such manner as may be agreed
to by the Member and the Pension Committee; provided,
however, that any repayment arrangement shall require
repayment in substantially level amounts, made no less
frequently than quarterly, in an amount sufficient to
amortize the loan over the repayment period;
(v) A loan may be prepaid in full as of any date without
penalty;
-41- -23-<PAGE>
(vi) No more than one loan may be made to a given Member in
any calendar year;
(vii) No more than two loans may be outstanding at any given
time; and
(viii) The Pension Committee may require Members to pay a
reasonable fee to defray administrative costs associated
with each loan.
(b) If a loan is not repaid in accordance with the terms contained
in the promissory note and a default occurs, the Plan may
execute upon its security interest in the Member's Accounts
under the Plan to satisfy the debt; however, the Plan shall not
levy against any portion of the Member's Accounts until such
time as a distribution of the Member's Accounts could otherwise
be made under the Plan. In the event a Member on whose behalf
a Plan loan is outstanding transfers employment to an
Affiliated Employer and such loan is not transferred to a
qualified plan under which such Affiliated Employer
participates, such Affiliated Employer shall accept, to the
extent applicable under the terms of the loan agreement, the
duties and obligations of the Employer under the repayment
terms of the loan agreement.
(c) Any additional rules, procedures or restrictions applicable to
the administration of the loan program and which may be
required to be set forth in writing to satisfy the requirements
of Title 29 of the Code of Federal Regulations
Section 2550.408b-1(d) shall be contained in the application
and disclosure forms provided to prospective loan applicants by
the Pension Committee. Such further documentation is hereby
incorporated into the Plan by reference, and the Pension
Committee is hereby authorized to make such revisions to these
rules as it deems necessary or appropriate.
Article 9. Distribution of Accounts Upon Termination of Employment
9.01 Eligibility
Upon a Member's termination of employment with all Employers and
Affiliated Employers, the Vested Portion of his Accounts, as
determined under Article 6, shall be distributed as provided in this
Article.
9.02 Form of Distribution
Distribution of the Vested Portion of a Member's Accounts shall be
made to the Member, or to his Beneficiary in the event of death, in a
cash lump sum; provided, however, that the Member or Beneficiary may
elect to have the Vested Portion of the Accounts maintained on his
behalf which is, as of the time of distribution, invested in the Zurn
Stock Fund, paid in shares of Common Stock not to exceed the whole
number of shares represented by the proportion of the units of the
Zurn Stock Fund in the Member's Accounts to the total number of units
of the Zurn Stock Fund then outstanding.
-42- -24-<PAGE>
9.03 Date of Payment of Distribution
(a) In the event of the termination of the Member's employment with
all Employers and Affiliated Employers, the Member, or his
Beneficiary in the event of death, shall be paid the Vested
Portion of the Member's Accounts in the form of a lump sum if
the fair market value of such Vested Portion is not currently,
and was not at the time of any prior distribution, in excess of
$3,500. If, as of the time of any distribution, the fair
market value of the Vested Portion of the Member's Accounts
exceeds $3,500, the Member may elect payment of such Vested
Portion upon termination. In lieu thereof, a Member may elect
to defer payment of such amount until a later date by giving
written notice to the Pension Committee on a form designated
for that purpose. Subject to the terms of Section 9.04, the
failure of any Member to make an election with respect to
Accounts, the Vested Portion of which have a fair market value
in excess of the $3,500 threshold, shall be deemed to be an
election by the Member to defer payment of such Vested Portion.
All determinations of fair market value under this Article 9
shall be made as of the applicable Valuation Date.
Notwithstanding the foregoing, distribution of the Vested
Portion of a Member's Accounts shall be made no later than the
sixtieth (60th) day after the latest of the close of the Plan
Year in which (i) the Member attains his Normal Retirement Age,
or (ii) the Member terminates employment with all Employers and
Affiliated Employers, unless the Member specifically elects to
defer distribution until a later date permitted under
Section 9.04.
(b) The Pension Committee shall notify a Member or Beneficiary of
his election right under Section 9.02 and, in the case of a
Member who may defer payment of the Vested Portion of his
Accounts in accordance with Section 9.03(a), his right to defer
payment. Such notification shall be provided to a Member or
Beneficiary as soon as administratively practicable following
termination or retirement, but not less than 30 days before the
account is distributed without the Member's or Beneficiary's
affirmative election to be paid the Vested Portion of the
Member's Accounts. A Member's or Beneficiary's affirmative
election to be paid the Vested Portion of the Member's Accounts
may be implemented by the Pension Committee less than 30 days
after the Member or Beneficiary receives the notice provided
under this Section 9.03(b).
(c) Notwithstanding any provision of the Plan to the contrary, a
Distributee may elect, subject to rules adopted by the Pension
Committee which shall be consistent with income tax
regulations, to have any portion of an Eligible Rollover
Distribution paid directly to an Eligible Retirement Plan
specified by the Distributee in a direct rollover to such plan.
The Pension Committee shall notify a Distributee of his right
to elect a direct rollover. Such notice shall be provided to
the Distributee as soon as administratively practicable
following the event which gives rise to the Distributee's
-43- -25-<PAGE>
rights under this Section but not less than 30 days before the
account is distributed without the Distributee's affirmative
election to make or not make a direct rollover. A
Distributee's affirmative election to make or not make a direct
rollover may be implemented by the Pension Committee less than
30 days after the Distributee receives such notice of his
direct rollover rights, but only if the Pension Committee
notifies the Distributee that he has the right to consider the
decision of whether or not to elect a direct rollover for up to
30 days. A Distributee who is eligible for an automatic lump
sum distribution under Section 9.03(a) and who has been given a
timely notice and explanation of the election to have his
Eligible Rollover Distribution paid to an Eligible Retirement
Plan, will be presumed to have elected to have his benefit paid
directly to him if the Distributee fails to make the election
within 31 days of being notified of his rights to make the
election. Notwithstanding the provisions of this Section, in
the event the provisions of Section 9.03(c) should not be
required as a condition for plan qualification under Section
401(a) of the Code, it shall automatically be deemed null,
void, and of no force or effect. For purposes of this Section:
(i) The term "Distributee" shall mean an Employee or former
Employee. In addition, such an individual's surviving
spouse or such an individual's spouse or former spouse
who is an alternate payee within the meaning of Section
414(p)(8) of the Code are Distributees with respect to
the interest of the spouse or former spouse.
(ii) The term "Eligible Rollover Distribution" shall mean any
distribution of all or any portion of the balance to the
credit of the Distributee other than (A) any
distribution that is one of a series of substantially
equal periodic payments made for the life, or life
expectancy, of the Distributee or the joint lives, or
joint life expectancies, of the Distributee and his
beneficiary, or for a specified period of ten years or
more, (B) any distribution to the extent such
distribution is required under Section 401(a)(9) of the
Code, and (C) the portion of any distribution that is
not includible in gross income.
(iii) The term "Eligible Retirement Plan" shall mean an
individual retirement account or annuity, as described
in Sections 408(a) and 408(b) of the Code, respectively,
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 a surviving spouse, an
"Eligible Retirement Plan" is an individual retirement
account or annuity.
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9.04 Required Distributions
(a) In no event shall the provisions of this Article operate so as
to allow the distribution of a Member's Accounts to begin later
than the April 1st following the calendar year in which he
attains age 70-1/2.
(b) In the event a Member is an Employee and is required to begin
receiving payments under the provisions of Section 9.04(a), the
Member shall receive a lump sum distribution, made in
accordance with Section 9.02, on or before the date specified
in Section 9.04(a). The amount of the lump sum shall be equal
to the fair market value of the Vested Portion of the Member's
Accounts. Thereafter, in each distribution calendar year, the
Plan shall distribute to the Member a lump sum payment made in
accordance with Section 9.02 which shall be equal to the fair
market value of the Vested Portion of the Member Accounts which
accrued during such calendar year. The commencement of
payments under Section 9.04 while a Member is an Employee shall
be considered an Annuity Starting Date for purposes of Section
72, Section 401(a)(11) and Section 417 of the Code.
(c) Except as provided under Section 9.03(a), a distribution to a
Beneficiary shall be made as soon as administratively
practicable following the Member's date of death. In no event
shall distribution to a Beneficiary be made later than the
December 31 of the calendar year which contains the fifth
anniversary of the Member's death.
9.05 Distributions Under a Qualified Domestic Relations Order
(a) The Pension Committee shall establish reasonable procedures to
determine the status of domestic relations orders and to
administer distributions under such orders which are deemed to
be qualified domestic relations orders. Such procedures shall
be in writing and shall comply with the provisions of
Section 414(p) of the Code.
(b) Upon determination by the Pension Committee that a domestic
relations order is a "qualified domestic relations order" as
described in Section 414(p) of the Code, the following shall
apply:
(i) If the fair market value of the vested interest to be
distributed to an Alternate Payee does not exceed
$3,500, such vested interest shall be paid to the
Alternate Payee in the form of a cash lump sum. Such
payment shall be made as soon as practicable following
the creation of such Alternate Payee's interest.
(ii) If the fair market value of the vested interest to be
distributed to an Alternate Payee exceeds $3,500, the
Alternate Payee may elect to be paid such vested
interest as soon as administratively practicable in the
form of a cash lump sum or may elect to receive the fair
market value of such vested interest in a cash lump sum
at any time after the "earliest retirement age"
described in Section 414(p)(4)(B) of the Code.
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(c) To the extent that, because of a qualified domestic relations
order, more than one individual is to be treated as a
Beneficiary of a Member, the total amount payable from the Plan
as a result of the death of the Member shall not exceed the
amount that would be payable if there were only one
Beneficiary.
9.06 Status of Accounts Pending Distribution
Until distributed under Section 9.03, 9.04 or 9.05, the Accounts of
Members, Beneficiaries and Alternate Payees shall continue to be
invested as part of the assets of the Plan. A Member or an Alternate
Payee may reallocate the Account(s) maintained on his behalf among
the Investment Funds offered under the Plan. A Beneficiary shall not
be permitted to reallocate the Accounts of a deceased Member among
such Investment Funds.
9.07 Proof of Death and Right of Beneficiary or Other Person
The Pension Committee may require and rely upon such proof of death
and such evidence of the right of any Beneficiary or other person to
receive the value of the Accounts of a deceased Member as the Pension
Committee may deem proper and its determination of the right of that
Beneficiary or other person to receive payment shall be conclusive.
9.08 Distribution Limitation
Notwithstanding any other provision of this Article 9, all
distributions from the Plan shall conform to the regulations issued
under Section 401(a)(9) of the Code, including the incidental death
benefit provisions of Section 401(a)(9)(G) of the Code. Further,
such regulations shall override any Plan provision that is
inconsistent with Section 401(a)(9) of the Code.
Article 10. Administration of Plan
10.01 Appointment of Pension Committee
The general administration of the Plan and the responsibility for
carrying out the provisions of the Plan shall be placed in a Pension
Committee of not less than three persons appointed, together with the
chairman of the Pension Committee, from time to time by the Board of
Directors to serve at the will of the Board of Directors. Any member
of the Pension Committee may resign by delivering his written
resignation to the Board of Directors and the Secretary of the
Pension Committee. The chairman of the Pension Committee shall serve
as secretary or shall appoint a secretary who may, but need not, be
one of the members of the Pension Committee. The members of the
Pension Committee may appoint from their number such subcommittees
with such powers as they shall determine, provided such powers are
consistent with the provisions of Section 10.02, and may authorize
one or more of their number or any agent to execute or deliver any
instrument or make any payment on their behalf. Whenever any action
is required or permitted to be taken in the administration of the
Plan, such action shall be taken by the Pension Committee unless the
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Pension Committee's power is expressly limited herein or by operation
of law. Unless otherwise delegated by the Pension Committee, the
Pension Committee shall be the Plan "Administrator", as such term is
defined in Section 3(16) of ERISA.
10.02 Powers of Pension Committee
The Pension Committee shall have sole and absolute discretion to
interpret and apply the provisions of the Plan to determine the
rights and status of Covered Employees, Members and all others under
the Plan, to decide disputes arising under the Plan, and to make any
determinations and findings of fact with respect to benefits payable
hereunder and the persons entitled thereto as may be required for any
purpose under the Plan. Without limiting the generality of the
above, the Pension Committee is hereby granted the following
authority which it shall discharge in its sole and absolute
discretion in accordance with Plan provisions as interpreted by the
Pension Committee:
(a) To make all determinations of fact relating to the eligibility
of any Employee to become a Member, to make Deferred Cash
Contributions and to receive distributions from the Plan.
(b) To authorize the Trustee to make payment of benefits from the
trust fund to Members, Alternate Payees and Beneficiaries
entitled to such benefits under the Plan and to establish
procedures governing the manner in which such authorizations
will be made.
(c) To develop procedures for the establishment and verification of
service and Compensation of Members, and, after affording
Members and the Employer an opportunity to make objection with
respect thereto, to establish such facts conclusively from time
to time in advance of retirement.
(d) To obtain from the Employer, Members, Alternate Payees and
Beneficiaries such information as shall be necessary for the
proper administration of the Plan.
(e) To establish rules and procedures relating to the
administration of the Plan and the transaction of its business
and to enforce the rules and procedures in the manner in which
it sees fit.
(f) To retain counsel, employ agents and provide for such clerical,
accounting and consulting services as may be necessary or
appropriate in connection with the administration of the Plan.
(g) To perform all reporting and disclosure requirements imposed
upon the Plan by ERISA, the Code, the Securities Act of 1933,
as amended, the Securities and Exchange Act of 1934, as
amended, or any other lawful authority.
(h) To ensure that procedures are established which are sufficient
to safeguard the confidentiality of information relating to the
purchase, holding, and sale of Common Stock held in the Zurn
Stock Fund and the exercise of voting, tender, and similar
rights with respect to Common Stock held in the Zurn Stock Fund
and to ensure that such procedures are being followed.
(i) To appoint and remove an independent Fiduciary for the purpose
of carrying-out activities relating to any situations which the
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Pension Committee determines involves an unreasonable potential
for undue Employer influence with regard to the direct or
indirect exercise of shareholder rights with respect to Common
Stock holdings in the Zurn Stock Fund.
(j) To take such steps as it, in its discretion, considers
necessary or appropriate to remedy any inequity under the Plan
that results from incorrect information received or
communicated or as the consequence of administrative error.
(k) To correct any defect, reconcile any inconsistency or supply
any omission under the Plan.
(l) To allocate among its members or, except as provided otherwise
herein, to delegate to other persons all or a portion of its
powers and duties as it sees fit.
(m) To exercise such other authority and responsibility as is
specifically assigned to it under the terms of the Plan and to
perform any other acts necessary to the performance of its
powers and duties.
All powers of the Pension Committee shall be exercised in a uniform
manner consistent with all provisions of the Plan unless the power is
being exercised in order to correct or reconcile provisions which are
inconsistent.
10.03 Individual Accounts
The Pension Committee shall maintain, or cause to be maintained,
records showing the individual balances in each Account maintained on
behalf of Members and other persons under the Plan. However,
maintenance of those records and Accounts shall not require any
segregation of the funds of the Plan.
10.04 Meetings
The Pension Committee shall hold meetings upon such notice, at such
place or places, and at such time as it may from time to time
determine.
10.05 Action of Majority
Any act which the Plan authorizes or requires the Pension Committee
to do may be done by a majority of its members. The action of that
majority expressed from time to time by a vote at a meeting, or in
writing without a meeting, shall constitute the action of the Pension
Committee and shall have the same effect for all purposes as if
assented to by all members of the Pension Committee at the time in
office. All decisions of the Pension Committee, including those
regarding the facts of any case, the interpretation of any provision
of the Plan or its application to any case, and as to any other
interpretative matter or other determination or question under the
Plan shall be final and binding upon the Employer, Covered Employees,
Members, Alternate Payees, Beneficiaries and all other persons,
subject to the provisions of Section 12.06. Any action taken by the
Pension Committee with respect to the rights or benefits of any
person under the Plan shall be revocable by the Pension Committee as
to payments or distributions from the trust fund not theretofore made
pursuant to such action; and appropriate adjustments may be made in
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future payments or distributions to a Member, Alternate Payee or
Beneficiary to offset any excess payment or make up for any
underpayment previously made to such Member, Alternate Payee or
Beneficiary from the trust fund. No ruling or decision of the
Pension Committee in any one case shall create a basis for an
adjustment in any other case prior to the date of written filing of
each specific claim.
10.06 Compensation and Bonding
No member of the Pension Committee shall receive any compensation
from the assets of the trust fund for his services as such. Except
as may otherwise be required by law, no bond or other security need
be required of any member in that capacity in any jurisdiction.
10.07 Prudent Conduct
The members of the Pension Committee shall use that degree of care,
skill, prudence and diligence that a prudent man acting in a like
capacity and familiar with such matters would use in his conduct in a
similar situation.
10.08 Service in More Than One Fiduciary Capacity
Any individual, entity or group of persons may serve in more than one
Fiduciary capacity with respect to the Plan or the funds of the Plan.
10.09 Limitation of Liability
The Employer, the Board of Directors, the members of the Pension
Committee, its delegates and appointees or any other person who may
be determined to be a Fiduciary, other than persons who are
independent of the Employer and are rendering services to or with
respect to the Plan, and any officer or employee of the Employer
shall not incur any liability individually or on behalf of any other
individuals or on behalf of the Employer for any act or failure to
act, made in good faith in relation to the Plan or the funds of the
Plan. However, this limitation shall not act to relieve any such
individual or the Employer from a responsibility or liability for any
fiduciary responsibility, obligation or duty under Part 4, Title I of
ERISA.
10.10 Indemnification
The members of the Pension Committee, its delegates and appointees or
any other person who may be determined to be a Fiduciary, other than
persons who are independent of the Employer and are rendering
services to or with respect to the Plan, the Board of Directors and
the officers or employees of the Employer shall be indemnified
against any and all liabilities arising by reason of any act, or
failure to act, in relation to the Plan or the funds of the Plan,
including, without limitation, expenses reasonably incurred in the
defense of any claim relating to the Plan or the funds of the Plan,
and amounts paid in any compromise or settlement relating to the Plan
or the funds of the Plan, except for actions or failures to act made
in bad faith. The foregoing indemnification shall be paid from any
insurance purchased by, or on behalf of, the Employer for this
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purpose and, to the extent of any deductible amount from the
insurance coverage, excess of an insured amount or any uninsured
amount from the assets of the Employer, the Company or the Company's
wholly-owned subsidiaries; otherwise, from the funds of the Plan to
the extent of those funds and to the extent permitted under
applicable law.
10.11 Delegation of Fiduciary Responsibility
Any named Fiduciary may, by an instrument in writing filed with the
Plan records, delegate a Fiduciary responsibility which it is
obligated to discharge to another person or party who shall, as a
consequence, be a Fiduciary; provided, however, that no such
delegation shall contravene the provisions of ERISA nor conflict with
a prior, written determination by the Pension Committee or the
Company that certain duties and responsibilities are nondelegable.
Article 11. Management of Funds
11.01 Trust Agreement
All the funds of the Plan shall be held by the Trustee appointed from
time to time by the Pension Committee under a trust agreement
adopted, or as amended, by the Pension Committee for use in providing
the benefits of the Plan and paying its expenses not paid directly by
the Employer. The Pension Committee shall establish the funding
policy of the Plan, which shall set forth the current liquidity needs
and investment philosophy, and which shall be communicated from time
to time to the Trustee and any investment manager appointed pursuant
to Section 11.03. However, no person or entity other than the Plan
shall have any liability for the payment of benefits under the Plan.
11.02 Exclusive Benefit Rule
Except as otherwise provided in the Plan, no part of the corpus or
income of the funds of the Plan shall be used for, or diverted to,
purposes other than for the exclusive benefit of Members and other
persons entitled to benefits under the Plan; provided, however, the
Vested Portion of the Accounts maintained on behalf of a Member,
Covered Employee, Alternate Payee, or Beneficiary shall be escheated
to the state of such person's last known address in the United States
of America no later than the last date prescribed by such state's
statutes pertaining to the disposition of unclaimed property if the
whereabouts of such person or his Beneficiary has been unknown to the
Pension Committee or its delegates and appointees for the time period
specified in such statutes. No person shall have any interest in or
right to any part of the earnings of the funds of the Plan, or any
right in, or to, any part of the assets held under the Plan, except
as and to the extent expressly provided in the Plan.
11.03 Appointment of Investment Manager
The Pension Committee may, in its discretion, appoint one or more
investment managers (within the meaning of Section 3(38) of ERISA) to
manage all or part of the assets of the Plan, including the power to
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acquire and dispose of said assets, as the Pension Committee shall
designate. In that event authority over and responsibility for the
management of the assets so designated shall be the sole
responsibility of that investment manager.
11.04 Expenses of Plan
All reasonable expenses, taxes and fees of the Plan, the Committee
and the Trustee incurred in the administration of the Plan and trust
fund (other than taxes on remuneration for providing services to the
Plan and expenses incurred for which a fee is paid) shall be paid
from the trust fund; provided, however, that the obligation of the
trust fund to pay such expenses, taxes and fees shall cease to exist
to the extent that the same are paid, at the discretion of the
Employer, by the Employer.
Article 12. General Provisions
12.01 Nonalienation
Neither the trust fund nor any benefit or Account held under the Plan
shall in any manner be liable for or subject to the debts or
liabilities of any Member, Beneficiary or Alternate Payee. No right
or benefit under the Plan shall at any time be subject to alienation,
sale, transfer, assignment, pledge or encumbrances of any kind and
any attempt to do so shall be void. However, payment shall be made
in accordance with the provisions of any judgment, decree, or order
which:
(a) Creates for, or assigns to, an Alternate Payee the right to
receive all or a portion of the Member's benefits under the
Plan for the purpose of providing child support, alimony
payments or marital property rights to that Alternate Payee;
(b) Is made pursuant to a State domestic relations law;
(c) Does not require the Plan to provide any type of benefit, or
any option, not otherwise provided under the Plan; and
(d) Otherwise meets the requirements of Section 206(d) of ERISA, as
amended, as a "qualified domestic relations order," as
determined in accordance with Section 9.05.
12.02 Conditions of Employment Not Affected by Plan
The establishment and maintenance of the Plan shall not confer any
legal rights upon any Employee or other person for a continuation of
employment, nor shall it interfere with the rights of an Employer or
Affiliated Employer to discharge any Employee and to treat him
without regard to the effect which that treatment might have upon him
as a Member or potential Member of the Plan.
12.03 Facility of Payment
If the Pension Committee shall find that a Member, Beneficiary or
other person entitled to a benefit is unable to care for his affairs
because of illness or accident or is a minor, the Pension Committee
may direct that any benefit due him, unless claim shall have been
made for the benefit by a duly appointed legal representative, be
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paid to his spouse, a child, a parent or other blood relative, or to
a person with whom he resides. Any payment so made shall be a
complete discharge of the liabilities of the Plan for that benefit.
12.04 Information
Each Member, Beneficiary or other person entitled to a benefit,
before any benefit shall be payable to him or on his account under
the Plan, shall file with the Pension Committee the information that
it shall require to establish his rights and benefits under the Plan.
The Pension Committee and any member, delegate or appointee thereof
shall be entitled to rely on the correctness of any information
furnished by the Employer, Trustee, Members, Alternate Payees and
Beneficiaries.
12.05 Construction
(a) The Plan shall be construed, regulated and administered under
ERISA and the laws of the Commonwealth of Pennsylvania, except
where ERISA controls.
(b) The masculine pronoun shall mean the feminine wherever
appropriate.
(c) Any terms defined in the singular shall mean the plural
wherever appropriate.
(d) The titles and headings of the Articles and Sections in this
Plan are for convenience only. In the case of ambiguity or
inconsistency, the text rather than the titles or headings
shall control.
12.06 Benefit Claim Appeals
Claims for benefits under the Plan shall be filed on forms prescribed
by the Pension Committee. Written notice of the disposition of the
claim shall be furnished to the claimant within 90 days after the
application therefor is filed. This response deadline may be
extended for another 90 days in special cases provided the claimant
is notified of the delay and the reasons therefor. In the event the
claim is denied, the reasons for the denial shall be specifically set
forth, pertinent provisions of the Plan shall be cited and, where
appropriate, the explanation as to how the claimant can perfect the
claim shall be provided. Any Employee, former Employee, Beneficiary
or Alternate Payee who has been denied a benefit or feels aggrieved
by any other action of the Employer, the Pension Committee or the
Trustee shall have the right, to be exercised by written application
filed with the Pension Committee within 60 days after receipt of
notice of the denial of such claim, to request a review of such
claim. A request for review which is not timely filed shall be
barred. A claimant's request for review may contain such additional
information and comments as the claimant may wish to present. The
Pension Committee shall reconsider the claim in the light of such
additional information and comments as the claimant may have
presented, and, if the claimant shall have so requested, shall afford
him or his designated representative a hearing before the Pension
Committee. The Pension Committee shall also permit the claimant or
his designated representative to review pertinent documents in its
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possession, including copies of the Plan document and information
provided by the Employer relating to the claim. The Pension
Committee shall make a final determination with respect to the claim
as soon as practicable, although not later than 60 days after the
receipt of the aforesaid request for review. This 60-day period may
be extended under special circumstances, such as the necessity for
holding a hearing, but in no event beyond the expiration of 120 days
after the receipt by the Pension Committee of such request for
review. Notice of the final determination of the Pension Committee
shall be furnished to the claimant in writing, in a manner calculated
to be understood by him, and shall set forth the specific reasons for
the decision and specific references to the pertinent provisions of
this Plan upon which the decision is based. The decision of the
Pension Committee in such case shall be final and binding on the
Employer, the claimant, all persons claiming by or through the
claimant, all Employees, Members, Alternate Payees, Beneficiaries and
all other persons.
12.07 Severability
If any provision of this Plan is held to be invalid or unenforceable,
such determination shall not affect the other provisions of this
Plan. In such event, this Plan shall be construed and enforced as if
such provision had not been included herein.
12.08 Employer Records
The records of a Member's Employer shall be presumed to be conclusive
of the facts concerning his employment or non-employment, Hours of
Service, Years of Eligibility Service and Compensation unless shown
beyond a reasonable doubt to be incorrect.
12.09 Application of Plan Provisions
This Plan shall be binding on all Members, Alternate Payees and
Beneficiaries and upon heirs, executors, administrators, successors,
and assigns of all persons having an interest herein. The provisions
of the Plan in no event shall be considered as giving any such person
any legal or equitable right against the Employer or an Affiliated
Employer, any of its officers, Employees, directors, or shareholders,
or against the Trustee, except such rights as are specifically
provided for in the Plan or hereafter created in accordance with the
terms of the Plan.
Article 13. Amendment, Merger and Termination
13.01 Amendment of Plan
The Board of Directors reserves the right at any time and from time
to time, and retroactively if deemed necessary or appropriate, to
amend in whole or in part any or all of the provisions of the Plan.
Any such amendment shall be expressed in an instrument executed,
adopted or ratified by the Board of Directors, or executed by such
Board's delegate. However, no amendment shall make it possible for
any part of the funds of the Plan to be used for, or diverted to,
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purposes other than for the exclusive benefit of persons entitled to
benefits under the Plan. No amendment shall be made which has the
effect of (i) decreasing the balance of the Accounts of any Member,
Beneficiary or Alternate Payee, (ii) eliminating an optional form of
benefit in a manner contrary to Section 411(d)(6) of the Code and
regulations promulgated thereunder, or (iii) reducing the
nonforfeitable percentage of the balance of any Accounts below the
nonforfeitable percentage computed under the Plan as in effect on the
date on which the amendment is adopted or, if later, the date on
which the amendment becomes effective. In the event an amendment is
made that changes the schedule of vesting under the Plan, each Member
having not less than three Years of Vesting Service shall be
permitted to elect, within 60 days after the later of: (i) adoption
of the amendment; (ii) the effective date of the amendment; or (iii)
the date on which the Member receives written notice of such
amendment, to have his nonforfeitable benefits computed under the
Plan without regard to such amendment.
13.02 Merger, Consolidation or Transfer
The Plan may not be merged or consolidated with, and its assets or
liabilities may not be transferred to, any other plan unless each
person entitled to benefits under the Plan would, if the resulting
plan were then terminated, 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 before
the merger, consolidation, or transfer if the Plan had then
terminated.
13.03 Additional Participating Employers
(a) If any company is or becomes a subsidiary of or associated with
the Company or any of its subsidiaries or associated companies,
the Pension Committee may designate such company as an Employer
upon appropriate action necessary to adopt the Plan being taken
by that company. In that event, or if any persons become
Covered Employees of an Employer as the result of merger or
consolidation or as the result of acquisition of all or part of
the assets or business of another company, the Pension
Committee shall determine to what extent, if any, previous
service with the subsidiary, associated or other company shall
be recognized under the Plan, but subject to the continued
qualification of the trust for the Plan as tax-exempt under the
Code.
(b) Any Employer may terminate its participation in the Plan upon
appropriate action by it. In that event, the funds of the Plan
held on account of Members in the employ of that Employer, and
any unpaid balances of the Accounts of all Members who have
separated from the employ of that Employer, shall be determined
by the Pension Committee. Those funds shall be distributed as
provided in Section 13.04 if the Plan should be terminated, or
shall be segregated by the Trustee as a separate trust,
pursuant to certification to the Trustee by the Pension
Committee, continuing the Plan as a separate plan for the
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employees of the former Employer under which the board of
directors of that company shall succeed to all the powers and
duties of the Board of Directors, including the appointment of
a plan administrator.
13.04 Termination of Plan
(a) The Board of Directors may terminate the Plan or completely
discontinue contributions under the Plan for any reason at any
time. In case of termination or partial termination of the
Plan, or complete discontinuance of Employer contributions to
the Plan, the rights of affected Members to their Accounts
under the Plan as of the date of the termination or
discontinuance shall be nonforfeitable.
(b) Upon termination of the Plan, Accounts maintained on behalf of
Members, Beneficiaries and Alternate Payees shall be
distributed to such persons as soon as administratively
practicable, provided that (i) neither the Employer nor an
Affiliated Employer establishes or maintains a "successor plan"
within the meaning of Section 1.401(k)-1(d)(3) of the Income
Tax Regulations, and (ii) payment is made in the form of a lump
sum distribution. If Accounts are not distributable in
accordance with the preceding sentence, such Accounts shall be
maintained in a manner consistent with Income Tax Regulations.
13.05 Distribution of Accounts Upon a Sale of Assets
Upon the disposition by the Employer, to an unrelated entity, of
substantially all of the assets (within the meaning of
Section 1.401(k)-1(d)(4) of the Income Tax Regulations) used by the
Employer in a trade or business, Accounts maintained on behalf of
Members may be distributed to those Members who continue in
employment with the unrelated entity acquiring such assets, provided
that (a) the Employer continues to maintain the Plan, (b) the
unrelated entity acquiring such assets does not maintain the Plan,
and (c) payment is made to the Member in the form of a lump sum
distribution.
13.06 Distribution of Accounts Upon a Sale of a Subsidiary
Upon the disposition of the Employer by its owner to an unrelated
entity of the owner's majority ownership interest in the Employer
(within the meaning of Section 1.401(k)-1(d)(4) of the Income Tax
Regulations), Accounts maintained on behalf of Members may be
distributed to those Members who continue in employment with such
subsidiary, provided that (a) the Employer continues to maintain the
Plan, (b) the unrelated entity acquiring such subsidiary does not
maintain the Plan, and (c) payment is made to the Member in the form
of a lump sum distribution.
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Article 14. Top-Heavy Provisions
The terms of this Article shall become applicable under the circumstances
described in this Article. In the event that the terms contained in this
Article are inconsistent with the terms contained in the remainder of the
Plan, the terms contained in this Article shall take precedence.
14.01 Top-Heaviness Defined
(a) For purposes of this Article, the Plan shall be "top-heavy" if,
as of the Determination Date:
(i) The value of the aggregate of the Account Balances under
the Plan for Key Employees exceeds 60% of the value of
the aggregate of the Account Balances under the Plan for
all Key Employees and Non-Key Employees; or
(ii) The Plan is part of a Required Aggregation Group, and
the sum of the present values of the cumulative Account
Balances and the aggregate present values of accrued
benefits of Key Employees in all plans in the Required
Aggregation Group exceeds 60% of a similar sum
determined for all Key Employees and Non-Key Employees.
Notwithstanding the results of the said 60% test, the
Plan shall not be considered "top-heavy" for any Plan
Year in which the Plan is in a Required Aggregation
Group or the Employer elects to treat the Plan as a part
of a Permissive Aggregation Group and such group is not
determined to be "top-heavy".
(b) For purposes of this Article, the following terms shall have
the meanings assigned to them in this Section 14.01(b):
(i) Account Balance means the sum of (i) the balance of a
Member's Accounts as of the most recent Valuation Date
occurring within the 12-month period ending on the
Determination Date, and (ii) the value of any
contributions actually made after the Valuation Date but
on or prior to the Determination Date. The term shall
include the aggregate distributions made with respect to
such Member under the Plan during the five-year period
ending on the Determination Date but shall not include
any qualifying rollover distributions, or similar
transfers, initiated by the Employee, and shall not
include the account balance of a Non-Key Employee who
was a Key Employee for any prior Plan Year, or the
account balance of any Member who has not performed
services for the Employer during the five-year period
ending on the Determination Date.
(ii) Defined Benefit Plan means a qualified pension plan
which is not a Defined Contribution Plan; however, in
the case of a Defined Benefit Plan which provides a
benefit which is based partly on the balance of the
separate account of a Member, that plan shall be treated
as a Defined Contribution Plan to the extent benefits
are based on the separate account of a Member and as a
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Defined Benefit Plan with respect to the remaining
portion of the benefits under the plan.
(iii) Defined Contribution Plan means a qualified plan which
provides for an individual account for each Member and
for benefits based solely upon the amount contributed to
the Member's account, and any income, expenses, gains
and losses, and any forfeitures of accounts of other
Members which may be allocated to that Member's
accounts, subject to Section 14.01(b)(ii).
(iv) Determination Date means the last day of the Plan Year
preceding the Plan Year in question, or in the case of
the first Plan Year, the last day of that Plan Year.
(v) 5% Owner of the Employer means any person who either
directly or constructively (as defined in Section 318 of
the Code) owns more than 5% of either the value of the
outstanding stock of the Employer or the total combined
voting power of all of the Employer's stock.
(vi) Employee includes such Beneficiary or Beneficiaries who
obtain an interest in the Plan by Beneficiary
designation, will, devise or through the laws of
intestacy.
(vii) Key Employee means any Employee or former Employee who
participated in the Plan at any time during the Plan
Year ending on the Determination Date, or during any of
the four preceding Plan Years, and was:
(A) An Officer of the Employer with Statutory
Compensation from the Employer greater than 50% of
the amount in effect under Section 415(b)(1)(A) of
the Code;
(B) A 5% Owner of the Employer;
(C) One of the Top Ten Owners of the Employer; or
(D) A 1% Owner of the Employer having Statutory
Compensation from the Employer or an Affiliated
Employer of more than $150,000.
The term shall also include Beneficiaries of Key
Employees.
(viii) Non-Key Employee means any Employee who is not a Key
Employee.
(ix) Officer means an Employee who, at any time during the
Plan Year or any four preceding Plan Years, served as an
administrative executive for the Employer or an
Affiliated Employer on a regular and continuous basis
and during the applicable year had Statutory
Compensation from the Employer or an Affiliated Employer
greater than 50% of the amount in effect under Section
415(b)(1)(A) of the Code. The maximum number of
Employees who shall be deemed to be Officers for
purposes of this Article shall be the lesser of:
(A) 50, or
(B) The greater of three, or 10% of all Employees.
If the actual number of officers of the Employer exceeds
the maximum number of Employees who are deemed to be
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Officers hereunder, the maximum number of Officers for
purposes of this Article shall include those Officers
who had the highest one-year Statutory Compensation
while serving as an officer of the Employer during any
applicable Plan Year.
(x) 1% Owner of the Employer means any person, who either
directly or constructively (as defined in Section 318 of
the Code) owns more than 1% of either the outstanding
stock of the Employer or the total combined voting power
of all of the Employer's stock.
(xi) Permissive Aggregation Group means each plan in the
Required Aggregation Group and any other Defined Benefit
Plan and Defined Contribution Plan of the Employer or an
Affiliated Employer with contributions or benefits at
least comparable to the contributions or benefits under
the Plan in which all members are Non-Key Employees, if
the resulting aggregation group continues to meet the
requirements of Section 401(a)(4) and 410 of the Code.
(xii) Required Aggregation Group includes:
(A) Each Defined Benefit Plan and Defined Contribution
Plan of the Employer or an Affiliated Employer,
regardless of whether the Plan terminated within
the past five years, in which a Key Employee is a
Member; and
(B) Each other Defined Benefit Plan and Defined
Contribution Plan of the Employer or an Affiliated
Employer which enables any plan described in
Section 14.01(b)(xii)(A), to meet the requirements
of Section 401(a)(4) or 410 of the Code.
(xiii) Top Ten Owner means the ten Employees who:
(A) Directly or constructively (as defined in Section
318 of the Code), own both more than 1/2%
ownership interest in value of the Employer and
all Affiliated Employers, and the largest
percentage ownership interest in value of the
Employer and all Affiliated Employers; and
(B) During the applicable year, have Statutory
Compensation from the Employer or an Affiliated
Employer greater than 100% of the amount in effect
under Section 415(c)(1)(A) of the Code.
14.02 Employer Contributions
The following provisions shall be applicable to Members for any Plan
Year with respect to which the Plan is top-heavy:
(a) If the required minimum contribution is not provided by the
Plan for any Member who is a Non-Key Employee, then in each
Plan Year, in addition to the contributions otherwise provided
under the Plan, the Employer shall make contributions on behalf
of any such Member, or each Employee eligible to become a
Member, who is a Non-Key Employee and who has not separated
from service as of the last day of the Plan Year (regardless of
(i) whether the Non-Key Employee has less than 1,000 Hours of
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Service, (ii) whether his Compensation is below any stated
level, (iii) whether he declines to make a mandatory
contribution, or (iv) whether he elects to make tax-deferred
contributions) which, when added to the Employer contributions
(as determined without reference to Deferred Cash
Contributions) otherwise allocated on his behalf for the Plan
Year will be equal to a percentage of the Member's Compensation
for the Plan Year, that percentage to be the lesser of 3% or
the percentage rate, determined for the Key Employee for whom
that percentage is the highest, equivalent to the fraction the
numerator of which is the contribution made on behalf of that
Key Employee by the Employer and the Member's Deferred Cash
Contributions and the denominator of which is the Compensation
of the Key Employee for that Plan Year.
(b) For purposes of Section 14.02, all Defined Contribution Plans
required to be included in a Required Aggregation Group shall
be treated as one plan. Section 14.02 shall not apply if the
Plan is required to be included in a Required Aggregation Group
under Section 14.01 and if the Plan enables a Defined Benefit
Plan required to be included in such group to meet the
requirements of Section 401(a)(4) or 410 of the Code.
(c) Notwithstanding the foregoing provisions, no minimum
contribution shall be made with respect to a Member, or an
Employee eligible to become a Member, if the required minimum
benefit under Section 416(c)(1) of the Code is provided under
an Employer sponsored Defined Benefit Plan. In the case of
Employees covered under both the Plan and any Defined Benefit
Plan maintained by the Employer, the Defined Benefit Plan shall
provide the top heavy minimum benefit which shall be offset by
any Employer contributions, other than Deferred Cash
Contributions, provided under the Plan.
IN WITNESS WHEREOF, Zurn Industries, Inc. has caused this Plan to be executed
by its duly authorized officer on this 7th day of December, 1995.
ATTEST: ZURN INDUSTRIES, INC.
/s/ Dennis Haines By: /s/ James A. Zurn
Senior Vice President and
Its: Chairman-Pension Committee
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