<PAGE> 1
As filed with the Securities and Exchange Commission on Novemober 18, 1996.
Registration No. 333-_________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
THE BOEING COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 91-0425694
(State or other jurisdiction of
incorporation or organization) (I.R.S. Employer Identification No.)
7755 EAST MARGINAL WAY SOUTH
SEATTLE, WASHINGTON 98108
(Address of principal executive offices, including zip code)
BOEING NORTH AMERICAN SALARIED VOLUNTARY SAVINGS PLAN
BOEING NORTH AMERICAN SAVINGS PLAN FOR CERTAIN EMPLOYEES
BOEING NORTH AMERICAN VOLUNTARY SAVINGS PLAN FOR
CERTAIN REPRESENTED HOURLY EMPLOYEES
(Full title of the plans)
HEATHER HOWARD
CORPORATE SECRETARY AND CORPORATE COUNSEL
THE BOEING COMPANY
7755 EAST MARGINAL WAY SOUTH
SEATTLE, WASHINGTON 98108
(206) 655-7531
(Name, address and telephone number, including area code, of agent for service)
COPY TO:
J. SUE MORGAN
PERKINS COIE
1201 THIRD AVENUE, 40TH FLOOR
SEATTLE, WASHINGTON 98101-3099
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Maximum
Title of Securities Number to Be Offering Price Per Proposed Maximum Amount of
to Be Registered Registered(1) Share(2) Aggregate Offering Registration
Price Fee
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $5.00 per share
- -----------------------------------------------------------------------------------------------------------------------------
Boeing North American Salaried Voluntary 932,495 $91.50 $85,323,293 $25,856
Savings Plan
- -----------------------------------------------------------------------------------------------------------------------------
Boeing North American Savings Plan for 31,815 $91.50 $ 2,911,072 $ 882
Certain Employees
- -----------------------------------------------------------------------------------------------------------------------------
Boeing North American Voluntary Savings Plan
for Certain Represented Hourly Employees 65,810 $91.50 $ 6,021,615 $ 1,825
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL 1,030,120 $91.50 $94,255,980 $28,563
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
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 plans
described herein.
(1) Includes an indeterminate number of additional shares that may be issued to
adjust the number of shares issued pursuant to such employee benefit plans
as the result of any future stock split, stock dividend or similar
adjustment of the registrant's outstanding Common Stock.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 under the Securities Act of 1933, as amended. The
price per share is estimated to be $91.50, based on the average of the high
sales price ($92.00) and the low sales price ($91.00) for the registrant's
Common Stock as reported on the New York Stock Exchange on November 13,
1996.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents are hereby incorporated by reference in this
registration statement:
(a) The registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1995, filed with the Securities and Exchange Commission
(the "Commission") on March 13, 1996, which contains audited consolidated
financial statements for the most recent fiscal year for which such statements
have been filed.
(b) All other reports filed by the registrant pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), since the end of the fiscal year covered by the Annual Report
on Form 10-K referred to in (a) above.
(c) The description of the registrant's Common Stock contained
in the registration statement on Form 10 (Registration No. 1-422), filed with
the Commission on April 20, 1935, under Section 12(g) of the Exchange Act,
including any amendments or reports filed for the purpose of updating such
description.
All documents filed by the registrant pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date hereof and prior to the filing of
a post-effective amendment which indicates that the securities offered hereby
have been sold or which deregisters the securities covered hereby then remaining
unsold shall also be deemed to be incorporated by reference into this
registration statement and to be a part hereof commencing on the respective
dates on which such documents are filed.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
The opinion of counsel as to the legality of the securities that may be
issued under the registrant's Boeing North American Salaried Voluntary Savings
Plan, Boeing North American Savings Plan for Certain Employees and Boeing North
American Voluntary Savings Plan for Certain Represented Hourly Employees (the
"Plans") is given by Heather Howard, Corporate Secretary and Corporate Counsel
for the registrant.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify directors and officers as well as other employees and
individuals against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement in connection with specified actions, suits or
proceedings, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation in a derivative action), if
they acted in good faith and in a manner they reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect to any
criminal action, had no reasonable cause to believe their conduct was unlawful.
A similar standard is applicable in the case of derivative actions, and the
statute requires court approval before there can be any indemnification where
the person seeking indemnification has been found liable to the corporation. The
statute provides that it is not exclusive of other indemnification that may be
granted by a corporation's charter, by-laws, disinterested director vote,
stockholder vote, agreement or otherwise.
Article VII, Section 4 of the registrant's By-Laws provides for
indemnification of the registrant's directors and officers to the full extent
permitted under Delaware law.
Section 102(b)(7) of the Delaware General Corporation Law permits a
corporation to provide in its certificate of incorporation that a director of
the corporation shall not be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
that involve intentional misconduct or a knowing violation of law, (iii) for
payments of unlawful dividends or
II-1
<PAGE> 3
unlawful stock repurchases or redemptions, or (iv) for any transaction from
which the director derived an improper personal benefit.
Article Twelfth of the registrant's Restated Certificate of
Incorporation provides that, to the full extent that Delaware law permits the
limitation or elimination of the liability of directors, a director of the
registrant will not be liable to the registrant or its stockholders for monetary
damages for breach of fiduciary duty as a director.
Officers and directors of the registrant are covered by insurance that,
with certain exceptions and within certain limitations, indemnifies them against
losses and liabilities arising from any alleged "wrongful act," including any
alleged error or misstatement, misleading statement, wrong act or omission,
neglect or breach of duty.
Article Sixth of the registrant's Restated Certificate of Incorporation
provides that the personal liability of each director of the registrant to the
registrant or to its stockholders for monetary damages for breach of fiduciary
duty as a director is limited to the fullest extent permitted by the Delaware
General Corporation Law.
The registrant also maintains an insurance policy insuring its
directors and officers against liability for certain acts or omissions while
acting in their official capacities.
Directors and officers of the registrant are covered by insurance that
(with certain exceptions and within certain limitations) indemnifies them
against losses and liabilities arising from any alleged "wrongful act,"
including any violation of statute, alleged error or misstatement or misleading
statement, or wrongful act or omission or neglect or breach of duty.
ITEM 8. EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
5.1 Opinion of counsel regarding legality of the common stock being
registered
15.1 Letter regarding unaudited interim financial information
23.1 Consent of Deloitte & Touche LLP (see page II-7)
23.2 Consent of counsel (included in Exhibit 5.1)
24.1 Power of Attorney (see signature page)
99.1 Boeing North American Salaried Voluntary Savings Plan
99.2 Boeing North American Savings Plan for Certain Employees
99.3 Boeing North American Voluntary Savings Plan for Certain Represented
Hourly Employees
II-2
<PAGE> 4
ITEM 9. UNDERTAKINGS
A. 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
(a) include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(b) reflect in the prospectus any facts or events arising
after the effective date of this registration statement (or the most recent
post-effective amendment thereof) that, individually or in the aggregate,
represent a fundamental change in the information set forth in this registration
statement; and
(c) include any material information with respect to the plan
of distribution not previously disclosed in this registration statement or any
material change to such information in this registration statement;
provided, however, that paragraphs (1)(a) and (1)(b) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered that remain unsold at the termination of
the offering.
B. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefits plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in this 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.
C. Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
D. The undersigned registrant hereby undertakes that it will submit the Plans
and any amendments thereto to the Internal Revenue Service (the "IRS") in a
timely manner and will make all changes required by the IRS to qualify the
Plans.
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<PAGE> 5
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 Seattle, State of Washington, on November 15,
1996.
THE BOEING COMPANY
By /s/ Philip M. Condit
-------------------------------------
Philip M. Condit
President and Chief Executive Officer
POWER OF ATTORNEY
EACH PERSON WHOSE SIGNATURE APPEARS BELOW CONSTITUTES AND APPOINTS
PHILIP M. CONDIT, THEODORE J. COLLINS AND B.E. GIVAN, OR ANY OF THEM, HIS OR HER
ATTORNEYS-IN-FACT, WITH THE POWER OF SUBSTITUTION, FOR HIM OR HER IN ANY AND ALL
CAPACITIES, TO SIGN ANY AMENDMENTS TO THIS REGISTRATION STATEMENT, AND TO FILE
THE SAME, WITH EXHIBITS THERETO AND OTHER DOCUMENTS IN CONNECTION THEREWITH,
WITH THE SECURITIES AND EXCHANGE COMMISSION, HEREBY RATIFYING AND CONFIRMING ALL
THAT SAID ATTORNEYS-IN-FACT, OR THEIR SUBSTITUTE OR SUBSTITUTES, MAY DO OR CAUSE
TO BE DONE BY VIRTUE HEREOF.
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 indicated on November 15, 1996.
SIGNATURE TITLE
President, Chief Executive Officer
/s/ Philip M. Condit (Principal Executive Officer) and Director
- ---------------------------
Philip M. Condit
Senior Vice President and Chief Financial Officer
/s/ B.E. Givan (Principal Financial Officer)
- ---------------------------
B.E. Givan
Vice President and Controller
/s/ Gary W. Beil (Principal Accounting Officer)
- ---------------------------
Gary W. Beil
/s/ Frank Shrontz Chairman of the Board
- ---------------------------
Frank Shrontz
/s/ John E. Bryson Director
- ---------------------------
John E. Bryson
II-4
<PAGE> 6
/s/ John B. Fery Director
- ---------------------------
John B. Fery
/s/ Paul E. Gray Director
- ---------------------------
Paul E. Gray
/s/ Harold J. Haynes Director
- ---------------------------
Harold J. Haynes
/s/ Stanley Hiller, Jr. Director
- ---------------------------
Stanley Hiller, Jr.
/s/ Donald E. Petersen Director
- ---------------------------
Donald E. Petersen
/s/ Charles M. Pigott Director
- ---------------------------
Charles M. Pigott
/s/ Rozanne L. Ridgway Director
- ---------------------------
Rozanne L. Ridgway
/s/ George H. Weyerhaeuser Director
- ---------------------------
George H. Weyerhaeuser
II-5
<PAGE> 7
THE PLANS
Pursuant to the requirements of the Securities Act of 1933, as amended,
the persons who administer the Boeing North American Salaried Voluntary Savings
Plan, the Boeing North American Savings Plan for Certain Employees and the
Boeing North American Voluntary Savings Plan for Certain Represented Hourly
Employees have duly caused this registration statement to be signed on their
behalf by the undersigned, thereunto duly authorized, in the City of Seattle,
State of Washington, on November 15, 1996.
BOEING NORTH AMERICAN SALARIED
VOLUNTARY SAVINGS PLAN
By: THE BOEING COMPANY
By /s/ Philip M. Condit
--------------------------------------------
Philip M. Condit
President and Chief Executive Officer
BOEING NORTH AMERICAN SAVINGS PLAN
FOR CERTAIN EMPLOYEES
By: THE BOEING COMPANY
By /s/ Philip M. Condit
--------------------------------------------
Philip M. Condit
President and Chief Executive Officer
BOEING NORTH AMERICAN VOLUNTARY SAVINGS PLAN
FOR CERTAIN REPRESENTED HOURLY EMPLOYEES
By: THE BOEING COMPANY
By /s/ Philip M. Condit
--------------------------------------------
Philip M. Condit
President and Chief Executive Officer
II-6
<PAGE> 8
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of The Boeing Company on Form S-8 of our reports dated January 25,
1996, appearing in and incorporated by reference in the Annual Report on Form
10-K of The Boeing Company and subsidiaries for the year ended December 31,
1995.
/s/ Deloitte & Touche LLP
- -------------------------
Deloitte & Touche LLP
Seattle, Washington
November 15, 1996
II-7
<PAGE> 9
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
5.1 Opinion of counsel regarding legality of the common stock
being registered
15.1 Letter regarding unaudited interim financial information
23.1 Consent of Deloitte & Touche LLP (see page II-7)
23.2 Consent of counsel (included in Exhibit 5.1)
24.1 Power of Attorney (see signature page)
99.1 Boeing North American Salaried Voluntary Savings Plan
99.2 Boeing North American Savings Plan for Certain Employees
99.3 Boeing North American Voluntary Savings Plan for Certain
Represented Hourly Employees
<PAGE> 1
EXHIBIT 5.1
November 15, 1996
The Boeing Company
7755 East Marginal Way South
Seattle, Washington 98108
Gentlemen and Ladies:
As Corporate Counsel of The Boeing Company (the "Company"), I have acted as
counsel in connection with the Registration Statement on Form S-8 which is being
filed with the Securities and Exchange Commission under the Securities Act of
1933, as amended, with respect to 1,030,120 shares of common stock, $5.00 par
value, of the Company (the "Shares"). The Shares may be issued pursuant to the
Boeing North American Salaried Voluntary Savings Plan, the Boeing North American
Savings Plan for Certain Employees, and the Boeing North American Voluntary
Savings Plan for Certain Represented Hourly Employees (the "Plans").
I have examined the Registration Statement and a copy of the Restated
Certificate of Incorporation of the Company and any amendments thereto to date,
a copy of the By-Laws of the Company as amended to date, and such resolutions of
the Board of Directors of the Company and other documentation as I have deemed
necessary for the purpose of this opinion.
Based upon and subject to the foregoing, I am of the opinion that the
Shares that may be issued by the Company pursuant to the Plans, upon the due
execution by the Company and registration by its registrar of the Shares and the
issuance thereof by the Company in accordance with the terms of the Plans, and
the receipt of consideration therefor in accordance with the terms of the Plans,
will be validly issued, fully paid and nonassessable.
I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to me under the heading "Interests of Named
Experts and Counsel" in the Registration Statement.
Cordially,
/s/ Heather Howard
Heather Howard
Corporate Secretary and
Corporate Counsel
<PAGE> 1
Exhibit 15.1
November 15, 1996
The Boeing Company
Seattle, Washington
We have made a review, in accordance with standards established by the American
Institute of Certified Public Accountants, of the unaudited interim financial
information of The Boeing Company and subsidiaries for the periods ended March
31, 1996 and 1995, June 30, 1996 and 1995 and September 30, 1996 and 1995, as
indicated in our reports dated April 29, 1996, August 1, 1996 and November 5,
1996; respectively; because we did not perform an audit, we expressed no
opinion on that information.
We are aware that our reports referred to above, which were included in your
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996, June 30,
1996 and September 30, 1996, are being incorporated by reference in this
Registration Statement.
We are also aware that the aforementioned reports, pursuant to Rule 436(c)
under the Securities Act of 1933, are not considered a part of the Registration
Statement prepared or certified by an accountant or a report prepared or
certified by an accountant within the meaning of Sections 7 and 11 of that Act.
/s/ Deloitte & Touche LLP
- -------------------------
<PAGE> 1
Exhibit 99.1
BOEING NORTH AMERICAN
SALARIED VOLUNTARY SAVINGS PLAN
November 15, 1996
<PAGE> 2
Table of Contents
Page
----
Introduction............................................................. 1
Article 1 -- Definitions................................................. 2
1.1 Accounts...................................................... 2
1.2 Affiliate or Subsidiary....................................... 2
1.3 Authorized Period of Absence.................................. 2
1.4 Beneficiary................................................... 2
1.5 Boeing Company Stock Fund..................................... 3
1.6 Code.......................................................... 3
1.7 Common Stock.................................................. 3
1.8 Common Unit................................................... 3
1.9 Company....................................................... 3
1.10 Company Contributions Account................................ 3
1.11 Company Matching Contributions............................... 3
1.12 Compensation................................................. 3
1.13 Compensation Deduction Account............................... 4
1.14 Compensation Deduction Contributions......................... 4
1.15 Compensation Deferral Account................................ 4
1.16 Compensation Deferral Contributions.......................... 4
1.17 Controlled Group............................................. 4
1.18 Effective Date............................................... 4
1.19 Eligible Employee............................................ 4
1.20 Employee..................................................... 5
1.21 Employment Date.............................................. 5
1.22 ERISA........................................................ 5
1.23 Highly Compensated Eligible Employee......................... 5
1.24 Highly Compensated Employee.................................. 5
1.25 Hour of Service.............................................. 7
1.26 Investment Fund.............................................. 8
1.27 Investment Manager........................................... 8
1.28 Layoff....................................................... 8
1.29 Member....................................................... 8
1.30 Military Service............................................. 8
1.31 Parent....................................................... 8
1.32 Period of Service............................................ 8
1.33 Period of Severance.......................................... 9
1.34 Plan......................................................... 9
1.35 Plan Administrator........................................... 9
1.36 Plan Year.................................................... 9
1.37 Reemployment Date............................................ 10
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<PAGE> 3
<TABLE>
<CAPTION>
<S> <C>
1.38 Rollover Contribution................................................................................ 10
1.39 Severance from Service Date.......................................................................... 10
1.40 Stable Value Fund.................................................................................... 10
1.41 Supplemental Deduction Account....................................................................... 10
1.42 Supplemental Deduction Contributions................................................................. 10
1.43 Supplemental Deferral Account........................................................................ 11
1.44 Supplemental Deferral Contributions.................................................................. 11
1.45 Total Disability..................................................................................... 11
1.46 Total Earnings....................................................................................... 11
1.47 Trust Agreement...................................................................................... 11
1.48 Trust Fund........................................................................................... 11
1.49 Trustee.............................................................................................. 12
1.50 Unit................................................................................................. 12
1.51 Valuation Date....................................................................................... 12
Article 2 -- Membership.......................................................................................... 13
2.1 Entry Date............................................................................................ 13
2.2 Application for Membership............................................................................ 13
Article 3 --Contributions........................................................................................ 14
3.1 Compensation Deferral Contributions and Supplemental Deferral Contributions........................... 14
3.2 Compensation Deduction Contributions and Supplemental Deduction
Contributions..................................................................................... 15
3.3 Deferral and Deduction Elections...................................................................... 15
3.4 Company Contributions................................................................................. 17
3.5 Return of Company Contributions....................................................................... 17
3.6 Contributions for Military Service.................................................................... 17
3.7 Testing Compensation and Supplemental Deferral Contributions for
Discrimination.................................................................................... 18
3.8 Testing Compensation and Supplemental Deduction Contributions and
Company Matching Contributions for Discrimination................................................. 20
3.9 Testing Aggregate Contributions for Discrimination.................................................... 23
3.10 Aggregation Rules for Discrimination Testing......................................................... 25
Article 4 -- Investment of Contributions......................................................................... 27
4.1 Investment Election................................................................................... 27
4.2 Changes in Investment Elections....................................................................... 27
4.3 Transfer of Investments............................................................................... 27
4.4 Independent Control................................................................................... 28
Article 5 -- Trust Agreement..................................................................................... 29
5.1 Establishment of Trust Fund........................................................................... 29
5.2 Investment Funds...................................................................................... 29
5.3 Voting Rights......................................................................................... 30
5.4 Tender Offer......................................................................................... 30
5.5 Trust Agreement....................................................................................... 31
5.6 Rights in the Trust Fund.............................................................................. 31
</TABLE>
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<PAGE> 4
<TABLE>
<CAPTION>
<S> <C>
Article 6 -- Maintenance of Members' Accounts.................................................................... 32
6.1 Accounts Maintained................................................................................... 32
6.2 Crediting Units to Accounts........................................................................... 32
6.3 Units Valuations...................................................................................... 32
6.4 Balance of Member's Accounts.......................................................................... 33
6.5 Member Account Statements............................................................................. 33
Article 7 -- Retirement.......................................................................................... 34
7.1 Eligibility........................................................................................... 34
7.2 Lump Sum Distribution................................................................................. 34
7.3 Installment Form of Payment........................................................................... 34
7.4 Limitations on Payment Date........................................................................... 35
7.5 Manner of Distribution................................................................................ 36
Article 8 -- Termination or Death................................................................................ 38
8.1 Vesting............................................................................................... 38
8.2 Distribution Upon Termination......................................................................... 38
8.3 Distribution Upon Death............................................................................... 39
8.4 Amount of Distribution................................................................................ 39
8.5 Forfeitures........................................................................................... 40
8.6 Repayment After Reemployment.......................................................................... 41
Article 9 -- Withdrawals and Loans............................................................................... 42
9.1 Withdrawals from Accounts by Members under Age 59 1/2................................................. 42
9.2 Withdrawal from Accounts by Members Over Age 59 1/2................................................... 43
9.3 Forfeitures and Limitation on Withdrawals............................................................. 43
9.4 Allocation of Withdrawals Among Investment Funds...................................................... 45
9.5 Hardship Withdrawals from Compensation and Supplemental Deferral
Accounts.......................................................................................... 45
9.6 Loans................................................................................................. 47
Article 10 -- Termination of Plan................................................................................ 49
10.1 Termination of Plan.................................................................................. 49
10.2 Procedures Upon Termination of Plan.................................................................. 49
Article 11 -- Top Heavy Provisions............................................................................... 50
11.1 Top-Heavy Plan....................................................................................... 50
11.2 Definition of Terms.................................................................................. 50
11.3 Modification of Vesting Schedule..................................................................... 52
11.4 Minimum Contribution................................................................................. 53
11.5 Modification of Maximum Contribution................................................................. 53
11.6 Collective Bargaining Agreements..................................................................... 53
Article 12 -- Administration of Plan............................................................................. 54
12.1 Administration....................................................................................... 54
12.2 Records.............................................................................................. 55
</TABLE>
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<PAGE> 5
<TABLE>
<CAPTION>
<S> <C>
12.3 Payment of Expenses.................................................................................. 55
12.4 Delegation of Authority.............................................................................. 55
12.5 Information Available................................................................................ 55
12.6 Appeal Procedure..................................................................................... 55
12.7 Fiduciary Capacity................................................................................... 56
12.8 Committee Liability.................................................................................. 56
Article 13 -- General Provisions................................................................................. 57
13.1 Amendment of Plan.................................................................................... 57
13.2 Qualification........................................................................................ 57
13.3 Employment Status.................................................................................... 57
13.4 Mergers or Consolidations............................................................................ 57
13.5 Provision Against Anticipation....................................................................... 58
13.6 Facility of Payment.................................................................................. 58
13.7 Construction......................................................................................... 58
13.8 Legal Actions........................................................................................ 58
13.9 Limitations on Contributions......................................................................... 58
13.10 Qualified Domestic Relations Order.................................................................. 60
13.11 Pronouns............................................................................................ 60
13.12 Eligible Rollover Distribution...................................................................... 61
13.13 Rollover Contributions.............................................................................. 62
Appendix A -- Retirement Sub-Plans Crediting Service............................................................. 64
Appendix B -- Procedures, Terms, and Conditions of Loans......................................................... 65
</TABLE>
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<PAGE> 6
Introduction
The Boeing North American Salaried Voluntary Savings Plan is effective on the
closing date of the merger involving Rockwell International Corporation and
Boeing NA, Inc. On this date, most Rockwell Aerospace and Defense business
employees became employees of Boeing North American, Inc.
Except as specifically provided in the Plan, the rights and benefits of any
Member who terminates or retires prior to the effective date of any amendment to
the Plan will be determined pursuant to the provisions of the Plan in effect on
the earlier of his date of retirement or termination.
The purpose of the Plan is to provide Eligible Employees with a means of making
regular savings to provide additional security for their retirement. As an
incentive, the Plan provides for Company matching contributions.
It is intended that the Plan qualify as a profit sharing plan under the Internal
Revenue Code of 1986 and comply with the Employee Retirement Income Security Act
of 1974 and any amendments to said Code or Act.
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<PAGE> 7
Article 1
Definitions
1.1 Accounts means the Company Contributions Account, Compensation Deferral
Account, Compensation Deduction Account, Supplemental Deferral Account,
and Supplemental Deduction Account maintained for each Member, as
applicable.
1.2 Affiliate or Subsidiary means a member of a controlled group of
corporations (as defined in Code Section 1563(a), determined without
regard to Code Sections 1563(a)(4) and (e)(3)(C)), a group of trades or
businesses (whether incorporated or not) which are under common control
within the meaning of Code Section 414(c), or an affiliated service
group (as defined in Code Sections 414(m) or 414(o)) of which The
Boeing Company is a part. With respect to the Limitation on
Contributions described in 13.9, in determining whether a corporation
is a member of a controlled group of corporations the phrase "more than
50 percent" shall be substituted for the phrase "at least 80 percent"
each place it appears in Code Section 1563(a)(1).
1.3 Authorized Period of Absence means an absence authorized by the Company
for one or more of the following reasons:
(a) Layoff not to exceed six years duration.
(b) Approved leave of absence.
(c) Jury duty.
(d) Labor-management dispute.
(e) Military Service as defined in section 1.30.
(f) Illness or injury, including disability.
Any discretion of the Company under the provisions of this definition
will be exercised without discrimination and in accordance with
definitely established rules uniformly applicable to Employees or
Members whose approved periods of absence were occasioned by similar
circumstances.
1.4 Beneficiary means the one or more persons or trusts designated by a
Member to receive any benefit payable from the Plan upon the death of
the Member. Each Member may designate a beneficiary; provided, however,
if the Member has been married for a one year period and is survived by
his spouse (or a former spouse to the extent provided under a qualified
domestic relations order as described in Code Section 414(p)), he will
be deemed to have designated such spouse as his Beneficiary unless he
has designated a different Beneficiary in writing and his spouse has
consented to this designation. The spouse's consent must be in writing,
must acknowledge the effect of the designation, and must be witnessed
by a Plan representative or a notary public. The requirement for
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<PAGE> 8
spouse's consent will be waived if the Member establishes to the
satisfaction of the Plan Administrator that such consent cannot be
obtained because there is no spouse, the spouse cannot be located, or
because of such other circumstances as the Secretary of the Treasury
may by regulations prescribe. The spouse's consent (or waiver of
consent where the spouse cannot be located) will be valid only with
respect to that spouse.
If no designation is filed with the Plan Administrator or if the
designated Beneficiary does not survive the Member, the Member shall be
deemed to have designated the following as Beneficiaries and contingent
Beneficiaries with priority in the order named.
(a) Surviving spouse, if none then to
(b) Children in equal shares, if none then to
(c) Any other relative of the Member designated by the Plan
Administrator or to the Member's estate.
1.5 Boeing Company Stock Fund means the Investment Fund described in
section 5.2(e).
1.6 Code means the Internal Revenue Code of 1986, as amended.
1.7 Common Stock means common stock of The Boeing Company
1.8 Common Unit means a Unit of the Boeing Company Stock Fund which is
attributable to Common Stock.
1.9 Company means Boeing North American, Inc., a Delaware corporation,
and any other entity to which the Board of Directors has extended
this Plan.
1.10 Company Contributions Account means the Account, if any, maintained
for each Member which is credited with the Member's share of Company
Matching Contributions and investment earnings allocable to such
Account.
1.11 Company Matching Contributions means the amount contributed to the
Plan by the Company on behalf of the Member in accordance with
section 3.4.
1.12 Compensation means a Member's base compensation from the Company and
will include lump sum merit awards, any amount which would be paid to
the Member absent an election under section 3.1(a) or (b) or an
election to make elective employer contributions pursuant to a
cafeteria plan meeting the requirement of Code Section 125.
Compensation will not include overtime, extended workweek compensation,
night work or other premium pay, bonuses, any form of extra,
contingent, or supplementary compensation (including, but not limited
to, lump sum payments for unused vacation) or compensation on the
hourly payroll. Compensation is limited to amounts which would have
been received by a Member in a Plan Year (but for a deferral election)
or to amounts which are attributable to services performed by the
Member in the Plan Year
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<PAGE> 9
which would have been received within two and one-half months after
the close of the Plan Year (but for a deferral election).
Compensation shall not exceed $150,000 for 1994. On January 1 of each
calendar year in which the Secretary of the Treasury prescribes a new
dollar limit, this $150,000 limit will automatically be adjusted to
that new limit. Compensation for the Plan Year commencing on the
Effective Date and ending December 31, 1996 shall not exceed $12,500.
For Plan Years beginning before January 1, 1997, this limit applies
to the combined Compensation of a 5% owner (as defined in Code
Section 416(i)(1)(A)(iii)) of the Company, or one of the 10 Highly
Compensated Employees paid the greatest amount of Total Earnings
during the year, and such individual's spouse and any lineal
descendants who are not yet age 19 before the close of the Plan Year,
to the extent required by Code Section 401(a)(17). If the limit
applies to combined Total Earnings, the limit will be allocated to
the affected individuals in proportion to each individual's
Compensation determined prior to the application of the limit.
1.13 Compensation Deduction Account means the Account, if any, maintained
for each Member which is credited with the Member's Compensation
Deduction Contributions and investment earnings allocable to such
Account.
1.14 Compensation Deduction Contributions means the amount contributed to
the Plan by the Member through payroll deductions pursuant to section
3.2(a).
1.15 Compensation Deferral Account means the Account, if any, maintained
for each Member which is credited with the Member's Compensation
Deferral Contributions and investment earnings allocable to such
Account.
1.16 Compensation Deferral Contributions means the amount contributed to
the Plan by the Company on behalf of the Member in accordance with
the Member's election pursuant to section 3.1(a).
1.17 Controlled Group means the Parent, the Company and any Affiliate or
Subsidiary. All employees of the Controlled Group will be treated as
employed by a single employer for purposes of applying the provisions
of qualification of the Plan; of minimum participation standards of
the Plan; of minimum vesting standards of the Plan; and of
limitations on contributions under the Plan.
1.18 Effective Date means the closing date of the merger involving
Rockwell International Corporation and Boeing NA, Inc.
(_____________________________).
1.19 Eligible Employee means any Employee who is employed by the Company
on a salaried payroll and paid directly through the Company's payroll
department. Provided, however, that Eligible Employee shall not
include any Employee who is employed at the Company's Guidance and
Repair Center at Newark Air Force Base, Ohio. Eligible Employee shall
not include any Employee represented by a collective bargaining agent
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<PAGE> 10
unless the terms of the collective bargaining agreement covering such
Employee specifically provide for coverage under the Plan. Eligible
Employee also shall not include a leased employee as defined in Code
Section 414(n).
1.20 Employee means any person employed by any member of the Controlled
Group. Employee includes, to the extent permitted by Code Section 406,
any United States citizen regularly employed by a foreign subsidiary or
affiliate of the Company. The term Employee shall not include:
(a) a person who serves the Company only as a Director and is not
otherwise employed by the Company;
(b) a person engaged only in an advisory or consulting capacity
on a retained or fee basis;
(c) any person compensated by special fees or pursuant to a
special contract or arrangement or on a commission basis who
is not otherwise employed by the Company;
(d) a person engaged only in a capacity which, in the sole
discretion of the Plan Administrator, is determined to be an
independent contractor;
(e) a person who is a leased employee (within the meaning of Code
Section 414(n)) except that a leased employee will be treated
as an employee of the Company to the extent required by law
and any contributions or benefits provided by the leasing
organization which are attributable to services performed for
the recipient employer shall be treated as provided by the
recipient employer; or
(f) any person whose services for the Company are not paid for
through the Company's payroll department.
1.21 Employment Date means the date on which an Employee first performs an
Hour of Service for any member of the Controlled Group.
1.22 ERISA means the Employee Retirement Income Security Act of 1974, as
amended.
1.23 Highly Compensated Eligible Employee means an Eligible Employee who is
a Highly Compensated Employee.
1.24 Highly Compensated Employee means:
(a) For Plan Years beginning before January 1, 1997, any Employee
who performs services for the Controlled Group during the
determination year and who, during the look-back year:
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<PAGE> 11
(1) received Total Earnings in excess of $75,000 (as
adjusted by the Secretary of the Treasury for the
relevant year),
(2) received Total Earnings in excess of $50,000 (as
adjusted by the Secretary of the Treasury for the
relevant year) and was a member of the top-paid group
for such year, or
(3) was an officer (within the meaning of Code Section
416(i)) of the Controlled Group and received Total
Earnings during such year that were greater than 50%
of the dollar limitation in effect under Code Section
415(b)(1)(A).
(b) For Plan Years beginning before January 1, 1997, any Employee
who is both (i) described in (a) above if the term
"determination year" is substituted for the term "look-back
year" and (ii) is one of the 100 Employees who received the
most Total Earnings from the Controlled Group during the
determination year.
(c) For Plan Years beginning after December 31, 1996, any Employee
who performs services for the Controlled Group during the
determination year and who, during the look-back year received
Total Earnings in excess of $80,000 (as adjusted by the
Secretary of the Treasury for the relevant year).
(d) Any Employee who is a 5% owner (as defined in Code Section
416(i)(1)(A)(iii)) of the Company at any time during the
look-back year or the determination year.
(e) Any former Employee who was a Highly Compensated Employee for
a separation year (as defined in Treasury Regulation section
1.414(q)-1T) or for any determination year ending on or after
the Employee attains age 55, as provided by Code Section
414(q)(9), as in effect on December 31, 1996, and the
regulations thereunder.
(f) For Plan Years beginning before January 1, 1997, if no officer
has satisfied the compensation requirement in (a)(3) above
during either a determination year or look-back year, the
highest paid officer for such determination year shall be
treated as a Highly Compensated Eligible Employee if such
officer is an Eligible Employee. No more than 50 Employees (or
if less, the greater of three Employees or 10% of the
Employees) shall be treated as officers.
(g) For purposes of this section the following definitions apply.
The determination year is the Plan Year. The look-back year is
the 12-month period immediately preceding the determination
year; provided, however, for the Plan Year commencing on the
Effective Date and ending December 31, 1996, the look-back
year is the 1996 calendar year. The top-paid group is the top
20% of Employees ranked on the basis of compensation received
during the year and shall be
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<PAGE> 12
determined in accordance with Code Section 414(q)(8), as in
effect on December 31, 1996, and the regulations thereunder.
(h) For Plan Years beginning before January 1, 1997, any Employee
who is a 5% owner or one of the 10 highly compensated
employees in the Controlled Group paid the greatest amount of
Total Earnings during the Plan Year and such Employee's
spouse, lineal ascendants or descendants and the spouses of
such lineal ascendants or descendants shall be treated as a
single Employee for purposes of this section.
1.25 Hour of Service means:
(a) each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for the Company;
(b) each hour for which an Employee is paid, or entitled to
payment, by the Company on account of a period of time during
which no duties are performed (whether or not the employment
relationship has terminated) due to vacation, holiday,
illness, incapacity (including disability), layoff, jury duty,
military duty or leave of absence; provided, however, that an
Employee shall not be credited with more than 501 Hours of
Service under this sentence for any continuous period during
which he performs no duties for the Company. Notwithstanding
the preceding provisions of this subsection, no credit will be
given:
(1) for an Hour of Service for which the individual is
directly or indirectly paid, or entitled to payment,
on account of a period during which no duties are
performed if such payment is made or due under a plan
maintained solely for the purpose of complying with
applicable workers' compensation, unemployment
compensation or disability insurance laws; or
(2) for an Hour of Service for which a payment is made
which solely reimburses the individual for medical or
medically related expenses incurred;
(c) each hour not otherwise credited under the Plan for which back
pay, irrespective of mitigation of damages, is either awarded
or agreed to by the Company.
(d) Hours of Service will be credited for employment with other
members of an affiliated service group, a controlled group of
corporations, or a group of trades or businesses under common
control of which the Company is a member.
(e) Hours of Service will also be credited for any individual
considered an employee under Code Section 414(n).
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<PAGE> 13
(f) The crediting of Hours of Service under this Plan will be
applied under the rules of paragraphs (b) and (c) of the
Department of Labor Regulation 2530.200b-2 which, by this
reference, is specifically incorporated in full within this
Plan.
1.26 Investment Fund has the meaning specified in section 5.2.
1.27 Investment Manager means any fiduciary (other than a Trustee, The
Boeing Company or the Plan Administrator):
(a) which has the power to manage, acquire, or dispose of any
assets of the Plan; and
(b) which (1) is registered as an investment adviser under the
Investment Advisers Act of 1940, or (2) is a bank, as defined
in that Act, or (3) is an insurance company qualified to
perform services described in item (a) above under the laws of
more than one state; and
(c) which has acknowledged in writing that it is a fiduciary with
respect to the Plan.
1.28 Layoff means an involuntary severance of employment, other than a
discharge for cause.
1.29 Member means any Eligible Employee who has become a Member in the Plan
as provided in Article 2.
1.30 Military Service means the period of time during which a person is
absent from active work for the Company or any member of the Controlled
Group serving as a member of the Armed Forces of the United States in
time of war or other emergency or under the laws of conscription in
time of peace. Military Service includes time when such person has a
right to reemployment at his former position or a substantially similar
position upon his separation from such Military Service, and such
period of time, not exceeding ninety days, immediately following such
Military Service as such person remains absent from active work for the
Company or any member of the Controlled Group.
1.31 Parent means The Boeing Company and any successor by change of name,
merger, purchase of stock or purchase of assets.
1.32 Period of Service means:
(a) a period beginning on the Employee's Employment Date or
Reemployment Date, whichever is applicable, and ending on his
Severance from Service Date.
(b) If an Employee has a Severance from Service Date due to
either:
(1) a quit, discharge or retirement which is not covered
under (2) below, and then performs an Hour of Service
for the Company or any member of the Controlled Group
within 12 months of his Severance from Service Date,
or
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<PAGE> 14
(2) a quit, discharge or retirement which occurs during
an absence from service (which is not due to a quit,
discharge, retirement or death) and performs an Hour
of Service for the Company or any member of the
Controlled Group within 12 months of the date on
which he was first absent from service,
then the Period of Severance shall be counted in determining
his Period of Service.
(c) If a Member has a Period of Severance before he has a vested
interest in the Plan, his Period of Service will exclude all
of the following:
(1) service prior to a one-year Period of Severance which
is not followed by a one-year Period of Service,
(2) service prior to a five-year Period of Severance when
the Period of Severance equals or exceeds the
Member's Period of Service prior to such Period of
Severance.
(d) A Member's Period of Service shall not be less than his
vesting service under any of the sub-plans of the Boeing North
American, Inc. Retirement Plan listed in Appendix A in which
he participates at the time his Period of Service for purposes
of this Plan is determined (if at the time of such
determination the Member does not participate in any of the
sub-plans listed in Appendix A, his vesting service for
purposes of this subsection will be determined as if he
participated in the sub-plan Rockwell International
Corporation Retirement Income Plan for Certain Salaried
Employees).
(e) For any person who is an Eligible Employee on the Effective
Date (including an active employee, an employee on layoff
status, or an employee on leave of absence) service with
Rockwell International Corporation and related employers that
is recognized as vesting service under the Rockwell
International Corporation Savings Plan shall be deemed to be
service as an Employee hereunder in determining the Member's
Period of Service.
1.33 Period of Severance means the period of time commencing on an
Employee's Severance from Service Date and ending on the date on which
the Employee again performs an Hour of Service for the Company or an
Affiliate or Subsidiary.
1.34 Plan means the Boeing North American Salaried Voluntary Savings Plan.
1.35 Plan Administrator means the Voluntary Investment Plan Committee
established by The Boeing Company Board of Directors.
1.36 Plan Year means the period commencing on the Effective Date and
concluding on the December 31 next following the effective date, and
each calendar year thereafter.
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<PAGE> 15
1.37 Reemployment Date means the first day following a Period of Severance
on which an Employee performs an Hour of Service for the Company or an
Affiliate or Subsidiary.
1.38 Rollover Contribution means the amount transferred to this Plan
pursuant to section 13.13.
1.39 Severance from Service Date means the earlier of:
(a) the date on which an Employee quits, retires, is discharged or
dies, and
(b) either (1) or (2) below, whichever is applicable:
(1) the first anniversary of the first day of a period in
which an Employee remains absent from service (with
or without pay) with the Company or an Affiliate or
Subsidiary for any reason other than quit,
retirement, discharge or death;
(2) the second anniversary of the first day of a period
in which an Employee remains absent from service
(with or without pay) with the Company or an
Affiliate or Subsidiary because of pregnancy, the
birth of the Employee's child, the placement of a
child with the Employee in connection with the
adoption of such child by the Employee, or the need
to care for the Employee's child during the period
immediately following the child's birth or placement.
Any such absence shall not be taken into account
unless the Employee furnishes the Plan Administrator
such timely information as the Plan Administrator may
require to establish that the absence from employment
is for such reason. The period of absence between the
first and second anniversaries of the first day of
absence shall not be included as a Period of Service
nor as a Period of Severance.
(c) An Employee who is on leave of absence for uniformed service
as defined in the Uniformed Services Employment and
Reemployment Rights Act shall not be deemed to have a
Severance from Service unless he fails to return to work
during the time he has reemployment rights under the law. If
such employee fails to return to work within such time, his
Severance from Service Date will be the first anniversary of
the first day of the period of his absence from employment.
1.40 Stable Value Fund means the Investment Fund described in section
5.2(c).
1.41 Supplemental Deduction Account means the Account, if any, maintained
for each Member which is credited with the Member's Supplemental
Deduction Contributions and investment earnings allocable to such
Account.
1.42 Supplemental Deduction Contributions means the amount contributed to
the Plan by the Member through payroll deductions pursuant to section
3.2(b).
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<PAGE> 16
1.43 Supplemental Deferral Account means the Account, if any, maintained for
each Member which is credited with the Member's Supplemental Deferral
Contributions, Rollover Contributions, and investment earnings
allocable to such Account.
1.44 Supplemental Deferral Contributions means the amount contributed to the
Plan by the Company on behalf of the Member in accordance with the
Member's election pursuant to section 3.1(b).
1.45 Total Disability means a physical or mental disability lasting at least
six months, which wholly prevents the Member from performing the duties
of his occupation or other appropriate work made available to him by
the Company. The condition of Total Disability will be determined by
the Plan Administrator through the application of procedures which are
uniformly applied and which do not discriminate in favor of any class
or classes of individuals.
1.46 Total Earnings means compensation used in determining the actual
deferral percentage and the actual contribution percentage. Total
Earnings is equal to compensation received by the Employee from the
Company, other than compensation in the form of qualified or previously
qualified deferred compensation, that is currently includible in gross
income for income tax purposes. Total Earnings also includes all
elective contributions made by the Company on behalf of the Employee
that are not includible in gross income of the Employee under Code
Sections 125 or 402(e)(3).
Total Earnings shall not exceed $150,000 for 1994. On January 1 of each
calendar year in which the Secretary of the Treasury prescribes a new
dollar limit, this $150,000 limit will automatically be adjusted to
that new limit. Compensation for the Plan Year commencing on the
Effective Date and ending December 31, 1996 shall not exceed $12,500.
For Plan Years beginning before January 1, 1997, this limit applies to
the combined Total Earnings of a 5% owner (as defined in Code Section
416(i)(1)(A)(iii)) of the Company, or one of the 10 Highly Compensated
Employees paid the greatest amount of Total Earnings during the Plan
Year, and such individual's spouse and any lineal descendants who are
not yet age 19 before the close of the Plan Year, to the extent
required by Code Section 401(a)(17). If the limit applies to combined
Total Earnings, the limit will be allocated to the affected individuals
in proportion to each individual's Total Earnings determined prior to
the application of the limit.
1.47 Trust Agreement means the instrument or instruments executed between
the Company and the Trustee named in it, which provides for the
receiving, holding, investing, and disposing of the Trust Fund.
1.48 Trust Fund means the fund established by the Trust Agreement, including
the earnings thereon, held by the Trustee for all contributions made by
Members and the Company pursuant to the Plan.
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<PAGE> 17
1.49 Trustee means the trustee or trustees designated in the Trust
Agreement, and any successor Trustee.
1.50 Unit means the applicable participation unit under the Trust Fund used
to measure the Member's proportionate interest in the Trust Fund as
provided in Article 6.
1.51 Valuation Date means the last business day of each month or such other
business day as the Plan Administrator may determine.
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<PAGE> 18
Article 2
Membership
2.1 Entry Date
(a) Each Eligible Employee on the Effective Date who was eligible
to participate in the Rockwell International Corporation
Savings Plan immediately prior to the Effective Date may elect
to become a Member of the Plan on the Effective Date or the
first day of any month thereafter.
(b) An Eligible Employee who is not described in (a) may elect to
become a Member on his Employment Date or the first day of any
month thereafter.
2.2 Application for Membership
An election to participate shall be made in the manner prescribed by
the Plan Administrator, including completion of such form(s) as the
Plan Administrator may prescribe. The election to participate shall be
effective as soon as practicable, but in no event later than the first
payroll payment date that is at least 30 days after the date the
election is made. By making an election to participate, an Eligible
Employee shall agree to the terms and conditions of this Plan.
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<PAGE> 19
Article 3
Contributions
3.1 Compensation Deferral Contributions and Supplemental Deferral
Contributions
(a) A Member may elect to defer receipt of a portion of his
Compensation and have the Company contribute such deferral to
the Plan on his behalf as a Compensation Deferral
Contribution. The amount of this deferral must be between one
and eight percent (in whole percentage increments) of the
Member's Compensation.
(b) A Member who has elected to defer receipt of eight percent of
his Compensation pursuant to subsection (a) may elect to defer
receipt of an additional portion of his Compensation and have
the Company contribute such deferral to the Plan on his behalf
as a Supplemental Deferral Contribution. The amount of this
deferral must be between one and three percent (in whole
percentage increments) of the Member's Compensation; provided,
however, that if the Member is a Highly Compensated Eligible
Employee, the amount of this deferral may not exceed two
percent of the Member's Compensation.
(c) The total of a Member's Compensation Deferral Contributions
and Supplemental Deferral Contributions in one calendar year,
when added to the Member's other Elective Deferrals for such
year, may not exceed $7,000 (adjusted for cost of living
changes under Code Section 402(g)). For purposes of this
section, "Elective Deferrals" means the sum of all elective
contributions made pursuant to a Member's deferral election
under another plan or arrangement described in Code Sections
401(k), 408(k) or 403(b). Compensation Deferral Contributions
and Supplemental Deferral Contributions in excess of this
limit and investment earnings on such contributions (including
gains and losses) shall be returned to the Member in
accordance with the provisions of Code Section 402(g), the
regulations thereunder, and other applicable rules and
regulations.
A Member's Compensation Deferral Contributions and
Supplemental Deferral Contributions in excess of this limit
for a calendar year and investment earnings (including gains
and losses) thereon may be distributed to the Member during
the same calendar year if (1) the Member and the Plan
Administrator designate the distribution as an excess Elective
Deferral and (2) the distribution is made after the date the
Plan received the excess contribution. If a Member notifies
the Plan Administrator in writing no later than March 1 (or
April 15 if the Plan Administrator waives the deadline)
following a calendar year that the Member's Compensation
Deferral Contributions and Supplemental Deferral Contributions
exceeded the limit under Code Section 402(g) (as adjusted) for
such year, the Plan Administrator may, in its discretion,
distribute the amount specified by the Member and investment
earnings on such amount (including gains and losses) no later
than April 15 following such year.
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<PAGE> 20
3.2 Compensation Deduction Contributions and Supplemental Deduction
Contributions
(a) A Member who has not elected to defer receipt of a portion of
his Compensation pursuant to section 3.1 may authorize to be
deducted from his Compensation, as paid, an amount which shall
be contributed to the Plan as a Compensation Deduction
Contribution. The amount of this deduction must be between one
and eight percent (in whole percentage increments) of the
Member's Compensation.
(b) A Member who has authorized deduction of eight percent of his
Compensation pursuant to paragraph (a) may authorize deduction
of an additional one to three percent (in whole percentage
increments) of his Compensation which shall be contributed to
the Plan as a Supplemental Deduction Contribution; provided,
however, that if the Member is a Highly Compensated Eligible
Employee, the amount of this deduction may not exceed two
percent of the Member's Compensation.
3.3 Deferral and Deduction Elections
(a) The Plan Administrator shall prescribe procedures for an
Eligible Employee to apply for membership and to elect to have
Compensation or Supplemental Deferral Contributions made on
his behalf pursuant to section 3.1 or to authorize
Compensation or Supplemental Deduction Contributions pursuant
to section 3.2. Such an election shall first apply to
Compensation received on the first payroll payment date
coincident with or immediately following the effective date of
the election to participate described in section 2.2.
(b) A Member may from time to time change the rate of his
Compensation Deferral Contributions, Supplemental Deferral
Contributions, Compensation Deduction Contributions, or
Supplemental Deduction Contributions by making a new election
in the manner prescribed by the Plan Administrator. Such
change shall be effective as soon as is reasonably possible
after his election, but, in general, no later than the first
payroll payment date that is at least 15 days subsequent to
his election.
(c) A Member who has an authorization in effect to make
Compensation or Supplemental Deduction Contributions may
revoke such authorization and at the same time elect to
commence Compensation or Supplemental Deferral Contributions.
Such revocation and election shall be effective as soon as
reasonably possible after his election, but, in general, no
later than the first payroll payment date that is at least 15
days subsequent to his election.
(d) A Member who has made an election to have Compensation or
Supplemental Deferral Contributions made on his behalf may
revoke such election and at the same time authorize
Compensation or Supplemental Deduction Contributions to
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<PAGE> 21
commence effective with the first payroll payment date in
April or October by giving the Plan Administrator prior notice
thereof.
(e) A Member may, at any time, revoke his election to have
Compensation or Supplemental Deferral Contributions made on
his behalf or his authorization to make Compensation or
Supplemental Deduction Contributions. Such revocation will be
effective as soon as reasonably possible, but, in general, no
later than the first payroll payment date that is at least 15
days subsequent to his revocation.
(f) A Member who has voluntarily suspended contributions under
section 3.3(e) may elect to have contributions resumed,
effective as soon as reasonably possible after his election,
but, in general, no later than the first payroll payment date
that is at least 15 days subsequent to such election.
(g) A Member's election to have Compensation or Supplemental
Deferral Contributions made on his behalf or his authorization
to make Compensation or Supplemental Deduction Contributions
shall remain in effect until a new election or authorization
is made, except as provided in (1) and (2) below.
(1) No contributions (including Company Matching
Contributions) shall be made by, or on behalf of, any
Member after any of the following events, until the
Member again makes an election that is effective
under section 2.2 and section 3.3(a):
(A) the Member ceases to be an Eligible
Employee;
(B) the Member receives a distribution under
section 7.2, 7.3, or 8.2; or
(C) the Member voluntarily elects to have
contributions suspended under section
3.3(e).
(2) No contributions (including Company Matching
Contributions) shall be made by, or on behalf of, any
Member when:
(A) no payment of Compensation is made by the
Company to the Member or, in the case of
Compensation or Supplemental Deduction
Contributions, the amount payable after all
applicable withholdings and deductions
required by law or the Company is less than
the applicable contributions;
(B) payroll deduction for Compensation or
Supplemental Deduction Contributions under
the Plan would be contrary to law;
(C) the Member receives a distribution from his
Company Contributions Account pursuant to
section 9.1(a)(3); provided, however, that
contributions shall automatically resume
following the completion of
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<PAGE> 22
the twenty-six (26) week period beginning
on the date of the distribution.
3.4 Company Contributions
(a) Each month the Company shall contribute to the Plan on behalf
of each Member who has completed a one-year Period of Service
with an Affiliate or Subsidiary an amount equal to 75% of the
Member's Compensation Deferral Contributions and Compensation
Deduction Contributions. No Company Matching Contributions
shall be made on behalf of a Member who has not yet completed
a one-year Period of Service with an Affiliate or Subsidiary,
and no Company Matching Contributions shall be made with
respect to Supplemental Deferral Contributions, Supplemental
Deduction Contributions, or Rollover Contributions.
(b) Amounts which have been forfeited in accordance with section
3.7(d), 3.8(d), 3.9(d), 8.5, or 9.3(a) shall be applied to
reduce subsequent Company Matching Contributions required
hereunder. If the Plan should be terminated, any amount not
previously so applied shall be credited ratably to the
Accounts of all Members in proportion to the amounts of
Company Matching Contributions credited to their respective
Accounts during the most recent Plan Year.
3.5 Return of Company Contributions
(a) Except as provided below, the assets of the Plan will never
inure to the benefit of the Company and will be held for the
exclusive purpose of providing benefits to Members of the Plan
and their Beneficiaries and defraying reasonable expenses of
administering the Plan.
(b) If a contribution is made by the Company by a mistake of fact,
such contribution will be returned to the Company provided
this is done within one year after the payment of such
contribution.
(c) Contributions are conditioned upon their deductibility under
Code Section 404. If a contribution deduction is disallowed,
to the extent the deduction is disallowed, such contribution
shall be returned to the Company within one year after the
disallowance.
(d) Contributions are conditioned upon the initial qualification
of the Plan under Code Section 401(a). If the Plan does not
initially qualify, such contributions will be returned to the
Company within one year of such denial.
3.6 Contributions for Military Service
Notwithstanding any provision of this plan to the contrary,
contributions, benefits, and service credit with respect to qualified
military service will be provided in accordance with Code Section
414(u).
- 17 -
<PAGE> 23
3.7 Testing Compensation and Supplemental Deferral Contributions for
Discrimination
(a) The actual deferral percentage for Highly Compensated Eligible
Employees for any Plan Year may not exceed the greater of:
(1) One and one-quarter times the actual deferral
percentage for all other Eligible Employees for the
Plan Year, or
(2) The lesser of (A) two percentage points plus the
actual deferral percentage for all other Eligible
Employees for the Plan Year, or (B) two times such
percentage for all other Eligible Employees for the
Plan Year.
(b) The "actual deferral percentage" for each group of Eligible
Employees is the average of the deferral percentages for each
Eligible Employee in such group. The deferral percentage is
equal to the sum of the Employee's Compensation Deferral
Contributions plus Supplemental Deferral Contributions for the
Plan Year, divided by his Total Earnings for the Plan Year.
Eligible Employees who are not making Compensation Deferral
Contributions or Supplemental Deferral Contributions will be
included at zero percent in determining the actual deferral
percentage.
(c) Prior to the beginning of each Plan Year and periodically
during the year, the Plan Administrator shall test deferral
elections under section 3.1 to determine whether or not the
limits under this section will be exceeded for the Plan Year.
In performing this test, the Plan Administrator will assume
that deferrals for current Eligible Employees will continue
for the remainder of the Plan Year at the rate currently
elected by the Eligible Employee. If elections made by Highly
Compensated Eligible Employees would (if not reduced) cause
the actual deferral percentage for such Employees to exceed
the limitation in this section, the Plan Administrator shall
first reduce any Supplemental Deferral Contribution and then
Compensation Deferral Contributions elected by the Highly
Compensated Eligible Employees to comply with the maximum
permissible deferral percentage for the Plan Year. Such
reduction shall be effective as of the first payroll payment
date in the month following such determination and shall be
made as set forth below:
(1) First, Highly Compensated Eligible Employees electing
Supplemental Deferral Contributions in an amount
equal to 3% of Compensation shall have their
elections reduced to 2% of Compensation. If,
following this reduction, the maximum permissible
deferral percentage is still exceeded, Highly
Compensated Eligible Employees electing Supplemental
Deferral Contributions in an amount equal to 2% of
Compensation (including any Highly Compensated
Eligible Employees whose elections were reduced
under the preceding sentence) shall have their
elections reduced to 1% of Compensation. If,
following this reduction, the maximum permissible
deferral percentage is still exceeded, Highly
Compensated Eligible
- 18 -
<PAGE> 24
Employees electing Supplemental Deferral
Contributions in an amount equal to 1% of
Compensation (including any Highly Compensated
Eligible Employees whose elections were reduced under
the preceding sentence) shall have their elections
reduced to 0% of Compensation.
(2) Second, if, following the reductions described in
paragraph (1), the maximum permissible deferral
percentage is still exceeded, Highly Compensated
Eligible Employees electing Compensation Deferral
Contributions in an amount equal to 8% of
Compensation shall have their elections reduced to 7%
of Compensation. If, following this reduction, the
maximum permissible deferral percentage is still
exceeded, Highly Compensated Eligible Employees
electing Compensation Deferral Contributions in an
amount equal to 7% of Compensation (including any
Highly Compensated Eligible Employees whose elections
were reduced under the preceding sentence) shall have
their elections reduced to 6% of Compensation. The
process set forth in this paragraph (2) shall
continue until the average deferral percentage for
the Highly Compensated Eligible Employees does not
exceed the maximum permissible deferral percentage.
(3) Subject to section 3.8, the amount that would have
been contributed as Supplemental Deferral
Contributions or Compensation Deferral Contributions
on behalf of the Member except for the reductions
prescribed in paragraphs (1) and (2) above, shall be
contributed by the Member to the Plan as Supplemental
Deduction Contributions or Compensation Deduction
Contributions, as appropriate. In addition, to the
extent permitted by regulation, the Plan
Administrator may during or following a Plan Year
cause Supplemental Deferral Contributions and
Compensation Deferral Contributions made on behalf of
Highly Compensated Eligible Employees to be
recharacterized (on a uniform and non-discriminatory
basis) as Supplemental Deduction Contributions and
Compensation Deduction Contributions to the extent
necessary to prevent the average deferral percentage
for said Members for any Plan Year from exceeding the
maximum permissible deferral percentage.
(d) At the end of the Plan Year, if Compensation and Supplemental
Deferral Contributions for Highly Compensated Eligible
Employees exceed the limitation described in this section, the
Plan Administrator shall determine the excess Compensation and
Supplemental Deferral Contributions of each Highly Compensated
Eligible Employee in accordance with the following leveling
method. The deferral percentage of the Highly Compensated
Eligible Employee with the highest deferral percentage will be
reduced to the extent required to (i) enable the Plan to
comply with this section, or (ii) cause such Employee's
deferral percentage to equal the deferral percentage of the
Highly Compensated Eligible Employee with the next highest
deferral percentage. This procedure will be
--19-
<PAGE> 25
repeated until the Plan satisfies the limitation in this
section. Subject to section 3.8, excess Compensation and
Supplemental Deferral Contributions and investment earnings
(including gains and losses) minus any Compensation and
Supplemental Deferral Contributions previously distributed for
the Plan Year under section 3.1(c) will be recharacterized as
Compensation and Supplemental Deduction Contributions. Such
excess Compensation and Supplemental Deferral Contributions
and investment earning (including gains and losses) that are
not recharacterized will be refunded to the Member in cash
before the end of the next Plan Year. If Compensation Deferral
Contributions are refunded, Company Matching Contributions
attributable to such Compensation Deferral Contributions and
investment earnings on such Company Matching Contributions
(including gains and losses) will be forfeited and used to
reduce subsequent Company Matching Contributions otherwise
payable pursuant to section 3.4.
Investment earnings allocable to excess Compensation and
Supplemental Deferral Contributions for a Plan Year and for
the period between the end of such Plan Year and the date of
the refund shall be determined in accordance with proposed
Treasury Regulation section 1.401(k)-1(f)(4)(ii), as it may be
revised from time to time by the Secretary of the Treasury.
For Plan Years beginning before January 1, 1997, in the case
of a Highly Compensated Eligible Employee whose deferral
percentage is determined under the family aggregation rules of
Code Section 414(q)(6) as in effect on December 31, 1996, the
deferral percentage shall be reduced in accordance with the
leveling method described above and the excess Compensation
and Supplemental Deferral Contributions will be allocated
among the family members in proportion to the Compensation and
Supplemental Deferral Contributions of each family member that
has been combined.
3.8 Testing Compensation and Supplemental Deduction Contributions and
Company Matching Contributions for Discrimination
(a) The actual contribution percentage for Highly Compensated
Eligible Employees for any Plan Year may not exceed the
greater of:
(1) One and one-quarter times the actual contribution
percentage for all other Eligible Employees for the
Plan Year, or
(2) The lesser of (A) two percentage points plus the
actual contribution percentage for all other Eligible
Employees for the Plan Year, or (B) two times such
percentage for all other Eligible Employees for the
Plan Year.
(b) The "actual contribution percentage" for each group of
Eligible Employees is the average of the contribution
percentages for each Eligible Employee in such group. The
contribution percentage is equal to sum of the Employee's
Compensation
- 20 -
<PAGE> 26
Deduction Contributions plus his Supplemental Deduction
Contributions plus his Company Matching Contributions, divided
by his Total Earnings for the Plan Year. Eligible Employees
for whom there are no Compensation Deduction Contributions,
Supplemental Deduction Contributions, or Company Matching
Contributions will be included at zero percent in determining
the actual contribution percentage.
(c) Prior to the beginning of each Plan Year and periodically
during the year, the Plan Administrator shall test deferral
elections under section 3.1 and deduction authorizations under
section 3.2 to determine whether or not the limits under this
section will be exceeded for the Plan Year. In performing this
test, the Plan Administrator will assume that deferrals and
deductions for current Eligible Employees will continue for
the remainder of the Plan Year at the rate currently elected
by the Eligible Employee. If elections made by Highly
Compensated Eligible Employees would (if not reduced) cause
the actual contribution percentage for such Employees to
exceed the limitation in this section, the Plan Administrator
shall first reduce any Supplemental Deduction Contributions
and then the Compensation Deduction Contributions elected by
the Highly Compensated Eligible Employees to comply with the
maximum permissible contribution percentage for the Plan Year.
Such reduction shall be effective as of the first payroll
payment date in the month following such determination and
shall be made as set forth below:
(1) First, Highly Compensated Eligible Employees electing
Supplemental Deduction Contributions in an amount
equal to 3% of Compensation shall have their
elections reduced to 2% of Compensation. If,
following this reduction, the maximum permissible
contribution percentage is still exceeded, Highly
Compensated Eligible Employees electing Supplemental
Deduction Contributions in an amount equal to 2% of
Compensation (including any Highly Compensated
Eligible Employees whose elections were reduced under
the preceding sentence) shall have their elections
reduced to 1% of Compensation. If, following this
reduction, the maximum permissible contribution
percentage is still exceeded, Highly Compensated
Eligible Employees electing Supplemental Deduction
Contributions in an amount equal to 1% of
Compensation (including any Highly Compensated
Eligible Employees whose elections were reduced under
the preceding sentence) shall have their elections
reduced to 0% of Compensation.
(2) Second, if, following the reductions described in
paragraph (1), the maximum permissible contribution
percentage is still exceeded, Highly Compensated
Eligible Employees electing Compensation Deduction
Contributions in an amount equal to 8% of
Compensation shall have their elections reduced to 7%
of Compensation. If, following this reduction, the
- 21 -
<PAGE> 27
maximum permissible contribution percentage is still
exceeded, Highly Compensated Eligible Employees
electing Compensation Deduction Contributions in an
amount equal to 7% of Compensation (including any
Highly Compensated Eligible Employees whose elections
were reduced under the preceding sentence) shall have
their elections reduced to 6% of Compensation. The
process set forth in this paragraph (2) shall
continue until the average contribution percentage
for the Highly Compensated Eligible Employees does
not exceed the maximum permissible deferral
percentage.
(d) At the end of the Plan Year, if Compensation and Supplemental
Deduction Contributions and Company Matching Contributions for
Highly Compensated Eligible Employees exceed the limitation
described in this section, the Plan Administrator shall
determine the excess Compensation and Supplemental Deduction
Contributions and Company Matching Contributions of each
Highly Compensated Eligible Employee in accordance with the
following leveling method. The contribution percentage of the
Highly Compensated Eligible Employee with the highest
contribution percentage will be reduced to the extent required
to (i) enable the Plan to comply with this section, or (ii)
cause such Employee's contribution percentage to equal the
contribution percentage of the Highly Compensated Eligible
Employee with the next highest contribution percentage. This
procedure will be repeated until the Plan satisfies the
limitation in this section. Excess Compensation and
Supplemental Deduction Contributions and investment earnings
(including gains and losses) will be refunded to the Member in
cash before the end of the next Plan Year. In accordance with
Treasury Regulations Section 1.401(m)-1(e)(2)(ii), the amount
of excess Compensation and Supplemental Deduction
Contributions and Company Matching Contributions shall be
determined only after first determining the excess
Compensation and Supplemental Deferral Contributions, if any,
that are treated as Compensation and Supplemental Deduction
Contributions due to recharacterization pursuant to section
3.6. If Compensation Deduction Contributions are refunded to
the Member, any Company Matching Contributions attributable to
such Compensation Deduction Contributions and investment
earnings (including gains and losses) shall be forfeited and
used to reduce Company Matching Contributions otherwise
payable pursuant to 3.4.
Investment earnings allocable to excess Compensation and
Supplemental Deduction Contributions and Company Matching
Contributions for a Plan Year and for the period between the
end of such Plan Year and the date of the refund shall be
determined in accordance with proposed Treasury Regulation
section 1.401(m)-1(e)(3)(ii), as it may be revised from time
to time by the Secretary of the Treasury.
- 22 -
<PAGE> 28
For Plan Years beginning before January 1, 1997, in the case
of a Highly Compensated Eligible Employee whose contribution
percentage is determined under the family aggregation rules of
Code Section 414(q)(6) as in effect on December 31, 1996, the
contribution percentage shall be reduced in accordance with
the leveling method described above and the excess
Compensation and Supplemental Deduction Contributions and
Company Matching Contributions will be allocated among the
family members in proportion to the contributions of each
family member that have been combined.
3.9 Testing Aggregate Contributions for Discrimination
(a) The sum of the actual deferral percentage and the actual
contribution percentage for Highly Compensated Eligible
Employees for each Plan Year may not exceed the greater of (1)
or (2) below:
(1) The sum of (A) and (B) below:
(A) one and one-quarter times the greater of (i)
the actual deferral percentage for all other
Eligible Employees for the Plan Year, or
(ii) the actual contribution percentage for
all other Eligible Employees for the Plan
Year, plus
(B) the lesser of (i) or (ii) below:
(i) Two percentage points plus the
lesser of 1) the actual deferral
percentage for all other Eligible
Employees for the Plan Year or 2)
the actual contribution percentage
for all other Eligible Employees
for the Plan Year.
(ii) Two times the lesser of 1) the
actual deferral percentage for all
other Eligible Employees for the
Plan Year or 2) the actual
contribution percentage for all
other Eligible Employees for the
Plan Year.
(2) The sum of (A) and (B) below:
(A) one and one-quarter times the lesser of (i)
the actual deferral percentage for all other
Eligible Employees for the Plan Year, or
(ii) the actual contribution percentage for
all other Eligible Employees for the Plan
Year, plus
(B) the lesser of (i) or (ii) below:
(i) Two percentage points plus the
greater of 1) the actual deferral
percentage for all other Eligible
Employees for the
- 23 -
<PAGE> 29
Plan Year or 2) the actual
contribution percentage for all
other Eligible Employees for the
Plan Year.
(ii) Two times the greater of 1) the
actual deferral percentage for all
other Eligible Employees for the
Plan Year or 2) the actual
contribution percentage for all
other Eligible Employees for the
Plan Year.
(b) Prior to the beginning of each Plan Year and periodically
during the year, the Plan Administrator shall test deferral
elections under section 3.1 and deduction authorizations under
section 3.2 to determine whether or not the limits under this
section will be exceeded for the Plan Year. If elections made
by Highly Compensated Eligible Employees would (if not
reduced) cause the sum of the actual deferral percentage and
the actual contribution percentage for such Employees to
exceed the limitation in this section, the Plan Administrator
shall reduce the deduction percentages elected by the Highly
Compensated Eligible Employees to comply with the limitations
of this section. This reduction will be accomplished by
determining the maximum possible upper limit on Compensation
and Supplemental Deduction Contributions (as a percentage of
Compensation) which, when imposed as a limitation on the
Highly Compensated Eligible Employees, will cause the Plan to
comply with this section.
If the limitation described in this section is still exceeded
after reducing the upper limit on Compensation and
Supplemental Deduction Contributions for Highly Compensated
Eligible Employees to zero, the Plan Administrator shall also
reduce Compensation and Supplemental Deferral Contributions
elected by Highly Compensated Eligible Employees. This
reduction will be accomplished by determining the maximum
possible upper limit on Compensation and Supplemental Deferral
Contributions (as a percentage of Compensation) which, when
imposed as a limitation on the Highly Compensated Eligible
Employees, will cause the Plan to comply with this section.
(c) At the end of the Plan Year, if the sum of the actual deferral
percentage and the actual contribution percentage for Highly
Compensated Eligible Employees exceeds the limitations
described in this section after the corrective distributions
or forfeitures are made under sections 3.7(d) and 3.8(d) the
Plan Administrator shall determine the maximum possible upper
limit on Compensation and Supplemental Deduction Contributions
(as a percentage of Total Earnings) which, when imposed as a
limitation on the Highly Compensated Eligible Employees, will
cause the Plan to comply with this section. Compensation and
Supplemental Deduction Contributions in excess of this limit
and investment earnings on such contributions (including gains
and losses) will be refunded to the Member in cash. If the
limitation in this section is still exceeded after refunding
all Compensation and Supplemental Deduction Contributions for
Highly Compensated Eligible Employees, the Plan Administrator
shall determine the maximum possible upper limit
- 24 -
<PAGE> 30
on Compensation and Supplemental Deferral Contributions (as a
percentage of Compensation) which, when imposed as a
limitation on the Highly Compensated Eligible Employees, will
cause the Plan to comply with this section. Compensation and
Supplemental Deferral Contributions in excess of this limit
and investment earnings on such contributions (including gains
and losses) will be refunded to the Member in cash.
(d) If Compensation Deduction Contributions or Compensation
Deferral Contributions are refunded to the Member, any Company
Matching Contributions attributable to such refunded
contributions and investment earnings on such Company Matching
Contributions will be forfeited and used to reduce Company
Matching Contributions otherwise payable pursuant to 3.4.
3.10 Aggregation Rules for Discrimination Testing
(a) If this Plan is combined with one or more plans maintained by
the Company or an Affiliate or Subsidiary of the Company for
purposes of Code Section 401(a)(4) or 410(b) (other than
section 410(b)(2)(A)(ii)), then this Plan and such other plans
will be considered a single plan for purposes of the
discrimination testing described in this article.
(b) If a Highly Compensated Eligible Employee is eligible to have
Compensation or Supplemental Deferral Contributions,
Compensation or Supplemental Deduction Contributions, or
Company Matching Contributions allocated to his account under
two or more plans described in Code Section 401(k) which are
maintained by the Company or an Affiliate or Subsidiary of the
Company, the average deferral percentage and average
contribution percentage for such Highly Compensated Eligible
Employee shall be determined as if all such contributions were
made under a single plan.
(c) For Plan Years beginning before January 1, 1997, for purposes
of determining the actual deferral percentage and the actual
contribution percentage of a Highly Compensated Eligible
Employee who is (1) a five-percent owner or (2) one of the ten
Employees paid the greatest Total Earnings for the Plan Year,
the Compensation and Supplemental Deferral Contributions,
Compensation and Supplemental Deduction Contributions, Company
Matching Contributions and Total Earnings of such Employee
shall include the Compensation and Supplemental Deferral
Contributions, Compensation and Supplemental Deduction
Contributions, Company Matching Contributions and Total
Earnings of such Employee's spouse, lineal ascendants or
descendants, and the spouses of such lineal ascendants or
descendants except as otherwise provided under Treasury
regulations. Such family members shall be disregarded in
determining the actual deferral percentage and the actual
contribution percentage for Eligible Employees who are not
Highly Compensated Eligible Employees. In applying the maximum
dollar limitation on Total Earnings described in 1.46, such
limitation will be
- 25 -
<PAGE> 31
applied to the combined Total Earnings of the Highly
Compensated Eligible Employees described in this section, the
spouse of such Employee, and any lineal descendants of the
Employee who have not attained age 19 before the end of the
Plan Year.
- 26 -
<PAGE> 32
Article 4
Investment of Contributions
4.1 Investment Election
At the time of enrollment in the Plan, the Member shall elect to have
his future Compensation and Supplemental Deferral Contributions,
Compensation and Supplemental Deduction Contributions, Company
Matching Contributions, and Rollover Contributions invested in one or
more of the Investment Funds listed in section 5.2. (Prior to
enrollment as a Member, an Eligible Employee may make such an
election with respect to Rollover Contributions.) The election shall
specify the percentage, if any, of such contributions to be allocated
to each of the Investment Funds. Members may allocate their
contributions among the Investment Funds in 5% increments, with the
total of the elected percentage increments equaling 100%; provided,
however, the maximum percentage of such contributions that may be
invested in the Boeing Company Stock Fund is 50%.
4.2 Changes in Investment Elections
A Member may change an election made pursuant to section 4.1
regarding his future Compensation and Supplemental Deferral
Contributions, Compensation and Supplemental Deduction Contributions,
Company Matching Contributions, and Rollover Contributions once each
calendar quarter. Such change shall be effective as of the last
business day of the month in which the change of election is made.
4.3 Transfer of Investments
A Member may elect once in each calendar quarter to change the
investment of his Accounts; provided, however, amounts may not be
transferred into or out of the Stable Value Fund before April 1,
1997. The election shall specify the percentage, if any, of the total
dollar balance of the Member's Accounts, determined pursuant to
section 6.4, to be allocated to each of the Investment Funds. Members
may allocate their balances among the Investment Funds in 5%
increments, with the total of the elected percentage increments
equaling 100%; provided, however, the maximum percentage of such
contributions that may be invested in the Boeing Company Stock Fund
is 50%. The transfers described in this section shall be effected on
the first day of the calendar month immediately succeeding the month
in which the Member elected to make the transfer.
All elections under this section shall be irrevocable and shall not
affect the Member's right to exercise any other election provided by
the Plan.
Upon making an election to transfer investments under this section,
the Member shall also either confirm or change his election under
section 4.1 or 4.2 with respect to future Compensation and
Supplemental Deferral Contributions, Compensation and Supplemental
Deduction Contributions, and Company Matching Contributions.
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<PAGE> 33
4.4 Independent Control
An election or change of election made pursuant to this section shall
be within the independent control of the Member. Neither the Trustee,
the Parent, nor the Company shall be liable for any loss which may
result from the exercise of such control by the Member. If, at any
time, no election under this section is in effect for any portion of
a Member's Accounts or contributions, such portion shall be invested
in the manner determined by the Plan Administrator on a uniform and
nondiscriminatory basis with respect to all Members. An election or
change of election deemed to have been made under this section shall
not be counted for purposes of the provisions of those sections which
impose restrictions on the frequency of changes.
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<PAGE> 34
Article 5
Trust Agreement
5.1 Establishment of Trust Fund
The property resulting from contributions made on behalf of all
Members, including contributions made by the Company, shall be held in
a Trust Fund by a Trustee or Trustees selected by the Plan
Administrator pursuant to a Trust Agreement entered into between such
Trustee and the Plan Administrator. References in the Plan to Trustee
shall be deemed to be applicable with equal force to co-Trustees or
successor Trustees who may be so designated.
5.2 Investment Funds
The Trust Agreement will provide that at the direction of the Plan
Administrator, the Trustee shall establish investment funds, each with
investment objectives determined by the Plan Administrator. The Plan
Administrator shall provide information to Members regarding the
Investment Funds available under the Plan, including a description of
the investment objectives and types of investments of each such fund.
As of the Effective Date, the following Investment Funds shall be
established:
(a) S&P 500 Index Fund. The assets of this fund are invested in
the same stocks and in substantially the same percentages as
the Standard and Poor's (S&P) 500 Index.
(b) Short-Term Income Fund. The assets of this fund are invested
in a variety of investment-grade instruments with maturities
generally between 1 and 365 days with an average maturity
between 30 and 60 days. These instruments may include: United
States government and agency obligations, bank obligations,
short-term corporate debt instruments, repurchase agreements,
unsecured loan participations, and registered investment
companies which invest in such instruments.
(c) Stable Value Fund. The assets of this fund are invested in
investment contracts with one or more insurance companies
which guarantee the principal and interest thereon for a
specified period of time.
(d) Intermediate-Term Bond Fund. The assets of this fund are
invested in debt obligations issued by the United States
government and its agencies and instrumentalities. The maximum
maturity of any issue in the fund is five years.
(e) Boeing Company Stock Fund. The assets of this fund are
invested in cash and Common Stock of The Boeing Company.
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<PAGE> 35
5.3 Voting Rights
Each Member who has Common Stock of The Boeing Company held in the
Boeing Company Stock Fund allocated to his Accounts shall be entitled
to instruct the Trustee regarding the voting of the number of such
shares allocated to the Accounts (determined by the proportionate share
of the Member's investment in the Fund) at all stockholders' meetings
of the Company, determined as of the record date for such stockholders'
meetings. The Company will send, or cause to be sent, to each Member
who has Common Stock of the Company allocated to the Member's Accounts
a voting instruction form and the same proxy solicitation material as
is sent to stockholders generally.
5.4 Tender Offer
Not withstanding any other provisions of the Plan to the contrary:
(a) If any person shall make a tender offer (as defined in
subsection (c) below) to acquire (by purchase or exchange)
Common Stock of the Company, including shares of such Common
Stock that are held in the Company Stock Fund, the Trustee and
the Company shall act as follows:
(1) The Company shall ensure that the materials made
available to shareholders generally in connection
with the tender offer are provided to each Member who
has shares of Common Stock of the Company held in the
Company Stock Fund allocated to his Member's
Accounts, and the response of the Trustee as to
whether to accept or reject the tender offer with
respect to the full and fractional shares of such
Common Stock that are so allocated shall be made in
accordance with the instructions of the Member given
to the Trustee on forms provided for that purpose.
(2) If the Trustee fails to receive clear and timely
instructions from a Member in a case where
instructions have been sought by the Trustee as
provided in paragraph (1), the Trustee shall have no
discretion in such matter and shall reject the tender
offer with respect to the affected full and
fractional shares of Common Stock of the Company that
are allocated to the Accounts of such Members.
(b) With respect to full and fractional shares of Common Stock of
the Company that have been acquired by the Plan and are not
yet allocated (including any such Common Stock held in a
suspense account because it cannot be allocated currently due
to the Code Section 415 limits), the Trustee shall have no
discretion in such matter and shall reject the tender offer
with respect to such Common Stock.
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<PAGE> 36
(c) If any tender offer is accepted (in whole or in part) pursuant
to subsection (a), the Trustee shall have the power to
transfer Common Stock of the Company in order to effect such
acceptance.
(d) For purposes of this section, "tender offer" shall mean any
offer to acquire Common Stock of the Company which is subject
to either section 13(e) or 14(d) of the Securities Exchange
Act of 1934 and which under applicable rules and regulations
is required to be the subject of a filing with the Securities
and Exchange Commission on either Schedule 13E-4 or Schedule
14D-9.
(e) The foregoing notwithstanding, nothing herein shall serve to
modify the related rules of the Trust Agreement or to expand
the duties of the Trustee unless and until the Trustee gives
its consent in the manner provided in the Trust Agreement.
5.5 Trust Agreement
The Plan Administrator has entered into a Trust Agreement with the
Trustee of the Trust Fund under which the Trustee will hold, invest and
distribute the assets of the Trust Fund as required by the Trust
Agreement. The Plan Administrator may remove the Trustee at any time
upon reasonable notice. The Trust Agreement shall provide that upon the
removal or resignation of the Trustee the assets shall be transferred
to another Trustee to be designated by the Plan Administrator under the
terms of the Trust Agreement satisfying the conditions herein set
forth.
5.6 Rights in the Trust Fund
No part of the Trust Fund shall be used for, or diverted to, purposes
other than the exclusive benefit of Members and their beneficiaries
under the Plan. No person shall have any interest in or right to any
part of the Trust Fund except as and to the extent expressly provided
in the Plan.
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<PAGE> 37
Article 6
Maintenance of Members' Accounts
6.1 Accounts Maintained
The Plan Administrator shall establish and maintain for each Member a
Compensation Deduction Account, Compensation Deferral Account,
Supplemental Deduction Account, Supplemental Deferral Account, and a
Company Contributions Account under each Investment Fund to represent
all amounts (if any), adjusted for gains or losses thereon, which have
been contributed by or on behalf of the Member as Compensation
Deduction Contributions, Compensation Deferral Contributions,
Supplemental Deduction Contributions, Supplemental Deferral
Contributions or Rollover Contributions, and Company Matching
Contributions. Such separate Accounts shall contain sufficient
information to permit, with respect to the Boeing Company Stock Fund, a
determination of the number of Common Units in such Member's Accounts,
and with respect to the Company Contributions Account, a determination
of the portion which is attributable to Compensation Deduction
Contributions and the portion which is attributable to Compensation
Deferral Contributions.
6.2 Crediting Units to Accounts
(a) The interest of each Member in the Investment Funds shall be
represented by Units allocated to his Accounts. The value of
each Unit shall be $1.00 for the contributions deposited on
behalf of each Member prior to the first Valuation Date
following the effective date of the particular Fund.
(b) Each contribution on behalf of a Member to, or payment made to
a Member from, an Investment Fund shall result in a credit or
charge to the Account representing his interest in such Fund
under his Company Contributions Account, Compensation Deferral
Account, Supplemental Deferral Account, Compensation Deduction
Account, or Supplemental Deduction Account, as applicable, and
shall be equal to the number of Units contributed or paid, as
the case may be.
(c) Dividends on Common Stock held in the Boeing Company Stock
Fund shall result in an appropriate increase in the Unit
values of said Fund.
6.3 Units Valuations
Except as otherwise provided in section 6.2, as of each Valuation Date,
an amount equal to the fair market value of all property in the
Investment Funds (other than dividends received which are attributable
to whole shares of Common Stock which were or are to be transferred to
Members subsequent to the record date for such dividend) or under a
contract, in the case of the Stable Value Fund, shall be determined by
the Trustee in such manner and on such basis as it shall deem
appropriate. Such amount shall be divided by the total number of Units
credited to all the Members in the Fund or under the contract
- 32 -
<PAGE> 38
concerned on the particular Valuation Date, thereby establishing a new
Unit value. With respect to each Investment Fund, each contribution or
other payment thereto or payment therefrom after such Valuation Date
and prior to or on the next Valuation Date shall be converted to Units
(in the case of the Boeing Company Stock Fund to Common Units to the
extent appropriate) by dividing such new Unit value into the amount of
such contribution or payment, and the individual Account of each
affected Member representing his interest in the Investment Fund under
his Company Contributions Account, Compensation Deferral Account,
Supplemental Deferral Account, Compensation Deduction Account, and
Supplemental Deduction Account, as applicable, shall be credited or
charged, as the case may be, with the portion of the number of Units so
attributable to such Member. The value of each contract under the
Stable Value Fund shall be equal to the principal amount held in such
fund plus accrued interest.
6.4 Balance of Member's Accounts
As of any specified date, the dollar balance of the Accounts of each
Member representing the interest of each Member in each Investment Fund
under his Company Contributions Account, Compensation Deferral Account,
Supplemental Deferral Account, Compensation Deduction Account, and
Supplemental Deduction Account, as applicable, shall be determined by
multiplying the number of Units in his current balance by the Unit
value as of the last preceding Valuation Date in accordance with the
foregoing and adding to the resulting dollar balance the amount of
contributions made with respect to such Account since the last
valuation date for which Units have not yet been credited. Only those
contributions actually received by the Trustee will be considered in
making valuations and determining Account balances.
6.5 Member Account Statements
After the end of each calendar year or more frequently as the Plan
Administrator shall determine, the Plan Administrator shall forward by
mail to each Member a statement, in such form as the Plan Administrator
shall determine, setting forth pertinent information relative to the
Member's Accounts. Such statement shall, for all purposes, be deemed to
have been accepted as correct unless the Plan Administrator is notified
to the contrary by mail within 60 days of the mailing thereof to the
Member.
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<PAGE> 39
Article 7
Retirement
7.1 Eligibility
This article will apply to any Member who terminates employment on or
after his 65th birthday or who retires before his 65th birthday
pursuant to a retirement plan sponsored by the Company or an Affiliate
or Subsidiary.
7.2 Lump Sum Distribution
(a) If the balance in the Member's Accounts is $3,500 or less,
such amount will be paid to the Member in a lump sum as soon
as practicable after his Severance from Service Date in the
manner described in section 7.5.
(b) If the balance in the Member's Accounts exceeds $3,500, the
Member may elect (1) to receive such amount in a lump sum as
soon as practicable after his Severance from Service Date in
the manner described in section 7.5 or (2) to defer any
distribution from his Accounts. If the Member elects to defer
distribution, his Accounts will be retained in the Plan and
maintained and valued in accordance with Article 6. The amount
of such deferred distribution(s) will be based on the value of
the Member's Accounts determined as of the Valuation Date
preceding the deferred distribution date. If the vested
balance in the Member's Accounts at the time of a distribution
exceeds $3,500, then the vested balance at any subsequent time
shall be deemed to exceed $3,500.
(c) A Member who has deferred receiving his distribution may elect
to receive the balance in his Accounts in a lump sum payable
as soon as practicable after the request for such distribution
is received by the Plan Administrator in the manner described
in section 7.5. Such request shall be in the manner prescribed
by the Plan Administrator for this purpose.
7.3 Installment Form of Payment
(a) If the balance in the Member's Accounts exceeds $3,500, the
Member may elect to have his benefit paid in annual
installments over 10 or fewer years; provided, however, that
the Member may not elect installments to be paid over a period
which exceeds the life expectancy of the Member or the
combined life expectancies of the Member and his Beneficiary
determined as of the date payments are to commence. The amount
of such installments will be the value of the Member's
Accounts as of the Valuation Date immediately preceding the
installment payment, divided by the number of installment
payments remaining at the time of the payment. The initial
installment payment will be made as soon as practicable after
the effective date of the Member's election. Subsequent
installment payments during the elected installment payment
period will be made
- 34 -
<PAGE> 40
as of the annual anniversary date of the initial installment
payment. If the vested balance in the Member's Accounts at the
time of a distribution exceeds $3,500, then the vested balance
at any subsequent time shall be deemed to exceed $3,500.
(b) A Member who is still an Employee on the required beginning
date described in section 7.4(b) and is, therefore, required
to commence distribution, shall receive his distribution in
annual installments over the period of the Member's life
expectancy (pursuant to Code Section 401(a)(9)). Upon the
Member's subsequent Termination of Employment, the Member
shall be entitled to elect either a lump sum distribution as
provided in section 7.2(b) or installment payments as provided
in section 7.3(a) with respect to his remaining Account
balance at that time.
(c) Subsection (a) notwithstanding, if a Member who is no longer
an Employee has elected to defer receiving his distribution
pursuant to section 7.2(b) and the Plan Administrator has not
received an election concerning the form of distribution by
the end of the calendar year in which the Member attains age
70 1/2, the distribution shall be made in the form of a lump
sum distribution payable no later than the required beginning
date described in section 7.4(b).
(d) If a Member who had previously elected and commenced receipt
of installment payments pursuant to subsection (a) returns to
employment with the Company or an Affiliate or Subsidiary
(other than as a member of the Company's flexible work force),
such installment payments shall be suspended until the
Member's subsequent retirement, at which time he shall be
permitted again to make the election described in this
section.
(e) A Member who had previously elected and commenced receipt of
installment payments pursuant to subsection (a) shall be
permitted to revoke such election at a later date and
accelerate receipt of the distribution by electing
distribution of the remaining Account balances in a lump sum
payment.
7.4 Limitations on Payment Date
(a) Payment will begin not later than the 60th day after the end
of the Plan Year in which:
(1) the Member's 65th birthday occurs, or
(2) the Member's Severance from Service Date occurs,
whichever is later.
However, payment under this subsection will not begin until
the Member has filed a claim for such payment in the manner
prescribed by the Plan Administrator for that purpose.
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<PAGE> 41
(b) The required beginning date described in this subsection (b)
will apply regardless of any election made by the Member.
(1) Benefit payments for a Member who attained age 70 1/2
before January 1, 1996, will begin January 1, 1997,
whether or not such Member's employment has
terminated.
(2) Benefit payments for a Member who attained age 70 1/2
in 1996, will begin not later than April 1, 1997,
whether or not such Member's employment has
terminated.
(3) Benefit payments for a Member who is not a 5% owner
who attains age 70 1/2 after December 31, 1996 will
begin not later than April 1 of the calendar year
following the later of (A) the calendar year in which
the Member attains age 70 1/2, or (B) the calendar
year in which the Member retires.
(4) Benefit payments for a Member who is a 5% owner will
begin not later than April 1 of the calendar year
following the later of (A) the calendar year in which
the Member attained age 70 1/2, or (B) the earlier of
(iii) the calendar year within which ends the Plan
Year in which the Member becomes a 5% owner, or (iv)
the calendar year in which the Member retires.
(5) A Member is treated as a 5% owner for purposes of
this subsection (b), if such Member is a 5% owner as
defined in Code Section 416(i) at any time during the
Plan Year ending within the calendar year in which
such owner attains age 66 1/2 or any subsequent Plan
Year. Once a Member is described in this paragraph,
distributions will continue to such Member even if
such Member ceases to own more than 5% of the Company
in a subsequent year.
(6) If a Member receives payments under this subsection
(b), such payments will be determined as if the
Member's retirement date were the date by which
benefit payments must be made under this subsection
(b). If the Member continues to have contributions
made to his Accounts after this date, the additional
benefit for each Plan Year will be paid in a lump sum
after the following January 1.
7.5 Manner of Distribution
A Member's distribution(s) shall be made as follows:
(a) With respect to Investment Funds other than the Boeing Company
Stock Fund, the Member entitled to a lump sum distribution
pursuant to section 7.2 shall receive the full dollar balance
of his Accounts in such Funds. A Member electing
- 36 -
<PAGE> 42
installment payments pursuant to section 7.3 shall receive the
full dollar balance divided by the remaining number of
installment payments. Such balance shall be determined in the
manner provided in section 6.4, by reference to the value of
Units in such Member's Accounts on the Valuation Date
coinciding with or immediately preceding the date of the
distribution.
(b) With respect to the Boeing Company Stock Fund, the full dollar
balance (for a Member electing installment payments pursuant
to section 7.3, the full dollar balance divided by the
remaining number of installment payments) in the Member's
Accounts in the fund as of the Valuation Date coinciding with
or immediately preceding the date of the distribution
(determined in the manner provided in section 6.4, separately
by reference to the Common Units in the Account on such
Valuation Date and the respective Unit values on such
Valuation Date) shall be applied to Common Stock to the extent
attributable to Common Units. The Member shall receive shares
of Common Stock equal to the maximum number of whole shares of
Common Stock which could be purchased at the closing price of
Common Stock on the New York Stock Exchange-- Composite
Transactions listing on such Valuation Date (or, in the event
such Valuation Date falls on a date on which there are no
trades of such stock reflected on such listing, the last
trading day preceding such Valuation Date) with the portion of
such dollar balance attributable to Common Units in the
Account. The Member shall be paid in cash the amount of such
dollar balance remaining after reduction by the value of the
whole shares previously described, based upon such closing
price. In addition, the Member shall be paid in cash the
amount of any cash dividends received since such Valuation
Date attributable to the number of whole shares of Common
Stock distributed to him and the dollar value of any
contributions to the Company Stock Fund in respect of such
Member between such Valuation Date and the Severance from
Service Date.
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<PAGE> 43
Article 8
Termination or Death
8.1 Vesting
(a) A Member will always have a 100% vested interest in his
Compensation Deduction Account, Compensation Deferral Account,
Supplemental Deduction Account, and Supplemental Deferral
Account.
(b) A Member who has completed a five-year Period of Service will
have a 100% vested interest in his Company Contributions
Account.
(c) No Units in a Member's Company Contributions Account shall
vest subsequent to the Member's termination of employment,
except as provided in section 8.6.
(d) Regardless of the number of years in his Period of Service, a
Member will have a 100% vested interest in his Company
Contributions Account upon the occurrence of any of the
following events:
(1) 65th birthday,
(2) retirement before his 65th birthday pursuant to a
retirement plan sponsored by the Company or an
Affiliate or Subsidiary,
(3) termination of employment to enter into the Armed
Forces of the United States, except temporary service
of 90 days or less, or to accept employment with the
Government of the United States,
(4) determination of Total Disability,
(5) termination of employment because of inability to
meet Company medical standards,
(6) Layoff, or
(7) death.
8.2 Distribution Upon Termination
(a) This section will apply to any Member whose Severance from
Service Date occurs before he has satisfied the eligibility
conditions for retirement as described in section 7.1.
(b) Subject to the provisions of subsection (c), the Member shall
receive as a lump sum all amounts described in section 8.4 as
soon as practicable after his Severance
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<PAGE> 44
from Service Date, but not later than 60 days after the end of
the Plan Year in which his Severance from Service Date
occurred.
(c) If the vested balance in the Member's Accounts exceeds $3,500,
no distribution of benefits under the Plan shall be made
unless the Plan Administrator has first obtained the Member's
written consent thereto. In the event such written consent is
not obtained, the vested portion of the Member's Accounts will
be retained by the Plan and will be maintained and valued in
accordance with Article 6. Distribution of the Member's
Accounts pursuant to this section shall be made following the
date on which the Plan Administrator obtains the Member's
written consent to the distribution or, if earlier, the
required beginning date described in section 7.4. The amount
of distribution will be determined as provided in section 8.4,
except that the balance of the Member's Accounts will be
determined by reference to the Unit Values on the Valuation
Date coincident with or immediately preceding the date of
distribution. If the Member is reemployed as an Employee prior
to the date on which the Plan Administrator receives his
written consent to the distribution, the Member shall not have
any further right to receive a distribution of benefits as a
result of his prior termination of employment. Under no
circumstances shall a Member have any right to withdraw a
portion of the balance of his Accounts under Article 9 prior
to the deferred distribution date. If the vested balance in
the Member's Accounts at the time of a distribution exceeds
$3,500, then the vested balance at any subsequent time shall
be deemed to exceed $3,500.
8.3 Distribution Upon Death
(a) If a Member dies before payment of benefits begins, his
Beneficiary(ies) shall receive all amounts described in
section 8.4 as soon as practicable after the Member's death,
but not later than 60 days after the end of the Plan Year in
which the Member's death occurred.
(b) If a Member dies after installment payments have commenced
pursuant to section 7.3, payments will continue to the
Beneficiary under the form of payment in effect at the time of
the Member's death.
8.4 Amount of Distribution
The amounts which a Member or Beneficiary will receive under section
8.2 or 8.3 shall be as follows:
(a) With respect to Investment Funds other than the Boeing Company
Stock Fund, the Member shall receive the vested dollar balance
of his Accounts in such Funds. Such balance shall be
determined in the manner provided in section 6.4, by reference
to the value of Units in such Member's Accounts on the
Valuation Date coinciding with or immediately preceding his
Severance from Service Date or, in
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<PAGE> 45
the case of death or Total Disability, the date all
documentation necessary to effect the distribution is received
by the Plan Administrator.
(b) With respect to the Boeing Company Stock Fund, the vested
dollar balance in the Member's Accounts in the fund as of the
Valuation Date coinciding with or immediately preceding his
Severance from Service Date or, in the case of death or Total
Disability, the date all documentation necessary to effect the
distribution is received by the Plan Administrator (determined
in the manner provided in section 6.4, separately by reference
to the Common Units in the Account on such Valuation Date and
the respective Unit values on such Valuation Date) shall be
applied to Common Stock to the extent attributable to Common
Units. The Member shall receive shares of Common Stock equal
to the maximum number of whole shares of Common Stock which
could be purchased at the closing price of Common Stock on the
New York Stock Exchange--Composite Transactions listing on
such Valuation Date (or, in the event such Valuation Date
falls on a date on which there are no trades of such stock
reflected on such listing, the last trading day preceding such
Valuation Date) with the portion of such vested dollar balance
attributable to Common Units in the Account. The Member shall
be paid in cash the vested dollar amount remaining in his
Accounts invested in the Boeing Company Stock Fund after
reduction of each such Account by the value of the whole
shares previously described, based upon such closing price. In
addition, the Member shall be paid in cash the amount of any
cash dividends received since such Valuation Date attributable
to the number of whole shares of Common Stock distributed to
him and the dollar value of any contributions to the Company
Stock Fund in respect of such Member between such Valuation
Date and his Severance from Service Date.
8.5 Forfeitures
(a) If a Member terminates employment and receives the vested
portion of his Accounts, the nonvested portion of the Company
Contributions Account, if any, will be forfeited at the time
such distribution is made. Such forfeiture will be applied as
soon as practicable to reduce Company Matching Contributions
otherwise payable under 3.4.
(b) If a Member who has not completed a five-year Period of
Service becomes eligible to receive a distribution under
section 8.2(c) but fails to provide written consent to such
distribution, the nonvested portions of the Member's Company
Contributions Account shall be forfeited at the conclusion of
the five-year Period of Severance following his Severance from
Service Date, unless the Member shall be reemployed as an
Employee prior to the conclusion of said five-year period.
Such forfeiture will be applied as soon as practicable to
reduce Company Matching Contributions otherwise payable under
3.4.
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<PAGE> 46
8.6 Repayment After Reemployment
If a Member who has forfeited a nonvested balance is reemployed as an
Employee, the previously forfeited nonvested portion of his Company
Contributions Account will be restored to the dollar amount on the date
the Member received a distribution under this article if the Member
makes a cash repayment to the Plan of the amounts which were
distributed from his Compensation Deduction and Compensation Deferral
Accounts on or before the earlier of:
(a) the fifth anniversary of his Reemployment Date or
(b) the completion of a five-year Period of Severance.
The Company Contributions Account balance will be restored by an
additional Company contribution. The amount of the Member's repayment
(which shall not reflect interest) will be credited to the Member's
Compensation Deduction Account. The repayment and the restored Company
Contributions Account will be allocated to the Investment Funds in the
same proportion as the Member's current Compensation Deduction or
Deferral Contributions. The nonvested portion of the member's Company
Contributions Account restored pursuant to this section shall vest as
provided in section 8.1.
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<PAGE> 47
Article 9
Withdrawals and Loans
9.1 Withdrawals from Accounts by Members under Age 59 1/2
(a) Subject to sections 9.4 and 9.5, a Member who has not yet
attained age 59 1/2 may elect while still employed to withdraw
certain amounts from his Accounts. As soon as practicable
after the Plan Administrator's receipt of such an election,
there shall be paid or transferred to such Member cash and, if
applicable, shares of Common Stock from his Accounts in the
following order:
(1) first, from his Supplemental Deduction Account;
(2) second, from his Compensation Deduction Account;
(3) third, from that portion (if vested) of his Company
Contributions Account, which is attributable to
Compensation Deduction Contributions;
(4) fourth, from his Supplemental Deferral Account; and
(5) fifth, from his Compensation Deferral Account.
(b) If a Member receives a withdrawal pursuant to section
9.1(a)(2), the nonvested portion of his Company Contributions
Account associated with the amounts withdrawn shall be
forfeited as provided in section 9.3 and the withdrawal
limitations of section 9.3 shall apply. If a Member receives a
withdrawal pursuant to section 9.1(a)(3), his Compensation and
Supplemental Deferral Contributions, Compensation and
Supplemental Deduction Contributions, and Company Matching
Contributions shall be suspended for a period of 26 weeks.
(c) A Member shall be permitted to withdraw from his Supplemental
and Compensation Deferral Accounts, as described in section
9.1(a)(4) and (5), only upon providing adequate evidence of a
hardship, as provided in section 9.5, and such a hardship
withdrawal shall be governed by the provisions of that
section.
(d) The portion of the Member's Company Contributions Account
which is attributable to Compensation Deferral Contributions
shall not be available for withdrawal prior to the Member's
attainment of age 59 1/2.
(e) In determining withdrawal amounts, the value of available
Units in the Member's Accounts shall be determined as of the
Valuation Date coinciding with or immediately preceding the
date of the election.
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<PAGE> 48
9.2 Withdrawal from Accounts by Members Over Age 59 1/2
(a) A Member who has attained age 59 1/2 while still employed by
the Company may elect to withdraw any or all vested amounts
from his Accounts. A Member making such an election shall
receive the amount of cash or, if applicable, stock to be
withdrawn from his Accounts in the following order:
(1) first, from his Supplemental Deduction Account;
(2) second, from his Compensation Deduction Account;
(3) third, from his Supplemental Deferral Account;
(4) fourth, from his Compensation Deferral Account;
(5) fifth, from that portion (if vested) of his Company
Contributions Account, which is attributable to
Compensation Deduction Contributions; and
(6) sixth, from that portion (if vested) of his Company
Contributions Account, which is attributable to
Compensation Deferral Contributions.
(b) If a Member receives a withdrawal pursuant to section
9.2(a)(2), the nonvested portion of his Company Contributions
Account associated with the amounts withdrawn shall be
forfeited as provided in section 9.3, but the withdrawal
limitations of section 9.3(d) shall not apply and his
Compensation and Supplemental Deferral Contributions,
Compensation and Supplemental Deduction Contributions, and
Company Matching Contributions shall not be suspended.
(c) In determining the distribution amounts, the value of
available Units in the Member's Accounts shall be determined
as of the Valuation Date coinciding with or immediately
preceding the date of the election.
9.3 Forfeitures and Limitation on Withdrawals
(a) When applicable, any nonvested portion of a Member's Company
Contributions Account associated with a withdrawal from his
Compensation Deduction Account shall be forfeited at the time
of such withdrawal.
(1) The forfeitable Units, if any, of a Member's Company
Contributions Account which are attributable to
Compensation Deduction Contributions shall be
determined by multiplying the dollar balance of the
Member's Company Contributions Account which is
attributable to Compensation Deduction Contributions
by a fraction, the numerator of which is equal to the
dollar value of the Compensation Deduction
Contributions which were withdrawn by the Member and
the denominator of which is the total dollar
value of the Member's Compensation Deduction Account
(both such dollar
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<PAGE> 49
values to be determined as of the last Valuation
Date preceding the date of withdrawal).
(2) An Employee who has suffered a forfeiture described
in this subsection (a) may elect to restore his
interest in the Plan by making a cash repayment to
the Plan in the amount and in the manner described in
subsections (b) and (c).
(b) In order to restore a forfeiture described in subsection (a),
a repayment of the amount withdrawn by the Employee from his
Compensation Deduction Account must be made within 60 months
after such withdrawal. For purposes of this subsection (b),
the amount distributed to an Employee means the sum of the
cash distributed to such Employee plus the dollar value of the
Common Stock distributed to such Employee, determined at the
closing price for Common Stock as reflected on the New York
Stock Exchange--Composite Transactions listing on the
Valuation Date applicable to the distribution or withdrawal
(or if such Valuation Date falls on a date on which, for any
reason, there are no trades of such stock reflected on such
listing, the last trading day preceding such Valuation Date).
Such amount shall not be increased to reflect interest.
(c) As soon as practicable after an Employee makes a repayment
described in subsection (b), there shall be credited to the
Employee's Company Contributions Account the dollar amount of
any amounts forfeited as a result of the withdrawals. The
amount repaid under this subsection (c) shall be credited to
the Employee's Compensation Deduction Account or, if
applicable, his Compensation Deferral Account and shall be
allocated to the Investment Funds in the same proportion as
the Member's current Compensation Deduction Contributions or
Compensation Deferral Contributions. The previously forfeited
amount which is credited under this subsection shall
subsequently vest as provided in section 8.1.
(d) Withdrawals shall be in a minimum amount of $100. A Member who
has not yet attained age 59 1/2 may not make a request for a
partial withdrawal within 26 weeks of any prior request for a
partial withdrawal; provided, however, that this limitation
upon the ability of such Member to make a partial withdrawal
(including hardship withdrawals pursuant to the provisions of
section 9.5) within 26 weeks of any prior request for a
partial withdrawal shall be waived by the Plan Administrator
for the six-month period immediately following any due
declaration by the President of the United States under
applicable federal law that a particular occurrence or
situation constitutes a national disaster condition, if such
partial withdrawal is requested for a reason associated with
financial need of the Member resulting from the effects of the
said condition.
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<PAGE> 50
9.4 Allocation of Withdrawals Among Investment Funds
(a) Withdrawals pursuant to sections 9.1 and 9.2 shall be taken
from the Member's Accounts in the Investment Funds in a pro
rata fashion, based upon the relative size of such Accounts.
(b) Notwithstanding the above subsection (a), a Member may elect
to have any such withdrawal taken:
(1) first from the Member's Accounts in the Boeing
Company Stock Fund, with any additional withdrawal
amount to be taken on a pro rata basis from the
Member's Accounts in the remaining Investment Funds
other than the Boeing Company Stock Fund; or.
(2) first on a pro rata basis from the Member's Accounts
in Investment Funds other than the Boeing Company
Stock Fund, with any additional withdrawal amount to
then be taken from the Member's Accounts in the
Boeing Company Stock Fund.
9.5 Hardship Withdrawals from Compensation and Supplemental Deferral
Accounts
Subject to any restrictions the Plan Administrator may establish
pursuant to section 9.6:
(a) A Member who has not attained age 59 1/2 may request approval
of the Company to withdraw some or all of the Units of his
Compensation Deferral Account and his Supplemental Deferral
Account, if the Member demonstrates that the withdrawal is
required as a result of a hardship and for payment of any
federal, state or local income taxes and penalties reasonably
anticipated to result from such withdrawal.
(1) For the purposes of this subsection (a) the term
"hardship" shall mean an immediate and heavy
financial need of the Member for which the amount
required is not reasonably available to the Member
from other sources and which arises for one of the
following reasons:
(A) the purchase (excluding mortgage payments)
or construction of a principal residence for
the Member, or to prevent eviction from, or
foreclosure on the mortgage on, the Member's
principal residence;
(B) the incurring of obligations for:
(i) tuition, related educational fees
and room and board expenses for
post-secondary education for the
Member, his spouse or one or more
of his children or other dependents
(as defined in section 152 of the
Code) to be incurred during the
12-month
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<PAGE> 51
period immediately following the
date of his request for
distribution; or
(ii) expenses not covered by insurance
which either have been previously
incurred by the Member for, or are
necessary in order for the Member
to obtain, medical care (as
described in section 213(d) of the
Code) for himself, his spouse or
one or more of his dependents (as
defined in section 152 of the
Code);
(C) any other reason permitted under section
401(k)(2)(B)(i)(IV) of the Code and approved
by the Plan Administrator.
(2) Any determination of the existence of hardship, the
reasonable availability to the Member of funds from
other sources and the amount to be withdrawn on
account of such hardship shall be made by the Plan
Administrator on the basis of all relevant facts and
circumstances and in accordance with the foregoing
rules, as applied in a uniform and nondiscriminatory
manner. In making such determination, the Plan
Administrator may, if it is reasonable to do so in
the light of all relevant and known facts and
circumstances, rely on the Member's representation
that the hardship cannot be relieved:
(A) through reimbursement or compensation by
insurance or otherwise;
(B) by reasonable liquidation of the Member's
assets, to the extent that such liquidation
would not itself cause an immediate and
heavy financial need;
(C) by suspension of Compensation Deferral or
Compensation Deduction Contributions; or
(D) by other distributions (other than hardship
distributions) or loans (which meet the
requirements of section 72(p) of the Code)
from the Plan and any other plan maintained
by an Affiliate or Subsidiary or by any
former employer or by borrowing from
commercial sources at reasonable commercial
rates.
(b) Withdrawals pursuant to subsection (a) shall not result in the
forfeiture of a Member's interest in his Company Contributions
Account.
(c) Withdrawals pursuant to subsection (a) shall be taken from the
Member's Accounts in the Investment Funds in a pro rata
fashion, based upon the relative size of such Accounts.
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(d) Notwithstanding the above subsection (c), a Member may elect
to have any such withdrawal taken:
(1) first from the Member's Accounts in the Boeing
Company Stock Fund, with any additional withdrawal
amount to be taken on a pro rata basis from the
Member's Accounts in the remaining Investment Funds
other than the Boeing Company Stock Fund; or
(2) first on a pro rata basis from the Member's Accounts
in Investment Funds other than the Boeing Company
Stock Fund, with any additional withdrawal amount to
then be taken from the Member's Accounts in the
Boeing Company Stock Fund.
(e) Withdrawals (including those from the Boeing Company Stock
Fund) shall be in cash and for a minimum amount of $100. A
Member may not make a request for partial withdrawal within 26
weeks of any prior request for partial withdrawal; provided,
however, that this limitation upon the ability of a Member to
make a partial withdrawal (including hardship withdrawals
pursuant to the provisions of subsection (a) of this Section)
within 26 weeks of any prior request for a partial withdrawal
shall be waived by the Plan Administrator for the six-month
period immediately following any due declaration by the
President of the United States under applicable federal law
that a particular occurrence or situation constitutes a
national disaster condition, if such partial withdrawal is
requested for a reason associated with financial need of the
Member resulting from the effects of such condition.
9.6 Loans
The Plan Administrator shall establish, and may from time to time
modify, procedures pursuant to which any Member or other "party in
interest" (as defined in ERISA section 3(14)) may apply for and receive
a loan from the Plan; provided, however, no loans shall be made
pursuant to this section before July 1, 1997. The amount of the loan
may not exceed the least of (a), (b), (c), or (d):
(a) the aggregate of the balances in the borrower's Compensation
Deferral, Supplemental Deferral, Compensation Deduction and
Supplemental Deduction Accounts;
(b) an amount which, when combined with all outstanding loans to
the borrower from all other plans of all Affiliate or
Subsidiary, equals $50,000, reduced by the excess, if any, of
(1) the highest outstanding and unpaid balances of all
prior loans to the borrower from the Plan and such
other plans during the 12-month period immediately
preceding the date on which such loan is made, over
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<PAGE> 53
(2) the outstanding balance of any loan to the borrower
from the Plan or such other plans on the date on
which the loan is made;
(c) one-half of the aggregate of the fully vested and
nonforfeitable interests in the balances of the borrower's
Accounts; or
(d) such amount, not exceeding the amounts described in (a)
through (c) above, as the Plan Administrator shall determine.
In addition to the above limitation, no such Member or other party in
interest shall be permitted to have more than a single loan outstanding
at any one time from this Plan and all other plans sponsored by
Affiliate or Subsidiary.
All such loans shall be made available to all eligible Members and
other parties in interest on a reasonably equivalent and
non-discriminatory basis and shall be governed by the provisions of
Appendix B, as such Appendix is from time to time constituted, pursuant
to determination of the Plan Administrator.
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<PAGE> 54
Article 10
Termination of Plan
10.1 Termination of Plan
The Company expects to continue the Plan indefinitely but reserves
the right to terminate the Plan in whole or in part upon giving prior
written notice to the Trustee and the Plan Administrator.
10.2 Procedures Upon Termination of Plan
Upon a complete or partial termination of the Plan or upon a complete
discontinuance of contributions to the Plan, the interests of the
Members in their Company Contributions Accounts (or, in the case of a
partial termination, the interests of those Members for whom the Plan
has terminated), shall be fully vested. Upon such termination, the
Plan Administrator shall perform a valuation of the Plan assets. Upon
completion of such valuation, the full balances in the Accounts of
Members (or, in the case of a partial termination, the Members for
whom the Plan has terminated), shall be distributed to them.
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Article 11
Top Heavy Provisions
11.1 Top-Heavy Plan
Notwithstanding any other provision of this Plan to the contrary, this
article will apply if the Plan is a Top-Heavy Plan. The Plan will be a
Top-Heavy Plan if, as of the Determination Date, the cumulative account
balances of Key Employees exceeds 60% of the cumulative account
balances under the Plan of all Employees and Key Employees (but
excluding the account balances of former Key Employees and individuals
who have not performed any services for the Company at any time during
the five year period ending on the Determination Date). This percentage
will be computed in accordance with Code Section 416(g).
In determining whether this Plan is a Top-Heavy Plan, all employers
that are aggregated under Code Sections 414(b), (c) and (m) shall be
treated as a single employer. In addition, all plans that are part of
the Aggregation Group shall be treated as a single plan. In determining
present values, mortality shall be based on the 1971 Group Annuity
Mortality Table and the interest rate utilized shall be five percent.
11.2 Definition of Terms
For purposes of this article only, the following terms shall have the
following meanings:
(a) "Aggregation Group" means the Required Aggregation Group or,
at the election of the Company, the Permissive Aggregation
Group.
(b) "Compensation" for purposes of this article and 13.9 only
means a Member's wages, salaries, fees for professional
service and other amounts received (without regard to whether
or not an amount is paid in cash) for personal services
actually rendered in the course of employment with the Company
to the extent that the amounts are includible in gross income
(including, but not limited to, commissions paid salesmen,
compensation for services on the basis of a percentage of
profits, commissions on insurance premiums, tips, bonuses,
fringe benefits, reimbursements, and expense allowances).
Compensation will not include the following:
(1) Company contributions to a plan of deferred
compensation which are not included in the Employee's
gross income for the taxable year in which
contributed (before the application of the Code
Section 415 limitation to that plan) or Company
contributions to a simplified employee pension plan
to the extent such contributions are deductible by
the Employee, or any distributions from a plan of
deferred compensation;
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<PAGE> 56
(2) amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property)
held by the Employee either becomes freely
transferable or is no longer subject to a substantial
risk of forfeiture;
(3) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option; and
(4) other amounts which receive special tax benefits,
such as premiums for group term life insurance (but
only to the extent that the premiums are not
includible in the Employee's gross income).
Compensation shall not exceed $150,000 for 1994. On January 1
of each calendar year in which the Secretary of the Treasury
prescribes a new dollar limit, this $150,000 limit will
automatically be adjusted to that new limit.
(c) "Determination Date" means the last day of the preceding Plan
Year. This date will also be the valuation date for
determining present values. For the first Plan Year, the
Determination Date will be the last day of that Plan Year.
(d) "Key Employee" means an Employee, a former Employee, or the
Beneficiary of a former Employee who, in the Plan Year
containing the Determination Date, or any of the four
preceding Plan Years, is:
(1) An officer of the Company having an annual
compensation from the Company greater than 50 percent
of the amount in effect under Code Section
415(b)(1)(A) for the calendar year in which any such
Plan Year ends. Not more than fifty Employees (or, if
fewer, the greater of three Employees or ten percent
of the Employees not excluded under Code Section
414(q)(8), as in effect on December 31, 1996),
including those Employees included under paragraphs
(2), (3) and (4) below, shall be considered as
officers for purposes of this paragraph.
(2) One of the ten Employees having an annual
Compensation from the Company greater than the amount
in effect under Code Section 415(c)(1)(A) for the
calendar year in which any such Plan Year ends and
owning (or considered as owning within the meaning of
Code Section 318) both more than a one-half percent
interest and the largest interests in the Company.
(3) A five-percent owner of the Company.
(4) A one-percent owner of the Company having an annual
Compensation from the Company of more than $150,000
for a Plan Year.
(5) For purposes of this subsection (d), Compensation
shall include amounts contributed by the Company
pursuant to a salary reduction agreement
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<PAGE> 57
which are excludable from gross income under Code
Sections 125, 402(e)(3), 402(h) or 403(b).
Whether an Employee is a five-percent owner or a one-percent
owner shall be determined in accordance with Code Section
416(i).
(e) "Non-key Employee" means an Employee (and any Beneficiary of
an Employee) who is not a Key Employee.
(f) "Permissive Aggregation Group" means the Required Aggregation
Group of plans plus any other plan or plans of the Company
which, when considered as a group with the Required
Aggregation Group, would continue to satisfy the requirements
of Code Sections 401(a)(4) and 410.
(g) "Required Aggregation Group" means:
(1) Each stock bonus, pension, or profit sharing plan of
the Company in which a Key Employee participates in
the Plan Year containing the Determination Date or
any of the four preceding Plan Years which is
intended to qualify under Code Section 401(a); and
(2) Each other such stock bonus, pension or profit
sharing plan of an employer which enables any plan in
which a Key Employee participates to meet the
requirements of Code Section 401(a)(4) or 410.
(h) "Top-Heavy Group" means the Aggregation Group if the sum of
(1) and (2) below exceeds sixty percent of a similar sum
determined for all Employees (excluding former Key Employees
and individuals who have not performed any services for the
Company at any time during the five year period ending on the
Determination Date):
(1) The present value of the cumulative accrued benefit
for Key Employees under all defined benefit plans
included in such group.
(2) The aggregate of the accounts of Key Employees under
all defined contribution plans included in such
group.
In a Top-Heavy Group, all plans in the Required Aggregation
Group are Top-Heavy regardless of whether or not the
individual plans are Top-Heavy.
11.3 Modification of Vesting Schedule
If the Plan is Top-Heavy in a Plan Year, a Participant who is credited
with an Hour of Service in such Plan Year shall have his vested
interest determined in accordance with the following schedule if it
produces a higher vesting interest than the schedule in section 8.1.
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<PAGE> 58
<TABLE>
<CAPTION>
Period of Service Vested Interest
----------------- ---------------
<S> <C>
Less than 3 years 0%
3 or more years 100%
</TABLE>
A Participant's vested interest shall not be less than that
determined as of the last day of the last Plan Year in which the Plan
was a Top-Heavy Plan.
If the Plan ceases to be Top-Heavy, each Participant with a Period of
Service of three or more years (determined as of the first day of the
Plan Year in which the Plan ceases to be Top-Heavy) shall continue to
have his vested interest determined in accordance with this section.
11.4 Minimum Contribution
If the Plan is a Top-Heavy Plan in a Plan Year, a Member, other than
a Key Employee, who is employed in such Plan Year or who is on an
authorized period of absence shall be credited with a Company
contribution as of the last day of such Plan Year not less than 3%
of compensation or, if less, the largest percentage contribution
made or required to be made for any Key Employee. Amounts
contributed as a result of a salary reduction agreement shall be
included in determining the largest percentage contribution made or
required to be made for Key Employees.
The minimum contribution under this section shall not apply to an
Employee during any year in which he is entitled to a minimum benefit
under a Top-Heavy defined benefit pension plan maintained by the
Company.
11.5 Modification of Maximum Contribution
If the Plan is a Top-Heavy Plan in a Plan Year, 13.9(e) shall be
amended for such Plan Year by substitution of "1.0" for "1.25" where
such factor appears in Code Section 415(e).
11.6 Collective Bargaining Agreements
The provisions shall not apply to any Employee who is included in a
group of Employees covered by a collective bargaining agreement which
the Secretary of Labor finds to be a collective bargaining agreement
between employee representatives and one or more employers, including
the Company, if there is evidence that retirement benefits were the
subject of good faith bargaining between such employee
representatives and such employer or employers.
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Article 12
Administration of Plan
12.1 Administration
(a) The Plan Administrator will serve as the named fiduciary
pursuant to ERISA. The Plan Administrator will have complete
control of the administration of the Plan, subject to the
provisions hereof, with all powers necessary to enable it to
carry out its duties properly in that respect. Not in
limitation, but in amplification of the foregoing, it will
have the power to interpret the Plan and to determine all
questions that may arise hereunder, including all questions
relating to the eligibility of Employees to participate in the
Plan and the amount of benefit to which any Member or
Beneficiary may become entitled. Its decisions upon all
matters within the scope of its authority will be final.
(b) The Plan Administrator will establish rules and procedures to
be followed by Members and Beneficiaries in filing
applications for benefits, in furnishing and verifying proofs
necessary to determine age or marital status, and in any other
matters required to administer the Plan.
(c) The Plan Administrator will receive all applications for
benefits and will determine all facts necessary to establish
the right of the applicant to benefits under the provisions of
the Plan and the amount thereof.
(d) The Plan Administrator shall maintain accounts showing the
fiscal transactions of the Plan, and shall keep data required
for the valuation of the assets and liabilities of the Plan.
The Plan Administrator shall also prepare an annual report
showing in reasonable detail the assets and liabilities of the
Plan and giving a brief account of the operation of the Plan
for each year. The Plan Administrator shall make the annual
report available to each Member as required by law.
(e) The Plan Administrator may appoint such accountants, counsel,
consultants, actuaries and other persons the Plan
Administrator deems necessary or desirable in connection with
the administration of the Plan.
(f) The Plan Administrator will have the power to appoint or
remove any Investment Manager or Managers and to manage
(including the power to acquire and dispose of) any assets of
the Plan.
(g) The Plan Administrator will have the power to appoint or
remove the Trustee.
(h) The Plan Administrator will be entitled to rely upon all
tables, valuations, certificates and reports furnished by the
accountant, consultant or actuary appointed by the Plan
Administrator and upon all opinions given by any counsel
selected or approved by it.
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<PAGE> 60
12.2 Records
All acts and determinations of the Plan Administrator and the Company
regarding this Plan will be duly recorded and all such records,
together with such other documents as may be necessary for the
administration of the Plan, will be preserved in the custody of the
Plan Administrator.
12.3 Payment of Expenses
Necessary and proper expenses of administration of the Plan shall be
paid from assets of the Trust Fund except for those expenses the
Company is required by law to pay or chooses to pay. Brokerage and
other fees incurred in the purchase or sale of securities will be
charged to the Investment Fund in which the transaction occurred.
Fees charged by the Trustee for supervision and administration of
Plan assets will be charged to the Investment Fund to which such fees
are properly allocable. Any expense charged by an insurance company
under the provision of an investment contract will be charged to the
Investment Fund which holds such contract.
12.4 Delegation of Authority
The administrative duties and responsibilities set forth in 12.1 may
be delegated by the Plan Administrator in whatever manner and extent
it chooses to such person or persons as it selects. It will notify
the Company and the Trustee of the authority conferred upon such
person or persons.
12.5 Information Available
Any Member of the Plan or any Beneficiary receiving benefits under
the Plan may examine copies of the Plan description, latest annual
report, any bargaining agreement, the Plan, the Trust Agreement or
any other instrument under which the Plan was established or is
operated. The Plan Administrator will maintain all of these items in
its office, or in such other place or places as it may designate from
time to time for examination during reasonable business hours. Upon
the written request of a Member or Beneficiary receiving benefits
under the Plan, the Plan Administrator will furnish a copy of any
item listed in this section. The Plan Administrator may make a
reasonable charge to the requesting person for the copy furnished.
12.6 Appeal Procedure
The Plan Administrator shall adopt procedures for the presentation of
claims for benefits and for the review of the denial of such claims
by the Plan Administrator. Detailed information regarding such
procedures may be obtained by writing to the Plan Administrator, The
Boeing Company, M.S. 11-59, P.O. Box 3707, Seattle, Washington 98124.
The decision of the Plan Administrator upon such review shall be
final, subject to appeal rights provided by law.
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<PAGE> 61
12.7 Fiduciary Capacity
Any person may serve in more than one fiduciary capacity with respect
to this Plan.
12.8 Committee Liability
The members of the Voluntary Investment Plan Committee shall use
ordinary care and diligence in the performance of their duties, but no
member will be personally liable by virtue of any contract, agreement,
or other instrument made or executed as a member of the Committee, nor
for any mistake of judgment made by him or by any other member, nor for
any loss unless resulting from willful misconduct or failure to
exercise good faith. No member of the Committee will be liable for the
neglect, omission, or wrongdoing of any other member or of the agents
or counsel of the Committee. The Company shall indemnify each member of
the Committee against, and hold him harmless from any and all expenses
and liabilities arising out of any act or omission to act as a member
of the Committee, except such liabilities and expenses as are due to
willful misconduct or failure to exercise good faith.
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<PAGE> 62
Article 13
General Provisions
13.1 Amendment of Plan
(a) The Company may amend the Plan at any time. Such amendments
may include any remedial retroactive changes to comply with
the requirements of any law or regulation issued by any
governmental agency to which the Company is subject. The
Company may delegate to the Voluntary Investment Plan
Committee, or to any member thereof, its authority to amend
the Plan. No amendment will diminish or adversely affect any
accrued interest or benefit of Members or their Beneficiaries,
except as may be required to comply with the requirements of
any law or regulation issued by any governmental agency to
which the Company is subject.
(b) If any amendment to the Plan changes the vesting schedule,
each Member who is an Employee and has completed a three-year
Period of Service may elect to remain under the vesting
schedule of the Plan prior to such amendment. If the Member
does not make the election within a reasonable time (as may be
determined pursuant to governmental regulations from time to
time), he will be subject to the vesting schedule under the
Plan as amended. In no event will the vesting percentage
attained by a Member be reduced below the percentage attained
prior to such amendment.
(c) If any amendment to the Plan eliminates an optional form of
payment, a Member may continue to elect such form of payment
with respect to any Account balance earned prior to the
effective date of such amendment.
13.2 Qualification
Each contribution of the Company to the Trust Fund is conditioned upon
the initial qualification of the Plan under Code Section 401. If the
deduction of any such contribution is disallowed, it shall be returned
to the Company (to the extent disallowed), within one year after the
date of such disallowance.
13.3 Employment Status
Nothing contained in the Plan will be deemed to give any Employee the
right to be retained in the employ of the Company or to interfere with
the rights of the Company to discharge any Employee at any time.
13.4 Mergers or Consolidations
If this Plan merges or consolidates with, or transfers its assets or
liabilities to any other qualified plan of deferred compensation, no
Member will, as a result of such merger, consolidation or transfer, be
entitled to a benefit on the day following such event which
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<PAGE> 63
is less than the benefit to which he is entitled on the day preceding
such event. For purposes of this section, the benefit to which a
Member is entitled shall be calculated based upon the assumption that
a Plan termination and distribution of assets occurred on the day as
of which the Member's entitlement is being determined.
13.5 Provision Against Anticipation
No benefit under the Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, charge or other legal process, and any attempt to do so
shall be void. The preceding sentence will not apply to a qualified
domestic relations order pursuant to Code Section 414(p).
13.6 Facility of Payment
If any Member or Beneficiary is physically or mentally incapable of
giving a valid receipt for any payment due him and no legal
representative has been appointed for him, the Plan Administrator may
direct the Trustee to make such payment to any person or institution
maintaining such Member or Beneficiary and the release of such person
or institution will be a valid and complete discharge for such
payment. Any final payment or distribution of any Member, to the
legal representative of the Member or to any Beneficiaries of such
Member in accordance with the provisions herein will be in full
satisfaction of all claims against the Plan, the Plan Administrator,
the Trustee, the Company and the Parent arising under or by virtue of
the Plan.
13.7 Construction
The validity of the Plan or any of its provisions will be determined
under and will be construed according to federal law and, to the
extent permissible, according to the laws of the state of Washington.
If any provision of the Plan is held illegal or invalid for any
reason, such determination will not affect the remaining provisions
of the Plan and the Plan will be construed and enforced as if said
illegal or invalid provision had never been included.
13.8 Legal Actions
The Plan Administrator will be the necessary party to any action or
proceeding involving the assets held with respect to the Plan or the
administration thereof. No Employee, Member, former Member or their
Beneficiaries, or any other person having or claiming to have an
interest in the Plan will be entitled to any notice or process. Any
final judgment that may be entered in any such action or proceeding
will be binding and conclusive on all persons having or claiming to
have any interest in the Plan.
13.9 Limitations on Contributions
(a) For purposes of this section only, the following definitions
shall apply:
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<PAGE> 64
(1) "Additions" means the sum of (A) Company Matching
Contributions, (B) Elective Contributions, (C)
forfeitures, if any, allocated to the Member's
Accounts, (D) amounts allocated after March 31, 1984,
to an individual medical account (defined in Code
Section 415(l)(2)) which is part of a pension or
annuity plan maintained by the Company (provided that
the 25% limitation in 13.9(b) shall not apply), and
(E) amounts allocated after December 31, 1985, to the
separate account of a key employee (as defined in
Code Section 419A(d)(3)) under a welfare benefit fund
(as defined in Code Section 419(e)) maintained by the
Company.
(2) "Compensation" has the meaning defined in 11.2(b).
(3) "Limitation Year" means a Plan Year.
(b) The total Additions made to the Accounts of a Member for any
Plan Year shall not exceed the lesser of 25% of the Member's
Compensation or the greater of $30,000 or one-quarter of the
dollar limitation in effect under Code Section 415(b)(1)(A) as
adjusted for cost of living increases by the Secretary of the
Treasury.
(c) If Additions exceed the limitation for any Plan Year as a
result of the allocation of forfeitures, a reasonable error in
estimating a Member's annual compensation, or under such facts
and circumstances as the Commissioner may allow, such excess
Additions will be applied in accordance with subdivisions (ii)
and (iv) of Treasury Regulation section 1.415-6(b)(6).
(d) All defined contribution plans of the Company, terminated or
not, will be considered as one plan for purposes of the
limitations specified under this section, and all entities of
a controlled group of entities will be considered as one
employer.
(e) In any case in which a person is a Member of both a defined
benefit plan and a defined contribution plan maintained by the
Company or any Affiliate or Subsidiary of the Company, then
the provisions of Code Section 415(e) shall apply. If for any
Plan Year, the limits described in Code Section 415(e) are
exceeded, the projected annual retirement income benefit under
the defined benefit plan shall be limited, to the extent
necessary, to reduce the defined benefit plan fraction (as
defined in Code Section 415(e)(2)) so that the sum of the
defined contribution plan fraction (as defined in Code Section
415(e)(3)) and the defined benefit plan fraction does not
exceed 1.0. Notwithstanding the foregoing, if the defined
benefit plan of the Company or Affiliate or Subsidiary
specifically provides that the defined benefit plan fraction
is not reduced, the Member's Additions will be adjusted as
described 13.9(c) to the extent necessary, to reduce the
defined contribution plan fraction so that the sum of the
defined contribution plan fraction and the defined benefit
plan fraction does not exceed 1.0.
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<PAGE> 65
13.10 Qualified Domestic Relations Order
(a) The Plan Administrator shall promptly notify a Member and any
other alternate payee of the receipt of a domestic relations
order and of the Plan's procedure for determining whether the
order qualifies as a Qualified Domestic Relations Order as
defined in Code Section 414(p)(1)(A). Within a reasonable
period of time after the receipt of such order, the Plan
Administrator shall determine whether such order qualifies as
a Qualified Domestic Relations Order and shall notify the
Member and each alternate payee of such determination.
(b) During any period in which the issue of qualification of a
domestic relations order is being determined, the Plan
Administrator shall segregate in a separate account in the
Plan the amounts, if any, which would have been payable to the
alternate payee during such period if the order had been
determined to be a Qualified Domestic Relations Order. If the
domestic relations order is determined to be qualified, the
Plan Administrator shall pay the balance of such account to
the person or persons entitled thereto. If within eighteen
months it is determined that the domestic relations order is
not qualified, or if the issue is not resolved, then, as of
the Valuation Date next following the close of such period,
the balance in the segregated account shall either be credited
to the account of the Member, or, if the Member has terminated
employment, distributed to the Member, or, in the event of the
Member's death, to his Beneficiary. Any subsequent
determination that the domestic relations order is a Qualified
Domestic Relations Order shall apply prospectively only.
(c) If a domestic relations order is determined to be qualified,
then the Plan Administrator shall make distribution to the
alternate payee as required by that Qualified Domestic
Relations Order. No payment shall be made under this section
which is in excess of the balance of a Member's Accounts as
determined pursuant to the provisions of the Plan.
(d) In the event that the Plan Administrator shall determine that
a distribution or a withdrawal of a Member's Account pursuant
to Article 7, Article 8, Article 9, or Article 10 has been
delayed as a result of a pending or threatened domestic
relations order, the Valuation Date immediately preceding the
date on which such withdrawal or distribution is approved by
the Plan Administrator pursuant to such order shall be
substituted for the Valuation Date which would otherwise be
applicable to such distribution or withdrawal.
13.11 Pronouns
Masculine pronouns as used in this Plan will include both masculine and
feminine gender unless the context indicates otherwise.
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<PAGE> 66
13.12 Eligible Rollover Distribution
(a) Notwithstanding any provision of the Plan to the contrary that
would otherwise limit a distributee's election under this
section, a distributee may elect, at the time and in the
manner prescribed by the Plan Administrator, to have any
portion of an eligible rollover distribution paid directly to
an eligible retirement plan specified by the distributee in a
direct rollover. Prior to effecting such transfer, the Plan
Administrator shall required evidence reasonably satisfactory
to him that the entity to which such transfer is to be made
is, in fact, and eligible retirement plan and such plan may
receive the distribution in the forms required under Article
7, Article 8, or Article 9, as applicable.
(b) Definitions.
(1) Eligible rollover distribution: An eligible rollover
distribution is any distribution of all or any
portion of the balance to the credit of the
distributee, except that an eligible rollover
distribution does not include: any distribution that
is one of a series of substantially equal periodic
payments (not less frequently than annually) made for
the life (or life expectancy) of the distributee or
the joint lives (or joint life expectancies) of the
distributee and the distributee's designated
beneficiary, or for a specified period of ten years
or more; any distribution to the extent such
distribution is required under Code Section
401(a)(9); and the portion of any distribution that
is not includible in gross income (determined without
regard to the exclusion for net unrealized
appreciation with respect to employer securities).
(2) Eligible retirement plan: An eligible retirement plan
is an individual retirement account described in Code
Section 408(a), an individual retirement annuity
described in Code Section 408(b), an annuity plan
described in Code Section 403(a), or a qualified
trust described in Code Section 401(a), that accepts
the distributee's eligible rollover distribution in
the forms required under Article 7, Article 8, or
Article 9, as applicable. However, in the case of an
eligible rollover distribution to the surviving
spouse, an eligible retirement plan is an individual
retirement account or individual retirement annuity.
(3) Distributee: A distributee includes an employee or
former employee. In addition, the employee's or
former employee's surviving spouse and the employee's
or former employee's spouse or former spouse who is
the alternate payee under a qualified domestic
relations order, as defined in Code Section 414(p),
are distributees with regard to the interest of the
spouse or former spouse.
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<PAGE> 67
(4) Direct rollover: A direct rollover is a payment by
the plan to the eligible retirement plan specified by
the distributee.
13.13 Rollover Contributions
With the consent of the Plan Administrator and without regard to any
limitations on contributions set forth in 3.1 and Article 13, the Plan
may receive from an Eligible Employee, in cash, a rollover contribution
if:
(a) The amounts transferred to the Plan originated under a
retirement plan sponsored by another employer and the
following conditions are satisfied:
(1) The Eligible Employee was a participant under another
plan that was qualified under Code Section 401(a) or
an annuity plan qualified under Code Section 403(a);
(2) In the case of a plan qualified under Code Section
401(a), the trust under such other plan is exempt
from tax under Code Section 501(a);
(3) Such Eligible Employee receives a distribution from
such other plan which qualifies as an eligible
rollover distribution, as described in Code Section
402(c)(1);
(4) The Eligible Employee furnishes evidence satisfactory
to the Plan Administrator that such contribution
meets conditions (1), (2), and (3) above; and
(5) The rollover contribution is made no later than the
60th day after receipt of the distribution; or
(b) The amounts transferred to the Plan are from a conduit
individual retirement account, provided that the following
conditions are satisfied:
(1) Such account has no assets other than assets that
were previously distributed to the Eligible Employee
by another qualified plan and contains no amount
attributable to contributions made by the Eligible
Employee;
(2) Such amounts met the applicable requirements of Code
Section 408(d)(3) for rollover treatment or transfer
to the conduit individual retirement account; and
(3) Such amounts are transferred by the Eligible Employee
to the Plan within 60 days following his receipt of
such amount from the conduit individual retirement
account.
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<PAGE> 68
Rollover contributions shall be held in the Supplemental Deferral
Account established and maintained under the Plan for the benefit of
the Eligible Employee who transferred such contributions. An Eligible
Employee who has made a rollover contribution shall at all times have a
100% nonforfeitable right to the value of the assets held in his
Supplemental Deferral Account. Amounts allocated to the Supplemental
Deferral Account shall be held in trust and invested in accordance with
the terms and conditions provided in Article 4. No Company Matching
Contribution shall be made under 3.4 with respect to such rollover.
Distributions of amounts allocated to a Supplemental Deferral Account
shall be payable on retirement as a benefit under Article 7, on
termination or death as a benefit under Article 8, or upon withdrawal
under Article 9. All other provisions of the Plan shall be applicable
to the amount so transferred, regardless of whether or not the Eligible
Employee becomes a Member under 2.1.
If an Eligible Employee makes a rollover contribution to the Plan under
this 13.13, such Eligible Employee nevertheless shall not become a
Member under the Plan and shall not participate in the allocation of
Company Matching Contributions under 13.13 until such Eligible Employee
has satisfied the requirements for membership set forth in Article 2.
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<PAGE> 69
Appendix A
Retirement Sub-Plans Crediting Service
1. Rockwell International Corporation Retirement Income Plan for Certain
Salaried Employees.
2. Rockwell International Corporation Retirement Income Plan For Salaried
Employees in Certain Units of the General Industries Operations.
3. Rockwell International Corporation Retirement Income Plan for Certain
Salaried Employees of the General Industries Operations.
4. Rockwell International Corporation Salaried Employees' Retirement Plan
- Electronics Operations.
5. Rockwell International Corporation Retirement Plan for Eligible
Employees on the Salary and Weekly Payrolls of Electronics Operations,
North American Aircraft Operations and North American Space Operations.
6. Maine Electronics Inc. Salary Payroll Retirement Plan.
7. Rockwell Telecommunications, Inc. (formerly Wescom) Retirement Plan for
Exempt Salaried Employees.
8. Retirement Plan for Hourly-Rated Employees of the Sulphur Springs,
Texas Plant.
9. Asheville Employees Retirement Savings Plan, Truck Axle Division.
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<PAGE> 70
Appendix B
Procedures, Terms, and Conditions of Loans
ELIGIBILITY FOR LOANS. The individuals eligible to obtain loans from the Plan
("Borrowers") are limited to:
(1) Employees, and
(2) non-Employees who are "parties in interest" (as defined in section
3(14) of ERISA)
who have Plan Account balances. An Employee who wishes to obtain a loan must be
employed on an active payroll of the Company or an Affiliate or Subsidiary at
the time of the loan application. A party in interest who is not an Employee
will be eligible to obtain a loan only if an agreement can be provided by the
party's current employer to deduct and remit the required loan repayments to the
Plan.
LIMITATION ON NUMBER AND MINIMUM AMOUNT OF LOANS. Only one loan to a Borrower is
permitted to be outstanding from all Company sponsored savings plans at any one
time. Any Borrower who has an outstanding loan from the Plan will be required to
repay that loan in full before applying for another loan. Each loan which is
approved must be for a minimum of $1,000.
MAXIMUM AMOUNT OF LOAN. The amount which a Borrower will be permitted to borrow
from the Plan is based on the aggregate value of the Borrower's Accounts,
determined in accordance with section 6.4 of the Plan, and may not exceed the
least of the amounts described in subsections (a), (b) and (c) of section 9.6 of
the Plan. The maximum amount of any loan will be further limited to ensure that,
after applying the appropriate interest rate and taking into account all
applicable deductions, the resulting periodic repayments will not exceed the
Borrower's net earnings. The deductions referred to in the preceding sentence
include statutory withholdings, deductions for employee benefits and all pre-tax
contributions to the Plan, but exclude credit union, savings bond, charitable
contribution and other similar deductions.
LOAN APPLICATIONS. Loan applications by prospective Borrowers will be made via
telephone to the Plan Administrator or such third party administrator as may be
designated by the Plan Administrator (either of whom is hereafter referred to as
the "Loan Administrator"). The Loan Administrator will then review the
telephonic application and determine eligibility for the loan. If the loan is
approved, the Loan Administrator will prepare and forward to the Borrower a
letter notifying the Borrower of the approval, together with a Truth in Lending
Statement and a check for the loan amount, all in the form approved by the Plan
Administrator. The Borrower's endorsement of the loan check will be considered
to be the Borrower's agreement to the terms of the loan. Failure by the Borrower
to endorse the check within 30 days after the date of the check will be deemed
to be a withdrawal by the Borrower of the loan application.
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<PAGE> 71
SOURCE OF LOAN FUNDS. Each loan will be funded by withdrawing the required
amounts from the Plan Account(s) of the Borrower in the following order:
First -- from the Borrower's Supplemental Deferral Account;
Second -- from the Borrower's Compensation Deferral Account;
Third -- from the Borrower's Supplemental Deduction Account; and
Fourth -- from the Borrower's Compensation Deduction Account.
Subject to the provisions of the following paragraph, the loan amount will be
funded by the Borrower's Investment Funds in the applicable Accounts, in a pro
rata fashion, based upon the relative size of the balance of each such Fund in
the Accounts.
Alternatively, a Borrower may elect to have the loan funded first from the
Borrower's interest in Stock Fund B, with any additional funding to be on a pro
rata basis from the remaining Investment Funds.
Any pro rata loan funding from the Borrower's interest in the Guaranteed Return
Fund will be taken in reverse sequence by accessing the Fund's contracts on a
last-in first-out basis.
To the extent a loan is made against the Borrower's Stock Fund B Account, the
Borrower will receive cash in lieu of shares of Common Stock. The Trustee will
not be permitted to sell shares of Common Stock in order to provide the cash
with which to finance loan applications.
If, at any time, the Trustee does not have sufficient cash on hand to finance
all outstanding loan applications, processing of each application for which
sufficient cash is not available will be deferred until sufficient cash becomes
available to process such loans on a first-come, first-serve basis.
DETERMINATION OF LOAN INTEREST RATE. The interest rate to be charged for loans
will be 1% over the prime rate, which is defined for this Appendix as the base
rate on corporate loans posted by at least 75% of the largest 30 U.S. banks, as
such rate is identified in the edition of The Wall Street Journal published on
the last business day of the month prior to the approval of a loan.
TERM OF LOANS. Loans will be permitted for terms of 12, 24, 36, 48 or 60 months
for loans other than those for the purpose of purchasing a primary residence,
which will be permitted for a term of 120 months.
REPAYMENTS. Loan repayments by Employees will be deducted from the Employee's
pay check each pay period. If a pay check is insufficient to cover the full
amount of the loan repayment, no deduction will be made, and the repayment will
be deducted from the Employee's next pay check. Loan repayment schedules for
Borrowers who are not Employees will be developed on an individual basis, but
will parallel as closely as possible the loan repayment schedules for Employees.
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<PAGE> 72
PREPAYMENTS. The full unpaid balance of a loan may be prepaid at any time by a
Borrower. Partial prepayments in excess of scheduled payroll deductions will not
be accepted. No prepayments will be accepted within 12 months after the date of
the loan, unless the Borrower is an Employee and terminates employment within
such 12 month period.
MISSED PAYMENTS. If any payment is not made, interest will continue to accrue on
such missed payment and subsequent payments will be applied first to accrued and
unpaid interest on the missed payment and then to principal. A notice will be
mailed to the last known address of the Borrower stating that if three
consecutive months of payments are missed, the loan will be considered to be in
default.
TERMINATION OF EMPLOYMENT. If a Borrower who is an Employee terminates
employment or is on an unpaid leave of absence, or if a Borrower who is not an
Employee is no longer able to repay a loan through payroll deductions, the
Borrower may continue to make loan repayments by personal check. Such repayments
to the Plan will be made through the Loan Administrator at an address to be
provided to the Borrower by the Loan Administrator.
DEFAULT. A loan will be considered to be in default after three consecutive
months of payments have been missed during the term of the loan or when a
Borrower revokes a payroll deduction authorization. In the event of such a
default, a distribution of the loan amount, including both unpaid principal and
accrued but unpaid interest, will be deemed to have occurred (as described in
section 1.401(k)-1(d)(6)(ii) of the Treasury Regulations) and an information
return reflecting the tax consequences, if any, to the Borrower will be issued.
Upon the occurrence of an event permitting actual distribution of the Borrower's
Account pursuant to the provisions of Code Section 401(k) (whether distribution
of the Borrower's entire Plan Account will actually be made or will be deferred
pursuant to applicable provisions of the Plan), the unpaid balance of a
defaulted loan will be charged off against the Borrower's Account. If no
distribution event has occurred, which would otherwise permit payment to the
Borrower under Code Section 401(k), the unpaid balance of the loan will be
retained in the Account until such time as payment would be permitted under that
Code Section, at which time the unpaid balance of the loan, including any
accrued and unpaid interest, will be charged off against the Borrower's Account.
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Exhibit 99.2
BOEING NORTH AMERICAN
SAVINGS PLAN FOR CERTAIN EMPLOYEES
November 15, 1996
051_BOEA0A_96.doc
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Table of Contents
<TABLE>
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Page
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<S> <C>
Introduction 1
Article 1 -- Definitions..........................................................................................2
1.1 Accounts...............................................................................................2
1.2 Affiliate or Subsidiary................................................................................2
1.3 Authorized Period of Absence...........................................................................2
1.4 Beneficiary............................................................................................2
1.5 Boeing Company Stock Fund..............................................................................3
1.6 Code...................................................................................................3
1.7 Common Stock...........................................................................................3
1.8 Common Unit............................................................................................3
1.9 Company................................................................................................3
1.10 Company Contributions Account.........................................................................3
1.11 Company Matching Contributions........................................................................3
1.12 Compensation..........................................................................................3
1.13 Compensation Deduction Account........................................................................4
1.14 Compensation Deduction Contributions..................................................................4
1.15 Compensation Deferral Account.........................................................................4
1.16 Compensation Deferral Contributions...................................................................4
1.17 Controlled Group......................................................................................4
1.18 Effective Date........................................................................................4
1.19 Eligible Employee.....................................................................................4
1.20 Employee..............................................................................................5
1.21 ERISA.................................................................................................5
1.22 Highly Compensated Eligible Employee..................................................................5
1.23 Highly Compensated Employee...........................................................................5
1.24 Hour of Service.......................................................................................7
1.25 Investment Fund.......................................................................................9
1.26 Investment Manager....................................................................................9
1.27 Layoff................................................................................................9
1.28 Member................................................................................................9
1.29 Military Service......................................................................................9
1.30 Newark Member.........................................................................................9
1.31 One-Year Break in Service.............................................................................9
1.32 Parent................................................................................................9
1.33 Plan..................................................................................................9
1.34 Plan Administrator...................................................................................10
1.35 Plan Year............................................................................................10
1.36 Reemployment Date....................................................................................10
1.37 Stable Value Fund....................................................................................10
</TABLE>
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<TABLE>
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1.38 Shreveport Member....................................................................................10
1.39 Termination of Employment............................................................................10
1.40 Total Disability.....................................................................................10
1.41 Total Earnings.......................................................................................10
1.42 Trust Agreement......................................................................................11
1.43 Trust Fund...........................................................................................11
1.44 Trustee..............................................................................................11
1.45 Unit.................................................................................................11
1.46 Valuation Date.......................................................................................11
1.47 Vesting Service......................................................................................11
Article 2 -- Membership..........................................................................................13
2.1 Entry Date............................................................................................13
2.2 Application for Membership............................................................................13
Article 3 --Contributions........................................................................................14
3.1 Compensation Deferral Contributions...................................................................14
3.2 Compensation Deduction Contributions..................................................................14
3.3 Deferral and Deduction Elections......................................................................15
3.4 Company Contributions.................................................................................17
3.5 Return of Company Contributions.......................................................................17
3.6 Contributions for Military Service....................................................................17
3.7 Testing Compensation Deferral Contributions for Discrimination........................................17
3.8 Testing Compensation Deduction Contributions and Company Matching Contributions for Discrimination....20
3.9 Testing Aggregate Contributions for Discrimination....................................................21
3.10 Aggregation Rules for Discrimination Testing.........................................................23
Article 4 -- Investment of Contributions.........................................................................25
4.1 Investment Election...................................................................................25
4.2 Changes in Investment Elections.......................................................................25
4.3 Transfer of Investments...............................................................................25
4.4 Independent Control...................................................................................27
Article 5 -- Trust Agreement.....................................................................................28
5.1 Establishment of Trust Fund...........................................................................28
5.2 Investment Funds......................................................................................28
5.3 Voting Rights.........................................................................................29
5.4 Tender Offer.........................................................................................29
5.5 Trust Agreement.......................................................................................30
5.6 Rights in the Trust Fund..............................................................................30
Article 6 -- Maintenance of Members' Accounts....................................................................31
6.1 Accounts Maintained...................................................................................31
6.2 Crediting Units to Accounts...........................................................................31
</TABLE>
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<PAGE> 4
<TABLE>
<S> <C>
6.3 Units Valuations......................................................................................31
6.4 Balance of Member's Accounts..........................................................................32
6.5 Member Account Statements.............................................................................32
Article 7 -- Retirement..........................................................................................33
7.1 Eligibility...........................................................................................33
7.2 Lump Sum Distribution.................................................................................33
7.3 Installment Form of Payment...........................................................................33
7.4 Limitations on Payment Date...........................................................................34
7.5 Manner of Distribution................................................................................35
Article 8 -- Termination or Death................................................................................37
8.1 Vesting...............................................................................................37
8.2 Distribution Upon Termination.........................................................................37
8.3 Distribution Upon Death...............................................................................38
8.4 Amount of Distribution................................................................................38
8.5 Employees of Divested Components......................................................................39
8.6 Forfeitures...........................................................................................40
8.7 Repayment After Reemployment..........................................................................40
Article 9 -- Withdrawals and Loans...............................................................................41
9.1 Withdrawals from Accounts by Members under Age 59 1/2.................................................41
9.2 Withdrawal from Accounts by Members Over Age 59 1/2...................................................41
9.3 Forfeitures and Limitation on Withdrawals.............................................................42
9.4 Allocation of Withdrawals Among Investment Funds......................................................43
9.5 Hardship Withdrawals from Compensation Deferral Accounts..............................................44
9.6 Loans.................................................................................................46
Article 10 -- Termination of Plan................................................................................47
10.1 Termination of Plan..................................................................................47
10.2 Procedures Upon Termination of Plan..................................................................47
Article 11 -- Top Heavy Provisions...............................................................................48
11.1 Top-Heavy Plan.......................................................................................48
11.2 Definition of Terms..................................................................................48
11.3 Modification of Vesting Schedule.....................................................................50
11.4 Minimum Contribution.................................................................................51
11.5 Modification of Maximum Contribution.................................................................51
11.6 Collective Bargaining Agreements.....................................................................51
Article 12 -- Administration of Plan.............................................................................52
12.1 Administration.......................................................................................52
12.2 Records..............................................................................................53
12.3 Payment of Expenses..................................................................................53
12.4 Delegation of Authority..............................................................................53
</TABLE>
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<TABLE>
<S> <C>
12.5 Information Available................................................................................53
12.6 Appeal Procedure.....................................................................................53
12.7 Fiduciary Capacity...................................................................................54
12.8 Committee Liability..................................................................................54
Article 13 -- General Provisions.................................................................................55
13.1 Amendment of Plan....................................................................................55
13.2 Qualification........................................................................................55
13.3 Employment Status....................................................................................55
13.4 Mergers or Consolidations............................................................................55
13.5 Provision Against Anticipation.......................................................................56
13.6 Facility of Payment..................................................................................56
13.7 Construction.........................................................................................56
13.8 Legal Actions........................................................................................56
13.9 Limitations on Contributions.........................................................................56
13.10 Qualified Domestic Relations Order..................................................................58
13.11 Pronouns............................................................................................58
13.12 Eligible Rollover Distribution......................................................................59
Appendix A -- Procedures, Terms, and Conditions of Loans.........................................................61
</TABLE>
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<PAGE> 6
Introduction
The Boeing North American Savings Plan for Certain Employees is effective on the
closing date of the merger involving Rockwell International Corporation and
Boeing NA, Inc. On this date, most Rockwell Aerospace and Defense business
employees became employees of Boeing North American, Inc.
Except as specifically provided in the Plan, the rights and benefits of any
Member who terminates or retires prior to the effective date of any amendment to
the Plan will be determined pursuant to the provisions of the Plan in effect on
the earlier of his date of retirement or termination.
The purpose of the Plan is to provide Eligible Employees with a means of making
regular savings to provide additional security for their retirement. As an
incentive, the Plan provides for Company matching contributions.
It is intended that the Plan qualify as a profit sharing plan under the Internal
Revenue Code of 1986 and comply with the Employee Retirement Income Security Act
of 1974 and any amendments to said Code or Act.
- 1 -
<PAGE> 7
Article 1
Definitions
1.1 Accounts means the Company Contributions Account, Compensation
Deferral Account, and Compensation Deduction Account maintained for
each Member, as applicable.
1.2 Affiliate or Subsidiary means a member of a controlled group of
corporations (as defined in Code Section 1563(a), determined without
regard to Code Sections 1563(a)(4) and (e)(3)(C)), a group of trades
or businesses (whether incorporated or not) which are under common
control within the meaning of Code Section 414(c), or an affiliated
service group (as defined in Code Sections 414(m) or 414(o)) of which
The Boeing Company is a part. With respect to the Limitation on
Contributions described in 13.9, in determining whether a corporation
is a member of a controlled group of corporations the phrase "more
than 50 percent" shall be substituted for the phrase "at least 80
percent" each place it appears in Code Section 1563(a)(1).
1.3 Authorized Period of Absence means an absence authorized by the
Company for one or more of the following reasons:
(a) Layoff not to exceed six years duration.
(b) Approved leave of absence.
(c) Jury duty.
(d) Labor-management dispute.
(e) Military Service as defined in section 1.29.
(f) Illness or injury, including disability.
Any discretion of the Company under the provisions of this definition
will be exercised without discrimination and in accordance with
definitely established rules uniformly applicable to Employees or
Members whose approved periods of absence were occasioned by similar
circumstances.
1.4 Beneficiary means the one or more persons or trusts designated by a
Member to receive any benefit payable from the Plan upon the death of
the Member. Each Member may designate a beneficiary; provided,
however, if the Member has been married for a one year period and is
survived by his spouse (or a former spouse to the extent provided
under a qualified domestic relations order as described in Code
Section 414(p)), he will be deemed to have designated such spouse as
his Beneficiary unless he has designated a different Beneficiary in
writing and his spouse has consented to this designation. The
spouse's consent must be in writing, must acknowledge the effect of
the designation, and must be witnessed by a Plan representative or a
notary public. The requirement for spouse's consent will be waived if
the Member establishes to the satisfaction of the Plan
- 2 -
<PAGE> 8
Administrator that such consent cannot be obtained because there is
no spouse, the spouse cannot be located, or because of such other
circumstances as the Secretary of the Treasury may by regulations
prescribe. The spouse's consent (or waiver of consent where the
spouse cannot be located) will be valid only with respect to that
spouse.
If no designation is filed with the Plan Administrator or if the
designated Beneficiary does not survive the Member, the Member shall
be deemed to have designated the following as Beneficiaries and
contingent Beneficiaries with priority in the order named.
(a) Surviving spouse, if none then to
(b) Children in equal shares, if none then to
(c) Any other relative of the Member designated by the Plan
Administrator or to the Member's estate.
1.5 Boeing Company Stock Fund means the Investment Fund described in
section 5.2(e).
1.6 Code means the Internal Revenue Code of 1986, as amended.
1.7 Common Stock means common stock of The Boeing Company
1.8 Common Unit means a Unit of the Boeing Company Stock Fund which is
attributable to Common Stock.
1.9 Company means Boeing North American, Inc., a Delaware corporation,
and any other entity to which the Board of Directors has extended
this Plan.
1.10 Company Contributions Account means the Account maintained for each
Shreveport Member which is credited with the Member's share of
Company Matching Contributions and investment earnings allocable to
such Account.
1.11 Company Matching Contributions means the amount contributed to the
Plan by the Company on behalf of the Member in accordance with
section 3.4.
1.12 Compensation means a Member's base compensation from the Company
including regular, straight-time base pay, gainsharing payments, any
annual lump sum payments which have been negotiated with a collective
bargaining unit, lump sum payments for unused vacation and any amount
which would have been paid to the Member absent an election under
section 3.1(a) or (b) or an election to make elective employer
contributions pursuant to a cafeteria plan meeting the requirements
of Code Section 125. Compensation will not include overtime, extended
workweek compensation, night work or other premium pay, bonuses, any
form of extra, contingent, or supplementary compensation or, in the
case of Shreveport Members, compensation on the salaried payroll.
Compensation is limited to amounts which would have been received by
a Member in a Plan Year (but for a deferral election) or to amounts
which are attributable
- 3 -
<PAGE> 9
to services performed by the Member in the Plan Year which would have
been received within two and one-half months after the close of the
Plan Year (but for a deferral election).
Compensation shall not exceed $150,000 for 1994. On January 1 of each
calendar year in which the Secretary of the Treasury prescribes a new
dollar limit, this $150,000 limit will automatically be adjusted to
that new limit. Compensation for the Plan Year commencing on the
Effective Date and ending December 31, 1996 shall not exceed $12,500.
For Plan Years beginning before January 1, 1997, this limit applies
to the combined Compensation of a 5% owner (as defined in Code
Section 416(i)(1)(A)(iii)) of the Company, or one of the 10 Highly
Compensated Employees paid the greatest amount of Total Earnings
during the year, and such individual's spouse and any lineal
descendants who are not yet age 19 before the close of the Plan Year,
to the extent required by Code Section 401(a)(17). If the limit
applies to combined Total Earnings, the limit will be allocated to
the affected individuals in proportion to each individual's
Compensation determined prior to the application of the limit.
1.13 Compensation Deduction Account means the Account, if any, maintained
for each Member which is credited with the Member's Compensation
Deduction Contributions and investment earnings allocable to such
Account.
1.14 Compensation Deduction Contributions means the amount contributed to
the Plan by the Member through payroll deductions pursuant to section
3.2.
1.15 Compensation Deferral Account means the Account, if any, maintained
for each Member which is credited with the Member's Compensation
Deferral Contributions and investment earnings allocable to such
Account.
1.16 Compensation Deferral Contributions means the amount contributed to
the Plan by the Company on behalf of the Member in accordance with
the Member's election pursuant to section 3.1.
1.17 Controlled Group means the Parent, the Company and any Affiliate or
Subsidiary. All employees of the Controlled Group will be treated as
employed by a single employer for purposes of applying the provisions
of qualification of the Plan; of minimum participation standards of
the Plan; of minimum vesting standards of the Plan; and of
limitations on contributions under the Plan.
1.18 Effective Date means the closing date of the merger involving
Rockwell International Corporation and Boeing NA, Inc.
(_____________________________).
1.19 Eligible Employee means any Employee who is:
(a) employed at the Company's Guidance and Repair Center at
Newark Air Force Base, Ohio; or
- 4 -
<PAGE> 10
(b) employed at Shreveport, Louisiana, as an hourly paid
employee.
1.20 Employee means any person employed by any member of the Controlled
Group. Employee includes, to the extent permitted by Code Section
406, any United States citizen regularly employed by a foreign
subsidiary or affiliate of the Company. The term Employee shall not
include:
(a) a person who serves the Company only as a Director and is not
otherwise employed by the Company;
(b) a person engaged only in an advisory or consulting capacity
on a retained or fee basis;
(c) any person compensated by special fees or pursuant to a
special contract or arrangement or on a commission basis who
is not otherwise employed by the Company;
(d) a person engaged only in a capacity which, in the sole
discretion of the Plan Administrator, is determined to be an
independent contractor;
(e) a person who is a leased employee (within the meaning of Code
Section 414(n)) except that a leased employee will be treated
as an employee of the Company to the extent required by law
and any contributions or benefits provided by the leasing
organization which are attributable to services performed for
the recipient employer shall be treated as provided by the
recipient employer; or
(f) any person whose services for the Company are not paid for
through the Company's payroll department.
1.21 ERISA means the Employee Retirement Income Security Act of 1974, as
amended.
1.22 Highly Compensated Eligible Employee means an Eligible Employee who
is a Highly Compensated Employee.
1.23 Highly Compensated Employee means:
(a) For Plan Years beginning before January 1, 1997, any Employee
who performs services for the Controlled Group during the
determination year and who, during the look-back year:
(1) received Total Earnings in excess of $75,000 (as adjusted by
the Secretary of the Treasury for the relevant year),
(2) received Total Earnings in excess of $50,000 (as adjusted by
the Secretary of the Treasury for the relevant year) and was
a member of the top-paid group for such year, or
- 5 -
<PAGE> 11
(3) was an officer (within the meaning of Code Section 416(i))
of the Controlled Group and received Total Earnings
during such year that were greater than 50% of the dollar
limitation in effect under Code Section 415(b)(1)(A).
(b) For Plan Years beginning before January 1, 1997, any
Employee who is both (i) described in (a) above if the
term "determination year" is substituted for the term
"look-back year" and (ii) is one of the 100 Employees who
received the most Total Earnings from the Controlled Group
during the determination year.
(c) For Plan Years beginning after December 31, 1996, any
Employee who performs services for the Controlled Group
during the determination year and who, during the
look-back year received Total Earnings in excess of
$80,000 (as adjusted by the Secretary of the Treasury for
the relevant year).
(d) Any Employee who is a 5% owner (as defined in Code Section
416(i)(1)(A)(iii)) of the Company at any time during the
look-back year or the determination year.
(e) Any former Employee who was a Highly Compensated Employee
for a separation year (as defined in Treasury Regulation
section 1.414(q)-1T) or for any determination year ending
on or after the Employee attains age 55, as provided by
Code Section 414(q)(9), as in effect on December 31, 1996,
and the regulations thereunder.
(f) For Plan Years beginning before January 1, 1997, if no
officer has satisfied the compensation requirement in
(a)(3) above during either a determination year or
look-back year, the highest paid officer for such
determination year shall be treated as a Highly
Compensated Eligible Employee if such officer is an
Eligible Employee. No more than 50 Employees (or if less,
the greater of three Employees or 10% of the Employees)
shall be treated as officers.
(g) For purposes of this section the following definitions
apply. The determination year is the Plan Year. The
look-back year is the 12-month period immediately
preceding the determination year; provided, however, for
the Plan Year commencing on the Effective Date and ending
December 31, 1996, the look-back year is the 1996 calendar
year. The top-paid group is the top 20% of Employees
ranked on the basis of compensation received during the
year and shall be determined in accordance with Code
Section 414(q)(8), as in effect on December 31, 1996, and
the regulations thereunder.
(h) For Plan Years beginning before January 1, 1997, any
Employee who is a 5% owner or one of the 10 highly
compensated employees in the Controlled Group paid the
greatest amount of Total Earnings during the Plan Year and
such Employee's spouse, lineal ascendants or descendants
and the spouses of such
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<PAGE> 12
lineal ascendants or descendants shall be treated as a
single Employee for purposes of this section.
1.24 Hour of Service means:
(a) each hour for which an Employee is paid, or entitled to payment,
for the performance of duties for the Company (hours worked at a
premium rate shall be credited as straight-time hours).
(b) each hour credited in accordance with subsection (i) for any of
the following absences, provided that at the time of commencement
of the absence, the Member is an Eligible Employee:
(1) absence from work, up to a maximum of two years, because of
injury or illness sustained in the course of employment with
the Company and with respect to which the Member receives
workmen's compensation benefits and during which he would
normally have been scheduled to work for the Company as an
Eligible Employee;
(2) absence from work pursuant to an authorized sick leave;
(3) absence from work for paid vacation or paid holiday(s) not
worked;
(4) absence from work for a period during which the Member is
serving as a juror
(5) absence from work for a period for which the Member is on an
authroized leave of absence for union business;
(6) absence from work for a period during which the Member is
required by the Armed Forces of the United States for
military training or emergency duty;
(7) absence from work for a paid funeral or bereavement leave;
(8) absence from work for a period during which the Member is on
authorized personal leave;
(9) absence from work for a period during which the Member is on
layoff status; and
(10) absence from work for a period during which the Member is on
an authorized educational leave.
(c) each hour for which an Employee is paid his regular hourly rate
by the Company for a period of absence that is not described in
subsection (b); provided, however,
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<PAGE> 13
that an Employee shall not be credited with more than 501 Hours
of Service under this sentence for any continuous period during
which he performs no duties for the Company.
(d) each hour not otherwise credited under the Plan for which back
pay, irrespective of mitigation of damages, is either awarded or
agreed to by the Company.
(e) each hour credited for absence from work by an Eligible Employee
who may be elected or appointed to governmental office requiring
him to be absent from duty with the Company; provided, however,
that a written opinion of counsel is obtained in advance that
granting such credit in a specific circumstance, and its
acceptance by the Member, does not violate any federal, state, or
local law.
(f) Hours of Service will be credited for employment with other
members of an affiliated service group, a controlled group of
corporations, or a group of trades or businesses under common
control of which the Company is a member.
(g) Hours of Service will also be credited for any individual
considered an employee under Code Section 414(n).
(h) Solely for purposes of determining whether a One-Year Break in
Service has occurred, an Employee who is absent from work shall
receive credit for up to 501 Hours of Service which would have
been credited to the Employee but for such absence if the absence
is (1) because of the Employee's pregnancy, (2) because of the
birth of the Employee's child, (3) because of the placement of a
child with the Employee in connection with the adoption of such
child by such Employee, (4) for purposes of caring for such child
for a period beginning immediately following such birth or
placement, or (5) because of leave required by the Family Medical
Leave Act. Where such hours cannot be determined, eight Hours of
Service per day of such absence shall be used. The Hours of
Service credited under (1), (2), (3), or (4) of this subsection
will be credited in the computation period in which the absence
begins if the crediting is necessary to prevent a Break in
Service in that period. In all other cases, Hours of Service
credited under (1), (2), (3), or (4) of this subsection will be
credited in the following computation period.
(i) For purposes of determining the number of Hours of Service to
which an Eligible Employee may be entitled pursuant to subsection
(b) with respect to any period of absence for which he is not
paid his regular hourly rate of compensation by the Company, the
Eligible Employee shall receive 174 Hours of Service for each
full month of such absence, prorated on a daily basis at the rate
of eight Hours of Service per day, not to exceed 40 Hours of
Service per week; and with respect to any period of absence for
which the Eligible Employee is paid his regular hourly rate of
compensation by the Company, Hours of Service shall be determined
by dividing the payments received by or due to the Eligible
Employee for such period by his regular hourly rate of
compensation. For purposes other than
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<PAGE> 14
subsection (b), the crediting of Hours of Service under this Plan
will be applied under the rules of paragraphs (b) and (c) of the
Department of Labor Regulation 2530.200b-2 which, by this reference,
is specifically incorporated in full within this Plan.
1.25 Investment Fund has the meaning specified in section 5.2.
1.26 Investment Manager means any fiduciary (other than a Trustee, The
Boeing Company or the Plan Administrator):
(a) which has the power to manage, acquire, or dispose of any assets
of the Plan; and
(b) which (1) is registered as an investment adviser under the
Investment Advisers Act of 1940, or (2) is a bank, as defined in
that Act, or (3) is an insurance company qualified to perform
services described in item (a) above under the laws of more than
one state; and
(c) which has acknowledged in writing that it is a fiduciary with
respect to the Plan.
1.27 Layoff means an involuntary severance of employment, other than a
discharge for cause.
1.28 Member means any Eligible Employee who has become a Member in the
Plan as provided in Article 2.
1.29 Military Service means the period of time during which a person is
absent from active work for the Company or any member of the
Controlled Group serving as a member of the Armed Forces of the
United States in time of war or other emergency or under the laws of
conscription in time of peace. Military Service includes time when
such person has a right to reemployment at his former position or a
substantially similar position upon his separation from such Military
Service, and such period of time, not exceeding ninety days,
immediately following such Military Service as such person remains
absent from active work for the Company or any member of the
Controlled Group.
1.30 Newark Member means an Eligible Employee employed at the Company's
Guidance and Repair Center at Newark Air Force Base, Ohio, who has
become a Member in the Plan pursuant to Article 2.
1.31 One-Year Break in Service means a calendar year during which the
Member fails to complete more than 500 Hours of Service.
1.32 Parent means The Boeing Company and any successor by change of name,
merger, purchase of stock or purchase of assets.
1.33 Plan means the Boeing North American Savings Plan for Certain
Employees.
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<PAGE> 15
1.34 Plan Administrator means the Voluntary Investment Plan Committee
established by The Boeing Company Board of Directors.
1.35 Plan Year means the period commencing on the Effective Date and
concluding on the December 31 next following the effective date, and
each calendar year thereafter.
1.36 Reemployment Date means the first day following a Period of Severance
on which an Employee performs an Hour of Service for the Company or
an Affiliate or Subsidiary.
1.37 Stable Value Fund means the Investment Fund described in section
5.2(c).
1.38 Shreveport Member means an Eligible Employee who is employed at
Shreveport, Louisiana, as an hourly paid employee and who has become
a Member in the Plan pursuant to Article 2.
1.39 Termination of Employment means cessation of employment with the
Company or any member of the Controlled Group due to:
(a) the date on which an Employee quits, retires, is discharged or
dies, and
(b) failure to return to work upon the expiration of any Authorized
Period Of Absence from the Company or any member of the
Controlled Group, in which event cessation of active work will be
deemed to have occurred at the time such Authorized Period of
Absence expired.
(c) An Employee who is on leave of absence for uniformed service as
defined in the Uniformed Services Employment and Reemployment
Rights Act shall not be deemed to have a Termination of
Employment unless he fails to return to work during the time he
has reemployment rights under the law. If such employee fails to
return to work within such time, his Termination of Employment
will be the first anniversary of the first day of the period of
his absence from employment.
1.40 Total Disability means a physical or mental disability lasting at
least six months, which wholly prevents the Member from performing
the duties of his occupation or other appropriate work made available
to him by the Company. The condition of Total Disability will be
determined by the Plan Administrator through the application of
procedures which are uniformly applied and which do not discriminate
in favor of any class or classes of individuals.
1.41 Total Earnings means compensation used in determining the actual
deferral percentage and the actual contribution percentage. Total
Earnings is equal to compensation received by the Employee from the
Company, other than compensation in the form of qualified or
previously qualified deferred compensation, that is currently
includible in gross income for income tax purposes. Total Earnings
also includes all elective contributions made by the Company on
behalf of the Employee that are not includible in gross income of the
Employee under Code Sections 125 or 402(e)(3).
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<PAGE> 16
Total Earnings shall not exceed $150,000 for 1994. On January 1 of
each calendar year in which the Secretary of the Treasury prescribes
a new dollar limit, this $150,000 limit will automatically be
adjusted to that new limit. Compensation for the Plan Year commencing
on the Effective Date and ending December 31, 1996 shall not exceed
$12,500. For Plan Years beginning before January 1, 1997, this limit
applies to the combined Total Earnings of a 5% owner (as defined in
Code Section 416(i)(1)(A)(iii)) of the Company, or one of the 10
Highly Compensated Employees paid the greatest amount of Total
Earnings during the Plan Year, and such individual's spouse and any
lineal descendants who are not yet age 19 before the close of the
Plan Year, to the extent required by Code Section 401(a)(17). If the
limit applies to combined Total Earnings, the limit will be allocated
to the affected individuals in proportion to each individual's Total
Earnings determined prior to the application of the limit.
1.42 Trust Agreement means the instrument or instruments executed between
the Company and the Trustee named in it, which provides for the
receiving, holding, investing, and disposing of the Trust Fund.
1.43 Trust Fund means the fund established by the Trust Agreement,
including the earnings thereon, held by the Trustee for all
contributions made by Members and the Company pursuant to the Plan.
1.44 Trustee means the trustee or trustees designated in the Trust
Agreement, and any successor Trustee.
1.45 Unit means the applicable participation unit under the Trust Fund
used to measure the Member's proportionate interest in the Trust Fund
as provided in Article 6.
1.46 Valuation Date means the last business day of each month or such
other business day as the Plan Administrator may determine.
1.47 Vesting Service shall be determined as follows:
(a) For each calendar year in which an Employee completes 1,000 Hours
of Service, he shall be credited with one year of Vesting
Service.
(b) For each calendar year in which an Employee completes less than
1000 Hours of Service but more than 500 Hours of Service he shall
accrue 1/12th of a Year of Vesting Service for each 80 of such
Hours of Service, computed to the nearest 1/12th.
(c) For each calendar year in which an Employee completes 500 or
fewer Hours of Service no Vesting Service shall be credited.
(d) Subject to the provisions of subsection (e) below, all calendar
years in which the Employee has accrued a whole or fractional
year of Vesting Service, whether or not continuous, shall be
counted in computing Vesting Service.
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<PAGE> 17
(e) If an Employee who has not completed five years of Vesting
Service incurs a One-Year Break in Service, Vesting Service will
not include:
(1) service prior to a One-Year Break in Service that is not
followed by a calendar year in which the Employee accrued a
full or fractional year of Vesting Service
(2) service prior to five or more consecutive One Year Breaks in
Service.
(f) For any person who is an Eligible Employee on the Effective Date
(including an active employee, an employee on layoff status, or
an employee on leave of absence) service with Rockwell
International Corporation and related employers that is
recognized as vesting service under the Rockwell Retirement
Savings Plan for Certain Employees shall be deemed to be Vesting
Service for purposes of this Plan.
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<PAGE> 18
Article 2
Membership
2.1 Entry Date
(a) Each Eligible Employee on the Effective Date who was eligible to
participate in the Rockwell Retirement Savings Plan for Certain
Employees immediately prior to the Effective Date may elect to
become a Member of the Plan on the Effective Date or at any time
thereafter.
(b) An Eligible Employee who is not described in (a) may elect to
become a Member at any time after he has completed 52 weeks of
employment with the Company or an Affiliate or Subsidiary.
2.2 Application for Membership
An election to participate shall be made in the manner prescribed by
the Plan Administrator, including completion of such form(s) as the
Plan Administrator may prescribe. The election to participate shall
be effective as soon as practicable, but in no event later than the
first payroll payment date that is at least 15 days after the date
the election is made. By making an election to participate, an
Eligible Employee shall agree to the terms and conditions of this
Plan.
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<PAGE> 19
Article 3
Contributions
3.1 Compensation Deferral Contributions
(a) A Newark Member may elect to defer receipt of a portion of his
Compensation and have the Company contribute such deferral to the
Plan on his behalf as a Compensation Deferral Contribution. The
amount of this deferral must be between one and 11 percent (in
whole percentage increments) of the Member's Compensation.
(b) A Shreveport Member may elect to defer receipt of a portion of
his Compensation and have the Company contribute such deferral to
the Plan on his behalf as a Compensation Deferral Contribution.
The amount of this deferral must be between one and ten percent
(in whole percentage increments) of the Member's Compensation.
(c) A Member's Compensation Deferral Contributions in one calendar
year, when added to the Member's other Elective Deferrals for
such year, may not exceed $7,000 (adjusted for cost of living
changes under Code Section 402(g)). For purposes of this section,
"Elective Deferrals" means the sum of all elective contributions
made pursuant to a Member's deferral election under another plan
or arrangement described in Code Sections 401(k), 408(k) or
403(b). Compensation Deferral Contributions in excess of this
limit and investment earnings on such contributions (including
gains and losses) shall be returned to the Member in accordance
with the provisions of Code Section 402(g), the regulations
thereunder, and other applicable rules and regulations.
A Member's Compensation Deferral Contributions in excess of this
limit for a calendar year and investment earnings (including
gains and losses) thereon may be distributed to the Member during
the same calendar year if (1) the Member and the Plan
Administrator designate the distribution as an excess Elective
Deferral and (2) the distribution is made after the date the Plan
received the excess contribution. If a Member notifies the Plan
Administrator in writing no later than March 1 (or April 15 if
the Plan Administrator waives the deadline) following a calendar
year that the Member's Compensation Deferral Contributions
exceeded the limit under Code Section 402(g) (as adjusted) for
such year, the Plan Administrator may, in its discretion,
distribute the amount specified by the Member and investment
earnings on such amount (including gains and losses) no later
than April 15 following such year.
3.2 Compensation Deduction Contributions
(a) A Newark Member who has not elected to defer receipt of a portion
of his Compensation pursuant to section 3.1(a) may authorize to
be deducted from his
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<PAGE> 20
Compensation, as paid, an amount which shall be contributed to the
Plan as a Compensation Deduction Contribution. The amount of this
deduction must be between one and 11 percent (in whole percentage
increments) of the Member's Compensation; provided.
(b) A Shreveport Member who has not elected to defer receipt of a
portion of his Compensation pursuant to section 3.1(b) may
authorize to be deducted from his Compensation, as paid, an
amount which shall be contributed to the Plan as a Compensation
Deduction Contribution. The amount of this deduction must be
between one and ten percent (in whole percentage increments) of
the Member's Compensation; provided.
3.3 Deferral and Deduction Elections
(a) The Plan Administrator shall prescribe procedures for an Eligible
Employee to apply for membership and to elect to have
Compensation Deferral Contributions made on his behalf pursuant
to section 3.13.1 or to authorize Compensation Deduction
Contributions pursuant to section 3.2. Such an election shall
first apply to Compensation received on the first payroll payment
date that is at least 15 days after the date the election is
made.
(b) A Member may from time to time change the rate of his
Compensation Deferral Contributions or Compensation Deduction
Contributions by making a new election in the manner prescribed
by the Plan Administrator. Such change shall be effective as soon
as is reasonably possible after his election, but, in general, no
later than the first payroll payment date that is at least 15
days subsequent to his election.
(c) A Member who has an authorization in effect to make Compensation
Deduction Contributions may revoke such authorization and at the
same time elect to commence Compensation Deferral Contributions.
Such revocation and election shall be effective as soon as
reasonably possible after his election, but, in general, no later
than the first payroll payment date that is at least 15 days
subsequent to his election.
(d) A Member who has made an election to have Compensation Deferral
Contributions made on his behalf may revoke such election and at
the same time authorize Compensation Deduction Contributions to
commence effective with the first payroll payment date in April
or October by giving the Plan Administrator prior notice thereof.
(e) A Member may, at any time, revoke his election to have
Compensation Deferral Contributions made on his behalf or his
authorization to make Compensation Deduction Contributions. Such
revocation will be effective as soon as reasonably
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<PAGE> 21
possible, but, in general, no later than the first payroll
payment date that is at least 15 days subsequent to his
revocation.
(f) A Member who has voluntarily suspended contributions under
section 3.3(e) may elect to have contributions resumed, effective
as soon as reasonably possible after his election, but, in
general, no later than the first payroll payment date that is at
least 15 days subsequent to such election.
(g) A Member's election to have Compensation Deferral Contributions
made on his behalf or his authorization to make Compensation
Deduction Contributions shall remain in effect until a new
election or authorization is made, except as provided in (1) and
(2) below.
(1) No contributions (including Company Matching Contributions)
shall be made by, or on behalf of, any Member after any of
the following events, until the Member again makes an
election that is effective under section 2.2 and section
3.3(a):
(A) the Member ceases to be an Eligible Employee;
(B) the Member receives a distribution under section 7.2,
7.3, or 8.2; or
(C) the Member voluntarily elects to have contributions
suspended under section 3.3(e).
(2) No contributions (including Company Matching Contributions)
shall be made by, or on behalf of, any Member when:
(A) no payment of Compensation is made by the Company to
the Member or, in the case of Compensation Deduction
Contributions, the amount payable after all applicable
withholdings and deductions required by law or the
Company is less than the applicable contributions;
(B) payroll deduction for Compensation Deduction
Contributions under the Plan would be contrary to law;
(C) the Member receives a distribution from his Company
Contributions Account pursuant to section 9.1(a)(2);
provided, however, that contributions shall
automatically resume following the completion of the
twenty-six (26) week period beginning on the date of
the distribution.
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<PAGE> 22
3.4 Company Contributions
(a) The Company shall contribute to the Plan on behalf of each
Shreveport Member an amount equal to 100% of the Member's
Compensation Deferral Contributions and Compensation Deduction
Contributions; provided, however, that the Company Contributions
made pursuant to this section for a Plan Year shall not exceed
$250 or 1% of the Member's Compensation, whichever amount is
less.
(b) Amounts which have been forfeited in accordance with section
3.7(d), 3.8(d), 3.9(d), 8.6, or 9.3(a) shall be applied to reduce
subsequent Company Matching Contributions required hereunder. If
the Plan should be terminated, any amount not previously so
applied shall be credited ratably to the Accounts of all Members
in proportion to the amounts of Company Matching Contributions
credited to their respective Accounts during the most recent Plan
Year.
3.5 Return of Company Contributions
(a) Except as provided below, the assets of the Plan will never inure
to the benefit of the Company and will be held for the exclusive
purpose of providing benefits to Members of the Plan and their
Beneficiaries and defraying reasonable expenses of administering
the Plan.
(b) If a contribution is made by the Company by a mistake of fact,
such contribution will be returned to the Company provided this
is done within one year after the payment of such contribution.
(c) Contributions are conditioned upon their deductibility under Code
Section 404. If a contribution deduction is disallowed, to the
extent the deduction is disallowed, such contribution shall be
returned to the Company within one year after the disallowance.
(d) Contributions are conditioned upon the initial qualification of
the Plan under Code Section 401(a). If the Plan does not
initially qualify, such contributions will be returned to the
Company within one year of such denial.
3.6 Contributions for Military Service
Notwithstanding any provision of this plan to the contrary,
contributions, benefits, and service credit with respect to
qualified military service will be provided in accordance with Code
Section 414(u).
3.7 Testing Compensation Deferral Contributions for Discrimination
(a) The actual deferral percentage for Highly Compensated Eligible
Employees for any Plan Year may not exceed the greater of:
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<PAGE> 23
(1) One and one-quarter times the actual deferral percentage
for all other Eligible Employees for the Plan Year, or
(2) The lesser of (A) two percentage points plus the actual
deferral percentage for all other Eligible Employees for
the Plan Year, or (B) two times such percentage for all
other Eligible Employees for the Plan Year.
(b) The "actual deferral percentage" for each group of Eligible
Employees is the average of the deferral percentages for each
Eligible Employee in such group. The deferral percentage is equal
to the Employee's Compensation Deferral Contributions for the Plan
Year, divided by his Total Earnings for the Plan Year. Eligible
Employees who are not making Compensation Deferral Contributions
will be included at zero percent in determining the actual
deferral percentage.
(c) Prior to the beginning of each Plan Year and periodically during
the year, the Plan Administrator shall test deferral elections
under section 3.13.1 to determine whether or not the limits under
this section will be exceeded for the Plan Year. In performing
this test, the Plan Administrator will assume that deferrals for
current Eligible Employees will continue for the remainder of the
Plan Year at the rate currently elected by the Eligible Employee.
If elections made by Highly Compensated Eligible Employees would
(if not reduced) cause the actual deferral percentage for such
Employees to exceed the limitation in this section, the Plan
Administrator shall reduce Compensation Deferral Contributions
elected by Highly Compensated Eligible Employees to comply with
the maximum permissible deferral percentage for the Plan Year.
Such reduction shall be effective as of the first payroll payment
date in the month following such determination and shall be made
as set forth below:
(1) First, Highly Compensated Eligible Employees electing
Compensation Deferral Contributions in an amount equal to
11% of Compensation shall have their elections reduced to
10% of Compensation. If, following this reduction, the
maximum permissible deferral percentage is still exceeded,
Highly Compensated Eligible Employees electing Compensation
Deferral Contributions in an amount equal to 10% of
Compensation (including any Highly Compensated Eligible
Employees whose elections were reduced under the preceding
sentence) shall have their elections reduced to 9% of
Compensation. The process set forth in this paragraph (2)
shall continue until the average deferral percentage for
the Highly Compensated Eligible Employees does not exceed
the maximum permissible deferral percentage.
(2) Subject to section 3.8, the amount that would have been
contributed as Compensation Deferral Contributions on
behalf of the Member except for the reductions prescribed
in paragraph (1) above, shall be contributed by the Member
to the Plan as Compensation Deduction Contributions. In
addition, to the extent permitted by regulation, the Plan
Administrator may
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<PAGE> 24
during or following a Plan Year cause Compensation Deferral
Contributions made on behalf of Highly Compensated Eligible
Employees to be recharacterized (on a uniform and
non-discriminatory basis) as Compensation Deduction
Contributions to the extent necessary to prevent the average
deferral percentage for said Members for any Plan Year from
exceeding the maximum permissible deferral percentage.
(d) At the end of the Plan Year, if Compensation Deferral
Contributions for Highly Compensated Eligible Employees exceed
the limitation described in this section, the Plan
Administrator shall determine the excess Compensation Deferral
Contributions of each Highly Compensated Eligible Employee in
accordance with the following leveling method. The deferral
percentage of the Highly Compensated Eligible Employee with
the highest deferral percentage will be reduced to the extent
required to (i) enable the Plan to comply with this section,
or (ii) cause such Employee's deferral percentage to equal the
deferral percentage of the Highly Compensated Eligible
Employee with the next highest deferral percentage. This
procedure will be repeated until the Plan satisfies the
limitation in this section. Subject to section 3.8, excess
Compensation Deferral Contributions and investment earnings
(including gains and losses) minus any Compensation Deferral
Contributions previously distributed for the Plan Year under
section 3.13.1(c) will be recharacterized as Compensation
Deduction Contributions. Such excess Compensation Deferral
Contributions and investment earning (including gains and
losses) that are not recharacterized will be refunded to the
Member in cash before the end of the next Plan Year. If
Compensation Deferral Contributions are refunded, Company
Matching Contributions attributable to such Compensation
Deferral Contributions and investment earnings on such Company
Matching Contributions (including gains and losses) will be
forfeited and used to reduce subsequent Company Matching
Contributions otherwise payable pursuant to section 3.4.
Investment earnings allocable to excess Compensation Deferral
Contributions for a Plan Year and for the period between the
end of such Plan Year and the date of the refund shall be
determined in accordance with proposed Treasury Regulation
section 1.401(k)-1(f)(4)(ii), as it may be revised from time
to time by the Secretary of the Treasury.
For Plan Years beginning before January 1, 1997, in the case
of a Highly Compensated Eligible Employee whose deferral
percentage is determined under the family aggregation rules of
Code Section 414(q)(6) as in effect on December 31, 1996, the
deferral percentage shall be reduced in accordance with the
leveling method described above and the excess Compensation
Deferral Contributions will be allocated among the family
members in proportion to the Compensation Deferral
Contributions of each family member that has been combined.
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<PAGE> 25
3.8 Testing Compensation Deduction Contributions and Company Matching
Contributions for Discrimination
(a) The actual contribution percentage for Highly Compensated
Eligible Employees for any Plan Year may not exceed the greater
of:
(1) One and one-quarter times the actual contribution percentage
for all other Eligible Employees for the Plan Year, or
(2) The lesser of (A) two percentage points plus the actual
contribution percentage for all other Eligible Employees for
the Plan Year, or (B) two times such percentage for all
other Eligible Employees for the Plan Year.
(b) The "actual contribution percentage" for each group of Eligible
Employees is the average of the contribution percentages for each
Eligible Employee in such group. The contribution percentage is
equal to sum of the Employee's Compensation Deduction
Contributions plus his Company Matching Contributions, divided by
his Total Earnings for the Plan Year. Eligible Employees for whom
there are no Compensation Deduction Contributions or Company
Matching Contributions will be included at zero percent in
determining the actual contribution percentage.
(c) Prior to the beginning of each Plan Year and periodically during
the year, the Plan Administrator shall test deferral elections
under section 3.13.1 and deduction authorizations under section
3.2 to determine whether or not the limits under this section
will be exceeded for the Plan Year. In performing this test, the
Plan Administrator will assume that deferrals and deductions for
current Eligible Employees will continue for the remainder of the
Plan Year at the rate currently elected by the Eligible Employee.
If elections made by Highly Compensated Eligible Employees would
(if not reduced) cause the actual contribution percentage for
such Employees to exceed the limitation in this section, the Plan
Administrator shall reduce the Compensation Deduction
Contributions elected by Highly Compensated Eligible Employees to
comply with the maximum permissible contribution percentage for
the Plan Year. Such reduction shall be effective as of the first
payroll payment date in the month following such determination
and shall be made as set forth below:
(1) Highly Compensated Eligible Employees electing Compensation
Deduction Contributions in an amount equal to 11% of
Compensation shall have their elections reduced to 10% of
Compensation. If, following this reduction, the maximum
permissible contribution percentage is still exceeded,
Highly Compensated Eligible Employees electing Compensation
Deduction Contributions in an amount equal to 10% of
Compensation (including any Highly Compensated Eligible
Employees whose elections were reduced under the preceding
sentence) shall have their elections reduced to 9% of
Compensation.
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<PAGE> 26
(2) The process set forth in paragraph (2) shall continue until
the average contribution percentage for the Highly
Compensated Eligible Employees does not exceed the maximum
permissible deferral percentage.
(d) At the end of the Plan Year, if Compensation Deduction
Contributions and Company Matching Contributions for Highly
Compensated Eligible Employees exceed the limitation described in
this section, the Plan Administrator shall determine the excess
Compensation Deduction Contributions and Company Matching
Contributions of each Highly Compensated Eligible Employee in
accordance with the following leveling method. The contribution
percentage of the Highly Compensated Eligible Employee with the
highest contribution percentage will be reduced to the extent
required to (i) enable the Plan to comply with this section, or
(ii) cause such Employee's contribution percentage to equal the
contribution percentage of the Highly Compensated Eligible
Employee with the next highest contribution percentage. This
procedure will be repeated until the Plan satisfies the
limitation in this section. Excess Compensation Deduction
Contributions and investment earnings (including gains and
losses) will be refunded to the Member in cash before the end of
the next Plan Year. In accordance with Treasury Regulations
Section 1.401(m)-1(e)(2)(ii), the amount of excess Compensation
Deduction Contributions and Company Matching Contributions shall
be determined only after first determining the excess
Compensation Deferral Contributions, if any, that are treated as
Compensation Deduction Contributions due to recharacterization
pursuant to section 3.7. If Compensation Deduction Contributions
are refunded to the Member, any Company Matching Contributions
attributable to such Compensation Deduction Contributions and
investment earnings (including gains and losses) shall be
forfeited and used to reduce Company Matching Contributions
otherwise payable pursuant to 3.4.
Investment earnings allocable to excess Compensation Deduction
Contributions and Company Matching Contributions for a Plan Year
and for the period between the end of such Plan Year and the date
of the refund shall be determined in accordance with proposed
Treasury Regulation section 1.401(m)-1(e)(3)(ii), as it may be
revised from time to time by the Secretary of the Treasury.
For Plan Years beginning before January 1, 1997, in the case of a
Highly Compensated Eligible Employee whose contribution
percentage is determined under the family aggregation rules of
Code Section 414(q)(6) as in effect on December 31, 1996, the
contribution percentage shall be reduced in accordance with the
leveling method described above and the excess Compensation
Deduction Contributions and Company Matching Contributions will
be allocated among the family members in proportion to the
contributions of each family member that have been combined.
3.9 Testing Aggregate Contributions for Discrimination
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<PAGE> 27
(a) The sum of the actual deferral percentage and the actual
contribution percentage for Highly Compensated Eligible Employees
for each Plan Year may not exceed the greater of (1) or (2)
below:
(1) The sum of (A) and (B) below:
(A) one and one-quarter times the greater of (i) the actual
deferral percentage for all other Eligible Employees
for the Plan Year, or (ii) the actual contribution
percentage for all other Eligible Employees for the
Plan Year, plus
(B) the lesser of (i) or (ii) below:
(i) Two percentage points plus the lesser of 1) the
actual deferral percentage for all other Eligible
Employees for the Plan Year or 2) the actual
contribution percentage for all other Eligible
Employees for the Plan Year.
(ii) Two times the lesser of 1) the actual deferral
percentage for all other Eligible Employees for
the Plan Year or 2) the actual contribution
percentage for all other Eligible Employees for
the Plan Year.
(2) The sum of (A) and (B) below:
(A) one and one-quarter times the lesser of (i) the actual
deferral percentage for all other Eligible Employees
for the Plan Year, or (ii) the actual contribution
percentage for all other Eligible Employees for the
Plan Year, plus
(B) the lesser of (i) or (ii) below:
(i) Two percentage points plus the greater of 1) the
actual deferral percentage for all other Eligible
Employees for the Plan Year or 2) the actual
contribution percentage for all other Eligible
Employees for the Plan Year.
(ii) Two times the greater of 1) the actual deferral
percentage for all other Eligible Employees for
the Plan Year or 2) the actual contribution
percentage for all other Eligible Employees for
the Plan Year.
(b) Prior to the beginning of each Plan Year and periodically during
the year, the Plan Administrator shall test deferral elections
under section 3.13.1 and deduction authorizations under section
3.2 to determine whether or not the limits under this section
will be exceeded for the Plan Year. If elections made by Highly
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<PAGE> 28
Compensated Eligible Employees would (if not reduced) cause the
sum of the actual deferral percentage and the actual contribution
percentage for such Employees to exceed the limitation in this
section, the Plan Administrator shall reduce the deduction
percentages elected by the Highly Compensated Eligible Employees
to comply with the limitations of this section. This reduction
will be accomplished by determining the maximum possible upper
limit on Compensation Deduction Contributions (as a percentage of
Compensation) which, when imposed as a limitation on the Highly
Compensated Eligible Employees, will cause the Plan to comply
with this section.
If the limitation described in this section is still exceeded
after reducing the upper limit on Compensation Deduction
Contributions for Highly Compensated Eligible Employees to zero,
the Plan Administrator shall also reduce Compensation Deferral
Contributions elected by Highly Compensated Eligible Employees.
This reduction will be accomplished by determining the maximum
possible upper limit on Compensation Deferral Contributions (as a
percentage of Compensation) which, when imposed as a limitation
on the Highly Compensated Eligible Employees, will cause the Plan
to comply with this section.
(c) At the end of the Plan Year, if the sum of the actual deferral
percentage and the actual contribution percentage for Highly
Compensated Eligible Employees exceeds the limitations described
in this section after the corrective distributions or forfeitures
are made under sections 3.7(d) and 3.8(d) the Plan Administrator
shall determine the maximum possible upper limit on Compensation
Deduction Contributions (as a percentage of Total Earnings)
which, when imposed as a limitation on the Highly Compensated
Eligible Employees, will cause the Plan to comply with this
section. Compensation Deduction Contributions in excess of this
limit and investment earnings on such contributions (including
gains and losses) will be refunded to the Member in cash. If the
limitation in this section is still exceeded after refunding all
Compensation Deduction Contributions for Highly Compensated
Eligible Employees, the Plan Administrator shall determine the
maximum possible upper limit on Compensation Deferral
Contributions (as a percentage of Compensation) which, when
imposed as a limitation on the Highly Compensated Eligible
Employees, will cause the Plan to comply with this section.
Compensation Deferral Contributions in excess of this limit and
investment earnings on such contributions (including gains and
losses) will be refunded to the Member in cash.
(d) If Compensation Deduction Contributions or Compensation Deferral
Contributions are refunded to the Member, any Company Matching
Contributions attributable to such refunded contributions and
investment earnings on such Company Matching Contributions will
be forfeited and used to reduce Company Matching Contributions
otherwise payable pursuant to 3.4.
3.10 Aggregation Rules for Discrimination Testing
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<PAGE> 29
(a) If this Plan is combined with one or more plans maintained by the
Company or an Affiliate or Subsidiary of the Company for purposes
of Code Section 401(a)(4) or 410(b) (other than section
410(b)(2)(A)(ii)), then this Plan and such other plans will be
considered a single plan for purposes of the discrimination
testing described in this article.
(b) If a Highly Compensated Eligible Employee is eligible to have
Compensation Deferral Contributions, Compensation Deduction
Contributions, or Company Matching Contributions allocated to his
account under two or more plans described in Code Section 401(k)
which are maintained by the Company or an Affiliate or Subsidiary
of the Company, the average deferral percentage and average
contribution percentage for such Highly Compensated Eligible
Employee shall be determined as if all such contributions were
made under a single plan.
(c) For Plan Years beginning before January 1, 1997, for purposes of
determining the actual deferral percentage and the actual
contribution percentage of a Highly Compensated Eligible Employee
who is (1) a five-percent owner or (2) one of the ten Employees
paid the greatest Total Earnings for the Plan Year, the
Compensation Deferral Contributions, Compensation Deduction
Contributions, Company Matching Contributions and Total Earnings
of such Employee shall include the Compensation Deferral
Contributions, Compensation Deduction Contributions, Company
Matching Contributions and Total Earnings of such Employee's
spouse, lineal ascendants or descendants, and the spouses of such
lineal ascendants or descendants except as otherwise provided
under Treasury regulations. Such family members shall be
disregarded in determining the actual deferral percentage and the
actual contribution percentage for Eligible Employees who are not
Highly Compensated Eligible Employees. In applying the maximum
dollar limitation on Total Earnings described in 1.41, such
limitation will be applied to the combined Total Earnings of the
Highly Compensated Eligible Employees described in this section,
the spouse of such Employee, and any lineal descendants of the
Employee who have not attained age 19 before the end of the Plan
Year.
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<PAGE> 30
Article 4
Investment of Contributions
4.1 Investment Election
At the time of enrollment in the Plan, the Member shall elect to have
his future Compensation Deferral Contributions and Compensation
Deduction Contributions invested in one or more of the Investment
Funds listed in section 5.2. The election shall specify the
percentage, if any, of such contributions to be allocated to each of
the Investment Funds. Members may allocate their contributions among
the Investment Funds in 5% increments, with the total of the elected
percentage increments equaling 100%. All Company Matching
Contributions shall be invested in the Boeing Company Stock Fund.
4.2 Changes in Investment Elections
A Member may change an election made pursuant to section 4.1
regarding his future Compensation Deferral Contributions and
Compensation Deduction Contributions once each calendar quarter. Such
change shall be effective as of the last business day of the
month in which the change of election is made.
4.3 Transfer of Investments
(a) A Member may elect once in each calendar quarter to change the
investment of his Accounts; provided, however, amounts may not be
transferred into or out of the Stable Value Fund before April 1,
1997, and amounts may not be transferred out of the Boeing
Company Stock Fund except as provided in subsection (b) below.
The election shall specify the percentage, if any, of the total
dollar balance of the Member's Accounts in the Investment Funds
(other than the Boeing Company Stock Fund and, for transfers
before April 1, 1997, the Stable Value Fund), determined pursuant
to section 6.4, to be allocated to each of the Investment Funds.
Members may allocate their balances among the Investment Funds in
5% increments, with the total of the elected percentage
increments equaling 100%. The transfers described in this section
shall be effected on the first day of the calendar month
immediately succeeding the month in which the Member elected to
make the transfer.
(b) In addition to the elections available under subsection (a), the
following elections shall be available to eligible Members:
(1) A Member who has not attained age 55 may elect once in each
calendar year, by giving the Plan Administrator notice of
such election, to have 10% of the total value of all Units
(or 100% of such total value, if $25.00 or less) in the
Boeing Company Stock Fund, which are attributable to the
Member's Compensation Deferral or Deduction Contributions,
transferred,
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<PAGE> 31
in increments of 5%, into any one or more of the Investment
Funds; provided, however, amounts may not be transferred
into the Stable Value Fund before April 1, 1997.
(2) A Member who has attained age 55, but not age 65, may elect
once in each calendar year, by giving the Plan Administrator
notice of such election, to have 50% of the total value of
all Units (or 100% of such total value, if $25.00 or less)
in the Boeing Company Stock Fund, which are attributable to
the Member's Compensation Deferral and Deduction
Contributions, transferred, in increments of 5%, into any
one or more of the Investment Funds; provided, however,
amounts may not be transferred into the Stable Value Fund
before April 1, 1997. A Member may not make an election
under this paragraph during the same calendar year in which
an election has been made under paragraph (1).
(3) A Member who is still an Employee and has attained age 65 or
a who has elected deferred distribution pursuant to section
7.2(b) may elect once each calendar quarter to have the
total value or a portion (in 5% increments) of the total
value of all Units in the Boeing Company Stock Fund,
transferred, in 5% increments, into any one or more of the
Investment Funds; provided, however, amounts may not be
transferred into the Stable Value Fund before April 1, 1997.
If, as a result of an election made pursuant to this
paragraph, 100% of the Member's interest in the Boeing
Company Stock Fund has been transferred to other Investment
Funds, all subsequent Company Matching Contributions, if
any, made to the Member's Company Contributions Account
after the effective date of said election shall be made in
cash and shall be invested in the same manner as the
Member's Compensation Deferral and Deduction Contributions.
If less than 100% of the Member's interest in the Boeing
Company Stock Fund has been so transferred, Company Matching
Contributions shall continue to be invested in the Boeing
Company Stock Fund.
(4) The effective date of an election under this subsection
shall be, and the value of all Units elected to be converted
hereunder shall be determined as of, the first Valuation
Date following the date on which such election is received
by the Plan Administrator. Such conversion shall be effected
by the conversion of such Units into cash and the transfer
of such cash to the designated Investment Fund(s). Such
transfer shall be effected by the Trustee on or before the
Valuation Date in the second month succeeding the month in
which the election was received.
(c) All elections under this section shall be irrevocable and shall
not affect the Member's right to exercise any other election
provided by the Plan.
- - 26 -
<PAGE> 32
(d) Upon making an election to transfer investments under this
section, the Member shall also either confirm or change his
election under section 4.1 or 4.2 with respect to future
Compensation Deferral Contributions, Compensation Deduction
Contributions, and Company Matching Contributions.
4.4 Independent Control
An election or change of election made pursuant to this section shall
be within the independent control of the Member. Neither the Trustee,
the Parent, nor the Company shall be liable for any loss which may
result from the exercise of such control by the Member. If, at any
time, no election under this section is in effect for any portion of
a Member's Accounts or contributions, such portion shall be invested
in the manner determined by the Plan Administrator on a uniform and
nondiscriminatory basis with respect to all Members. An election or
change of election deemed to have been made under this section shall
not be counted for purposes of the provisions of those sections which
impose restrictions on the frequency of changes.
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<PAGE> 33
Article 5
Trust Agreement
5.1 Establishment of Trust Fund
The property resulting from contributions made on behalf of all
Members, including contributions made by the Company, shall be held
in a Trust Fund by a Trustee or Trustees selected by the Plan
Administrator pursuant to a Trust Agreement entered into between such
Trustee and the Plan Administrator. References in the Plan to Trustee
shall be deemed to be applicable with equal force to co-Trustees or
successor Trustees who may be so designated.
5.2 Investment Funds
The Trust Agreement will provide that at the direction of the Plan
Administrator, the Trustee shall establish investment funds, each
with investment objectives determined by the Plan Administrator. The
Plan Administrator shall provide information to Members regarding the
Investment Funds available under the Plan, including a description of
the investment objectives and types of investments of each such fund.
As of the Effective Date, the following Investment Funds shall be
established:
(a) S&P 500 Index Fund. The assets of this fund are invested in the
same stocks and in substantially the same percentages as the
Standard and Poor's (S&P) 500 Index.
(b) Short-Term Income Fund. The assets of this fund are invested in a
variety of investment-grade instruments with maturities generally
between 1 and 365 days with an average maturity between 30 and 60
days. These instruments may include: United States government and
agency obligations, bank obligations, short-term corporate debt
instruments, repurchase agreements, unsecured loan
participations, and registered investment companies which invest
in such instruments.
(c) Stable Value Fund. The assets of this fund are invested in
investment contracts with one or more insurance companies which
guarantee the principal and interest thereon for a specified
period of time.
(d) Intermediate-Term Bond Fund. The assets of this fund are invested
in debt obligations issued by the United States government and
its agencies and instrumentalities. The maximum maturity of any
issue in the fund is five years.
(e) Boeing Company Stock Fund. The assets of this fund are invested
in cash and Common Stock of The Boeing Company.
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<PAGE> 34
5.3 Voting Rights
Each Member who has Common Stock of The Boeing Company held in the
Boeing Company Stock Fund allocated to his Accounts shall be entitled
to instruct the Trustee regarding the voting of the number of such
shares allocated to the Accounts (determined by the proportionate
share of the Member's investment in the Fund) at all stockholders'
meetings of the Company, determined as of the record date for such
stockholders' meetings. The Company will send, or cause to be sent,
to each Member who has Common Stock of the Company allocated to the
Member's Accounts a voting instruction form and the same proxy
solicitation material as is sent to stockholders generally.
5.4 Tender Offer
Not withstanding any other provisions of the Plan to the contrary:
(a) If any person shall make a tender offer (as defined in subsection
(c) below) to acquire (by purchase or exchange) Common Stock of
the Company, including shares of such Common Stock that are held
in the Company Stock Fund, the Trustee and the Company shall act
as follows:
(1) The Company shall ensure that the materials made available
to shareholders generally in connection with the tender
offer are provided to each Member who has shares of Common
Stock of the Company held in the Company Stock Fund
allocated to his Member's Accounts, and the response of the
Trustee as to whether to accept or reject the tender offer
with respect to the full and fractional shares of such
Common Stock that are so allocated shall be made in
accordance with the instructions of the Member given to the
Trustee on forms provided for that purpose.
(2) If the Trustee fails to receive clear and timely
instructions from a Member in a case where instructions have
been sought by the Trustee as provided in paragraph (1), the
Trustee shall have no discretion in such matter and shall
reject the tender offer with respect to the affected full
and fractional shares of Common Stock of the Company that
are allocated to the Accounts of such Members.
(b) With respect to full and fractional shares of Common Stock of the
Company that have been acquired by the Plan and are not yet
allocated (including any such Common Stock held in a suspense
account because it cannot be allocated currently due to the Code
Section 415 limits), the Trustee shall have no discretion in such
matter and shall reject the tender offer with respect to such
Common Stock.
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<PAGE> 35
(c) If any tender offer is accepted (in whole or in part) pursuant to
subsection (a), the Trustee shall have the power to transfer
Common Stock of the Company in order to effect such acceptance.
(d) For purposes of this section, "tender offer" shall mean any offer
to acquire Common Stock of the Company which is subject to either
section 13(e) or 14(d) of the Securities Exchange Act of 1934 and
which under applicable rules and regulations is required to be
the subject of a filing with the Securities and Exchange
Commission on either Schedule 13E-4 or Schedule 14D-9.
(e) The foregoing notwithstanding, nothing herein shall serve to
modify the related rules of the Trust Agreement or to expand the
duties of the Trustee unless and until the Trustee gives its
consent in the manner provided in the Trust Agreement.
5.5 Trust Agreement
The Plan Administrator has entered into a Trust Agreement with the
Trustee of the Trust Fund under which the Trustee will hold, invest
and distribute the assets of the Trust Fund as required by the Trust
Agreement. The Plan Administrator may remove the Trustee at any time
upon reasonable notice. The Trust Agreement shall provide that upon
the removal or resignation of the Trustee the assets shall be
transferred to another Trustee to be designated by the Plan
Administrator under the terms of the Trust Agreement satisfying the
conditions herein set forth.
5.6 Rights in the Trust Fund
No part of the Trust Fund shall be used for, or diverted to, purposes
other than the exclusive benefit of Members and their beneficiaries
under the Plan. No person shall have any interest in or right to any
part of the Trust Fund except as and to the extent expressly provided
in the Plan.
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<PAGE> 36
Article 6
Maintenance of Members' Accounts
6.1 Accounts Maintained
The Plan Administrator shall establish and maintain for each Member a
Compensation Deduction Account, a Compensation Deferral Account, and
a Company Contributions Account under each Investment Fund to
represent all amounts (if any), adjusted for gains or losses thereon,
which have been contributed by or on behalf of the Member as
Compensation Deduction Contributions, Compensation Deferral
Contributions, and Company Matching Contributions. Such separate
Accounts shall contain sufficient information to permit, with respect
to the Boeing Company Stock Fund, a determination of the number of
Common Units in such Member's Accounts, and with respect to the
Company Contributions Account, a determination of the portion which
is attributable to Compensation Deduction Contributions and the
portion which is attributable to Compensation Deferral Contributions.
6.2 Crediting Units to Accounts
(a) The interest of each Member in the Investment Funds shall be
represented by Units allocated to his Accounts. The value of each
Unit shall be $1.00 for the contributions deposited on behalf of
each Member prior to the first Valuation Date following the
effective date of the particular Fund.
(b) Each contribution on behalf of a Member to, or payment made to a
Member from, an Investment Fund shall result in a credit or
charge to the Account representing his interest in such Fund
under his Company Contributions Account, Compensation Deferral
Account, or Compensation Deduction Account, as applicable, and
shall be equal to the number of Units contributed or paid, as the
case may be.
(c) Dividends on Common Stock held in the Boeing Company Stock Fund
shall result in an appropriate increase in the Unit values of
said Fund.
6.3 Units Valuations
Except as otherwise provided in section 6.2, as of each Valuation
Date, an amount equal to the fair market value of all property in the
Investment Funds (other than dividends received which are
attributable to whole shares of Common Stock which were or are to be
transferred to Members subsequent to the record date for such
dividend) or under a contract, in the case of the Stable Value Fund,
shall be determined by the Trustee in such manner and on such basis
as it shall deem appropriate. Such amount shall be divided by the
total number of Units credited to all the Members in the Fund or
under the contract concerned on the particular Valuation Date,
thereby establishing a new Unit value. With respect to each
Investment Fund, each contribution or other payment thereto or
payment
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<PAGE> 37
therefrom after such Valuation Date and prior to or on the next
Valuation Date shall be converted to Units (in the case of the
Boeing Company Stock Fund to Common Units to the extent appropriate)
by dividing such new Unit value into the amount of such contribution
or payment, and the individual Account of each affected Member
representing his interest in the Investment Fund under his Company
Contributions Account, Compensation Deferral Account, and
Compensation Deduction Account, as applicable, shall be credited or
charged, as the case may be, with the portion of the number of Units
so attributable to such Member. The value of each contract under the
Stable Value Fund shall be equal to the principal amount held in such
fund plus accrued interest.
6.4 Balance of Member's Accounts
As of any specified date, the dollar balance of the Accounts of each
Member representing the interest of each Member in each Investment
Fund under his Company Contributions Account, Compensation Deferral
Account, and Compensation Deduction Account, as applicable, shall be
determined by multiplying the number of Units in his current balance
by the Unit value as of the last preceding Valuation Date in
accordance with the foregoing and adding to the resulting dollar
balance the amount of contributions made with respect to such Account
since the last valuation date for which Units have not yet been
credited. Only those contributions actually received by the Trustee
will be considered in making valuations and determining Account
balances.
6.5 Member Account Statements
After the end of each calendar year or more frequently as the Plan
Administrator shall determine, the Plan Administrator shall forward
by mail to each Member a statement, in such form as the Plan
Administrator shall determine, setting forth pertinent information
relative to the Member's Accounts. Such statement shall, for all
purposes, be deemed to have been accepted as correct unless the Plan
Administrator is notified to the contrary by mail within 60 days of
the mailing thereof to the Member.
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<PAGE> 38
Article 7
Retirement
7.1 Eligibility
This article will apply to any Member who terminates employment on or
after his 65th birthday or who retires before his 65th birthday
pursuant to a retirement plan sponsored by the Company or an
Affiliate or Subsidiary.
7.2 Lump Sum Distribution
(a) If the balance in the Member's Accounts is $3,500 or less, such
amount will be paid to the Member in a lump sum as soon as
practicable after his Termination of Employment in the manner
described in section 7.5.
(b) If the balance in the Member's Accounts exceeds $3,500, the
Member may elect (1) to receive such amount in a lump sum as soon
as practicable after his Termination of Employment in the manner
described in section 7.5 or (2) to defer any distribution from
his Accounts. If the Member elects to defer distribution, his
Accounts will be retained in the Plan and maintained and valued
in accordance with Article 6. The amount of such deferred
distribution(s) will be based on the value of the Member's
Accounts determined as of the Valuation Date preceding the
deferred distribution date. If the vested balance in the Member's
Accounts at the time of a distribution exceeds $3,500, then the
vested balance at any subsequent time shall be deemed to exceed
$3,500.
(c) A Member who has deferred receiving his distribution may elect to
receive the balance in his Accounts in a lump sum payable as soon
as practicable after the request for such distribution is
received by the Plan Administrator in the manner described in
section 7.5. Such request shall be in the manner prescribed by
the Plan Administrator for this purpose.
7.3 Installment Form of Payment
(a) If the balance in the Member's Accounts exceeds $3,500, the
Member may elect to have his benefit paid in annual installments
over 10 or fewer years; provided, however, that the Member may
not elect installments to be paid over a period which exceeds the
life expectancy of the Member or the combined life expectancies
of the Member and his Beneficiary determined as of the date
payments are to commence. The amount of such installments will be
the value of the Member's Accounts as of the Valuation Date
immediately preceding the installment payment, divided by the
number of installment payments remaining at the time of the
payment. The initial installment payment will be made as soon as
practicable after the effective date of the Member's election.
Subsequent installment payments during the elected installment
payment period will be made
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<PAGE> 39
as of the annual anniversary date of the initial installment
payment. If the vested balance in the Member's Accounts at the
time of a distribution exceeds $3,500, then the vested balance
at any subsequent time shall be deemed to exceed $3,500.
(b) A Member who is still an Employee on the required beginning date
described in section 7.4(b) and is, therefore, required to
commence distribution, shall receive his distribution in annual
installments over the period of the Member's life expectancy
(pursuant to Code Section 401(a)(9)). Upon the Member's
subsequent Termination of Employment, the Member shall be
entitled to elect either a lump sum distribution as provided in
section 7.2(b) or installment payments as provided in section
7.3(a) with respect to his remaining Account balance at that
time.
(c) Subsection (a) notwithstanding, if a Member who is no longer an
Employee has elected to defer receiving his distribution pursuant
to section 7.2(b) and the Plan Administrator has not received an
election concerning the form of distribution by the end of the
calendar year in which the Member attains age 70 1/2, the
distribution shall be made in the form of a lump sum distribution
payable no later than the required beginning date described in
section 7.4(b).
(d) If a Member who had previously elected and commenced receipt of
installment payments pursuant to subsection (a) returns to
employment with the Company or an Affiliate or Subsidiary (other
than as a member of the Company's flexible work force), such
installment payments shall be suspended until the Member's
subsequent retirement, at which time he shall be permitted again
to make the election described in this section.
(e) A Member who had previously elected and commenced receipt of
installment payments pursuant to subsection (a) shall be
permitted to revoke such election at a later date and accelerate
receipt of the distribution by electing distribution of the
remaining Account balances in a lump sum payment.
7.4 Limitations on Payment Date
(a) Payment will begin not later than the 60th day after the end of
the Plan Year in which:
(1) the Member's 65th birthday occurs, or
(2) the Member's Termination of Employment occurs, whichever is
later.
However, payment under this subsection will not begin until the
Member has filed a claim for such payment in the manner
prescribed by the Plan Administrator for that purpose.
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<PAGE> 40
(b) The required beginning date described in this subsection (b) will
apply regardless of any election made by the Member.
(1) Benefit payments for a Member who attained age 70 1/2 before
January 1, 1996, will begin January 1, 1997, whether or not
such Member's employment has terminated.
(2) Benefit payments for a Member who attained age 70 1/2 in
1996, will begin not later than April 1, 1997, whether or
not such Member's employment has terminated.
(3) Benefit payments for a Member who is not a 5% owner who
attains age 70 1/2 after December 31, 1996 will begin not
later than April 1 of the calendar year following the later
of (A) the calendar year in which the Member attains age 70
1/2, or (B) the calendar year in which the Member retires.
(4) Benefit payments for a Member who is a 5% owner will begin
not later than April 1 of the calendar year following the
later of (A) the calendar year in which the Member attained
age 70 1/2, or (B) the earlier of (iii) the calendar year
within which ends the Plan Year in which the Member becomes
a 5% owner, or (iv) the calendar year in which the Member
retires.
(5) A Member is treated as a 5% owner for purposes of this
subsection (b), if such Member is a 5% owner as defined in
Code Section 416(i) at any time during the Plan Year ending
within the calendar year in which such owner attains age 66
1/2 or any subsequent Plan Year. Once a Member is described
in this paragraph, distributions will continue to such
Member even if such Member ceases to own more than 5% of the
Company in a subsequent year.
(6) If a Member receives payments under this subsection (b),
such payments will be determined as if the Member's
retirement date were the date by which benefit payments must
be made under this subsection (b). If the Member continues
to have contributions made to his Accounts after this date,
the additional benefit for each Plan Year will be paid in a
lump sum after the following January 1.
7.5 Manner of Distribution
A Member's distribution(s) shall be made as follows:
(a) With respect to Investment Funds other than the Boeing Company
Stock Fund, the Member entitled to a lump sum distribution
pursuant to section 7.2 shall receive the full dollar balance of
his Accounts in such Funds. A Member electing
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installment payments pursuant to section 7.3 shall receive the
full dollar balance divided by the remaining number of
installment payments. Such balance shall be determined in the
manner provided in section 6.4, by reference to the value of
Units in such Member's Accounts on the Valuation Date coinciding
with or immediately preceding the date of the distribution.
(b) With respect to the Boeing Company Stock Fund, the full dollar
balance (for a Member electing installment payments pursuant to
section 7.3, the full dollar balance divided by the remaining
number of installment payments) in the Member's Accounts in the
fund as of the Valuation Date coinciding with or immediately
preceding the date of the distribution (determined in the manner
provided in section 6.4, separately by reference to the Common
Units in the Account on such Valuation Date and the respective
Unit values on such Valuation Date) shall be applied to Common
Stock to the extent attributable to Common Units. The Member
shall receive shares of Common Stock equal to the maximum number
of whole shares of Common Stock which could be purchased at the
closing price of Common Stock on the New York Stock Exchange--
Composite Transactions listing on such Valuation Date (or, in the
event such Valuation Date falls on a date on which there are no
trades of such stock reflected on such listing, the last trading
day preceding such Valuation Date) with the portion of such
dollar balance attributable to Common Units in the Account. The
Member shall be paid in cash the amount of such dollar balance
remaining after reduction by the value of the whole shares
previously described, based upon such closing price. In addition,
the Member shall be paid in cash the amount of any cash dividends
received since such Valuation Date attributable to the number of
whole shares of Common Stock distributed to him and the dollar
value of any contributions to the Company Stock Fund in respect
of such Member between such Valuation Date and the Termination of
Employment.
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Article 8
Termination or Death
8.1 Vesting
(a) A Member will always have a 100% vested interest in his
Compensation Deduction Account and Compensation Deferral Account.
(b) A Member who has completed at least five years of Vesting Service
will have a 100% vested interest in his Company Contributions
Account.
(c) No Units in a Member's Company Contributions Account shall vest
subsequent to the Member's termination of employment, except as
provided in section 8.7.
(d) Regardless of his years of Vesting Service, a Member will have a
100% vested interest in his Company Contributions Account upon
the occurrence of any of the following events:
(1) 65th birthday,
(2) retirement before his 65th birthday pursuant to a retirement
plan sponsored by the Company or an Affiliate or Subsidiary,
(3) termination of employment to enter into the Armed Forces of
the United States, except temporary service of 90 days or
less, or to accept employment with the Government of the
United States,
(4) determination of Total Disability,
(5) termination of employment because of inability to meet
Company medical standards,
(6) Layoff, or
(7) death.
8.2 Distribution Upon Termination
(a) This section will apply to any Member whose Termination of
Employment occurs before he has satisfied the eligibility
conditions for retirement as described in section 7.1 and who is
not an Employee of a divested component covered by section 8.5.
(b) Subject to the provisions of subsection (c), the Member shall
receive as a lump sum all amounts described in section 8.4 as
soon as practicable after his
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<PAGE> 43
Termination of Employment, but not later than 60 days after the end
of the Plan Year in which his Termination of Employment occurred.
(c) If the vested balance in the Member's Accounts exceeds $3,500, no
distribution of benefits under the Plan shall be made unless the
Plan Administrator has first obtained the Member's written
consent thereto. In the event such written consent is not
obtained, the vested portion of the Member's Accounts will be
retained by the Plan and will be maintained and valued in
accordance with Article 6. Distribution of the Member's Accounts
pursuant to this section shall be made following the date on
which the Plan Administrator obtains the Member's written consent
to the distribution or, if earlier, the required beginning date
described in section 7.4. The amount of distribution will be
determined as provided in section 8.4, except that the balance of
the Member's Accounts will be determined by reference to the Unit
Values on the Valuation Date coincident with or immediately
preceding the date of distribution. If the Member is reemployed
as an Employee prior to the date on which the Plan Administrator
receives his written consent to the distribution, the Member
shall not have any further right to receive a distribution of
benefits as a result of his prior termination of employment.
Under no circumstances shall a Member have any right to withdraw
a portion of the balance of his Accounts under Article 9 prior to
the deferred distribution date. If the vested balance in the
Member's Accounts at the time of a distribution exceeds $3,500,
then the vested balance at any subsequent time shall be deemed to
exceed $3,500.
8.3 Distribution Upon Death
(a) If a Member dies before payment of benefits begins, his
Beneficiary(ies) shall receive all amounts described in section
8.4 as soon as practicable after the Member's death, but not
later than 60 days after the end of the Plan Year in which the
Member's death occurred.
(b) If a Member dies after installment payments have commenced
pursuant to section 7.3, payments will continue to the
Beneficiary under the form of payment in effect at the time of
the Member's death.
8.4 Amount of Distribution
The amounts which a Member or Beneficiary will receive under section
8.2 or 8.3 shall be as follows:
(a) With respect to Investment Funds other than the Boeing Company
Stock Fund, the Member shall receive the vested dollar balance of
his Accounts in such Funds. Such balance shall be determined in
the manner provided in section 6.4, by reference to the value of
Units in such Member's Accounts on the Valuation Date coinciding
with or immediately preceding his Termination of Employment or,
in
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<PAGE> 44
the case of death or Total Disability, the date all documentation
necessary to effect the distribution is received by the Plan
Administrator.
(b) With respect to the Boeing Company Stock Fund, the vested dollar
balance in the Member's Accounts in the fund as of the Valuation
Date coinciding with or immediately preceding his Termination of
Employment or, in the case of death or Total Disability, the date
all documentation necessary to effect the distribution is
received by the Plan Administrator (determined in the manner
provided in section 6.4, separately by reference to the Common
Units in the Account on such Valuation Date and the respective
Unit values on such Valuation Date) shall be applied to Common
Stock to the extent attributable to Common Units. The Member
shall receive shares of Common Stock equal to the maximum number
of whole shares of Common Stock which could be purchased at the
closing price of Common Stock on the New York Stock
Exchange--Composite Transactions listing on such Valuation Date
(or, in the event such Valuation Date falls on a date on which
there are no trades of such stock reflected on such listing, the
last trading day preceding such Valuation Date) with the portion
of such vested dollar balance attributable to Common Units in the
Account. The Member shall be paid in cash the vested dollar
amount remaining in his Accounts invested in the Boeing Company
Stock Fund after reduction of each such Account by the value of
the whole shares previously described, based upon such closing
price. In addition, the Member shall be paid in cash the amount
of any cash dividends received since such Valuation Date
attributable to the number of whole shares of Common Stock
distributed to him and the dollar value of any contributions to
the Company Stock Fund in respect of such Member between such
Valuation Date and his Termination of Employment.
8.5 Employees of Divested Components
(a) This section shall apply to any Member who is employed by a
Divested Component immediately prior to its divestiture. For
purposes of this section, "Divested Component" means a component
of the Company or of an Affiliate or Subsidiary which ceases to
be a component of the Company or of an Affiliate or Subsidiary,
by reason of its divestiture or any action incident thereto.
(b) The Member shall be fully vested in his Company Contributions
Account, regardless of his years of Vesting Service.
(c) If the Member does not continue employment with the Divested
Component, his Accounts shall be distributed to him as provided
in Article 7 or section 8.2, whichever is applicable.
(d) If the Member continues employment with the Divested Component,
his Account shall be distributable as provided in Article 7 or
section 8.2, whichever is applicable, or shall be transferred by
the Trustee to the trustee of the other funding
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<PAGE> 45
agent of any appropriate plan established or otherwise maintained
by the acquiror of the Divested Component in such a manner as to
ensure that no portion of the Member's Accounts shall be subject
to forfeiture.
8.6 Forfeitures
(a) If a Member terminates employment and receives a distribution of
the vested portion of his Accounts pursuant to section 8.2, the
nonvested portion of his Company Contributions Account, if any,
will be forfeited at the time such distribution is made. Such
forfeiture will be applied as soon as practicable to reduce
Company Matching Contributions otherwise payable under 3.4.
(b) If a Member who has not completed five years of Vesting Service
becomes eligible to receive a distribution under section 8.2(c)
but fails to provide written consent to such distribution, the
nonvested portion of the Member's Company Contributions Account
shall be forfeited when the Member incurs five consecutive
One-Year Breaks in Service, unless the Member is reemployed as an
Employee prior to incurring five consecutive One-Year Breaks in
Service. . Such forfeiture will be applied as soon as practicable
to reduce Company Matching Contributions otherwise payable under
3.4.
8.7 Repayment After Reemployment
If a Member who has forfeited a nonvested balance is reemployed as an
Employee, the previously forfeited nonvested portion of his Company
Contributions Account will be
restored to the dollar amount on the date the Member received a
distribution under this article if the Member makes a cash repayment
to the Plan of the amounts which were distributed from his
Compensation Deduction and Compensation Deferral Accounts on or
before the earlier of:
(a) the last day of the month containing the fifth anniversary of his
Reemployment Date or
(b) the date the Member incurs five consecutive One-Year Breaks in
Service.
The Company Contributions Account balance will be restored by an
additional Company contribution. The amount of the Member's repayment
(which shall not reflect interest) will be credited to the Member's
Compensation Deduction Account. The repayment and the restored
Company Contributions Account will be allocated to the Investment
Funds in the same proportion as the Member's current Compensation
Deduction or Deferral Contributions. The nonvested portion of the
member's Company Contributions Account restored pursuant to this
section shall vest as provided in section 8.1.
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<PAGE> 46
Article 9
Withdrawals and Loans
9.1 Withdrawals from Accounts by Members under Age 59 1/2
(a) Subject to sections 9.4 and 9.5, a Member who has not yet
attained age 59 1/2 may elect while still employed to withdraw
certain amounts from his Accounts. As soon as practicable after
the Plan Administrator's receipt of such an election, there shall
be paid or transferred to such Member cash and, if applicable,
shares of Common Stock from his Accounts in the following order:
(1) first, from his Compensation Deduction Account;
(2) second, from that portion (if vested) of his Company
Contributions Account, which is attributable to Compensation
Deduction Contributions;
(3) third, from his Compensation Deferral Account.
(b) If a Member receives a withdrawal pursuant to section 9.1(a)(1),
the nonvested portion of his Company Contributions Account
associated with the amounts withdrawn shall be forfeited as
provided in section 9.3; and the withdrawal limitations of
section 9.3 shall apply. If a Member receives a withdrawal
pursuant to section 9.1(a)(2), his Compensation Deferral
Contributions, Compensation Deduction Contributions, and Company
Matching Contributions shall be suspended for a period of 26
weeks.
(c) A Member shall be permitted to withdraw from his Compensation
Deferral Account, as described in section 9.1(a)(3), only upon
providing adequate evidence of a hardship, as provided in section
9.5, and such a hardship withdrawal shall be governed by the
provisions of that section.
(d) The portion of the Member's Company Contributions Account which
is attributable to Compensation Deferral Contributions shall not
be available for withdrawal prior to the Member's attainment of
age 59 1/2.
(e) In determining withdrawal amounts, the value of available Units
in the Member's Accounts shall be determined as of the Valuation
Date coinciding with or immediately preceding the date of the
election.
9.2 Withdrawal from Accounts by Members Over Age 59 1/2
(a) A Member who has attained age 59 1/2 while still employed by the
Company may elect to withdraw any or all vested amounts from his
Accounts. A Member making such an election shall receive the
amount of cash or, if applicable, stock to be withdrawn from his
Accounts in the following order:
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<PAGE> 47
(1) first, from his Compensation Deduction Account;
(2) second, from his Compensation Deferral Account;
(3) third, from that portion (if vested) of his Company
Contributions Account, which is attributable to Compensation
Deduction Contributions; and
(4) fourth, from that portion (if vested) of his Company
Contributions Account, which is attributable to Compensation
Deferral Contributions.
(b) If a Member receives a withdrawal pursuant to section 9.2(a)(1),
the nonvested portion of his Company Contributions Account
associated with the amounts withdrawn shall be forfeited as
provided in section 9.3, but the withdrawal limitations of
section 9.3(d) shall not apply and his Compensation Deferral
Contributions, Compensation Deduction Contributions, and Company
Matching Contributions shall not be suspended.
(c) In determining the distribution amounts, the value of available
Units in the Member's Accounts shall be determined as of the
Valuation Date coinciding with or immediately preceding the date
of the election.
9.3 Forfeitures and Limitation on Withdrawals
(a) When applicable, any nonvested portion of a Member's Company
Contributions Account associated with a withdrawal from his
Compensation Deduction Account shall be forfeited at the time of
such withdrawal.
(1) The forfeitable Units, if any, of a Member's Company
Contributions Account which are attributable to Compensation
Deduction Contributions shall be determined by multiplying
the dollar balance of the Member's Company Contributions
Account which is attributable to Compensation Deduction
Contributions by a fraction, the numerator of which is equal
to the dollar value of the Compensation Deduction
Contributions which were withdrawn by the Member and the
denominator of which is the total dollar value of the
Member's Compensation Deduction Account (both such dollar
values to be determined as of the last Valuation Date
preceding the date of withdrawal).
(2) An Employee who has suffered a forfeiture described in this
subsection (a) may elect to restore his interest in the Plan
by making a cash repayment to the Plan in the amount and in
the manner described in subsections (b) and (c).
(b) In order to restore a forfeiture described in subsection (a), a
repayment of the amount withdrawn by the Employee from his
Compensation Deduction Account must be made within 60 months
after such withdrawal. For purposes of
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<PAGE> 48
this subsection (b), the amount distributed to an Employee means
the sum of the cash distributed to such Employee plus the dollar
value of the Common Stock distributed to such Employee,
determined at the closing price for Common Stock as reflected on
the New York Stock Exchange--Composite Transactions listing on
the Valuation Date applicable to the distribution or withdrawal
(or if such Valuation Date falls on a date on which, for any
reason, there are no trades of such stock reflected on such
listing, the last trading day preceding such Valuation Date).
Such amount shall not be increased to reflect interest.
(c) As soon as practicable after an Employee makes a repayment
described in subsection (b), there shall be credited to the
Employee's Company Contributions Account the dollar amount of any
amounts forfeited as a result of the withdrawals. The amount
repaid under this subsection (c) shall be credited to the
Employee's Compensation Deduction Account or, if applicable, his
Compensation Deferral Account and shall be allocated to the
Investment Funds in the same proportion as the Member's current
Compensation Deduction Contributions or Compensation Deferral
Contributions. The previously forfeited amount which is credited
under this subsection shall subsequently vest as provided in
section 8.1.
(d) Withdrawals shall be in a minimum amount of $100. A Member who
has not yet attained age 59 1/2 may not make a request for a
partial withdrawal within 26 weeks of any prior request for a
partial withdrawal; provided, however, that this limitation upon
the ability of such Member to make a partial withdrawal
(including hardship withdrawals pursuant to the provisions of
section 9.5) within 26 weeks of any prior request for a partial
withdrawal shall be waived by the Plan Administrator for the
six-month period immediately following any due declaration by the
President of the United States under applicable federal law that
a particular occurrence or situation constitutes a national
disaster condition, if such partial withdrawal is requested for a
reason associated with financial need of the Member resulting
from the effects of the said condition.
9.4 Allocation of Withdrawals Among Investment Funds
(a) Withdrawals pursuant to sections 9.1 and 9.2 shall be taken from
the Member's Accounts in the Investment Funds in a pro rata
fashion, based upon the relative size of such Accounts.
(b) Notwithstanding the above subsection (a), a Member may elect to
have any such withdrawal taken:
(1) first from the Member's Accounts in the Boeing Company Stock
Fund, with any additional withdrawal amount to be taken on a
pro rata basis from the Member's Accounts in the remaining
Investment Funds other than the Boeing Company Stock Fund;
or.
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<PAGE> 49
(2) first on a pro rata basis from the Member's Accounts in
Investment Funds other than the Boeing Company Stock Fund,
with any additional withdrawal amount to then be taken from
the Member's Accounts in the Boeing Company Stock Fund.
9.5 Hardship Withdrawals from Compensation Deferral Accounts
Subject to any restrictions the Plan Administrator may establish
pursuant to section 9.6:
(a) A Member who has not attained age 59 1/2 may request approval of
the Company to withdraw some or all of the Units of his
Compensation Deferral Account if the Member demonstrates that the
withdrawal is required as a result of a hardship and for payment
of any federal, state or local income taxes and penalties
reasonably anticipated to result from such withdrawal.
(1) For the purposes of this subsection (a) the term "hardship"
shall mean an immediate and heavy financial need of the
Member for which the amount required is not reasonably
available to the Member from other sources and which arises
for one of the following reasons:
(A) the purchase (excluding mortgage payments) or
construction of a principal residence for the Member,
or to prevent eviction from, or foreclosure on the
mortgage on, the Member's principal residence;
(B) the incurring of obligations for:
(i) tuition, related educational fees and room and
board expenses for post-secondary education for
the Member, his spouse or one or more of his
children or other dependents (as defined in
section 152 of the Code) to be incurred during the
12-month period immediately following the date of
his request for distribution; or
(ii) expenses not covered by insurance which either
have been previously incurred by the Member for,
or are necessary in order for the Member to
obtain, medical care (as described in section
213(d) of the Code) for himself, his spouse or one
or more of his dependents (as defined in section
152 of the Code);
(C) any other reason permitted under section
401(k)(2)(B)(i)(IV) of the Code and approved by the
Plan Administrator.
(2) Any determination of the existence of hardship, the
reasonable availability to the Member of funds from other
sources and the amount to be withdrawn on account of such
hardship shall be made by the Plan
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<PAGE> 50
Administrator on the basis of all relevant facts and
circumstances and in accordance with the foregoing rules, as
applied in a uniform and nondiscriminatory manner. In making
such determination, the Plan Administrator may, if it is
reasonable to do so in the light of all relevant and known
facts and circumstances, rely on the Member's representation
that the hardship cannot be relieved:
(A) through reimbursement or compensation by insurance or
otherwise;
(B) by reasonable liquidation of the Member's assets, to
the extent that such liquidation would not itself cause
an immediate and heavy financial need;
(C) by suspension of Compensation Deferral or Compensation
Deduction Contributions; or
(D) by other distributions (other than hardship
distributions) or loans (which meet the requirements of
section 72(p) of the Code) from the Plan and any other
plan maintained by an Affiliate or Subsidiary or by any
former employer or by borrowing from commercial sources
at reasonable commercial rates.
(b) Withdrawals pursuant to subsection (a) shall not result in the
forfeiture of a Member's interest in his Company Contributions
Account.
(c) Withdrawals pursuant to subsection (a) shall be taken from the
Member's Accounts in the Investment Funds in a pro rata fashion,
based upon the relative size of such Accounts.
(d) Notwithstanding the above subsection (c), a Member may elect to
have any such withdrawal taken:
(1) first from the Member's Accounts in the Boeing Company Stock
Fund, with any additional withdrawal amount to be taken on a
pro rata basis from the Member's Accounts in the remaining
Investment Funds other than the Boeing Company Stock Fund;
or
(2) first on a pro rata basis from the Member's Accounts in
Investment Funds other than the Boeing Company Stock Fund,
with any additional withdrawal amount to then be taken from
the Member's Accounts in the Boeing Company Stock Fund.
(e) Withdrawals (including those from the Boeing Company Stock Fund)
shall be in cash and for a minimum amount of $100. A Member may
not make a request for partial withdrawal within 26 weeks of any
prior request for partial withdrawal; provided, however, that
this limitation upon the ability of a Member to make a
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<PAGE> 51
partial withdrawal (including hardship withdrawals pursuant to
the provisions of subsection (a) of this Section ) within 26
weeks of any prior request for a partial withdrawal shall be
waived by the Plan Administrator for the six-month period
immediately following any due declaration by the President of the
United States under applicable federal law that a particular
occurrence or situation constitutes a national disaster
condition, if such partial withdrawal is requested for a reason
associated with financial need of the Member resulting from the
effects of such condition.
9.6 Loans
The Plan Administrator shall establish, and may from time to time
modify, procedures pursuant to which any Member or other "party in
interest" (as defined in ERISA section 3(14)) may apply for and
receive a loan from the Plan; provided, however, no loans shall be
made pursuant to this section before July 1, 1997. The amount of the
loan may not exceed the least of (a), (b), (c), or (d):
(a) the aggregate of the balances in the borrower's Compensation
Deferral and Compensation Deduction Accounts;
(b) an amount which, when combined with all outstanding loans to the
borrower from all other plans of all Affiliate or Subsidiary,
equals $50,000, reduced by the excess, if any, of
(1) the highest outstanding and unpaid balances of all prior
loans to the borrower from the Plan and such other plans
during the 12-month period immediately preceding the date on
which such loan is made, over
(2) the outstanding balance of any loan to the borrower from the
Plan or such other plans on the date on which the loan is
made;
(c) one-half of the aggregate of the fully vested and nonforfeitable
interests in the balances of the borrower's Accounts; or
(d) such amount, not exceeding the amounts described in (a) through
(c) above, as the Plan Administrator shall determine.
In addition to the above limitation, no such Member or other party in
interest shall be permitted to have more than a single loan
outstanding at any one time from this Plan and all other plans
sponsored by Affiliate or Subsidiary.
All such loans shall be made available to all eligible Members and
other parties in interest on a reasonably equivalent and
non-discriminatory basis and shall be governed by the provisions of
Appendix A, as such Appendix is from time to time constituted,
pursuant to determination of the Plan Administrator.
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<PAGE> 52
Article 10
Termination of Plan
10.1 Termination of Plan
The Company expects to continue the Plan indefinitely but reserves
the right to terminate the Plan in whole or in part upon giving prior
written notice to the Trustee and the Plan Administrator.
10.2 Procedures Upon Termination of Plan
Upon a complete or partial termination of the Plan or upon a complete
discontinuance of contributions to the Plan, the interests of the
Members in their Company Contributions Accounts (or, in the case of a
partial termination, the interests of those Members for whom the Plan
has terminated), shall be fully vested. Upon such termination, the
Plan Administrator shall perform a valuation of the Plan assets. Upon
completion of such valuation, the full balances in the Accounts of
Members (or, in the case of a partial termination, the Members for
whom the Plan has terminated), shall be distributed to them.
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<PAGE> 53
Article 11
Top Heavy Provisions
11.1 Top-Heavy Plan
Notwithstanding any other provision of this Plan to the contrary,
this article will apply if the Plan is a Top-Heavy Plan. The Plan
will be a Top-Heavy Plan if, as of the Determination Date, the
cumulative account balances of Key Employees exceeds 60% of the
cumulative account balances under the Plan of all Employees and Key
Employees (but excluding the account balances of former Key Employees
and individuals who have not performed any services for the Company
at any time during the five year period ending on the Determination
Date). This percentage will be computed in accordance with Code
Section 416(g).
In determining whether this Plan is a Top-Heavy Plan, all employers
that are aggregated under Code Sections 414(b), (c) and (m) shall be
treated as a single employer. In addition, all plans that are part of
the Aggregation Group shall be treated as a single plan. In
determining present values, mortality shall be based on the 1971
Group Annuity Mortality Table and the interest rate utilized shall be
five percent.
11.2 Definition of Terms
For purposes of this article only, the following terms shall have the
following meanings:
(a) "Aggregation Group" means the Required Aggregation Group or, at
the election of the Company, the Permissive Aggregation Group.
(b) "Compensation" for purposes of this article and 13.9 only means a
Member's wages, salaries, fees for professional service and other
amounts received (without regard to whether or not an amount is
paid in cash) for personal services actually rendered in the
course of employment with the Company to the extent that the
amounts are includible in gross income (including, but not
limited to, commissions paid salesmen, compensation for services
on the basis of a percentage of profits, commissions on insurance
premiums, tips, bonuses, fringe benefits, reimbursements, and
expense allowances). Compensation will not include the following:
(1) Company contributions to a plan of deferred compensation
which are not included in the Employee's gross income for
the taxable year in which contributed (before the
application of the Code Section 415 limitation to that plan)
or Company contributions to a simplified employee pension
plan to the extent such contributions are deductible by the
Employee, or any distributions from a plan of deferred
compensation;
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<PAGE> 54
(2) amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by the
Employee either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture;
(3) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option; and
(4) other amounts which receive special tax benefits, such as
premiums for group term life insurance (but only to the
extent that the premiums are not includible in the
Employee's gross income).
Compensation shall not exceed $150,000 for 1994. On January
1 of each calendar year in which the Secretary of the
Treasury prescribes a new dollar limit, this $150,000 limit
will automatically be adjusted to that new limit.
(c) "Determination Date" means the last day of the preceding Plan
Year. This date will also be the valuation date for determining
present values. For the first Plan Year, the Determination Date
will be the last day of that Plan Year.
(d) "Key Employee" means an Employee, a former Employee, or the
Beneficiary of a former Employee who, in the Plan Year containing
the Determination Date, or any of the four preceding Plan Years,
is:
(1) An officer of the Company having an annual compensation from
the Company greater than 50 percent of the amount in effect
under Code Section 415(b)(1)(A) for the calendar year in
which any such Plan Year ends. Not more than fifty Employees
(or, if fewer, the greater of three Employees or ten percent
of the Employees not excluded under Code Section 414(q)(8),
as in effect on December 31, 1996), including those
Employees included under paragraphs (2), (3) and (4) below,
shall be considered as officers for purposes of this
paragraph.
(2) One of the ten Employees having an annual Compensation from
the Company greater than the amount in effect under Code
Section 415(c)(1)(A) for the calendar year in which any such
Plan Year ends and owning (or considered as owning within
the meaning of Code Section 318) both more than a one-half
percent interest and the largest interests in the Company.
(3) A five-percent owner of the Company.
(4) A one-percent owner of the Company having an annual
Compensation from the Company of more than $150,000 for a
Plan Year.
(5) For purposes of this subsection (d), Compensation shall
include amounts contributed by the Company pursuant to a
salary reduction agreement
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<PAGE> 55
which are excludable from gross income under Code Sections
125, 402(e)(3), 402(h) or 403(b).
Whether an Employee is a five-percent owner or a one-percent
owner shall be determined in accordance with Code Section 416(i).
(e) "Non-key Employee" means an Employee (and any Beneficiary of
an Employee) who is not a Key Employee.
(f) "Permissive Aggregation Group" means the Required
Aggregation Group of plans plus any other plan or plans of
the Company which, when considered as a group with the
Required Aggregation Group, would continue to satisfy the
requirements of Code Sections 401(a)(4) and 410.
(g) "Required Aggregation Group" means:
(1) Each stock bonus, pension, or profit sharing plan of
the Company in which a Key Employee participates in the
Plan Year containing the Determination Date or any of
the four preceding Plan Years which is intended to
qualify under Code Section 401(a); and
(2) Each other such stock bonus, pension or profit sharing
plan of an employer which enables any plan in which a
Key Employee participates to meet the requirements of
Code Section 401(a)(4) or 410.
(h) "Top-Heavy Group" means the Aggregation Group if the sum of
(1) and (2) below exceeds sixty percent of a similar sum
determined for all Employees (excluding former Key Employees
and individuals who have not performed any services for the
Company at any time during the five year period ending on
the Determination Date):
(1) The present value of the cumulative accrued benefit for
Key Employees under all defined benefit plans included
in such group.
(2) The aggregate of the accounts of Key Employees under
all defined contribution plans included in such group.
In a Top-Heavy Group, all plans in the Required Aggregation
Group are Top-Heavy regardless of whether or not the
individual plans are Top-Heavy.
11.3 Modification of Vesting Schedule
If the Plan is Top-Heavy in a Plan Year, a Participant who is
credited with an Hour of Service in such Plan Year shall have his
vested interest determined in accordance with the following schedule
if it produces a higher vesting interest than the schedule in section
8.1.
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<PAGE> 56
<TABLE>
<CAPTION>
Vesting Service Vested Interest
--------------- ---------------
<S> <C>
Less than 2 years 0%
2 but less than 3 years 20%
3 but less than 4 years 40%
4 but less than 5 years 60%
5 or more years 100%
</TABLE>
A Participant's vested interest shall not be less than that
determined as of the last day of the last Plan Year in which the Plan
was a Top-Heavy Plan.
If the Plan ceases to be Top-Heavy, each Participant with three or
more years of Vesting Service (determined as of the first day of the
Plan Year in which the Plan ceases to be Top-Heavy) shall continue to
have his vested interest determined in accordance with this section.
11.4 Minimum Contribution
If the Plan is a Top-Heavy Plan in a Plan Year, a Member, other
than a Key Employee, who is employed in such Plan Year or who is on an
authorized period of absence shall be credited with a Company
contribution as of the last day of such Plan Year not less than 3% of
compensation or, if less, the largest percentage contribution made or
required to be made for any Key Employee. Amounts contributed as a
result of a salary reduction agreement shall be included in
determining the largest percentage contribution made or required to be
made for Key Employees.
The minimum contribution under this section shall not apply to an
Employee during any year in which he is entitled to a minimum benefit
under a Top-Heavy defined benefit pension plan maintained by the
Company.
11.5 Modification of Maximum Contribution
If the Plan is a Top-Heavy Plan in a Plan Year, 13.9(e) shall be
amended for such Plan Year by substitution of "1.0" for "1.25" where
such factor appears in Code Section 415(e).
11.6 Collective Bargaining Agreements
The provisions shall not apply to any Employee who is included in a
group of Employees covered by a collective bargaining agreement which
the Secretary of Labor finds to be a collective bargaining agreement
between employee representatives and one or more employers, including
the Company, if there is evidence that retirement benefits were the
subject of good faith bargaining between such employee
representatives and such employer or employers.
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<PAGE> 57
Article 12
Administration of Plan
12.1 Administration
(a) The Plan Administrator will serve as the named fiduciary pursuant
to ERISA. The Plan Administrator will have complete control of
the administration of the Plan, subject to the provisions hereof,
with all powers necessary to enable it to carry out its duties
properly in that respect. Not in limitation, but in amplification
of the foregoing, it will have the power to interpret the Plan
and to determine all questions that may arise hereunder,
including all questions relating to the eligibility of Employees
to participate in the Plan and the amount of benefit to which any
Member or Beneficiary may become entitled. Its decisions upon all
matters within the scope of its authority will be final.
(b) The Plan Administrator will establish rules and procedures to be
followed by Members and Beneficiaries in filing applications for
benefits, in furnishing and verifying proofs necessary to
determine age or marital status, and in any other matters
required to administer the Plan.
(c) The Plan Administrator will receive all applications for benefits
and will determine all facts necessary to establish the right of
the applicant to benefits under the provisions of the Plan and
the amount thereof.
(d) The Plan Administrator shall maintain accounts showing the fiscal
transactions of the Plan, and shall keep data required for the
valuation of the assets and liabilities of the Plan. The Plan
Administrator shall also prepare an annual report showing in
reasonable detail the assets and liabilities of the Plan and
giving a brief account of the operation of the Plan for each
year. The Plan Administrator shall make the annual report
available to each Member as required by law.
(e) The Plan Administrator may appoint such accountants, counsel,
consultants, actuaries and other persons the Plan Administrator
deems necessary or desirable in connection with the
administration of the Plan.
(f) The Plan Administrator will have the power to appoint or remove
any Investment Manager or Managers and to manage (including the
power to acquire and dispose of) any assets of the Plan.
(g) The Plan Administrator will have the power to appoint or remove
the Trustee.
(h) The Plan Administrator will be entitled to rely upon all tables,
valuations, certificates and reports furnished by the accountant,
consultant or actuary appointed by the Plan Administrator and
upon all opinions given by any counsel selected or approved by
it.
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<PAGE> 58
12.2 Records
All acts and determinations of the Plan Administrator and the Company
regarding this Plan will be duly recorded and all such records,
together with such other documents as may be necessary for the
administration of the Plan, will be preserved in the custody of the
Plan Administrator.
12.3 Payment of Expenses
Necessary and proper expenses of administration of the Plan shall be
paid from assets of the Trust Fund except for those expenses the
Company is required by law to pay or chooses to pay. Brokerage and
other fees incurred in the purchase or sale of securities will be
charged to the Investment Fund in which the transaction occurred.
Fees charged by the Trustee for supervision and administration of
Plan assets will be charged to the Investment Fund to which such fees
are properly allocable. Any expense charged by an insurance company
under the provision of an investment contract will be charged to the
Investment Fund which holds such contract.
12.4 Delegation of Authority
The administrative duties and responsibilities set forth in 12.1 may
be delegated by the Plan Administrator in whatever manner and extent
it chooses to such person or persons as it selects. It will notify
the Company and the Trustee of the authority conferred upon such
person or persons.
12.5 Information Available
Any Member of the Plan or any Beneficiary receiving benefits under
the Plan may examine copies of the Plan description, latest annual
report, any bargaining agreement, the Plan, the Trust Agreement or
any other instrument under which the Plan was established or is
operated. The Plan Administrator will maintain all of these items in
its office, or in such other place or places as it may designate from
time to time for examination during reasonable business hours. Upon
the written request of a Member or Beneficiary receiving benefits
under the Plan, the Plan Administrator will furnish a copy of any
item listed in this section. The Plan Administrator may make a
reasonable charge to the requesting person for the copy furnished.
12.6 Appeal Procedure
The Plan Administrator shall adopt procedures for the presentation of
claims for benefits and for the review of the denial of such claims
by the Plan Administrator. Detailed information regarding such
procedures may be obtained by writing to the Plan Administrator, The
Boeing Company, M.S. 11-59, P.O. Box 3707, Seattle, Washington 98124.
The decision of the Plan Administrator upon such review shall be
final, subject to appeal rights provided by law.
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<PAGE> 59
12.7 Fiduciary Capacity
Any person may serve in more than one fiduciary capacity with respect
to this Plan.
12.8 Committee Liability
The members of the Voluntary Investment Plan Committee shall use
ordinary care and diligence in the performance of their duties, but
no member will be personally liable by virtue of any contract,
agreement, or other instrument made or executed as a member of the
Committee, nor for any mistake of judgment made by him or by any
other member, nor for any loss unless resulting from willful
misconduct or failure to exercise good faith. No member of the
Committee will be liable for the neglect, omission, or wrongdoing of
any other member or of the agents or counsel of the Committee. The
Company shall indemnify each member of the Committee against, and
hold him harmless from any and all expenses and liabilities arising
out of any act or omission to act as a member of the Committee,
except such liabilities and expenses as are due to willful misconduct
or failure to exercise good faith.
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<PAGE> 60
Article 13
General Provisions
13.1 Amendment of Plan
(a) The Company may amend the Plan at any time. Such amendments may
include any remedial retroactive changes to comply with the
requirements of any law or regulation issued by any governmental
agency to which the Company is subject. The Company may delegate
to the Voluntary Investment Plan Committee, or to any member
thereof, its authority to amend the Plan. No amendment will
diminish or adversely affect any accrued interest or benefit of
Members or their Beneficiaries, except as may be required to
comply with the requirements of any law or regulation issued by
any governmental agency to which the Company is subject.
(b) If any amendment to the Plan changes the vesting schedule, each
Member who is an Employee and has completed three years of
Vesting Service may elect to remain under the vesting schedule of
the Plan prior to such amendment. If the Member does not make the
election within a reasonable time (as may be determined pursuant
to governmental regulations from time to time), he will be
subject to the vesting schedule under the Plan as amended. In no
event will the vesting percentage attained by a Member be reduced
below the percentage attained prior to such amendment.
(c) If any amendment to the Plan eliminates an optional form of
payment, a Member may continue to elect such form of payment with
respect to any Account balance earned prior to the effective date
of such amendment.
13.2 Qualification
Each contribution of the Company to the Trust Fund is conditioned
upon the initial qualification of the Plan under Code Section 401. If
the deduction of any such contribution is disallowed, it shall be
returned to the Company (to the extent disallowed), within one year
after the date of such disallowance.
13.3 Employment Status
Nothing contained in the Plan will be deemed to give any Employee the
right to be retained in the employ of the Company or to interfere
with the rights of the Company to discharge any Employee at any time.
13.4 Mergers or Consolidations
If this Plan merges or consolidates with, or transfers its assets or
liabilities to any other qualified plan of deferred compensation, no
Member will, as a result of such merger, consolidation or transfer,
be entitled to a benefit on the day following such event which
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<PAGE> 61
is less than the benefit to which he is entitled on the day preceding
such event. For purposes of this section, the benefit to which a
Member is entitled shall be calculated based upon the assumption that
a Plan termination and distribution of assets occurred on the day as
of which the Member's entitlement is being determined.
13.5 Provision Against Anticipation
No benefit under the Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, charge or other legal process, and any attempt to do so
shall be void. The preceding sentence will not apply to a qualified
domestic relations order pursuant to Code Section 414(p).
13.6 Facility of Payment
If any Member or Beneficiary is physically or mentally incapable of
giving a valid receipt for any payment due him and no legal
representative has been appointed for him, the Plan Administrator may
direct the Trustee to make such payment to any person or institution
maintaining such Member or Beneficiary and the release of such person
or institution will be a valid and complete discharge for such
payment. Any final payment or distribution of any Member, to the
legal representative of the Member or to any Beneficiaries of such
Member in accordance with the provisions herein will be in full
satisfaction of all claims against the Plan, the Plan Administrator,
the Trustee, the Company and the Parent arising under or by virtue of
the Plan.
13.7 Construction
The validity of the Plan or any of its provisions will be determined
under and will be construed according to federal law and, to the
extent permissible, according to the laws of the state of Washington.
If any provision of the Plan is held illegal or invalid for any
reason, such determination will not affect the remaining provisions
of the Plan and the Plan will be construed and enforced as if said
illegal or invalid provision had never been included.
13.8 Legal Actions
The Plan Administrator will be the necessary party to any action or
proceeding involving the assets held with respect to the Plan or the
administration thereof. No Employee, Member, former Member or their
Beneficiaries, or any other person having or claiming to have an
interest in the Plan will be entitled to any notice or process. Any
final judgment that may be entered in any such action or proceeding
will be binding and conclusive on all persons having or claiming to
have any interest in the Plan.
13.9 Limitations on Contributions
(a) For purposes of this section only, the following definitions
shall apply:
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<PAGE> 62
(1) "Additions" means the sum of (A) Company Matching
Contributions, (B) Elective Contributions, (C) forfeitures,
if any, allocated to the Member's Accounts, (D) amounts
allocated after March 31, 1984, to an individual medical
account (defined in Code Section 415(l)(2)) which is part of
a pension or annuity plan maintained by the Company
(provided that the 25% limitation in 13.9(b) shall not
apply), and (E) amounts allocated after December 31, 1985,
to the separate account of a key employee (as defined in
Code Section 419A(d)(3)) under a welfare benefit fund (as
defined in Code Section 419(e)) maintained by the Company.
(2) "Compensation" has the meaning defined in 11.2(b).
(3) "Limitation Year" means a Plan Year.
(b) The total Additions made to the Accounts of a Member for any Plan
Year shall not exceed the lesser of 25% of the Member's
Compensation or the greater of $30,000 or one-quarter of the
dollar limitation in effect under Code Section 415(b)(1)(A) as
adjusted for cost of living increases by the Secretary of the
Treasury.
(c) If Additions exceed the limitation for any Plan Year as a result
of the allocation of forfeitures, a reasonable error in
estimating a Member's annual compensation, or under such facts
and circumstances as the Commissioner may allow, such excess
Additions will be applied in accordance with subdivisions (ii)
and (iv) of Treasury Regulation section 1.415-6(b)(6).
(d) All defined contribution plans of the Company, terminated or not,
will be considered as one plan for purposes of the limitations
specified under this section, and all entities of a controlled
group of entities will be considered as one employer.
(e) In any case in which a person is a Member of both a defined
benefit plan and a defined contribution plan maintained by the
Company or any Affiliate or Subsidiary of the Company, then the
provisions of Code Section 415(e) shall apply. If for any Plan
Year, the limits described in Code Section 415(e) are exceeded,
the projected annual retirement income benefit under the defined
benefit plan shall be limited, to the extent necessary, to reduce
the defined benefit plan fraction (as defined in Code Section
415(e)(2)) so that the sum of the defined contribution plan
fraction (as defined in Code Section 415(e)(3)) and the defined
benefit plan fraction does not exceed 1.0. Notwithstanding the
foregoing, if the defined benefit plan of the Company or
Affiliate or Subsidiary specifically provides that the defined
benefit plan fraction is not reduced, the Member's Additions will
be adjusted as described 13.9(c) to the extent necessary, to
reduce the defined contribution plan fraction so that the sum of
the defined contribution plan fraction and the defined benefit
plan fraction does not exceed 1.0.
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<PAGE> 63
13.10 Qualified Domestic Relations Order
(a) The Plan Administrator shall promptly notify a Member and any
other alternate payee of the receipt of a domestic relations
order and of the Plan's procedure for determining whether the
order qualifies as a Qualified Domestic Relations Order as
defined in Code Section 414(p)(1)(A). Within a reasonable period
of time after the receipt of such order, the Plan Administrator
shall determine whether such order qualifies as a Qualified
Domestic Relations Order and shall notify the Member and each
alternate payee of such determination.
(b) During any period in which the issue of qualification of a
domestic relations order is being determined, the Plan
Administrator shall segregate in a separate account in the Plan
the amounts, if any, which would have been payable to the
alternate payee during such period if the order had been
determined to be a Qualified Domestic Relations Order. If the
domestic relations order is determined to be qualified, the Plan
Administrator shall pay the balance of such account to the person
or persons entitled thereto. If within eighteen months it is
determined that the domestic relations order is not qualified, or
if the issue is not resolved, then, as of the Valuation Date next
following the close of such period, the balance in the segregated
account shall either be credited to the account of the Member,
or, if the Member has terminated employment, distributed to the
Member, or, in the event of the Member's death, to his
Beneficiary. Any subsequent determination that the domestic
relations order is a Qualified Domestic Relations Order shall
apply prospectively only.
(c) If a domestic relations order is determined to be qualified, then
the Plan Administrator shall make distribution to the alternate
payee as required by that Qualified Domestic Relations Order. No
payment shall be made under this section which is in excess of
the balance of a Member's Accounts as determined pursuant to the
provisions of the Plan.
(d) In the event that the Plan Administrator shall determine that a
distribution or a withdrawal of a Member's Account pursuant to
Article 7, Article 8, Article 9, or Article 10 has been delayed
as a result of a pending or threatened domestic relations order,
the Valuation Date immediately preceding the date on which such
withdrawal or distribution is approved by the Plan Administrator
pursuant to such order shall be substituted for the Valuation
Date which would otherwise be applicable to such distribution or
withdrawal.
13.11 Pronouns
Masculine pronouns as used in this Plan will include both masculine
and feminine gender unless the context indicates otherwise.
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<PAGE> 64
13.12 Eligible Rollover Distribution
(a) Notwithstanding any provision of the Plan to the contrary that
would otherwise limit a distributee's election under this
section, a distributee may elect, at the time and in the manner
prescribed by the Plan Administrator, to have any portion of an
eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct
rollover. Prior to effecting such transfer, the Plan
Administrator shall required evidence reasonably satisfactory to
him that the entity to which such transfer is to be made is, in
fact, and eligible retirement plan and such plan may receive the
distribution in the forms required under Article 7, Article 8, or
Article 9, as applicable.
(b) Definitions.
(1) Eligible rollover distribution: An eligible rollover
distribution is any distribution of all or any portion of
the balance to the credit of the distributee, except that an
eligible rollover distribution does not include: any
distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made
for the life (or life expectancy) of the distributee or the
joint lives (or joint life expectancies) of the distributee
and the distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to
the extent such distribution is required under Code Section
401(a)(9); and the portion of any distribution that is not
includible in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to
employer securities).
(2) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in Code Section
408(a), an individual retirement annuity described in Code
Section 408(b), an annuity plan described in Code Section
403(a), or a qualified trust described in Code Section
401(a), that accepts the distributee's eligible rollover
distribution in the forms required under Article 7, Article
8, or Article 9, as applicable. However, in the case of an
eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account
or individual retirement annuity.
(3) Distributee: A distributee includes an employee or former
employee. In addition, the employee's or former employee's
surviving spouse and the employee's or former employee's
spouse or former spouse who is the alternate payee under a
qualified domestic relations order, as defined in Code
Section 414(p), are distributees with regard to the interest
of the spouse or former spouse.
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<PAGE> 65
(4) Direct rollover: A direct rollover is a payment by the plan
to the eligible retirement plan specified by the
distributee.
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<PAGE> 66
Appendix A
Procedures, Terms, and Conditions of Loans
ELIGIBILITY FOR LOANS. The individuals eligible to obtain loans from the Plan
("Borrowers") are limited to:
(1) Employees, and
(2) non-Employees who are "parties in interest" (as defined in section
3(14) of ERISA)
who have Plan Account balances. An Employee who wishes to obtain a loan must be
employed on an active payroll of the Company or an Affiliate or Subsidiary at
the time of the loan application. A party in interest who is not an Employee
will be eligible to obtain a loan only if an agreement can be provided by the
party's current employer to deduct and remit the required loan repayments to the
Plan.
LIMITATION ON NUMBER AND MINIMUM AMOUNT OF LOANS. Only one loan to a Borrower is
permitted to be outstanding from all Company sponsored savings plans at any one
time. Any Borrower who has an outstanding loan from the Plan will be required to
repay that loan in full before applying for another loan. Each loan which is
approved must be for a minimum of $1,000.
MAXIMUM AMOUNT OF LOAN. The amount which a Borrower will be permitted to borrow
from the Plan is based on the aggregate value of the Borrower's Accounts,
determined in accordance with section 6.4 of the Plan, and may not exceed the
least of the amounts described in subsections (a), (b) and (c) of section 9.6 of
the Plan. The maximum amount of any loan will be further limited to ensure that,
after applying the appropriate interest rate and taking into account all
applicable deductions, the resulting periodic repayments will not exceed the
Borrower's net earnings. The deductions referred to in the preceding sentence
include statutory withholdings, deductions for employee benefits and all pre-tax
contributions to the Plan, but exclude credit union, savings bond, charitable
contribution and other similar deductions.
LOAN APPLICATIONS. Loan applications by prospective Borrowers will be made via
telephone to the Plan Administrator or such third party administrator as may be
designated by the Plan Administrator (either of whom is hereafter referred to as
the "Loan Administrator"). The Loan Administrator will then review the
telephonic application and determine eligibility for the loan. If the loan is
approved, the Loan Administrator will prepare and forward to the Borrower a
letter notifying the Borrower of the approval, together with a Truth in Lending
Statement and a check for the loan amount, all in the form approved by the Plan
Administrator. The Borrower's endorsement of the loan check will be considered
to be the Borrower's agreement to the terms of the loan. Failure by the Borrower
to endorse the check within 30 days after the date of the check will be deemed
to be a withdrawal by the Borrower of the loan application.
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<PAGE> 67
SOURCE OF LOAN FUNDS. Each loan will be funded by withdrawing the required
amounts from the Plan Account(s) of the Borrower in the following order:
First -- from the Borrower's Compensation Deferral Account;
Second -- from the Borrower's Compensation Deduction Account.
Subject to the provisions of the following paragraph, the loan amount will be
funded by the Borrower's Investment Funds in the applicable Accounts, in a pro
rata fashion, based upon the relative size of the balance of each such Fund in
the Accounts.
Alternatively, a Borrower may elect to have the loan funded first from the
Borrower's interest in Stock Fund B, with any additional funding to be on a pro
rata basis from the remaining Investment Funds.
Any pro rata loan funding from the Borrower's interest in the Guaranteed Return
Fund will be taken in reverse sequence by accessing the Fund's contracts on a
last-in first-out basis.
To the extent a loan is made against the Borrower's Stock Fund B Account, the
Borrower will receive cash in lieu of shares of Common Stock. The Trustee will
not be permitted to sell shares of Common Stock in order to provide the cash
with which to finance loan applications.
If, at any time, the Trustee does not have sufficient cash on hand to finance
all outstanding loan applications, processing of each application for which
sufficient cash is not available will be deferred until sufficient cash becomes
available to process such loans on a first-come, first-serve basis.
DETERMINATION OF LOAN INTEREST RATE. The interest rate to be charged for loans
will be 1% over the prime rate, which is defined for this Appendix as the base
rate on corporate loans posted by at least 75% of the largest 30 U.S. banks, as
such rate is identified in the edition of The Wall Street Journal published on
the last business day of the month prior to the approval of a loan.
TERM OF LOANS. Loans will be permitted for terms of 12, 24, 36, 48 or 60 months
for loans other than those for the purpose of purchasing a primary residence,
which will be permitted for a term of 120 months.
REPAYMENTS. Loan repayments by Employees will be deducted from the Employee's
pay check each pay period. If a pay check is insufficient to cover the full
amount of the loan repayment, no deduction will be made, and the repayment will
be deducted from the Employee's next pay check. Loan repayment schedules for
Borrowers who are not Employees will be developed on an individual basis, but
will parallel as closely as possible the loan repayment schedules for Employees.
PREPAYMENTS. The full unpaid balance of a loan may be prepaid at any time by a
Borrower. Partial prepayments in excess of scheduled payroll deductions will not
be accepted. No
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<PAGE> 68
prepayments will be accepted within 12 months after the date of the loan, unless
the Borrower is an Employee and terminates employment within such 12 month
period.
MISSED PAYMENTS. If any payment is not made, interest will continue to accrue on
such missed payment and subsequent payments will be applied first to accrued and
unpaid interest on the missed payment and then to principal. A notice will be
mailed to the last known address of the Borrower stating that if three
consecutive months of payments are missed, the loan will be considered to be in
default.
TERMINATION OF EMPLOYMENT. If a Borrower who is an Employee terminates
employment or is on an unpaid leave of absence, or if a Borrower who is not an
Employee is no longer able to repay a loan through payroll deductions, the
Borrower may continue to make loan repayments by personal check. Such repayments
to the Plan will be made through the Loan Administrator at an address to be
provided to the Borrower by the Loan Administrator.
DEFAULT. A loan will be considered to be in default after three consecutive
months of payments have been missed during the term of the loan or when a
Borrower revokes a payroll deduction authorization. In the event of such a
default, a distribution of the loan amount, including both unpaid principal and
accrued but unpaid interest, will be deemed to have occurred (as described in
section 1.401(k)-1(d)(6)(ii) of the Treasury Regulations) and an information
return reflecting the tax consequences, if any, to the Borrower will be issued.
Upon the occurrence of an event permitting actual distribution of the Borrower's
Account pursuant to the provisions of Code Section 401(k) (whether distribution
of the Borrower's entire Plan Account will actually be made or will be deferred
pursuant to applicable provisions of the Plan), the unpaid balance of a
defaulted loan will be charged off against the Borrower's Account. If no
distribution event has occurred, which would otherwise permit payment to the
Borrower under Code Section 401(k), the unpaid balance of the loan will be
retained in the Account until such time as payment would be permitted under that
Code Section , at which time the unpaid balance of the loan, including any
accrued and unpaid interest, will be charged off against the Borrower's Account.
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Exhibit 99.3
APPENDIX A
ROCKWELL INTERNATIONAL CORPORATION
SAVINGS PLAN
FOR CERTAIN REPRESENTED HOURLY EMPLOYEES
PREAMBLE
The Plan and Effective Date
The Plan hereinafter described constitutes a savings plan in the form of a
qualified cash or deferred arrangement under section 401(k) of the Internal
Revenue Code of 1986, as amended, for employees on the hourly payrolls of the
Company who are covered by collective bargaining agreements that provide for
participation in the Plan. The effective date of the Plan is November 30, 1985.
The Plan as restated herein is effective January 1, 1993. The provisions of the
Plan as in effect from time to time prior to January 1, 1993, apply to the
related periods prior to such date for all purposes, except as specifically
provided in the Plan.
<PAGE> 2
ARTICLE I - DEFINITIONS
1.010 "Account" or "Compensation Deferral Account" means the Participant's
account maintained under the Plan.
1.020 "Administrative Committee" means the committee appointed by the Plan
Committee and assigned power and authority under Sections 2.030 and
5.010.
1.030 "Affiliated Company" means Rockwell International Corporation and:
(1) any corporation incorporated under the laws of one of the
United States of America of which Rockwell International
Corporation, a Delaware corporation, owns, directly or
indirectly, eighty percent (80%) or more of the combined
voting power of all classes of stock or eighty percent (80%)
or more of the total value of the shares of all classes of
stock (all within the meaning of section 1563 of the Code);
(2) any partnership or other business entity organized under such
laws, of which Rockwell International Corporation owns,
directly or indirectly, eighty percent (80%) or more of the
voting power or eighty percent (80%) or more of the total
value (all within the meaning of section 414(c) of the Code);
and
(3) any other company deemed to be an Affiliated Company by the
Board of Directors of Rockwell International Corporation.
1.040 "Beneficiary" means the one or more persons or trusts designated by a
Participant pursuant to Article VII of the Plan; provided, however,
that notwithstanding the foregoing and any provision to the contrary in
Article VII, in the case of a Participant who has been married for a
one (1) year period within the meaning of section 417(d) of the Code
who dies prior to complete distribution of his Account pursuant to
Section 7.010 of the Plan, the Beneficiary shall be deemed to be the
Participant's spouse regardless of any contrary designation unless the
Participant has filed with the Plan Administrator a written designation
of a person or persons other than such spouse as a Beneficiary or
Beneficiaries with respect to all or any part of the Participant's
Accounts and such written designation is accompanied by the consent of
the Participant's spouse or it is established to the satisfaction of
the Plan Administrator that such consent cannot be obtained because
there is no spouse or the spouse cannot be located or because of other
circumstances permitted under section 417(a)(2) of the Code. Such
consent shall be in writing on a form furnished to the Participant by
the Plan Administrator and shall acknowledge the effect of such
consent. The spouse's signature must be witnessed by a notary public
not an Employee of the Company. Such consent shall apply only to the
signatory spouse. In the event the Participant has a new spouse to whom
he has been married for a one (1) year period within the meaning of
section 417(d) of the Code, the written designation shall be void, and
such new spouse shall be deemed to be the Participant's Beneficiary
until such time as the Participant makes a written designation
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of a person or persons other than such spouse in accordance with the
provisions of this Section 1.040.
1.050 "Board of Directors" means the Board of Directors of Rockwell
International Corporation; provided that any action of the Board of
Directors contemplated by Sections 1.030, 1.070, and 1.120, may be
taken by the Board of Directors or by any officer or officers of
Rockwell International Corporation authorized by the Board of Directors
to take such action.
1.060 "Class A Stock" means the Class A Common Stock of Rockwell
International Corporation.
1.065 "Code" means the Internal Revenue Code of 1986, as it may be amended
from time to time. References to sections of the Code are to such
sections as of January 1, 1987, and shall include any subsequent
modifications or successor sections thereto.
1.070 "Common Stock" means the common stock of Rockwell International
Corporation other than the Class A Stock.
1.080 "Company" means Rockwell International Corporation and any other entity
to which the Board of Directors has extended the benefits of the Plan.
1.090 "Compensation" means regular, straight-time base pay received by a
Participant from the Company with respect to all hourly-rate employment
during a calendar week. The term Compensation shall not include:
(a) any premium pay received for overtime hours, night shift or
seven-day premiums;
(b) payments under patent contracts, employee suggestion programs,
tuition refund payments, travel and/or relocation allowances;
(c) grievance payments for lost earning (except back pay awarded
in cases of reinstatement to a payroll) or any other special
payments, fees or allowances; and
(d) amounts in excess of $200,000 ($150,000, effective as of
January 1, 1994) or such other sum as may be established for
any year pursuant to section 401(a)(17) of the Code;
provided, however, that the rules of section 414(q)(6) of the Code
(which section is incorporated herein by reference) shall apply in
determining a Participant's Compensation, except that the term "family"
shall only include the Participant's spouse and any lineal descendants
of the Participant who have not attained age 19 before the close of the
applicable year
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1.100 "Compensation Deferral Contributions" means the amounts contributed to
the Plan on behalf of Participants on and after November 30, 1985
pursuant to Participants' elections under Section 2.020(a).
1.110 "Divested Component" means a component of the Company or of an
Affiliated Company which ceases to be a component of the Company or of
an Affiliated Company, by reason of its divestiture, or any action
taken incident thereto.
1.120 "Effective Date" with respect to any hourly payroll described in
Section 1.130 means the date set forth in Appendix A with respect to
such payroll.
1.130 "Eligible Employee" means any Employee employed on an hourly payroll in
a component of the Company or of an Affiliated Company to which the
benefits of the Plan have been extended by the Board of Directors
pursuant to a collective bargaining agreement which provides for
participation in the Plan. Such payrolls and the effective dates on
which the benefits of the Plan are extended to such payrolls are listed
on Appendix A to the Plan.
1.135 "Eligible Retirement Plan" means:
(a) an individual retirement account described in section 408(a)
of the Code,
(b) an individual retirement annuity described in section 408(b)
of the Code,
(c) an annuity plan described in section 403(a) of the Code, or
(d) a qualified plan (which is a defined contribution plan)
described in section 401(a) of the Code;
which accepts an individual's eligible rollover distributions;
provided, however, that in the case of an eligible rollover
distribution to a Participant's surviving Spouse, only an individual
retirement account or individual retirement annuity described in (a)
and (b) above shall be deemed to be an Eligible Retirement Plan.
1.140 "Employee" means any person who is employed by the Company or by an
Affiliated Company, including an Eligible Employee. Employee shall to
the extent permitted by section 406 of the Code, be deemed to include
any United States citizen regularly employed by a foreign subsidiary or
affiliate of the Company.
1.150 "Equity Fund" means the fund established by the Trustee pursuant to
Section 8.020(a).
1.160 "ERISA" means the Employee Retirement Income Security Act of 1974 as it
may be amended from time to time.
1.170 "Guaranteed Investment Fund" means the fund established by the Trustee
pursuant to Section 8.020(b).
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1.180 "Money Market Fund" means the fund established by the Trustee pursuant
to Section 8.020(c).
1.190 "Named Fiduciary" means the Plan Committee, the Plan Administrator, the
Administrative Committee and the Trustee(s).
1.200 "Participant" means a person who has elected to participate in the Plan
in accordance with Article II; provided, however, that such term shall
include a person who no longer has an effective election under Article
II only so long as he retains, under the provisions of the Plan, a
nonforfeited interest in an Account under the Plan.
1.210 "Plan" means the Rockwell International Corporation Savings Plan for
Certain Represented Hourly Employees as it may be amended from time to
time.
1.220 "Plan Administrator" means the person so designated by name or
corporate office by resolution of the Board of Directors.
1.230 "Plan Committee" means the Rockwell International Corporation Employee
Benefit Plan Committee.
1.240 "Plan Year" means each twelve-month period ending on the last day of
September, except that the first Plan Year with respect to any hourly
payroll shall be the period from the Effective Date for such payroll
through the last day of September, and the last Plan Year with respect
to any hourly payroll shall be the period from the last preceding
October 1 to the date on which the Plan shall be terminated with
respect to such payroll.
1.250 "Rockwell Stock Fund" means the funds established by the Trustee
pursuant to Section 8.020(d), including, effective February 23, 1987,
the "Rockwell Common Stock Fund" and the "Rockwell Class A Stock Fund"
unless the context otherwise requires.
1.255 "Transfer Contributions" means the amounts described in Section
2.020(c) which are transferred to a Participant's Account in the manner
provided in said Section 2.020(c).
1.260 "Trust Agreement" means the trust agreement established pursuant to
Section 8.010 of the Plan.
1.270 "Trust Fund" means the fund, including the earnings thereon, held by
the Trustee into which all contributions on behalf of the Participant
are deposited pursuant to the Plan. The Trust Fund shall be divided
into an Equity Fund, a Guaranteed Investment Fund, a Money Market Fund
and a Rockwell Stock Fund.
1.280 "Trustee" means the trustee or trustees of the trust to be established
pursuant to Article VIII of the Plan.
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1.285 "Unit" means the unit of measurement of a Participant's interest in the
Trust Fund. "Common Unit" means a Unit of the Rockwell Common Stock
Fund attributable to Common Stock. "Class A Unit" means a Unit of the
Rockwell Class A Stock Fund attributable to Class A Stock. Where
appropriate, "Units" includes Common Units and Class A Units.
1.290 "Valuation Date" means any business day for which the Trustee shall
determine the fair market value of Units of the Equity Fund, the Money
Market, the Rockwell Stock Fund and each contract under the Guaranteed
Investment Fund. The final stock-trading day of each month shall
constitute the Valuation Date for that month.
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ARTICLE II -- PARTICIPATION
2.010 PARTICIPATION
(a) An Eligible Employee may elect to participate in the Plan if
he has completed at least six months of employment.
(b) No contributions shall be made with respect to any Participant
after any of the following events until such Participant again
makes an election that is effective under subsection (a):
(i) The Participant ceases to be an Eligible Employee;
(ii) The Participant receives a distribution of the entire
balance of his Account under Section 5.010(a) or (b);
(iii) Contributions have been suspended under Article VI.
(c) No contributions shall be made with respect to any Participant
during any period of suspension of contributions described in
Section 6.010 or Section 6.020.
2.020 CONTRIBUTION ELECTIONS
An Eligible Employee who has notified the Company of his election to become a
Participant shall also:
(a) Elect to defer receipt of an amount (in whole percentages
only) equal to 1%, 2%, 3%, 4%, 5%, 6%, 7% or 8% of
Compensation, which amounts shall be contributed as a
Compensation Deferral Contribution to the Participant's
Compensation Deferral Account; and
(b) Elect as provided in Section 2.050 whether the amount of such
Compensation Deferral Contributions shall be contributed to
one of the following investment options: (i) entirely to the
Equity Fund; (ii) entirely to the Guaranteed Investment Fund;
(iii) entirely to the Money Market Fund; (iv) entirely to the
Rockwell Stock Fund; or (v) one-half to the Money Market Fund
and one-half to the Rockwell Stock Fund.
(c) (i) With the consent of the Plan Administrator, whose consent
(1) shall be given only in connection with the
termination of a qualified individual account plan
and related trust of a business organization the
stock, assets or business of which has been acquired
by the Company, and the extension of the Plan to such
business organization pursuant to Section 1.130, and
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(2) when given, shall extend to all participants in said
individual account plan, an Eligible Employee may, in
accordance with and subject to applicable provisions
of the Code, cause to be transferred to the Plan and
Trust Fund any portion of the balance credited to him
in such individual account plan and related trust if
any portion of such balance would have been payable
to him as a rollover amount under section 402(a)(5)
of the Code but for such transfer. Such balance shall
be transferred to the Plan entirely in cash and shall
constitute a Transfer Contribution. Transfer
Contributions shall not constitute Compensation
Deferral Contributions under this Section 2.020.
(ii) Transfer Contributions shall be credited to the
Eligible Employee's Account as follows:
(1) that portion of such balance attributable to
employer contributions made pursuant to
deferral elections under section 401(k) of
the Code, which contributions remain subject
to the provisions of said section 401(k)
following transfer to the Plan, shall be
credited to the Eligible Employee's
Compensation Deferral Account and shall be
designated as such in a manner determined by
the Plan Administrator in order to ensure
compliance with the requirements of said
section 401(k);
(d) In addition to the elections and authorization set forth in
(a), (b) and (c), the Participant shall elect, as provided
in Section 2.060, whether the amount of any such
Compensation Deferral Contributions or Transfer
Contributions shall be contributed under one of the
following investment options: (i) entirely to the Equity
Fund; (ii) entirely to the Guaranteed Investment Fund; (iii)
entirely to the Money Market Fund; (iv) entirely to the
Rockwell Stock Fund; or (v) one-half to the Money Market
Fund and one-half to the Rockwell Stock Fund.
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2.030 LIMITATION ON COMPENSATION DEFERRAL CONTRIBUTIONS.
(a) Commencing January 1, 1987, with the respect to any
Participant, the aggregate amount in any calendar year of:
(i) Compensation Deferral Contributions to the Plan,
(ii) all elective deferrals under any other cash or
deferred arrangement as defined in section 402(g) of
the Code which are maintained by an Affiliated
Company, and
(iii) all elective employer contributions to any simplified
employee pension as defined in and pursuant to
sections 408(k)(1) and (6), respectively, of the Code
which are maintained by an Affiliated Company,
may not exceed Seven Thousand Dollars ($7,000.00) or such
larger sum as may be established pursuant to section 402(g)(5)
of the Code.
(b) For purposes of this Section 2.030:
(i) the term "Highly Compensated Eligible Employees"
means those Eligible Employees who are "highly
compensate employees" within the meaning of Code
section 414(q), which is incorporated herein by
reference. The Plan Administrator may determine those
Employees who are "highly compensated employees" for
purposes of this Section 2.030 in any manner
permitted by the said section 414(q) or by any
regulations duly promulgated thereunder, which are
together also incorporated herein by reference.
(ii) the term "Average Deferral Percentage" for each group
of Eligible Employees with deferral elections under
Section 2.020(a) shall be the average of the
percentages, calculated separately for each Eligible
Employee in such group, of each such Eligible
Employee's compensation (as such term is defined in
section 414(s) of the Code) that he has elected to
defer pursuant to Section 2.020(a) for the Plan Year.
Eligible Employees who do not elect to make
Compensation Deferral Contributions shall be included
at zero percent (0%) in the Average Deferral
Percentage of each group.
(iii) the term "Limitation Deferral Percentage" shall mean
the maximum deferral percentage in each Plan Year for
the group of Highly Compensated Eligible Employees
and shall be that percentage amount which does not
exceed the greater of:
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(1) the Average Deferral Percentage for all
Eligible Employees other than Highly
Compensated Eligible Employees multiplied by
one and twenty five hundredths (1.25); or
(2) the lesser of
(A) an amount which does not exceed the
Average Deferral Percentage for all
Eligible Employees other than
Highly Compensated Eligible
Employees by more than two (2)
percentage points, or
(B) the Average Deferral Percentage for
all Eligible Employees other than
Highly Compensated Eligible
Employees multiplied by two (2).
If any Highly Compensated Eligible Employee is a
participant in any other cash or deferred arrangement
within the meaning of section 401(k) of the Code
established or maintained by an Affiliated Company,
for the purpose of determining the Limitation
Deferral Percentage with respect to such Highly
Compensated Eligible Employee such other cash or
deferred arrangement shall be a part of this Plan.
(c) Prior to the beginning of, and periodically during, each Plan
Year the Administrative Committee shall test deferral
elections under Section 2.020(a) in order to determine whether
the Average Deferral Percentage for Highly Compensated
Eligible Employees exceeds the Limitation Deferral Percentage.
(d) In the event that the Administrative Committee should
determine that Compensation Deferral Contributions made for
any Plan Year on behalf of the Highly Compensated Eligible
Employees would (if not reduced) cause the Average Deferral
Percentage of such Employees to exceed the Limitation Deferral
Percentage, the Administrative Committee shall report such
determination to the Plan Administrator, who shall refer such
determination to the Plan Committee. In such event, the Plan
Committee shall reduce the Compensation Deferral Contributions
elected by the Highly Compensated Eligible Employees so that
the Limitation Deferral Percentage is not exceeded for any
Plan Year. Such reduction shall be effective as of the first
payroll payment date in the month following such determination
and shall be made as set forth in subsection (d)(i) below, and
if necessary, subsection (d)(ii):
(i) Highly Compensated Eligible Employees electing
Compensation Deferral Contributions in an amount
equal to 8% of Compensation under Section 2.020(a)
shall have their election reduced by 1%;
(ii) Highly Compensated Eligible Employees electing
Compensation Deferral Contributions in an amount
equal to 7% of Compensation (including any
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Highly Compensated Employees whose elections were
reduced under subsection (d)(i)) shall have their
elections reduced by 1%. This process shall continue
until the Average Deferral Percentage for the Highly
Compensated Eligible Employees does not exceed the
Limitation Deferral Percentage.
(e) The reduced election of a Participant under Section
2.030(d)(i) or (ii), as applicable, shall be substituted for
the actual election of the Participant under Section 2.020(a)
and shall represent the percentage of Compensation that shall
be paid into the Plan on his behalf as Compensation Deferral
Contributions.
(f) The amount representing the additional amount of Compensation
that would have been contributed as Compensation Deferral
Contributions on behalf of the Participant absent the
limitations set forth in the Section 2.030 shall be paid to
the Participant.
(g) Reductions in Compensation Deferral Contributions made under
subsection (d) shall remain in effect for the remainder of the
Plan Year unless the Administrative Committee determines that
changed circumstances permit an increase in Compensation
Deferral Contributions. If the Administrative Committee makes
such a determination, the Plan Committee shall determine the
amount by which Compensation Deferral Contributions shall be
increased for the balance of the Plan Year.
(h) The Plan shall comply with the limitation on multiple use of
the alternative limitation as described in Treasury Regulation
1.401(m)-(2)(b).
(i) If multiple use of the alternative limitation does occur, it
will be corrected by requiring reduction in actual
contribution ratios of Highly Compensated Eligible Employees
who are eligible to participate in both arrangements in
accordance with subsections (d) through (g) of this Section
2.030.
2.040 CHANGES IN RATE OF COMPENSATION DEFERRAL CONTRIBUTIONS
Upon fifteen (15) days' notice a Participant may from time to time
change his rate of Compensation Deferral Contribution. Such change
shall be effective on the first payroll payment date following the
expiration of the fifteen (15) days' notice period.
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2.050 CHANGES IN INVESTMENT ELECTIONS.
A Participant may make an election pursuant to Section 2.020(b)
above or change such election effective with the first payroll
payment date in April of any year by giving the Company notice
thereof during the month of February of that year, and effective
with the first payroll payment date in October of any year by giving
the Company notice thereof during the month of August of that year.
In such election, the Participant may also specify that all or any
part of his Account then currently invested in any fund described in
Section 8.020 shall be transferred from such fund to any other such
fund; provided, however, that no such transfer of existing
investments may be made to or from the Guaranteed Investment Fund
except under the circumstances set forth in Section 2.060; and
provided further, that any transfer from the Rockwell Stock Fund
shall first be made from the Rockwell Common Stock Fund.
2.060 CONVERSION OF GUARANTEED INVESTMENT FUND ACCOUNT.
A Participant with Units in the Guaranteed Investment Fund may
elect, by providing written notice on a form provided by the
Company, at least thirty (30) days prior to the Valuation Date upon
which any contract under the Guaranteed Investment Fund or any
interest guarantee period under any such contract expires, to
convert his interest under such contract to Units in the Equity
Fund, the Money Market Fund or the Rockwell Stock Fund. Such
conversion shall be based on the value of Units in such respective
funds as of the date of such expiration or the Valuation Date
immediately preceding the transfer of funds, whichever is later. The
transfer of funds pursuant to this Section shall be made by the
Trustee within a reasonable period after such expiration or receipt
of the funds. An election under this Section shall be irrevocable. A
Participant making an election under this Section shall also
indicate his election under Section 2.020(b) regarding investment of
contributions made subsequent to the conversion described in this
Section. The interest under a Guaranteed Investment Fund contract of
a Participant who does not make an election under this Section shall
continue to be invested in the Guaranteed Investment Fund.
2.070 DEPOSITS IN TRUST FUND.
Contributions made hereunder shall be deposited in the Trust Fund
and credited to the Participant's Account as soon as practicable.
2.080 NON-REVERSION OF CONTRIBUTIONS.
At no time shall any part of the Plan revert to or be recoverable
by the Company or be used for or diverted to purposes other than
for the exclusive benefit of Participants and their Beneficiaries.
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ARTICLE III -- MAINTENANCE AND VALUATION OF ACCOUNTS
3.010 PARTICIPANT'S ACCOUNTS.
A separate Account representing each Participant's interest in the
Equity Fund, the Money Market Fund, the Rockwell Stock Fund and each
contract under the Guaranteed Investment Fund shall be maintained by
the Trustee (or by such other person or persons as the Plan Committee
shall designate). Such separate Account shall contain sufficient
information to permit, with respect to the Equity Fund, the Money
Market Fund, the Rockwell Stock Fund and each contract under the
Guaranteed Investment Fund, a determination of the dollar balance of
such Participant's Account at any time in accordance with the
provisions of Section 3.020 through 3.040 of this Article. Each such
Account shall contain sufficient information to permit such other
determinations as may be required to carry out the provisions of the
Plan.
3.020 CREDITING OF UNITS TO ACCOUNTS; INITIAL UNIT VALUATIONS.
The interest of each Participant in the Equity Fund, the Money Market
Fund, the Rockwell Stock Fund and each contract under the Guaranteed
Investment Fund shall be represented by Units allocated to his Account.
The initial value of each Unit of the Equity Fund, the Money Market
Fund and each contract under the Guaranteed Investment Fund shall be
equal to the price at which such Units are offered by the Trustee or
its affiliates to the public (in the case of the Guaranteed Investment
Fund, to institutional investors) as of a date no later than the first
Valuation Date following the day on which the initial investment is
received by the Trustee in proper form for investment. The initial
value of each Unit of the Rockwell Stock Fund shall be ten dollars
($10.00), and the initial number of shares of Common Stock which shall
be represented by each Unit in the Rockwell Stock Fund shall be
determined by the number of shares of Common Stock purchased by the
Trustee with the initial investment in the Rockwell Stock Fund.
Effective February 23, 1987:
(a) the Rockwell Stock Fund shall be divided into the Rockwell
Common Stock Fund and the Rockwell Class A Stock Fund.
Effective as of such date and each Valuation Date thereafter
until the date on which distribution of the stock dividend to
holders of Common Stock of record on February 23, 1987, shall
occur, the value of each Unit of the Rockwell Common Stock
Fund shall be determined in the manner provided in Section
3.030 as if such stock dividend had been distributed on
February 23, 1987.
(b) each Participant who has Units of the Rockwell Common Stock
Fund shall receive an equal number of Units of the Rockwell
Class A Stock Fund which shall be represented by the number of
shares of Class A Stock which the Trustee shall be entitled to
receive pursuant to the stock dividend to holders of Common
Stock of record on February 23, 1987, in respect of the shares
of Common Stock held of record in the Rockwell Common Stock
Fund on such date. Effective as of
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such date and each Valuation Date thereafter until the date on
which distribution of such stock dividend shall occur, the
value of each Unit of the Rockwell Class A Stock Fund shall be
determined in the manner provided in Section 3.030 as if such
stock dividend had been distributed on February 23, 1987.
Contributions to and withdrawals from the Participant's Account shall
be made by purchasing or selling Units of the Equity Fund, the Money
Market Fund, the Rockwell Stock Fund and/or each contract under the
Guaranteed Return Fund, as designated by the Participant in the manner
provided by the Plan, and dividends on shares of Class A Stock which
represent the Participant's interest in the Rockwell Class A Stock Fund
shall be used to purchase Units of the Rockwell Common Stock Fund for
him in accordance with such interest. The number of such Units which
shall be purchased or sold, as the case may be, shall be that number of
such Units which have a value as of the last preceding Valuation Date
equal to the dollar amount of such contribution or dividend to, or
withdrawal from, such fund, as the case may be.
3.030 UNIT VALUATIONS.
No later than the first Valuation Date following the date of receipt by
the Trustee of each deposit in proper form for investment in the fund
concerned (or under the contract concerned, in the case of the
Guaranteed Investment Fund) and as of each succeeding Valuation Date an
amount equal to the fair market value of all property in such fund
(other than dividends received that are attributable to whole shares of
Common Stock or Class A Stock that were or are to be transferred to
Participants subsequent to the record date for such dividend) or under
such contract, in the case of the Guaranteed Investment Fund, shall be
determined by the Trustee in such manner and on such basis as it shall
deem appropriate, except that Class A Stock shall be deemed to have the
same value per share as Common Stock. Such amount shall be divided by
the total number of outstanding Units of such fund or under the
contract concerned on the particular Valuation Date, thereby
establishing a new Unit value. With respect to each fund, each
contribution or other payment thereto or payment therefrom (or in the
case of the Rockwell Common Stock Fund, each dividend on shares of
Class A Stock held in the Rockwell Class A Stock Fund) after such
Valuation Date and prior to or on the next Valuation Date shall be
converted to Units of such fund by dividing such new Unit value into
the amount of such contribution or payment (or, in the case of the
Rockwell Common Stock Fund, dividend), and the individual Account of
each affected Participant representing his interest in the fund or
contract under his Account shall be credited or charged, as the case
may be, with the Units so computed. The fair market value of each
contract under the Guaranteed Investment Fund shall be equal to the
principal amount held in such fund plus accrued interest.
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3.040 BALANCE OF PARTICIPANT'S ACCOUNT.
As of any specified date, the dollar balance of the Account of each
Participant representing the interest of each Participant in each
fund or contract under his Account shall be determined by
multiplying the number of Units in his current balance by the Unit
value as of the last preceding Valuation Date in accordance with the
foregoing. Only those contributions actually received by the Trustee
will be considered in making valuations and determining account
balances.
3.050 STATEMENTS OF PARTICIPANTS.
Twice during each Plan Year the Plan Administrator (or if the Plan
Administrator shall so determine, the Trustee) shall forward by mail
to each Participant a statement, in such form as the Plan
Administrator shall determine, setting forth pertinent information
relative to each Participant's Account. Such statement shall, for
all purposes, be deemed to have been accepted as correct unless the
Plan Administrator (or the Trustee, as the case may be) is notified
to the contrary by mail within sixty (60) days of the mailing
thereof to the Participant.
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ARTICLE IV -- BENEFITS PAYABLE UPON TERMINATING EMPLOYMENT
4.010 VESTING.
Each Participant shall at all times be fully vested in his Account.
4.020 TERMINATION OF EMPLOYMENT.
(a) (i) As soon as practicable after the Participant
terminates employment with the Company and all
Affiliated Companies for any reason, including
disability which has continued for a period of at
least six (6) months, but in no event later than
sixty (60) days after the end of the Plan Year in
which such termination occurs, the Participant (or
his Beneficiary in the case of death) shall receive
all amounts described in paragraph (ii) of this
subsection.
(ii) The amounts that the Participant (or his Beneficiary
in the case of death) shall receive under paragraph
(i) shall be as follows:
(1) With respect to the Equity Fund, the
Guaranteed Investment Fund, the Money Market
Fund and, except as otherwise provided in
subparagraph (2) below, the Rockwell Stock
Fund, the Participant shall receive the full
dollar balance of his Account in such funds.
Such balance shall be determined in the
manner provided by Section 3.040, by
reference to the Units in such Participant's
Account on the first Valuation Date
following receipt by the Trustee of written
notice of such termination, or in the case
of disability, on the date all documentation
determined by the Plan Administrator to be
necessary to effect distribution from the
Plan shall have been received by the Plan
Administrator and the value of each Unit on
such Valuation Date; provided, however, that
in the case of Participants who hold one or
more contracts under the Guaranteed
Investment Fund such balance shall be
determined in the manner provided by Section
3.040 by reference to the Units in such
Participant's Account on the Valuation Date
for the first regularly scheduled
distribution date from the Guaranteed
Investment Fund following receipt by the
Trustee of written notification of the
Participant's termination and the value of
each Unit on such Valuation Date.
(2) With respect to the Rockwell Stock Fund, the
Participant may notify the Company in
writing no later than his effective date of
termination of employment, or in the case of
disability, the date all documentation
determined by the Plan Administrator to be
necessary to effect distribution from the
Plan shall have been received by the Plan
Administrator of his election to receive the
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dollar balances of his account in the
Rockwell Common Stock Fund in shares of
Common Stock and in the Rockwell Class A
Stock Fund in shares of Class A Stock. In
such event, the dollar balances that were in
such Participant's accounts in such Rockwell
Common and Class A Stock Funds as of the
Valuation Date described in subparagraph (1)
above (determined, in the manner provided by
Section 3.040 by reference to the Units in
the Participant's Account on such Valuation
Date and the value of each Unit on such
Valuation Date) shall be applied to Common
Stock and Class A Stock, respectively. The
Participant shall receive the maximum number
of whole shares of Common Stock which could
be purchased with such balance of his
account in the Rockwell Common Stock Fund,
and the maximum number of whole shares of
Class A Stock which could be purchased with
such balance of his account in the Rockwell
Class A Stock Fund, both at the closing
price of Common Stock as reflected on the
New York Stock Exchange Composite listing on
such Valuation Date (or, in the event such
Valuation Date falls on a date on which for
any reason there are no trades of Common
Stock reflected on such listing, the last
trading day preceding such Valuation Date).
The Participant shall be paid in cash the
amount remaining in such balances of his
accounts in the Rockwell Common and Class A
Stock Funds after reduction by the value,
based on such closing price, of the whole
shares previously described. In addition,
the Participant shall be paid the dollar
value of dividends received since such
Valuation Date attributable to the number of
whole shares of Common Stock and Class A
Stock as described in this paragraph (2) and
the dollar amount of any contributions to
the Rockwell Stock Fund between such
Valuation Date and the date of such
termination.
(iii) A Participant may make an irrevocable election at any
time during the thirty (30) day period ending on the
day immediately prior to the effective date of his
retirement pursuant to a retirement plan of the
Company or any Affiliated Company to remain in the
Plan without any further Compensation Deferral
Contribution until January 1 of the calendar year
following the effective date of such retirement, at
which time he shall receive all amounts provided in
paragraph (ii) above, valued as of the valuation date
immediately prior to such January 1.
(iv) Notwithstanding the foregoing provisions of this
Section 4.020(a) or any other provisions of the Plan,
if the aggregate value of a Participant's Account is
in excess of Three Thousand Five Hundred Dollars
($3,500) and the Participant shall not have attained
age seventy and one-half (70-1/2) at the time
distribution of his Account would otherwise be made
pursuant to paragraph (i) of this subsection, no such
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distribution shall be made unless the Plan
Administrator shall first have obtained the
Participant's written consent thereto. In the event
such written consent shall not have been so obtained
by the time such distribution would otherwise have
been made pursuant to paragraph (i) of this
subsection, the Participant's Account shall be
retained by the Plan and the Participant, from and
after the date of his termination of employment,
shall be deemed to be a Participant whose
Compensation Deferral Contributions have been
suspended under Section 6.020, except that the
Participant shall not have the right to withdraw any
portion of the balance of his Account under Article
V. Distribution of the entire balance of the
Participant's Account pursuant to paragraphs (i) and
(ii) of this subsection shall be made following the
earlier of the date on which the Participant's
written consent to such distribution shall have been
obtained by the Plan Administrator or the date on
which the Participant shall have attained age seventy
and one-half (70-1/2), in the same manner as if the
Participant had terminated employment on such date.
(b) Notwithstanding the provisions of Sections 4.020 and
5.010(a) and (b), if an Employee attains age 70-1/2
on or after January 1, 1988, distribution of the
amounts described in paragraph (a)(ii) of this
Section 4.020 to such Employee shall be made not
later than April 1 of the calendar year following the
calendar year in which the Employee shall have
attained age 70-1/2. If such a Participant shall so
request in writing, the Plan Administrator shall
cause all or a portion of the amounts and shares of
Common and Class A Stock with respect to which the
Participant would be taxable under section 402 of the
Code (other than amounts and/or shares required to be
distributed at that time pursuant to the provisions
of section 401(a)(9)(A) of the Code) to be
transferred from the Trustee directly to the
custodian of an Eligible Retirement Plan specified by
the Participant. Such request shall be made by such
date as the Plan Administrator shall determine, but
in no event later than the said April 1 date. Prior
to effecting such transfer the Plan Administrator
shall require evidence reasonably satisfactory to him
that the entity to which such transfer is to be made
is in fact an Eligible Retirement Plan and that such
Eligible Retirement Plan may receive the distribution
in the forms required under this Section.
4.025 TRANSFER OF DISTRIBUTION DIRECTLY TO ELIGIBLE RETIREMENT PLAN.
If a Participant, a Participant's spouse entitled to distribution
pursuant to Article VII in the case of a Participant's death, or former
spouse entitled to distribution pursuant to Section 9.150 shall so
request in writing, the Plan Administrator shall cause all or a portion
of the amounts and shares of Common and Class A Stock with respect to
which the Participant would be taxable under section 402 of the Code to
be transferred from the Trustee directly to the custodian of an
Eligible Retirement Plan specified by the Participant. Such request
shall be made, in the case of a Participant, at the time his consent to
such distribution shall be given to the Plan Administrator pursuant to
Section 4.020(a)(iv), or at such later date as the Plan Administrator
shall permit, or, in the case
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of the Participant's spouse or former spouse, at such time as the Plan
Administrator shall determine. Prior to effecting such transfer the
Plan Administrator shall require evidence reasonably satisfactory to
him that the entity to which such transfer is to be made is in fact an
Eligible Retirement Plan and that such Eligible Retirement Plan may
receive the distribution in the forms required under this Article IV.
4.030 RESUMPTION OF PARTICIPATION.
An Employee who has received a distribution under this Article shall be
eligible to resume participation in the Plan only as provided in
Section 2.010.
4.040 VALUATION DATES FOR WITHDRAWALS AND DISTRIBUTIONS PURSUANT TO DOMESTIC
RELATIONS ORDERS.
Notwithstanding any other provision of this Article IV or Article V, in
the event that the Plan Administrator shall determine that a
distribution of a Participant's Account pursuant to this Article IV or
Article V has been delayed as a result of a pending or threatened
domestic relations order, the Valuation Date immediately preceding the
date on which such withdrawal or distribution is approved by the Plan
Administrator pursuant to such order shall be substituted for the
Valuation Date which would otherwise be applicable to such withdrawal
or distribution pursuant to this Article IV or Article V.
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ARTICLE V -- WITHDRAWALS WHILE EMPLOYED; LOANS
5.010 WITHDRAWALS FROM PARTICIPANT'S ACCOUNT.
(a) Subject to such restrictions as the Plan Committee may
establish pursuant to Section 5.020, a Participant may
withdraw all or a portion of the balance of his Account if he
has attained age fifty-nine and one-half (59-1/2).
(b) Subject to such restrictions as the Plan Committee may
establish pursuant to Section 5.020, an Employee who has not
attained age fifty-nine and one-half (59-1/2) may request
approval of the Administrative Committee to withdraw some or
all of the Units of his Compensation Deferral Account
attributable solely to his Compensation Deferral Contributions
and/or Transfer Contributions, excluding those Units thereof
which are attributable to earnings under the individual
account plan from which such Transfer Contributions were
transferred or distributed.
(c) In no event, however, may any Units attributable to income
allocated to his Compensation Deferral Account on and after
October 1, 1989 be withdrawn pursuant to subsections (b) and
(d) of this Section 5.010.
(d) (i) The Trustee shall, upon the direction of the
Administrative Committee, distribute all or a portion of the
Compensation Deferral Account of an Employee requesting a
withdrawal under subsection (b) prior to the time such Account
is distributable in accordance with Article IV hereof;
provided, however, that any such withdrawal shall be made only
if, and the amount of such withdrawal shall be limited to the
extent that, the Employee demonstrates that the withdrawal is
required as a result of a hardship and to pay any federal,
state or local income taxes and penalties reasonably
anticipated to result from such withdrawal. For the purposes
of this subsection (d) the term "hardship" shall mean an
immediate and heavy financial need of the Employee for which
the amount required is not reasonably available to the
Employee from other sources and which arises for one of the
following reasons:
(1) the purchase (excluding mortgage payments) or
construction of a principal residence for the
Employee, or to prevent eviction from, or foreclosure
on the mortgage on, the Employee's principal
residence;
(2) the incurring of obligations for
(A) tuition, related educational fees and room
and board expenses for post-secondary
education of the Employee, his spouse or one
or more of his children or other dependents
(as defined in section 152 of the Code) to
be incurred
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during the twelve (12) month period
immediately following the date of his
request for distribution; or
(B) expenses not covered by insurance which
either have been previously incurred by the
Employee for, or are necessary in order for
the Employee to obtain, medical care (as
described in section 213(d) of the Code) for
himself, his spouse or one or more of his
dependents (as defined in section 152 of the
Code);
(C) any other reason permitted under section
401(k)(2)(B)(i)(IV) of the Code and is
approved by the Administrative Committee.
(ii) Any determination of the existence of hardship, the reasonable
availability to the Employee of funds from other sources and
the amount to be withdrawn on account of such hardship shall
be made by the Administrative Committee on the basis of all
relevant facts and circumstances and in accordance with the
foregoing rules, as applied in a uniform and nondiscriminatory
manner. In making such determination, the Administrative
Committee may, if it is reasonable to do so in the light of
all relevant and known facts and circumstances, rely on the
Employee's representation that the hardship cannot be
relieved:
(1) through reimbursement or compensation by insurance or
otherwise;
(2) by reasonable liquidation of the Employee's assets,
to the extent that such liquidation would not itself
cause an immediate and heavy financial need;
(3) by suspension of Compensation Deferral Contributions;
or
(4) by other distributions (other than hardship
distributions) or loans (which meet the requirements
of section 72(p) of the Code) from the Plan and any
other plan maintained by an Affiliated Company or by
any former employer or by borrowing from commercial
sources at reasonable commercial rates.
(e) A Participant may elect to have any withdrawal taken from his account
in the Equity Fund, the Money Market Fund, the Guaranteed Investment
Fund, or the Rockwell Stock Fund, or to have specified portions taken
from his accounts in the Equity Fund, the Money Market Fund, the
Guaranteed Investment Fund, the Rockwell Stock Fund; provided that any
withdrawal from the Rockwell Stock Fund shall first be taken from the
Rockwell Common Stock Fund. As soon as practicable after a withdrawal
election is made, there shall be paid or transferred
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<PAGE> 22
to the Participant cash determined in the same manner as under
Section 4.020 above (except that the date of withdrawal shall
be used for such determination in lieu of the date of
termination). In the absence of such election, such withdrawal
shall be made from his accounts in such Funds in the following
order: first, from his account, if any, in the Money Market
Fund; next, from his account, if any, in the Equity Fund;
next, from his account or accounts, if any, in the Guaranteed
Investment Fund; and finally, from his account, if any, in the
Rockwell Stock Fund. Notwithstanding the foregoing provisions
of this paragraph (e), any withdrawal from his account or
accounts in the Guaranteed Investment Fund shall be taken in
reverse sequence by first exhausting his accounts in the most
recent contracts under such Fund.
(f) Withdrawals shall be in a minimum amount of $100 with respect
to the Equity Fund, the Money Market Fund, the Rockwell Stock
Fund or Guaranteed Investment Fund. A Participant may not make
a request for withdrawal within twenty-six (26) weeks of any
prior request for withdrawal; provided, however, that this
limitation upon the ability of such Participant to make a
partial withdrawal (including hardship withdrawals pursuant to
the provisions of Section 5.010) within twenty-six (26) weeks
of any prior request for a partial withdrawal shall be waived
by the Plan Administrator for the six-month period immediately
following any due declaration by the President of the United
States under applicable federal law that a particular
occurrence or situation constitutes a national disaster
condition, if such partial withdrawal is requested for a
reason associated with financial need of the Participant
resulting from the effects of the said condition. Payment of
withdrawal requests shall be made to the Participant as soon
as practicable.
5.015 TRANSFER OF DISTRIBUTION OR WITHDRAWAL TO ELIGIBLE RETIREMENT PLAN
If a Participant entitled to a distribution or withdrawal under this
Article V shall so request in writing at the time his election to
receive such distribution or withdrawal is made or at such later date
as the Plan Administrator may permit, the Plan Administrator shall
cause all or a portion of the amounts and shares of Common and Class A
Stock with respect to which the Participant would be taxable under
section 402 of the Code to be transferred from the Trustee directly to
the custodian of an Eligible Retirement Plan specified by the
Participant. Prior to effecting such transfer the Plan Administrator
shall require evidence reasonably satisfactory to him that the entity
to which such transfer is to be made is in fact an Eligible Retirement
Plan and that such Eligible Retirement Plan may receive the
distribution in the forms required under this Article V.
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<PAGE> 23
5.020 LOANS
As soon as practicable after January 1, 1990, the Plan Administrator
shall establish written procedures pursuant to which any Employee or
other "party in interest" (as defined in ERISA Section 3(14)) may
apply for and receive from the Plan loans in accordance with such
terms and conditions as the Plan Administrator may prescribe in
writing consistent with the provisions of the Plan and applicable
provisions of the Code and ERISA. Such procedures, terms and
conditions shall require, in addition to such other written
procedures, terms and conditions as may be established by the Plan
Administrator not inconsistent herewith, that
(a) the amount which any Employee or other party in interest
shall be permitted to borrow from the Plan shall be based on
the aggregate of the value of his Account determined in
accordance with Section 3.030;
(b) no Employee or other party in interest shall be permitted to
obtain a loan from the Plan of less than One Thousand
Dollars ($1,000) or in an amount exceeding the lesser of
(i) an amount which, when combined with all
outstanding loans to such Employee or other party
in interest from all other plans of all Affiliated
Companies, equals Fifty Thousand Dollars
($50,000), reduced by the highest outstanding and
unpaid balances during the twelve (12) month
period immediately preceding the date on which
such loan is made of all prior loans to such
Employee or other party in interest from the Plan
and such other plans;
(ii) one-half (1/2) the aggregate of the balances of
his Account; or
(iii) such amount, not exceeding the amounts described
in (i) and (ii) above, as the Plan Administrator
shall determine.
or to have more than a single loan from the Plan and all
other "qualified employer plans" (as such term is defined in
section 72(p)(4) of the Code) of the Company outstanding at
any one time.
At such time as the Plan Administrator shall have established such
written procedures, terms and conditions the Plan Administrator
shall cause (1) an announcement thereof to be disseminated to all
eligible Employees and other parties in interest, and (2) a copy of
such written procedures, terms and conditions to be attached to and
made a part of this Plan as Appendix C. Until the Plan Administrator
shall have established such procedures, terms and conditions no
Employee or other party in interest shall have any right to obtain a
loan from the Plan. Once available to eligible Employees, however,
all such loans shall be made available to all eligible Employees and
other parties in interest on a reasonably equivalent and
non-discriminatory basis.
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<PAGE> 24
ARTICLE VI -- SUSPENSION OF CONTRIBUTIONS
6.010 VOLUNTARY SUSPENSION
(a) A Participant may at any time, upon fifteen (15) days'
notice, elect to have contributions suspended until further
notice. Suspension shall become effective not later than the
first payroll payment date following the expiration of the
fifteen (15) days' notice period.
(b) Subject to Section 2.010 and Section 2.020, a Participant
who has elected to have contributions suspended, may elect
to have contributions resumed upon fifteen (15) days'
written notice to the Company, effective the first payroll
payment date following the expiration of the fifteen (15)
days' notice period.
6.020 INVOLUNTARY SUSPENSION
A Participant's Compensation Deferral Contributions for purposes of
the Plan shall be suspended whenever:
(a) No payment of Compensation is made by the Company to the
Participant.
(b) The Participant, although an Employee, is not an Eligible
Employee.
(c) The Participant is transferred to a component of the Company
to which the benefits of the Plan have not been extended.
(d) The Participant's employment is terminated in order to
accept employment with any subsidiary or affiliate of the
Company to which the benefits of the Plan have not been
extended.
6.030 GENERAL PROVISIONS APPLICABLE TO SUSPENSIONS
(a) Suspensions of a Participant's Compensation Deferral
Contributions, whether voluntary or involuntary, shall not
affect his benefit and withdrawal rights, which shall be
determined in accordance with the provisions of Article IV
and V of the Plan.
(b) During the period of a Participant's suspension the Trustee
shall continue to adjust the Participant's Account as of
each Valuation Date during such period in accordance with
the provisions of Article III of the Plan.
(c) A Participant may not make up suspended Compensation
Deferral Contributions.
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<PAGE> 25
ARTICLE VII -- DESIGNATION OF AND PAYMENT TO A BENEFICIARY
7.010 DESIGNATION OF A BENEFICIARY.
Subject to the provisions of Section 1.040,
(a) if a Participant dies, payment of the benefits provided
under the Plan shall be made to such person or persons as he
has designated as his Beneficiary to receive such benefits
in the event of his death.
(b) a Participant may change his designation of Beneficiary at
any time by filing with the Plan Administrator (or such
other person as is designated by the Plan Administrator) a
request for such change. Such change shall become effective
only upon receipt of the request by the Plan Administrator
(or such other person as is designated by the Plan
Administrator) but upon such receipt the change shall relate
back to and take effect as of the date the Participant
signed such request; provided, however, that neither the
Company, the Trustee, the Plan Committee, the Plan
Administrator, any other named or unnamed fiduciary, nor the
Trust Fund shall be liable by reason of any payment made to
the Beneficiary theretofore designated before receipt of
such request.
(c) if no designation is effective pursuant to this Article or
if the Plan Administrator or Trustee shall have any doubt as
to the right of any Beneficiary or if the Beneficiary shall
predecease the Participant, the amount of such benefits may
be paid to the estate of the Participant, in which event
neither the Company, the Trustee, the Plan Committee, the
Plan Administrator, any other named or unnamed fiduciary,
nor the Trust Fund shall be liable to any other person or
entity with respect to such payment.
7.020 PAYMENT TO A BENEFICIARY.
Upon receipt by the Plan Administrator (or such other person as is
designated by the Plan Administrator) of evidence satisfactory to
such person of the death of a Participant and of the identity and
existence at the time of such death of the Participant's
Beneficiary, the Plan Administrator shall direct the Trustee to pay
the Participant's Account to the Beneficiary.
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ARTICLE VIII -- TRUST AGREEMENT
8.010 ESTABLISHMENT OF TRUST FUND.
The property resulting from contributions made on behalf of all
Participants shall be held as a Trust Fund by a corporate Trustee or
Trustees selected by the Plan Committee pursuant to a Trust
Agreement entered into between such Trustee and the Plan Committee.
References in the Plan to the Trustee shall be deemed to be
applicable with equal force to co-Trustees or successor Trustees who
may be so designated.
8.020 INVESTMENTS.
The Trustee shall establish:
(a) an Equity Fund which shall include all contributions made
with respect to Participants under the Plan and designated
as contributions to the Equity Fund, all property purchased
therewith and the proceeds and income from such
contributions and property, which property may consist of
any kind of property (real, personal or mixed) and every
kind of investment (specifically including, but not by way
of limitation, corporate obligations of every kind and
common or preferred stocks);
(b) a Guaranteed Investment Fund which shall include the Trust
Fund's interest in a contract or contracts providing a
guarantee of principal and a defined rate or rates of
earnings or interest on principal held pursuant to such
contract or contracts for a specified period of time, which
guaranteed earnings or interest is accrued monthly, and
which interest and principal are repaid to the Trustee in
accordance with the provisions of the Plan and such contract
or contracts;
(c) a Money Market Fund which shall include all contributions
made with respect to Participants under the Plan and
designated as contributions to the Money Market Fund, all
property purchased therewith and the proceeds and income of
such contributions and property, which property may consist
of treasury bills, treasury notes, treasury bonds, federal
agency obligations and other instruments of federal, state
or local government debt, all the foregoing to the extent
the same have stated maturities of not more than one (1)
year; and
(d) a Rockwell Stock Fund consisting of all cash contributed to
purchase Common Stock, all Common Stock so purchased and the
proceeds and income therefrom; provided, that effective
February 23, 1987, (i) the Rockwell Stock Fund shall be
divided into the Rockwell Common Stock Fund and the Rockwell
Class A Stock Fund, (ii) the Rockwell Common Stock Fund
shall consist of all cash contributed, and dividends on
shares of Class A Stock applied, to purchase Common Stock;
all Common Stock so purchased and the proceeds and income
therefrom, and (iii) the Rockwell Class A Stock Fund shall
consist of shares of Class A Stock received by the Trustee
as dividends on shares of Common Stock held in the
26
<PAGE> 27
Rockwell Common Stock Fund or on Class A Stock held in the
Class A Stock Fund. The Trustee shall use all cash in the
Rockwell Stock Fund only to purchase Common Stock. Purchases
may be made from or through any source (other than the
Company) including a Participant. Rights, options, or
warrants offered to purchase Common Stock may be exercised
but only to the extent that there is cash available in the
Rockwell Stock Fund for investment. To the extent they are
not exercised, the same shall be sold on the open market.
Rights, options, or warrants to purchase securities of
Rockwell International Corporation or its subsidiaries or
affiliates other than Common Stock shall be sold by the
Trustee on the open market.
The Trustee shall keep records so as to segregate with respect to
each Participant benefits derived from contributions on behalf of
such Participant.
8.030 DUTY OF TRUSTEE AS TO COMMON STOCK AND CLASS A STOCK IN THE ROCKWELL
STOCK FUND.
(a) Except as otherwise provided in this Section 8.030, the
Trust Agreement shall provide that the duty with respect to
the voting, retention, and tendering of Common Stock and
Class A Stock held in the Rockwell Stock Fund shall be
solely that of the Trustee, to be exercised solely in the
Trustee's discretion.
(b) The Trust Agreement shall provide that, with respect to any
matter as to which a vote of the outstanding shares of
Common Stock or Class A Stock is solicited by proxies,
consents or authorizations:
(i) Each Participant shall be entitled to direct the
Trustee, and the Trustee shall solicit the
direction in writing of each Participant, as to
the manner in which voting rights of shares of
Common Stock or Class A Stock held in the Rockwell
Stock Fund as of the record date fixed for
determining the holders of Common Stock or Class A
Stock entitled to vote on such matter are to be
exercised with respect to such matter, and the
Trustee shall exercise the voting rights of such
shares with respect to such matter in accordance
with the last-dated timely written direction, if
any, of such Participant. In connection with the
solicitation of written directions from
Participants, the Company will cause to be
furnished to each Participant and the Trustee
notice of each occasion for the exercise of such
voting rights, an appropriate form on which such
written direction may be given, and a statement
containing the information that the Company
distributes to stockholders generally regarding
the exercise of such voting rights; and
(ii) The Trustee shall vote (A) shares of Common Stock
held in the Rockwell Common Stock Fund as to which
no timely direction in writing has been received
pursuant to paragraph (i) of this subsection
proportionately in the same manner as the Trustee
votes the aggregate of
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<PAGE> 28
all shares of Common Stock held in the Rockwell
Stock Fund as to which timely direction in writing
has been received pursuant to paragraph (i) of
this subsection (b), and (B) shares of Class A
Stock held in the Rockwell Class A Stock Fund as
to which no timely direction in writing has been
received pursuant to paragraph (i) of this
subsection (b) proportionately in the same manner
as the Trustee votes the aggregate of all shares
of Class A Stock held in the Rockwell Class A
Stock Fund as to which timely direction in writing
has been received pursuant to paragraph (i) of
this subsection (b).
(c) The Trust Agreement shall provide that, in the event of any
Tender Offer (as defined in Section 15.010):
(i) Each Participant shall be entitled to direct the
Trustee, and the Trustee shall solicit the
direction in writing of each Participant, as to
the tendering or depositing of any shares of
Common Stock or Class A Stock held, and any shares
of Common Stock issuable on conversion of Class A
Stock held, in the Rockwell Stock Fund which
represents the interest of such Participant in the
Rockwell Stock Fund as of the Tender Date (as
defined herein) with respect to such Participant
and, except as limited by paragraph (iii) hereof,
the Trustee shall tender or deposit such shares
pursuant to any such Tender Offer in accordance
with the last dated timely written direction, if
any, of such Participant;
(ii) Except as limited by paragraph (iii) hereof, the
duty with respect to the retention, tendering or
depositing of shares of Common Stock or Class A
Stock held in the Rockwell Stock Fund as to which
no timely direction in writing has been received
pursuant to paragraph (i) hereof shall be solely
that of the Trustee to be exercised solely in the
Trustee's discretion; and
(iii) Shares of Common Stock or Class A Stock held, and
any shares of Common Stock issuable on conversion
of Class A Stock held, in the Rockwell Stock Fund
shall not be tendered or deposited by the Trustee
pursuant to any such Tender Offer until the
earlier of (A) immediately preceding the scheduled
expiration of the Tender Offer pursuant to which
such shares are to be tendered or deposited or (B)
immediately preceding the expiration of the period
during which such shares of Common Stock
(including shares of Common Stock issuable on
conversion of Class A Stock) or Class A Stock will
be taken up and paid for on a pro rata basis
pursuant to such Tender Offer or (C) the
expiration of 30 days from the date of the
Trustee's solicitation of Participants' written
direction pursuant to paragraph (i) hereof; and
(iv) The duty with respect to the withdrawing of, or
other exercise of any right to withdraw, shares of
Common Stock held, and any shares of
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<PAGE> 29
Common Stock issuable on conversion of Class A
Stock held, in the Rockwell Stock Fund which have
been tendered or deposited pursuant to any such
Tender Offer shall be solely that of the Trustee,
provided that the Trustee may solicit the
direction in writing of each Participant with
respect to whom any such shares of Common Stock
(including shares of Common Stock issued on
conversion of Class A Stock) or Class A Stock have
been tendered or deposited pursuant to any such
Tender Offer as to the withdrawing of, or other
exercise of any right to withdraw, such shares of
Common Stock (including shares of Common Stock
issued on conversion of Class A Stock) or Class A
Stock, and if such solicitation is made, the
Trustee shall act in accordance with the last
dated timely written direction, if any, of each
such Participant.
As used in this subsection (c) with respect to a
Participant, the term "Tender Date" means the date on which
the Trustee tenders or deposits any shares of the Common
Stock (including shares of Common Stock issued on conversion
of Class A Stock) or Class A Stock representing interests of
such Participant in the Rockwell Stock Fund in accordance
with this subsection (c).
8.040 FORM OF TRUST AGREEMENT.
The Trust Agreement shall be in such form and contain such
provisions as the Plan Committee may deem appropriate (consistent
with the provisions of Section 8.020, Section 8.030 and Section
15.030), including, but not limited to, provisions with respect to
the powers and authority of the Trustee, the authority of the Plan
Committee to amend the Trust Agreement and to terminate the trust,
and a provision that at no time shall any part of the Trust Fund
revert to or be recoverable by the Company (within the taxable year
or thereafter) or be used for or diverted to purposes other than for
the exclusive benefit of Participants or their Beneficiaries. The
Trust Agreement shall be deemed to form a part of the Plan, and all
rights and benefits that may accrue to any person under the Plan
shall be subject to all the terms and provisions of the Trust
Agreement. The Trustee may deposit amounts held in any of the funds
comprising the Trust Fund in an interest bearing account or accounts
including short-term fixed income commingled and collective
investment funds in a bank or similar financial institution
including without limitation the commercial banking department of
the Trustee on a temporary basis pending either (1) investment of
such amounts or (2) distribution of funds to Plan Participants.
29
<PAGE> 30
8.050 RIGHTS IN THE TRUST FUND.
Nothing in the Plan or in the Trust Agreement shall be deemed to
confer any legal or equitable right or interest in the Trust Fund in
favor of any Participant, Beneficiary or other person, except to the
extent expressly provided in the Plan.
8.060 TRUST FUND VALUES.
Neither the Company, the Board of Directors, the Plan Committee, the
Plan Administrator nor the Trustee warrants or represents in any way
that the value of Participants' Accounts shall increase or not
decrease, each Participant assuming this risk as to his own Account.
8.070 TAXES, FEES AND EXPENSES OF THE TRUSTEE.
(a) Except as provided in subsection (b) below, the fees and
expenses of the Trustee and expenses of the Trustee's
counsel shall be borne by the Company and shall constitute a
charge on the Trust Fund until so paid; provided that unless
the Board of Directors shall by resolution provide to the
contrary the Company shall not, and in no event shall the
Trust Fund, pay any such Trustee or Trustee's counsel fees
or expenses incurred (1) in preparing for or prosecuting any
action against the Company, any member of the Plan Committee
or the Plan Administrator or (2) in defending or settling,
or satisfying a judgment relating to any proceeding either
arising out of any alleged misfeasance or nonfeasance in any
person's performance of duties with respect to the Plan or
arising out of any alleged wrongful act against the Plan.
Neither the Plan Administrator nor the members of the Plan
Committee shall be compensated from the Plan but may be
compensated for services rendered on behalf of the Plan by
the Company.
(b) Brokerage fees, investment management fees, commissions,
stock transfer taxes and other charges and expenses incurred
in connection with the management of the Trust Fund or
transactions relating to the acquisition or disposition of
property for or of the Trust Fund, or distributions
therefrom, shall be paid from the Trust Fund. Taxes, if any,
payable by the Trustee on the assets at any time held in the
Trust Fund or on the income thereof shall be paid from the
Trust Fund. Other expenses incurred hereunder to the extent
not paid by the Company, shall be paid from the Trust Fund.
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ARTICLE IX -- ADMINISTRATION
9.010 GENERAL ADMINISTRATION.
Authority to control and manage the operation and administration of
the Plan shall be vested in the Plan Committee except to the extent
that: (1) the Plan Administrator or the Administrative Committee is
allocated any such authority under the Plan; or (2) any Trustee
appointed pursuant to Section 8.010 may, pursuant to Article VIII,
be granted exclusive authority and discretion to manage and control
all or any portion of the assets of the Plan. The Plan Committee,
the Plan Administrator, the Administrative Committee, and the
Trustee(s) shall constitute the Named Fiduciaries of the Plan for
purposes of ERISA.
9.020 PLAN COMMITTEE.
The Board of Directors shall, from time to time, determine the size
of the Plan Committee and appoint its individual members. The Plan
Committee shall act, with or without a meeting, in a manner
consistent with the rules and regulations adopted pursuant to
Section 9.060(c).
9.030 PLAN COMMITTEE RECORDS.
The Plan Committee shall keep such records and data as it shall deem
appropriate and it shall from time to time file with the Board of
Directors such reports as the latter may request. It shall be a
function of the Plan Committee to keep records of the assets of the
Trust Fund, based upon reports furnished by the Trustee, and the
evaluations placed thereon by the Committee shall be final and
conclusive. The records of the Plan shall be kept on the basis of a
Plan Year beginning October 1.
9.040 FUNDING POLICY.
The Plan Committee shall be responsible for determining a funding
policy of the Plan consistent with the objectives for the Equity
Fund, the Guaranteed Investment Fund, the Money Market Fund and the
Rockwell Stock Fund and shall from time to time advise the Trustee
of such policy.
9.050 ALLOCATION AND DELEGATION OF DUTIES UNDER PLAN.
The Plan Committee, the Plan Administrator and the Administrative
Committee shall each have the following powers and authorities:
(a) To designate agents to carry out responsibilities relating
to the Plan, other than fiduciary responsibilities.
(b) To employ such legal, consultant, medical, accounting,
clerical and other assistance as it may deem appropriate in
carrying out the provisions of the Plan
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including one or more persons to render advice with regard
to any responsibility any Named Fiduciary or any other
fiduciary may have under the Plan.
9.060 PLAN COMMITTEE POWERS.
In addition to any powers and authority conferred on the Plan
Committee elsewhere in the Plan or by law, the Plan Committee shall
have the following powers and authority:
(a) To allocate fiduciary responsibilities (other than trustee
responsibilities) to one or more members of the Plan
Committee or to the Plan Administrator and to designate one
or more persons (other than the Trustee) to carry out
fiduciary responsibilities (other than trustee
responsibilities). The term "trustee responsibilities" as
used herein shall mean responsibilities provided in the
Trust Agreement to manage or control the assets of the Plan.
(b) To determine the manner in which the assets of the Plan, or
any part thereof, shall be disbursed by the Trustee, except
that the making and retention of investments shall be solely
governed by the Trust Agreement.
(c) To establish rules and regulations from time to time for the
conduct of the Plan Committee's business and for the
administration and effectuation of its responsibilities
under the Plan.
9.070 PLAN ADMINISTRATOR.
In addition to any powers and authority conferred on the Plan
Administrator elsewhere in the Plan or by law, the Plan
Administrator shall have the following powers and authority:
(a) To administer, interpret, construe and apply the Plan and to
decide all questions which may arise or which may be raised
by any Employee, Participant, Beneficiary, or other person
whatsoever, and the actions or decisions of the Plan
Administrator in regard thereto, or in regard to anything or
matter otherwise within his discretion, shall be conclusive
and binding on all Employees, Participants, Beneficiaries,
and other persons whatsoever.
(b) To designate one or more persons (other than the Trustee) to
carry out fiduciary responsibilities (other than trustee
responsibilities). The term "trustee responsibilities" as
used herein shall mean responsibilities provided in the
Trust Agreement to manage or control the assets of the Plan.
(c) To establish rules and regulations from time to time for the
administration and effectuation of his responsibilities
under the Plan including but not limited to, adoption of
forms under Section 9.170.
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(d) The Plan Administrator shall have such other responsibility
as is designated by ERISA as the responsibility of the
administrator of the Plan and shall have such other power
and authority as is necessary to fulfill his
responsibilities under ERISA or under the Plan.
9.080 RELIANCE UPON DOCUMENTS AND OPINIONS.
The members of the Plan Committee and the Administrative Committee,
the Plan Administrator, the Board of Directors and the Company shall
be entitled to rely upon any tables, valuations, computations,
estimates, certificates and reports furnished by any consultant or
firm or corporation which employs one or more consultants, upon any
opinions furnished by legal counsel, upon any computation,
estimates, and reports furnished by any consultants or consulting
firms, and upon any reports furnished by the Trustee, and the
members of the Plan Committee, the Plan Administrator, the Board of
Directors and the Company shall be fully protected and shall not be
liable in any manner whatsoever except as otherwise specifically
provided by law for anything done or action taken or suffered in
reliance upon any such consultant or firm or corporation which
employs one or more consultants, Trustee, or counsel, and any and
all such things done or such actions taken or suffered by the Plan
Committee, the Plan Administrator, the Board of Directors and the
Company shall be conclusive and binding on all Employees,
Participants, Beneficiaries, and other persons whatsoever except as
otherwise specifically provided by law. The Plan Committee and the
Plan Administrator may, but are not required to, rely upon all
records of the Company with respect to any matter or thing
whatsoever, and to the extent they rely thereon, such records shall
be conclusive with respect to all Employees, Participants, and
Beneficiaries, except as otherwise provided by law.
9.090 REQUIREMENT OF PROOF.
The Plan Committee, the Plan Administrator, the Administrative
Committee, the Board of Directors or the Company may require
satisfactory proof of any matter under the Plan from or with respect
to any Employee, Participant, or Beneficiary, and no such person
shall acquire any rights or be entitled to receive any benefits
under the Plan until such proof shall be furnished as so required.
9.100 LIMITATION ON LIABILITY.
(a) Except as provided in Part 4 of Title l of ERISA, no person
shall be subject to any liability with respect to his duties
under the Plan, unless he acts fraudulently or in bad faith.
(b) No person shall be liable for any breach of fiduciary
responsibility resulting from the act or omission of any
other fiduciary or any person to whom fiduciary
responsibilities have been allocated or delegated, except as
provided in
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sections 405(a) and 405(c)(2)(A) or (B) of ERISA. No action
or responsibility shall be deemed to be a fiduciary action
or responsibility except to the extent required by ERISA.
9.110 INDEMNIFICATION.
To the extent permitted by law, the Company shall indemnify the
Board of Directors, the Plan Administrator, each member of the Plan
Committee, each member of the Administrative Committee and any other
employee of the Company with duties under the Plan against expenses
(including any amount paid in settlement) reasonably incurred by him
in connection with any claims against him by reason of his conduct
in the performance of his duties under the Plan. Except in relation
to matters as to which he has been guilty of willful misconduct in
the performance of such duties, the foregoing right of
indemnification shall be in addition to any other right to which any
such Plan Committee member, Plan Administrator, Administrative
Committee member, or other person may be entitled as a matter of law
or otherwise.
9.120 MULTIPLE FIDUCIARY CAPACITY.
Any person or group of persons may serve in more than one fiduciary
capacity with respect to the Plan.
9.130 EXPENSES.
All costs and expenses incurred in the administration of the Plan
including the expenses incurred by the Plan Committee, the
Administrative Committee and Plan Administrator shall be paid by the
Company.
9.140 MAILING AND LAPSE OF PAYMENTS.
All payments under the Plan shall be delivered in person or mailed
to the last address of the Participant (or, in the case of the death
of the Participant, to that of any other person entitled to such
payments under the terms of the Plan) furnished pursuant to Section
9.160 below. If the Plan Administrator cannot, by making a
reasonably diligent attempt by mail, locate either the Participant
or his Beneficiary, as the case may be, for a period of seven years,
such Participant or Beneficiary shall be presumed dead. If payment
cannot be made alternately to the estate of either and no surviving
spouse, child, grandchild, parent, brother or sister of the
Participant or his Beneficiary are known to the Plan Administrator
or the Trustee or, if known, cannot with reasonable diligence be
located, the amount payable shall be retained by the Trustee until
the same can be distributed as required by applicable law.
9.150 NON-ALIENATION.
(a) Except as provided in subsection (b), no right or benefit
provided for in the Plan shall be subject in any manner to
anticipation, alienation, sale, transfer,
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assignment, pledge, encumbrance or charge, and any attempt
to anticipate, alienate, sell, transfer, assign, pledge,
encumber or charge the same shall be void. Except as may
otherwise be required or permitted by the Internal Revenue
Service, no such right or benefit shall be in any manner
liable for or subject to the debts, contracts, liabilities,
engagements or torts of any person entitled to such right or
benefit. No such right or benefit shall be subject to
garnishment, attachment, execution or levy of any kind. If
any Participant or Beneficiary shall become bankrupt or
shall attempt to anticipate, alienate, sell, transfer,
assign, pledge, encumber or charge such right or benefit, or
if the right or benefit to which such person may be entitled
should be held by any court to be subject to garnishment,
attachment, execution or levy of any kind, then in the
discretion of the Plan Administrator such right or benefits
shall cease and determine and the same shall be held or
applied, in whole or in part, to or for the benefit of such
Participant or Beneficiary or his spouse, children or other
dependents, or any of them, in such manner and in such
proportion as the Plan Administrator shall deem proper. Any
payment so made or applied shall be conclusively deemed to
have been made for the benefit of such Participant or
Beneficiary as the case may be.
(b) (i) The non-alienation rule of subsection (a) shall
apply to the creation, assignment, or recognition
of a right to any benefit payable with respect to
a Participant pursuant to a domestic relations
order (as defined in section 414(p)(1)(B) of the
Code), except that subsection (a) shall not apply
if the Plan Administrator determines that such
order is a qualified domestic relations order
under section 414(p) of the Code.
(ii) Upon receipt of a domestic relations order, the
Plan Administrator shall promptly notify the
Participant and any other alternative payee of the
receipt of such order and the Plan's procedures
for determining the qualified status of domestic
relations orders.
(iii) Within a reasonable period after the receipt of a
domestic relations order, the Plan Administrator
shall determine the qualified status of such
order, and thereafter notify the Participant and
each alternate payee of such determination. During
any period in which the issue of whether a
domestic relations order is a qualified domestic
relations order is being determined by the Plan
Administrator, the Plan Administrator shall
segregate in a separate account in the Plan or in
an escrow account the amounts which would have
been payable to the alternate payee during such
period if the order had been determined to be a
qualified domestic relations order.
(iv) If within 18 months after issuance of the order,
the order is determined to be a qualified domestic
relations order, the Plan Administrator shall pay
the segregated amounts (plus interest thereon, if
any) to the person or persons entitled thereto. If
within 18 months (A) it is determined that the
order is not a qualified domestic relations order,
or (B) the issue as
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to whether such order is a qualified domestic
relations order is not resolved, the Plan
Administrator shall pay the segregated amounts
(plus interest thereon, if any) to the person or
persons who would have been entitled to such
amounts if there had been no order. Any
determination that an order is a qualified
domestic relations order which is made after the
close of the 18 month period shall be applied
prospectively only from the date of such
determination.
9.160 ADDRESSES.
Each Participant shall be responsible for furnishing the Plan
Administrator with his current address and the correct current name
and address of his Beneficiary.
9.170 NOTICES AND COMMUNICATIONS.
(a) All applications, notices, designations, elections, and
other communications from Participants shall be in writing,
on forms prescribed by the Plan Administrator and shall be
mailed or delivered to such office as may be designated by
the Plan Administrator, and shall be deemed to have been
given to the Company when received by such office.
(b) Each notice, report, remittance, statement and other
communication directed to a Participant or Beneficiary shall
be in writing and may be delivered in person or by mail, in
which latter event it shall be deemed to have been delivered
and received by him when so deposited in the United States
Mail with postage prepaid addressed to the Participant or
Beneficiary at his last address of record with the office
designated by the Plan Administrator.
9.180 COMPANY RIGHTS.
Nothing contained in the Plan shall be construed as a contract of
employment between the Company and any Participant, or as a right of
any Participant to be continued in the employment of the Company, or
as a limitation of the right of the Company to discharge any
Participant.
9.190 PAYMENTS ON BEHALF OF INCOMPETENT PARTICIPANTS OR BENEFICIARIES.
In the event that the Plan Administrator or his designee shall find
that any Participant or Beneficiary to whom a benefit is payable
under the terms of the Plan is unable to care for his affairs
because of illness or accident, is otherwise mentally or physically
incompetent, or unable to give a valid receipt, the Plan
Administrator may cause the payment becoming due to such Participant
or Beneficiary to be paid to another person for his benefit without
responsibility on the part of the Plan Administrator, the Plan
Committee, the Administrative Committee, the Company, or the
Trustee, to follow the application of such payment. Any such payment
shall be a payment for the account of the Participant or Beneficiary
and shall operate as a complete discharge of all liability
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therefor under the Plan of the Trustee, the Company, the Plan
Administrator, the Administrative Committee, and the Plan Committee.
9.200 WITHHOLDING OF TAXES.
Any payment out of the Trust Fund may be subject to withholding for
taxes as required by law.
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ARTICLE X -- PARTICIPANT'S CLAIMS
10.010 REQUIREMENT TO FILE CLAIM.
(a) A Participant wishing to make a withdrawal from the Plan
under Section 5.010 must file a written claim with the
person designated by the Plan Administrator. A claimant who
fails to reduce a claim to writing shall be deemed not to
have made such claim.
(b) Except as otherwise provided by the Plan Administrator, a
claimant will not be required to file a claim to be entitled
to a distribution under the Plan for any reason other than
those identified in subsection (a). However, a person who
fails to receive a benefit to which he claims to be entitled
under the Plan may file a claim in the manner described in
subsection (a).
(c) The person designated by the Plan Administrator shall
approve or deny in writing within thirty (30) days any claim
which has been filed with it.
10.020 APPEAL OF DENIED CLAIM
(a) A Participant whose claim has been denied as set forth in
Section 10.010(c) may appeal the denial to the Plan
Administrator by filing a written appeal within sixty (60)
days of the date of the denial.
(b) The Participant or his representative shall, for the purpose
of preparation of such appeal, have the right to inspect any
document relied upon by the person designated by the Plan
Administrator in denying the claim.
(c) The Plan Administrator or his delegate shall make a final,
full and fair review of any such decision which is appealed
to him. A decision which is not appealed within the time
herein provided shall be final and conclusive as to any
matter which was presented to the person making such
decision.
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ARTICLE XI -- MODIFICATION, SUSPENSION, MERGER AND TERMINATION
11.010 AMENDMENT.
The Board of Directors may, at any time and from time to time, amend
the Plan in whole or in part. However, except as provided in Section
14.030 below, no amendment shall be made the effect of which would
be:
(a) To cause any contributions paid to the Trustee to be used
for or diverted to purposes other than providing benefits to
the Participants and their Beneficiaries, and defraying
reasonable expenses of administering the Plan, prior to
satisfaction of all liabilities with respect to Participants
and their Beneficiaries;
(b) To have any retroactive effect so as to deprive any
Participant or Beneficiary of any benefit to which he would
be entitled under the Plan if his employment were terminated
immediately before such amendment; or
(c) To increase the responsibilities or liabilities of any
Trustee without its written consent.
11.020 TRANSFER OF ASSETS AND LIABILITIES.
The Plan Committee at any time may in its sole discretion without
the consent of the Participant or his representative cause the
Trustee to segregate part of the assets of the Trust Fund into one
or more separate trust funds and designate a group of Participants
whose benefits shall be provided solely from each such segregated
fund. The Board of Directors may, in its sole discretion without the
consent of any Participant or his representative, establish a
separate plan to cover any such group of Participants. The initial
terms and conditions of any such plan shall be identical to the
extent such terms and conditions affect the rights of Participants
under the Plan. Amendment to the Plan shall not be necessary to
carry out the provisions of this Section 11.020. Any such transfer
of assets and liabilities to another plan shall be expressly
conditioned on the qualification of such plan and trust under
sections 401(a) and 501(a) of the Code.
11.030 MERGER RESTRICTION.
Notwithstanding any other provision in the Plan, the Plan shall not
in whole or in part merge or consolidate with, or transfer its
assets or liabilities to any other plan unless each affected
Participant in the Plan would (if the Plan 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).
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11.040 SUSPENSION OF CONTRIBUTIONS.
The Company may, without amendment of the Plan and without the
consent of any Participant or representative of any Participant,
suspend Compensation Deferral Contributions to the Plan as to all or
certain Participants by action of the Board of Directors. In any
event, the Company will suspend Compensation Deferral Contributions
at any time when the amount of any contribution by it would be in
excess of the earnings, including retained earnings, of the Company.
Upon a suspension, the Plan Committee may, in its sole discretion
permit the Trust Fund to continue to be held by the Trustee, or may
segregate one or more parts of the Trust Fund, as provided in
Section 11.020.
11.050 DISCONTINUANCE OF CONTRIBUTIONS.
The Company may, by action of the Board of Directors, without
amendment of the Plan and without the consent of any Participant or
representative of any Participant, discontinue Compensation Deferral
Contributions to the Plan as to all or certain Participants. Upon
such discontinuance the Plan Committee may in its sole discretion
segregate one or more parts of the Trust Fund, as provided in
Section 11.020.
11.060 TERMINATION.
The Plan Committee may terminate or partially terminate the Plan at
any time. In the event of termination or partial termination the
Plan Committee may, without the consent of any Participant or other
person, but subject to the rights of Participants and other persons
under the Plan, (i) permit the Trustee to retain all or part of the
Trust Fund or (ii) distribute all or part of the Trust Fund to the
Participants or their spouses or Beneficiaries.
11.070 VESTING UPON PLAN TERMINATION OR DISCONTINUANCE OF CONTRIBUTIONS.
Upon complete or partial termination of the Plan or upon the
complete discontinuance of contributions to the Plan, the rights of
all affected Participants to the amounts credited to their Accounts
shall be fully vested and nonforfeitable.
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ARTICLE XII -- STATUTORY LIMITATIONS
12.010 ANNUAL LIMITS OF PARTICIPANTS' ACCOUNT INCREASES.
The amount allocated in each calendar year to any Participant under
the combination of defined contribution plans of all Affiliated
Companies cannot exceed the lesser of $30,000.00 (or such larger
amount as may be established under section 415(d)(1)(B) of the Code,
to reflect an increase in the cost of living) or 25% of the
Participant's total compensation.
12.020 LIMITS AS TO COMBINED PLANS.
In the case of a Participant who also is a participant in a defined
benefit pension plan which is or was maintained by the Company or an
Affiliated Company and to which section 415 of the Code applies, the
limitation set forth herein shall be further adjusted in compliance
with section 415(e) of the Code. In making such adjustment, the
maximum benefit allowable shall be paid hereunder before applying
the limitations on the defined benefit plan.
12.030 COMBINING SIMILAR PLANS.
For purposes of this Article, all defined contribution plans which
are required to be aggregated under section 414(b) of the Code shall
be so aggregated and the limitation set forth herein shall be
applied to the total amounts allocated under all such plans.
12.040 ADJUSTMENT TO COMPENSATION DEFERRAL CONTRIBUTIONS.
To the extent the Compensation Deferral Contributions elected by a
Participant under Section 2.020(a) would, if made, cause the total
amount allocated to a Participant in any calendar year to exceed the
limitations set forth in this Article, such amount shall be paid as
compensation to the Participant.
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ARTICLE XIII -- MISCELLANEOUS
13.010 BENEFITS PAYABLE ONLY FROM TRUST FUND.
All benefits payable hereunder shall be provided solely from the
trust, and the Company assumes no responsibility for the acts of the
Trustee, except as provided in the Trust Agreement
13.020 REQUIREMENT FOR RELEASE.
Any payment to any Participant or his Beneficiary in accordance with
the provisions of the Plan shall, to the extent thereof, be in full
satisfaction of all claims against the Trustee and the Company, and
the Trustee may require such Participant or Beneficiary, as a
condition precedent to such payment to execute a receipt and release
to such effect. If in the opinion of the Plan Administrator any
present, former or future spouse of a Participant shall by reason of
the law of any jurisdiction appear to have paid interest in the
benefits that might, but for any election made by such Participant
pursuant to the Plan, be or become payable to such Participant or
his Beneficiary, the Plan Administrator may, as a condition
precedent to the making of such an election or revocation of such an
election or as a condition of the continued effectiveness of any
such election or revocation of such election, require such written
release or releases, or such other proof in lieu thereof, as in his
discretion he shall determine to be necessary, desirable or
appropriate either to protect the rights of any such present, former
or future spouse or to prevent or avoid any conflict or multiplicity
of claims with respect to the payment of any benefits under the
Plan.
13.030 TRANSFERS OF STOCK TO PARTICIPANTS.
Transfers of Common Stock and Class A Stock from the Trustee to
Participants pursuant to Article IV or V shall be made as soon as
practicable, but neither the Company, any Named Fiduciary nor the
Trustee shall have any responsibility for any decrease in the value
of such stock between the Valuation Date used for determination of
the number of shares to which the Participant is entitled and the
date of transfer to the Participant by the transfer agent, nor,
except as provided in Articles IV and V, shall the Participant
receive any dividends, rights, options or warrants on such stock
other than those payable to shareholders of record as of a date on
or after the date of transfer to the Participant.
13.040 INTERPRETATION.
The masculine gender shall include the feminine and the singular
shall include the plural unless the context clearly indicates
otherwise.
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ARTICLE XIV -- APPROVAL OF THE COMMISSIONER OF INTERNAL REVENUE
14.010 QUALIFICATION OF THE PLAN.
The Company intends to preserve the qualification with and approval
by the Internal Revenue Service of the Plan as a plan, Company
Contributions to which are deductible by the Company for Federal
income tax purposes. Should any amendment to the Plan cause the Plan
as amended to fail so to qualify and obtain such approval, then in
such event, the amendment to the Plan shall be deemed revoked and,
as soon as practicable thereafter, the Plan shall be amended to the
extent necessary to preserve such qualification and approval.
14.020 CONTINUATION OF THE PLAN.
Continuation of the Plan is contingent upon and subject to retaining
such approval of the Commissioner of Internal Revenue as the Company
may find necessary.
14.030 MODIFICATION OF THE PLAN.
Any modification or amendment of the Plan or the Trust Agreement may
be made retroactively by the Company, if necessary or appropriate,
to qualify or maintain the Plan as a plan and trust, meeting the
requirements of applicable sections of the Code and of other Federal
and State laws, as now in effect or hereafter amended or enacted.
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ARTICLE XV -- PLAN ADMINISTRATION IN THE EVENT OF THIRD-PARTY TENDER OFFERS
15.010 APPLICABILITY.
The provisions of this Article XV shall take effect only as of the
date of the first tender or deposit by the Trustee of any share of
Common Stock (including any share of Common Stock issued on
conversion of Class A Stock) and Class A Stock pursuant to any
Tender Offer (as herein defined) in accordance with the Trust
Agreement as provided in Section 8.030(c) and shall remain in effect
thereafter unless and until (a) each share of Common Stock
(including any share of Common Stock issued on conversion of Class A
Stock) and Class A Stock held in the Rockwell Stock Fund which has
been tendered or deposited in accordance with the Trust Agreement as
provided in Section 8.030(c) pursuant to such Tender Offer or any
subsequent Tender Offer commenced while the provisions of this
Article XV are in effect has been effectively withdrawn by or
otherwise returned to the Trustee and (b) the certificate
representing each share is in the possession of the Trustee. As used
in this Article XV, the term "Tender Offer" means any tender offer
for, or request or invitation for tenders of, the Common Stock
and/or Class A Stock subject to Section 14(d)(1) of the Securities
Exchange Act of 1934, as amended, or any regulation thereunder,
except for any such tender offer or request or invitation for
tenders made by the Company or any Affiliated Company.
15.020 ADDITIONAL DEFINITIONS.
While the provisions of this Article XV are in effect:
(a) the term "Sub Fund" shall mean the fund established by the
Trustee pursuant to Section 15.030(a).
(b) in lieu of the definition set forth in Section 1.010, the term
"Account" or "Compensation Deferral Account" means the
account, with respect to a Participant, that is comprised of
or attributable to contributions made on behalf of or with
respect to the Participant under Article II, including, but
not limited to, Transfer Contributions as defined in Section
1.255, adjusted by gains or losses related to the investment
of such contributions.
(c) in lieu of the definition set forth in Section 1.270, the term
"Trust Fund" shall mean the fund, including the earnings
thereon, held by the Trustee into which all contributions
attributable to the Participant and the Company are deposited
pursuant to the Plan. The Trust Fund shall be divided into an
Equity Fund, Guaranteed Investment Fund, a Money Market Fund,
a Rockwell Stock Fund and a Sub Fund.
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15.030 ESTABLISHMENT AND INVESTMENT OF THE SUB FUND.
While the provisions of this Article XV are in effect:
(a) the Trustee shall establish a Sub Fund consisting of any cash,
securities or other consideration received by the Trustee as
payment for shares of Common Stock (including any shares of
Common Stock issued on conversion of Class A Stock) or Class A
Stock previously held in the Rockwell Stock Fund which were
tendered or deposited in accordance with the Trust Agreement
as provided in Section 8.030(c), all property purchased
therewith and the proceeds and income therefrom.
(b) the Trustee shall use all cash in the Sub Fund only to
purchase the kinds of instruments of debt with maturity of not
more than one year in which the Trustee may invest and
reinvest the principal and income of the Money Market Fund
pursuant to Section 8.020(c) and shall so invest and reinvest
the principal thereof and income thereon. Dividends, income
and other distributions received on, and proceeds from the
sale or other disposition of, any securities or other
consideration held by the Trustee for Participants in the Sub
Fund pursuant to a tender or deposit of shares of Common Stock
(including any shares of Common Stock issued on conversion of
Class A Stock) or Class A Stock in accordance with the Trust
Agreement as provided in Section 8.030(c) shall be similarly
invested and reinvested.
(c) the funding policy of the Plan determined by the Plan
Committee pursuant to Section 9.040 shall be consistent with
the objectives for the Sub Fund.
15.040 MAINTENANCE AND VALUATION OF SUB FUND; CORRESPONDING REDUCTIONS OF
ROCKWELL STOCK FUND.
While the provisions of this Article XV are in effect:
(a) a separate account representing each Participant's interest in
the Sub Fund shall be maintained. Such separate account shall
contain sufficient information to permit with respect to the
Sub Fund a determination of the dollar balance of such
Participant's Account at any time in accordance with the Unit
valuation described in subsections (b), (c) and (d) hereof.
Such separate account shall contain sufficient information to
permit such other determinations as may be required to carry
out the provisions of the Plan.
(b) the interest of each Participant in the Sub Fund shall be
represented by Units allocated to his Account. The initial
value of each Unit to be allocated to his Account in respect
of amounts held by the Trustee in the Sub Fund shall be One
Dollar ($1.00), and Units shall be credited to each
Participant on such basis for amounts received by the Trustee
on his behalf prior to the first Valuation Date following the
first receipt by the Trustee of cash, securities or other
consideration
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for shares of Common Stock (including any shares of Common
Stock issued on conversion of Class A Stock) or Class A Stock
previously representing his interest in the Rockwell Stock
Fund which were tendered or deposited in accordance with the
Trust Agreement as provided in Section 8.030(c). Each receipt
on behalf of a Participant of cash, securities or other
consideration for shares of Common Stock (including any shares
of Common Stock issued on conversion of Class A Stock) or
Class A Stock previously representing his interest in the
Rockwell Stock Fund which were tendered or deposited in
accordance with the Trust Agreement as provided in Section
8.030(c) or each payment to a Participant from the Sub Fund
shall result in a credit or charge to the affected Account of
the Participant equal to the number of Units received or paid
as the case may be.
(c) as of the Valuation Date next following the first deposit into
the Sub Fund and as of each succeeding Valuation Date, an
amount equal to the fair market value of all property in such
fund shall be determined by the Trustee in such manner and on
such basis as it shall deem appropriate. Such amount shall be
divided by the total number of Units credited to all
Participants in each such fund, thereby establishing a new
Unit value. With respect to such fund, each receipt therein or
payment therefrom after such Valuation Date shall be converted
to Units by dividing such new Unit value into the amount of
such receipt or payment and the Account of the Participant
shall be credited or charged, as the case may be, with the
portion of the number of Units so computed properly
attributable to such Participant.
(d) as of any specified date, the dollar balance of the individual
Account of each Participant in the Sub Fund shall be
determined in the same manner as under Section 3.040. (but
using for such determination amounts received by the Trustee
in respect of the Sub Fund in lieu of contributions).
(e) the Participant's Account in the Rockwell Stock Fund shall be
reduced as of each date on which the Trustee receives cash,
securities or other consideration for shares of Common Stock
(including any shares of Common Stock issued on conversion of
Class A Stock) or Class A Stock previously representing some
or all of his interest in the Rockwell Stock Fund which were
tendered or deposited in accordance with the Trust Agreement
as provided in Section 8.030(c) by the number of Units which
bears the same relation to the number of Units credited to
such Account immediately prior to the tender or deposit of
such shares as the portion of his interest in the Rockwell
Stock Fund in respect of which such shares were tendered bore
to his entire interest in the Rockwell Stock Fund immediately
prior to the tender or deposit of such shares.
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15.050 BENEFITS PAYABLE FROM THE SUB FUND
While the provisions of this Article XV are in effect:
(a) For purposes of Section 4.020(a):
(i) The full dollar balance of the Participant's Accounts in
the Sub Fund shall be deemed to be described in
paragraph (2) thereof, and such balance shall be deemed
to be an amount that the Participant (or his Beneficiary
in the case of death) shall receive under paragraph (1)
thereof. Such balance shall be determined, in the manner
provided by Section 15.040(d), by reference to the Units
in each such Account on the date of the Participant's
termination of employment.
(ii) The amounts set forth in subparagraph (ii) of paragraph
(a) of Section 4.020 shall be amounts that the
Participant (or his Beneficiary in the case of death,
shall receive under paragraph (1) thereof; provided,
however, that no share of Common Stock (including any
share of Common Stock issued on conversion of Class A
Stock) or Class A Stock representing a Participant's
interest in the Rockwell Stock Fund which, as of the
date of such Participant's termination of employment,
has been tendered or deposited in accordance with the
Trust Agreement as provided in Section 8.030(c) shall be
transferred to such Participant (or his Beneficiary in
the case of death) pursuant to Section 4.020(a)(i)
unless and until such share has been effectively
withdrawn by or otherwise returned to the Trustee and
the certificate representing such share is in the
possession of the Trustee; and provided, further,
however, that there shall be paid or transferred to such
Participant (or his Beneficiary in the case of death)
any and all cash, securities or other consideration
received by the Trustee for whole shares of Common Stock
(including any shares of Common Stock issued on
conversion of Class A Stock) or Class A Stock previously
representing such Participant's interest in the Rockwell
Stock Fund as of the Valuation Date immediately
preceding the date of such termination and which were
tendered or deposited in accordance with the Trust
Agreement as provided in Section 8.030(c) as soon as
practicable after the receipt of such cash, securities
or other consideration by the Trustee.
15.060 WITHDRAWALS FROM A PARTICIPANT'S COMPENSATION DEFERRAL ACCOUNT UNDER
SECTION 5.010
While the provisions of this Article XV are in effect:
(a) for purposes and subject to the provisions of Section
5.010(d), a Participant may elect to have any withdrawal from
his Compensation
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Deferral Account taken from any of the funds as set forth in
Section 5.010(e) or from his Compensation Deferral Account in
the Sub Fund, or to have a specified portion taken from any of
the funds as set forth in Section 5.010(e) and a specified
portion taken from any two or more of the above funds.
Notwithstanding the foregoing provisions of this subsection
(2), and subject only to the provisions of Section 5.010(e),
any withdrawal from his account or accounts in the Guaranteed
Investment Fund shall be taken in reverse sequence by first
exhausting his accounts in the most recent contracts under
such Fund.
(b) partial withdrawals pursuant to Section 5.010 shall be in a
minimum amount of $100 with respect to the Sub Fund.
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DESIGNATION OF ADMINISTRATOR
ROCKWELL INTERNATIONAL CORPORATION
ADVICE OF ACTION
To: THOSE CONCERNED Date 7/1/87
Subject: REDESIGNATION OF PLAN ADMINISTRATOR
You are hereby notified of action taken as follows:
By BOARD OF DIRECTORS
Place of Meeting Pittsburgh, PA
Date of Meeting July 1, 1987
RESOLVED, that, effective June 1, 1987, the Director, Benefits Administration,
be, and he hereby is, appointed for all purposes contemplated by the Employee
Retirement Income Security Act of 1974, as amended, the "administrator" of each
of the Corporation's employee benefit plans, and in such capacity is hereby
designated Plan Administrator.
* * * * *
I, Charles H. Harff, Secretary of Rockwell International Corporation, hereby
certify that the foregoing resolution was duly adopted by the Board of Directors
at a meeting held in Pittsburgh, Pennsylvania, on July 1, 1987 and that the same
is in full force and effect.
/s/ Charles H. Harff
Secretary
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APPENDIX A
APPENDIX A -- ELIGIBLE PAYROLLS AND EFFECTIVE DATES
ELIGIBLE PAYROLL EFFECTIVE DATE
UAW Los Angeles Area Unit (Local 887) November 30, 1985
UAW Palmdale Area Unit (Local 887) November 30, 1985
UAW Weedpatch Area Unit (Local 887) November 30, 1985
UAW Manufacturing Planning and
Tool Design Unit (Local 887) November 30, 1985
UAW Tulsa Area Unit (Local 952) November 30, 1985
UAW Santa Susana Field Laboratory
Area Unit (Local 1519) November 30, 1985
UAW Edwards Field Laboratory Area
Unit (Local 1519) November 30, 1985
UAW McAlester Area Unit (Local 1558) November 30, 1985
SMWIA Weldors (Local 461) November 30, 1985
IUOE Operating Engineers (Local 501) November 30, 1985
UIPFA Police & Fireman November 30, 1985
Painters (Local 36) November 30, 1985
Industrial Carpenters (Local 530) November 30, 1985
UPGWA Tulsa Guards (Local 801) November 30, 1985
IBT Teamsters (Locals 578 and 952) November 30, 1985
IBEW Electricians (Local 2295) November 30, 1985
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APPENDIX B
PROCEDURES FOR DISTRIBUTIONS TO PARTICIPANTS AGE 70-1/2
This procedure applies only to Participants who have become age 70-1/2 on or
after January 1, 1988:
1. Commencing no later than January 31, 1990, each such Participant
shall receive a complete distribution of his or her Account in the Plan in
accordance with Section 5.020 of the Plan valued as of December 31, 1989. No
later than January 31 of each year thereafter, each Participant who, as of
December 31 of that year has attained age 70-1/2 will also receive a complete
distribution of his or her Account in the Plan valued as of the immediately
preceding December 31.
2. Applicable waivers for Federal and State income tax purposes must
be completed and returned to the Company's Administrative Services Center by no
later than ten (10) days prior to January 31 of each year in order to prevent
Federal and, if applicable, state income taxes from being withheld from
distributions.
3. Distributions pursuant to Paragraph 1 shall not affect any
existing elections by such Participants to continue making contributions to the
Plan, all of which shall be invested in accordance with the provisions of
Article II. Compensation Deferral Contributions made to the Plan during each
calendar year by such Participants, together with earnings thereon, will be
distributed the following year in accordance with Paragraph 1.
Approved, 12/5, 1990:
/s/ L. A. Felix, Jr.
------------------------------------
L. A. Felix, Jr.
Plan Administrator
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APPENDIX C
PROCEDURES, TERMS AND CONDITIONS OF LOANS
Pursuant to Section 5.020 of the Plan, the Plan Administrator hereby adopts the
following amended procedures, terms and conditions for the granting and
administration of loans from the Plan to be effective October 1, 1993:
Eligibility for Loan: To be eligible to obtain a loan from the Plan, an Employee
must have an Account balance with the Plan and be employed on an active payroll
of an Affiliated Company at the time he applies for a loan. A "party in
interest" (as defined in ERISA Section 3(14)) who has an Account balance with
the Plan, but who is not an Employee, shall be eligible to obtain a loan only if
he can provide an agreement by his current employer to deduct and remit to
Savings Plan Loan Administration the required loan repayments. However, an
Employee or other party in interest may not obtain a loan from the Plan prior to
the expiration of the greater of the following periods of time following a
default on another loan from the Plan or any other Company sponsored savings
plan: one (1) year or a period of time equal to the original term of the
defaulted loan.
Number of Loans Permitted at Any One Time; Minimum Amount of Loan: Only a single
loan is permitted to be outstanding from all Company sponsored savings plans at
any one time. Any Employee or other party in interest who has an outstanding
loan with the Plan or any other Company sponsored savings plan will be required
to repay the loan in full before applying for another loan from the Plan. Each
loan must be in the minimum amount of $1,000.
Maximum Amount of Loan: The amount which any Employee or other party in interest
shall be permitted to borrow from the Plan shall be based on the aggregate of
the value of his Account determined in accordance with Section 3.030 of the Plan
and may not exceed the lesser of an amount which, when combined with all
outstanding loans to such Employee or other party in interest from all other
plans of all Affiliated Companies, equals Fifty Thousand Dollars ($50,000),
reduced by the highest outstanding and unpaid balances during the twelve (12)
month period immediately preceding the date on which such loan is made of all
prior loans to such Employee or other party in interest from the Plan and such
other plans; or one-half (1/2) the aggregate of the balances of his Account.
The maximum amount of any loan will be further limited to an amount which, at
the applicable rate of interest, will result in a monthly repayment collected in
four (4) weekly deductions not in excess of the net earnings, after all
applicable statutory withholdings, deductions for employee benefits and pre-tax
contributions to the Plan, but before other deductions for credit union, savings
bond and other savings and charitable deductions, of the Employee or other party
in interest for the weeks in which the loan repayment is to be deducted.
Loan Applications: Initial loan application forms will consist of an application
form and a repayment worksheet, both in form approved by the Plan Administrator,
and may be obtained from any Benefits Representative or Payroll Department. The
loan application form must be completed and signed by the Employee or other
party in interest and returned to the applicable
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Benefits Representative or Payroll Department, which will review the forms to
determine eligibility and, if approved, forward them to:
Savings Plan Loan Administration
Rockwell International Corporation
P. O. Box 2837
Seal Beach, California 90740
for processing. If the loan is approved by the Savings Plan Loan Administrator,
a promissory note, payroll deduction authorization and Truth In Lending
statement, together with a letter notifying the applicant of the approval of the
loan, all in form approved by the Plan Administrator, will be prepared and
forwarded to the applicant for execution. These forms must be executed by the
applicant and returned to Savings Plan Loan Administration within thirty (30)
days after the date of the letter approving the loan or the application will be
deemed withdrawn.
Source of Loan Funds: Each loan will be funded by withdrawing the required
amounts from the Plan account(s) of the Employee or other party in interest
specified in his loan application form. Each such account will be credited with
a receivable equal to the amount withdrawn, the aggregate of which receivables
will be evidenced by the promissory note of the Employee or other party in
interest for the amount of the loan.
Determination of Interest Rate to be Charged for Loans: The interest rate to be
charged for loans will be the rate determined by the Plan Administrator as
equivalent to the rate of interest charged by Wells Fargo for secured loans
comparable to loans from the Plan at the time the loan from the Plan is
approved. The Plan Administrator has determined that Wells Fargo's prime rate of
interest plus 1% represents an appropriate rate of interest under this standard.
Term of Loan: Loans will be permitted for terms of 12, 24, 36, 48 or 60 months
for loans other than those for the purpose of purchasing a primary residence.
Loans for the purpose of purchasing a primary residence will be permitted for a
term of 120 months.
Repayments: Beginning with the first payroll payment in October 1993, current
loans will be converted from monthly to weekly paycheck deductions, totalling
the prior monthly amount. Repayments for loans obtained by Employees beginning
October 1993 will be deducted from the Employee's weekly paycheck. If a paycheck
is insufficient to cover the full amount of the loan repayment, no deduction
will be made, and the repayment will be deducted from the Employee's next weekly
paycheck. Loan repayment schedules for parties in interest who are not Employees
will be developed on an individual basis, but parallelling as closely as
possible the loan repayment schedules for Employees.
Prepayments: Subject to the limitations described in this paragraph, a
Participant may prepay at any time the full unpaid balance of his loan. Partial
prepayments in excess of scheduled payroll deductions will not be accepted. No
prepayments will be accepted within twelve (12) months
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after the date of the loan unless the borrower is an Employee and terminates
employment within such twelve (12) month period, in which case prepayment may be
made at any time following the date written notice is given to him by the
Company or an Affiliated Company or by him to the Company or an Affiliated
Company and prior to his date of termination.
Missed Payments: If a payment is not made in any month, interest will continue
to accrue on such missed payment and subsequent payments will be applied first
to accrued and unpaid interest and then to principal. A notice will be mailed to
the last known address of the Participant on each occasion of a missed payment
(until three (3) consecutive monthly payments have been missed) stating the
amount of the missed payment(s), that the missed payment(s) will be deducted
from his next paycheck, that if three (3) consecutive monthly payments are
missed the loan will be considered in default, and that, upon default, the
unpaid balance of the loan and all accrued and unpaid interest will be
considered as taxable income.
Termination of Employment: If an Employee or other party in interest terminates
employment so that payroll deductions may no longer be made to effect loan
repayments, such person may continue to make loan repayments by personal check
to Savings Plan Loan Administration, Rockwell International Corporation,
Department LA 21089S, Pasadena, California 91185. In the event that three (3)
consecutive monthly payments are missed, the loan will be deemed to be default.
Default: A loan will be considered in default after three (3) consecutive
monthly payments have been missed during the term of the loan or when a
Participant effectively revokes a payroll deduction authorization. When a loan
is in default, all accrued and unpaid interest will be capitalized, and a
taxable distribution for the purposes of section 72(p) of the Code only will be
deemed to have occurred, and a notice will be sent to the Participant advising
him of the default and the tax implications thereof. If an event permitting
distribution of the Account of the Participant has occurred (whether or not
distribution of the Account will actually be made concurrently therewith or has
been deferred pursuant to applicable provisions of the Plan, the unpaid balance
of the loan, including capitalized interest, will be charged off against such
person's Account. If no distributable event has occurred, the unpaid balance of
the loan, including capitalized interest, will be retained in the Account and
will continue to bear interest until such time as distribution is permitted
under section 401(k) of the Code, at which time the unpaid balance of the loan,
including all accrued and unpaid interest, will be charged off, and the
Participant's promissory note will be marked "Charged in Full Against Account"
and returned to the Participant. An appropriate form, as is from time to time
required by the applicable taxing authority, reflecting the Participant's
taxable income (in the year of default, the unpaid balance of the loan plus
capitalized interest and interest accrued and unpaid thereafter; in each
subsequent year, interest accrued and unpaid on the loan) will be issued to the
Participant as soon as practicable after the end of each calendar year during
any part of which a defaulted loan is retained in a Participant's Account.
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Procedure upon Payment in Full or Charge-Off of Loan: Upon receipt of the final,
scheduled repayment paying the loan in full, the Participant's promissory note
will be marked "Paid In Full" and returned to the Participant. If, as a result
of missed payments, the loan has not been paid in full at such time, the
Participant will be billed for the remaining balance. If payment of the
remaining balance and all accrued and unpaid interest is not received within
three (3) months thereafter, the loan will be considered to be in default.
Approved, October 1 ,1993
By /s/ A. J. Spigarelli
--------------------------
A. J. Spigarelli
Plan Administrator
55
