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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________ to __________
Commission file number 1-2376
FMC CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 94-0479804
- ------------------------------- --------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 East Randolph Drive,
Chicago, Illinois 60601
- ------------------ -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 312/861-6000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
- ------------------- -------------------
Common Stock, $0.10 par value New York Stock Exchange
Chicago Stock Exchange
Pacific Stock Exchange
Preferred Share Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS.
YES [X] NO [ ]
INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM
405 OF REGULATION S-K IS NOT CONTAINED HEREIN AND WILL NOT BE CONTAINED, TO THE
BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENTS
INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO THIS
FORM 10-K. [X]
THE AGGREGATE MARKET VALUE OF VOTING STOCK HELD BY NON-AFFILIATES OF THE
REGISTRANT AS OF MARCH 8, 2000, WAS $1,503,160,875, THE NUMBER OF SHARES OF THE
REGISTRANT'S COMMON STOCK, $0.10 PAR VALUE, OUTSTANDING AS OF THAT DATE WAS
31,194,000.
DOCUMENTS INCORPORATED BY REFERENCE
-----------------------------------
DOCUMENT FORM 10-K REFERENCE
- -------- -------------------
Portions of 1999 Annual Report Part I, Item 1; Part
to Stockholders II; and Part IV, Items
14(a)(1) and (2)
Portions of Proxy Statement for Part III
2000 Annual Meeting of Stockholders
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PART I
FMC Corporation was incorporated in 1928 under Delaware law and has its
principal executive offices at 200 East Randolph Drive, Chicago, Illinois 60601.
As used in this report, except where otherwise stated or indicated by the
context, "FMC", "the company" or "the Registrant" means FMC Corporation and its
consolidated subsidiaries and their predecessors.
The company is one of the world's leading producers of machinery and chemicals
for industry and agriculture. The company employs 15,609 people at 97
manufacturing facilities and mines in 26 countries.
The company operates in five principal industry segments: Energy Systems; Food
and Transportation Systems; Agricultural Products; Specialty Chemicals; and
Industrial Chemicals. The Energy Systems businesses supply drilling,
engineering, metering and subsea products systems and related services to the
oil and gas exploration industry. Food and Transportation Systems businesses
provide automated processing and handling equipment to consumer-based
industries. Agricultural Products produces crop protection and pest control
chemicals for worldwide markets. The Specialty Chemicals businesses develop and
manufacture highly specialized products used in food, pharmaceutical and
personal care products. The Industrial Chemicals businesses provide commodity-
based chemicals produced in large quantities to industrial consumers.
Business and geographic segment data for 1999, 1998 and 1997 are summarized on
pages 16, 17 and 36 of the 1999 Annual Report to Stockholders, which is
incorporated herein by reference.
ITEM 1. BUSINESS
Incorporated by Reference From:
(a) General Development - 1999 Annual Report to
of Business Stockholders, pages 2-4 and
56, Management's Discussion
and Analysis on pages
22-31, and Notes 2, 3 and 4
to the consolidated
financial statements on
pages 40-43
(b) Financial Information - 1999 Annual Report to
About Industry Segments Stockholders, pages 16-17
and page 36
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(c) Narrative Description - 1999 Annual Report to
of Business Stockholders, pages 18-21
and 22-31
Source and Availability of Raw Materials
- ----------------------------------------
FMC's raw material requirements vary by business segment and include mineral-
related natural resources, processed chemicals, seaweed, steel, aluminum, steel
castings and forgings and energy sources, such as oil, gas, coal, coke,
hydroelectric power and nuclear power.
Ores used in the Industrial Chemicals manufacturing process, such as trona and
phosphate rock, are produced from mines in the United States on property held by
FMC under long-term leases subject to periodic adjustment of royalty rates. Raw
materials used by Specialty Chemicals include lithium carbonate, which is
obtained from a South American manufacturer under a long-term sourcing
agreement, and alginates and carrageenan, which are derived from various types
of seaweed that are sourced by the company on a global basis. Raw materials used
by Agricultural Products, primarily processed chemicals, are obtained from
worldwide sources. The business segments that are involved in machinery
production, Energy Systems and Food and Transportation Systems, purchase carbon
steel, stainless steel, aluminum and steel castings and forgings both
domestically and internationally.
The company does not use single source suppliers for the majority of its raw
material purchases and believes the available supplies of raw materials are
adequate.
Patents
- -------
FMC owns a number of U.S. and foreign patents, trademarks and licenses that are
cumulatively important to its business. FMC does not believe that the loss of
any one or group of related patents, trademarks or licenses would have a
material adverse effect on the overall business of FMC.
Seasonality
- -----------
FMC's businesses are generally not subject to significant seasonal fluctations,
except for the Agricultural Products segment, which tends toward lower
profitability in the fourth quarter primarily due to seasonality in worldwide
agricultural markets.
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Competitive Conditions
- ----------------------
FMC encounters substantial competition in each of its five segments. This
competition is expected to continue in both the United States and markets
outside the United States. FMC markets its products through its own sales
organization and through independent distributors and sales representatives.
Competitive factors impacting sales of the company's products include: price,
service (including the ability to deliver products on an "as needed, where
needed" basis), product quality, warranty, technological innovation and
technical proficiency. The number of the company's principal competitors varies
from segment to segment.
See pages 18 through 21 of the 1999 Annual Report to Stockholders for
information about each segment's principal products.
Research and Development Expense
- --------------------------------
In Millions Year Ended December 31
1999 1998 1997
------ ------ ------
Energy Systems $ 25.7 $ 24.7 $ 20.0
Food and Transportation Systems 26.1 26.0 26.7
Agricultural Products 60.9 60.2 73.9
Specialty Chemicals 21.2 28.0 35.2
Industrial Chemicals 18.5 18.6 18.2
Corporate - 0.2 -
------ ------ ------
Total $152.4 $157.7 $174.0
====== ====== ======
Research and development ("R&D") expense for Specialty Chemicals declined in
1999 and 1998. The 1999 decline was primarily due to the divestiture of
businesses, while the decline in 1998 reflected the segment's reallocation of
certain R&D resources toward customer-focused technical support (which is
included in selling, general and administrative expenses) and R&D workforce
reductions.
Agricultural Products R&D costs declined in 1998 when compared with 1997,
reflecting the completion of product development cycles related to Authority and
Aim herbicides.
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Environmental
- -------------
Incorporated by Reference From:
Compliance with Environmental - 1999 Annual Report to
Laws and Regulations Stockholders, Note 14 to
the consolidated financial
statements on pages 50-51
Employees
- ---------
FMC employs 15,609 people in its domestic and foreign operations. Approximately
2,400 such employees are represented by collective bargaining agreements in the
United States. In 2000, 5 of the company's 14 collective bargaining agreements
will expire, covering approximately 1,500 employees. Certain of those contracts
are under negotiation at the present time. FMC maintains good employee
relations and has successfully concluded virtually all of its recent
negotiations without a work stoppage. In those rare instances where a work
stoppage has occurred, there has been no material effect on consolidated sales
and earnings. FMC, however, cannot predict the outcome of future contract
negotiations.
Incorporated by Reference From:
(d) Financial Information - 1999 Annual Report to
About Foreign and Domestic Stockholders, page 36
Operations and
Export Sales
Forward Looking Statements - Safe Harbor Provisions
- ---------------------------------------------------
Statement under the Safe Harbor Provisions of the Private Securities Litigation
Reform Act of 1995: The company and its representatives may from time to time
make written or oral statements that are "forward-looking" and provide other
than historical information, including statements contained in this Annual
Report on Form 10-K, in the company's other filings with the Securities and
Exchange Commission or in reports to its stockholders.
Whenever possible, FMC has identified these forward-looking statements by such
words or phrases as "will likely result", "is confident that", "expected",
"should", "could", "will continue to", "believes", "anticipates", "predicts",
"forecasts", "estimates", "projects" or similar expressions identifying
"forward-looking statements" within the meaning of the Private Securities
Litigation
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Reform Act of 1995. Such forward-looking statements are based on management's
current views and assumptions regarding future events, future business
conditions and the outlook for the company based on currently available
information. These forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from those
expressed in, or implied by, these statements. The company wishes to caution
readers not to place undue reliance on any such forward-looking statements,
which speak only as of the date made.
In connection with the Safe Harbor Provisions of the Private Securities
Litigation Reform Act of 1995, the company is hereby identifying important
factors that could affect the company's financial performance and could cause
the company's actual results for future periods to differ materially from any
opinions or statements expressed with respect to future periods in any current
statements.
Among the factors that could have an impact on the company's ability to achieve
its operating results and growth plan goals are:
. Significant price competition, particularly among competitors in the
company's chemical businesses;
. The impact of unforeseen economic and political changes in the
international markets where the company competes, including currency
exchange rates, war, civil unrest, inflation rates, recessions, trade
restrictions, foreign ownership restrictions and economic embargoes
imposed by the United States or any of the foreign countries in which
FMC does business, and other external factors over which the company
has no control;
. The impact of significant changes in interest rates or taxation rates;
. Increases in ingredient or raw material prices compared with
historical levels, or shortages of ingredients or raw materials;
. Inherent risks in the marketplace associated with new product
introductions and technologies, particularly in agricultural and
specialty chemicals;
. Changes in capital spending by customers in the petroleum exploration
and airline industries;
. Risks associated with developing new manufacturing processes,
particularly with respect to complex chemical products;
. The ability of the company to integrate possible future acquisitions
or joint ventures into its existing operations;
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. The impact of freight transportation delays beyond the control of the
company;
. The effect of previously undetected compliance issues related to the
arrival of the year 2000;
. Risks associated with joint venture, partnership or limited endeavors
in which the company may be responsible at least in part for the acts
or omissions of its partners;
. Conditions affecting domestic and international capital markets;
. Risks derived from unforeseen developments in industries served by the
company, such as extreme weather patterns or low insect infestations
in the agricultural sector, political or economic changes in the
energy industries, and other external factors over which the company
has no control;
. Risks associated with litigation, including the possibility that
current reserves and estimated loss contingencies relating to the
company's ongoing litigation may prove inadequate;
. Environmental liabilities that may arise in the future that exceed
current reserves and estimated loss contingencies; and
. Increased competition in the hiring and retention of employees.
The company cautions that the foregoing list of important factors may not be
all-inclusive, and it specifically declines to undertake any obligation to
publicly revise any forward-looking statements that have been made to reflect
events or circumstances after the date of such statements or to reflect the
occurrence of anticipated or unanticipated events.
With respect to forward-looking statements set forth in the notes to
consolidated financial statements, including those relating to environmental
obligations, contingent liabilities and legal proceedings, as well as this 1999
Annual Report on Form 10-K, some of the factors that could affect the ultimate
disposition of those contingencies are changes in applicable laws, the
development of facts in individual cases, settlement opportunities and the
actions of plaintiffs, judges and juries.
ITEM 2. PROPERTIES
FMC leases executive offices in Chicago and administrative offices in
Philadelphia. The company operates 97 manufacturing facilities and mines in 26
countries. Its major research facility is in
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Princeton, NJ. FMC holds mining leases on shale and ore deposits in Idaho to
supply its phosphorus plant in Pocatello, and owns substantial phosphatic ore
deposits in Rich County, Utah. Trona ore, used for soda ash production in Green
River, WY, is mined primarily from property held under long-term leases. FMC
owns the land and mineral rights to the Salar del Hombre Muerto lithium reserves
in Argentina. Many of FMC's chemical plants require the basic raw materials,
which are provided by these FMC-owned or leased mines, without which other
sources would have to be obtained. With regard to FMC's mining properties
operated under long-term leases, no single lease or related group of leases is
material to the businesses or to the company as a whole.
Most of FMC's plant sites are owned, with an immaterial number of them being
leased. FMC believes its properties and facilities meet present requirements
and are in good operating condition and that each of its significant
manufacturing facilities is operating at a level consistent with the industry in
which it operates. The number and location of FMC's production properties for
continuing operations are:
Latin
-----
America
-------
United and Western
------ --- -------
States Canada Europe Other Total
-------- -------- --------- ------- -------
Energy Systems 8 5 5 5 23
Food and Transportation
Systems 10 2 7 1 20
Agricultural Products 6 1 - 3 10
Specialty Chemicals 4 2 7 1 14
Industrial Chemicals 14 2 14 - 30
-- -- -- -- --
Total 42 12 33 10 97
== == == == ==
ITEM 3. LEGAL PROCEEDINGS
Environmental Proceedings
- -------------------------
In June 1999, the Federal District Court in Idaho approved a Consent Decree
signed by the company, the United States Environmental Protection Agency
("EPA")(Region X) and the United States Department of Justice ("DOJ") settling
outstanding alleged violations of the Resource Conservation and Recovery Act
("RCRA") at the company's Phosphorus Chemicals ("PCD") plant in Pocatello,
Idaho. The RCRA Consent Decree provides for injunctive relief covering
remediation expense for closure of existing ponds, estimated at $50 million, and
in excess of $100 million of capital costs for waste treatment and other
compliance projects, including supplemental environmental projects. These
amounts will be expended over approximately four years. As described in Note 4
to the consolidated financial statements, included in the 1999 Annual Report to
Stockholders, an expected increase in capital costs for
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environmental compliance contributed to an impairment in the value of PCD's
assets during the fourth quarter of 1997. The company provided for the estimated
expenses related to the Consent Decree in prior periods.
In addition, FMC signed a second Consent Decree with the EPA, which was lodged
in court on July 21, 1999. The Consent Decree relates to a Record of Decision
("ROD") issued by the EPA in 1998 which addresses previously closed ponds on the
FMC portion of the Eastern Michaud Flats Superfund site, including FMC's PCD
Pocatello, Idaho, facility. The remedy the EPA selected in the ROD is a
combination of capping, surface runoff controls and institutional controls for
soils, with a contingency for extraction and recycling for hydraulic control of
groundwater. FMC believes its reserves for environmental costs adequately
provide for the estimated costs of the Superfund remediation plan for the site
and the expenses previously described related to the RCRA Consent Decree.
On October 21, 1999 the Federal District Court for the Western District of
Virginia approved a Consent Decree signed by the company, the EPA (Region III)
and the DOJ regarding past response costs and future clean-up work at the
discontinued fiber manufacturing site in Front Royal, Virginia. As part of a
prior settlement, government agencies are expected to reimburse FMC for
approximately one third of the clean up costs due to the government's role at
the site. FMC's $70 million portion of the settlement was provided for in 1998
and prior years, and no additional charge to earnings was recorded in 1999.
See Note 14 to the consolidated financial statements (pages 50-51 of the 1999
Annual Report to Stockholders) for a discussion of legal proceedings against
other Potentially Responsible Parties and insurers for contribution and/or
coverage with respect to environmental remediation costs.
Other
- -----
On April 14, 1998, a jury returned a verdict against the company in the amount
of $125.0 million in conjunction with a federal False Claims Act action, in
which Mr. Henry Boisvert filed and ultimately took to trial allegations that the
company had filed false claims for payment in connection with its contract to
provide Bradley Fighting Vehicles to the U.S. Army between 1981 and 1996. Under
law, portions of the jury verdict were subject to doubling or trebling. On
December 24, 1998, the U.S. District Court for the Northern District of
California entered judgment for Mr. Boisvert in the amount of approximately $87
million. This was approximately $300 million less than the maximum judgment
possible under the jury verdict. The reduction resulted from several rulings by
the District Court in favor of the company in the post-trial motions. Briefing
on cross-appeals by both parties to the U.S. Court of
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Appeals for the Ninth Circuit has been completed, and it is probable that oral
arguments will be heard during 2000. Both sides are asserting arguments on
appeal, and a number of the company's arguments, if successful, would alter or
eliminate the amount of the existing judgment. Any legal proceeding is subject
to inherent uncertainty, and it is not possible to predict how the appellate
court will rule. Therefore, the company's management believes based on a review,
including a review by outside counsel, that it is not possible to estimate the
amount of a probable loss, if any, to the company that might result from some
adverse aspects of the judgment ultimately standing against the company.
Accordingly, no provision for this matter has been made in the company's
consolidated financial statements.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
Executive Officers of the Registrant
- ------------------------------------
The executive officers of FMC Corporation, together with the offices in FMC
Corporation currently held by them, their business experience since January 1,
1995, and their ages as of March 1, 2000, are as follows:
<TABLE>
<CAPTION>
Age Office, year of election and other
Name 3/1/2000 information for past five years
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Robert N. Burt 62 Chairman of the Board and
Chief Executive Officer
(91); President (90-93)
Joseph H. Netherland 53 President (99); Executive Vice President
(98); Vice President (87) and General
Manager-Energy Systems Group (93)
William H. Schumann III 49 Senior Vice President and Chief Financial
Officer (99); Vice President, Corporate
Development (98); Vice President and
General Manager-Agricultural
Products Group (95); Director, North
American Operations, Agricultural
Products Group (93-95); Executive
Director, Corporate Development (91-93)
William J. Kirby 62 Senior Vice President (94); Vice
President-Administration (85)
</TABLE>
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<TABLE>
<S> <C> <C>
Thomas P. Hester 62 Senior Vice President, General
Counsel and Corporate Secretary
(00); Partner, Mayer, Brown & Platt (97); Senior
Vice President, General Counsel and Secretary,
Sears, Roebuck and Co. (98-99); Executive
Vice President and General Counsel, Ameritech
Corp. (91-97)
Charles H. Cannon, Jr. 47 Vice President and General Manager-
FMC FoodTech (94) and Transportation Systems Group
(98); Manager, Food Processing Systems Division
(92-94)
W. Kim Foster 51 Vice President and General Manager-
Agricultural Products Group (98);
Director, International, Agricultural Products Group (97-98);
Division Manager, Airport Products and Systems Division (91-97)
Robert I. Harries 56 Vice President (92) and General
Manager-Chemical Products Group (94)
Peter D. Kinnear 52 Vice President (00); General Manager,
Petroleum Equipment and Systems Division
(94); Division Manager, Wellhead Equipment
Division (92); Division Manager, Fluid Control Division (85)
Stephanie K. Kushner 44 Vice President and Treasurer (99);
Director, Financial Planning (97);
Controller, Process Additives Division
(92)
Ronald D. Mambu 50 Vice President and Controller (95);
Director, Financial Planning (94);
Director, Strategic Planning (93);
Director, Financial Control (87)
James A. McClung 62 Vice President-Worldwide Marketing
(91)
William G. Walter 54 Vice President and General Manager-Specialty
Chemicals Group (97); General Manager-Alkali Division (92);
International Managing Director, APG (91); Division
Manager, Defense Systems International (86); Director of
Marketing/Sales-Construction Equipment Group (82)
</TABLE>
Each of the company's executive officers has been employed by the company in a
managerial capacity for the past five (5) years except for Mr. Hester. No
family relationships exist among any of the above-listed officers, and there are
no arrangements or understandings between any of the above-listed officers and
any other person pursuant to which they serve as an officer. All officers are
elected to hold office for one (1) year and until their successors are elected
and qualified.
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PART II
Incorporated by Reference From:
ITEM 5. MARKET FOR - 1999 Annual Report to
REGISTRANT'S COMMON Stockholders, pages 30, 37
EQUITY AND RELATED and 56, and Notes 11 and 12
STOCKHOLDER MATTERS to the consolidated
financial statements on
pages 47-48
ITEM 6. SELECTED FINANCIAL - 1999 Annual Report to
DATA Stockholders, pages 54-55
ITEM 7. MANAGEMENT'S - 1999 Annual Report to
DISCUSSION AND ANALYSIS Stockholders, pages 22-31
OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
ITEM 7A. QUANTITATIVE AND - 1999 Annual Report to
QUALITATIVE DISCLOSURES Stockholders, page 30
ABOUT MARKET RISK
ITEM 8. FINANCIAL - 1999 Annual Report to
STATEMENTS AND Stockholders, pages 16-17
SUPPLEMENTARY DATA and 32-52
(INCLUDING ALL SCHEDULES
REQUIRED UNDER ITEM 14 OF
PART IV)
ITEM 9. CHANGES IN AND - None
DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL
DISCLOSURE
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PART III
Incorporated by Reference From:
ITEM 10. DIRECTORS AND - Part I; Proxy Statement for
EXECUTIVE OFFICERS 2000 Annual Meeting of
OF THE REGISTRANT Stockholders, pages 3-8
ITEM 11. EXECUTIVE - Proxy Statement for 2000
COMPENSATION Annual Meeting of
Stockholders, pages 14-20
ITEM 12. SECURITY OWNERSHIP - Proxy Statement for 2000
OF CERTAIN BENEFICIAL Annual Meeting of
OWNERS AND MANAGEMENT Stockholders, pages 12-13
ITEM 13. CERTAIN RELATION- - Proxy Statement for 2000
SHIPS AND RELATED Annual Meeting of
TRANSACTIONS Stockholders, page 11
Page 14
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) Documents filed with this Report
1. Consolidated financial statements of FMC Corporation and its
subsidiaries are incorporated under Item 8 of this Form 10-K.
2. All required financial statement schedules are included in the
consolidated financial statements or notes thereto as incorporated
under Item 8 of this Form 10-K.
All other schedules are omitted because of the absence of
conditions under which they are required or because information
called for is shown in the financial statements and notes thereto
in the 1999 Annual Report to Stockholders.
3. Exhibits: See attached Index of Exhibits
(b) Reports on Form 8-K
During the quarter ended December 31, 1999, the Registrant filed
reports on Form 8-K as follows:
Date Subject
---- -------
December 16, 1999 FMC's anticipated growth in fourth quarter
and full year 1999 earnings from continuing
operations.
(c) Exhibits
See Index of Exhibits beginning on page 17 of this document.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
FMC CORPORATION
(Registrant)
By: /s/ William H. Schumann III
---------------------------
William H. Schumann III
Senior Vice President and
Chief Financial Officer
Date: March 29, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the date indicated.
Signature Title
- --------- -----
William H. Schumann III Senior Vice President and /s/ William H. Schumann III
Chief Financial Officer ---------------------------
William H. Schumann III
March 29, 2000
Ronald D. Mambu Vice President, Controller /s/ Ronald D. Mambu
and Principal Accounting -------------------------
Officer Ronald D. Mambu
March 29, 2000
Robert N. Burt Chairman of the Board and /s/ Robert N. Burt
Chief Executive Officer -------------------------
Joseph H. Netherland President /s/ Joseph H. Netherland
-------------------------
B.A. Bridgewater, Jr. Director /s/ B.A. Bridgewater, Jr.
-------------------------
Patricia A. Buffler Director /s/ Patricia A. Buffler
-------------------------
Albert J. Costello Director /s/ Albert J. Costello
-------------------------
Paul L. Davies, Jr. Director /s/ Paul L. Davies, Jr.
-------------------------
Asbjorn Larsen Director /s/ Asbjorn Larsen
-------------------------
Edward J. Mooney Director /s/ Edward J. Mooney
-------------------------
William F. Reilly Director /s/ William F. Reilly
-------------------------
Enrique J. Sosa Director /s/ Enrique J. Sosa
-------------------------
James R. Thompson Director /s/ James R. Thompson
-------------------------
Clayton Yeutter Director /s/ Clayton Yeutter
-------------------------
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INDEX OF EXHIBITS FILED WITH OR
INCORPORATED BY REFERENCE INTO
FORM 10-K OF FMC CORPORATION
FOR THE YEAR ENDED DECEMBER 31, 1999
Exhibit
- -------
No. Exhibit Description
- -- -------------------
2.1 Purchase Agreement, dated as of August 25, 1997, by and among FMC
Corporation, Harsco Corporation, Harsco UDLP Corporation and Iron
Horse Acquisition Corp. (incorporated by reference from Exhibit 2.1 to
the Form 8-K/A filed on October 16, 1997)
3.1 Restated Certificate of Incorporation, as filed on June 23, 1998
(incorporated by reference from Exhibit 4.1 to the Form S-3 filed on
July 21, 1998)
3.2 Restated By-Laws of the company, amended as of February 20, 1998
(incorporated by reference from Exhibit 3.3 to the Annual Report on
Form 10-K filed on March 17, 1998)
4.1 Amended and Restated Rights Agreement, dated as of February 19, 1988,
between Registrant and Harris Trust and Savings Bank (incorporated by
reference from Exhibit 4 to the Form SE (File No. 1-02376) filed on
March 25, 1993)
4.2 Amendment to Amended and Restated Rights Agreement, dated February 9,
1996 (incorporated by reference from Exhibit 1 to the Form 8-K filed
on February 9, 1996)
4.3 $450,000,000 Five-Year Credit Agreement, dated as of December 6, 1996,
among FMC Corporation, the Lenders Party thereto and Morgan Guaranty
Trust Company of New York as Agent, J.P. Morgan Securities Inc.,
Arranger (incorporated by reference from Exhibit 4.3 to 1998 Annual
Report on Form 10-K filed on March 25, 1999)
4(iii)(A) Registrant undertakes to furnish to the Commission upon request, a
copy of any instrument defining the rights of holders of long-term
debt of the Registrant and its consolidated subsidiaries and for any
of its unconsolidated subsidiaries for which financial statements are
required to be filed
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10.1* FMC 1997 Compensation Plan for Non-Employee Directors, as amended April
18, 1997 (incorporated by reference from Exhibit 10.1 to the Quarterly
Report on Form 10-Q filed May 15, 1997)
10.1.a* Amendment of FMC Corporation 1997 Plan for Non-Employee Directors
10.2* FMC 1981 Incentive Share Plan, as amended, effective May 28, 1986
(incorporated by reference from Exhibit 10.1 to the Form SE (File No.
1-02376) filed on March 25, 1993)
10.3* FMC 1990 Incentive Share Plan (incorporated by reference from Exhibit
10.1 to the Form SE (File No. 1-02376) filed on March 26, 1991)
10.3.a* Amendment dated April 18, 1997 to FMC 1990 Incentive Share Plan
(incorporated by reference from Exhibit 10.3.a to the Quarterly Report
on Form 10-Q filed on May 15, 1997)
10.3.b* Amendment to the FMC 1990 Incentive Share Plan
10.4* FMC Corporation Employees' Retirement Program, as amended and restated
effective January 1, 1999
10.4.a* First Amendment of FMC Corporation Employee's Retirement Program Part I
Salaried and Non-Union Hourly Employees' Plan
10.4.b* First Amendment of FMC Corporation Employees' Retirement Program Part
II Union Employees' Plan (dated September 16, 1999)
10.5* FMC Corporation Savings and Investment Plan, as amended and restated as
of January 1, 1999
10.6* FMC Salaried Employees' Equivalent Retirement Plan (incorporated by
reference from Exhibit 10.4 to the Form SE (File No. 1-02376) filed on
March 27, 1992)
10.7* FMC Corporation Non-Qualified Retirement and Thrift Plan (incorporated
by reference from Exhibit 10.8 to the Annual Report on Form 10-K filed
on March 17, 1998)
10.8* FMC 1995 Management Incentive Plan, as amended as of October 17, 1997
(incorporated by reference from Exhibit 10.9 to the Annual Report on
Form 10-K filed on March 17, 1998)
_______________________
* Indicates a management contract or compensatory plan or arrangement.
Page 18
<PAGE>
10.9* FMC 1995 Stock Option Plan, as amended as of April 18, 1997
(incorporated by reference from Exhibit 10.10 to the Form 10-Q filed on
May 15, 1997)
10.9.a* Amendment to the FMC 1995 Stock Option Plan (As Amended 4/18/97) (Dated
September 16, 1999)
10.10* FMC Corporation Executive Severance Plan, as amended as of April 18,
1997 (incorporated by reference from Exhibit 10.11 to the Annual Report
on Form 10-K filed on March 17, 1998)
10.11* Master Trust Agreement between FMC Corporation and Fidelity Management
Trust Company, dated June 1, 1997 (incorporated by reference from
Exhibit 10.12 to the Annual Report on Form 10-K filed on March 17,
1998)
10.12* FMC Corporation Defined Benefit Retirement Trust, as amended and
restated as of August 31, 1999
10.13 Fiscal Agency Agreement between FMC Corporation and Union Bank of
Switzerland, Fiscal Agent, dated as of January 16, 1990 (incorporated
by reference from Exhibit 10.4 to the Form SE (File No. 1-02376) filed
on March 28, 1990)
10.15 Supplemental Agreement No. 1 to Purchase Agreement, dated as of August
25, 1997, by and among FMC Corporation, Harsco Corporation, Harsco UDLP
Corporation and Iron Horse Acquisition Corp. (incorporated by reference
from Exhibit 16.1 to the Form 8-K/A filed on December 23, 1997)
10.16 Allocation and Contribution Agreement, by and among FMC Corporation,
Harsco Corporation and Harsco UDLP Corporation (incorporated by
reference from Exhibit 10.1 to the Form 8-K/A filed on December 23,
1997)
12 Statement re Computation of Ratios of Earnings to Fixed Charges
13 1999 Annual Report to Stockholders is included as an Exhibit to this
report for the information of the Securities and Exchange Commission
and, except for those portions thereof specifically incorporated by
reference elsewhere herein, such Annual Report should not be deemed
filed as a part of this report.
21 List of Significant Subsidiaries of Registrant
23 Consent of KPMG LLP
24 Powers of Attorney
27 Financial Data Schedule
__________________
* Indicates a management contract or compensatory plan or arrangement.
Page 19
<PAGE>
Amendment
---------
of
--
FMC Corporation 1997 Compensation Plan for Non-Employee Directors
-----------------------------------------------------------------
WHEREAS, FMC Corporation (the "Company") maintains the FMC Corporation 1997
Compensation Plan for Non-Employee Directors (the "Plan"); and
WHEREAS, the Company previously has amended the Plan and now considers it
desirable to further amend the Plan.
NOW, THEREFORE, in exercise of the authority delegated to the undersigned
officer by Resolution of the Company's Board of Directors and by virtue of the
power reserved to the Company under Section 8 of the Plan, the Plan, as
previously amended, be and is hereby further amended, effective as of October
17, 1997, in the following particulars:
1. By adding the following new sentence to paragraph 2(d) of the Plan:
"Each Option that has not vested under the foregoing provisions of this
paragraph, will vest and become exercisable upon a Change in Control."
2. By substituting the following for paragraph (d) of Annex A to the Plan:
"d. A 'Change in Control' of the Company shall be deemed to have occurred
as of the first day that any one or more of the following condition is
satisfied:
(1) The 'beneficial ownership' (as defined in Rule 13d-3 under
the Exchange Act) of securities representing more than 20 percent (20%) of
the combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors (the
'Company Voting Securities') is acquired by a `Person' as defined in
Sections 13(d) and 14(d) of the Exchange Act (other than the Company, any
trustee or other fiduciary holding securities under an employee benefit
plan of the Company or an affiliate thereof, any corporation owned,
directly or indirectly, by the stockholders of the Company in substantially
the same proportions as their ownership of stock of the Company); provided,
however that any acquisition from the Company or any acquisition pursuant
to a transaction that complies with clauses (i), (ii) and (iii) of
paragraph (3) of this paragraph d shall not be a Change in Control under
this paragraph (1); or
<PAGE>
(2) Individuals who, as of the date hereof, constitute the Board
of Directors (the `Incumbent Board') cease for any reason to constitute at
least a majority of the Board of Directors; provided, however, that any
individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company's stockholders, was
approved by a vote of at least a majority of the directors then comprising
the Incumbent Board shall be considered as though such individual were a
member of the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of an
actual or threatened election contest with respect to the election or
removal of directors or other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the Board of Directors;
or
(3) Consummation by the Company of a reorganization, merger or
consolidation, or sale or other disposition of all or substantially all of
the assets of the Company or the acquisition of assets or stock of another
entity (a `Business Combination'), in each case, unless immediately
following such Business Combination: (i) more than 60% of the combined
voting power of then outstanding voting securities entitled to vote
generally in the election of directors of (x) the corporation resulting
from such Business Combination (the `Surviving Corporation'), or (y) if
applicable, a corporation which as a result of such transaction owns the
Company or all or substantially all of the Company's assets either directly
or through one or more subsidiaries (the `Parent Corporation'), is
represented, directly or indirectly by Company Voting Securities
outstanding immediately prior to such Business Combination (or, if
applicable, is represented by shares into which such Company Voting
Securities were converted pursuant to such Business Combination), and such
voting power among the holders thereof is in substantially the same
proportions as their ownership, immediately prior to such Business
Combination, of the Company Voting Securities, (ii) no Person (excluding
any employee benefit plan (or related trust) of the Company or such
corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 20% or more of the combined voting power of the
then outstanding voting securities eligible to elect directors of the
Parent Corporation (or, if there is no Parent Corporation, the Surviving
Corporation) except to the extent that such ownership of the Company
existed prior to the Business Combination and (iii) at least a majority of
the members of the board of directors of the Parent Corporation (or, if
there is no Parent Corporation, the Surviving Corporation) were members of
the Incumbent Board at the time of the execution of the initial agreement,
or of the action of the Board, providing for such Business Combination; or
(4) Approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
However, in no event shall a Change in Control be deemed to have occurred,
with respect to the Participant, if the Participant is part of a purchasing
group which consummates the Change in Control transaction. The Participant
shall be deemed
-2-
<PAGE>
'part of a purchasing group' for purposes of the preceding sentence if the
Participant is an equity participant in the purchasing company or group
(except for: (i) passive ownership of less than three percent (3%) of the
stock of the purchasing company; or (ii) ownership of equity participation
in the purchasing company or group which is otherwise not significant, as
determined prior to the Change in Control by a majority of the nonemployee
continuing Directors)."
IN WITNESS WHEREOF, the Company has caused this Amendment of the Plan to be
executed this 16th day of September , 1999.
FMC Corporation
By: /s/ Michael Murray
----------------------------------------
Its: Vice President, Human Resources
--------------------------------
-3-
<PAGE>
Amendment
---------
to the
------
FMC 1990 Incentive Share Plan
-----------------------------
WHEREAS, FMC Corporation (the "Company") maintains the FMC 1990 Incentive
Share Plan (the "Plan"); and
WHEREAS, the Company previously has amended the Plan and the Company now
considers it desirable to further amend the Plan.
NOW, THEREFORE, in exercise of the authority delegated to the undersigned
officer by Resolution of the Company's Board of Directors and by virtue of the
power reserved to the Company under Section 12(a) of the Plan, the Plan, as
previously amended, be and is hereby further amended, by substituting the
following for Section 11(a) of the Plan, effective as of September 1, 1999:
"(a) Assignment and Transfer. Except as provided below, Options
shall not be transferable other than by will or the laws of descent
and distribution, shall not be subject to execution, attachment or
similar process, and may be exercised or otherwise realized, during
the grantee's lifetime, only by the grantee or his or her guardian or
legal representative.
(i) Beginning September 1, 1999, an Option agreement for a
grant of Nonqualified Stock Options, may permit or may be amended
to permit the Participant who received the Option, at any time
prior to the Participant's death, to assign all or any portion of
the Option granted to him or her to: (A) the Participant's spouse
or lineal descendants; (B) the trustee of a trust for the primary
benefit of the Participant, the Participant's spouse or lineal
descendants, or any combination thereof; (C) a partnership of
which the Participant, the Participant's spouse and/or lineal
descendants are the only partners; (D) custodianships under the
Uniform Transfers to Minors Act or any other similar statute; or
(E) upon the termination of a trust by the custodian or trustee
thereof, or the dissolution or other termination of the family
partnership or the termination of a custodianship under the
Uniform Transfers to Minors Act or other similar statute, to the
person or persons who, in accordance with the terms of such
trust, partnership or custodianship are entitled to receive
Options held in trust, partnership or custody. In such event, the
spouse, lineal descendant, trustee, partnership or custodianship
will be entitled to all of the
<PAGE>
Participant's rights with respect to the assigned portion of such
Option, and such portion of the Option will continue to be
subject to all of the terms, conditions and restrictions
applicable to the Option, as set forth herein and in the related
option agreement. Any such assignment will be permitted only if:
(x) the Participant does not receive any consideration therefor;
and (y) the assignment is expressly permitted by the applicable
Option agreement and any amendment thereto as approved by the
Committee. The Committee's approval of an Option agreement with
assignment rights or amendment of an Option agreement to allow
for assignment rights for any one Participant shall not require
the Committee to include such assignment rights in an Option
agreement or any amendment thereto with any other Participant.
Any such assignment shall be evidenced by an appropriate written
document executed by the Participant, and the Participant shall
deliver a copy thereof to the Committee on or prior to the
effective date of the assignment.
(iii) An assignee or transferee of an Option must sign an
agreement with FMC to be bound by the terms of the applicable
Option agreement."
IN WITNESS WHEREOF, the Company has caused this Amendment of the Plan
to be executed this 16th day of September, 1999.
FMC Corporation
By: /s/ Michael Murray
------------------------------------
Its: Vice President, Human Resources
---------------------------------
-2-
<PAGE>
FMC CORPORATION EMPLOYEES' RETIREMENT PROGRAM
PART I
SALARIED AND NONUNION HOURLY EMPLOYEES' RETIREMENT PLAN
<PAGE>
TABLE OF CONTENTS
-----------------
INTRODUCTION................................................................ 1
ARTICLE I................................................................... 2
Definitions................................................................. 2
Actuarial Equivalent........................................................ 2
Administrator............................................................... 2
Affiliate................................................................... 2
Annuity Starting Date....................................................... 3
Beneficiary................................................................. 3
Board....................................................................... 3
Code........................................................................ 3
Committee................................................................... 3
Company..................................................................... 3
Early Retirement Benefit.................................................... 3
Early Retirement Date....................................................... 4
Earnings.................................................................... 4
Effective Date.............................................................. 4
Eligible Employee........................................................... 4
Employee.................................................................... 5
Employee Contributions...................................................... 5
Employment Commencement Date................................................ 5
ERISA....................................................................... 5
50% Joint and Survivor's Annuity............................................ 5
Final Average Yearly Earnings............................................... 5
Foreign Subsidiary.......................................................... 6
Hour of Service............................................................. 6
Individual Life Annuity..................................................... 6
Interest.................................................................... 6
Investment Manager.......................................................... 6
Joint Annuitant............................................................. 6
Leased Employee............................................................. 6
Level Income Option......................................................... 6
Normal Retirement Date...................................................... 6
100% Joint and Survivor's Annuity........................................... 6
One-year Period of Severance................................................ 6
Participant................................................................. 7
Participating Employer...................................................... 7
Period of Service........................................................... 7
Period of Severance......................................................... 7
Plan........................................................................ 7
Plan Year................................................................... 7
i
<PAGE>
Primary Social Security Benefit............................................. 7
Reemployment Commencement Date.............................................. 7
Severance From Service Date................................................. 7
Social Security Covered Compensation Base................................... 8
Supplement.................................................................. 8
Thrift Plan................................................................. 8
Trust....................................................................... 8
Trust Fund.................................................................. 9
Year of Credited Service.................................................... 9
Year of Vesting Service..................................................... 9
ARTICLE II.................................................................. 11
Participation............................................................... 11
2.1 Eligibility and Commencement of Participation.......................... 11
2.2 Provision of Information............................................... 11
2.3 Termination of Participation........................................... 11
2.4 Special Rules Relating to Veterans' Reemployment Rights. .............. 11
ARTICLE III................................................................. 12
Normal, Early and Deferred Retirement Benefits.............................. 12
3.1 Normal Retirement Benefits............................................. 12
3.2 Early Retirement Benefits.............................................. 13
3.3 Deferred Retirement Benefits........................................... 13
3.4 Suspension of Benefits................................................. 14
3.5 Benefit Limitations.................................................... 17
ARTICLE IV.................................................................. 20
Termination Benefits........................................................ 20
4.1 Termination of Service................................................. 20
4.2 Amount of Termination Benefit.......................................... 20
ARTICLE V................................................................... 22
Refund of Employee Contributions............................................ 22
5.1 Employee Contributions................................................. 22
5.2 Withdrawal of Employee Contributions................................... 22
5.3 Refund Upon Death Before Annuity Starting Date......................... 22
5.4 Refund After Annuity Starting Date..................................... 22
ARTICLE VI.................................................................. 24
Payment of Retirement Benefits.............................................. 24
6.1 Normal Form of Benefit................................................. 24
6.2 Available Forms of Benefits............................................ 24
6.3 Five Year Certain Benefit.............................................. 25
6.4 Election of Benefits................................................... 25
6.5 Joint Annuitants....................................................... 27
ARTICLE VII................................................................. 28
ii
<PAGE>
Survivor's Benefits......................................................... 28
7.1 Preretirement Survivor's Benefit....................................... 28
7.2 Surviving Spouse's Benefit............................................. 29
7.3 Certain Former Employees............................................... 29
ARTICLE VIII................................................................ 31
Fiduciaries................................................................. 31
8.1 Named Fiduciaries...................................................... 31
8.2 Employment of Advisers................................................. 31
8.3 Multiple Fiduciary Capacities.......................................... 31
8.4 Payment of Expenses.................................................... 31
8.5 Indemnification........................................................ 32
ARTICLE IX.................................................................. 33
Plan Administration......................................................... 33
9.1 Powers, Duties and Responsibilities of the Administrator............... 33
9.2 Delegation of Administration Responsibilities.......................... 33
9.3 Committee Members...................................................... 34
ARTICLE X................................................................... 35
Funding of the Plan......................................................... 35
10.1 Appointment of Trustee................................................. 35
10.2 Actuarial Cost Method.................................................. 35
10.3 Cost of the Plan....................................................... 35
10.4 Funding Policy......................................................... 35
10.5 Cash Needs of the Plan................................................. 36
10.6 Public Accountant...................................................... 36
10.7 Enrolled Actuary....................................................... 36
10.8 Basis of Payments to the Plan.......................................... 36
10.9 Basis of Payments from the Plan........................................ 36
ARTICLE XI.................................................................. 37
Plan Amendment or Termination............................................... 37
11.1 Plan Amendment or Termination.......................................... 37
11.2 Limitations on Plan Amendment.......................................... 37
11.3 Effect of Plan Termination............................................. 37
11.4 Allocation of Trust Fund on Termination................................ 37
ARTICLE XII................................................................. 39
Miscellaneous Provisions.................................................... 39
12.1 Subsequent Changes..................................................... 39
12.2 Plan Mergers........................................................... 39
12.3 No Assignment of Property Rights....................................... 39
12.4 Beneficiary............................................................ 40
12.5 Benefits Payable to Minors, Incompetents and Others.................... 40
12.6 Employment Rights...................................................... 41
12.7 Proof of Age and Marriage.............................................. 41
iii
<PAGE>
12.8 Small Annuities....................................................... 41
12.9 Controlling Law....................................................... 41
12.10 Direct Rollover Option................................................ 41
12.11 Claims Procedure...................................................... 42
12.11 Claims Procedure...................................................... 42
12.12 Participation in the Plan by an Affiliate............................. 44
12.13 Action by Participating Employers..................................... 44
ARTICLE XIII................................................................ 45
Top Heavy Provisions........................................................ 45
13.1 Top Heavy Definitions................................................. 45
13.2 Determination of Top Heavy Status..................................... 48
13.3 Minimum Benefit Requirement for Top Heavy Plan........................ 48
13.4 Vesting Requirement for Top Heavy Plan................................ 49
EXHIBIT A - Credited Service................................................ 51
EXHIBIT B - Inactive Locations.............................................. 52
EXHIBIT C - Merged Plans.................................................... 53
EXHIBIT D - Certain Retired Participants.................................... 54
EXHIBIT E - Actuarial Equivalence Tables.................................... 58
SUPPLEMENT 1 - Specialty Chemicals Division, Livonia, Michigan.............. 59
SUPPLEMENT 2 - Marine Colloids Division..................................... 60
SUPPLEMENT 3 - Jetway Equipment Division.................................... 63
SUPPLEMENT 4 - Stein........................................................ 65
SUPPLEMENT 5 - Moorco International Inc. Retirement Income Plan............ 66
SUPPLEMENT 6 - Smith Meter, Inc. Salaried Retirement Plan.................. 68
iv
<PAGE>
FMC CORPORATION EMPLOYEES' RETIREMENT PROGRAM
PART I
SALARIED AND NONUNION HOURLY EMPLOYEES' RETIREMENT PLAN
INTRODUCTION
The FMC Corporation Employees' Retirement Program ("Program"), previously
known as the FMC Corporation Salaried Employees' Retirement Plan ("Salaried
Plan") was established, effective September 30, 1941, as the Employees'
Retirement Plan. The Salaried Plan was subsequently amended, certain plans were
subsequently merged into it, including certain frozen and union plans, and the
FMC Corporation Salaried Employees' Retirement Plan was renamed as the Program.
The Program consists of two parts, Part I Salaried and Nonunion Hourly
Employees' Retirement Plan and Part II Union Hourly Employees' Retirement Plan,
which are contained in two separate plan documents. Supplements to Part I and
Part II of the Program contain provisions which apply only to a specific group
of Employees or Participants as specified therein and override any contrary
provision of the Program or either Part I or Part II. This document is Part I
Salaried and Nonunion Hourly Employees' Retirement Plan ("Plan") and covers the
eligible employees as provided in Article II Participation. This document is an
amendment and restatement of the Plan generally effective as of January 1, 1999,
except as and to the extent otherwise provided herein. This document shall not
be construed to affect the making of contributions or alter the right to
participate in the Plan with respect to any Plan Year ending before January 1,
1999, to affect a Participant's accrued benefit for any such prior Plan Year or
to alter in any way the rights of any Participant, Joint Annuitant or
Beneficiary who has retired, died, or with respect to whom there has been a
Severance From Service Date before January 1, 1999.
The Plan is intended to be qualified under Code Section 401(a), and its
associated trust is intended to be tax exempt under Code Section 501(a). The
Plan is intended also to meet the requirements of ERISA and shall be
interpreted, wherever possible, to comply with the terms of the Code and ERISA.
The Plan is intended to provide a regular monthly retirement benefit for
employees who meet the eligibility requirements.
1
<PAGE>
ARTICLE I
Definitions
-----------
For purposes of this Plan and any amendments to it, the following
terms have the meanings ascribed to them below.
Actuarial Equivalent means a benefit determined to be of equal value
to another benefit on the basis of either (a) the actuarial assumptions in
Exhibit E-1, E-2, E-3 or E-4, as applicable, or (b) the mortality table and
interest rate described in the applicable Supplement.
Notwithstanding the foregoing, for purposes of Section 12.8, Actuarial
Equivalent value shall be determined as follows:
(i) for Annuity Starting Dates occurring prior to June 1, 1995, based
on the actuarial assumptions in Exhibit E-4; provided that the
interest rate shall not exceed the rate for immediate annuities
used by the Pension Benefit Guaranty Corporation for plans
terminating on the first day of the Plan Year that contains the
Annuity Starting Date;
(ii) for Annuity Starting Dates occurring on or after June 1, 1995,
with respect to any Participant who had an Hour of Service prior
to August 31, 1999, based on the 1983 Group Annuity Mortality
Table (weighed 50% male and 50% female) (or the applicable
mortality table prescribed under Section 417(e)(3) of the Code)
and the lesser of the interest rate in Exhibit E-4 or the
applicable interest rate prescribed under Section 417(e)(3) of
the Code for the November preceding the Plan Year that contains
the Annuity Starting Date; and
(iii) for Annuity Starting Dates occurring on or after August 31,
1999, with respect to any Participant who did not have an Hour of
Service prior to July 1, 1999, based on the 1983 Group Annuity
Mortality Table (weighted 50% male and 50% female) (or the
applicable mortality table, prescribed under Section 417(e)(3) of
the Code) and the applicable interest rate prescribed under
Section 417(e)(3) of the Code for the November preceding the Plan
Year that contains the Annuity Starting Date.
Administrator means the Company. The Plan is administered by the
Company through the Committee. The Administrator and the Committee have the
responsibilities specified in Article IX.
Affiliate means any corporation, partnership, or other entity that is:
(a) a member of a controlled group of corporations of which the
Company is a member (as described in Code Section 414(b));
2
<PAGE>
(b) a member of any trade or business under common control with the
Company (as described in Code Section 414(c));
(c) a member of an affiliated service group that includes the Company
(as described in Code Section 414(m));
(d) an entity required to be aggregated with the Company pursuant to
regulations promulgated under Code Section 414(o); or
(e) a leasing organization that provides Leased Employees to the
Company or an Affiliate (as determined under paragraphs (a)
through (d) above), unless (i) the Leased Employees constitute
less than 20% of the nonhighly compensated workforce of the
Company and Affiliates (as determined under paragraphs (a)
through (d) above); and (ii) the Leased Employees are covered by
a plan described in Code Section 414(n)(5).
"Leasing organization" has the meaning ascribed to it in the
definition of "Leased Employee" below.
For purposes of Section 3.5, the 80% thresholds of Code Sections
414(b) and (c) are deemed to be "more than 50%," rather than "at least 80%."
Annuity Starting Date means the first day of the first period for
which an amount is paid in an annuity or other form of benefit. In the case of
a lump sum distribution, the Annuity Starting Date is the date payment is
actually made.
Beneficiary means the person or persons determined pursuant to Section
12.4.
Board means the board of directors of the Company.
Code means the Internal Revenue Code of 1986, as amended from time to
time. Reference to a specific provision of the Code includes that provision,
any successor to it and any valid regulation promulgated under the provision or
successor provision.
Committee means the FMC Employee Welfare Benefits Plan Committee as
described in Section 9.3, its authorized delegatee and any successor to the
Committee.
Company means FMC Corporation, a Delaware corporation, and any
successor to it.
Early Retirement Benefit means the benefits determined pursuant to
Section 3.2.
3
<PAGE>
Early Retirement Date means (a) in the case of an Employee who became
a Participant before January 1, 1984, the Participant's 55th birthday; and (b)
in the case of an Employee who became a Participant after December 31, 1983, the
later of the Participant's 55th birthday and the date the Participant acquires
10 Years of Credited Service.
Earnings means the Participant's total compensation paid as an
Eligible Employee, including overtime, administrative and discretionary bonuses,
the Participant's Employee-elected Company contributions under the Thrift Plan
and amounts contributed to a plan described in Code Section 125 or 132, and
sales bonuses and sales commissions earned and paid within a reasonable period
of time after the end of the Plan Year, and incentive compensation earned
pursuant to an incentive compensation arrangement and paid within a reasonable
period of time after the end of the Plan Year, but excluding hiring bonuses,
stay bonuses, awards, deferred compensation, severance pay, accrued (but not
earned) vacation, other special payments such as reimbursements, relocation or
moving expense allowances, stock options, other stock-based compensation, other
distributions that receive special tax benefits, any amounts paid by a
Participating Employer to cover an Employee's FICA tax obligation as to amounts
deferred or accrued under any nonqualified retirement plan of a Participating
Employer, and any gross-up paid by a Participating Employer or Employee FICA
amounts it pays. Earnings also includes sick pay or sickness benefits, but not
disability benefits from the Long-term Disability Plan for Employees of FMC
Corporation. A Participant's Earnings will be conclusively determined according
to the Company's records.
The annual amount of Earnings taken into account for a Participant
must not exceed $160,000 (as adjusted by the Internal Revenue Service for cost-
of-living increases in accordance with Code Section 401(a)(17)(B)).
Effective Date means January 1, 1999 or, if later, an Employee's
Employment Commencement Date or Reemployment Commencement date, whichever is
applicable.
Eligible Employee means an Employee of a Participating Employer who is
employed on a salaried basis or in such other classifications as the Company may
designate as salaried positions, other than:
(a) a Leased Employee;
(b) a member of a bargaining unit covered by a collective bargaining
agreement that does not specifically provide for participation in
the Plan by members of the bargaining unit; or
(c) any Employee who generally resides outside the United States or
whose principal duties generally are performed outside the United
States as determined by the Company, unless such individual is a
United States citizen or permanent resident alien or the Company
designates such individual as an Eligible Employee.
4
<PAGE>
Any individual who is a United States citizen or permanent resident
alien and who is employed by a Foreign Subsidiary in a position which would make
such individual an Eligible Employee if employed by the Company shall be deemed
to be employed by the Company, provided that no entity other than the Company
makes contributions under any funded plan of deferred compensation (other than
the Thrift Plan or any governmental retirement plan) with respect to the
remuneration such individual receives from such Foreign Subsidiary.
Employee means a common law employee or Leased Employee of the Company
or an Affiliate, subject to the following rules:
(a) a person who is not a Leased Employee and who is engaged as an
independent contractor is not an Employee;
(b) only individuals who are paid as employees from the payroll of
the Company or an Affiliate and treated as employees are
Employees under the Plan; and
(c) any person retroactively found to be a common law employee shall
not be eligible to participate in the Plan for any period he was
not an Employee under the Plan.
Employee Contributions means required contributions made by
Participants to the Plan or prior plans prior to May 1, 1969.
Employment Commencement Date means the date on which the Employee
first performs an Hour of Service.
ERISA means the Employee Retirement Income Security Act of 1974, as
amended from time to time. Reference to a specific provision of ERISA includes
the provision, any successor provision and any valid regulation promulgated
under the provision or successor provision.
50% Joint and Survivor's Annuity means the immediate annuity
determined pursuant to Section 6.1.2.
Final Average Yearly Earnings means 1/5th of the sum of the
Participant's Earnings while an Eligible Employee for the 60 consecutive
calendar months (not taking into account months in which the Participant had no
Earnings) out of the past 120 calendar months in which such Earnings were the
highest. If the commencement of a Participant's retirement benefits hereunder
is preceded by a period of long-term disability, the Company may adjust Final
Average Yearly Earnings on a nondiscriminatory basis. With respect to
Participants who accepted offers of employment with Snap-On Incorporated ("Snap-
On") as a result of the Company's sale of assets of its Automotive Service
Equipment Division to Snap-On, the Participants' Earnings shall include eligible
wages with Snap-On and its subsidiaries for purposes of calculating Final
Average Yearly Earnings.
5
<PAGE>
Foreign Subsidiary means a foreign corporation covered by an agreement
between the Company and the Internal Revenue Service extending Federal Social
Security benefits to such foreign corporation's employees who are United States
citizens, provided that either (a) not less than 20% of the voting stock of such
foreign corporation is owned by the Company or (b) more than 50% of the voting
stock of such foreign corporation is owned by another foreign corporation which
is described in (a) above.
Hour of Service means each hour for which an Employee is directly or
indirectly paid or entitled to payment by the Company or an Affiliate for the
performance of duties.
Individual Life Annuity means the annuity determined pursuant to
Section 6.1.1.
Interest means interest compounded annually at the following rates:
(a) for periods prior to January 1, 1976,
(i) if Employee Contributions are withdrawn in a lump sum before
or upon retirement, 3%;
(ii) if Employee Contributions are left in the Plan to provide an
adjustment to the retirement benefit, 5%;
(b) for periods after December 31, 1975, 5%.
Investment Manager means a person who is an "investment manager" as
defined in section 3(38) of ERISA.
Joint Annuitant means the individual determined pursuant to Section
6.5.
Leased Employee means an individual who performs services for the
Company or an Affiliate on a substantially full-time basis for a period of at
least one year, under the primary direction or control of the Company or an
Affiliate, and under an agreement between the Company or Affiliate and a leasing
organization. The leasing organization can be a third party or the Leased
Employee himself.
Level Income Option means the annuity determined pursuant to Section
6.2.4.
Normal Retirement Date means the Participant's 65th birthday.
100% Joint and Survivor's Annuity means the immediate annuity
determined pursuant to Section 6.2.3.
One-Year Period of Severance means a 12-consecutive-month period
commencing on an Employee's Severance From Service Date in which the Employee is
not credited with an Hour of Service.
6
<PAGE>
Participant means an Eligible Employee who has begun, but not ended,
his or her participation in the Plan pursuant to the provisions of Article II.
Participating Employer means the Company and each other Affiliate that
adopts the Plan with the consent of the Board, as provided in Section 12.12.
Period of Service means the period commencing on the Effective Date
and ending on the Severance From Service Date. All Periods of Service (whether
or not consecutive) shall be aggregated. Notwithstanding the foregoing, if an
Employee incurs a One-Year Period of Severance at a time when he or she has no
vested interest under the Plan and the Employee does not perform an Hour of
Service within 5 years after the beginning of the One-Year Period of Severance,
or fails to complete a Period of Vesting Service of 1 year after he or she
performs an Hour of Service following the One-Year Period of Severance, the
Period of Vesting Service prior to such One-Year Period of Severance shall not
be aggregated.
Period of Severance means the period commencing on the Severance From
Service Date and ending on the date on which the Employee again performs an Hour
of Service.
Plan means Part I FMC Corporation Salaried and Nonunion Hourly
Employees' Retirement Plan of the FMC Employees' Retirement Program.
Plan Year means the 12-month period beginning on January 1 and ending
the next December 31.
Primary Social Security Benefit means the primary benefit which the
Participant is eligible to receive at age 65 under the old age portion of the
Federal Old Age, Survivors' and Disability Insurance Program assuming that after
termination of employment with the Company and Affiliates the Participant has no
further earnings subject to such programs. A Participant's Primary Social
Security Benefit shall be determined by taking his Earnings at the time of his
employment and applying a salary scale, projected backwards, reflecting the
actual change in the average wage from year to year as determined by the Social
Security Administration.
Reemployment Commencement Date means the first date following a Period
of Severance which is not required to be taken into account for purposes of an
Employee's Period of Vesting Service on which the Employee performs an Hour of
Service.
Severance From Service Date means the earliest of:
(a) the date on which an Employee voluntarily terminates, retires, is
discharged or dies;
(b) the first anniversary of the first date of a period in which an
Employee remains absent from service (with or without pay) with
the Company and Affiliates for any reason other than voluntary
termination, retirement, discharge or death; or
7
<PAGE>
(c) the second anniversary of the date an Employee is absent pursuant
to a maternity or paternity leave of absence; provided, however,
that the period between the first and second anniversaries of the
first date of such absence shall be neither a Period of Service
nor a One-Year Period of Severance.
Notwithstanding the foregoing, a Severance From Service Date shall not
be considered to have occurred under the following circumstances:
(i) during a leave of absence, vacation or holiday with pay;
(ii) during a leave of absence without pay granted by reason of
disability or under the Family and Medical Leave Act of 1993;
(iii) during a period of qualified military service, provided the
Employee makes application to return within 90 days after
completion of active service and returns to active employment as
an Employee while reemployment rights are protected by law. If
the Employee does not so return, the Employee shall have a
Severance From Service Date on the first anniversary of the date
of entry into military service.
If the Employee violates the terms of a leave of absence, the Employee
shall be deemed to have voluntarily terminated as of the date of such violation.
In the case of a leave in excess of 12 months, if the Employee fails to return
to active employment immediately after such leave, the Employee shall be deemed
to have voluntarily terminated as of the last day of the 12th month of the
leave.
A "maternity or paternity leave of absence" means an absence from work
by reason of the Employee's pregnancy, birth of the Employee's child, placement
of a child with the Employee in connection with the adoption of such child, or
any absence for the purpose of caring for such child for a period immediately
following such birth or placement.
Social Security Covered Compensation Base means the average of the
compensation and benefit bases in effect under Section 230 of the Social
Security Act for each year in the 35-year period ending with the year in which
the participant attains Social Security retirement age as defined in Section
415(b)(8) of the Code.
Supplement means the provisions of the Plan which apply only to a
specific group of Employees or Participants as detailed in such Supplement and
which override any contrary provision of the Plan.
Thrift Plan means the FMC Corporation Employees' Thrift and Stock
Purchase Plan, as amended from time to time.
Trust means the trust established by the Trust Agreement. "Trust
Agreement" means the trust agreement or agreements, as amended from time to
time, entered into by the
8
<PAGE>
Company and the Trustee pursuant to Section 8.1. "Trustee" means the trustee or
trustees at any time appointed by the Company pursuant to Section 8.1.
Trust Fund means the trust fund established and maintained by the
Trustee to hold all assets of the Plan pursuant to the Trust Agreement.
Year of Credited Service means (a) the Employee's Years of Credited
Service prior to the Effective Date, and (b) the total number of calendar months
during the Employee's Period of Service while the Employee is an Eligible
Employee and after he has become a Participant divided by 12. A partial month
in such Period of Service counts as a whole month, and fractional Years of
Credited Service shall be taken into account in determining a Participant's
benefits. Year of Credited Service shall also include such other periods as the
Company recognizes as a Year of Credited Service, pursuant to written and
nondiscriminatory rules.
Notwithstanding the foregoing, Credited Service shall not include (i)
any leave of absence without pay unless the Employee returns to active
employment as an Employee immediately after such leave and abides by all the
terms of the leave, (ii) any maternity or paternity leave of absence unless the
Employee returns to active employment as an Employee within 12 months after the
first day of such leave, or (iii) any period of service with respect to which
such Eligible Employee accrues a benefit under any pension, profit sharing or
other retirement plan listed on Exhibit A.
Year of Vesting Service means (a) the Employee's Years of Service
prior to the Effective Date, and (b) the total number of calendar months during
the Employee's Period of Service divided by 12, determined in accordance with
the following rules:
(i) a partial month in the Employee's Period of Service counts as a
whole month;
(ii) if the Employee has a Severance From Service Date by reason of a
voluntary termination, discharge or retirement and the Employee
then performs 1 Hour of Service within 12 months of the Severance
From Service Date, such Period of Severance is included in the
Period of Vesting Service. If the Employee has a Severance From
Service Date by reason of a voluntary termination, discharge or
retirement during an absence from service of 12 months or less
for any reason other than a voluntary termination, discharge or
retirement, and then performs 1 Hour of Service within 12 months
of the date on which the Employee was first absent from service,
such Period of Severance is included in the Period of Vesting
Service;
(iii) period of Vesting Service also includes the following:
(1) a period of employment with an employer substantially all of
the equity interest or assets of which have been acquired by
the Company or an Affiliate, but only to the extent that the
Company
9
<PAGE>
expressly recognizes such period as a Period of Vesting
Service pursuant to written and nondiscriminatory rules; and
(2) such other periods as the Company recognizes as a Period of
Vesting Service pursuant to written and nondiscriminatory
rules.
10
<PAGE>
ARTICLE II
Participation
-------------
2.1 Eligibility and Commencement of Participation
---------------------------------------------
Except as otherwise provided in the applicable Supplement, each
Employee shall automatically become a Participant in the Plan as of the first
day of the month in which the Participant satisfies all of the following
requirements:
(a) the Employee is an Eligible Employee; and
(b) the Employee either (i) is a permanent, full-time Employee, or
(ii) has completed not less than 1,000 Hours of Service in a 12-
month period beginning on the date his employment commenced or
any anniversary thereof.
2.2 Provision of Information
------------------------
Each Participant must make available to the Administrator any
information it reasonably requests. As a condition of participation in the
Plan, an Employee agrees, on his or her own behalf and on behalf of all persons
who may have or claim any right by reason of the Employee's participation in the
Plan, to be bound by all provisions of the Plan.
2.3 Termination of Participation
----------------------------
A Participant ceases to be a Participant when he or she dies or, if
earlier, when his or her entire vested benefit accrued under the Plan has been
paid to him or her.
2.4 Special Rules Relating to Veterans' Reemployment Rights
-------------------------------------------------------
Notwithstanding any provision of this Plan to the contrary, with
respect to an Eligible Employee or Participant who is reemployed in accordance
with the reemployment provisions of the Uniformed Services Employment and
Reemployment Rights Act following a period of qualifying military service (as
determined under such Act), contributions, benefits and service credit will be
provided in accordance with Section 414(u) of the Code.
11
<PAGE>
ARTICLE III
Normal, Early and Deferred Retirement Benefits
----------------------------------------------
3.1 Normal Retirement Benefits
--------------------------
3.1.1 Normal Retirement: A Participant who retires on the Normal
Retirement Date shall be entitled to receive a Normal Retirement Benefit
determined under Section 3.1.2. Payment of such benefit shall commence as of the
first day of the month coincident with or next following the Participant's
Normal Retirement Date, unless the Participant elects to defer commencement
subject to Section 3.3.2.
3.1.2 Calculation of Normal Retirement Benefit: Subject to Section
3.1.3, a Participant's monthly Normal Retirement Benefit shall be equal to the
product of (a) multiplied by (b) below:
(a) 1/12th of the sum of (i) and (ii) below:
(i) the sum of (1) 1% of the Participant's Final Average Yearly
Earnings up to the Social Security Covered Compensation Base
and (2) 1-1/2% of the Participant's Final Average Yearly
Earnings in excess of the Social Security Covered
Compensation Base multiplied by the Participant's expected
Years of Credited Service at age 65 up to 35 Years of
Credited Service; and
(ii) 1-1/2% of the Participant's Final Average Yearly Earnings
multiplied by the Participant's expected Years of Credited
Service at age 65 in excess of 35 Years of Credited Service.
(b) the ratio of actual Years of Credited Service to expected Years
of Credited Service at age 65.
In no event, however, shall a Participant's monthly Normal Retirement Benefit be
less than his or her accrued monthly Normal Retirement Benefit under the Plan as
of December 31, 1990.
3.1.3 Increases for Employee Contributions: A Participant's Normal
Retirement Benefit shall be increased $1 for each $120.00 of unwithdrawn
Employee Contributions and Interest credited to the Participant.
3.1.4 Reductions for Certain Benefits: A Participant's Normal
Retirement Benefit shall be reduced by the value of (a) the Participant's vested
benefit accrued under the Plan as of November 30, 1985 (to the extent funded by
an individual Aetna nonparticipating annuity) and (b) any vested benefit payable
to the Participant under any pension, profit sharing or other retirement plan
other than the Thrift Plan (hereinafter called "Duplicate Benefit Plan") which
is attributable to any period which counts as Credited Service under this Plan.
For
12
<PAGE>
purposes of determining the amount of the reduction, the vested benefit
under the Duplicate Benefit Plan shall be converted to a form which is identical
to the form of benefit which is to be paid under this Plan. Such conversion
will be made using the actuarial assumptions in effect (as shown on Exhibits E-
1, E-2, E-3, and E-4, as amended from time to time) as of the Annuity Starting
Date. The value of the Participant's vested benefit under the Duplicate Benefit
Plan shall be determined as of the earlier of such date or the date distribution
of such vested benefit was made or commenced.
3.2 Early Retirement Benefits
-------------------------
3.2.1 Early Retirement: A Participant who retires on or after the
Early Retirement Date shall be entitled to receive an Early Retirement Benefit
determined under Section 3.2.2. Payment of such benefit shall commence as of the
first of the month after the Participant retires or, if the Participant elects,
as of the first day of any subsequent month. Any such election of a deferred
commencement date may be revoked at any time prior to such date and a new date
may be elected by giving advance written notice to the Administrator in
accordance with rules prescribed by the Administrator.
3.2.2 Calculation of Early Retirement Benefit: Subject to Sections
3.2.3 and 3.2.4, a Participant's monthly Early Retirement Benefit shall be equal
to the greater of (a) or (b) below:
(a) an amount determined pursuant to Section 3.1.2; and
(b) the Participant's accrued monthly unreduced Early Retirement
Benefit under the Plan as of December 31, 1990.
3.2.3 Early Retirement Reduction Factor: The Participant's Early
Retirement Benefit computed pursuant to Section 3.2.2 shall be reduced by 1/3 of
1% for each month in excess of 36 by which the commencement of the Participant's
Early Retirement Benefit precedes the Participant's 62nd birthday.
3.2.4 Adjustments to Early Retirement Benefit: A Participant's Early
Retirement Benefit shall be increased as provided in Section 3.1.3 except that
the number of dollars of unwithdrawn Employee Contributions and Interest
required to provide $1 of monthly retirement benefits shall be increased by $3
for each full year by which the commencement of the Participant's Early
Retirement Benefit precedes the Participant's Normal Retirement Date.
3.3 Deferred Retirement Benefits
----------------------------
3.3.1 Deferred Retirement: A Participant who retires after the Normal
Retirement Date shall be entitled to receive a Normal Retirement Benefit
determined under Section 3.1.2 commencing as of the first day of the month
coinciding with or next following the date the Participant actually retires.
Each Participant shall accrue additional benefits hereunder after the
Participant's Normal Retirement Date with respect to the portion of the Normal
Retirement Benefit which is attributable to contributions by the Company, and
the amount of Employee Contributions and Interest required to provide $1 of
monthly retirement benefit under
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<PAGE>
Section 3.1.3 shall be decreased by $3 for each full year by which the
commencement of the Normal Retirement Benefit follows the Normal Retirement
Date.
3.3.2 Distribution Requirements: Except as hereinafter provided,
unless the Participant elects otherwise in accordance with the terms of the
Plan, payment of a Participant's retirement benefits will begin no later than 60
days after the close of the Plan Year in which the latest of the following
events occurs:
(a) the Participant's 65th birthday;
(b) the 10th anniversary of the year in which the Participant
commenced participation in the Plan; and
(c) the Participant terminates employment with the Company and all
Affiliates.
If the amount of the payment required to commence on the date
determined under this Section 3.3.2 cannot be ascertained by such date, or if it
is not possible to make such payment on such date because the Administrator
cannot locate the Participant after making reasonable efforts to do so, a
payment retroactive to such date may be made no later than 60 days after the
earliest date on which the amount of such payment can be ascertained under this
Plan or the date the Participant is located.
Notwithstanding any other provision of this Plan:
(i) the accrued benefit of a Participant who attains age 70-1/2 on or
after January 1, 2000 must be distributed or commence to be
distributed no later than the April 1 following the later of (1)
the calendar year in which the Participant attains age 70-1/2 or
(2) the calendar year in which the Participant retires (unless
the Participant is a 5% owner, as defined in Code Section 416, of
the Company with respect to the Plan Year in which the
Participant attains age 70-1/2, in which case this Subsection (2)
shall not apply); and
(ii) the accrued benefit of a Participant who attains age 70-1/2
prior to January 1, 2000 must be distributed or commence to be
distributed no later than the April 1 following the calendar year
in which the Participant attains age 70-1/2 unless the
Participant is not a 5% owner (as defined in Subsection (i)) and
elects to defer distribution to the calendar year in which the
Participant retires.
All Plan distributions will comply with Code Section 401(a)(9),
including Department of Treasury Regulation Section 1.401(a)(9)-2.
3.4 Suspension of Benefits
----------------------
14
<PAGE>
3.4.1 Prior to Normal Retirement Date: If a Participant receives
retirement benefits under the Plan following a termination of his employment
prior to the Participant's Normal Retirement Date and again becomes an Employee
prior to the Participant's Normal Retirement Date, no retirement benefits shall
be paid during such later period of employment and up to the Participant's
Normal Retirement Date. Any benefits payable under the Plan to or on behalf of
the Participant at the time of the Participant's subsequent termination of
employment shall be reduced by the actuarial equivalent (based on the
assumptions in Exhibit E-4) of any benefits paid to the Participant after the
Participant earlier termination and prior to his Normal Retirement Date.
3.4.2 After Normal Retirement Date: If (a) a Participant whose
employment terminates again becomes an Employee after the Participant's Normal
Retirement Date, or again becomes an Employee prior to the Participant's Normal
Retirement Date and continues in employment beyond the Participant's Normal
Retirement Date, or (b) a Participant continues in employment with the Company
and Affiliates after his Normal Retirement Date without a prior termination, the
following provisions of this Section 3.4.2 shall become applicable to the
Participant as of the Participant's Normal Retirement Date or, if later, the
Participant's date of reemployment.
(i) For purposes of this Section 3.4.2, the following definitions
shall apply:
(1) Postretirement Date Service means each calendar month after a
Participant's Normal Retirement Date and subsequent to the
time that:
(A) payment of retirement benefits commenced to the
Participant if the Participant returned to employment
with the Company and Affiliates, or
(B) payment of retirement benefits would have commenced to
him if the Participant had not remained in employment
with the Company and Affiliates,
if in either case the Participant receives pay from the
Company and Affiliates for any Hours of Service performed on
each of 8 or more days (or separate work shifts) in such
calendar month.
(2) Suspendable Amount means the monthly retirement benefits
otherwise payable in a calendar month in which the
Participant is engaged in Postretirement Date Service.
(ii) Payment shall be permanently withheld of a portion of a
Participant's retirement benefits, not in excess of the
Suspendable Amount, for each calendar month during which the
Participant is employed in Postretirement Date Service.
15
<PAGE>
(iii) If payments have been suspended pursuant to Subsection (ii)
above, such payments shall resume no later than the first day of
the third calendar month after the calendar month in which the
Participant ceases to be employed in Postretirement Date Service;
provided, however, that no payments shall resume until the
Participant has complied with the requirements set forth in
Subsection (vi) below. The initial payment upon resumption shall
include the payment scheduled to occur in the calendar month when
payments resume and any amounts withheld during the period
between the cessation of Postretirement Date Service and the
resumption of payment, less any amounts that are subject to
offset pursuant to Subsection (iv) below.
(iv) Retirement benefits made subsequent to Postretirement Date
Service shall be reduced by (1) the actuarial equivalent (based
on the assumptions in Exhibit E-4) of any benefits paid to the
Participant prior to the time the Participant is reemployed after
the Participant's Normal Retirement Date (such reduction will
occur only if such benefits are not repaid in full to the Trust
within 2 years after his date of reemployment); and (2) the
amount of any payments previously made during those calendar
months in which the Participant was engaged in Postretirement
Date Service; provided, however, that such reduction under
(Subsection (2)) shall not exceed, in any one month, 25% percent
of that month's total retirement benefits (excluding amounts
described in Subsection (ii) above) that would have been due but
for the offset.
(v) Any Participant whose retirement benefits are suspended pursuant
to Subsection (ii) of this Section 3.4.2 shall be notified (by
personal delivery or certified or registered mail) during the
first calendar month in which payments are withheld that the
Participant's retirement benefits are suspended. Such
notification shall include:
(1) a description of the specific reasons for the suspension of
payments;
(2) a general description of the Plan provisions relating to the
suspension;
(3) a copy of the provisions;
(4) a statement to the effect that applicable Department of Labor
Regulations may be found at Section 2530.203-3 of Title 29 of
the Code of Federal Regulations;
(5) the procedure for appealing the suspension, which procedure
shall be governed by Section 12.11; and
16
<PAGE>
(6) the procedure for filing a benefits resumption notification
pursuant to Subsection (vi) below.
If payments subsequent to the suspension are to be reduced by an
offset pursuant to Subsection (iv) above, the notification shall
specifically identify the periods of employment for which the
amounts to be offset were paid, the Suspendable Amounts subject
to offset, and the manner in which the Plan intends to offset
such Suspendable Amounts.
(vi) Payments shall not resume as set forth in Subsection (iii) above
until a Participant performing Postretirement Date Service
notifies the Administrator in writing of the cessation of such
Service and supplies the Administrator with such proof of the
cessation as the Administrator may reasonably require.
(vii) A Participant may request, pursuant to the procedure contained
in Section 12.11, a determination whether specific contemplated
employment will constitute Postretirement Date Service.
3.5 Benefit Limitations
-------------------
3.5.1 Limitation on Accrued Benefit: Notwithstanding any other
provision of the Plan, the annual benefit payable under the Plan to a
Participant, when expressed as a monthly benefit commencing at the Participant's
Social Security Retirement Age (as defined in Code Section 415(b)(8)), shall not
exceed the lesser of (a) $7,500 or (b) the highest average of the Participant's
monthly compensation for 3 consecutive calendar years, subject to the following:
(i) The maximum shall apply to the Individual Life Annuity computed
under Section 3.1, 3.2, 3.3 or Article IV and to that portion of
the 50% Joint and Survivor's Annuity payable to the Participant
during the Participant's lifetime.
(ii) If a Participant has fewer than 10 years of participation in the
Plan, the maximum dollar limitation of Subsection (a) above shall
be multiplied by a fraction of which the numerator is the
Participant's actual years of participation in the Plan (computed
to fractional parts of a year) and the denominator is 10. If a
Participant has fewer than 10 Years of Vesting Service, the
maximum compensation limitation in Subsection (b) above shall be
multiplied by a fraction of which the numerator is the Years of
Vesting Service (computed to fractional parts of a year) and the
denominator is 10. Provided, however, that in no event shall such
dollar or compensation limitation, as applicable, be less than
1/10th of such limitation determined without regard to any
adjustment under this Subsection (ii).
17
<PAGE>
(iii) As of January 1 of each year, 1/12th of the dollar limitation
as determined by the Commissioner of Internal Revenue for that
calendar year to reflect increases in the cost of living shall
become effective as the maximum dollar limitation in Subsection
(a) above for the Plan Year ending within that calendar year for
Participants terminating in or after such Plan Year.
(iv) The dollar limitation under Subsection (a) above shall be
modified as follows to reflect commencement of retirement
benefits on a date other than the Participant's Social Security
Retirement Age:
(1) if the Participant's Social Security Retirement Age is 65,
the dollar limitation for benefits commencing on or after age
62 is determined by reducing the dollar limitation under
Subsection (a) above by 5/9ths of 1% for each month by which
benefits commence before the month in which the Participant
attains age 65;
(2) if the Participant's Social Security Retirement Age is
greater than 65, the dollar limitation for benefits
commencing on or after age 62 is determined by reducing the
dollar limitation under Subsection (a) above by 5/9ths of 1%
for each of the first 36 months and by 5/12ths of 1% for each
of the additional months by which benefits commence before
the month in which the Participant attains the Participant's
Social Security Retirement Age;
(3) if the Participant's benefit commences prior to age 62, the
dollar limitation shall be the actuarial equivalent of
Subsection (a) above, payable at age 62, as determined above,
reduced for each month by which benefits commence before the
month in which the Participant attains age 62. The interest
rate for determining Actuarial Equivalence shall be the
greater of the interest rate assumption under the Plan for
determining early retirement benefits or 5% per year. The
mortality basis for determining Actuarial Equivalence for
terminations on or after January 1, 1985 shall be the 1983
Group Annuity Mortality Table (weighted 50% male and 50%
female);
(4) in the case of a Participant whose retirement benefit
commences after the Participant's Social Security Retirement
Age, the dollar limitation shall be the Actuarial Equivalent
of Subsection (a) above payable at the Participant's Social
Security Retirement Age, using the lesser of the interest
rate assumption under the Plan or 5% per year. The mortality
basis for determining Actuarial Equivalence for terminations
on or after January 1, 1985 shall be the 1983 Group Annuity
Mortality Table (weighted 50% male and 50% female).
(v) Notwithstanding the foregoing, the maximum as applied to any
Employee on April 1, 1987 shall in no event be less than the
Participant's "current
18
<PAGE>
accrued benefit" as of March 31, 1987, as that term is defined in
Section 1106 of the Tax Reform Act of 1986.
(vi) The maximum shall apply to the benefits payable to a Participant
under the Plan and all other tax-qualified defined benefit plans
of the Company and Affiliates (whether or not terminated), and
benefits shall be reduced, if necessary, in the reverse of the
chronological order of participation in such plans.
3.5.2 Multiple Plan Reduction: With respect to a Participant who did
not have 1 Hour of Service after December 31, 1999 and who is (or has been) a
participant in any defined contribution plan (whether or not terminated)
maintained by the Company or an Affiliate, the sum of the Participant's defined
benefit plan fraction (as defined under Code Section 415(e)(2)) and defined
contribution plan fraction (as defined under Code Section 415(e)(3)) shall not
exceed 1. If such sum exceeds 1, the participant's defined benefit plan
fraction shall be reduced until such sum equal 1.
3.5.3 Annual Compensation Limit: The accrued benefit of each "Section
401(a)(17) employee" under this Plan will be the greater of the accrued benefit
determined for the Employee under (a) or (b) below:
(a) the Employee's accrued benefit determined with respect to the
benefit formula applicable for the Plan Year beginning on or
after January 1, 1994, as applied to the Employee's total Years
of Credited Service, or
(b) the sum of:
(i) the Employee's accrued benefit as of the last day of the last
Plan Year beginning before January 1, 1994, frozen in
accordance with section 1.401(a)(4)-13 of the regulations
under the Code, and
(ii) the Employee's accrued benefit determined under the benefit
formula applicable for the Plan Year beginning on or after
January 1, 1994, as applied to the Employee's Years of
Credited Service credited to the Employee for Plan Years
beginning on or after January 1, 1994.
A "Section 401(a)(17) employee" means an Employee whose current
accrued benefit as of a date on or after the first day of the first
Plan Year beginning on or after January 1, 1994, is based on Earnings
for a year beginning prior to January 1, 1994 that exceeded $150,000.
19
<PAGE>
ARTICLE IV
Termination Benefits
--------------------
4.1 Termination of Service
----------------------
Except as otherwise provided in the applicable Supplement, a
Participant who has 5 Years of Vesting Service but who ceases to be an Employee
before the Participant's Early Retirement Date for any reason other than death,
shall be entitled to receive a "Termination Benefit" determined under Section
4.2. Except as otherwise provided in the applicable Supplement, unless the
Participant elects otherwise subject to Section 3.3.2, payment of such benefit
shall commence as of the first day of the month coincident with or next
following the Participant's Normal Retirement Date or, if the Participant
elects, as of the first day of any month before such Normal Retirement Date and
coincident with or following the Participant's 55th birthday. Any such election
of the earlier Annuity Starting Date shall be made by giving advance written
notice to the Administrator in accordance with rules prescribed by the
Administrator. Except as provided in Article V and Article VII, no benefits
shall be payable to any person if the Participant dies prior to the Annuity
Starting Date. A terminated Participant who has no vested interest in the
Participant's accrued benefit shall be deemed to have received a distribution of
the Participant's entire vested benefit.
4.2 Amount of Termination Benefit
-----------------------------
Except as otherwise provided in the applicable Supplement, a
Participant's monthly Termination Benefit shall be determined pursuant to
Sections 3.1.2 and 3.1.3 as in effect on the date the Participant terminates
employment, except that the following adjustments shall be made if payment of
the Participant's Termination Benefit is to commence before the Normal
Retirement Date:
(a) the amount computed pursuant to Section 3.1.2 shall be reduced by
1/2 of 1% for each month between the Annuity Starting Date and
the Normal Retirement Date;
(b) the amount of Employee Contributions and Interest required to
provide $1 of monthly retirement benefit under Section 3.1.3
shall be increased by $3 for each full year by which the Annuity
Starting Date precedes the Normal Retirement Date;
(c) notwithstanding Subsection (a) of this Section 4.2, the amounts
computed pursuant to Section 3.1.2 shall be reduced by 1/3 of 1%
for each month in excess of 36 by which the Annuity Starting Date
precedes the Participant's 62nd birthday if:
(i) the Participant's combined age and Years of Credited Service
equal at least 65, and the Participant ceases to be an
Employee (1) because of the permanent shutdown of a single
site of employment or one or
20
<PAGE>
more facilities or operating units within a single site of
employment or (2) in connection with a permanent reduction
in force; or
(ii) the Participant has Years of Credited Service attributable
to employment before January 1, 1989, has attained age 40,
and permanently ceases to be an Employee because of the
permanent shutdown of a single site of employment, resulting
in the termination of employment of not more than 20
Participants at that employment site.
Notwithstanding any contrary provision of the Plan, for purposes
of determining a Participant's total combined age and Years of
Vesting Service under Section 4.2(c)(i), a partial month of age
or Period of Service shall be counted as a whole month, and
fractional years of age and Years of Vesting Service shall be
taken into account.
(d) Effective January 1, 1995, a Participant covered under Subsection
(c) of this Section 4.2 who has 10 Years of Credited Service
shall have added to his age the period of time during which he is
receiving severance pay from the Company.
21
<PAGE>
ARTICLE V
Refund of Employee Contributions
--------------------------------
5.1 Employee Contributions
----------------------
With respect to various periods prior to May 1, 1969, certain
Participants were required to make Employee Contributions to this Plan or to
certain prior plans. Since April 30, 1969, no Employee Contributions have been
made to any of said plans.
5.2 Withdrawal of Employee Contributions
------------------------------------
A Participant may withdraw all of the Participant's Employee
Contributions, plus Interest thereon to the date of withdrawal, at any time
before payment of a monthly retirement benefit commences by giving advance
written notice to the Administrator in accordance with procedures prescribed by
the Administrator. No partial withdrawal of Employee Contributions and Interest
shall be permitted.
Payment of the Participant's Employee Contributions plus Interest
shall be in the normal form of benefit (50% Joint and Survivor's Annuity for a
married Participant, Individual Life Annuity for an unmarried Participant)
unless the Participant waives such annuity (with the consent of the
Participant's spouse, if the Participant is married, in accordance with Section
6.4) and elects payment in a single sum.
5.3 Refund Upon Death Before Annuity Starting Date
----------------------------------------------
If a Participant dies before the Annuity Starting Date, the
Participant's Beneficiary shall receive in a lump sum a refund of the
Participant's unwithdrawn Employee Contributions and Interest. The refund shall
be made as soon as reasonably practicable after the date of the Participant's
death, and Interest shall be computed to the date when the refund is paid.
5.4 Refund After Annuity Starting Date
----------------------------------
If a Participant dies after the Annuity Starting Date, there shall be
paid to his or her Beneficiary the difference, if any, between such
Participant's Employee Contributions and Interest as of the Annuity Starting
Date and:
(a) if the Participant elected an Individual Life Annuity or a Level
Income Option, the portion of the benefits which the Participant
has received which are attributable to Employee Contributions and
Interest;
(b) if the Participant elected any other form of benefit, the portion
of the benefits received by the Participant and the Participant's
Joint Annuitant which are attributable to Employee Contributions
and Interest.
22
<PAGE>
Any payment pursuant to (a) above shall be made as soon as reasonably
practicable after the Participant's death. Any payment pursuant to (b) above
shall be made as soon as reasonably practicable after all other benefit payments
to the Joint Annuitant have ceased.
23
<PAGE>
ARTICLE VI
Payment of Retirement Benefits
------------------------------
6.1 Normal Form of Benefit
----------------------
Except as otherwise provided in the applicable Supplement, a
Participant's benefit shall be paid in the form of a 50% Joint and Survivor's
Annuity, with the Participant's spouse as Joint Annuitant if the Participant is
married on the Annuity Starting Date, and in the form of an Individual Life
Annuity if the Participant is not married on the Annuity Starting Date, unless
the Participant elects with spousal consent not to receive payments pursuant to
this 6.1 and to receive payments in one of the optional forms permitted under
Section 6.2. An election not to receive the normal form of benefit and to
receive payment in any optional form shall satisfy the applicable requirements
of Section 6.4.
6.2 Available Forms of Benefits
---------------------------
A Participant may elect with spousal consent and in accordance with
Section 6.4, to receive the Participant's benefits in any one of the forms of
benefits described in this Section 6.2.
6.2.1 Individual Life Annuity: An Individual Life Annuity is an
immediate annuity which provides equal monthly payments for the Participant's
life only.
6.2.2 50% Joint and Survivor's Annuity: A 50% Joint and Survivor's
Annuity is an immediate annuity which is the actuarial equivalent of an
Individual Life Annuity (determined in accordance with Exhibit E-1), but which
provides a smaller monthly annuity for the Participant's life than an Individual
Life Annuity. After the Participant's death, 50% of such reduced annuity will,
subject to Section 6.2, be paid to the Participant's surviving Joint Annuitant
for such Joint Annuitant's life.
6.2.3 100% Joint and Survivor's Annuity: A 100% Joint and
Survivor's Annuity is an immediate annuity which is the actuarial equivalent of
an Individual Life Annuity (determined in accordance with Exhibit E-2), but
which provides a smaller monthly annuity for the Participant's life than an
Individual Life Annuity. After the Participant's death, 100% of such reduced
annuity will continue to be paid to the Participant's surviving Joint Annuitant
for such Joint Annuitant's life.
6.2.4 Level Income Option: The Level Income Option provides
greater monthly annuity payments prior to the Participant's 62nd birthday
(determined in accordance with Exhibit E-3) and after such birthday provides
reduced monthly annuity payments in an amount which, when added to the Primary
Social Security Benefits which the Participant could elect to receive,
approximately equals the amount of the monthly annuity paid prior to the
Participant's 62nd birthday. A Participant who is entitled to an Early
Retirement Benefit under
24
<PAGE>
Section 3.2 and who elects to have such benefit commence prior to age 62 may
elect the Level Income Option, unless the Primary Social Security Benefits which
the Participant could elect to receive at age 62 would equal or exceed the
amount of the monthly annuity payments prior to age 62 or unless the Participant
is receiving Social Security disability benefits. Such election shall be subject
to the approval of the Participant's spouse, given in accordance with the
requirements for spousal consent under Section 6.4.
6.3 5 Year Certain Benefit
----------------------
If a Participant who retires prior to January 2, 1984, is receiving
retirement benefits in the form of an Individual Life Annuity or a Joint and
Survivor Annuity pursuant to Sections 3.1, 3.2 or 3.3 (but not a Participant
receiving a Termination Benefit pursuant to Article IV) and dies before the
Participant (or the Participant and the Participant's Joint Annuitant) has
received 60 monthly payments, the Participant's Beneficiary shall receive the
same benefits (other than any benefits attributable to employee contributions)
the Participant was receiving until the number of monthly payments made to the
Participant (or the Participant and the Participant's Joint Annuitant) and the
Beneficiary equals 60. Any Participant who commences participation in this Plan
prior to January 2, 1984 and retires after January 1, 1984, entitled to
retirement benefits under this Plan shall receive benefits without the 5 Year
Certain Benefit described in the preceding sentence in an amount not less than
the actuarial equivalent, calculated in accordance with Exhibit E-5, of the
retirement benefits the Participant had accrued under this plan as of January 1,
1984 (based upon his Final Average Monthly Earnings as of that date), payable
with the 5 Year Certain Benefit.
6.4 Election of Benefits
--------------------
6.4.1 The Administrator shall provide each Participant with a written
notice containing the following information:
(a) a general description of the normal form of benefit payable under
the Plan;
(b) the Participant's right to make and the effect of an election to
waive the normal form of benefit;
(c) the right of the Participant's spouse not to consent to the
Participant's election under Section 6.1;
(d) the right of Participant to revoke such election, and the effect
of such revocation;
(e) the optional forms of benefits available under the Plan; and
(f) the Participant's right to request in writing information on the
particular financial effect of an election by the Participant to
receive an optional form of benefit in lieu of the normal form of
benefit.
25
<PAGE>
6.4.2 The notice under Section 6.4.1 shall be provided to the
Participant at each of the following times as shall be applicable to him:
(a) not more than 90 days and not less than 30 days after a
Participant who is in the employ of the Company or an Affiliate
gives notice of the Participant's intention to terminate
employment and commence receipt of the Participant's retirement
benefits under the Plan; or
(b) not more than 90 days and not less than 30 days prior to the
attainment of age 65 of a Participant (whether or not the
Participant has terminated employment) who has not previously
commenced receiving retirement benefits.
The election period in Section 6.4.3 for a Participant who requests
additional information during the election period will be extended until 90 days
after the additional information is mailed or personally delivered. Any such
request shall be made only within 90 days after the date the information
described in Section 6.4.1 is given to the Participant, and the Administrator
shall not be obligated to comply with more than one such request. Any
information provided pursuant to this Section 6.3.2 will be given to the
Participant within 30 days after the date of the Participant's request and will
be based upon the estimated benefits to which the Participant will be entitled
as of the later of the first day on which such benefits could commence or the
last day of the Plan Year in which the Participant's request is received. If a
Participant files an election (or revokes an election) pursuant to this Section
6.4 less than 60 days prior to the Annuity Starting Date, such Participant's
initial payments may be delayed for administrative reasons. In such event, the
payments shall begin as soon as practicable and shall be made retroactively to
such date.
6.4.3 A Participant may make the election provided in Section 6.3 by
filing the prescribed form with the Administrator at any time during the
election period. The election period shall begin 90 days prior to the
Participant's Annuity Starting Date. Such election shall be subject to the
written consent of the Participant's spouse, acknowledging the effect of the
election and witnessed by a Plan representative or a notary public. Such
spousal consent shall not be required if the Participant establishes to the
satisfaction of the Administrator that the consent of the spouse may not be
obtained because there is no spouse or the spouse cannot be located. A spouse's
consent shall be irrevocable. The election in Section 6.3 may be revoked or
changed at any time during the election period but shall be irrevocable
thereafter.
6.4.4 Notwithstanding Section 6.4.3:
(a) distribution of benefits may commence less than 30 days after the
notice required pursuant to Section 6.4.1 is provided if:
(i) the Participant elects to waive the requirement that notice
be given at least 30 days prior to the Annuity Starting Date;
and
26
<PAGE>
(ii) the distribution commences more than 7 days after such
notice is provided.
(b) The notice described in Section 6.4.1 may be provided after the
Annuity Starting Date, in which case the applicable election
period shall not end before the 30th day after the date on which
such notice is provided, unless the Participant elects to waive
the 30-day notice requirements pursuant to Subsection (a) above.
6.5 Joint Annuitants
----------------
A Participant who elects a joint and survivor's annuity shall
designate a Joint Annuitant when making such an election. A Participant may
designate any individual as the Joint Annuitant; provided, however, that the
Joint Annuitant shall be the Participant's spouse unless the Participant's
spouse consents to the designation of another individual in accordance with the
requirements for spousal consent under Section 6.4.3. A designation of a Joint
Annuitant may be revoked or changed at any time during the applicable election
period described in Section 6.4.3 but shall become irrevocable thereafter. If
the Joint Annuitant dies on or after the Annuity Starting Date the Participant
shall continue to receive the reduced monthly annuity.
27
<PAGE>
ARTICLE VII
Survivor's Benefits
-------------------
7.1 Preretirement Survivor's Benefit
--------------------------------
7.1.1 Eligibility: If a Participant who continues to be employed by
the Company at any time on or after attaining age 55 and 10 Years of Credited
Service dies (whether or not so employed on the date of death) before the
Annuity Starting Date, then such Participant's surviving Joint Annuitant (if
any) shall be entitled to receive a survivor's benefit for life, determined
under Section 7.2. Payment of such benefit shall commence as of the first day
of the month coincident with or next following the date of the Participant's
death.
7.1.2 Amount of Preretirement Survivor's Benefit: The preretirement
survivor's benefit under this Section 7.1 shall be computed as follows:
(a) If the Participant's Period of Service has not terminated before
the Participant's death, the survivor's benefit shall be equal to
the benefit which would have been paid to the Participant's Joint
Annuitant if the Participant's Period of Service had terminated
on the date of death, benefits in the form of a 50% Joint and
Survivor's Annuity commenced as of the first day of the next
following month, and the Participant died on such day.
(b) If the Participant's Period of Service has terminated before the
Participant's death but the Participant has deferred the
commencement of the Early Retirement Benefit, the survivor's
benefit shall be equal to the benefit which the Participant's
Joint Annuitant would have been paid if the Participant had
elected a 50% Joint and Survivor's benefit commencing as of the
first day of the month next following the date of the
Participant's death.
(c) The survivor's benefit payable pursuant to this Section 7.1.2
shall exclude any retirement benefit based upon Employee
Contributions and Interest (which will be refunded upon the
Participant's death, to the extent provided in Article V).
7.1.3 Designation of Joint Annuitant Other Than Spouse: A
participant may elect at any time during the Election Period (as defined in
Section 7.1.5) to waive the Preretirement Survivor Annuity and to revoke any
such election at any time during the Election Period. Any election by a
Participant to waive the Preretirement Survivor Annuity shall not take effect
unless the Participant's spouse consents in writing to such election, such
consent acknowledges the effect of such an election and the consent is witnessed
by a representative of the Plan or a notary public, unless the Participant
establishes to the satisfaction of the Committee
28
<PAGE>
that such consent may not 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 consent by a spouse shall be
irrevocable and shall be effective only with respect to that spouse.
7.1.4 Explanation of Preretirement Survivor's Benefit: The
Committee shall provide each Participant with a written explanation with respect
to the Preretirement Survivor Annuity as soon as administratively feasible after
the Participant attains age 55. The explanation shall include:
(a) the terms and conditions of the Preretirement Survivor Annuity,
(b) the Participant's right to make, and the effect of, an election
to waive the Preretirement Survivor Annuity,
(c) the rights of the Participant's spouse in connection therewith,
and
(d) the right to make, and the effect of, the revocation of an
election to waive the Preretirement Survivor Annuity.
7.1.5 Election Period: For purposes of this Section 7.1.5, the
term "Election Period" means the period that begins on the Participant's 55th
birthday and ends on the date of the Participant's death.
7.2 Surviving Spouse's Benefit
--------------------------
If a Participant who has 5 or more Years of Vesting Service but does
not meet the requirements for the preretirement survivor's benefit under Section
7.1 dies before the Annuity Starting Date, then such Participant's surviving
spouse (if any) shall be entitled to receive a survivor's benefit for life. The
amount of such survivor's benefit shall be determined pursuant to Section 4.2
based upon the Participant's age and Years of Credited Service on the date of
the Participant's death and paid in the form of a 50% Joint and Survivor's
Annuity as if the Participant had died on the date such benefits commenced. The
survivor's benefit payable pursuant to this Section 7.2 shall exclude any
retirement benefit based upon Employee Contributions and Interest (which will be
refunded upon the Participant's death to the extent provided in Article V).
Payment of the survivor's benefit shall commence on the first day of the month
coincident with or next following the later of the Participant's 55th birthday
or his death, unless the Participant's spouse elects to commence payment of
benefits as of the first day of any subsequent month, but not later than the
Participant's Normal Retirement Date.
7.3 Certain Former Employees
------------------------
Participants who have 10 Years of Vesting Service but who are not
credited with an Hour of Service on or after August 23, 1984 and are not
receiving benefits on that date shall be entitled to elect survivor's benefits
only as follows:
29
<PAGE>
(a) If the Participant is credited with an Hour of Service under this
Plan or a predecessor plan on or after September 2, 1974, but is
not otherwise credited with an Hour of Service in a Plan Year
beginning on or after January 1, 1976, the Participant shall be
afforded an opportunity to elect payment of benefits in the form
of a 50% Joint and Survivor's Annuity.
(b) If the Participant is credited with an Hour of Service under this
Plan or a predecessor plan in a Plan Year beginning after
December 31, 1975, the Participant shall be afforded the
opportunity to elect a Surviving Spouse's Benefit under Section
7.2.
30
<PAGE>
ARTICLE VIII
Fiduciaries
-----------
8.1 Named Fiduciaries
-----------------
8.1.1 The Company is the Plan sponsor and a "named fiduciary"
with respect to control over and management of the Plan's assets only to the
extent that it (a) shall appoint the members of the Committee which administers
the Plan at the Administrator's direction; (b) shall delegate its authorities
and duties as "plan administrator," as defined under ERISA, to the Committee;
and (c) shall continually monitor the performance of the Committee.
8.1.2 The Company, as Administrator, and the Committee, which
administers the Plan at the Administrator's direction, are "named fiduciaries"
of the Plan, as that term is defined in ERISA Section 402(a)(2), with authority
to control and manage the operation and administration of the Plan. The
Administrator is also the "administrator" and "plan administrator" of the Plan,
as those terms are defined in ERISA Section 3(16)(A) and Code Section 414(g),
respectively.
8.1.3 The Trustee is a "named fiduciary" of the Plan, as that term is
defined in ERISA Section 402(a)(2), with authority to manage and control all
Trust assets, except to the extent that authority is delegated to an Investment
Manager or to the extent the Administrator or the Committee directs the
allocation of Trust assets among general investment categories.
8.1.4 The Company, the Administrator, and the Trustee are the only
named fiduciaries of the Plan.
8.2 Employment of Advisers
----------------------
A named fiduciary, and any fiduciary appointed by a named fiduciary,
may employ one or more persons to render advice regarding any of the named
fiduciary's or fiduciary's responsibilities under the Plan.
8.3 Multiple Fiduciary Capacities
-----------------------------
Any named fiduciary and any other fiduciary may serve in more than one
fiduciary capacity with respect to the Plan.
8.4 Payment of Expenses
-------------------
All Plan expenses, including expenses of the Administrator, the
Committee, the Trustee, any Investment Manager and any insurance company, will
be paid by the Trust Fund, unless a Participating Employer elects to pay some or
all of those expenses.
31
<PAGE>
8.5 Indemnification
---------------
To the extent not prohibited by state or federal law, each
Participating Employer agrees to, and will indemnify and save harmless the
Administrator, any past, present, additional or replacement member of the
Committee, and any other employee, officer or director of that Participating
Employer, from all claims for liability, loss, damage (including payment of
expenses to defend against any such claim) fees, fines, taxes, interest,
penalties and expenses which result from any exercise or failure to exercise any
responsibilities with respect to the Plan, other than willful misconduct or
willful failure to act.
32
<PAGE>
ARTICLE IX
Plan Administration
-------------------
9.1 Powers, Duties and Responsibilities of the Administrator and the Committee
--------------------------------------------------------------------------
9.1.1 The Administrator and the Committee have full discretion and
power to construe the Plan and to determine all questions of fact or
interpretation that may arise under it. Interpretation of the Plan or
determination of questions of fact regarding the Plan by the Administrator or
the Committee will be conclusively binding on all persons interested in the
Plan.
9.1.2 The Administrator and the Committee have the power to
promulgate such rules and procedures, to maintain or cause to be maintained such
records, and to issue such forms as they deem necessary or proper to administer
the Plan.
9.1.3 Subject to the terms of the Plan, the Administrator and/or the
Committee will determine the time and manner in which all elections authorized
by the Plan must be made or revoked.
9.1.4 The Administrator and the Committee have all the rights,
powers, duties and obligations granted or imposed upon them elsewhere in the
Plan.
9.1.5 The Administrator and the Committee have the power to do all
other acts in the judgment of the Administrator or Committee necessary or
desirable for the proper and advantageous administration of the Plan.
9.1.6 The Administrator and the Committee will exercise all
responsibilities in a uniform and nondiscriminatory manner.
9.2 Delegation of Administration Responsibilities
---------------------------------------------
The Administrator and the Committee may designate by written
instrument one or more actuaries, accountants or consultants as fiduciaries to
carry out, where appropriate, their administrative responsibilities, including
their fiduciary duties. The Committee may from time to time allocate or
delegate to any subcommittee, member of the Committee and others, not
necessarily employees of the Company, any of its duties relative to compliance
with ERISA, administration of the Plan and other related matters, including
those involving the exercise of discretion. The Company's duties and
responsibilities under the Plan shall be carried out by its directors, officers
and employees, acting on behalf of and in the name of the Company in their
capacities as directors, officers and employees, and not as individual
fiduciaries. No director, officer nor employee of the Company shall be a
fiduciary with respect to the Plan unless he or she is specifically so
designated and expressly accepts such designation.
33
<PAGE>
9.3 Committee Members
-----------------
The Committee shall consist of not less than three people, who need
not be directors, and shall be appointed by the Chief Executive Officer of the
Company. Any Committee member may resign and the Chief Executive Officer may
remove any Committee member, with or without cause, at any time. A majority of
the members of the Committee shall constitute a quorum for the transaction of
business and the act of a majority of the Committee members at a meeting at
which a quorum is present shall be the act of the Committee. The Committee can
act by written consent signed by all of its members. Any members of the
Committee who are Employees shall not receive compensation for their services
for the Committee. No Committee member shall be entitled to act on or decide any
matter relating solely to his or her status as a Participant.
34
<PAGE>
ARTICLE X
Funding of the Plan
-------------------
10.1 Appointment of Trustee
----------------------
The Committee or its authorized delegatee will appoint the Trustee and
either may remove it. The Trustee accepts its appointment by executing the
Trust Agreement. A Trustee will be subject to direction by the Committee or its
authorized delegatee or, to the extent specified by the Company, by an
Investment Manager, and will have the degree of discretion to manage and
control Plan assets specified in the Trust Agreement. Neither the Company nor
any other Plan fiduciary will be liable for any act or omission to act of a
Trustee, as to duties delegated to the Trustee.
10.2 Actuarial Cost Method
---------------------
The Committee or its authorized delegatee shall determine the
actuarial cost method to be used in determining costs and liabilities under the
Plan pursuant to Section 301 et seq., of ERISA, and Section 412 of the Code.
The Committee or its authorized delegatee shall review such actuarial cost
method from time to time, and if it determines from review that such method is
no longer appropriate, then it shall petition the Secretary of the Treasury for
approval of a change of actuarial cost method.
10.3 Cost of the Plan
----------------
Annually the Committee or its authorized delegatee shall determine the
normal cost of the Plan for the Plan Year and the amount (if any) of the
unfunded past service cost on the basis of the actuarial cost method established
for the Plan using actuarial assumptions which, in the aggregate, are
reasonable. The Committee or its authorized delegatee shall also determine the
contributions required to be made for each Plan Year by the Participating
Companies in order to satisfy the minimum funding standard (or alternative
minimum funding standard) for such Plan Year determined pursuant to Sections 302
through 305 of ERISA and Section 412 of the Code.
10.4 Funding Policy
--------------
The Participating Companies shall cause contributions to be made to
the Plan for each Plan Year in the amount necessary to satisfy the minimum
funding standard (or alternative minimum funding standard) for such Plan Year;
provided, however, that this obligation shall cease when the Plan is terminated.
In the case of a partial termination of the Plan, this obligation shall cease
with respect to those Participants, Joint Annuitants and Beneficiaries who are
affected by such partial termination. Each contribution is conditioned upon its
deductibility under Section 404 of the Code and shall be returned to the
Participating Companies within one year after the disallowance of the deduction
(to the extent disallowed). Upon the Company's written
35
<PAGE>
request, a contribution that was made by a mistake of fact shall be returned to
the Participating Company within one year after the payment of the contribution.
10.5 Cash Needs of the Plan
----------------------
The Committee or its authorized delegatee from time to time shall
estimate the benefits and administrative expenses to be paid out of the Plan
during the period for which the estimate is made and shall also estimate the
contributions to be made to the Plan during such period by the Participating
Companies. The Committee or its authorized delegatee shall inform the Trustees
of the estimated cash needs of and contributions to the Plan during the period
for which such estimates are made. Such estimates shall be made on an annual,
quarterly, monthly or other basis, as the Committee shall determine.
10.6 Public Accountant
-----------------
The Committee or its authorized delegatee shall engage an independent
qualified public accountant to conduct such examinations and to render such
opinions as may be required by Section 103(a)(3) of ERISA. The Committee or its
authorized delegatee in its discretion may remove and discharge the person so
engaged, but in such case it shall engage a successor independent qualified
public accountant to perform such examinations and to render such opinions.
10.7 Enrolled Actuary
----------------
The Committee or its authorized delegatee shall engage an enrolled
actuary to prepare the actuarial statement described in Section 103(d) of ERISA
and to render the opinion described in Section 103(a)(4) of ERISA. The
Committee or its authorized delegatee in its discretion may remove and discharge
the person so engaged, but in such event it shall engage a successor enrolled
actuary to perform such examination and render such opinion.
10.8 Basis of Payments to the Plan
-----------------------------
All contributions to the Plan shall be made by the Participating
Companies, and no contributions shall be required of or permitted by
Participants. From time to time the Participating Companies shall make such
contributions to the Plan as the Company determines to be necessary or desirable
in order to fund the benefits provided by the Plan, and any expenses thereof
which are paid out of the Trust Fund and in order to carry out the obligations
of the Participating Companies set forth in Section 10.3. All contributions to
the Plan shall be held by the Trustee in accordance with the Trust Agreement.
10.9 Basis of Payments from the Plan
-------------------------------
All benefits payable under the Plan shall be paid by the Trustee out
of the Trust Fund pursuant to the directions of the Administrator or the
Committee and the terms of the Trust Agreement. The Trustee shall pay all
proper expenses of the Plan and the Trust Fund out of the Trust Fund, except to
the extent paid by the Participating Companies.
36
<PAGE>
ARTICLE XI
Plan Amendment or Termination
-----------------------------
11.1 Plan Amendment or Termination
-----------------------------
The Company may amend, modify or terminate the Plan at any time by
resolution of the Board or by resolution of or other action recorded in the
minutes of the Administrator or the Committee. Execution and delivery by the
Chairman of the Board, the President, any Vice President of the Company or the
Committee of an amendment to the Plan is conclusive evidence of the amendment,
modification or termination.
11.2 Limitations on Plan Amendment
-----------------------------
No Plan amendment can:
(a) authorize any part of the Trust Fund to be used for, or diverted
to, purposes other than the exclusive benefit of Participants or
their Joint Annuitants and Beneficiaries;
(b) decrease the accrued benefits of any Participant or his or her
Joint Annuitant or Beneficiary under the Plan; or
(c) except to the extent permitted by law, eliminate or reduce an
early retirement benefit or retirement-type subsidy (as defined
in Code Section 411) or an optional form of benefit with respect
to service prior to the date the amendment is adopted or
effective, whichever is later.
11.3 Effect of Plan Termination
--------------------------
Upon termination of the Plan, each Participant's rights to benefits
accrued hereunder shall be vested and nonforfeitable, and the Trust shall
continue until the Trust Fund has been distributed as provided in Section 11.4.
Any other provision hereof notwithstanding, the Participating Companies shall
have no obligation to continue making contributions to the Plan after
termination of the Plan. Except as otherwise provided in ERISA, neither the
Participating Companies nor any other person shall have any liability or
obligation to provide benefits hereunder after such termination in excess of the
value of the Trust Fund. Upon such termination, Participants, Joint Annuitants,
and Beneficiaries shall obtain benefits solely from the Trust Fund. Upon
partial termination of the Plan, this Section 11.3 shall apply only with respect
to such Participants, Joint Annuitants and Beneficiaries as are affected by such
partial termination.
11.4 Allocation of Trust Fund on Termination
---------------------------------------
37
<PAGE>
On termination of the Plan, the Trust Fund shall be allocated by the
Administrator on an actuarial basis among Participants, Joint Annuitants and
Beneficiaries in the manner prescribed by Section 4044 of ERISA. Any residual
assets of the Trust Fund remaining after such allocation shall be distributed to
the Company if (a) all liabilities of the Plan to Participants, Joint Annuitants
and Beneficiaries have been satisfied and (b) such a distribution does not
contravene any provision of law. The foregoing notwithstanding, if any remaining
assets of the Plan are attributable to Employee Contributions, such assets shall
be equitably distributed to the Participants who made such contributions (or to
their Beneficiaries) in accordance with their rate of contribution. Effective
January 1, 1989, the benefit of any highly compensated employee or former
employee (determined in accordance with section 414(g) of the Code and
regulations thereunder) shall be limited to a benefit that is nondiscriminatory
under section 401(a)(4) of the Code. In the event of a partial termination of
the Plan, the Administrator shall arrange for the division of the Trust Fund, on
a nondiscriminatory basis to the extent required by section 401 of the Code,
into the portion attributable to those Participants, Joint Annuitants and
Beneficiaries who are not affected by such partial termination and the portion
attributable to such persons who are so affected. The portion of the Trust Fund
attributable to persons who are so affected shall be allocated in the manner
prescribed by section 4044 of ERISA.
38
<PAGE>
ARTICLE XII
Miscellaneous Provisions
------------------------
12.1 Subsequent Changes
------------------
Except as provided in Exhibit D, all benefits to which any
Participant, Joint Annuitant, or Beneficiary may be entitled hereunder shall be
determined under the Plan in effect when the Participant ceases to be an
Eligible Employee and shall not be affected by any subsequent change in the
provisions of the Plan, unless the Participant again becomes an Eligible
Employee.
12.2 Plan Mergers
------------
The Plan shall not be merged or consolidated with any other plan, and
no assets or liabilities of the Plan shall be transferred to any other plan,
unless each Participant would receive a benefit immediately after such merger,
consolidation or transfer (if the Plan then terminated) which is equal to or
greater than the benefit such Participant would have been entitled to receive
immediately before such merger, consolidation or transfer (if the Plan had then
been terminated). A list of plans which have been merged into the Plan since
January 1, 1979 is attached hereto and made a part hereof as Exhibit C.
12.3 No Assignment of Property Rights
--------------------------------
The interest or property rights of any person in the Plan, in the
Trust Fund or in any payment to be made under the Plan shall not be assignable
nor be subject to alienation or option, either by voluntary or involuntary
assignment or by operation of law, including (without limitation) bankruptcy,
garnishment, attachment or other creditor's process, and any act in violation of
this Section 12.3 shall be void. This provision shall not apply to a "qualified
domestic relations order" defined in Code Section 414(p). The Company shall
establish a written procedure to determine the qualified status of domestic
relations orders and to administer distributions under such qualified orders.
In addition, the prohibition of this Section 12.3 will not apply to
any offset of a Participant's benefit under the Plan against an amount the
Participant is ordered or required to pay to the Plan under a judgment, order,
decree or settlement agreement that meets the requirements as set forth in this
Section 12.3. The Participant must be ordered or required to pay the Plan under
a judgment of conviction for a crime involving the Plan, under a civil judgment
(including a consent order or decree) entered by a court in an action brought in
connection with a violation (or alleged violation) of part 4 of subtitle B of
title I of ERISA, or pursuant to a settlement agreement between the Secretary of
Labor and the Participant in connection with a violation (or alleged violation)
of that part 4. This judgment, order, decree or settlement agreement must
expressly provide for the offset of all or part of the amount that must be paid
to the Plan against the Participant's benefit under the Plan. In addition, if a
Participant is entitled to
39
<PAGE>
receive a 50% Joint and Survivor Annuity under Section 6.1 of the Plan or a
Survivor's Benefit under Article VII of the Plan, and the Participant is married
at the time at which the offset is to be made, the Participant's spouse must
consent to the offset in accordance with the spousal consent requirements of
Section 6.4.3 of the Plan, an election to waive the right of the spouse to the
50% Joint and Survivor Annuity (made in accordance with Section 6.4 of the Plan)
or to the Survivor's Benefit (made in accordance with Article VII of the Plan)
must be in effect, the spouse is ordered or required in the judgment, order,
decree, or settlement to pay an amount to the Plan in connection with a
violation of Part 4 of subtitle B or ERISA Title I, or the spouse retains in the
judgment, order, decree, or settlement the right to receive the survivor annuity
under the 50% Joint and Survivor Annuity or under the Survivor's Benefit,
determined in the following manner: the Participant terminated employment on the
date of the offset, there was no offset, the Plan permitted the commencement of
benefits only on or after Normal Retirement Age, the Plan provided only the
minimum-required qualified joint and survivor annuity, and the amount of the
Survivor's Benefit under the Plan is equal to the amount of the survivor annuity
payable under the minimum-required qualified joint and survivor annuity. For
purposes of this Section 12.3 the term "minimum-required qualified joint and
survivor annuity" means a qualified joint and survivor annuity which is the
actuarial equivalent of the Participant's accrued benefit and under which the
survivor's annuity is 50% of the amount of the annuity which is payable during
the joint lives of the Participant and the Participant's spouse.
12.4 Beneficiary
-----------
The Beneficiary of a Participant shall be the person or persons so
designated by such Participant. If no Beneficiary has been designated or if the
designated Beneficiary is not living when a Plan Benefit is to be distributed,
the Beneficiary shall be such Participant's spouse if then living or, if not,
such Participant's then living children in equal shares or, if there are no
children, such Participant's estate. A Participant may revoke and change a
designation of a Beneficiary at any time. A designation of a Beneficiary, or
any revocation and change thereof, shall be effective only if it is made in
writing in a form acceptable to the Administrator and is received by it prior to
the Participant's death.
12.5 Benefits Payable to Minors, Incompetents and Others
---------------------------------------------------
If any benefit is payable to a minor, an incompetent, or a person
otherwise under a legal disability, or to a person the Administrator reasonably
believes to be physically or mentally incapable of handling and disposing of his
or her property, whether because of his or her advanced age, illness, or other
physical or mental impairment, the Administrator has the power to apply all or
any part of the benefit directly to the care, comfort, maintenance, support,
education, or use of the person, or to pay all or any part of the benefit to the
person's parent, guardian, committee, conservator, or other legal
representative, wherever appointed, to the individual with whom the person is
living or to any other individual or entity having the care and control of the
person. The Plan, the Administrator and any other Plan fiduciary will have
fully discharged all responsibilities to the Participant, Joint Annuitant or
Beneficiary entitled to a payment by making payment under the preceding
sentence.
40
<PAGE>
12.6 Employment Rights
-----------------
Nothing in the Plan shall be deemed to give any person a right to
remain in the employ of the Company and Affiliates or affect any right of the
Company or any Affiliate to terminate a person's employment with or without
cause.
12.7 Proof of Age and Marriage
-------------------------
Participants and Joint Annuitants shall furnish proof of age and
marital status satisfactory to the Administrator at such time or times as it
shall prescribe. The Administrator may delay the disbursement of any benefits
under the Plan until all pertinent information with respect to age or marital
status has been furnished and then make payment retroactively.
12.8 Small Annuities
---------------
If the lump sum Actuarial Equivalent value of (a) a Normal, Early, or
Deferred Retirement Benefit under Article III, Termination Benefit (payable at
the Participant's Normal Retirement Date) under Article IV, or Survivor's
Benefit under Article VII, excluding the individual Aetna nonparticipating
annuity (if any), and (b) the lump sum Actuarial Equivalent value of the
individual Aetna nonparticipating annuity (if any) are both $5,000 or less, such
amounts shall be paid in a lump sum as soon as administratively practicable
following the Participant's retirement, termination of employment, or death.
If a lump sum distribution is so paid and the Participant is
thereafter reemployed by the Company, the Participant shall have the option to
repay to the Plan the amount of such distribution, together with interest at the
rate of 5% per annum (or such other rate as may be prescribed pursuant to
section 411(c)(2)(C)(III) of the Code), compounded annually from the date of the
distribution to the date of repayment. If a reemployed Participant does not
make such repayment, no part of the Period of Service with respect to which the
lump sum distribution was made shall count as Years of Vesting Service or Years
of Credited Service.
12.9 Controlling Law
---------------
The Plan and all rights thereunder shall be interpreted and construed
in accordance with ERISA and, to the extent that state law is not preempted by
ERISA, the law of the State of Illinois.
12.10 Direct Rollover Option
----------------------
Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a distributee's election under this Section 12.10, a distributee
may elect, at the time and in the manner prescribed by the 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.
41
<PAGE>
(a) As used in this Section 12.10, an "eligible rollover
distribution" means 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 10 years or more; any
distribution to the extent such distribution is required under
Section 401(a)(9) of the Code; 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); and any other distribution(s) that is
reasonably expected to total less than $200 during a year.
(b) As used in this Section 12.10, an "eligible retirement plan"
means an individual retirement account described in Section
408(a) of the Code, an individual retirement annuity described in
Section 408(b) of the Code, an annuity plan described in Section
403(a) of the Code, or a qualified trust described in Section
401(a) of the Code, that accepts the distributee's eligible
rollover distribution. In the case of an eligible rollover
distribution to the surviving spouse, however, an eligible
retirement plan is an individual retirement account or individual
retirement annuity.
(c) As used in this Section 12.10, 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 Section
414(p) of the Code, are distributees with regard to the interest
of the spouse or former spouse.
(d) As used in this Section 12.10, a "direct rollover" is a payment
by the Plan to the eligible retirement plan specified by the
distributee.
12.11 Claims Procedure
----------------
12.11.1 Any application for benefits under the Plan and all
inquiries concerning the Plan shall be submitted to the Company at such address
as may be announced to Participants from time to time. Applications for
benefits shall be in writing on the form prescribed by the Company and shall be
signed by the Participant or, in the case of a benefit payable after the death
of the Participant, by the Participant's surviving spouse, Joint Annuitant or
Beneficiary, as the case may be.
12.11.2 The Company shall give written notice of its decision on any
application to the applicant within 90 days. If special circumstances require a
longer period of time the Company shall so notify the applicant within 90 days,
and give written notice of its decision to
42
<PAGE>
the applicant within 180 days after receiving the application. In the event any
application for benefits is denied in whole or in part, the Company shall notify
the applicant in writing of the right to a review of the denial. Such written
notice shall set forth, in a manner calculated to be understood by the
applicant, specific reasons for the denial, specific references to the Plan
provisions on which the denial is based, a description of any information or
material necessary to perfect the application, an explanation of why such
material is necessary and an explanation of the Plan's review procedure.
12.11.3 The Company shall appoint a "Review Panel," which shall
consist of three or more individuals who may (but need not) be employees of the
Company. The Review Panel shall be the named fiduciary which has the authority
to act with respect to any appeal from a denial of benefits under the Plan.
12.11.4 Any person (or his authorized representative) whose
application for benefits is denied in whole or in part may appeal the denial by
submitting to the Review Panel a request for a review of the application within
60 days after receiving written notice of the denial. The Company shall give
the applicant or such representative an opportunity to review, by written
request, pertinent materials (other than legally privileged documents) in
preparing such request for review. The request for review shall be in writing
and addressed as follows: "Review Panel of the Employee Welfare Benefits Plan
Committee, 200 East Randolph Drive, Chicago, Illinois 60601." The request for
review shall set forth all of the grounds on which it is based, all facts in
support of the request and any other matters which the applicant deems
pertinent. The Review Panel may require the applicant to submit such additional
facts, documents or other material as it may deem necessary or appropriate in
making its review.
12.11.5 The Review Panel shall act upon each request for review
within 60 days after receipt thereof. If special circumstances require a longer
period of time the Review Panel shall so notify the applicant within 60 days,
and give written notice of its decision to the applicant within 120 days after
receiving the request for review. The Review Panel shall give notice of its
decision to the Company and to the applicant in writing. In the event the
Review Panel confirms the denial of the application for benefits in whole or in
part, such notice shall set forth in a manner calculated to be understood by the
applicant, the specific reasons for such denial and specific references to the
Plan provisions on which the decision is based.
12.11.6 The Review Panel shall establish such rules and procedures,
consistent with ERISA and the Plan, as it may deem necessary or appropriate in
carrying out its responsibilities under this Section 12.11.
12.11.7 No legal or equitable action for benefits under the Plan
shall be brought unless and until the claimant (a) has submitted a written
application for benefits in accordance with Section 12.10.1, (b) has been
notified by the Company that the application is denied, (c) has filed a written
request for a review of the application in accordance with Section 12.10.4 and
(d) has been notified in writing that the Review Panel has affirmed the denial
of the application; provided that legal action may be brought after the Review
Panel has failed to take any action on the claim within the time prescribed in
Section 12.11.5. A claimant may not bring an action for
43
<PAGE>
benefits in accordance with this Section 12.11.7 after 90 days after the Review
Panel denies the claimant's application for benefits.
12.12 Participation in the Plan by an Affiliate
-----------------------------------------
12.12.1 With the consent of the Board, any Affiliate, by appropriate
action of its board of directors, a general partner or the sole proprietor, as
the case may be, may adopt the Plan and determine the classes of its Employees
that will be Eligible Employees.
12.12.2 A Participating Employer will have no power with respect to
the Plan except as specifically provided herein.
12.13 Action by Participating Employers
---------------------------------
Any action required to be taken by the Company pursuant to any Plan
provisions will be evidenced in the manner set forth in Section 11.1. Any
action required to be taken by a Participating Employer will be evidenced by a
resolution of the Participating Employer's board of directors (or an authorized
committee of that board). Participating Employer action may also be evidenced
by a written instrument executed by any person or persons authorized to take the
action by the Participating Employer's board of directors, any authorized
committee of that board, or the stockholders. A copy of any written instrument
evidencing the action by the Company or Participating Employer must be delivered
to the secretary or assistant secretary of the Company or Participating
Employer.
44
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ARTICLE XIII
Top Heavy Provisions
--------------------
13.1 Top Heavy Definitions
---------------------
For purposes of this Article XIII and any amendments to it, the terms
listed in this Section 13.1 have the meanings ascribed to them below.
Aggregate Account means the value of all accounts maintained on behalf
of a Participant, whether attributable to Company or employee contributions,
determined under applicable provisions of the defined contribution plan used in
determining Top Heavy Plan status.
Aggregation Group means the group of plans in a Mandatory Aggregation
Group, if any, that includes the Plan, unless including additional Related Plans
in the group would prevent the Plan for being a Top Heavy Plan, in which case
Aggregation Group means the group of plans in a Permissive Aggregation Group, if
any, that includes the Plan.
Compensation means compensation as defined in Code Section 415(c)(3)
and Treasury regulations thereunder. For purposes of determining who is a Key
Employee, Compensation will be applied by taking into account amounts paid by
Affiliates who are not Participating Employers, as well as amounts paid by
Participating Employers, and without applying the exclusions for amounts paid by
a Participating Employer to cover an Employee's nonqualified deferred
compensation FICA tax obligations and for gross-up payments on such FICA tax
payments.
Determination Date means, for a Plan Year, the last day of the
preceding Plan Year. If the Plan is part of an Aggregation Group, the
Determination Date for each other plan will be, for any Plan Year, the
Determination Date for that other plan that falls in the same calendar year as
the Determination Date for the Plan.
Key Employee means an employee described in Code Section 416(i)(1) and
the regulations promulgated thereunder. Generally, a Key Employee is an
Employee or former Employee who, at any time during the Plan Year containing the
Determination Date or any of the 4 preceding Plan Years, is:
(a) an officer of the Company or an Affiliate with annual
Compensation greater than 50% of the amount in effect under Code
Section 415(b)(1)(A);
(b) one of the 10 Employees of the Company and all Affiliates owning
(or considered to own within the meaning of Code Section 318) the
largest interests in any of the Company and the Affiliates, but
only if the
45
<PAGE>
Employee has annual Compensation greater than the
limitation in effect under Code Section 415(c)(1)(A);
(c) a 5% owner of the Company or an Affiliate; or
(d) a 1% owner of the Company or an Affiliate with annual
Compensation from the Company and all Affiliates of more than
$150,000.
Mandatory Aggregation Group means each plan (considering the Plan and
Related Plans) that, during the Plan Year that contains the Determination Date
or any of the 4 preceding Plan Years:
(a) had a participant who was a Key Employee; or
(b) was required to be considered with a plan in which a Key Employee
participated in order to enable the plan in which the Key
Employee participated to meet the requirements of Code Section
401(a)(4) or 410(b).
Non-key Employee means an Employee or former Employee who is not a Key
Employee.
Permissive Aggregation Group means the group of plans consisting of
the plans in a Mandatory Aggregation Group with the Plan, plus any other Related
Plan or Plans that, when considered as a part of the Aggregation Group, does not
cause the Aggregation Group to fail to satisfy the requirements of Code Section
401(a)(4) or 410(b).
Present Value of Accrued Benefits means, in the case of a defined
benefit plan, a Participant's present value of accrued benefits determined as
follows:
(a) as of the most recent "Actuarial Valuation Date," which is the
most recent valuation date within a 12-month period ending on the
Determination Date.
(b) as if the Participant terminated service as of the actuarial
valuation date; and
(c) the Actuarial Valuation Date must be the same date used for
computing the defined benefit plan minimum funding costs,
regardless of whether a valuation is performed that Plan Year.
Present Value means, in calculating a Participant's present value of
accrued benefits as of a Determination Date, the sum of:
(a) the present value of accrued benefits using the actuarial
assumptions of Exhibit E-4;
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<PAGE>
(b) any Plan distributions made within the Plan Year that includes
the Determination Date or within the 4 preceding Plan Years.
However, in the case of distributions made after the valuation
date and prior to the Determination Date, such distributions are
not included as distributions for top heavy purposes to the
extent that such distributions are already included in the
Participant's present value of accrued benefits as of the
valuation date. Notwithstanding anything herein to the contrary,
all distributions, including distributions under a terminated
plan which if it had not been terminated would have been required
to be included in an Aggregation Group, will be counted;
(c) any Employee Contributions, whether voluntary or mandatory.
However, amounts attributable to tax deductible Qualified
Voluntary Employee Contributions shall not be considered to be a
part of the Participant's present value of accrued benefits;
(d) with respect to unrelated rollovers and plan-to-plan transfers
(ones which are both initiated by the Participant and made from a
plan maintained by one employer to a plan maintained by another
employer), if this Plan provides for rollovers or plan-to-plan
transfers, it shall always consider such rollover or plan-to-plan
transfer as a distribution for the purposes of this Section 13.1.
If this Plan is the plan accepting such rollovers or plan-to-plan
transfers, it shall not consider such rollovers or plan-to-plan
transfers, as part of the Participant's present value of accrued
benefits; and
(e) with respect to related rollovers and plan-to-plan transfers
(ones either not initiated by the Participant or made to a plan
maintained by the same employer), if this Plan provides the
rollover or plan-to-plan transfer, it shall not be counted as a
distribution for purposes of this Section. If this Plan is the
plan accepting such rollover or plan-to-plan transfer, it shall
consider such rollover or plan-to-plan transfer as part of the
Participant's present value of accrued benefits, irrespective of
the date on which such rollover or plan-to-plan transfer is
accepted.
Related Plan means any other defined contribution plan (a "Related
Defined Contribution Plan") or defined benefit plan (a "Related Defined Benefit
Plan") (both as defined in Code Section 415(k), maintained by the Company or an
Affiliate.
A Super Top Heavy Aggregation Group exists in any Plan Year for which,
as of the Determination Date, the sum of the present value of accrued benefits
and the Aggregate Accounts of Key Employees under all plans in the Aggregation
Group exceeds 90% of the sum of the present value of accrued benefits and the
Aggregate Accounts of all employees under all plans in the Aggregation Group.
In determining the sum of the Present Value of Accrued Benefits and/or Aggregate
Accounts for all employees, the present value of accrued benefits and/or
Aggregate Accounts for any Non-key Employee who was a Key Employee for any Plan
Year preceding the Plan Year that contains the Determination Date will be
excluded.
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<PAGE>
Super Top Heavy Plan means the Plan when it is described in the second
sentence of Section 13.2.
A Top Heavy Aggregation Group exists in any Plan Year for which, as of
the Determination Date, the sum of the Present Value of Accrued Benefits for Key
Employees under all plans in the Aggregation Group exceeds 60% of the sum of the
Present Value of Accrued Benefits for all employees under all plans in the
Aggregation Group. In determining the sum of the Present Value of Accrued
Benefits for all employees, the Present Value of Accrued Benefits for any Non-
key Employee who was a Key Employee for any Plan Year preceding the Plan Year
that contains the Determination Date will be excluded.
Top Heavy Plan means the Plan when it is described in the first
sentence of Section 13.2.
13.2 Determination of Top Heavy Status
---------------------------------
This Plan is a Top Heavy Plan in any Plan Year in which it is a member
of a Top Heavy Aggregation Group, including a Top Heavy Aggregation Group that
includes only the Plan. The Plan is a Super Top Heavy Plan in any Plan Year in
which it is a member of a Super Top Heavy Aggregation Group, including a Super
Top Heavy Aggregation Group that includes only the Plan.
13.3 Minimum Benefit Requirement for Top Heavy Plan
----------------------------------------------
13.3.1 Minimum Accrued Benefit: The minimum accrued benefit
(expressed as an Individual Life Annuity commencing at Normal Retirement Date)
derived from Company contributions to be provided under this Section for each
Non-key Employee who is a Participant for any Plan Year in which this Plan is a
Top Heavy Plan shall equal the product of (a) 1/12th of "416 Compensation"
averaged over 5 the consecutive Plan Years (or actual number of Plan Years if
less) which produce the highest average and (b) the lesser of (i) 2% multiplied
by Years of Vesting Service or (ii) 20%.
13.3.2 For purposes of providing the minimum benefit under Code
Section 416, a Non-key Employee who is not a Participant solely because (a) his
compensation is below a stated amount or (b) he declined to make mandatory
contributions to the Plan will be considered to be a Participant.
13.3.3 For purposes of this Section 13.3, Years of Vesting Service
for any Plan Year ending prior to January 1, 1984, or for any Plan Year during
which the Plan was not a Top Heavy Plan shall be disregarded.
13.3.4 For purposes of this Section 13.3, 416 Compensation for any
Plan Year ending prior to January 1, 1984, or subsequent to the last Plan Year
during which the Plan is a Top Heavy Plan shall be disregarded.
13.3.5 For the purposes of this Section 13.3, "416 Compensation"
shall mean W-2 wages for the calendar year ending with or within the Plan Year,
and shall be limited to
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<PAGE>
$160,000 (as adjusted for cost-of-living in accordance with Section
401(a)(17)(B) of the Code) in Top Heavy Plan Years.
13.3.6 If payment of the minimum accrued benefit commences at a date
other than Normal Retirement Date, or if the form of benefit is other than on
Individual Life Annuity, the minimum accrued benefit shall be the actuarial
equivalent of the minimum accrued benefit expressed as an Individual Life
Annuity commencing at Normal Retirement Date pursuant to Exhibits E-l, E-2, E-3,
and E-4.
13.3.7 For any Plan Year before January 1, 2000, when the Plan is a
Top Heavy Plan but not a Super Top Heavy Plan and a Key Employee is a
Participant in both this Plan and a defined contribution plan included in a
required Aggregation Group which is top heavy, the extra minimum accrued benefit
shall be provided for each Non-key Employee who is a Participant by 20% in
Section 13.3.1.
13.3.8 In lieu of the benefit in Section 13.3.7, if a Non-key
Employee participates in this Plan and a defined contribution plan included in a
Required Aggregation Group which is top heavy, a minimum allocation of 5% of 416
Compensation shall be provided under the defined contribution plan. If the
defined contribution plan is amended so that the minimum benefits are no longer
provided under the defined contribution plan, the minimum benefits shall be
provided under this Plan. However, for any Plan Year when the Plan is a Top
Heavy Plan but not a Super Top Heavy Plan and a Key Employee is a Participant in
both this Plan and a defined contribution plan included in a Required
Aggregation Group which is top heavy, 7-1/2% shall be substituted for 5% above.
13.3.9 To the extent required to be nonforfeitable under Section
13.4, the minimum accrued benefit under this Section 13.3 may not be forfeited
under Code Section 411(a)(3)(B) or Code Section 411(a)(3)(D).
13.4 Vesting Requirement for Top Heavy Plan
--------------------------------------
13.4.1 Notwithstanding any other provision of this Plan, for any Top
Heavy Plan Year, the vested portion of any Participant's accrued benefit shall
be determined on the basis of the Participant's number of Years of Vesting
Service according to the following schedule:
Years of Service Percentage Vested
---------------- -----------------
1 - 2 0%
3 100%
If in any subsequent Plan Year, the Plan ceases to be a Top Heavy
Plan, the Company may, in its sole discretion, elect to continue to apply this
vesting schedule in determining the vested portion of any Participant's accrued
benefit, or revert to the vesting schedule in effect before this Plan became a
Top Heavy Plan. Any such reversion shall be treated as a Plan amendment.
49
<PAGE>
13.4.2 The computation of the nonforfeitable percentage of the
Participant's interest in the Plan shall not be reduced as the result of any
direct or indirect amendment to this Plan. In the event that this Plan is
amended to change or modify any vesting schedule, a Participant with at least 5
Years of Service as of the expiration date of the election period may elect to
have the Participant's nonforfeitable percentage computed under the Plan without
regard to such amendment. If a Participant fails to make such election, then
such Participant shall be subject to the new vesting schedule. The
Participant's election period shall commence on the adoption date of the
amendment and shall end 60 days after the latest of
(a) the adoption date of the amendment,
(b) the effective date of the amendment, or
(c) the date the Participant receives written notice of the amendment
from the Company.
To record the amendment and restatement of the Plan to read as set
forth herein, the Company has caused its authorized member of the Committee to
execute the same this 31st day of August, 1999, but to be effective January 1,
1999, except as otherwise provided in the text herein.
FMC CORPORATION
BY:/s/ J. Paul McGrath
__________________________
Member, Employee Welfare Benefits
Plan Committee
50
<PAGE>
EXHIBIT A
CREDITED SERVICE
----------------
Any service acquired as a participant under any of the plans listed herein shall
not be counted as Credited Service for purposes of this Plan.
1. Stearns Electric Company Profit Sharing Plan.
2. Fritzke and Icke Employees Savings and Profit Sharing Plan.
3. Employees Profit Sharing Plan of Industrial Brush Company.
4. Wayne Manufacturing Company Profit Sharing Company.
5. P. E. Van Pelt, Inc. Profit Sharing Plan.
6. Mojonnier Bros. Co. Salaried Employees Profit Sharing Plan.
7. Lithium Corporation of America Retirement Plan.
8. Elf Aquitaine, Inc. Pension Plan
9. Frigoscandia Inc. Money Purchase Pension Plan
10. Frigoscandia Inc. Retirement Plan: Pension Plan/401(k) Plan
51
<PAGE>
EXHIBIT B
INACTIVE LOCATIONS
------------------
The following is a list of former locations of the Company which have been sold
or closed. The Plan has retained the assets and liabilities with respect to
certain Participants formerly employed by the Company at such locations:
<TABLE>
<CAPTION>
LOCATION DATE SOLD/CLOSED
-------- ----------------
<S> <C>
- --------------------------------------------------------------------------------
Power Transmission - (Salaried and Nonunion Hourly) September 28, 1981
- --------------------------------------------------------------------------------
FMC Gold - Salaried/1/ July 31, 1996
- --------------------------------------------------------------------------------
Invalco February 26, 1999
- --------------------------------------------------------------------------------
Houston Fluid Control January 1, 1984
- --------------------------------------------------------------------------------
</TABLE>
/1/ All benefits except individual Aetna annuities and benefits for
inactive participants transferred to the purchaser.
52
<PAGE>
EXHIBIT C
MERGED PLANS
------------
The following is a list of other plans which have been merged into this Part I
Salaried Employees' Retirement Plan on and after January 1, 1979.
<TABLE>
<CAPTION>
EFFECTIVE
DATE OF SUPPLEMENT
PLAN NAME MERGER NUMBER
--------- ------ ----------
<S> <C> <C>
- -------------------------------------------------------------------------------------
Salaried Part of the Retirement Plan for January 1, 1979 1
Nonunion Employees of Sun Cleanser Company
- -------------------------------------------------------------------------------------
Marine Colloids Division of FMC Corporation January 1, 1979 2
Salaried Employees' Retirement Plan
- -------------------------------------------------------------------------------------
Hourly Part of the Retirement Plan for Nonunion September 15, 1980 1
Employees of Sun Cleanser Company
- -------------------------------------------------------------------------------------
Pneumo Abex Corporation Retirement Income May 27, 1994 3
Plan (Jetway Equipment Division)
- -------------------------------------------------------------------------------------
Retirement Plan for Employees of Stein June 1, 1997 4
- -------------------------------------------------------------------------------------
Moorco International, Inc. Retirement July 1, 1997 5
Income Plan
- -------------------------------------------------------------------------------------
Smith Meter, Inc. Salaried Retirement Plan July 1, 1997 6
- -------------------------------------------------------------------------------------
</TABLE>
53
<PAGE>
EXHIBIT D
CERTAIN RETIRED PARTICIPANTS
----------------------------
A. Except as provided in paragraph B. below, the monthly benefit payment
of each Participant, Joint Annuitant, or Beneficiary who is receiving a monthly
benefit payment on November 1, 1979, with respect to a Participant who retired
before July 1, 1978, shall be increased, effective with respect to payments made
on and after November 1, 1979, by an amount determined by multiplying the
percentage to be obtained from (1) and (2) below, whichever is applicable, by
(3) below:
(1) If the Participant retired prior to January 1, 1978, the sum of the
percentage obtained under a. and b. below, but not to exceed 10%:
a. The percentage obtained from the following table:
Calendar year during which monthly benefit payments were first paid to
the Participant (if the payments on November 1, 1979, were being
received by the Participant or by the Joint Annuitant or Beneficiary
of a Participant who died after beginning to receive payments), or
were first paid to the Joint Annuitant or Beneficiary (if the payments
on November 1, 1979, were being received by the Joint Annuitant or
Beneficiary of a Participant who died before beginning to receive
payments).
Percentage
---------- ----------
1977 2%
1976 4%
1975 6%
1974 8%
1973 or earlier 10%
b. A percentage equal to 1/2% for each full year of Credited Service
in excess of 30 full years of Credited Service that the Participant had
at retirement (e.g., 31 years - 1/2%, 32 years - 1%).
(2) If the Participant retired after December 31, 1977, but before July
1, 1978, and if he had 31 or more full years of Credited Service, a
percentage equal to 2-1/2% plus an additional 1/2% for each full year of
his Credited Service in excess of 31 full years (e.g., 31 years - 2-1/2%,
32 years - 3%), but not to exceed 10%.
(3) The amount of the monthly benefit payment which the Participant,
Joint Annuitant, or Beneficiary would otherwise have received on November
1, 1979 (if this
54
<PAGE>
increase in amount were not granted). If the Participant's monthly benefit
payment in this paragraph A(3) is a payment prior to the Participant's 62nd
birthday under a Level Income Option, the increase determined by applying
the applicable percentage under (1) or (2) above to such payment shall be
payable only prior to his 62nd birthday, and after such birthday the
applicable percentage under (1) or (2) above shall be applied to the
reduced monthly annuity payments otherwise payable under the Level Income
Option to increase that amount by said applicable percentage.
B. If a Participant attained his Normal Retirement Date before July 1,
1978, but continued in employment after attaining his Normal Retirement Date,
the provisions of paragraph A. above shall not be applicable, but instead the
following shall apply:
(1) If such a Participant, or his Joint Annuitant or Beneficiary, is
receiving a monthly benefit payment on November 1, 1979, the monthly
benefit payment shall be increased, effective with respect to payments made
on and after November 1, 1979, by an amount determined by multiplying the
percentage to be obtained from a., b. or c. below, whichever is applicable,
by d. below.
a. If the Participant attained his Normal Retirement Date before
January 1, 1978, and he retired prior to July 1, 1978, the sum of
the percentage obtained under i. and ii. below, but not to exceed
10%:
i. The percentage obtained from the following table:
Calendar year during which the
Participant attained his Normal
Retirement Date Percentage
------------------------------ ----------
1977 2%
1976 4%
1975 6%
1974 8%
1973 and earlier 10%
ii A percentage equal to 1/2% for each full year of credited Service
in excess of 30 full years of Credited Service that the
Participant had at retirement (e.g., 31 years - 1/2%, 32 years -
1%).
b. If the Participant both attained his Normal Retirement Date and
retired after December 31, 1977, but before July 1, 1978, and if he
had 31 or more full years of Credited Service, a percentage equal
to 2-1/2% plus an additional 1/2% for each full year of his
Credited Service in excess of 31 full years (e.g., 31 years
- 2-1/2%, 32 years - 3%), but not to exceed 10%.
c. If the Participant retired after June 30, 1978 but prior to
November 2, 1979, the percentage obtained from the following table:
55
<PAGE>
Calendar year during which the
Participant attained his Normal
Retirement Date Percentage
------------------------------ ----------
1977 2%
1976 4%
1975 6%
1974 8%
1973 and earlier 10%
d. The amount of the monthly benefit payment which the Participant,
Joint Annuitant, or Beneficiary would otherwise have received on
November 1, 1979 (if this increase in amount were not granted).
(2) If such a Participant, or his Joint Annuitant or Beneficiary, is not
receiving a monthly benefit payment on November 1, 1979, and the Participant
continues in employment, then upon his retirement, the monthly benefit payment
thereafter payable to the Participant, or his Joint Annuitant or Beneficiary,
shall be increased by an amount determined by multiplying the percentage to be
obtained from a. or b. below, whichever is applicable, by c. below:
a. The sum of the percentage obtained under i. and ii. below, but not
to exceed 10%:
i. The percentage obtained from the following table:
Calendar year during which the
Participant attained his Normal
Retirement Date Percentage
------------------------------- ----------
1977 2%
1976 4%
1975 6%
1974 8%
1973 and earlier 10%
ii. A percentage equal to 1/2% for each full year of Credited
Service in excess of 30 full years of Credited Service that
the Participant had at retirement (e.g., 31 years - 1/2%, 32
years - 1%).
b. If the Participant attained his Normal Retirement Date after
December 31, 1977, but before July 1, 1978, and if he had 31 or
more full years of Credited Service, a percentage equal to 2-1/2%
plus an additional 1/2% for each full year of his Credited Service
in excess of 31 full years (e.g., 31 years - 2-1/2%, 32 years -3%),
but not to exceed 10%.
56
<PAGE>
c. The amount of the monthly benefit payment which the Participant,
Joint Annuitant, or Beneficiary would otherwise have received on
the date benefit payments begin (if this increase in amount were
not granted).
C. If the amount of monthly increase in the monthly benefit payment to be
made under paragraph A. or B. above would be less than $10.00, then the amount
shall be $10.00.
57
<PAGE>
Exhibit E-1
FMC Corporation
Optional Form Factors
For Conversion from Single Life Annuity to 50% Joint and Survivor Annuity Form
Mortality: 1971GAT (95% Male / 5% Female); Interest: 6.0%
Payment at Beginning of Month
<TABLE>
<CAPTION>
Beneficiary's Age
20 21 22 23 24 25 26 27 28 29
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Participant's 55 0.8339 0.8348 0.8359 0.8369 0.8381 0.8393 0.8405 0.8418 0.8432 0.8447
Age 56 0.8248 0.8257 0.8268 0.8279 0.8290 0.8302 0.8315 0.8328 0.8342 0.8356
57 0.8152 0.8162 0.8172 0.8183 0.8195 0.8207 0.8219 0.8233 0.8247 0.8262
58 0.8052 0.8062 0.8072 0.8083 0.8095 0.8107 0.8120 0.8133 0.8147 0.8162
59 0.7947 0.7957 0.7968 0.7979 0.7990 0.8002 0.8015 0.8028 0.8043 0.8057
60 0.7838 0.7848 0.7858 0.7869 0.7881 0.7893 0.7906 0.7919 0.7933 0.7948
61 0.7724 0.7734 0.7744 0.7755 0.7767 0.7779 0.7792 0.7805 0.7819 0.7834
62 0.7605 0.7615 0.7626 0.7636 0.7648 0.7660 0.7673 0.7687 0.7701 0.7716
63 0.7482 0.7492 0.7502 0.7513 0.7525 0.7537 0.7550 0.7563 0.7578 0.7593
64 0.7354 0.7364 0.7374 0.7385 0.7397 0.7409 0.7421 0.7435 0.7449 0.7464
65 0.7221 0.7231 0.7241 0.7252 0.7264 0.7276 0.7289 0.7302 0.7316 0.7331
66 0.7084 0.7094 0.7104 0.7115 0.7127 0.7139 0.7151 0.7165 0.7179 0.7194
67 0.6944 0.6954 0.6964 0.6975 0.6986 0.6998 0.7011 0.7024 0.7038 0.7053
68 0.6801 0.6810 0.6820 0.6831 0.6842 0.6854 0.6867 0.6880 0.6894 0.6909
69 0.6654 0.6664 0.6674 0.6685 0.6696 0.6708 0.6720 0.6734 0.6747 0.6762
70 0.6506 0.6515 0.6525 0.6536 0.6547 0.6559 0.6571 0.6585 0.6598 0.6613
71 0.6357 0.6366 0.6376 0.6386 0.6398 0.6409 0.6422 0.6435 0.6448 0.6463
72 0.6207 0.6216 0.6226 0.6236 0.6247 0.6259 0.6271 0.6284 0.6297 0.6312
73 0.6055 0.6064 0.6074 0.6084 0.6095 0.6107 0.6119 0.6131 0.6145 0.6159
74 0.5900 0.5909 0.5919 0.5929 0.5939 0.5951 0.5963 0.5975 0.5989 0.6003
75 0.5741 0.5749 0.5759 0.5769 0.5780 0.5791 0.5802 0.5815 0.5828 0.5842
76 0.5577 0.5585 0.5595 0.5605 0.5615 0.5626 0.5638 0.5650 0.5663 0.5677
77 0.5410 0.5418 0.5428 0.5437 0.5447 0.5458 0.5470 0.5482 0.5495 0.5508
78 0.5243 0.5251 0.5260 0.5270 0.5280 0.5290 0.5301 0.5313 0.5326 0.5339
79 0.5077 0.5085 0.5094 0.5104 0.5113 0.5124 0.5135 0.5147 0.5159 0.5172
80 0.4914 0.4922 0.4931 0.4940 0.4950 0.4960 0.4971 0.4982 0.4994 0.5007
81 0.4755 0.4763 0.4771 0.4780 0.4789 0.4799 0.4810 0.4821 0.4833 0.4845
82 0.4599 0.4607 0.4615 0.4624 0.4633 0.4643 0.4653 0.4664 0.4676 0.4688
83 0.4447 0.4454 0.4462 0.4471 0.4480 0.4490 0.4500 0.4510 0.4522 0.4534
84 0.4298 0.4306 0.4314 0.4322 0.4331 0.4340 0.4350 0.4361 0.4372 0.4384
85 0.4154 0.4161 0.4169 0.4177 0.4186 0.4195 0.4205 0.4215 0.4226 0.4237
86 0.4013 0.4020 0.4027 0.4035 0.4044 0.4053 0.4062 0.4072 0.4082 0.4094
87 0.3874 0.3881 0.3888 0.3896 0.3904 0.3913 0.3922 0.3932 0.3942 0.3953
88 0.3738 0.3745 0.3752 0.3759 0.3767 0.3776 0.3785 0.3794 0.3804 0.3815
89 0.3604 0.3610 0.3617 0.3625 0.3633 0.3641 0.3649 0.3659 0.3668 0.3679
</TABLE>
58
<PAGE>
Exhibit E-1
FMC Corporation
Optional Form Factors
For Conversion from Single Life Annuity to 50% Joint and Survivor Annuity Form
Mortality: 1971GAT (95% Male / 5% Female); Interest: 6.0%
Payment at Beginning of Month
<TABLE>
<CAPTION>
Beneficiary's Age
30 31 32 33 34 35 36 37 38 39
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Participant's 55 0.8462 0.8478 0.8495 0.8512 0.8530 0.8550 0.8570 0.8590 0.8612 0.8635
Age 56 0.8372 0.8388 0.8405 0.8422 0.8441 0.8460 0.8480 0.8502 0.8524 0.8547
57 0.8277 0.8293 0.8310 0.8328 0.8347 0.8366 0.8387 0.8408 0.8431 0.8454
58 0.8178 0.8194 0.8211 0.8229 0.8248 0.8268 0.8288 0.8310 0.8333 0.8357
59 0.8073 0.8089 0.8107 0.8125 0.8144 0.8164 0.8185 0.8207 0.8230 0.8254
60 0.7964 0.7980 0.7998 0.8016 0.8035 0.8055 0.8076 0.8098 0.8122 0.8146
61 0.7850 0.7867 0.7884 0.7902 0.7922 0.7942 0.7963 0.7985 0.8009 0.8033
62 0.7732 0.7748 0.7766 0.7784 0.7803 0.7824 0.7845 0.7868 0.7891 0.7916
63 0.7608 0.7625 0.7642 0.7661 0.7680 0.7701 0.7722 0.7745 0.7768 0.7793
64 0.7480 0.7497 0.7514 0.7533 0.7552 0.7573 0.7594 0.7617 0.7640 0.7665
65 0.7347 0.7364 0.7381 0.7400 0.7419 0.7440 0.7461 0.7484 0.7508 0.7533
66 0.7210 0.7226 0.7244 0.7262 0.7282 0.7302 0.7324 0.7346 0.7370 0.7395
67 0.7069 0.7085 0.7103 0.7121 0.7141 0.7161 0.7183 0.7205 0.7229 0.7254
68 0.6925 0.6941 0.6959 0.6977 0.6996 0.7017 0.7038 0.7061 0.7085 0.7110
69 0.6778 0.6794 0.6811 0.6830 0.6849 0.6869 0.6891 0.6913 0.6937 0.6962
70 0.6629 0.6645 0.6662 0.6680 0.6699 0.6719 0.6741 0.6763 0.6787 0.6812
71 0.6478 0.6494 0.6511 0.6529 0.6548 0.6569 0.6590 0.6612 0.6636 0.6660
72 0.6327 0.6343 0.6360 0.6378 0.6397 0.6417 0.6438 0.6460 0.6483 0.6508
73 0.6174 0.6190 0.6207 0.6225 0.6243 0.6263 0.6284 0.6306 0.6329 0.6354
74 0.6018 0.6033 0.6050 0.6067 0.6086 0.6106 0.6126 0.6148 0.6171 0.6195
75 0.5857 0.5872 0.5889 0.5906 0.5924 0.5943 0.5964 0.5985 0.6008 0.6032
76 0.5691 0.5706 0.5723 0.5740 0.5758 0.5777 0.5797 0.5818 0.5841 0.5864
77 0.5522 0.5537 0.5553 0.5570 0.5588 0.5607 0.5626 0.5647 0.5670 0.5693
78 0.5353 0.5368 0.5384 0.5400 0.5418 0.5436 0.5456 0.5476 0.5498 0.5521
79 0.5186 0.5200 0.5215 0.5232 0.5249 0.5267 0.5286 0.5307 0.5328 0.5351
80 0.5020 0.5035 0.5050 0.5066 0.5082 0.5100 0.5119 0.5139 0.5160 0.5182
81 0.4859 0.4873 0.4887 0.4903 0.4920 0.4937 0.4956 0.4975 0.4996 0.5018
82 0.4701 0.4714 0.4729 0.4744 0.4760 0.4778 0.4796 0.4815 0.4835 0.4857
83 0.4546 0.4560 0.4574 0.4589 0.4605 0.4622 0.4639 0.4658 0.4678 0.4699
84 0.4396 0.4409 0.4423 0.4437 0.4453 0.4469 0.4487 0.4505 0.4525 0.4545
85 0.4249 0.4262 0.4275 0.4290 0.4305 0.4321 0.4338 0.4356 0.4375 0.4395
86 0.4105 0.4118 0.4131 0.4145 0.4160 0.4176 0.4192 0.4210 0.4228 0.4248
87 0.3965 0.3977 0.3990 0.4003 0.4018 0.4033 0.4049 0.4066 0.4085 0.4104
88 0.3826 0.3838 0.3851 0.3864 0.3878 0.3893 0.3909 0.3925 0.3943 0.3962
89 0.3690 0.3701 0.3713 0.3726 0.3740 0.3754 0.3770 0.3786 0.3803 0.3822
</TABLE>
59
<PAGE>
Exhibit E-1
FMC Corporation
Optional Form Factors
For Conversion from Single Life Annuity to 50% Joint and Survivor Annuity Form
Mortality: 1971GAT (95% Male / 5% Female); Interest: 6.0%
Payment at Beginning of Month
<TABLE>
<CAPTION>
Beneficiary's Age
40 41 42 43 44 45 46 47 48 49
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Participant's 55 0.8659 0.8683 0.8709 0.8735 0.8762 0.8791 0.8820 0.8850 0.8881 0.8912
Age 56 0.8571 0.8596 0.8622 0.8649 0.8677 0.8706 0.8736 0.8767 0.8799 0.8831
57 0.8479 0.8504 0.8531 0.8558 0.8587 0.8616 0.8647 0.8679 0.8712 0.8745
58 0.8381 0.8407 0.8434 0.8462 0.8491 0.8522 0.8553 0.8586 0.8619 0.8654
59 0.8279 0.8305 0.8332 0.8361 0.8391 0.8422 0.8454 0.8487 0.8522 0.8557
60 0.8171 0.8198 0.8226 0.8255 0.8285 0.8316 0.8349 0.8383 0.8418 0.8455
61 0.8059 0.8086 0.8114 0.8143 0.8174 0.8206 0.8239 0.8274 0.8310 0.8347
62 0.7942 0.7969 0.7997 0.8027 0.8058 0.8090 0.8124 0.8159 0.8196 0.8234
63 0.7819 0.7847 0.7875 0.7905 0.7937 0.7969 0.8004 0.8040 0.8077 0.8116
64 0.7692 0.7719 0.7748 0.7778 0.7810 0.7843 0.7878 0.7914 0.7952 0.7991
65 0.7559 0.7587 0.7616 0.7646 0.7678 0.7711 0.7746 0.7783 0.7821 0.7861
66 0.7422 0.7450 0.7479 0.7509 0.7541 0.7575 0.7610 0.7647 0.7686 0.7726
67 0.7281 0.7309 0.7338 0.7368 0.7401 0.7435 0.7470 0.7507 0.7546 0.7587
68 0.7136 0.7164 0.7193 0.7224 0.7256 0.7290 0.7326 0.7363 0.7403 0.7444
69 0.6988 0.7016 0.7045 0.7076 0.7109 0.7143 0.7178 0.7216 0.7255 0.7297
70 0.6838 0.6866 0.6895 0.6926 0.6958 0.6992 0.7028 0.7066 0.7105 0.7147
71 0.6687 0.6714 0.6743 0.6774 0.6806 0.6840 0.6876 0.6914 0.6953 0.6995
72 0.6534 0.6562 0.6591 0.6621 0.6653 0.6687 0.6723 0.6760 0.6800 0.6842
73 0.6379 0.6407 0.6436 0.6466 0.6498 0.6532 0.6567 0.6605 0.6644 0.6686
74 0.6221 0.6248 0.6277 0.6307 0.6339 0.6372 0.6408 0.6445 0.6484 0.6525
75 0.6058 0.6085 0.6113 0.6143 0.6174 0.6208 0.6243 0.6280 0.6319 0.6360
76 0.5890 0.5916 0.5944 0.5974 0.6005 0.6038 0.6073 0.6109 0.6148 0.6189
77 0.5718 0.5744 0.5772 0.5801 0.5832 0.5864 0.5899 0.5935 0.5974 0.6014
78 0.5546 0.5571 0.5599 0.5627 0.5658 0.5690 0.5724 0.5760 0.5798 0.5838
79 0.5375 0.5400 0.5427 0.5455 0.5485 0.5517 0.5551 0.5586 0.5624 0.5663
80 0.5206 0.5231 0.5257 0.5285 0.5315 0.5346 0.5379 0.5414 0.5451 0.5490
81 0.5041 0.5065 0.5091 0.5119 0.5148 0.5179 0.5211 0.5245 0.5282 0.5320
82 0.4879 0.4903 0.4929 0.4956 0.4984 0.5014 0.5046 0.5080 0.5116 0.5154
83 0.4721 0.4745 0.4770 0.4796 0.4824 0.4854 0.4885 0.4918 0.4953 0.4990
84 0.4567 0.4590 0.4615 0.4640 0.4668 0.4697 0.4728 0.4760 0.4794 0.4831
85 0.4416 0.4439 0.4463 0.4488 0.4515 0.4543 0.4574 0.4605 0.4639 0.4675
86 0.4269 0.4291 0.4314 0.4339 0.4365 0.4393 0.4423 0.4454 0.4487 0.4522
87 0.4124 0.4146 0.4169 0.4193 0.4218 0.4246 0.4274 0.4305 0.4337 0.4371
88 0.3982 0.4003 0.4025 0.4049 0.4074 0.4100 0.4128 0.4158 0.4190 0.4223
89 0.3841 0.3861 0.3883 0.3906 0.3931 0.3957 0.3984 0.4013 0.4044 0.4077
</TABLE>
60
<PAGE>
Exhibit E-1
FMC Corporation
Optional Form Factors
For Conversion from Single Life Annuity to 50% Joint and Survivor Annuity Form
Mortality: 1971GAT (95% Male / 5% Female); Interest: 6.0%
Payment at Beginning of Month
<TABLE>
<CAPTION>
Beneficiary's Age
50 51 52 53 54 55 56 57 58 59
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Participant's 55 0.8945 0.8978 0.9012 0.9046 0.9081 0.9116 0.9152 0.9188 0.9224 0.9261
Age 56 0.8865 0.8899 0.8935 0.8970 0.9007 0.9044 0.9082 0.9120 0.9158 0.9196
57 0.8780 0.8816 0.8852 0.8890 0.8928 0.8966 0.9006 0.9046 0.9086 0.9126
58 0.8690 0.8727 0.8765 0.8803 0.8843 0.8883 0.8924 0.8966 0.9008 0.9051
59 0.8594 0.8632 0.8671 0.8711 0.8752 0.8794 0.8837 0.8881 0.8925 0.8970
60 0.8493 0.8532 0.8572 0.8613 0.8656 0.8699 0.8744 0.8789 0.8836 0.8882
61 0.8386 0.8426 0.8467 0.8510 0.8554 0.8599 0.8645 0.8692 0.8741 0.8790
62 0.8274 0.8315 0.8357 0.8401 0.8446 0.8493 0.8541 0.8590 0.8640 0.8691
63 0.8156 0.8198 0.8241 0.8286 0.8333 0.8380 0.8430 0.8481 0.8532 0.8585
64 0.8032 0.8075 0.8119 0.8165 0.8213 0.8262 0.8313 0.8365 0.8419 0.8474
65 0.7903 0.7946 0.7991 0.8038 0.8087 0.8137 0.8190 0.8243 0.8299 0.8356
66 0.7769 0.7813 0.7858 0.7906 0.7956 0.8007 0.8061 0.8116 0.8173 0.8231
67 0.7630 0.7674 0.7721 0.7769 0.7820 0.7872 0.7927 0.7983 0.8042 0.8102
68 0.7487 0.7532 0.7579 0.7628 0.7679 0.7733 0.7788 0.7846 0.7906 0.7967
69 0.7340 0.7385 0.7433 0.7483 0.7534 0.7589 0.7645 0.7704 0.7765 0.7828
70 0.7190 0.7236 0.7284 0.7334 0.7386 0.7441 0.7498 0.7558 0.7620 0.7684
71 0.7038 0.7084 0.7132 0.7183 0.7236 0.7291 0.7349 0.7409 0.7472 0.7538
72 0.6885 0.6931 0.6979 0.7030 0.7083 0.7139 0.7197 0.7258 0.7322 0.7388
73 0.6729 0.6775 0.6824 0.6874 0.6928 0.6984 0.7043 0.7104 0.7168 0.7235
74 0.6569 0.6615 0.6663 0.6714 0.6768 0.6824 0.6883 0.6945 0.7009 0.7077
75 0.6403 0.6449 0.6497 0.6548 0.6601 0.6658 0.6717 0.6779 0.6844 0.6912
76 0.6232 0.6278 0.6326 0.6376 0.6429 0.6486 0.6545 0.6607 0.6672 0.6741
77 0.6057 0.6102 0.6149 0.6200 0.6253 0.6309 0.6368 0.6430 0.6495 0.6564
78 0.5880 0.5925 0.5972 0.6022 0.6075 0.6130 0.6189 0.6251 0.6316 0.6385
79 0.5705 0.5749 0.5796 0.5845 0.5897 0.5953 0.6011 0.6072 0.6137 0.6205
80 0.5531 0.5575 0.5621 0.5670 0.5722 0.5776 0.5834 0.5895 0.5959 0.6027
81 0.5361 0.5404 0.5449 0.5498 0.5549 0.5603 0.5660 0.5720 0.5784 0.5852
82 0.5194 0.5236 0.5281 0.5328 0.5379 0.5432 0.5489 0.5549 0.5612 0.5679
83 0.5030 0.5071 0.5116 0.5162 0.5212 0.5265 0.5320 0.5380 0.5442 0.5508
84 0.4870 0.4910 0.4954 0.5000 0.5049 0.5101 0.5156 0.5214 0.5276 0.5341
85 0.4713 0.4753 0.4795 0.4841 0.4889 0.4940 0.4994 0.5051 0.5112 0.5176
86 0.4559 0.4598 0.4640 0.4684 0.4732 0.4782 0.4835 0.4891 0.4951 0.5015
87 0.4408 0.4446 0.4487 0.4531 0.4577 0.4626 0.4678 0.4734 0.4793 0.4855
88 0.4259 0.4296 0.4336 0.4379 0.4424 0.4472 0.4524 0.4578 0.4636 0.4697
89 0.4111 0.4148 0.4187 0.4229 0.4273 0.4320 0.4370 0.4424 0.4480 0.4540
</TABLE>
61
<PAGE>
Exhibit E-1
FMC Corporation
Optional Form Factors
For Conversion from Single Life Annuity to 50% Joint and Survivor Annuity Form
Mortality: 1971GAT (95% Male / 5% Female); Interest: 6.0%
Payment at Beginning of Month
<TABLE>
<CAPTION>
Beneficiary's Age
60 61 62 63 64 65 66 67 68 69
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Participant's 55 0.9297 0.9332 0.9368 0.9403 0.9437 0.9471 0.9504 0.9537 0.9568 0.9599
Age 56 0.9234 0.9272 0.9310 0.9348 0.9385 0.9421 0.9457 0.9492 0.9526 0.9559
57 0.9167 0.9207 0.9247 0.9287 0.9327 0.9366 0.9404 0.9442 0.9479 0.9514
58 0.9094 0.9136 0.9179 0.9222 0.9264 0.9306 0.9347 0.9387 0.9427 0.9466
59 0.9015 0.9060 0.9105 0.9150 0.9195 0.9240 0.9284 0.9327 0.9370 0.9412
60 0.8930 0.8977 0.9025 0.9073 0.9121 0.9168 0.9215 0.9262 0.9307 0.9352
61 0.8839 0.8889 0.8939 0.8990 0.9040 0.9091 0.9141 0.9191 0.9240 0.9288
62 0.8742 0.8795 0.8848 0.8901 0.8954 0.9008 0.9061 0.9114 0.9166 0.9218
63 0.8639 0.8694 0.8750 0.8805 0.8862 0.8918 0.8974 0.9031 0.9086 0.9142
64 0.8530 0.8587 0.8645 0.8703 0.8762 0.8822 0.8881 0.8941 0.9000 0.9059
65 0.8414 0.8473 0.8533 0.8594 0.8656 0.8718 0.8781 0.8844 0.8907 0.8969
66 0.8292 0.8353 0.8415 0.8479 0.8544 0.8609 0.8675 0.8741 0.8807 0.8874
67 0.8164 0.8227 0.8292 0.8358 0.8425 0.8493 0.8562 0.8632 0.8701 0.8772
68 0.8031 0.8096 0.8163 0.8231 0.8301 0.8372 0.8444 0.8516 0.8590 0.8663
69 0.7893 0.7960 0.8029 0.8099 0.8171 0.8245 0.8319 0.8395 0.8472 0.8549
70 0.7751 0.7819 0.7890 0.7962 0.8037 0.8113 0.8190 0.8269 0.8349 0.8430
71 0.7605 0.7675 0.7748 0.7822 0.7898 0.7977 0.8057 0.8138 0.8221 0.8306
72 0.7457 0.7528 0.7602 0.7678 0.7757 0.7837 0.7919 0.8004 0.8090 0.8178
73 0.7305 0.7378 0.7453 0.7530 0.7610 0.7693 0.7777 0.7864 0.7953 0.8044
74 0.7148 0.7221 0.7297 0.7376 0.7458 0.7542 0.7628 0.7718 0.7809 0.7903
75 0.6983 0.7057 0.7134 0.7214 0.7297 0.7383 0.7472 0.7563 0.7657 0.7753
76 0.6812 0.6887 0.6964 0.7045 0.7129 0.7216 0.7307 0.7400 0.7496 0.7595
77 0.6635 0.6710 0.6789 0.6870 0.6955 0.7043 0.7135 0.7230 0.7328 0.7429
78 0.6456 0.6531 0.6610 0.6692 0.6777 0.6867 0.6959 0.7055 0.7155 0.7259
79 0.6277 0.6352 0.6431 0.6513 0.6599 0.6689 0.6782 0.6880 0.6981 0.7086
80 0.6099 0.6174 0.6252 0.6334 0.6420 0.6511 0.6605 0.6703 0.6805 0.6911
81 0.5922 0.5997 0.6075 0.6157 0.6244 0.6334 0.6428 0.6527 0.6630 0.6737
82 0.5749 0.5823 0.5901 0.5983 0.6068 0.6159 0.6253 0.6352 0.6456 0.6564
83 0.5578 0.5651 0.5729 0.5810 0.5895 0.5985 0.6079 0.6178 0.6282 0.6391
84 0.5410 0.5482 0.5559 0.5640 0.5725 0.5814 0.5908 0.6007 0.6111 0.6220
85 0.5244 0.5316 0.5392 0.5472 0.5556 0.5645 0.5739 0.5837 0.5941 0.6050
86 0.5082 0.5153 0.5227 0.5306 0.5390 0.5478 0.5571 0.5669 0.5772 0.5881
87 0.4921 0.4991 0.5065 0.5143 0.5225 0.5312 0.5404 0.5502 0.5604 0.5713
88 0.4762 0.4831 0.4903 0.4980 0.5062 0.5148 0.5239 0.5335 0.5437 0.5545
89 0.4604 0.4672 0.4743 0.4819 0.4899 0.4984 0.5074 0.5169 0.5270 0.5377
</TABLE>
62
<PAGE>
Exhibit E-1
FMC Corporation
Optional Form Factors
For Conversion from Single Life Annuity to 50% Joint and Survivor Annuity Form
Mortality: 1971GAT (95% Male / 5% Female); Interest: 6.0%
Payment at Beginning of Month
<TABLE>
<CAPTION>
Beneficiary's Age
70 71 72 73 74 75 76 77 78 79
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Participant's 55 0.9628 0.9656 0.9683 0.9708 0.9732 0.9754 0.9775 0.9795 0.9813 0.9830
Age 56 0.9591 0.9621 0.9650 0.9678 0.9704 0.9728 0.9751 0.9773 0.9793 0.9812
57 0.9549 0.9582 0.9614 0.9644 0.9673 0.9699 0.9725 0.9748 0.9771 0.9791
58 0.9503 0.9539 0.9574 0.9607 0.9638 0.9667 0.9695 0.9721 0.9745 0.9768
59 0.9452 0.9491 0.9529 0.9565 0.9599 0.9631 0.9661 0.9690 0.9716 0.9742
60 0.9396 0.9439 0.9479 0.9518 0.9555 0.9590 0.9624 0.9655 0.9684 0.9712
61 0.9335 0.9381 0.9425 0.9467 0.9507 0.9546 0.9582 0.9616 0.9649 0.9679
62 0.9269 0.9318 0.9365 0.9411 0.9455 0.9497 0.9536 0.9574 0.9609 0.9643
63 0.9196 0.9249 0.9300 0.9350 0.9397 0.9442 0.9485 0.9526 0.9565 0.9602
64 0.9117 0.9174 0.9229 0.9282 0.9333 0.9382 0.9429 0.9474 0.9516 0.9556
65 0.9031 0.9092 0.9151 0.9208 0.9264 0.9317 0.9367 0.9416 0.9462 0.9506
66 0.8939 0.9004 0.9067 0.9129 0.9188 0.9245 0.9300 0.9352 0.9403 0.9450
67 0.8841 0.8910 0.8977 0.9043 0.9106 0.9168 0.9227 0.9284 0.9338 0.9390
68 0.8737 0.8810 0.8881 0.8951 0.9019 0.9085 0.9148 0.9209 0.9268 0.9324
69 0.8627 0.8704 0.8779 0.8853 0.8926 0.8996 0.9064 0.9129 0.9193 0.9253
70 0.8511 0.8592 0.8672 0.8750 0.8827 0.8901 0.8974 0.9044 0.9112 0.9177
71 0.8391 0.8475 0.8559 0.8642 0.8723 0.8802 0.8879 0.8954 0.9027 0.9096
72 0.8266 0.8354 0.8442 0.8529 0.8614 0.8698 0.8780 0.8859 0.8937 0.9011
73 0.8136 0.8228 0.8320 0.8410 0.8500 0.8588 0.8675 0.8759 0.8841 0.8921
74 0.7998 0.8094 0.8189 0.8284 0.8378 0.8471 0.8561 0.8651 0.8738 0.8822
75 0.7852 0.7951 0.8050 0.8149 0.8247 0.8344 0.8439 0.8533 0.8625 0.8715
76 0.7696 0.7798 0.7901 0.8004 0.8106 0.8207 0.8307 0.8406 0.8503 0.8598
77 0.7533 0.7638 0.7744 0.7850 0.7956 0.8061 0.8166 0.8269 0.8371 0.8471
78 0.7364 0.7472 0.7581 0.7691 0.7800 0.7909 0.8018 0.8126 0.8232 0.8337
79 0.7194 0.7304 0.7415 0.7528 0.7641 0.7753 0.7866 0.7978 0.8089 0.8199
80 0.7021 0.7133 0.7247 0.7362 0.7478 0.7594 0.7710 0.7826 0.7941 0.8055
81 0.6848 0.6962 0.7078 0.7195 0.7314 0.7433 0.7552 0.7672 0.7791 0.7909
82 0.6676 0.6791 0.6909 0.7028 0.7149 0.7270 0.7393 0.7515 0.7638 0.7760
83 0.6504 0.6620 0.6739 0.6860 0.6983 0.7107 0.7232 0.7357 0.7483 0.7609
84 0.6333 0.6450 0.6570 0.6693 0.6817 0.6943 0.7070 0.7198 0.7327 0.7456
85 0.6163 0.6281 0.6402 0.6525 0.6651 0.6778 0.6907 0.7038 0.7169 0.7301
86 0.5994 0.6112 0.6233 0.6357 0.6484 0.6613 0.6744 0.6876 0.7010 0.7145
87 0.5826 0.5944 0.6065 0.6190 0.6317 0.6447 0.6579 0.6713 0.6849 0.6986
88 0.5657 0.5775 0.5896 0.6021 0.6149 0.6279 0.6412 0.6547 0.6685 0.6824
89 0.5489 0.5606 0.5727 0.5851 0.5979 0.6110 0.6244 0.6380 0.6519 0.6659
</TABLE>
63
<PAGE>
Exhibit E-1
FMC Corporation
Optional Form Factors
For Conversion from Single Life Annuity to 50% Joint and Survivor Annuity Form
Mortality: 1971GAT (95% Male / 5% Female); Interest: 6.0%
Payment at Beginning of Month
<TABLE>
<CAPTION>
Beneficiary's Age
80 81 82 83 84 85 86 87 88 89
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Participant's 55 0.9846 0.9860 0.9874 0.9886 0.9898 0.9908 0.9918 0.9927 0.9935 0.9943
Age 56 0.9829 0.9845 0.9860 0.9874 0.9887 0.9898 0.9909 0.9919 0.9928 0.9936
57 0.9810 0.9828 0.9845 0.9860 0.9874 0.9887 0.9899 0.9910 0.9920 0.9929
58 0.9789 0.9809 0.9827 0.9844 0.9860 0.9874 0.9887 0.9900 0.9911 0.9921
59 0.9765 0.9787 0.9807 0.9826 0.9843 0.9859 0.9874 0.9888 0.9900 0.9912
60 0.9738 0.9762 0.9784 0.9805 0.9825 0.9843 0.9859 0.9874 0.9888 0.9901
61 0.9708 0.9734 0.9759 0.9782 0.9804 0.9824 0.9842 0.9859 0.9874 0.9889
62 0.9674 0.9703 0.9731 0.9756 0.9780 0.9802 0.9823 0.9842 0.9859 0.9875
63 0.9636 0.9668 0.9699 0.9727 0.9754 0.9778 0.9801 0.9822 0.9841 0.9859
64 0.9594 0.9630 0.9663 0.9694 0.9723 0.9751 0.9776 0.9800 0.9821 0.9841
65 0.9547 0.9586 0.9623 0.9657 0.9690 0.9720 0.9748 0.9774 0.9798 0.9821
66 0.9495 0.9538 0.9578 0.9616 0.9652 0.9686 0.9717 0.9746 0.9773 0.9797
67 0.9439 0.9486 0.9530 0.9571 0.9611 0.9648 0.9682 0.9714 0.9744 0.9772
68 0.9378 0.9428 0.9477 0.9522 0.9565 0.9606 0.9644 0.9679 0.9712 0.9743
69 0.9311 0.9366 0.9419 0.9468 0.9515 0.9560 0.9602 0.9641 0.9677 0.9711
70 0.9240 0.9299 0.9356 0.9410 0.9462 0.9510 0.9556 0.9599 0.9639 0.9677
71 0.9164 0.9228 0.9289 0.9348 0.9404 0.9457 0.9507 0.9554 0.9598 0.9640
72 0.9083 0.9152 0.9219 0.9282 0.9343 0.9400 0.9455 0.9506 0.9554 0.9600
73 0.8997 0.9072 0.9143 0.9211 0.9277 0.9339 0.9398 0.9454 0.9507 0.9557
74 0.8904 0.8983 0.9060 0.9133 0.9204 0.9271 0.9336 0.9397 0.9454 0.9508
75 0.8802 0.8886 0.8968 0.9047 0.9123 0.9196 0.9266 0.9332 0.9395 0.9454
76 0.8690 0.8780 0.8867 0.8952 0.9033 0.9112 0.9187 0.9259 0.9327 0.9392
77 0.8569 0.8664 0.8757 0.8847 0.8934 0.9019 0.9100 0.9178 0.9252 0.9323
78 0.8440 0.8541 0.8639 0.8735 0.8829 0.8919 0.9006 0.9090 0.9171 0.9247
79 0.8306 0.8412 0.8516 0.8618 0.8717 0.8813 0.8907 0.8997 0.9083 0.9166
80 0.8168 0.8279 0.8388 0.8495 0.8600 0.8702 0.8802 0.8898 0.8991 0.9080
81 0.8026 0.8142 0.8256 0.8368 0.8479 0.8587 0.8693 0.8795 0.8894 0.8989
82 0.7882 0.8002 0.8121 0.8238 0.8354 0.8468 0.8579 0.8688 0.8793 0.8895
83 0.7734 0.7859 0.7982 0.8105 0.8226 0.8345 0.8462 0.8576 0.8688 0.8796
84 0.7585 0.7713 0.7841 0.7968 0.8094 0.8219 0.8341 0.8461 0.8579 0.8693
85 0.7434 0.7566 0.7697 0.7829 0.7959 0.8089 0.8217 0.8342 0.8466 0.8586
86 0.7280 0.7415 0.7551 0.7686 0.7821 0.7955 0.8088 0.8220 0.8349 0.8475
87 0.7123 0.7262 0.7401 0.7540 0.7679 0.7818 0.7956 0.8093 0.8227 0.8360
88 0.6964 0.7105 0.7247 0.7390 0.7533 0.7676 0.7819 0.7961 0.8101 0.8239
89 0.6802 0.6945 0.7090 0.7236 0.7383 0.7530 0.7677 0.7824 0.7969 0.8113
</TABLE>
64
<PAGE>
SUPPLEMENT 1
SPECIALTY CHEMICALS DIVISION, LIVONIA, MICHIGAN
-----------------------------------------------
1-1 Eligible Employees
------------------
The terms of this Supplement apply only to Participants who were Eligible
Employees of the FMC Corporation Specialty Chemicals Division in Livonia,
Michigan (the "Division") on the Sale Date. Certain Participants in such group
previously participated in the salaried part of the Retirement Plan for Nonunion
Employees of Sun Cleaner Company (merged into the Plan effective January 1,
1979) or the hourly part of the Retirement Plan for Nonunion Employees of Sun
Cleaner Company (merged into the Plan effective September 15, 1980).
1-2 Sale Date
---------
Effective August 16, 1985 ("Sale Date") the Division was sold to Olin
Corporation (the "Purchaser").
1-3 Early Retirement Date
---------------------
With respect to any Participant who was an Eligible Employee of the
Division on the Sale Date, such Participant's employment with the Purchaser
shall be considered as employment with the Company for purposes of satisfying
the age requirement for Early Retirement Date.
1-4 Year of Vesting Service
-----------------------
With respect to any Participant who was an Eligible Employee of the
Division on the Sale Date who was not 100% vested in his benefits under the Plan
on such date, such Participant's years of vesting service with the Purchaser
(determined in accordance with rules similar to the rules used to determine
Years of Vesting Service under this Plan) will be considered Years of Vesting
Service under this Plan for purposes of determining such Participant's vesting
in benefits accrued under this Plan.
65
<PAGE>
SUPPLEMENT 2
MARINE COLLOIDS DIVISION
------------------------
2-1 Eligible Employees
------------------
The terms of this Supplement apply only to individuals who were
participants in the Marine Colloids, Inc. Pension Plan ("Prior Plan") prior to
January 1, 1979 (the Merger Date") and who had not yet received a full
distribution of their benefit under such Prior Plan as of the Effective Date
("Participant").
2-2 Calculation of Normal Retirement Benefit
----------------------------------------
A Participant's monthly Normal Retirement Benefit shall be no less than
the normal retirement benefit to which the Participant would have been entitled
under the Prior Plan if the Participant had terminated employment immediately
prior to the Merger Date.
2-3 Early Retirement Date
---------------------
Early Retirement Date means a Participant's 55th birthday.
2-4 Calculation of Early Retirement Benefit
---------------------------------------
Subject to Section 2-5 of this Supplement, if a Participant has 10 or
more Years of Credited Service, the Participant's monthly Early Retirement
Benefit under the Prior Plan will equal the greater of the amounts shown in
Subsections (a) and (b) below. If a Participant has fewer than 10 Years of
Credited Service, his monthly Early Retirement Benefit under the Prior Plan will
equal the amount shown in Subsection (a) below.
(a) 1-1/2% of the Participant's highest average earnings multiplied
by the Participant's years of credited service (all as determined
under the Prior Plan), reduced by the Social Security offset.
The Social Security offset is an amount equal to 50% of the
Participant's primary Social Security benefit (determined under
the Prior Plan) multiplied by his or her Years of Vesting Service
(not in excess of 30), divided by 30. If the early retirement
benefit commences before the Participant reaches age 61, the
Social Security offset will not be larger than the Participant's
primary Social Security benefit (determined under the Prior Plan)
multiplied by the percentage determined by the following
schedule:
66
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------
Age of Benefit Social Security
Commencement Date Amount Reduced to
----------------- -----------------
<S> <C>
------------------------------------------------
60 48.0
------------------------------------------------
59 45.6
------------------------------------------------
58 43.2
------------------------------------------------
57 40.8
------------------------------------------------
56 38.4
------------------------------------------------
55 36.0
------------------------------------------------
</TABLE>
If the Participant's age is not a whole number when the early
retirement benefit begins, an appropriate interpolation of the
percentage indicated by the above schedule will be made.
(b) 1% of the Participant's highest average earnings multiplied by
the Participant's years of credited service (both as determined
under the Prior Plan).
2-5 Early Retirement Reduction Factor
---------------------------------
The Participant's Early Retirement Benefit computed pursuant to
Section 2-4 of this Supplement shall be reduced by 1/3 of 1% for each month in
excess of 36 by which the commencement of the Participant's Early Retirement
Benefit precedes the Participant's Normal Retirement Date.
2-6 Years of Vesting Service
------------------------
A Participant is fully vested in the Participant's benefit under the
Prior Plan. A Participant's Employment Commencement Date will be the date the
Participant was first employed by the Company or an Affiliate, or any earlier
date from which the Participant was granted vesting service under the Prior
Plan. In no event will a Participant be credited with fewer Years of Vesting
Service under the Plan than the Participant would have been credited with under
the vesting rules of the Prior Plan.
2-7 Available Forms of Benefits
---------------------------
In addition to the optional forms of benefit described in the Plan, a
Participant may elect to receive the Participant's benefit under the Prior Plan
in the following form of benefit:
Life and 5 Year Certain Annuity: A Life and 5 Year Certain Annuity is
an immediate annuity which is the Actuarial Equivalent of an
Individual Life Annuity, but which provides a smaller monthly annuity
for the Participant's life than an Individual Life Annuity. After the
Participant's
67
<PAGE>
death, if the monthly annuity has been paid for a period shorter
than 60 months, it will continue, in the same amount as during
the Participant's life, for the remainder of the 60 month term
certain. The Participant's Joint Annuitant will receive any
payments due after the Participant's death.
2-8 Payment to Active Participant After Normal Retirement Date
----------------------------------------------------------
A Participant who continues to be employed by the Company or a
Participating Employer after reaching his or her Normal Retirement Date may
begin receiving his or her benefit with respect to the Prior Plan at or after
his or her Normal Retirement Date.
68
<PAGE>
SUPPLEMENT 3
JETWAY SYSTEMS DIVISION
-----------------------
3-1 Eligible Employees
The terms of this Supplement apply only to individuals who are current or
former salaried and nonunion hourly employees of the FMC Corporation Jetway
Systems Division and who were participants in the Pneumo Abex Corporation
Retirement Income Plan ("Prior Plan") before May 27, 1994 (the "Merger Date")
who had not received a full distribution of their benefit under such plan as of
the Effective Date ("Participant"). On the Merger Date the benefits of such
participants were spun off from the Prior Plan and merged into this Plan.
3-2 Calculation of Normal Retirement Benefit
A Participant's monthly Normal Retirement Benefit shall be no less than the
normal retirement benefit to which the Participant would have been entitled
under the Prior Plan if the Participant had terminated employment immediately
prior to the Merger Date.
3-3 Early Retirement Date
Early Retirement Date means the earlier of: (a) a Participant's Early
Retirement Date under the Plan or (b) the date the Participant has a Severance
from Service before Normal Retirement Date for a reason other than death (i) if
the Participant is at least age 55 and has at least 10 Years of Vesting Service,
(ii) if the Participant was hired before age 35 and before January 1, 1989 and
the sum of the Participant's age and Years of Vesting Service is at least 75, or
(iii) if the Participant was entitled to an early retirement benefit under the
Prior Plan.
3-4 Termination Benefit
If a Participant has a Severance from Service before Early or Normal
Retirement Date for a reason other than death and had accrued at least 10 Years
of Vesting Service, the Participant may begin to receive the Participant's Plan
benefit, subject to the Plan's reduction for early retirement, as early as the
date the Participant reaches age 55.
3-5 Years of Vesting Service
A Participant is fully vested in the Participant's benefit under the Plan.
A Participant's Employment Commencement Date will be the date the Participant
was first employed by the Company or an Affiliate, or any earlier date from
which the Participant was granted vesting service under the Prior Plan. In no
event will a Participant be credited with fewer Years of Vesting Service under
the Plan than the Participant would have been credited with under the vesting
rules of the Prior Plan.
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3-6 Available Forms of Benefits
In addition to the optional forms of benefit described in the Plan, a
Participant may elect to receive his benefit under the Prior Plan in the
following form of benefit:
Life and 10 Year Certain Annuity: A Life and 10 Year Certain Annuity
is an immediate annuity which is the Actuarial Equivalent of an
Individual Life Annuity, but which provides a smaller monthly annuity
for the Participant's life than an Individual Life Annuity. After the
Participant's death, if the monthly annuity has been paid for a period
shorter than 10 years, it will continue in the same amount as during
the Participant's life, for the remainder of the 10 year term certain.
The Participant's Joint Annuitant will receive any payments due after
the Participant's death.
3-7 Special Provisions for Participants in the Retirement Plan for Salaried
Employees of Abex Corporation
In addition to the special provisions of the preceding sections, a
Participant who participated in the Retirement Plan for Salaried Employees of
Abex Corporation before January 1, 1989 will be subject to the following
provision with respect to the Participant's Prior Plan benefit accrued before
January 1, 1989:
Special Rule of 75 Benefit: Participants who were hired before age 35
and before January 1, 1989, and who accrue total years of age and
Vesting Service at Early Retirement equal to at least 75 will be
entitled to a monthly benefit at their Early Retirement Date reduced
by 1/3 of 1% for each month payments are made before the Participant
reaches age 65.
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SUPPLEMENT 4
STEIN
-----
4-1 Eligible Employees
The terms of this Supplement apply only to individuals who were
participants in the Retirement Plan for Employees of Stein (the "Prior Plan")
prior to June 1, 1997 (the "Merger Date") and who had not received a full
distribution of their benefit under such Prior Plan as of the Effective Date
("Participant").
4-2 Calculation of Normal Retirement Benefit
A Participant's Normal Retirement Benefit shall be no less than the
normal retirement benefit to which the Participant would have been entitled
under the Prior Plan if the Participant had permanently terminated employment
immediately prior to the Merger Date.
4-3 Years of Vesting Service
A Participant is fully vested in the Participant's benefit under the
Prior Plan. A Participant's Employment Commencement Date will be the date the
Participant was first employed by the Company or an Affiliate, or any earlier
date from which the Participant was granted vesting service under the Prior
Plan. In no event will a Participant be credited with fewer Years of Vesting
Service under the Plan than the Participant would have been credited with under
the vesting rules of the Prior Plan.
4-4 Available Forms of Benefits
In addition to the optional forms of benefit described in the Plan, a
Participant may elect to receive the Participant's benefit under the Prior Plan
in the following form of benefit:
Life and 5 Year Certain Annuity: A Life and 10 Year Certain Annuity is
an immediate annuity which is the Actuarial Equivalent of an
Individual Life Annuity, but which provides a smaller monthly annuity
for the Participant's life than an Individual Life Annuity. After the
Participant's death, if the monthly annuity has been paid for a period
shorter than 60 months, it will continue, in the same amount as during
the Participant's life, for the remainder of the 60 month term
certain. The Participant's Joint Annuitant will receive any payments
due after the Participant's death.
71
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SUPPLEMENT 5
MOORCO INTERNATIONAL INC. RETIREMENT INCOME PLAN
------------------------------------------------
5-1 Eligible Employees
The terms of this Supplement apply only to individuals who were
participants in the Moorco International Inc. Retirement Income Plan (the "Prior
Plan") prior to July 1, 1997 (the "Merger Date") and who had not yet received a
full distribution of their benefit under such Prior Plan as of the Effective
Date ("Participant").
5-2 Calculation of Normal Retirement Benefit
A Participant's Normal Retirement Benefit shall be no less than the
normal retirement benefit to which the Participant would have been entitled if
the Participant had terminated employment immediately prior to the Merger Date.
5-3 Early Retirement Date
Early Retirement Date means the earlier of: (a) Early Retirement Date
under the Plan; or (b) the date the Participant has a Severance from Service
before Normal Retirement Date for a reason other than death, if the Participant
is at least age 55 and has at least 10 Years of Vesting Service or if the
Participant was entitled to an early retirement benefit under the Geosource Inc.
Retirement Income Plan.
5-4 Years of Vesting Service
A Participant is fully vested in the Participant's benefits under the
Prior Plan. A Participant's Employment Commencement Date will be the date the
Participant was first employed by the Company or an Affiliate, or any earlier
date from which the Participant was first granted vesting service under the
Prior Plan. Each Participant will be credited with the number of full years of
vesting service with which the Participant was credited under the Prior Plan
plus the greater of: (a) 6 months of Vesting Service; and (b) if the Participant
accrued 1,000 hours of service under the Prior Plan during the period from
January 1, 1997 through June 30, 1997, 1 Year of Vesting Service. In no event
will a Participant be credited with fewer Years of Vesting Service under the
Plan than the Participant would have been credited with under the vesting rules
of the Prior Plan.
5-5 Available Forms of Benefits
In addition to the optional forms of benefit described in the Plan, a
Participant may elect to receive the Participant's benefit under the Prior Plan
in the following form:
72
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Life and Term Certain Annuity: A Life and Term Certain Annuity is an
immediate annuity which is the Actuarial Equivalent (determined in
accordance with Exhibit E-1) of an Individual Life Annuity, but which
provides a smaller monthly annuity for the Participant's life than an
Individual Life Annuity. After the Participant's death, if the monthly
annuity has been paid for a period shorter than the term certain
chosen by the Participant, it will continue, in the same amount as
during the Participant's life, for the remainder of the term certain.
The Participant's Joint Annuitant will receive any payments due after
the Participant's death. The Participant may choose a term certain of
60, 120, 180 or 240 months, so long as the term certain does not
exceed the joint life expectancies of the Participant and the Joint
Annuitant.
5-6 Non-Spouse Death Benefit
If the Preretirement Survivor's Benefit is not payable to the spouse of a
deceased Participant, and if the Participant dies on or after the Participant's
Early Retirement Date, the Participant's Beneficiary will be entitled to a death
benefit consisting of monthly payments made for a period of 60 months, beginning
as of the first day of the month coincident with or next following the month in
which the Participant dies. The amount of the monthly payment will be equal to
the monthly payment to which the Participant would have been entitled if the
Participant had retired on the day before his death, and had elected to receive
only the Participant's Prior Plan benefit in the form of an immediate Life and
Term Certain Annuity with a term certain of 60 months.
73
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SUPPLEMENT 6
SMITH METER, INC. SALARIED RETIREMENT PLAN
------------------------------------------
6-1 Eligible Employees
The terms of this Supplement apply only to individuals who were
participants in the Smith Meter, Inc. Salaried Retirement Plan ("Prior Plan")
prior to July 1, 1997 (the "Merger Date") and who had not yet received a full
distribution of their benefit under such Prior Plan as of the Effective Date
("Participant").
6-2 Calculation of Normal Retirement Benefit
A Participant's Normal Retirement Benefit shall be no less than the
normal retirement benefit to which the Participant would have been entitled if
the Participant had permanently terminated employment with the Company and all
Affiliates on the Merger Date.
6-3 Early Retirement Date
Early Retirement Date means the earlier of: (a) the Participant's
Early Retirement Date under the Plan, or (b) the date the Participant has a
Severance from Service before Normal Retirement Date for a reason other than
death (i) if the Participant is at least age 57 and has at least 10 Years of
Vesting Service or (ii) if the Participant was entitled to an early retirement
benefit under the Geosource Inc. Smith Meter Systems Division Salaried
Retirement Income Plan.
6-4 Normal Retirement Date
Normal Retirement Date means the earlier of: (a) the Participant's
Normal Retirement Date under the Plan, or (b) the date the Participant has a
Severance from Service with at least 10 Years of Vesting Service at or after age
62.
6-5 Years of Vesting Service
A Participant is fully vested in the Participant's benefits under the
Prior Plan. A Participant's Employment Commencement Date will be the date the
Participant was first employed by the Company or any Affiliate, or any earlier
date from which he was granted vesting service under the Prior Plan. Each
Participant will be credited with the number of full years of vesting service
with which the Participant was credited under the Prior Plan plus the greater
of: (a) 6 months of Vesting Service, or (b) if the Participant accrued 1,000
hours of service under the Prior Plan during the period from January 1, 1997
through June 30, 1997, 1 Year of Vesting Service. In no event will a Participant
be credited with fewer Years of Vesting Service under the Plan than the
Participant would have been credited with under the vesting rules of the Prior
Plan.
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<PAGE>
6-6 Available Forms of Benefits
In addition to the optional forms of benefit described in the Plan, a
Participant may elect to receive his Prior Plan benefit in the following form of
benefit:
Life and Term Certain Annuity: A Life and Term Certain Annuity is an
immediate annuity which is the Actuarial Equivalent (determined in
accordance with Exhibit E-1) of an Individual Life Annuity, but which
provides a smaller monthly annuity for the Participant's life than an
Individual Life Annuity. After the Participant's death, if the monthly
annuity has been paid for a period shorter than the term certain
chosen by the Participant, it will continue, in the same amount as
during the Participant's life, for the remainder of the term certain.
The Participant's Joint Annuitant will receive any payments due after
the Participant's death. The Participant may choose a term certain of
60, 120, 180 or 240 months, so long as the term certain does not
exceed the joint life expectancies of the Participant and the Joint
Annuitant.
6-7 Payment to Active Participant After Normal Retirement Date
A Participant who continues to be employed by the Company or a
Participating Employer after reaching Normal Retirement Date may begin receiving
the Participant's Prior Plan benefit at or after Normal Retirement Date.
6-8 Non-Spouse Death Benefit
If the Preretirement Survivor's Benefit is not payable to the spouse
of a deceased Participant, and if the Participant dies on or after the
Participant's Early Retirement Date, the Participant's Beneficiary will be
entitled to a death benefit consisting of monthly payments made for a period of
60 months, beginning as of the first day of the month coincident with or next
following the month in which the Participant dies. The amount of the monthly
payment will be equal to the monthly payment to which the Participant would have
been entitled if he had retired on the day before his death, and had elected to
receive only his Prior Plan benefit in the form of an immediate Life and Term
Certain Annuity with a term certain of 60 months.
75
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FMC CORPORATION EMPLOYEES' RETIREMENT PROGRAM
PART II
UNION HOURLY EMPLOYEES' RETIREMENT PLAN
<PAGE>
TABLE OF CONTENTS
-----------------
INTRODUCTION......................................................... 1
ARTICLE I............................................................ 2
Definitions......................................................... 2
Actuarial Equivalent................................................ 2
Administrator....................................................... 2
Affiliate........................................................... 3
Annuity Starting Date............................................... 3
Beneficiary......................................................... 3
Board............................................................... 3
Code................................................................ 3
Collective Bargaining Agreement..................................... 3
Committee........................................................... 3
Company............................................................. 3
Early Retirement Benefit............................................ 4
Early Retirement Date............................................... 4
Effective Date...................................................... 4
Eligible Employee................................................... 4
Employee............................................................ 4
Employment Commencement Date........................................ 4
ERISA............................................................... 4
50% Joint and Survivor's Annuity.................................... 4
Hour of Service..................................................... 4
Individual Life Annuity............................................. 4
Investment Manager.................................................. 5
Leased Employee..................................................... 5
Normal Retirement Benefit........................................... 5
Normal Retirement Date.............................................. 5
100% Joint and Survivor's Annuity................................... 5
One-year Period of Severance........................................ 5
Participant......................................................... 5
Participating Employer.............................................. 5
Period of Service................................................... 5
Period of Severance................................................. 5
Plan................................................................ 5
Plan Year........................................................... 6
Reemployment Commencement Date...................................... 6
Severance From Service Date......................................... 6
Supplement.......................................................... 7
Total and Permanent Disability...................................... 7
Trust............................................................... 7
Trust Fund.......................................................... 7
Year of Credited Service............................................ 7
i
<PAGE>
Year of Vesting Service............................................. 7
ARTICLE II........................................................... 9
Participation....................................................... 9
2.1 Eligibility and Commencement of Participation.................. 9
2.2 Provision of Information....................................... 9
2.3 Termination of Participation................................... 9
2.4 Special Rules Relating to Veterans' Reemployment Rights........ 9
ARTICLE III.......................................................... 10
Normal, Early and Deferred Retirement Benefits...................... 10
3.1 Normal Retirement Benefits..................................... 10
3.2 Early Retirement Benefits...................................... 10
3.3 Deferred Retirement Benefits................................... 10
3.4 Suspension of Benefits......................................... 12
3.5 Benefit Limitations............................................ 14
ARTICLE IV........................................................... 17
Termination Benefits................................................ 17
4.1 Termination of Service......................................... 17
4.2 Amount of Termination Benefit.................................. 17
ARTICLE V............................................................ 18
Refund of Employee Contributions.................................... 18
5.1 Disability Retirement.......................................... 18
5.2 Amount of Disability Retirement Benefit........................ 18
ARTICLE VI........................................................... 19
Payment of Retirement Benefits...................................... 19
6.1 Normal Form of Benefit......................................... 19
6.2 Optional Forms of Benefit...................................... 19
6.3 Election of Benefits........................................... 19
ARTICLE VII.......................................................... 22
Survivor's Benefits................................................. 22
7.1 Surviving Spouse's Benefit..................................... 22
7.2 Certain Former Employees....................................... 22
ARTICLE VIII......................................................... 23
Fiduciaries......................................................... 23
8.1 Named Fiduciaries.............................................. 23
8.2 Employment of Advisers......................................... 23
8.3 Multiple Fiduciary Capacities.................................. 23
8.4 Payment of Expenses............................................ 23
8.5 Indemnification................................................ 24
ARTICLE IX........................................................... 25
ii
<PAGE>
Plan Administration................................................. 25
9.1 Powers, Duties and Responsibilities of the Administrator....... 25
9.2 Delegation of Administration Responsibilities.................. 25
9.3 Committee Members.............................................. 26
ARTICLE X............................................................ 27
Funding of the Plan................................................. 27
10.1 Appointment of Trustee......................................... 27
10.2 Actuarial Cost Method.......................................... 27
10.3 Cost of the Plan............................................... 27
10.4 Funding Policy................................................. 27
10.5 Cash Needs of the Plan......................................... 28
10.6 Public Accountant.............................................. 28
10.7 Enrolled Actuary............................................... 28
10.8 Basis of Payments to the Plan.................................. 28
10.9 Basis of Payments from the Plan................................ 28
ARTICLE XI........................................................... 29
Plan Amendment or Termination....................................... 29
11.1 Plan Amendment or Termination.................................. 29
11.2 Limitations on Plan Amendment.................................. 29
11.3 Effect of Plan Termination..................................... 29
11.4 Allocation of Trust Fund on Termination........................ 30
ARTICLE XII.......................................................... 31
Miscellaneous Provisions............................................ 31
12.1 Subsequent Changes............................................. 31
12.2 Plan Mergers................................................... 31
12.3 No Assignment of Property Rights............................... 31
12.4 Beneficiary.................................................... 32
12.5 Benefits Payable to Minors, Incompetents and Others............ 32
12.6 Employment Rights.............................................. 33
12.7 Proof of Age and Marriage...................................... 33
12.8 Small Annuities................................................ 33
12.9 Controlling Law................................................ 33
12.10 Direct Rollover Option......................................... 33
12.11 Claims Procedure............................................... 34
12.12 Participation in the Plan by an Affiliate...................... 35
12.13 Action by Participating Employers.............................. 36
ARTICLE XIII......................................................... 37
Top Heavy Provisions................................................ 37
13.1 Top Heavy Definitions.......................................... 37
13.2 Determination of Top Heavy Status.............................. 40
13.3 Minimum Benefit Requirement for Top Heavy Plan................. 40
13.4 Vesting Requirement for Top Heavy Plan......................... 41
iii
<PAGE>
EXHIBIT A - Merged Plans............................................. 43
SUPPLEMENT 1 - Industrial Chemical Division, Green River, Wyoming.... 45
SUPPLEMENT 2 - Jetway Systems Division, Ogden, Utah.................. 49
SUPPLEMENT 3 - Packing Machinery Division, Green Bay, Wisconsin...... 52
SUPPLEMENT 4 - Agricultural Chemical Division, Fresno, California.... 54
SUPPLEMENT 5 - Sweeper Division, Pomona, California.................. 56
SUPPLEMENT 6 - Skull Point Mine, Kemmerer, Wyoming................... 57
SUPPLEMENT 7 - Commercial Segment, San Jose, California.............. 59
SUPPLEMENT 8 - Agriculture Chemical Division, Baltimore, Maryland.... 61
SUPPLEMENT 9 - Inorganic Chemical Division, Tonowanda, New York...... 64
SUPPLEMENT 10 - Industrial Chemicals Division, Carteret, New Jersey.. 67
SUPPLEMENT 11 - Smith Meter Plant, Erie, Pennsylvania................ 70
SUPPLEMENT 12 - Food Processing Machinery Division, Hoopeston,
Illinois............................................. 75
SUPPLEMENT 13 - Kemmerer Coke Plant, Kemmerer, Wyoming............... 78
SUPPLEMENT 14 - Industrial Chemical Division, Lawrence, Kansas....... 86
SUPPLEMENT 15 - Agricultural Chemical Division, Middleport, New York. 89
SUPPLEMENT 16 - Industrial Chemical Division, Newark, California..... 91
SUPPLEMENT 17 - Food and Pharmaceutical Products Division, Newark,
Delaware............................................. 93
SUPPLEMENT 18 - Industrial Chemical Division, Nitro, West Virginia... 95
SUPPLEMENT 19 - Industrial Chemical Division, Pocatello, Idaho....... 98
SUPPLEMENT 20 - Industrial Chemical Group, Spring Hill Plant, West
Virginia............................................. 101
iv
<PAGE>
FMC CORPORATION EMPLOYEES' RETIREMENT PROGRAM
PART II
UNION HOURLY EMPLOYEES' RETIREMENT PLAN
INTRODUCTION
The FMC Corporation Employees' Retirement Program ("Program"), previously
known as the FMC Corporation Salaried Employees' Retirement Plan ("Salaried
Plan"), was established, effective September 30, 1941, as the Employees'
Retirement Plan. The Salaried Plan was subsequently amended, certain plans were
subsequently merged into the Salaried Plan, including certain frozen and union
plans, and the Salaried Plan was renamed as the Program.
The Program consists of two parts, Part I Salaried and Nonunion Hourly
Employees' Retirement Plan and Part II Union Hourly Employees' Retirement Plan,
which are contained in two separate plan documents. Supplements to Part I and
Part II of the Program contain provisions which apply only to a specific group
of Employees or Participants as specified therein and override any contrary
provision of the Program or either Part I or Part II. This document is Part II
Union Hourly Employees' Retirement Plan ("Plan") and covers certain eligible
union hourly employees as provided in Article II Participation. This document is
an amendment and restatement of the Plan generally effective as of January 1,
1999, except as and to the extent otherwise provided herein. This document shall
not be construed to affect the making of contributions or alter the right to
participate in the Plan with respect to any Plan Year ending before January 1,
1999, to affect a Participant's accrued benefit for any such prior Plan Year or
to alter in any way the rights of a Participant or Beneficiary who has retired,
died or with respect to whom there has been a Severance From Service Date before
January 1, 1999.
The Plan is intended to be qualified under Code Section 401(a), and its
associated trust is intended to be tax exempt under Code Section 501(a). The
Plan is intended also to meet the requirements of ERISA and shall be construed
wherever possible to comply with the terms of the Code and ERISA. The Plan is
intended to provide a regular monthly retirement benefit for employees who meet
the eligibility requirements.
1
<PAGE>
ARTICLE I
Definitions
-----------
For purposes of this Plan and any amendments to it, the following
terms have the meanings ascribed to them below.
Actuarial Equivalent means a benefit determined to be of equal value
to another benefit on the basis of either (a) the UP-1984 Mortality Table and 8-
1/2% interest compounded annually or (b) the mortality table and interest rate
described in the applicable Supplement.
Notwithstanding the foregoing, for purposes of Section 12.8, Actuarial
Equivalent value shall be determined as follows:
(i) for Annuity Starting Dates occurring prior to June 1, 1995,
based on the actuarial assumptions described above; provided
that the interest rate shall not exceed the rate for immediate
annuities used by the Pension Benefit Guaranty Corporation for
plans terminating on the first day of the Plan Year that
contains the Annuity Starting Date;
(ii) for Annuity Starting Dates occurring on or after June 1, 1995,
with respect to any Participant who had an Hour of Service
prior to August 31, 1999, based on the 1983 Group Annuity
Mortality Table (weighted 50% male and 50% female) (or the
applicable mortality table prescribed under Section 417(e)(3)
of the Code) and the lesser of the interest rate described
above or the applicable interest rate prescribed under Section
417(e)(3) of the Code for the November preceding the Plan Year
that contains the Annuity Starting Date; and
(iii) for Annuity Starting Dates occurring on or after August 31,
1999, with respect to any Participant who did not have an Hour
of Service prior to August 31, 1999 based on the 1983 Group
Annuity Mortality Table (weighted 50% male and 50% female) (or
the applicable mortality table, prescribed under Section
417(e)(3) of the Code) and the applicable interest rate
prescribed under Section 417(e)(3) of the Code for the November
preceding the Plan Year that contains the Annuity Starting
Date.
Administrator means the Company. The Plan is administered by the
Company through the Committee. The Administrator and the Committee have the
responsibilities specified in Article IX.
2
<PAGE>
Affiliate means any corporation, partnership, or other entity that is:
(a) a member of a controlled group of corporations of which the
Company is a member (as described in Code Section 414(b));
(b) a member of any trade or business under common control with the
Company (as described in Code Section 414(c));
(c) a member of an affiliated service group that includes the Company
(as described in Code Section 414(m));
(d) an entity required to be aggregated with the Company pursuant to
regulations promulgated under Code Section 414(o); or
(e) a leasing organization that provides Leased Employees to the
Company or an Affiliate (as determined under paragraphs (a)
through (d) above), unless (i) the Leased Employees constitute
less than 20% of the nonhighly compensated workforce of the
Company and Affiliates (as determined under paragraphs (a)
through (d) above; and (ii) the Leased Employees are covered by a
plan described Code Section 414(n)(5).
"Leasing organization" has the meaning ascribed to it in the
definition of "Leased Employee" below.
For purposes of Section 3.5, the 80% thresholds of Code Sections
414(b) and (c) are deemed to be "more than 50%," rather than "at least 80%."
Annuity Starting Date means the first day of the first period for
which an amount is paid in an annuity or other form of benefit. In the case of
a lump sum distribution, the Annuity Starting Date is the date payment is
actually made.
Beneficiary means the person or persons determined pursuant to Section
12.4.
Board means the board of directors of the Company.
Code means the Internal Revenue Code of 1986, as amended from time to
time. Reference to a specific provision of the Code includes that provision, any
successor to it and any valid regulation promulgated under the provision or
successor provision.
Collective Bargaining Agreement means the collective bargaining
agreement referred to in the applicable Supplement.
Committee means the FMC Corporation Employee Welfare Benefits Plan
Committee, as described in Section 9.3, its authorized delegatee and any
successor to the Committee.
3
<PAGE>
Company means FMC Corporation, a Delaware corporation, and any
successor to it.
Early Retirement Benefit means the benefits determined pursuant to
Section 3.2.
Early Retirement Date means the later of the Participant's 55th
birthday and the date he or she acquires 10 Years of Credited Service.
Effective Date means January 1, 1999 or, if later, an Employee's
Employment Commencement Date or Reemployment Commencement Date, whichever is
applicable.
Eligible Employee means an Employee of a Participating Employer, other
than a Leased Employee, who is employed on an hourly basis and covered by the
applicable Collective Bargaining Agreement which specifically provides for Plan
participation, or to whom coverage under the Plan is extended by the Company.
Employee means a common law employee or Leased Employee of the Company
or an Affiliate, subject to the following rules:
(a) a person who is not a Leased Employee and who is engaged as an
independent contractor is not an Employee;
(b) only individuals who are paid as employees from the payroll of
the Company or an Affiliate and treated as employees are
Employees under the Plan; and
(c) any person retroactively found to be a common law employee shall
not be eligible to participate in the Plan for any period he was
not an Employee under the Plan.
Employment Commencement Date means the date on which the Employee
first performs an Hour of Service.
ERISA means the Employee Retirement Income Security Act of 1974, as
amended from time to time. Reference to a specific provision of ERISA includes
the provision, any successor provision and any valid regulation promulgated
under the provision or successor provision.
50% Joint and Survivor's Annuity means an immediate annuity which is
the Actuarial Equivalent of an Individual Life Annuity, but which provides a
smaller monthly annuity for the Participant's life than an Individual Life
Annuity. After the Participant's death, 50% of such reduced annuity will be paid
to the Participant's surviving spouse for such spouse's life.
4
<PAGE>
Hour of Service means each hour for which an Employee is directly or
indirectly paid or entitled to payment by the Company or an Affiliate for the
performance of duties.
Individual Life Annuity means an immediate annuity which provides
equal monthly payments for the Participant's life only.
Investment Manager means a person who is an "investment manager" as
defined in section 3(38) of ERISA.
Leased Employee means an individual who performs services for the
Company or an Affiliate on a substantially full-time basis for a period of at
least 1 year, under the primary direction or control of the Company or an
Affiliate, and under an agreement between the Company or Affiliate and a leasing
organization. The leasing organization can be a third party or the Leased
Employee himself.
Normal Retirement Benefit means the benefits determined pursuant to
Section 3.1.
Normal Retirement Date means the Participant's 65th birthday, except
as otherwise provided in the applicable Supplement.
100% Joint and Survivor's Annuity means an immediate annuity which is
the Actuarial Equivalent of an Individual Life Annuity, but which provides a
smaller monthly annuity for the Participant's life than a 50% Joint and Survivor
Annuity. After the Participant's death, 100% of such reduced annuity will
continue to be paid to the Participant's surviving spouse for such spouse's
life.
One-Year Period of Severance means a 12-consecutive-month period
commencing on an Employee's Severance From Service Date in which the Employee is
not credited with an Hour of Service.
Participant means an Eligible Employee who has begun but not ended his
or her participation in the Plan pursuant to the provisions of Article II.
Participating Employer means the Company and each other Affiliate that
adopts the Plan with the consent of the Board, as provided in Section 12.12.
Period of Service means the period commencing on the Effective Date
and ending on the Severance From Service Date. All Periods of Service (whether
or not consecutive) shall be aggregated. Notwithstanding the foregoing, if an
Employee incurs a One-Year Period of Severance at a time when he or she has no
vested interest under the Plan and the Employee does not perform an Hour of
Service within 5 years after the beginning of the One-Year Period of Severance,
or fails to complete a Period of Service of 1 year after he or she performs an
Hour of Service following the One-Year Period of Severance, the Period of
Service prior to such One-Year Period of Severance shall not be aggregated.
5
<PAGE>
Period of Severance means the period commencing on the Severance From
Service Date and ending on the date on which the Employee again performs an Hour
of Service.
Plan means Part II Union Hourly Employees' Retirement Plan of the FMC
Corporation Employees' Retirement Program.
Plan Year means the 12-month period beginning on January 1 and ending
the next December 31.
Reemployment Commencement Date means the first date following a Period
of Severance which is not required to be taken into account for purposes of an
Employee's Period of Vesting Service on which the Employee performs an Hour of
Service.
Severance From Service Date means the earliest of:
(a) the date on which an Employee voluntarily terminates, retires,
is discharged or dies;
(b) the first anniversary of the first date of a period in which an
Employee remains absent from service (with or without pay) with
the Company and Affiliates for any reason other than voluntary
termination, retirement, discharge or death; or
(c) the second anniversary of the date an Employee is absent
pursuant to a maternity or paternity leave of absence; provided,
however, that the period between the first and second
anniversaries of the first date of such absence shall be neither
a Period of Service nor a One-Year Period of Severance.
Notwithstanding the foregoing, a Severance From Service Date shall not
be considered to have occurred under the following circumstances:
(i) during a leave of absence, vacation or holiday with pay;
(ii) during a leave of absence without pay granted by reason of
disability or under the Family and Medical Leave Act of 1993;
(iii) during a period of qualified military service, provided the
Employee makes application to return within 90 days after
completion of active service and returns to active employment as
an Employee while reemployment rights are protected by law. If
the Employee does not so return, the Employee shall have a
Severance From Service Date on the first anniversary of the date
of entry into military service.
If the Employee violates the terms of a leave of absence, the Employee
shall be deemed to have voluntarily terminated as of the date of such violation.
In the case of a leave in excess of 12 months, if the Employee fails to return
to active employment immediately after such
6
<PAGE>
leave, the Employee shall be deemed to have voluntarily terminated as of the
last day of the 12th month of the leave.
A "maternity or paternity leave of absence" means an absence from work
by reason of the Employee's pregnancy, birth of the Employee's child, placement
of a child with the Employee in connection with the adoption of such child, or
any absence for the purpose of caring for such child for a period immediately
following such birth or placement.
Supplement means the provisions of the Plan which apply only to a
specific group of Employees or Participants as detailed in such Supplement and
which override any contrary provision of the Plan.
Total and Permanent Disability has the meaning assigned thereto in the
applicable Supplement.
Trust means the trust established by the Trust Agreement. "Trust
Agreement" means the trust agreement or agreements, as amended from time to
time, entered into by the Company and the Trustee pursuant to Section 8.1.
"Trustee" means the trustee or trustees at any time appointed by the Company
pursuant to Section 8.1.
Trust Fund means the trust fund established and maintained by the
Trustee to hold all assets of the Plan pursuant to the Trust Agreement.
Year of Credited Service means (a) the Employee's Years of Credited
Service prior to the Effective Date, and (b) the total number of calendar months
during the Employee's Period of Service while the Employee is an Eligible
Employee and after he has become a Participant divided by 12. A partial month in
such Period of Service counts as a whole month, and fractional Years of Credited
Service shall be taken into account in determining a Participant's benefits.
Year of Credited Service shall also include such other periods as the Company
recognizes as a Year of Credited Service, pursuant to written and
nondiscriminatory rules.
Notwithstanding the foregoing, Credited Service shall not include: (i)
any leave of absence without pay unless the Employee returns to active
employment as an Employee immediately after such leave and abides by all the
terms of the leave, (ii) any maternity or paternity leave of absence unless the
Employee returns to active employment as an Employee within 12 months after the
first day of such leave, or (iii) any period of service with respect to which
such Eligible Employee accrues a benefit under any pension, profit sharing or
other retirement plan listed on Exhibit A.
Year of Vesting Service means (a) the Employee's Years of Service
prior to the Effective Date, and (b) the total number of calendar months during
the Employee's Period of Service divided by 12, determined in accordance with
the following rules:
(i) a partial month in the Employee's Period of Service counts as a
whole month;
7
<PAGE>
(ii) if the Employee has a Severance From Service Date by reason of
a voluntary termination, discharge or retirement and the
Employee then performs 1 Hour of Service within 12 months of
the Severance From Service Date, such Period of Severance is
included in the Period of Service. If the Employee has a
Severance From Service Date by reason of a voluntary
termination, discharge or retirement during an absence from
service of 12 months or less for any reason other than a
voluntary termination, discharge or retirement, and then
performs 1 Hour of Service within 12 months of the date on
which the Employee was first absent from service, such Period
of Severance is included in the Period of Service;
(iii) period of Service also includes the following:
(1) a period of employment with an employer substantially all
of the equity interest or assets of which have been
acquired by the Company or an Affiliate, but only to the
extent that the Company expressly recognizes such period
as a Period of Service pursuant to written and
nondiscriminatory rules; and
(2) such other periods as the Company recognizes as a Period
of Service pursuant to written and nondiscriminatory
rules.
8
<PAGE>
ARTICLE II
Participation
-------------
2.1 Eligibility and Commencement of Participation
---------------------------------------------
Except as otherwise provided in the applicable Supplement, each Employee
shall automatically become a Participant in the Plan as of the date he or she
satisfies all of the following requirements:
(a) the Employee is an Eligible Employee; and
(b) the Employee either (i) is a permanent, full-time employee, or (ii)
has completed not less than 1,000 Hours of Service in a 12-month
period beginning on the Employee's Employment Commencement Date or
any anniversary thereof.
2.2 Provision of Information
------------------------
Each Participant must make available to the Administrator any
information it reasonably requests. As a condition of participation in the
Plan, an Employee agrees, on his or her own behalf and on behalf of all persons
who may have or claim any right by reason of the Employee's participation in the
Plan, to be bound by all provisions of the Plan.
2.3 Termination of Participation
----------------------------
A Participant ceases to be a Participant when he or she dies or, if
earlier, when his or her entire vested benefit accrued under the Plan has been
paid to him or her.
2.4 Special Rules Relating to Veterans' Reemployment Rights
-------------------------------------------------------
Notwithstanding any provision of this Plan to the contrary, with
respect to an Eligible Employee or Participant who is reemployed in accordance
with the reemployment provisions of the Uniformed Services Employment and
Reemployment Rights Act following a period of qualifying military service (as
determined under such Act), contributions, benefits and service credit will be
provided in accordance with Section 414(u) of the Code.
9
<PAGE>
ARTICLE III
Normal, Early and Deferred Retirement Benefits
----------------------------------------------
3.1 Normal Retirement Benefits
--------------------------
3.1.1 Normal Retirement: A Participant who retires on the Normal
Retirement Date shall be entitled to receive a Normal Retirement Benefit
determined under Section 3.1.2. Payment of such benefit shall commence as of the
first day of the month coincident with or next following the Participant's
Normal Retirement Date, unless the Participant elects to defer commencement
subject to Section 3.3.2.
3.1.2 Amount of Normal Retirement Benefit: A Participant's monthly
Normal Retirement Benefit shall be equal to the amount determined in accordance
with the applicable Supplement.
3.2 Early Retirement Benefits
-------------------------
3.2.1 Early Retirement: A Participant who retires on or after the
Early Retirement Date shall be entitled to receive an Early Retirement Benefit
determined under Section 3.2.2. Payment of such benefit shall commence as of
the first of the month coincident with or next following the Participant's Early
Retirement Date or, if the Participant elects, as of the first day of any
subsequent month, but not later than the Normal Retirement Date. Any such
election of a deferred commencement date may be revoked at any time prior to
such date and a new date may be elected by giving advance written notice to the
Administrator in accordance with rules prescribed by the Administrator.
3.2.2 Amount of Early Retirement Benefit: Subject to Section 3.2.3,
a Participant's monthly Early Retirement Benefit shall be equal to an amount
determined pursuant to Section 3.1.2 as in effect on the date the Participant's
Years of Credited Service terminate, based on the Participant's Years of
Credited Service as of such date.
3.2.3 Early Retirement Reduction Factor: If a Participant's Early
Retirement Benefit commences prior to the Participant's Normal Retirement Date,
the Participant's Early Retirement Benefit computed pursuant to Section 3.2.2
shall be reduced in accordance with the applicable Supplement.
3.3 Deferred Retirement Benefits
----------------------------
3.3.1 Deferred Retirement: A Participant who retires after the Normal
Retirement Date shall be entitled to receive a Normal Retirement Benefit
determined under Section 3.1.2 commencing as of the first day of the month
coinciding with or next following the date the Participant actually retires.
Each Participant shall accrue additional benefits hereunder
10
<PAGE>
after the Participant's Normal Retirement Date with respect to the portion of
the Normal Retirement Benefit which is attributable to contributions by the
Company.
3.3.2 Distribution Requirements: Except as hereinafter provided, unless
the Participant elects otherwise in accordance with the terms of the Plan,
payment of a Participant's retirement benefits will begin no later than 60 days
after the close of the Plan Year in which the latest of the following events
occurs:
(a) the Participant's 65th birthday;
(b) the 10th anniversary of the year in which the Participant
commenced participation in the Plan; and
(c) the Participant terminates employment with the Company and all
Affiliates.
If the amount of the payment required to commence on the date
determined under this Section 3.3.2 cannot be ascertained by such date, or if it
is not possible to make such payment on such date because the Administrator
cannot locate the Participant after making reasonable efforts to do so, a
payment retroactive to such date may be made no later than 60 days after the
earliest date on which the amount of such payment can be ascertained under this
Plan or the date the Participant is located.
Notwithstanding any other provision of this Plan:
(i) the accrued benefit of a Participant who attains age 70-1/2 on
or after January 1, 2000 must be distributed or commence to be
distributed no later than the April 1 following the later of (1)
the calendar year in which the Participant attains age 70-1/2 or
(2) the calendar year in which the Participant retires (unless
the Participant is a 5% owner, as defined in Code Section 416,
of the Company with respect to the Plan Year in which the
Participant attains age 70-1/2, in which case this Subsection
(2) shall not apply); and
(ii) the accrued benefit of a Participant who attains age 70-1/2
prior to January 1, 2000 must be distributed or commence to be
distributed no later than the April 1 following the calendar
year in which the Participant attains age 70-1/2 unless the
Participant is not a 5% owner (as defined in Subsection (i)) and
elects to defer distribution to the calendar year in which the
Participant retires.
All Plan distributions will comply with Code Section 401(a)(9),
including Department of Treasury Regulation Section 1.401(a)(9)-2.
11
<PAGE>
3.4 Suspension of Benefits
----------------------
3.4.1 Prior to Normal Retirement Date: If a Participant receives
retirement benefits under the Plan following a termination of employment prior
to the Participant's Normal Retirement Date and again becomes an Employee prior
to Normal Retirement Date, no retirement benefits shall be paid during such
later period of employment and up to Normal Retirement Date. Any benefits
payable under the Plan to or on behalf of the Participant at the time of the
Participant's subsequent termination of employment shall be reduced by the
Actuarial Equivalent of any benefits paid to the Participant after the
Participant's earlier termination and prior to the Participant's Normal
Retirement Date.
3.4.2 After Normal Retirement Date: If (a) a Participant whose
employment terminates again becomes an Employee after the Participant's Normal
Retirement Date, or again becomes an Employee prior to the Participant's Normal
Retirement Date and continues in employment beyond the Participant's Normal
Retirement Date, or (b) a Participant continues in employment with the Company
and Affiliates after the Participant's Normal Retirement Date without a prior
termination, the following provisions of this Section 3.4.2 shall apply to the
Participant as of the Participant's Normal Retirement Date or, if later, the
Participant's date of reemployment.
(i) For purposes of this Section 3.4.2, the following definitions
shall apply:
(1) Postretirement Date Service means each calendar month after a
Participant's Normal Retirement Date and subsequent to the
time that:
(A) payment of retirement benefits commenced to the
Participant if the Participant returned to employment
with the Company and Affiliates, or
(B) payment of retirement benefits would have commenced to
the Participant if the Participant had not remained in
employment with the Company and Affiliates,
if in either case the Participant receives pay from the
Company and Affiliates for any Hours of Service performed on
each of 8 or more days (or separate work shifts) in such
calendar month.
(2) Suspendable Amount means the monthly retirement benefits
otherwise payable in a calendar month in which the
Participant is engaged in Postretirement Date Service.
(ii) Payment shall be permanently withheld on a portion of a
Participant's retirement benefits, not in excess of the
Suspendable Amount, for each
12
<PAGE>
calendar month during which the Participant is employed in
Postretirement Date Service.
(iii) If payments have been suspended pursuant to Subsection (ii)
above, such payments shall resume no later than the first day
of the third calendar month after the calendar month in which
the Participant ceases to be employed in Postretirement Date
Service; provided, however, that no payments shall resume until
the Participant has complied with the requirements set forth in
Subsection (vi) below. The initial payment upon resumption
shall include the payment scheduled to occur in the calendar
month when payments resume and any amounts withheld during the
period between the cessation of Postretirement Date Service and
the resumption of payment, less any amounts that are subject to
offset pursuant to Subsection (iv) below.
(iv) Retirement benefits made subsequent to Postretirement Date
Service shall be reduced by (1) the Actuarial Equivalent of any
benefits paid to the Participant prior to the time the
Participant is reemployed after the Participant's Normal
Retirement Date (such reduction will occur only if such
benefits are not repaid in full to the Trust within two years
after the Participant's date of reemployment); and (2) the
amount of any payments previously made during those calendar
months in which the Participant was engaged in Postretirement
Date Service; provided, however, that such reduction under
Subsection (2) shall not exceed, in any one month, 25% percent
of that month's total retirement benefits (excluding amounts
described in Subsection (ii) above) that would have been due
but for the offset.
(v) Any Participant whose retirement benefits are suspended
pursuant to Subsection (ii) of this Section 3.4.2 shall be
notified (by personal delivery or certified or registered mail)
during the first calendar month in which payments are withheld
that the Participant's retirement benefits are suspended. Such
notification shall include:
(1) a description of the specific reasons for the suspension
of payments;
(2) a general description of the Plan provisions relating to
the suspension;
(3) a copy of the provisions;
(4) a statement to the effect that applicable Department of
Labor Regulations may be found at Section 2530.203-3 of
Title 29 of the Code of Federal Regulations;
13
<PAGE>
(5) the procedure for appealing the suspension, which procedure
shall be governed by Section 12.11; and
(6) the procedure for filing a benefits resumption notification
pursuant to Subsection (vi) below.
If payments subsequent to the suspension are to be reduced by
an offset pursuant to Subsection (iv) above, the notification
shall specifically identify the periods of employment for which
the amounts to be offset were paid, the Suspendable Amounts
subject to offset, and the manner in which the Plan intends to
offset such Suspendable Amounts.
(vi) Payments shall not resume as set forth in Subsection (iii)
above until a Participant performing Postretirement Date
Service notifies the Administrator in writing of the cessation
of such Service and supplies the Administrator with such proof
of the cessation as the Administrator may reasonably require.
(vii) A Participant may request, pursuant to the procedure contained
in Section 12.11, a determination whether specific contemplated
employment will constitute Postretirement Date Service.
3.5 Benefit Limitations
-------------------
3.5.1 Limitation on Accrued Benefit: Notwithstanding any other
provision of the Plan, the annual benefit payable under the Plan to a
Participant, when expressed as a monthly benefit commencing at the Participant's
Social Security Retirement Age (as defined in Code Section 415(b)(8)), shall not
exceed the lesser of (a) $7,500 or (b) the highest average of the Participant's
monthly compensation for 3 consecutive calendar years, subject to the following:
(i) The maximum shall apply to the Individual Life Annuity and to
that portion of the 100% (or 50%, as applicable) Joint and
Survivor's Annuity payable to the Participant during his
lifetime.
(ii) If a Participant has fewer than 10 years of participation in
the Plan, the maximum dollar limitation of Subsection (a) above
shall be multiplied by a fraction of which the numerator is the
Participant's actual years of participation in the Plan
(computed to fractional parts of a year) and the denominator is
10. If a Participant has fewer than 10 Years of Vesting
Service, the maximum compensation limitation in Subsection (b)
above shall be multiplied by a fraction of which the numerator
is the Years of Vesting Service (computed to fractional parts
of a year) and the denominator is 10. Provided, however, that
in no event shall such dollar or compensation limitation, as
applicable, be less than 1/10th of such limitation determined
without regard to any adjustment under this Subsection (ii).
14
<PAGE>
(iii) As of January 1 of each year, 1/12th of the dollar limitation
as determined by the Commissioner of Internal Revenue for that
calendar year to reflect increases in the cost of living shall
become effective as the maximum dollar limitation in Subsection
(a) above for the Plan Year ending within that calendar year
for Participants terminating in or after such Plan Year.
(iv) The dollar limitation under Subsection (a) above shall be
modified as follows to reflect commencement of retirement
benefits on a date other than the Participant's Social Security
Retirement Age:
(1) If the Participant's Social Security Retirement Age is 65,
the dollar limitation for benefits commencing on or after
age 62 is determined by reducing the dollar limitation
under Subsection (a) above by 5/9ths of 1% for each month
by which benefits commence before the month in which the
Participant attains age 65;
(2) If the Participant's Social Security Retirement Age is
greater than 65, the dollar limitation for benefits
commencing on or after age 62 is determined by reducing the
dollar limitation under Subsection (a) above by 5/9ths of
1% for each of the first 36 months and by 5/12ths of 1% for
each of the additional months by which benefits commence
before the month in which the Participant attains Social
Security Retirement Age;
(3) If the Participant's benefit commences prior to age 62, the
dollar limitation shall be the actuarial equivalent of
Subsection (a) above, payable at age 62, as determined
above, reduced for each month by which benefits commence
before the month in which the Participant attains age 62.
Actuarial equivalence shall be determined using the greater
of the interest rate assumption under the Plan for
determining early retirement benefits or 5% per year. The
mortality basis for determining Actuarial Equivalence for
terminations prior to January 1, 1995 shall be the 1983
Group Annuity Mortality Table (weighted 50% male and 50%
female);
(4) In the case of a Participant whose retirement benefit
commences after Social Security Retirement Age, the dollar
limitation shall be the actuarial equivalent of Subsection
(a) above payable at Social Security Retirement Age, using
the lesser of the interest rate assumption under the Plan
or 5% per year. The mortality basis for determining
Actuarial Equivalence for terminations prior to January 1,
1995 shall be the 1983 Group Annuity Mortality Table
(weighted 50% male and 50% female).
15
<PAGE>
(v) Notwithstanding the foregoing, the maximum as applied to any
Employee on April 1, 1987 shall in no event be less than the
Participant's "current accrued benefit" as of March 31, 1987,
as that term is defined in Section 1106 of the Tax Reform Act
of 1986.
(vi) The maximum shall apply to the benefits payable to a Participant
under the Plan and all other tax-qualified defined benefit plans
of the Company and Affiliates (whether or not terminated), and
benefits shall be reduced, if necessary, in the reverse of the
chronological order of participation in such plans.
3.5.2 Multiple Plan Reduction: With respect to a Participant who did
not have 1 Hour of Service after December 31, 1999 and who is (or has been) a
participant in any defined contribution plan (whether or not terminated)
maintained by the Company or an Affiliate, the sum of the Participant's defined
benefit plan fraction (as defined under Code Section 415(e)(2)) and defined
contribution plan fraction (as defined under Code Section 415(e)(3)) shall not
exceed 1. If such sum exceeds 1, the participant's defined benefit plan
fraction shall be reduced until such sum equal 1.
16
<PAGE>
ARTICLE IV
Termination Benefits
--------------------
4.1 Termination of Service
----------------------
Except as provided in the applicable Supplement, a Participant who has
5 Years of Vesting Service but who ceases to be an Employee before the
Participant's Early Retirement Date for any reason other than death shall be
entitled to receive a "Termination Benefit" determined under Section 4.2. Except
as provided in the applicable Supplement, payment of such benefit shall commence
as of the first day of the month coincident with or next following the
Participant's Normal Retirement Date, unless the Participant elects to defer
commencement subject to Section 3.3.2. Except as provided in the applicable
Supplement, if the Participant satisfies the age requirement for an Early
Retirement Benefit, the Participant may elect payment of the Actuarial
Equivalent of the Participant's Termination Benefit to commence as of the first
day of any month before such Normal Retirement Date and coincident with or
following the Participant's Early Retirement Date. Any such election of the
earlier Annuity Starting Date shall be made by giving advance written notice to
the Administrator in accordance with rules prescribed by the Administrator.
Except as provided in Article V and Article VII, no benefits shall be payable to
any person if the Participant dies prior to the Annuity Starting Date. A
terminated Participant who has no vested interest in the Participant's accrued
benefit shall be deemed to have received a distribution of the Participant's
entire vested benefit.
4.2 Amount of Termination Benefit
-----------------------------
Except as provided in the applicable Supplement, a Participant's monthly
Termination Benefit shall be determined pursuant to Section 3.1.2 as in effect
on the date his Years of Credited Service terminate based on the Participant's
Years of Credited Service as of such date. Except as provided in the applicable
Supplement, if payment of the Participant's Termination Benefit commences before
the Normal Retirement Date, the amount of the monthly benefit shall be reduced
to an Actuarial Equivalent to reflect such earlier commencement.
17
<PAGE>
ARTICLE V
Disability Retirement Benefits
------------------------------
5.1 Disability Retirement
---------------------
To the extent provided in the applicable Supplement, a Participant who
is an Employee and who satisfies the requirements for Disability Retirement in
the applicable Supplement shall be entitled to receive a Disability Retirement
Benefit determined under Section 5.2. If a Participant's Total and Permanent
Disability ceases, the payment of the Participant's Disability Retirement
Benefit shall cease.
5.2 Amount of Disability Retirement Benefit
---------------------------------------
A Participant's Disability Retirement Benefit shall be determined
pursuant to the applicable Supplement as in effect on the date the Participant's
Years of Credited Service terminate.
18
<PAGE>
ARTICLE VI
Payment of Retirement Benefits
------------------------------
6.1 Normal Form of Benefit
----------------------
Except as otherwise provided in the applicable Supplement, a
Participant's benefit shall be paid in the form of a 100% Joint and Survivor's
Annuity, with the Participant's spouse as joint annuitant if the Participant is
married on the Annuity Starting Date, and in the form of an Individual Life
Annuity if the Participant is not married on the Annuity Starting Date, unless
the Participant elects not to receive payments pursuant to this Section 6.1 and
to receive payments in one of the optional forms permitted under Section 6.2. An
election not to receive the normal form of benefit and to receive payment in an
optional form shall satisfy the applicable requirements of Section 6.3.
6.2 Optional Forms of Benefit
-------------------------
Except as otherwise provided in the applicable Supplement, a married
Participant may elect, with spousal consent and in accordance with Section 6.3,
to receive the Participant's benefits in the form of an Individual Life Annuity.
6.3 Election of Benefits
--------------------
6.3.1 The Administrator shall provide each Participant with a written
notice containing the following information:
(a) a general description of the normal form of benefit payable under
the Plan;
(b) the Participant's right to make and the effect of an election to
waive the normal form of benefit;
(c) the right of the Participant's spouse not to consent to the
Participant's election under Section 6.1;
(d) the right of Participant to revoke such election, and the effect
of such revocation;
(e) the optional forms of benefits available under the Plan; and
(f) the Participant's right to request in writing information on the
particular financial effect of an election by the Participant to
receive an optional form of benefit in lieu of the normal form of
benefit.
19
<PAGE>
6.3.2 The notice under Section 6.3.1 shall be provided to the
Participant at each of the following times as shall be applicable to him:
(a) not more than 90 days and not less than 30 days after a
Participant who is in the employ of the Company or an Affiliate
gives notice of the Participant's intention to terminate
employment and commence receipt of the Participant's retirement
benefits under the Plan; or
(b) not more than 90 days and not less than 30 days prior to the
attainment of age 65 of a Participant (whether or not the
Participant has terminated employment) who has not previously
commenced receiving retirement benefits.
The election period in Section 6.3.3 for a Participant who requests
additional information during the election period will be extended until 90 days
after the additional information is mailed or personally delivered. Any such
request shall be made only within 90 days after the date the information
described in Section 6.3.1 is given to the Participant, and the Administrator
shall not be obligated to comply with more than one such request. Any
information provided pursuant to this Section 6.3.2 will be given to the
Participant within 30 days after the date of the Participant's request and will
be based upon the estimated benefits to which the Participant will be entitled
as of the later of the first day on which such benefits could commence or the
last day of the Plan Year in which the Participant's request is received. If a
Participant files an election (or revokes an election) pursuant to this Section
6.3 less than 60 days prior to the Annuity Starting Date, such Participant's
initial payments may be delayed for administrative reasons. In such event, the
payments shall begin as soon as practicable and shall be made retroactively to
such date.
6.3.3 A Participant may make the election provided in Section 6.1 by
filing the prescribed form with the Administrator at any time during the
election period. The election period shall begin 90 days prior to the
Participant's Annuity Starting Date. Such election shall be subject to the
written consent of the Participant's spouse, acknowledging the effect of the
election and witnessed by a Plan representative or a notary public. Such spousal
consent shall not be required if the Participant establishes to the satisfaction
of the Administrator that the consent of the spouse may not be obtained because
there is no spouse or the spouse cannot be located. A spouse's consent shall be
irrevocable. The election in Section 6.1 may be revoked or changed at any time
during the election period but shall be irrevocable thereafter.
6.3.4 Notwithstanding Section 6.3.3:
(a) distribution of benefits may commence less than 30 days after
the notice required pursuant to Section 6.3.1 is provided if:
(i) the Participant elects to waive the requirement that
notice be given at least 30 days prior to the Annuity
Starting Date; and
20
<PAGE>
(ii) the distribution commences more than 7 days after such
notice is provided.
(b) The notice described in Section 6.3.1 may be provided after the
Annuity Starting Date, in which case the applicable election
period shall not end before the 30th day after the date on which
such notice is provided, unless the Participant elects to waive
the 30-day notice requirements pursuant to Subsection (a) above.
21
<PAGE>
ARTICLE VII
Survivor's Benefits
-------------------
7.1 Surviving Spouse's Benefit
--------------------------
If a Participant who has 5 or more Years of Vesting Service dies
before the Annuity Starting Date and leaves a surviving spouse to whom the
Participant has been married for at least 12 months, the Participant's surviving
spouse shall be entitled to receive a survivor's benefit for life. Except as
otherwise provided in the applicable Supplement, the amount of such survivor's
benefit shall be determined pursuant to Section 4.2 based upon the Participant's
age and Years of Credited Service on the date of the Participant's death and
paid in the form of a 50% Joint and Survivor's Annuity as if the Participant had
died on the day before such benefits commence. Except as otherwise provided in
the applicable Supplement, payment of the survivor's benefit shall commence on
the first day of the month coincident with or next following the later of the
first date the Participant could have commenced an Early Retirement Benefit or
the Participant's death, unless the Participant's spouse elects to commence
payment of benefits as of the first day of any subsequent month, but not later
than the Participant's Normal Retirement Date.
7.2 Certain Former Employees
------------------------
Participants who have 10 Years of Vesting Service but who are not
credited with an Hour of Service on or after August 23, 1984 and are not
receiving benefits on that date shall be entitled to elect survivor's benefits
only as follows:
(a) if the Participant is credited with an Hour of Service under this
Plan or a predecessor plan on or after September 2, 1974, but is
not otherwise credited with an Hour of Service in a Plan Year
beginning on or after January 1, 1976, the Participant shall be
afforded an opportunity to elect payment of benefits in the form
of a 100% Joint and Survivor's Annuity; or
(b) if the Participant is credited with an Hour of Service under this
Plan or a predecessor plan in a Plan Year beginning after
December 31, 1975, the Participant shall be afforded the
opportunity to elect a Surviving Spouse's Benefit under Section
7.1.
22
<PAGE>
ARTICLE VIII
Fiduciaries
-----------
8.1 Named Fiduciaries
-----------------
8.1.1 The Company is the Plan sponsor and a "named fiduciary" with
respect to control over and management of the Plan's assets only to the extent
that it (a) shall appoint the members of the Committee which administers the
Plan at the Administrator's direction; (b) shall delegate its authorities and
duties as "plan administrator," as defined under ERISA, to the Committee; and
(c) shall continually monitor the performance of the Committee.
8.1.2 The Company, as Administrator, and the Committee, which
administers the Plan at the Administrator's direction, are "named fiduciaries"
of the Plan, as that term is defined in ERISA Section 402(a)(2), with authority
to control and manage the operation and administration of the Plan. The
Administrator is also the "administrator" and "plan administrator" of the Plan,
as those terms are defined in ERISA Section 3(16)(A) and Code Section 414(g),
respectively.
8.1.3 The Trustee is a "named fiduciary" of the Plan, as that term is
defined in ERISA Section 402(a)(2), with authority to manage and control all
Trust assets, except to the extent that authority is delegated to an Investment
Manager or to the extent the Administrator or the Committee directs the
allocation of Trust assets among general investment categories.
8.1.4 The Company, the Administrator, and the Trustee are the only
named fiduciaries of the Plan.
8.2 Employment of Advisers
----------------------
A named fiduciary, and any fiduciary appointed by a named fiduciary,
may employ one or more persons to render advice regarding any of the named
fiduciary's or fiduciary's responsibilities under the Plan.
8.3 Multiple Fiduciary Capacities
-----------------------------
Any named fiduciary and any other fiduciary may serve in more than one
fiduciary capacity with respect to the Plan.
8.4 Payment of Expenses
-------------------
All Plan expenses, including expenses of the Administrator, the
Committee, the Trustee, any Investment Manager and any insurance company, will
be paid by the Trust Fund, unless a Participating Employer elects to pay some or
all of those expenses.
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8.5 Indemnification
---------------
To the extent not prohibited by state or federal law, each
Participating Employer agrees to, and will indemnify and save harmless the
Administrator, any past, present, additional or replacement member of the
Committee, and any other employee, officer or director of that Participating
Employer, from all claims for liability, loss, damage (including payment of
expenses to defend against any such claim) fees, fines, taxes, interest,
penalties and expenses which result from any exercise or failure to exercise any
responsibilities with respect to the Plan, other than willful misconduct or
willful failure to act.
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ARTICLE IX
Plan Administration
-------------------
9.1 Powers, Duties and Responsibilities of the Administrator and the
Committee
9.1.1 The Administrator and the Committee have full discretion and
power to construe the Plan and to determine all questions of fact or
interpretation that may arise under it. Interpretation of the Plan or
determination of questions of fact regarding the Plan by the Administrator or
the Committee will be conclusively binding on all persons interested in the
Plan.
9.1.2 The Administrator and the Committee have the power to
promulgate such rules and procedures, to maintain or cause to be maintained such
records, and to issue such forms as it deems necessary or proper to administer
the Plan.
9.1.3 Subject to the terms of the Plan, the Administrator and/or the
Committee will determine the time and manner in which all elections authorized
by the Plan must be made or revoked.
9.1.4 The Administrator and the Committee have all the rights,
powers, duties and obligations granted or imposed upon them elsewhere in the
Plan.
9.1.5 The Administrator and the Committee have the power to do all
other acts in the judgment of the Administrator or the Committee necessary or
desirable for the proper and advantageous administration of the Plan.
9.1.6 The Administrator and the Committee will exercise all
responsibilities in a uniform and nondiscriminatory manner.
9.2 Delegation of Administration Responsibilities
The Administrator and the Committee may designate by written
instrument one or more actuaries, accountants or consultants as fiduciaries to
carry out, where appropriate, the administrative responsibilities, including
their fiduciary duties. The Committee may from time to time allocate or
delegate to any subcommittee, member of the Committee and others, not
necessarily employees of the Company, any of its duties relative to compliance
with ERISA, administration of the Plan and related matters, including involving
the exercise of discretion. The Company's duties and responsibilities under the
Plan shall be carried out by its directors, officers and employees, acting on
behalf of and in the name of the Company in their capacities as directors,
officers and employees, and not as individual fiduciaries. No director, officer
nor employee of the Company shall be a fiduciary with respect to the Plan unless
he or she is specifically so designated and expressly accepts such designation.
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9.3 Committee Members
The Committee shall consist of not less than 3 people, who need not be
directors, and shall be appointed by the Chief Executive Officer of the Company.
Any Committee member may resign and the Chief Executive Officer may remove any
Committee member, with or without cause, at any time. A majority of the members
of the Committee shall constitute a quorum for the transaction of business and
the act of a majority of the Committee members at a meeting at which a quorum is
present shall be the act of the Committee. The Committee can act by written
consent signed by all of its members. Any members of the Committee who are
Employees shall not receive compensation for their services for the Committee.
No Committee member shall be entitled to act on or decide any matter relating
solely to his or her status as a Participant.
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ARTICLE X
Funding of the Plan
-------------------
10.1 Appointment of Trustee
The Committee or its authorized delegatee will appoint the Trustee and
either may remove it. The Trustee accepts its appointment by executing the
Trust Agreement. A Trustee will be subject to direction by the Committee or its
authorized delegatee or, to the extent specified by the Company, by an
Investment Manager, and will have the degree of discretion to manage and control
Plan assets specified in the Trust Agreement. Neither the Company nor any other
Plan fiduciary will be liable for any act or omission to act of a Trustee, as to
duties delegated to the Trustee.
10.2 Actuarial Cost Method
The Committee or its authorized delegatee shall determine the
actuarial cost method to be used in determining costs and liabilities under the
Plan pursuant to Section 301 et seq., of ERISA and Section 412 of the Code. The
Committee or its authorized delegatee shall review such actuarial cost method
from time to time, and if it determines from review that such method is no
longer appropriate, then it shall petition the Secretary of the Treasury for
approval of a change of actuarial cost method.
10.3 Cost of the Plan
Annually the Committee or its authorized delegatee shall determine the
normal cost of the Plan for the Plan Year and the amount (if any) of the
unfunded past service cost on the basis of the actuarial cost method established
for the Plan using actuarial assumptions which, in the aggregate, are
reasonable. The Committee or its authorized delegatee shall also determine the
contributions required to be made for each Plan Year by the Participating
Companies in order to satisfy the minimum funding standard (or alternative
minimum funding standard) for such Plan Year determined pursuant to Sections 302
through 305 of ERISA and Section 412 of the Code.
10.4 Funding Policy
The Participating Companies shall cause contributions to be made to
the Plan for each Plan Year in the amount necessary to satisfy the minimum
funding standard (or alternative minimum funding standard) for such Plan Year;
provided, however, that this obligation shall cease when the Plan is terminated.
In the case of a partial termination of the Plan, this obligation shall cease
with respect to those Participants, Joint Annuitants and Beneficiaries who are
affected by such partial termination. Each contribution is conditioned upon its
deductibility under Section 404 of the Code and shall be returned to the
Participating Companies within one year after the disallowance of the deduction
(to the extent disallowed). Upon the Company's written
27
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request, a contribution that was made by a mistake of fact shall be returned to
the Participating Company within one year after the payment of the contribution.
10.5 Cash Needs of the Plan
The Committee or its authorized delegatee from time to time shall
estimate the benefits and administrative expenses to be paid out of the Plan
during the period for which the estimate is made and shall also estimate the
contributions to be made to the Plan during such period by the Participating
Companies. The Committee or its authorized delegatee shall inform the Trustees
of the estimated cash needs of and contributions to the Plan during the period
for which such estimates are made. Such estimates shall be made on an annual,
quarterly, monthly or other basis, as the Committee shall determine.
10.6 Public Accountant
The Committee or its authorized delegatee shall engage an independent
qualified public accountant to conduct such examinations and to render such
opinions as may be required by Section 103(a)(3) of ERISA. The Committee or its
authorized delegatee in its discretion may remove and discharge the person so
engaged, but in such case it shall engage a successor independent qualified
public accountant to perform such examinations and to render such opinions.
10.7 Enrolled Actuary
The Committee or its authorized delegatee shall engage an enrolled
actuary to prepare the actuarial statement described in Section 103(d) of ERISA
and to render the opinion described in Section 103(a)(4) of ERISA. The
Committee or its authorized delegatee in its discretion may remove and discharge
the person so engaged, but in such event it shall engage a successor enrolled
actuary to perform such examination and render such opinion.
10.8 Basis of Payments to the Plan
All contributions to the Plan shall be made by the Participating
Companies and no contributions shall be required of or permitted by
Participants. From time to time the Participating Companies shall make such
contributions to the Plan as the Company determines to be necessary or desirable
in order to fund the benefits provided by the Plan and any expenses thereof
which are paid out of the Trust Fund and in order to carry out the obligations
of the Participating Companies set forth in Section 10.3. All contributions to
the Plan shall be held by the Trustee in accordance with the Trust Agreement.
10.9 Basis of Payments from the Plan
All benefits payable under the Plan shall be paid by the Trustee out
of the Trust Fund pursuant to the directions of the Committee or its authorized
delegatee and the terms of the Trust Agreement. The Trustee shall pay all
proper expenses of the Plan and the Trust Fund out of the Trust Fund, except to
the extent paid by the Participating Companies.
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ARTICLE XI
Plan Amendment or Termination
-----------------------------
11.1 Plan Amendment or Termination
The Company may, subject to any applicable Collective Bargaining
Agreement, amend, modify or terminate the Plan at any time by resolution of the
Board or by resolution of or other action recorded in the minutes of the
Administrator or Committee. Execution and delivery by the Administrator or the
Committee or by the Chairman of the Board, the President, or any Vice President
of the Company of an amendment to the Plan is conclusive evidence of the
amendment, modification or termination. The Committee in any event shall have
the authority to amend the Plan at any time to the extent that such amendments
are required in order to obtain a favorable determination letter from the
Internal Revenue Service regarding the Plan's qualification under the Code or to
conform the Plan to such regulations and rulings as may be issued by the
Internal Revenue Service or the United States Department of Labor.
11.2 Limitations on Plan Amendment
No Plan amendment can:
(a) authorize any part of the Trust Fund to be used for, or diverted
to, purposes other than the exclusive benefit of Participants or
their Beneficiaries;
(b) decrease the accrued benefits of any Participant or his or her
Beneficiary under the Plan; or
(c) except to the extent permitted by law, eliminate or reduce an
early retirement benefit or retirement-type subsidy (as defined
in Code Section 411) or an optional form of benefit with respect
to service prior to the date the amendment is adopted or
effective, whichever is later.
11.3 Effect of Plan Termination
Upon termination of the Plan, each Participant's rights to benefits
accrued hereunder shall be vested and nonforfeitable, and the Trust shall
continue until the Trust Fund has been distributed as provided in Section 11.4.
Any other provision hereof notwithstanding, the Participating Companies shall
have no obligation to continue making contributions to the Plan after
termination of the Plan. Except as otherwise provided in ERISA, neither the
Participating Companies nor any other person shall have any liability or
obligation to provide benefits hereunder after such termination in excess of the
value of the Trust Fund. Upon such termination, Participants and Beneficiaries
shall obtain benefits solely from the Trust Fund.
29
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Upon partial termination of the Plan, this Section 11.3 shall apply only with
respect to such Participants and Beneficiaries as are affected by such partial
termination.
11.4 Allocation of Trust Fund on Termination
On termination of the Plan, the Trust Fund shall be allocated by the
Administrator on an actuarial basis among Participants and Beneficiaries in the
manner prescribed by Section 4044 of ERISA. Any residual assets of the Trust
Fund remaining after such allocation shall be distributed to the Company if (a)
all liabilities of the Plan to Participants and Beneficiaries have been
satisfied and (b) such a distribution does not contravene any provision of law.
The foregoing notwithstanding, if any remaining assets of the Plan are
attributable to Employee Contributions, such assets shall be equitably
distributed to the Participants who made such contributions (or to their
Beneficiaries) in accordance with their rate of contribution. Effective January
1, 1989, the benefit of any highly compensated employee or former employee
(determined in accordance with section 414(g) of the Code and regulations
thereunder) shall be limited to a benefit that is nondiscriminatory under
section 401(a)(4) of the Code. In the event of a partial termination of the
Plan, the Administrator shall arrange for the division of the Trust Fund, on a
nondiscriminatory basis to the extent required by section 401 of the Code, into
the portion attributable to those Participants and Beneficiaries who are not
affected by such partial termination and the portion attributable to such
persons who are so affected. The portion of the Trust Fund attributable to
persons who are so affected shall be allocated in the manner prescribed by
section 4044 of ERISA.
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ARTICLE XII
Miscellaneous Provisions
------------------------
12.1 Subsequent Changes
All benefits to which any Participant may be entitled hereunder shall
be determined under the Plan in effect when the Participant ceases to be an
Eligible Employee and shall not be affected by any subsequent change in the
provisions of the Plan, unless the Participant again becomes an Eligible
Employee.
12.2 Plan Mergers
The Plan shall not be merged or consolidated with any other plan, and
no assets or liabilities of the Plan shall be transferred to any other plan,
unless each Participant would receive a benefit immediately after such merger,
consolidation or transfer (if the Plan then terminated) which is equal to or
greater than the benefit such Participant would have been entitled to receive
immediately before such merger, consolidation or transfer (if the Plan had then
been terminated). A list of other plans which have been merged into the Plan is
attached hereto and made a part hereof as Exhibit A.
12.3 No Assignment of Property Rights
The interest or property rights of any person in the Plan, in the
Trust Fund or in any payment to be made under the Plan shall not be assignable
nor be subject to alienation or option, either by voluntary or involuntary
assignment or by operation of law, including (without limitation) bankruptcy,
garnishment, attachment or other creditor's process, and any act in violation of
this Section 12.3 shall be void. This provision shall not apply to a "qualified
domestic relations order" defined in Code Section 414(p). The Company shall
establish a written procedure to determine the qualified status of domestic
relations orders and to administer distributions under such qualified orders.
In addition, the prohibition of this Section 12.3 will not apply to
any offset of a Participant's benefit under the Plan against an amount the
Participant is ordered or required to pay to the Plan under a judgment, order,
decree or settlement agreement that meets the requirements as set forth in this
Section 12.3. The Participant must be ordered or required to pay the Plan under
a judgment of conviction for a crime involving the Plan, under a civil judgment
(including a consent order or decree) entered by a court in an action brought in
connection with a violation (or alleged violation) of part 4 of subtitle B of
title I of ERISA, or pursuant to a settlement agreement between the Secretary of
Labor and the Participant in connection with a violation (or alleged violation)
of that part 4. This judgment, order, decree or settlement agreement must
expressly provide for the offset of all or part of the amount that must be paid
to the Plan against the Participant's benefit under the Plan. In addition, if a
Participant is entitled to receive a 100% Joint and Survivor Annuity under
Section 6.1 of the Plan or a Surviving Spouse's
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<PAGE>
Benefit under Section 7.1 of the Plan, and the Participant is married at the
time at which the offset is to be made, the Participant's spouse must consent to
the offset in accordance with the spousal consent requirements of Section 6.3.3
of the Plan, an election to waive the right of the spouse to the 100% Joint and
Survivor Annuity (made in accordance with Section 6.3 of the Plan) or the
Surviving Spouse's Benefit under Section 7.1 of the Plan, must be in effect, the
spouse is ordered or required in the judgment, order, decree, or settlement to
pay an amount to the Plan in connection with a violation of Part 4 of subtitle B
or ERISA Title I, or the spouse retains in the judgment, order, decree, or
settlement the right to receive the survivor annuity under the 100% Joint and
Survivor Annuity or under the Surviving Spouse's Benefit, determined in the
following manner: the Participant terminated employment on the date of the
offset, there was no offset, the Plan permitted the commencement of benefits
only on or after Normal Retirement Age, the Plan provided only the minimum-
required qualified joint and survivor annuity, and the amount of the Surviving
Spouse's Benefit under the Plan is equal to the amount of the survivor annuity
payable under the minimum-required qualified joint and survivor annuity. For
purposes of this Section 12.3 the term "minimum-required qualified joint and
survivor annuity" means a qualified joint and survivor annuity which is the
Actuarial Equivalent of the Participant's accrued benefit and under which the
survivor's annuity is 50% of the amount of the annuity which is payable during
the joint lives of the Participant and the Participant's spouse.
12.4 Beneficiary
To the extent permitted by the applicable Supplement, the Beneficiary
of a Participant shall be the person or persons so designated by such
Participant with spousal consent and in accordance with Section 6.3. A
Participant may revoke and change a designation of a Beneficiary at any time. A
designation of a Beneficiary, or any revocation and change thereof, shall be
effective only if it is made in writing in a form acceptable to the
Administrator and is received by it prior to the Participant's death.
12.5 Benefits Payable to Minors, Incompetents and Others
If any benefit is payable to a minor, an incompetent, or a person
otherwise under a legal disability, or to a person the Administrator reasonably
believes to be physically or mentally incapable of handling and disposing of his
or her property, whether because of his or her advanced age, illness, or other
physical or mental impairment, the Administrator has the power to apply all or
any part of the benefit directly to the care, comfort, maintenance, support,
education, or use of the person, or to pay all or any part of the benefit to the
person's parent, guardian, committee, conservator, or other legal
representative, wherever appointed, to the individual with whom the person is
living or to any other individual or entity having the care and control of the
person. The Plan, the Administrator and any other Plan fiduciary will have
fully discharged all responsibilities to the Participant or Beneficiary entitled
to a payment by making payment under the preceding sentence.
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12.6 Employment Rights
Nothing in the Plan shall be deemed to give any person a right to
remain in the employ of the Company and Affiliates or affect any right of the
Company or any Affiliate to terminate a person's employment with or without
cause.
12.7 Proof of Age and Marriage
Participants and Beneficiaries shall furnish proof of age and marital
status satisfactory to the Administrator at such time or times as it shall
prescribe. The Administrator may delay the disbursement of any benefits under
the Plan until all pertinent information with respect to age or marital status
has been furnished and then make payment retroactively.
12.8 Small Annuities
If the lump sum Actuarial Equivalent value of a retirement or
survivor's benefit is $5,000 or less, such amount shall be paid in a lump sum as
soon as administratively practicable following the Participant's retirement,
termination of employment, or death.
If a lump sum distribution is so paid and the Participant is
thereafter reemployed by the Company, the Participant shall have the option to
repay to the Plan the amount of such distribution, together with interest at the
rate of 5% per annum (or such other rate as may be prescribed pursuant to
section 411(c)(2)(C)(III) of the Code), compounded annually from the date of the
distribution to the date of repayment. If a reemployed Participant does not
make such repayment, no part of the Period of Service with respect to which the
lump sum distribution was made shall count as Years of Vesting Service or Years
of Credited Service.
12.9 Controlling Law
The Plan and all rights thereunder shall be interpreted and construed
in accordance with ERISA and, to the extent that state law is not preempted by
ERISA, the law of the State of Illinois.
12.10 Direct Rollover Option
Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a distributee's election under this Section 12.10, a distributee
may elect, at the time and in the manner prescribed by the 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.
(a) As used in this Section 12.10, an "eligible rollover
distribution" means 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
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<PAGE>
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 10 years or
more; any distribution to the extent such distribution is
required under Section 401(a)(9) of the Code; 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); and any other
distribution(s) that is reasonably expected to total less than
$200 during a year.
(b) As used in this Section 12.10, an "eligible retirement plan"
means an individual retirement account described in Section
408(a) of the Code, an individual retirement annuity described in
Section 408(b) of the Code, an annuity plan described in Section
403(a) of the Code, or a qualified trust described in Section
401(a) of the Code, that accepts the distributee's eligible
rollover distribution. In the case of an eligible rollover
distribution to the surviving spouse, however, an eligible
retirement plan is an individual retirement account or individual
retirement annuity.
(c) As used in this Section 12.10, 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 Section
414(p) of the Code, are distributees with regard to the interest
of the spouse or former spouse.
(d) As used in this Section 12.10, a "direct rollover" is a payment
by the Plan to the eligible retirement plan specified by the
distributee.
12.11 Claims Procedure
12.11.1 Any application for benefits under the Plan and all inquiries
concerning the Plan shall be submitted to the Company at such address as may be
announced to Participants from time to time. Applications for benefits shall be
in writing on the form prescribed by the Company and shall be signed by the
Participant or, in the case of a benefit payable after the death of the
Participant, by the Participant's surviving spouse or Beneficiary, as the case
may be.
12.11.2 The Company shall give written notice of its decision on any
application to the applicant within 90 days. If special circumstances require a
longer period of time the Company shall so notify the applicant within 90 days,
and give written notice of its decision to the applicant within 180 days after
receiving the application. In the event any application for benefits is denied
in whole or in part, the Company shall notify the applicant in writing of the
right to a review of the denial. Such written notice shall set forth, in a
manner calculated to be understood by the applicant, specific reasons for the
denial, specific references to the Plan provisions on which the denial is based,
a description of any information or material necessary to
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<PAGE>
perfect the application, an explanation of why such material is necessary and an
explanation of the Plan's review procedure.
12.11.3 The Company shall appoint a "Review Panel," which shall
consist of three or more individuals who may (but need not) be employees of the
Company. The Review Panel shall be the named fiduciary which has the authority
to act with respect to any appeal from a denial of benefits under the Plan.
12.11.4 Any person (or his authorized representative) whose
application for benefits is denied in whole or in part may appeal the denial by
submitting to the Review Panel a request for a review of the application within
60 days after receiving written notice of the denial. The Company shall give
the applicant or such representative an opportunity to review, by written
request, pertinent materials (other than legally privileged documents) in
preparing such request for review. The request for review shall be in writing
and addressed as follows: "Review Panel of the Employee Welfare Benefits Plan
Committee, 200 East Randolph Drive, Chicago, Illinois 60601." The request for
review shall set forth all of the grounds on which it is based, all facts in
support of the request and any other matters which the applicant deems
pertinent. The Review Panel may require the applicant to submit such additional
facts, documents or other material as it may deem necessary or appropriate in
making its review.
12.11.5 The Review Panel shall act upon each request for review
within 60 days after receipt thereof. If special circumstances require a longer
period of time the Review Panel shall so notify the applicant within 60 days,
and give written notice of its decision to the applicant within 120 days after
receiving the request for review. The Review Panel shall give notice of its
decision to the Company and to the applicant in writing. In the event the
Review Panel confirms the denial of the application for benefits in whole or in
part, such notice shall set forth in a manner calculated to be understood by the
applicant, the specific reasons for such denial and specific references to the
Plan provisions on which the decision is based.
12.11.6 The Review Panel shall establish such rules and procedures,
consistent with ERISA and the Plan, as it may deem necessary or appropriate in
carrying out its responsibilities under this Section 12.11.
12.11.7 No legal or equitable action for benefits under the Plan
shall be brought unless and until the claimant (a) has submitted a written
application for benefits in accordance with Section 12.10.1, (b) has been
notified by the Company that the application is denied, (c) has filed a written
request for a review of the application in accordance with Section 12.10.4 and
(d) has been notified in writing that the Review Panel has affirmed the denial
of the application; provided that legal action may be brought after the Review
Panel has failed to take any action on the claim within the time prescribed in
Section 12.11.5. A claimant may not bring an action for benefits in accordance
with this Section 12.11.7 after 90 days after the Review Panel denies the
claimant's application for benefits.
12.12 Participation in the Plan by an Affiliate
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12.12.1 With the consent of the Board, any Affiliate, by appropriate
action of its board of directors, a general partner or the sole proprietor, as
the case may be, may adopt the Plan and determine the classes of its Employees
that will be Eligible Employees.
12.12.2 A Participating Employer will have no power with respect to
the Plan except as specifically provided herein.
12.13 Action by Participating Employers
Any action required to be taken by the Company pursuant to any Plan
provisions will be evidenced in the manner set forth in Section 11.1. Any
action required to be taken by a Participating Employer will be evidenced by a
resolution of the Participating Employer's board of directors (or an authorized
committee of that board). Participating Employer action may also be evidenced
by a written instrument executed by any person or persons authorized to take the
action by the Participating Employer's board of directors, any authorized
committee of that board, or the stockholders. A copy of any written instrument
evidencing the action by the Company or Participating Employer must be delivered
to the secretary or assistant secretary of the Company or Participating
Employer.
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ARTICLE XIII
Top Heavy Provisions
--------------------
13.1 Top Heavy Definitions
For purposes of this Article XIII and any amendments to it, the terms
listed in this Section 13.1 have the meanings ascribed to them below.
Aggregate Account means the value of all accounts maintained on behalf
of a Participant, whether attributable to Company or employee contributions,
determined under applicable provisions of the defined contribution plan used in
determining Top Heavy Plan status.
Aggregation Group means the group of plans in a Mandatory Aggregation
Group, if any, that includes the Plan, unless including additional Related Plans
in the group would prevent the Plan for being a Top Heavy Plan, in which case
Aggregation Group means the group of plans in a Permissive Aggregation Group, if
any, that includes the Plan.
Compensation means compensation as defined in Code Section 415(c)(3)
and Treasury regulations thereunder. For purposes of determining who is a Key
Employee, Compensation will be applied by taking into account amounts paid by
Affiliates who are not Participating Employers, as well as amounts paid by
Participating Employers, and without applying the exclusions for amounts paid by
a Participating Employer to cover an Employee's nonqualified deferred
compensation FICA tax obligations and for gross-up payments on such FICA tax
payments.
Determination Date means, for a Plan Year, the last day of the
preceding Plan Year. If the Plan is part of an Aggregation Group, the
Determination Date for each other plan will be, for any Plan Year, the
Determination Date for that other plan that falls in the same calendar year as
the Determination Date for the Plan.
Key Employee means an employee described in Code Section 416(i)(1) and
the regulations promulgated thereunder. Generally, a Key Employee is an
Employee or former Employee who, at any time during the Plan Year containing the
Determination Date or any of the 4 preceding Plan Years, is:
(a) an officer of the Company or an Affiliate with annual
Compensation greater than 50% of the amount in effect under Code
Section 415(b)(1)(A);
(b) one of the 10 Employees of the Company and all Affiliates owning
(or considered to own within the meaning of Code Section 318) the
largest interests in any of the Company and the Affiliates, but
only if the Employee has annual Compensation greater than the
limitation in effect under Code Section 415(c)(1)(A);
(c) a 5% owner of the Company or an Affiliate; or
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(d) a 1% owner of the Company or an Affiliate with annual
Compensation from the Company and all Affiliates of more than
$150,000.
Mandatory Aggregation Group means each plan (considering the Plan and
Related Plans) that, during the Plan Year that contains the Determination Date
or any of the 4 preceding Plan Years:
(a) had a participant who was a Key Employee; or
(b) was required to be considered with a plan in which a Key Employee
participated in order to enable the plan in which the Key
Employee participated to meet the requirements of Code Section
401(a)(4) or 410(b).
Non-key Employee means an Employee or former Employee who is not a Key
Employee.
Permissive Aggregation Group means the group of plans consisting of
the plans in a Mandatory Aggregation Group with the Plan, plus any other Related
Plan or Plans that, when considered as a part of the Aggregation Group, does not
cause the Aggregation Group to fail to satisfy the requirements of Code Section
401(a)(4) or 410(b).
Present Value of Accrued Benefits means, in the case of a defined
benefit plan, a Participant's present value of accrued benefits determined as
follows:
(a) as of the most recent "Actuarial Valuation Date," which is the
most recent valuation date within a 12-month period ending on the
Determination Date;
(b) as if the Participant terminated service as of the actuarial
valuation date; and
(c) the Actuarial Valuation Date must be the same date used for
computing the defined benefit plan minimum funding costs,
regardless of whether a valuation is performed that Plan Year.
Present Value means, in calculating a Participant's present value of
accrued benefits as of a Determination Date, the sum of:
(a) the Actuarial Equivalent present value of accrued benefits;
(b) any Plan distributions made within the Plan Year that includes
the Determination Date or within the 4 preceding Plan Years.
However, in the case of distributions made after the valuation
date and prior to the Determination Date, such distributions are
not included as distributions for top heavy purposes to the
extent that such distributions are already included in the
Participant's present value of accrued benefits as of the
valuation date. Notwithstanding anything herein to the contrary,
all
38
<PAGE>
distributions, including distributions under a terminated plan
which if it had not been terminated would have been required to
be included in an Aggregation Group, will be counted;
(c) any Employee Contributions, whether voluntary or mandatory.
However, amounts attributable to tax deductible Qualified
Voluntary Employee Contributions shall not be considered to be a
part of the Participant's present value of accrued benefits;
(d) with respect to unrelated rollovers and plan-to-plan transfers
(ones which are both initiated by the Participant and made from a
plan maintained by one employer to a plan maintained by another
employer), if this Plan provides for rollovers or plan-to-plan
transfers, it shall always consider such rollover or plan-to-plan
transfer as a distribution for the purposes of this Section 13.1.
If this Plan is the plan accepting such rollovers or plan-to-plan
transfers, it shall not consider such rollovers or plan-to-plan
transfers, as part of the Participant's present value of accrued
benefits; and
(e) with respect to related rollovers and plan-to-plan transfers
(ones either not initiated by the Participant or made to a plan
maintained by the same employer), if this Plan provides the
rollover or plan-to-plan transfer, it shall not be counted as a
distribution for purposes of this Section. If this Plan is the
plan accepting such rollover or plan-to-plan transfer, it shall
consider such rollover or plan-to-plan transfer as part of the
Participant's present value of accrued benefits, irrespective of
the date on which such rollover or plan-to-plan transfer is
accepted.
Related Plan means any other defined contribution plan (a "Related
Defined Contribution Plan") or defined benefit plan (a "Related Defined Benefit
Plan") (both as defined in Code Section 415(k), maintained by the Company or an
Affiliate.
A Super Top Heavy Aggregation Group exists in any Plan Year for which,
as of the Determination Date, the sum of the present value of accrued benefits
and the Aggregate Accounts of Key Employees under all plans in the Aggregation
Group exceeds 90% of the sum of the present value of accrued benefits and the
Aggregate Accounts of all employees under all plans in the Aggregation Group.
In determining the sum of the Present Value of Accrued Benefits and/or Aggregate
Accounts for all employees, the present value of accrued benefits and/or
Aggregate Accounts for any Non-key Employee who was a Key Employee for any Plan
Year preceding the Plan Year that contains the Determination Date will be
excluded.
Super Top Heavy Plan means the Plan when it is described in the second
sentence of Section 13.2.
A Top Heavy Aggregation Group exists in any Plan Year for which, as of
the Determination Date, the sum of the Present Value of Accrued Benefits for Key
Employees under all plans in the Aggregation Group exceeds 60% of the sum of the
Present Value of Accrued
39
<PAGE>
Benefits for all employees under all plans in the Aggregation Group. In
determining the sum of the Present Value of Accrued Benefits for all employees,
the Present Value of Accrued Benefits for any Non-key Employee who was a Key
Employee for any Plan Year preceding the Plan Year that contains the
Determination Date will be excluded.
Top Heavy Plan means the Plan when it is described in the first
sentence of Section 13.2.
13.2 Determination of Top Heavy Status
This Plan is a Top Heavy Plan in any Plan Year in which it is a member
of a Top Heavy Aggregation Group, including a Top Heavy Aggregation Group that
includes only the Plan. The Plan is a Super Top Heavy Plan in any Plan Year in
which it is a member of a Super Top Heavy Aggregation Group, including a Super
Top Heavy Aggregation Group that includes only the Plan.
13.3 Minimum Benefit Requirement for Top Heavy Plan
13.3.1 Minimum Accrued Benefit: The minimum accrued benefit
(expressed as an Individual Life Annuity commencing at Normal Retirement Date)
derived from Company contributions to be provided under this Section for each
Non-key Employee who is a Participant for any Plan Year in which this Plan is a
Top Heavy Plan shall equal the product of (a) 1/12th of "416 Compensation"
averaged over 5 the consecutive Plan Years (or actual number of Plan Years if
less) which produce the highest average and (b) the lesser of (i) 2% multiplied
by Years of Vesting Service or (ii) 20%.
13.3.2 For purposes of providing the minimum benefit under Code
Section 416, a Non-key Employee who is not a Participant solely because (a) his
compensation is below a stated amount or (b) he declined to make mandatory
contributions to the Plan will be considered to be a Participant.
13.3.3 For purposes of this Section 13.3, Years of Vesting Service
for any Plan Year ending prior to January 1, 1984, or for any Plan Year during
which the Plan was not a Top Heavy Plan shall be disregarded.
13.3.4 For purposes of this Section 13.3, 416 Compensation for any
Plan Year ending prior to January 1, 1984, or subsequent to the last Plan Year
during which the Plan is a Top Heavy Plan shall be disregarded.
13.3.5 For the purposes of this Section 13.3, "416 Compensation"
shall mean W-2 wages for the calendar year ending with or within the Plan Year,
and shall be limited to $160,000 (as adjusted for cost-of-living in accordance
with Section 401(a)(17)(B) of the Code) in Top Heavy Plan Years.
13.3.6 If payment of the minimum accrued benefit commences at a date
other than Normal Retirement Date, or if the form of benefit is other than on
Individual Life Annuity,
40
<PAGE>
the minimum accrued benefit shall be the Actuarial Equivalent of the minimum
accrued benefit expressed as an Individual Life Annuity commencing at Normal
Retirement Date.
13.3.7 For any Plan Year before January 1, 2000, when the Plan is a
Top Heavy Plan but not a Super Top Heavy Plan and a Key Employee is a
Participant in both this Plan and a defined contribution plan included in a
required Aggregation Group which is top heavy, the extra minimum accrued benefit
shall be provided for each Non-key Employee who is a Participant by 20% in
Section 13.3.1.
13.3.8 In lieu of the benefit in Section 13.3.7, if a Non-key
Employee participates in this Plan and a defined contribution plan included in a
Required Aggregation Group which is top heavy, a minimum allocation of 5% of 416
Compensation shall be provided under the defined contribution plan. If the
defined contribution plan is amended so that the minimum benefits are no longer
provided under the defined contribution plan, the minimum benefits shall be
provided under this Plan. However, for any Plan Year when the Plan is a Top
Heavy Plan but not a Super Top Heavy Plan and a Key Employee is a Participant in
both this Plan and a defined contribution plan included in a Required
Aggregation Group which is top heavy, 7-1/2% shall be substituted for 5% above.
13.3.9 To the extent required to be nonforfeitable under Section
13.4, the minimum accrued benefit under this Section 13.3 may not be forfeited
under Code Section 411(a)(3)(B) or Code Section 411(a)(3)(D).
13.4 Vesting Requirement for Top Heavy Plan
13.4.1 Notwithstanding any other provision of this Plan, for any Top
Heavy Plan Year, the vested portion of any Participant's accrued benefit shall
be determined on the basis of the Participant's number of Years of Vesting
Service according to the following schedule:
Years of Service Percentage Vested
---------------- -----------------
1 - 2 0%
3 100%
If in any subsequent Plan Year, the Plan ceases to be a Top Heavy Plan,
the Company may, in its sole discretion, elect to continue to apply this vesting
schedule in determining the vested portion of any Participant's accrued benefit,
or revert to the vesting schedule in effect before this Plan became a Top Heavy
Plan. Any such reversion shall be treated as a Plan amendment.
13.4.2 The computation of a Participant's nonforfeitable percentage of
the Participant's interest in the Plan shall not be reduced as the result of any
direct or indirect amendment to this Plan. In the event that this Plan is
amended to change or modify any vesting schedule, a Participant with at least 5
Years of Service as of the expiration date of the election period may elect to
have the Participant's nonforfeitable percentage computed under the Plan without
regard to such amendment. If a Participant fails to make such election, then
such
41
<PAGE>
Participant shall be subject to the new vesting schedule. The Participant's
election period shall commence on the adoption date of the amendment and shall
end 60 days after the latest of
(a) the adoption date of the amendment,
(b) the effective date of the amendment, or
(c) the date the Participant receives written notice of the amendment
from the Company.
To record the amendment and restatement of the Plan to read as set
forth herein, the Company has caused its authorized representative to execute
the same this 31st day of August, 1999, but to be effective January 1, 1999,
except as otherwise provided in the text herein.
FMC CORPORATION
BY:/s/ J. Paul McGrath
---------------------------------
Member, Employee Welfare Benefits
Plan Committee
42
<PAGE>
EXHIBIT A
MERGED PLANS
------------
The following is a list of plans which have been previously merged into this
Plan, the effective date of such merger and the applicable Supplement containing
the provisions of such prior plans which have been maintained in this Plan for
the applicable Participants. Notwithstanding any Plan provision to the contrary,
the terms of the Supplement shall control with respect to the applicable
Participants. Unless otherwise defined in the Supplement, defined terms used in
the Supplement have the meanings ascribed to them elsewhere in the Plan.
<TABLE>
<CAPTION>
EFFECTIVE
DATE OF SUPPLEMENT
PLAN MERGER NUMBER
- ------ --------- ----------
<S> <C> <C>
FMC Corporation Pension Plan for Hourly Employees - January 1, 1991 1
Industrial Chemical Division - Green River, WY
- -----------------------------------------------------------------------------------------------
Jetway Systems Division Pension Plan for Hourly May 27, 1994 2
Employees
- -----------------------------------------------------------------------------------------------
FMC Corporation Retirement Plan for Hourly Employees - December 31, 1998 3
Packaging Machinery Division, Green Bay, WI
- -----------------------------------------------------------------------------------------------
FMC Corporation Retirement Plan for Hourly Employees - December 31, 1998 4
Agricultural Chemical Division, Fresno, CA
- -----------------------------------------------------------------------------------------------
FMC Corporation Retirement Plan for Hourly Employees - December 31, 1998 5
Sweeper Division, Pomona, CA
- -----------------------------------------------------------------------------------------------
Skull Point Mine, Kemmerer, Wyoming December 31, 1998 6
- -----------------------------------------------------------------------------------------------
FMC Corporation Retirement Plan for San Jose Commercial December 31, 1998 7
Segment Hourly Employees
- -----------------------------------------------------------------------------------------------
FMC Corporation Retirement Plan for Agriculture Chemical December 31, 1998 8
Division, Baltimore
- -----------------------------------------------------------------------------------------------
FMC Corporation Retirement Plan for Hourly Employees of December 31, 1998 9
Inorganic Chemical Division, Tonowanda, New York
- -----------------------------------------------------------------------------------------------
FMC Corporation Retirement Plan - Industrial Chemicals December 31, 1998 10
Division, Carteret
- -----------------------------------------------------------------------------------------------
Smith Meter, Inc., Erie Plant Industrial Pension Plan December 31, 1998 11
- -----------------------------------------------------------------------------------------------
FMC Corporation Retirement Plan - Food Processing December 31, 1998 12
Machinery Division, Hoopeston
- -----------------------------------------------------------------------------------------------
FMC Corporation Retirement Plan for Hourly Employees of December 31, 1998 13
Kemmerer Coke Plant
- -----------------------------------------------------------------------------------------------
FMC Corporation Hourly Retirement Plan for Industrial December 31, 1998 14
Chemical Division, Lawrence Kansas
- -----------------------------------------------------------------------------------------------
FMC Corporation Retirement Plan for Hourly Employees of December 31, 1998 15
Agricultural Chemical Division, Middleport
- -----------------------------------------------------------------------------------------------
FMC Corporation Hourly Retirement Plan for Industrial December 31, 1998 16
- -----------------------------------------------------------------------------------------------
</TABLE>
43
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Chemical Division, Newark, CA
- -------------------------------------------------------------------------------------------------
FMC Corporation Retirement Plan for Newark, Delaware - December 31, 1998 17
Food and Pharmaceutical Products Division
- -------------------------------------------------------------------------------------------------
FMC Corporation Retirement Plan for Industrial Chemical December 31, 1998 18
Division, Nitro, West Virginia
- -------------------------------------------------------------------------------------------------
FMC Corporation Retirement Plan for Hourly Employees of December 31, 1998 19
Industrial Chemical Division, Pocatello, Idaho
- -------------------------------------------------------------------------------------------------
FMC Corporation Retirement Plan for Industrial Chemical December 31, 1998 20
Group, Spring Hill/Steam Plan
- -------------------------------------------------------------------------------------------------
</TABLE>
44
<PAGE>
SUPPLEMENT 1
INDUSTRIAL CHEMICAL DIVISION, GREEN RIVER, WYOMING
--------------------------------------------------
1-1 Eligible Employees
The terms of this Supplement apply only to Eligible Employees of the
FMC Corporation Industrial Chemical Division who work in Green River, Wyoming
and are covered by the Collective Bargaining Agreement between the Company and
the United Steelworkers of America, Local No. 13214.
1-2 Actuarial Equivalent
Actuarial Equivalent, other than for purposes of Section 12.8 of the
Plan, shall be determined based on the following:
(a) other than for purposes of a "qualified domestic relations order"
as defined in Code Section 414(p), based on Table 1 of this
Supplement; and
(b) for purposes of a "qualified domestic relations order" as defined
in Code Section 414(p), the 1971 Group Annuity Table (weighted
95% male, 5% female) and 6% interest compounded annually.
1-3 Earnings
Earnings means the Participant's total compensation paid as an
Eligible Employee, including overtime, administrative and discretionary bonuses,
and his Employee-elected Company contributions under a plan described in Code
Section 125, 132 or 401(k), but excluding awards, deferred compensation,
severance pay, other special payments such as relocation or moving expense
allowances, and stock options or other stock-based compensation. Earnings also
includes sick pay or sickness benefits, but not disability benefits from the
Long-Term Disability Plan for Employees of FMC Corporation. A Participant's
Earnings will be conclusively determined according to the Company's records.
The annual amount of Earnings taken into account for a Participant
must not exceed $160,000 (as adjusted by the Internal Revenue Service for cost-
of-living increases in accordance with Code Section 401(a)(17)(B)).
Final Average Monthly Earnings means the average of the Participant's
monthly Earnings during the 3 calendar years in which Earnings were the highest
during the 10 calendar years preceding the Participant's retirement.
For the period July 1, 1997 through July 1, 2007, Earnings in excess
of $100,000 in any calendar year will not be used in calculating Final Average
Monthly Earnings.
45
<PAGE>
1-4 Commencement of Participation
An Eligible Employee shall become a Participant as of the date the
Participant completes one Year of Credited Service.
1-5 Normal Retirement Date
Normal Retirement Date means the first day of the month coinciding
with or next following the Participant's 65th birthday.
1-6 Amount of Normal Retirement Benefit
A Participant's monthly Normal Retirement Benefit shall be the product
of the Participant's Years of Credited Service multiplied by 1.2% of the
Participant's Final Average Monthly Earnings, plus the product of the
Participant's full Years of Credited Service (disregarding any fractional year)
multiplied by $5.00.
The minimum monthly Normal Retirement Benefit is $25.00 for each Year
of Credited Service.
1-7 Early Retirement Reduction Factor
If a Participant has less than 30 Years of Credited Service and his
Early Retirement Benefit commences prior to age 62, his Early Retirement Benefit
shall be reduced by 1/4 of 1% for each month between his Annuity Starting Date
and his 62nd birthday.
If a Participant has 30 or more Years of Credited Service and his
Early Retirement Benefit commences prior to age 62, his Early Retirement Benefit
shall be reduced by 1/6 of 1% for each month between his Annuity Starting Date
and his 62nd birthday.
If a Participant's Early Retirement Benefit commences on or after age
62, no reduction shall apply.
A Participant who retires on or after July 1, 1997 but before July 1,
2000 and after attaining age 60 shall receive a supplemental Early Retirement
Benefit of $200 per month until the Participant attains age 65.
1-8 Normal Form of Benefit
If the spouse of a Participant predeceases him after payment of the
100% Joint and Survivor's Annuity has commenced, the Participant's monthly
pension will be increased to the amount of the Individual Life Annuity as of the
first day of the month following the Administrator's receipt of notice of such
death.
46
<PAGE>
1-9 Optional Forms of Benefit
-------------------------
A married Participant may elect, with spousal consent in accordance
with Section 6.3, to receive the Participant's benefits in one of the following
forms:
(a) an Individual Life Annuity;
(b) a 50% Joint and Survivor's Annuity; or
(c) a 100% Joint and Survivor's Annuity.
If the spouse of a Participant predeceases the Participant after
payment of the 50% Joint and Survivor's Annuity or 100% Joint and Survivor's
Annuity has commenced, the Participant's monthly pension will be increased to
the amount of the Individual Life Annuity as of the first day of the month
following the Administrator's receipt of notice of such death.
1-10 Surviving Spouse's Benefit
--------------------------
The amount of the surviving spouse's benefit shall be determined
pursuant to Section 1-6 based on the Participant's age, Final Average Earnings
and Years of Credited Service on the date of the Participant's death and paid in
the form of a 100% Joint and Survivor's Annuity as if the Participant had
retired on the day preceding the Participant's death or the day the Participant
would have reached age 55, if later.
1-11 Disability Retirement
---------------------
A Participant who has completed 10 Years of Credited Service as of the
date Total and Permanent Disability occurs shall be eligible for a Disability
Retirement Benefit.
Total and Permanent Disability means a total and permanent mental or
physical disability of a Participant and confirmed by medical examination of a
physician selected by the Company or the Participant, and confirmed by medical
examination of a physician selected by the other party, whether or not such
disability arose out of or during the course of employment, of a nature
preventing such Participant from engaging in work for the Company.
1-12 Disability Retirement Benefit
-----------------------------
The Participant's Disability Retirement Benefit shall be determined
pursuant to Section 1-6, based on the Participant's Final Average Earnings and
Years of Credited Service to the date of the Participant's Disability
Retirement.
The Disability Retirement payment shall commence with the first day of
the month coincident with or immediately following the medical certification of
disability, unless the Participant elects a later date.
47
<PAGE>
Such payment shall also take into account and have deducted therefrom
any benefits paid or payable, now or in the future, to the Participant by way of
(a) Worker's Compensation payments; (b) public pension payments (except Social
Security Disability and Military pension payments) and (c) 1/2 of any accident
or health insurance benefit payment as may be provided by any program as now or
in the future made available by the Company or placed in effect by any
governmental authority for the benefit of Participants; however, any lump sum
award under (a) and (c) above shall not be deducted. Any Participant who shall
receive a Disability Retirement Benefit shall be subject to reexamination by a
physician of the Company at any time the Company may so request and if, in the
opinion of the Company, the Total and Permanent Disability of the Participant
shall no longer continue to exist, such Participant's right to a continuance of
Disability Retirement Benefit payment shall cease. Failure or refusal of a
Participant to submit to medical examination as requested by the Company shall
be cause of cancellation of the Disability Retirement Benefit. Such disabled
Participant shall, however, be entitled to Early or Normal Retirement benefit
payments upon qualification by the Participant under the requirements set forth
in Section 3.1 and Section 3.2. In no event, however, shall any Participant be
entitled to receive both a Disability Retirement Benefit and an Early or Normal
Retirement Benefit, it being intended that there should be no duplication of
retirement benefits.
48
<PAGE>
SUPPLEMENT 2
JETWAY SYSTEMS DIVISION, OGDEN, UTAH
------------------------------------
2-1 Eligible Employees
The terms of this Supplement apply only to Eligible Employees of the
FMC Corporation Jetway Systems Division who work in Ogden, Utah and are covered
by the Collective Bargaining Agreement between the Company and the United
Steelworkers of America Local Union 6162.
2-2 Actuarial Equivalent
Actuarial Equivalent, other than for purposes of Section 12.8 of the
Plan, shall be determined based on the UP-1983 Group Annuity Mortality table for
males set back 1 year for the Participant and 5 years for the Beneficiary, and
8% interest compounded annually.
2-3 Average Monthly Earnings
Average Monthly Earnings means the average for each Participant
determined by dividing total Considered Compensation during the Participant's 9-
year Period of Service ending on his retirement or Severance from Service Date
by 108. The denominator of 108 shall be reduced to the number of months actually
worked if the Participant was not employed by the Company during that entire 9-
year period. The denominator shall also be reduced in the case of Disability
Retirement by the number of months without pay because of Disability in the last
6 months before retirement, and in all other cases shall be reduced by the
greater of the number of months without pay (a) in excess of 3, during each
absence, or (b) in excess of 12.
2-4 Considered Compensation
Considered Compensation means the Base Pay paid to an individual by
the Company and/or any Affiliate during a Plan Year while that individual is a
Participant. "Base Pay" means a Participant's regular hourly wage and does not
include bonuses, amounts paid in lieu of regular vacation, overtime or other
premium pay, deferred compensation, stock options, and other amounts that
receive special tax treatment.
The annual amount of Considered Compensation taken into account for a
Participant must not exceed $160,000 (as adjusted by the Internal Revenue
Service for cost-of-living increases in accordance with Code Section
401(a)(17)(B).)
2-5 Normal Retirement Date
Normal Retirement Date means the first day of the month coinciding
with or next following the Participant's 65th birthday.
49
<PAGE>
2-6 Normal Retirement Benefit
A Participant's monthly Normal Retirement Benefit shall be the greater
of (a) or (b):
(a) 1.025% of Average Monthly Earnings multiplied by the
Participant's Years of Credited Service.
(b) The product of the benefit rate provided below in effect at the
termination of the Participant's Years of Credited Service
multiplied by the Participant's Years of Credited Service.
Termination Date Benefit Rate
---------------- ------------
On or after September 1, 1998 $21.50
but before August 31, 1999
On or after September 1, 1999 $22.50
2-7 Early Retirement Date
Early Retirement Date means the later of the Participant's 55th
birthday and the date the Participant acquires 15 years of Credited Service.
2-8 Early Retirement Reduction Factor
If a Participant's Early Retirement Benefit commences prior to age 65,
the Participant's Early Retirement Benefit shall be paid according to the
reduced percentage provided below.
<TABLE>
<CAPTION>
Age Benefits Reduced
Begin Percentage
-------------------------------------------------
<S> <C>
65 00.00%
-------------------------------------------------
64 93.00%
-------------------------------------------------
63 86.53%
-------------------------------------------------
62 80.60%
-------------------------------------------------
61 75.20%
-------------------------------------------------
60 70.33%
-------------------------------------------------
59 66.00%
-------------------------------------------------
58 62.20%
-------------------------------------------------
57 58.93%
-------------------------------------------------
56 56.20%
-------------------------------------------------
55 54.00%
-------------------------------------------------
</TABLE>
50
<PAGE>
2-9 Disability Retirement
A Participant who has completed 10 Years of Vesting Service who
retires due to Total and Permanent Disability shall be eligible for a Disability
Retirement Benefit.
Total and Permanent Disability means a total and permanent mental or
physical disability of a Participant and confirmed by medical examination of a
physician selected by the Company or the Participant, and confirmed by medical
examination of a physician selected by the other party, whether or not such
disability arose out of or during the course of employment, of a nature
preventing such Participant from engaging in any occupation for compensation for
the balance of the Participant's life.
2-10 Disability Retirement Benefit
If the Participant is eligible for unreduced Social Security benefits,
the Participant's Disability Retirement Benefit shall be determined pursuant to
Section 3.1.2, without reduction for early commencement, but shall be no less
than $100 per month. If the Participant is not eligible for unreduced Social
Security benefits, the Participant's Disability Retirement Benefit shall be
determined according to the preceding sentence, then increased by $100 per
month.
2-11 Normal Form of Benefit
A Participant's benefit shall be paid in the form of a 50% Joint and
Survivor's Annuity, with the Participant's spouse as joint annuitant if the
Participant is married on the Annuity Starting Date, and in the form of an
Individual Life Annuity if the Participant is not married on the Annuity
Starting Date, unless the Participant elects, in accordance with Section 6.3,
not to receive payment in the normal form and to receive payment in one of the
permitted optional forms.
2-12 Optional Forms of Benefit
A Participant may elect, in accordance with Section 6.3, to receive
the Participant's benefits in one of the following optional forms:
(a) an Individual Life Annuity; or
(b) a 50% or 100% joint and survivor annuity, with the Participant's
Beneficiary as the survivor.
2-13 Surviving Spouse's Benefit
The amount of the surviving spouse's benefit shall be determined
pursuant to this Supplement as if the Participant had retired on the later of
the Participant's 55th birthday or the date of the Participant's death. Payment
of the survivor's benefit shall commence on the first day of the month next
following the later of the Participant's 55th birthday or the
51
<PAGE>
Participant's death, unless the Participant's spouse elects to commence payment
of benefits as of the first day of any subsequent month, but not later than the
Participant's Normal Retirement Date.
52
<PAGE>
SUPPLEMENT 3
PACKAGING MACHINERY DIVISION, GREEN BAY, WISCONSIN
--------------------------------------------------
3-1 Eligible Employees
The terms of this Supplement apply only to individuals participating
in the FMC Corporation Retirement Plan for Hourly Employees - Packaging
Machinery Division, Green Bay, Wisconsin ("Prior Plan") on the Freeze Date who
had not yet received a full distribution of their benefit under such Prior Plan
as of the Effective Date ("Participant").
3-2 Freeze Date
Effective March 22, 1995 ("Freeze Date") the union group covering the
Participants was decertified and the Prior Plan was frozen. No new participants
entered the Prior Plan after the Freeze Date, and no benefits accrued under the
Prior Plan after the Freeze Date.
3-3 Actuarial Equivalent
Actuarial Equivalent, other than for purposes of Section 12.8 of the
Plan, shall be determined based on the 1971 Group Annuity Table (weighted 95%
male, 5% female) and 6% interest compounded annually.
3-4 Normal Retirement Date
Normal Retirement Date means the first day of the month coinciding
with or next following the Participant's 65th birthday.
3-5 Normal Retirement Benefit
A Participant's monthly Normal Retirement Benefit shall be the
Participant's monthly normal retirement benefit accrued under the Prior Plan as
of the Freeze Date.
3-6 Early Retirement Date
Early Retirement Date means the later of the Participant's 55th
birthday and the date the Participant acquires 15 Years of Credited Service.
3-7 Early Retirement Reduction Factor
If a Participant's Early Retirement Benefit commences prior to age 62,
the Participant's Early Retirement Benefit shall be reduced by 4% for each year
between the Participant's Annuity Starting Date and the Participant's 65th
birthday.
53
<PAGE>
3-8 Surviving Spouse's Benefit
The amount of the surviving spouse's benefit shall be determined
pursuant to this Supplement as if the Participant had retired on the later of
the Participant's 55th birthday or the date of the Participant's death.
Payment of the survivor's benefit shall commence on the first day of the month
next following the later of the Participant's 55th birthday or the Participant's
death, unless the Participant's spouse elects to commence payment of benefits as
of the first day of any subsequent month, but not later than the Participant's
Normal Retirement Date.
54
<PAGE>
SUPPLEMENT 4
Agricultural Chemical Division, Fresno, California
--------------------------------------------------
4-1 Eligible Employees
The terms of this Supplement apply only to individuals participating
in the FMC Corporation Retirement Plan for Hourly Employees, Agricultural
Chemical Division, Fresno, California ("Prior Plan") on the Freeze Date who had
not yet received a full distribution of their benefit under such Prior Plan as
of the Effective Date ("Participant").
4-2 Freeze Date
Effective December 31, 1992 ("Freeze Date") the Prior Plan was frozen.
No new participants entered the Prior Plan after the Freeze Date, and no
benefits accrued under the Prior Plan after the Freeze Date.
4-3 Actuarial Equivalent
Actuarial Equivalent, other than for purposes of Section 12.8 of the
Plan, shall be determined based on the 1971 Group Annuity Table (weighted 95%
male, 5% female) and 6% interest compounded annually.
4-4 Normal Retirement Date
Normal Retirement Date means the first day of the month coinciding
with or next following the Participant's 65th birthday.
4-5 Normal Retirement Benefit
A Participant's monthly Normal Retirement Benefit shall be the
Participant's monthly normal retirement benefit accrued under the Prior Plan as
of the Freeze Date.
4-6 Early Retirement Date
Early Retirement Date means the later of the Participant's 55th
birthday and the date the Participant acquires 15 Years of Credited Service.
4-7 Early Retirement Reduction Factor
If a Participant's Early Retirement Benefit commences prior to age 65,
the Participant's Early Retirement Benefit shall be reduced by 2% for each of
the first 3 years between the Participant's Annuity Starting Date and the
Participant's 65th birthday, plus 4% for each additional year the Participant's
Annuity Starting Date precedes the Participant's 65th birthday.
55
<PAGE>
4-7 Surviving Spouse's Benefit
The amount of the surviving spouse's benefit shall be determined
pursuant to this Supplement as if the Participant had retired on the later of
the Participant's 55th birthday or the date of the Participant's death. Payment
of the survivor's benefit shall commence on the first day of the month next
following the later of the Participant's 55th birthday or the Participant's
death, unless the Participant's spouse elects to commence payment of benefits as
of the first day of any subsequent month, but not later than the Participant's
Normal Retirement Date.
56
<PAGE>
SUPPLEMENT 5
Sweeper Division, Pomona, California
------------------------------------
5-1 Eligible Employees
The terms of this Supplement apply only to individuals participating
in the FMC Corporation Retirement Plan for Hourly Employees, Sweeper Division,
Pomona, California ("Prior Plan") on the Freeze Date who had not yet received a
full distribution of their benefit under such Prior Plan as of the Effective
Date ("Participant").
5-2 Freeze Date
Effective March 31, 1992 ("Freeze Date") the Prior Plan was frozen was
frozen. No new participants entered the Prior Plan after the Freeze Date, and
no benefits accrued under the Prior Plan after the Freeze Date.
5-3 Actuarial Equivalent
Actuarial Equivalent, other than for purposes of Section 12.8 of the
Plan, shall be determined based on the 1971 Group Annuity Table (weighted 95%
male, 5% female) and 6% interest compounded annually.
5-4 Normal Retirement Date
Normal Retirement Date means the first day of the month coinciding
with or next following the Participant's 65th birthday.
5-5 Normal Retirement Benefit
A Participant's monthly Normal Retirement Benefit shall be the
Participant's monthly normal retirement benefit accrued under the Prior Plan as
of the Freeze Date.
5-6 Early Retirement Reduction Factor
If a Participant's Early Retirement Benefit commences prior to age 65,
the Participant's Early Retirement Benefit shall be reduced by 5% for each year
between the Participant's Annuity Starting Date and the Participant's 65th
birthday.
5-7 Surviving Spouse's Benefit
The amount of the surviving spouse's benefit shall be determined
pursuant to this Supplement as if the Participant had retired on the later of
the Participant's 55th birthday or the date of the Participant's death. Payment
of the survivor's benefit shall commence on the first day of the month next
following the later of the Participant's 55th birthday or the Participant's
death,
57
<PAGE>
unless the Participant's spouse elects to commence payment of benefits as
of the first day of any subsequent month, but not later than the Participant's
Normal Retirement Date.
SUPPLEMENT 6
SKULL POINT MINE, KEMMERER, WYOMING
-----------------------------------
6-1 Eligible Employees
The terms of this Supplement apply only to individuals participating
in the Skull Point Mine Pension Plan ("Prior Plan") on the Freeze Date who had
not yet received a full distribution of their benefit under such Prior Plan as
of the Effective Date ("Participant").
6-2 Freeze Date
Effective March 10, 1997 (the "Freeze Date") the Prior Plan was
frozen. No new participants entered the Prior Plan after the Freeze Date, and
no benefits accrued under the Prior Plan after the Freeze Date.
6-3 Actuarial Equivalent
Actuarial Equivalent, other than for purposes of Section 12.8 of the
Plan, shall be determined based on Table 6 of this Supplement.
6-4 Service
For purposes of this Supplement, Years of Credited Service,
Nonsignatory Past Service and Reciprocal Service shall have the meanings
assigned thereto under the terms of the Prior Plan as in effect on the Freeze
Date.
6-5 Normal Retirement Date
Normal Retirement Date means the first day of the month following the
later of the Participant's 65th birthday or the 5th anniversary of the date the
Participant commenced participation in the Plan.
6-6 Normal Retirement Benefit
A Participant's monthly Normal Retirement Benefit shall be the
Participant's monthly normal retirement benefit accrued under the Prior Plan as
of the Freeze Date.
6-7 Early Retirement Date
58
<PAGE>
Early Retirement Date means the later of the Participant's 55th
birthday and the date the Participant acquires (a) 10 Years of Vesting Service
or (b) 20 Years of Credited Service, Reciprocal Service and Nonsignatory Past
Service.
6-8 Early Retirement Reduction Factor
---------------------------------
If a Participant's Early Retirement Benefit commences prior to age 62,
the Participant's Early Retirement Benefit shall be reduced by 1/4 of 1% for
each month between the Participant's Annuity Starting Date and the Participant's
62nd birthday. If a Participant's Early Retirement Benefit commences on or
after age 62, no reduction shall apply.
6-9 Termination of Service
----------------------
A Participant who ceases to be an Employee before his Early Retirement
Date or Disability Retirement Date for any reason other than death shall be
entitled to receive a Termination Benefit if the Participant has 5 Years of
Vesting Service or 20 Years of Credited Service, Reciprocal Service and
Nonsignatory Past Service. Payment of such benefit shall commence as of the
first day of the month coincident with or next following the Participant's
Normal Retirement Date or, if the Participant elects, as of the first day of any
month before such Normal Retirement Date and coincident with or following the
Participant's 55th birthday.
6-10 Amount of Termination Benefit
-----------------------------
A Participant's monthly Termination Benefit shall be determined as a
Normal Retirement Benefit under this Supplement, based on the Participant's
normal retirement benefit accrued under the Prior Plan as of the Freeze Date.
Subject to the terms of the Prior Plan, if payment of the Participant's
Termination Benefit commences before age 62, the amount of the monthly benefit
shall be reduced to an Actuarial Equivalent to reflect such earlier
commencement.
6-11 Normal Form of Benefit
----------------------
The normal form of benefit shall be a 50% Joint and Survivor's Annuity
with the Participant's spouse as joint annuitant if the Participant is married
on the Annuity Starting Date, and an Individual Life Annuity if the Participant
is not married on the Annuity Starting Date.
59
<PAGE>
FMC CORPORATION - SKULL POINT MINE UNION
Normal Form: Payable Immediately Life Annuity
Optional Form: Joint Life Payable Immediately
Reduction on Participant's Death -- 50% Continued to Beneficiary
Factors to Convert from the Normal Form to the Optional Form
Payment at Beginning of Month
Mortality: Retiree - 71GAT Beneficiary - 71GAT Interest: 3.00%
(Except at frozen ages)
<TABLE>
<CAPTION>
Unisex Unisex
Participant Age Beneficiary Age
Years Years
20 21 22 23 24
<S> <C> <C> <C> <C> <C>
20 0.9713 0.9726 0.9738 0.9751 0.9763
21 0.9690 0.9704 0.9717 0.9730 0.9743
22 0.9667 0.9681 0.9695 0.9709 0.9722
23 0.9641 0.9656 0.9671 0.9686 0.9700
24 0.9614 0.9630 0.9646 0.9661 0.9676
25 0.9586 0.9602 0.9618 0.9635 0.9650
26 0.9555 0.9572 0.9589 0.9606 0.9623
27 0.9523 0.9541 0.9559 0.9576 0.9594
28 0.9489 0.9507 0.9526 0.9544 0.9563
29 0.9453 0.9472 0.9491 0.9511 0.9530
30 0.9415 0.9435 0.9455 0.9475 0.9495
31 0.9374 0.9395 0.9416 0.9437 0.9457
32 0.9332 0.9353 0.9375 0.9396 0.9418
33 0.9287 0.9310 0.9332 0.9354 0.9376
34 0.9241 0.9263 0.9286 0.9309 0.9332
35 0.9191 0.9215 0.9238 0.9262 0.9286
36 0.9140 0.9164 0.9188 0.9212 0.9237
37 0.9086 0.9110 0.9135 0.9160 0.9185
38 0.9029 0.9054 0.9079 0.9105 0.9131
39 0.8970 0.8995 0.9021 0.9047 0.9074
40 0.8908 0.8934 0.8960 0.8987 0.9014
41 0.8843 0.8869 0.8896 0.8923 0.8951
42 0.8775 0.8802 0.8829 0.8857 0.8885
43 0.8704 0.8732 0.8759 0.8788 0.8816
44 0.8631 0.8659 0.8687 0.8715 0.8745
45 0.8555 0.8583 0.8611 0.8640 0.8670
46 0.8476 0.8504 0.8533 0.8562 0.8592
47 0.8394 0.8422 0.8451 0.8481 0.8512
48 0.8309 0.8337 0.8367 0.8397 0.8428
49 0.8221 0.8250 0.8279 0.8310 0.8341
50 0.8130 0.8159 0.8189 0.8220 0.8251
51 0.8036 0.8065 0.8095 0.8126 0.8158
52 0.7938 0.7968 0.7998 0.8029 0.8061
53 0.7838 0.7867 0.7897 0.7929 0.7961
54 0.7733 0.7763 0.7793 0.7825 0.7857
55 0.7625 0.7655 0.7685 0.7717 0.7749
56 0.7514 0.7543 0.7574 0.7605 0.7638
57 0.7398 0.7427 0.7458 0.7490 0.7522
58 0.7278 0.7308 0.7338 0.7370 0.7402
59 0.7154 0.7184 0.7214 0.7246 0.7278
60 0.7026 0.7056 0.7086 0.7118 0.7150
61 0.6895 0.6924 0.6954 0.6986 0.7018
62 0.6760 0.6789 0.6819 0.6850 0.6882
63 0.6621 0.6650 0.6680 0.6711 0.6743
64 0.6478 0.6507 0.6536 0.6567 0.6599
65 0.6332 0.6360 0.6389 0.6420 0.6452
66 0.6182 0.6210 0.6239 0.6269 0.6301
67 0.6029 0.6057 0.6086 0.6116 0.6147
68 0.5873 0.5901 0.5929 0.5959 0.5989
69 0.5714 0.5742 0.5770 0.5799 0.5829
70 0.5554 0.5581 0.5608 0.5637 0.5667
71 0.5392 0.5419 0.5446 0.5474 0.5503
72 0.5231 0.5256 0.5283 0.5311 0.5340
73 0.5069 0.5094 0.5120 0.5148 0.5176
74 0.4906 0.4931 0.4957 0.4984 0.5011
75 0.4743 0.4767 0.4792 0.4819 0.4846
76 0.4579 0.4602 0.4627 0.4653 0.4679
77 0.4415 0.4438 0.4462 0.4487 0.4512
78 0.4252 0.4274 0.4298 0.4322 0.4347
79 0.4092 0.4114 0.4136 0.4160 0.4185
80 0.3935 0.3956 0.3978 0.4001 0.4025
81 0.3781 0.3802 0.3823 0.3846 0.3869
82 0.3631 0.3651 0.3672 0.3694 0.3716
83 0.3484 0.3504 0.3524 0.3545 0.3567
84 0.3341 0.3360 0.3379 0.3399 0.3421
85 0.3201 0.3219 0.3238 0.3257 0.3278
86 0.3064 0.3081 0.3099 0.3118 0.3138
87 0.2930 0.2947 0.2964 0.2982 0.3001
88 0.2798 0.2815 0.2832 0.2849 0.2867
89 0.2670 0.2685 0.2702 0.2719 0.2736
90 0.2544 0.2559 0.2575 0.2591 0.2608
91 0.2421 0.2435 0.2450 0.2466 0.2482
92 0.2301 0.2315 0.2329 0.2344 0.2359
93 0.2182 0.2196 0.2209 0.2223 0.2238
94 0.2065 0.2078 0.2091 0.2104 0.2119
95 0.1951 0.1963 0.1976 0.1989 0.2002
96 0.1841 0.1853 0.1864 0.1877 0.1889
97 0.1735 0.1746 0.1757 0.1768 0.1781
98 0.1631 0.1641 0.1652 0.1663 0.1674
99 0.1530 0.1539 0.1549 0.1560 0.1570
</TABLE>
60
<PAGE>
FMC CORPORATION - SKULL POINT MINE UNION
Normal Form: Payable Immediately Life Annuity
Optional Form: Joint Life Payable Immediately
Reduction on Participant's Death -- 50% Continued to Beneficiary
Factors to Convert from the Normal Form to the Optional Form
Payment at Beginning of Month
Mortality: Retiree - 71GAT Beneficiary - 71GAT Interest: 3.00%
(Except at frozen ages)
<TABLE>
<CAPTION>
Unisex Unisex
Participant Age Beneficiary Age
Years Years
25 26 27 28 29
<S> <C> <C> <C> <C> <C>
20 0.9774 0.9786 0.9797 0.9808 0.9818
21 0.9756 0.9768 0.9780 0.9791 0.9802
22 0.9736 0.9749 0.9761 0.9773 0.9785
23 0.9714 0.9728 0.9741 0.9754 0.9767
24 0.9691 0.9705 0.9720 0.9733 0.9747
25 0.9666 0.9681 0.9696 0.9711 0.9726
26 0.9640 0.9656 0.9672 0.9687 0.9702
27 0.9611 0.9628 0.9645 0.9661 0.9678
28 0.9581 0.9599 0.9617 0.9634 0.9651
29 0.9549 0.9567 0.9586 0.9604 0.9622
30 0.9514 0.9534 0.9554 0.9573 0.9592
31 0.9478 0.9499 0.9519 0.9539 0.9559
32 0.9439 0.9461 0.9482 0.9503 0.9524
33 0.9398 0.9421 0.9443 0.9465 0.9487
34 0.9355 0.9378 0.9401 0.9424 0.9447
35 0.9309 0.9333 0.9357 0.9381 0.9405
36 0.9261 0.9286 0.9311 0.9336 0.9360
37 0.9210 0.9236 0.9261 0.9287 0.9313
38 0.9157 0.9183 0.9209 0.9236 0.9263
39 0.9100 0.9127 0.9155 0.9182 0.9210
40 0.9041 0.9069 0.9097 0.9125 0.9154
41 0.8979 0.9007 0.9036 0.9065 0.9094
42 0.8914 0.8943 0.8972 0.9002 0.9032
43 0.8846 0.8875 0.8905 0.8936 0.8967
44 0.8774 0.8805 0.8835 0.8867 0.8898
45 0.8700 0.8731 0.8762 0.8794 0.8827
46 0.8623 0.8654 0.8686 0.8719 0.8752
47 0.8543 0.8575 0.8607 0.8640 0.8674
48 0.8459 0.8492 0.8525 0.8558 0.8593
49 0.8373 0.8406 0.8439 0.8473 0.8508
50 0.8283 0.8316 0.8350 0.8385 0.8420
51 0.8190 0.8224 0.8258 0.8293 0.8329
52 0.8094 0.8127 0.8162 0.8197 0.8234
53 0.7994 0.8028 0.8063 0.8098 0.8135
54 0.7890 0.7924 0.7959 0.7995 0.8032
55 0.7783 0.7817 0.7852 0.7889 0.7926
56 0.7671 0.7706 0.7741 0.7778 0.7815
57 0.7556 0.7590 0.7626 0.7662 0.7700
58 0.7436 0.7470 0.7506 0.7543 0.7581
59 0.7312 0.7346 0.7382 0.7419 0.7457
60 0.7184 0.7218 0.7254 0.7291 0.7329
61 0.7052 0.7086 0.7122 0.7158 0.7196
62 0.6916 0.6950 0.6986 0.7022 0.7060
63 0.6776 0.6810 0.6845 0.6882 0.6920
64 0.6632 0.6666 0.6701 0.6738 0.6775
65 0.6484 0.6518 0.6553 0.6589 0.6627
66 0.6333 0.6367 0.6401 0.6437 0.6475
67 0.6179 0.6212 0.6246 0.6282 0.6319
68 0.6021 0.6054 0.6088 0.6123 0.6160
69 0.5860 0.5893 0.5926 0.5961 0.5997
70 0.5698 0.5730 0.5763 0.5797 0.5833
71 0.5534 0.5565 0.5598 0.5632 0.5667
72 0.5370 0.5401 0.5433 0.5466 0.5501
73 0.5205 0.5236 0.5267 0.5300 0.5334
74 0.5040 0.5070 0.5101 0.5133 0.5167
75 0.4874 0.4903 0.4934 0.4965 0.4998
76 0.4707 0.4735 0.4765 0.4796 0.4828
77 0.4539 0.4567 0.4596 0.4627 0.4658
78 0.4374 0.4401 0.4429 0.4459 0.4489
79 0.4210 0.4237 0.4264 0.4293 0.4323
80 0.4050 0.4076 0.4102 0.4130 0.4159
81 0.3893 0.3918 0.3944 0.3971 0.4000
82 0.3740 0.3764 0.3789 0.3816 0.3843
83 0.3589 0.3613 0.3638 0.3663 0.3690
84 0.3443 0.3465 0.3489 0.3514 0.3540
85 0.3299 0.3321 0.3344 0.3368 0.3393
86 0.3159 0.3180 0.3202 0.3225 0.3250
87 0.3021 0.3042 0.3063 0.3086 0.3109
88 0.2887 0.2906 0.2927 0.2949 0.2971
89 0.2755 0.2774 0.2794 0.2814 0.2836
90 0.2625 0.2644 0.2663 0.2683 0.2703
91 0.2499 0.2517 0.2535 0.2554 0.2574
92 0.2375 0.2392 0.2410 0.2428 0.2447
93 0.2254 0.2270 0.2287 0.2304 0.2322
94 0.2133 0.2149 0.2165 0.2181 0.2199
95 0.2016 0.2031 0.2046 0.2062 0.2078
96 0.1903 0.1917 0.1931 0.1946 0.1962
97 0.1793 0.1806 0.1820 0.1834 0.1849
98 0.1686 0.1699 0.1712 0.1725 0.1739
99 0.1582 0.1593 0.1606 0.1618 0.1632
</TABLE>
61
<PAGE>
FMC CORPORATION - SKULL POINT MINE UNION
Normal Form: Payable Immediately Life Annuity
Optional Form: Joint Life Payable Immediately
Reduction on Participant's Death -- 50% Continued to Beneficiary
Factors to Convert from the Normal Form to the Optional Form
Payment at Beginning of Month
Mortality: Retiree - 71GAT Beneficiary - 71GAT Interest: 3.00%
(Except at frozen ages)
<TABLE>
<CAPTION>
Unisex
Unisex Beneficiary Age
Participant Age Years
Years
30 31 32 33 34
<S> <C> <C> <C> <C> <C>
20 0.9828 0.9837 0.9847 0.9855 0.9864
21 0.9813 0.9823 0.9833 0.9843 0.9852
22 0.9797 0.9808 0.9818 0.9829 0.9838
23 0.9779 0.9791 0.9802 0.9813 0.9824
24 0.9760 0.9773 0.9785 0.9797 0.9808
25 0.9740 0.9753 0.9766 0.9779 0.9791
26 0.9717 0.9732 0.9746 0.9759 0.9773
27 0.9693 0.9709 0.9724 0.9738 0.9752
28 0.9668 0.9684 0.9700 0.9716 0.9731
29 0.9640 0.9657 0.9674 0.9691 0.9707
30 0.9610 0.9629 0.9647 0.9664 0.9681
31 0.9579 0.9598 0.9617 0.9636 0.9654
32 0.9545 0.9565 0.9585 0.9605 0.9624
33 0.9509 0.9530 0.9551 0.9572 0.9592
34 0.9470 0.9492 0.9515 0.9536 0.9558
35 0.9429 0.9452 0.9476 0.9499 0.9521
36 0.9385 0.9410 0.9434 0.9458 0.9482
37 0.9339 0.9364 0.9390 0.9415 0.9440
38 0.9289 0.9316 0.9343 0.9369 0.9395
39 0.9237 0.9265 0.9293 0.9320 0.9348
40 0.9182 0.9211 0.9239 0.9268 0.9297
41 0.9124 0.9154 0.9183 0.9213 0.9243
42 0.9063 0.9093 0.9124 0.9155 0.9186
43 0.8998 0.9030 0.9061 0.9093 0.9125
44 0.8930 0.8963 0.8995 0.9028 0.9061
45 0.8859 0.8893 0.8926 0.8960 0.8994
46 0.8785 0.8819 0.8854 0.8889 0.8924
47 0.8708 0.8743 0.8778 0.8814 0.8850
48 0.8628 0.8663 0.8699 0.8736 0.8773
49 0.8544 0.8580 0.8617 0.8654 0.8692
50 0.8456 0.8493 0.8531 0.8569 0.8608
51 0.8365 0.8403 0.8441 0.8480 0.8519
52 0.8271 0.8309 0.8347 0.8387 0.8427
53 0.8172 0.8211 0.8250 0.8290 0.8331
54 0.8070 0.8109 0.8149 0.8190 0.8231
55 0.7964 0.8003 0.8044 0.8085 0.8127
56 0.7854 0.7893 0.7934 0.7976 0.8018
57 0.7739 0.7779 0.7820 0.7862 0.7905
58 0.7620 0.7660 0.7701 0.7743 0.7787
59 0.7496 0.7536 0.7578 0.7620 0.7664
60 0.7368 0.7408 0.7450 0.7493 0.7537
61 0.7236 0.7276 0.7318 0.7361 0.7405
62 0.7099 0.7140 0.7182 0.7225 0.7269
63 0.6959 0.6999 0.7041 0.7084 0.7129
64 0.6814 0.6855 0.6896 0.6939 0.6984
65 0.6666 0.6706 0.6747 0.6790 0.6834
66 0.6513 0.6553 0.6594 0.6637 0.6681
67 0.6357 0.6397 0.6438 0.6480 0.6524
68 0.6198 0.6237 0.6278 0.6320 0.6363
69 0.6035 0.6074 0.6114 0.6156 0.6199
70 0.5870 0.5908 0.5948 0.5990 0.6032
71 0.5704 0.5742 0.5781 0.5822 0.5864
72 0.5537 0.5574 0.5613 0.5654 0.5695
73 0.5370 0.5407 0.5445 0.5485 0.5526
74 0.5202 0.5238 0.5275 0.5314 0.5355
75 0.5032 0.5068 0.5104 0.5143 0.5183
76 0.4862 0.4896 0.4932 0.4970 0.5009
77 0.4691 0.4725 0.4760 0.4797 0.4835
78 0.4521 0.4554 0.4589 0.4625 0.4662
79 0.4354 0.4386 0.4420 0.4455 0.4492
80 0.4190 0.4221 0.4254 0.4288 0.4324
81 0.4029 0.4060 0.4092 0.4125 0.4159
82 0.3872 0.3901 0.3932 0.3965 0.3999
83 0.3718 0.3746 0.3777 0.3808 0.3841
84 0.3567 0.3595 0.3624 0.3654 0.3686
85 0.3419 0.3446 0.3474 0.3504 0.3535
86 0.3275 0.3301 0.3328 0.3357 0.3387
87 0.3133 0.3159 0.3185 0.3213 0.3241
88 0.2994 0.3019 0.3044 0.3071 0.3099
89 0.2858 0.2882 0.2906 0.2932 0.2959
90 0.2725 0.2748 0.2771 0.2796 0.2822
91 0.2595 0.2617 0.2639 0.2663 0.2688
92 0.2467 0.2488 0.2510 0.2532 0.2556
93 0.2341 0.2361 0.2382 0.2404 0.2426
94 0.2217 0.2236 0.2256 0.2276 0.2298
95 0.2096 0.2114 0.2132 0.2152 0.2173
96 0.1978 0.1995 0.2013 0.2032 0.2052
97 0.1865 0.1881 0.1898 0.1916 0.1934
98 0.1754 0.1770 0.1786 0.1803 0.1820
99 0.1646 0.1660 0.1675 0.1691 0.1708
</TABLE>
62
<PAGE>
FMC CORPORATION - SKULL POINT MINE UNION
Normal Form: Payable Immediately Life Annuity
Optional Form: Joint Life Payable Immediately
Reduction on Participant's Death -- 50% Continued to Beneficiary
Factors to Convert from the Normal Form to the Optional Form
Payment at Beginning of Month
Mortality: Retiree - 71GAT Beneficiary - 71GAT Interest: 3.00%
(Except at frozen ages)
<TABLE>
<CAPTION>
Unisex
Unisex Beneficiary Age
Participant Age Years
Years
35 36 37 38 39
<S> <C> <C> <C> <C> <C>
20 0.9872 0.9880 0.9887 0.9894 0.9900
21 0.9860 0.9869 0.9877 0.9884 0.9891
22 0.9848 0.9857 0.9866 0.9874 0.9882
23 0.9834 0.9844 0.9853 0.9862 0.9871
24 0.9819 0.9830 0.9840 0.9850 0.9859
25 0.9803 0.9814 0.9825 0.9836 0.9846
26 0.9785 0.9798 0.9809 0.9821 0.9831
27 0.9766 0.9779 0.9792 0.9804 0.9816
28 0.9745 0.9759 0.9773 0.9786 0.9799
29 0.9723 0.9738 0.9752 0.9766 0.9780
30 0.9698 0.9714 0.9730 0.9745 0.9760
31 0.9672 0.9689 0.9706 0.9722 0.9738
32 0.9643 0.9661 0.9679 0.9697 0.9714
33 0.9612 0.9632 0.9651 0.9670 0.9688
34 0.9579 0.9600 0.9620 0.9640 0.9659
35 0.9544 0.9566 0.9587 0.9608 0.9629
36 0.9506 0.9529 0.9552 0.9574 0.9596
37 0.9465 0.9489 0.9513 0.9537 0.9560
38 0.9421 0.9447 0.9472 0.9497 0.9522
39 0.9375 0.9402 0.9429 0.9455 0.9481
40 0.9325 0.9354 0.9382 0.9409 0.9437
41 0.9272 0.9302 0.9331 0.9361 0.9389
42 0.9216 0.9247 0.9278 0.9308 0.9339
43 0.9157 0.9189 0.9221 0.9253 0.9285
44 0.9095 0.9128 0.9161 0.9194 0.9228
45 0.9029 0.9063 0.9098 0.9132 0.9167
46 0.8959 0.8995 0.9031 0.9067 0.9103
47 0.8887 0.8923 0.8960 0.8998 0.9035
48 0.8810 0.8848 0.8886 0.8925 0.8963
49 0.8730 0.8769 0.8809 0.8848 0.8888
50 0.8647 0.8687 0.8727 0.8768 0.8809
51 0.8560 0.8601 0.8642 0.8684 0.8726
52 0.8468 0.8510 0.8553 0.8596 0.8639
53 0.8373 0.8416 0.8459 0.8503 0.8548
54 0.8274 0.8317 0.8361 0.8406 0.8452
55 0.8170 0.8214 0.8259 0.8305 0.8352
56 0.8062 0.8107 0.8152 0.8199 0.8247
57 0.7949 0.7994 0.8041 0.8088 0.8137
58 0.7832 0.7877 0.7924 0.7972 0.8022
59 0.7709 0.7755 0.7803 0.7852 0.7901
60 0.7582 0.7629 0.7677 0.7726 0.7776
61 0.7451 0.7498 0.7546 0.7595 0.7646
62 0.7315 0.7362 0.7410 0.7460 0.7512
63 0.7174 0.7222 0.7270 0.7321 0.7372
64 0.7030 0.7077 0.7126 0.7176 0.7228
65 0.6880 0.6928 0.6976 0.7027 0.7079
66 0.6727 0.6774 0.6823 0.6873 0.6925
67 0.6570 0.6617 0.6665 0.6716 0.6768
68 0.6409 0.6455 0.6504 0.6554 0.6606
69 0.6244 0.6291 0.6339 0.6389 0.6440
70 0.6077 0.6123 0.6171 0.6220 0.6272
71 0.5908 0.5954 0.6001 0.6050 0.6101
72 0.5739 0.5784 0.5831 0.5879 0.5930
73 0.5569 0.5613 0.5659 0.5707 0.5757
74 0.5397 0.5441 0.5487 0.5534 0.5583
75 0.5224 0.5267 0.5312 0.5359 0.5407
76 0.5050 0.5092 0.5136 0.5182 0.5230
77 0.4875 0.4916 0.4960 0.5004 0.5051
78 0.4701 0.4742 0.4784 0.4828 0.4874
79 0.4530 0.4569 0.4611 0.4654 0.4698
80 0.4361 0.4400 0.4440 0.4482 0.4526
81 0.4196 0.4233 0.4273 0.4314 0.4356
82 0.4034 0.4070 0.4109 0.4148 0.4190
83 0.3875 0.3911 0.3948 0.3987 0.4027
84 0.3719 0.3754 0.3790 0.3828 0.3867
85 0.3567 0.3600 0.3635 0.3672 0.3710
86 0.3418 0.3450 0.3484 0.3519 0.3556
87 0.3271 0.3303 0.3335 0.3370 0.3406
88 0.3128 0.3158 0.3190 0.3223 0.3257
89 0.2987 0.3016 0.3046 0.3078 0.3112
90 0.2849 0.2877 0.2906 0.2937 0.2969
91 0.2713 0.2740 0.2769 0.2798 0.2829
92 0.2581 0.2607 0.2634 0.2662 0.2692
93 0.2450 0.2475 0.2501 0.2528 0.2556
94 0.2321 0.2344 0.2369 0.2395 0.2422
95 0.2194 0.2217 0.2240 0.2265 0.2291
96 0.2072 0.2094 0.2116 0.2139 0.2164
97 0.1954 0.1974 0.1996 0.2018 0.2041
98 0.1839 0.1858 0.1878 0.1899 0.1921
99 0.1725 0.1743 0.1762 0.1782 0.1803
</TABLE>
63
<PAGE>
FMC CORPORATION - SKULL POINT MINE UNION
Normal Form: Payable Immediately Life Annuity
Optional Form: Joint Life Payable Immediately
Reduction on Participant's Death -- 50% Continued to Beneficiary
Factors to Convert from the Normal Form to the Optional Form
Payment at Beginning of Month
Mortality: Retiree - 71GAT Beneficiary - 71GAT Interest: 3.00%
(Except at frozen ages)
<TABLE>
<CAPTION>
Unisex
Unisex Beneficiary Age
Participant Age Years
Years
40 41 42 43 44
<S> <C> <C> <C> <C> <C>
20 0.9907 0.9913 0.9918 0.9924 0.9929
21 0.9898 0.9905 0.9911 0.9917 0.9922
22 0.9889 0.9896 0.9903 0.9909 0.9915
23 0.9879 0.9887 0.9894 0.9901 0.9907
24 0.9868 0.9876 0.9884 0.9892 0.9899
25 0.9855 0.9864 0.9873 0.9881 0.9889
26 0.9842 0.9852 0.9861 0.9870 0.9879
27 0.9827 0.9838 0.9848 0.9858 0.9867
28 0.9811 0.9822 0.9834 0.9844 0.9854
29 0.9793 0.9806 0.9818 0.9829 0.9840
30 0.9774 0.9787 0.9801 0.9813 0.9825
31 0.9753 0.9768 0.9782 0.9795 0.9808
32 0.9730 0.9746 0.9761 0.9775 0.9789
33 0.9705 0.9722 0.9738 0.9754 0.9769
34 0.9678 0.9696 0.9714 0.9731 0.9747
35 0.9649 0.9668 0.9687 0.9705 0.9723
36 0.9617 0.9638 0.9658 0.9678 0.9697
37 0.9583 0.9605 0.9627 0.9648 0.9668
38 0.9546 0.9570 0.9593 0.9615 0.9637
39 0.9506 0.9531 0.9556 0.9580 0.9603
40 0.9464 0.9490 0.9516 0.9541 0.9566
41 0.9418 0.9446 0.9473 0.9500 0.9527
42 0.9369 0.9398 0.9427 0.9456 0.9484
43 0.9316 0.9347 0.9378 0.9408 0.9438
44 0.9260 0.9293 0.9325 0.9357 0.9389
45 0.9201 0.9235 0.9269 0.9303 0.9336
46 0.9138 0.9174 0.9210 0.9245 0.9280
47 0.9072 0.9109 0.9147 0.9183 0.9220
48 0.9002 0.9041 0.9080 0.9118 0.9157
49 0.8928 0.8969 0.9009 0.9049 0.9089
50 0.8851 0.8892 0.8934 0.8976 0.9018
51 0.8769 0.8812 0.8856 0.8899 0.8942
52 0.8683 0.8728 0.8772 0.8817 0.8863
53 0.8593 0.8639 0.8685 0.8732 0.8778
54 0.8498 0.8545 0.8593 0.8641 0.8689
55 0.8399 0.8447 0.8496 0.8546 0.8595
56 0.8295 0.8344 0.8394 0.8445 0.8496
57 0.8186 0.8236 0.8287 0.8339 0.8392
58 0.8072 0.8123 0.8175 0.8228 0.8282
59 0.7952 0.8004 0.8058 0.8112 0.8167
60 0.7828 0.7881 0.7935 0.7990 0.8046
61 0.7699 0.7752 0.7807 0.7863 0.7920
62 0.7564 0.7619 0.7674 0.7731 0.7789
63 0.7425 0.7480 0.7536 0.7594 0.7652
64 0.7281 0.7336 0.7393 0.7451 0.7510
65 0.7133 0.7188 0.7245 0.7303 0.7363
66 0.6979 0.7035 0.7092 0.7151 0.7211
67 0.6821 0.6877 0.6934 0.6993 0.7054
68 0.6660 0.6715 0.6772 0.6831 0.6892
69 0.6494 0.6549 0.6606 0.6665 0.6726
70 0.6325 0.6380 0.6437 0.6496 0.6557
71 0.6154 0.6209 0.6265 0.6324 0.6385
72 0.5982 0.6036 0.6093 0.6151 0.6211
73 0.5809 0.5863 0.5918 0.5976 0.6036
74 0.5634 0.5687 0.5742 0.5800 0.5859
75 0.5458 0.5510 0.5564 0.5621 0.5680
76 0.5279 0.5331 0.5384 0.5440 0.5498
77 0.5100 0.5151 0.5203 0.5258 0.5315
78 0.4922 0.4971 0.5023 0.5077 0.5133
79 0.4745 0.4794 0.4845 0.4897 0.4952
80 0.4571 0.4619 0.4669 0.4720 0.4774
81 0.4401 0.4447 0.4496 0.4546 0.4599
82 0.4234 0.4279 0.4326 0.4376 0.4427
83 0.4069 0.4114 0.4160 0.4208 0.4258
84 0.3908 0.3951 0.3996 0.4043 0.4092
85 0.3750 0.3792 0.3835 0.3881 0.3929
86 0.3595 0.3636 0.3678 0.3722 0.3768
87 0.3443 0.3482 0.3523 0.3566 0.3611
88 0.3294 0.3331 0.3371 0.3413 0.3456
89 0.3147 0.3183 0.3222 0.3262 0.3303
90 0.3003 0.3038 0.3075 0.3113 0.3154
91 0.2861 0.2895 0.2931 0.2968 0.3007
92 0.2723 0.2755 0.2789 0.2825 0.2862
93 0.2486 0.2617 0.2650 0.2684 0.2720
94 0.2450 0.2480 0.2511 0.2544 0.2579
95 0.2318 0.2347 0.2376 0.2408 0.2440
96 0.2190 0.2217 0.2245 0.2275 0.2306
97 0.2066 0.2092 0.2119 0.2147 0.2177
98 0.1945 0.1969 0.1995 0.2021 0.2050
99 0.1825 0.1848 0.1873 0.1898 0.1925
</TABLE>
64
<PAGE>
FMC CORPORATION - SKULL POINT MINE UNION
Normal Form: Payable Immediately Life Annuity
Optional Form: Joint Life Payable Immediately
Reduction on Participant's Death -- 50% Continued to Beneficiary
Factors to Convert from the Normal Form to the Optional Form
Payment at Beginning of Month
Mortality: Retiree - 71GAT Beneficiary - 71GAT Interest: 3.00% (Except at
frozen ages)
<TABLE>
<CAPTION>
Unisex Unisex
Participant Age Beneficiary Age
Years Years
45 46 47 48 49
<S> <C> <C> <C> <C> <C>
20 0.9933 0.9938 0.9942 0.9946 0.9950
21 0.9927 0.9932 0.9937 0.9941 0.9945
22 0.9921 0.9926 0.9931 0.9936 0.9940
23 0.9914 0.9919 0.9925 0.9930 0.9935
24 0.9905 0.9912 0.9918 0.9924 0.9929
25 0.9897 0.9904 0.9910 0.9916 0.9922
26 0.9887 0.9894 0.9902 0.9908 0.9915
27 0.9876 0.9884 0.9892 0.9900 0.9907
28 0.9864 0.9873 0.9882 0.9890 0.9898
29 0.9851 0.9861 0.9870 0.9879 0.9887
30 0.9836 0.9847 0.9857 0.9867 0.9876
31 0.9820 0.9832 0.9843 0.9854 0.9864
32 0.9803 0.9816 0.9828 0.9839 0.9850
33 0.9784 0.9798 0.9811 0.9823 0.9835
34 0.9763 0.9778 0.9792 0.9806 0.9819
35 0.9740 0.9756 0.9772 0.9786 0.9801
36 0.9715 0.9732 0.9749 0.9765 0.9781
37 0.9687 0.9706 0.9725 0.9742 0.9759
38 0.9658 0.9678 0.9698 0.9717 0.9735
39 0.9625 0.9647 0.9668 0.9689 0.9708
40 0.9590 0.9614 0.9636 0.9658 0.9679
41 0.9552 0.9577 0.9602 0.9625 0.9648
42 0.9511 0.9538 0.9564 0.9589 0.9614
43 0.9467 0.9495 0.9523 0.9550 0.9576
44 0.9419 0.9450 0.9479 0.9508 0.9536
45 0.9369 0.9401 0.9432 0.9463 0.9493
46 0.9314 0.9348 0.9381 0.9414 0.9446
47 0.9256 0.9292 0.9327 0.9362 0.9396
48 0.9195 0.9232 0.9269 0.9306 0.9342
49 0.9129 0.9169 0.9208 0.9246 0.9284
50 0.9060 0.9101 0.9142 0.9183 0.9223
51 0.8986 0.9029 0.9072 0.9115 0.9157
52 0.8908 0.8953 0.8998 0.9043 0.9087
53 0.8825 0.8872 0.8919 0.8966 0.9013
54 0.8738 0.8787 0.8835 0.8884 0.8933
55 0.8646 0.8696 0.8747 0.8798 0.8848
56 0.8548 0.8600 0.8653 0.8705 0.8758
57 0.8445 0.8499 0.8553 0.8608 0.8663
58 0.8337 0.8392 0.8448 0.8504 0.8561
59 0.8223 0.8280 0.8337 0.8395 0.8454
60 0.8103 0.8161 0.8220 0.8280 0.8340
61 0.7979 0.8038 0.8098 0.8159 0.8221
62 0.7848 0.7909 0.7970 0.8033 0.8096
63 0.7713 0.7774 0.7837 0.7901 0.7966
64 0.7571 0.7634 0.7697 0.7762 0.7829
65 0.7425 0.7488 0.7553 0.7619 0.7686
66 0.7273 0.7337 0.7402 0.7469 0.7538
67 0.7117 0.7181 0.7247 0.7314 0.7384
68 0.6955 0.7020 0.7086 0.7154 0.7224
69 0.6789 0.6854 0.6921 0.6989 0.7060
70 0.6620 0.6684 0.6751 0.6820 0.6891
71 0.6447 0.6512 0.6579 0.6648 0.6719
72 0.6274 0.6338 0.6405 0.6474 0.6545
73 0.6098 0.6162 0.6229 0.6297 0.6368
74 0.5921 0.5984 0.6050 0.6119 0.6189
75 0.5740 0.5804 0.5869 0.5937 0.6007
76 0.5558 0.5621 0.5685 0.5752 0.5822
77 0.5374 0.5436 0.5500 0.5566 0.5635
78 0.5191 0.5252 0.5315 0.5380 0.5448
79 0.5010 0.5069 0.5131 0.5195 0.5262
80 0.4830 0.4889 0.4949 0.5013 0.5078
81 0.4654 0.4711 0.4771 0.4833 0.4897
82 0.4481 0.4537 0.4595 0.4656 0.4719
83 0.4310 0.4365 0.4422 0.4481 0.4543
84 0.4143 0.4196 0.4251 0.4309 0.4370
85 0.3978 0.4030 0.4084 0.4140 0.4199
86 0.3816 0.3867 0.3919 0.3974 0.4032
87 0.3658 0.3706 0.3757 0.3811 0.3866
88 0.3501 0.3548 0.3598 0.3650 0.3704
89 0.3347 0.3393 0.3441 0.3491 0.3543
90 0.3196 0.3240 0.3286 0.3335 0.3385
91 0.3048 0.3090 0.3135 0.3181 0.3230
92 0.2902 0.2943 0.2985 0.3030 0.3077
93 0.2758 0.2797 0.2838 0.2881 0.2926
94 0.2614 0.2652 0.2691 0.2733 0.2776
95 0.2475 0.2511 0.2548 0.2588 0.2629
96 0.2339 0.2373 0.2409 0.2447 0.2486
97 0.2208 0.2240 0.2275 0.2310 0.2348
98 0.2079 0.2110 0.2143 0.2177 0.2212
99 0.1953 0.1982 0.2013 0.2045 0.2079
</TABLE>
65
<PAGE>
FMC CORPORATION - SKULL POINT MINE UNION
Normal Form: Payable Immediately Life Annuity
Optional Form: Joint Life Payable Immediately
Reduction on Participant's Death -- 50% Continued to Beneficiary
Factors to Convert from the Normal Form to the Optional Form
Payment at Beginning of Month
Mortality: Retiree - 71GAT Beneficiary - 71GAT Interest: 3.00% (Except at
frozen ages)
<TABLE>
<CAPTION>
Unisex Unisex
Participant Age Beneficiary Age
Years Years
50 51 52 53 54
<S> <C> <C> <C> <C> <C> <C>
20 0.9953 0.9957 0.9960 0.9963 0.9965
21 0.9949 0.9953 0.9956 0.9959 0.9962
22 0.9945 0.9949 0.9952 0.9956 0.9959
23 0.9940 0.9944 0.9948 0.9952 0.9955
24 0.9934 0.9939 0.9943 0.9947 0.9951
25 0.9928 0.9933 0.9938 0.9943 0.9947
26 0.9921 0.9927 0.9932 0.9937 0.9942
27 0.9913 0.9920 0.9925 0.9931 0.9936
28 0.9905 0.9912 0.9918 0.9924 0.9930
29 0.9895 0.9903 0.9910 0.9917 0.9923
30 0.9885 0.9893 0.9901 0.9908 0.9915
31 0.9874 0.9883 0.9891 0.9899 0.9907
32 0.9861 0.9871 0.9880 0.9889 0.9897
33 0.9847 0.9858 0.9868 0.9878 0.9887
34 0.9831 0.9843 0.9854 0.9865 0.9875
35 0.9814 0.9827 0.9839 0.9851 0.9862
36 0.9795 0.9809 0.9823 0.9835 0.9847
37 0.9775 0.9790 0.9805 0.9818 0.9832
38 0.9752 0.9769 0.9784 0.9800 0.9814
39 0.9727 0.9745 0.9762 0.9779 0.9794
40 0.9700 0.9719 0.9738 0.9756 0.9773
41 0.9670 0.9691 0.9711 0.9731 0.9749
42 0.9637 0.9660 0.9682 0.9703 0.9723
43 0.9602 0.9626 0.9650 0.9673 0.9695
44 0.9563 0.9590 0.9615 0.9640 0.9663
45 0.9522 0.9550 0.9578 0.9604 0.9630
46 0.9477 0.9507 0.9537 0.9565 0.9593
47 0.9429 0.9461 0.9493 0.9523 0.9553
48 0.9377 0.9412 0.9445 0.9478 0.9510
49 0.9322 0.9359 0.9394 0.9429 0.9463
50 0.9263 0.9301 0.9340 0.9377 0.9413
51 0.9199 0.9240 0.9281 0.9320 0.9359
52 0.9131 0.9175 0.9217 0.9260 0.9301
53 0.9059 0.9104 0.9150 0.9194 0.9238
54 0.8981 0.9029 0.9077 0.9124 0.9171
55 0.8880 0.8920 0.8960 0.9000 0.9030
56 0.8790 0.8830 0.8870 0.8920 0.8960
57 0.8700 0.8740 0.8790 0.8830 0.8870
58 0.8600 0.8650 0.8690 0.8740 0.8780
59 0.8500 0.8550 0.8590 0.8630 0.8690
60 0.8390 0.8440 0.8480 0.8530 0.8580
61 0.8280 0.8320 0.8370 0.8420 0.8470
62 0.8160 0.8210 0.8250 0.8300 0.8350
63 0.8032 0.8099 0.8166 0.8235 0.8304
64 0.7896 0.7965 0.8034 0.8105 0.8176
65 0.7755 0.7825 0.7896 0.7968 0.8042
66 0.7607 0.7679 0.7751 0.7825 0.7901
67 0.7454 0.7527 0.7601 0.7677 0.7753
68 0.7296 0.7369 0.7445 0.7521 0.7600
69 0.7132 0.7206 0.7283 0.7361 0.7440
70 0.6964 0.7039 0.7116 0.7195 0.7275
71 0.6792 0.6867 0.6945 0.7025 0.7106
72 0.6618 0.6694 0.6772 0.6852 0.6934
73 0.6442 0.6517 0.6595 0.6676 0.6759
74 0.6262 0.6338 0.6416 0.6496 0.6580
75 0.6080 0.6155 0.6233 0.6313 0.6397
76 0.5894 0.5969 0.6046 0.6127 0.6210
77 0.5706 0.5780 0.5857 0.5937 0.6020
78 0.5519 0.5592 0.5668 0.5747 0.5829
79 0.5332 0.5404 0.5479 0.5557 0.5639
80 0.5147 0.5218 0.5292 0.5369 0.5450
81 0.4964 0.5034 0.5107 0.5183 0.5263
82 0.4785 0.4853 0.4925 0.5000 0.5078
83 0.4608 0.4675 0.4745 0.4818 0.4895
84 0.4433 0.4499 0.4567 0.4639 0.4714
85 0.4261 0.4325 0.4392 0.4463 0.4536
86 0.4091 0.4154 0.4220 0.4288 0.4360
87 0.3925 0.3986 0.4049 0.4116 0.4186
88 0.3760 0.3819 0.3881 0.3946 0.4014
89 0.3598 0.3655 0.3715 0.3778 0.3845
90 0.3438 0.3494 0.3552 0.3613 0.3677
91 0.3281 0.3335 0.3391 0.3450 0.3512
92 0.3127 0.3178 0.3232 0.3289 0.3349
93 0.2974 0.3023 0.3075 0.3130 0.3188
94 0.2821 0.2869 0.2919 0.2972 0.3027
95 0.2672 0.2718 0.2766 0.2816 0.2870
96 0.2528 0.2571 0.2617 0.2665 0.2716
97 0.2387 0.2429 0.2473 0.2519 0.2567
98 0.2250 0.2289 0.2331 0.2375 0.2421
99 0.2114 0.2152 0.2191 0.2233 0.2277
</TABLE>
66
<PAGE>
FMC CORPORATION - SKULL POINT MINE UNION
Normal Form: Payable Immediately Life Annuity
Optional Form: Joint Life Payable Immediately
Reduction on Participant's Death -- 50% Continued to Beneficiary
Factors to Convert from the Normal Form to the Optional Form
Payment at Beginning of Month
Mortality: Retiree - 71GAT Beneficiary - 71GAT Interest: 3.00% (Except at
frozen ages)
<TABLE>
<CAPTION>
Unisex Unisex
Participant Age Beneficiary Age
Years Years
55 56 57 58 59
<S> <C> <C> <C> <C> <C>
20 0.9968 0.9970 0.9972 0.9975 0.9977
21 0.9965 0.9968 0.9970 0.9973 0.9975
22 0.9962 0.9965 0.9968 0.9970 0.9973
23 0.9959 0.9962 0.9965 0.9968 0.9970
24 0.9955 0.9959 0.9962 0.9965 0.9968
25 0.9951 0.9955 0.9958 0.9962 0.9965
26 0.9946 0.9950 0.9954 0.9958 0.9961
27 0.9941 0.9946 0.9950 0.9954 0.9958
28 0.9935 0.9940 0.9945 0.9950 0.9954
29 0.9929 0.9935 0.9940 0.9945 0.9949
30 0.9922 0.9928 0.9934 0.9939 0.9944
31 0.9914 0.9921 0.9927 0.9933 0.9938
32 0.9905 0.9912 0.9919 0.9926 0.9932
33 0.9895 0.9903 0.9911 0.9918 0.9925
34 0.9884 0.9893 0.9902 0.9909 0.9917
35 0.9872 0.9882 0.9891 0.9900 0.9908
36 0.9859 0.9870 0.9880 0.9889 0.9898
37 0.9844 0.9856 0.9867 0.9877 0.9887
38 0.9827 0.9840 0.9852 0.9864 0.9875
39 0.9809 0.9823 0.9837 0.9849 0.9861
40 0.9789 0.9804 0.9819 0.9833 0.9846
41 0.9767 0.9784 0.9800 0.9815 0.9829
42 0.9742 0.9761 0.9778 0.9795 0.9810
43 0.9715 0.9735 0.9754 0.9773 0.9790
44 0.9686 0.9708 0.9729 0.9748 0.9767
45 0.9654 0.9678 0.9700 0.9722 0.9742
46 0.9619 0.9645 0.9669 0.9693 0.9715
47 0.9582 0.9609 0.9636 0.9661 0.9685
48 0.9541 0.9570 0.9599 0.9627 0.9653
49 0.9496 0.9529 0.9559 0.9589 0.9618
50 0.9449 0.9483 0.9516 0.9548 0.9579
51 0.9397 0.9434 0.9470 0.9504 0.9538
52 0.9341 0.9381 0.9419 0.9456 0.9492
53 0.9281 0.9323 0.9364 0.9404 0.9443
54 0.9216 0.9261 0.9305 0.9347 0.9389
55 0.9070 0.9110 0.9150 0.9190 0.9220
56 0.9000 0.9030 0.9070 0.9110 0.9150
57 0.8920 0.8950 0.8990 0.9030 0.9080
58 0.8820 0.8870 0.8910 0.8950 0.8990
59 0.8730 0.8780 0.8830 0.8870 0.8910
60 0.8630 0.8680 0.8720 0.8780 0.8820
61 0.8520 0.8570 0.8620 0.8670 0.8720
62 0.8410 0.8450 0.8510 0.8560 0.8610
63 0.8374 0.8444 0.8514 0.8584 0.8654
64 0.8248 0.8321 0.8394 0.8467 0.8540
65 0.8116 0.8191 0.8267 0.8343 0.8419
66 0.7977 0.8054 0.8133 0.8211 0.8291
67 0.7832 0.7911 0.7992 0.8073 0.8155
68 0.7680 0.7761 0.7844 0.7928 0.8013
69 0.7522 0.7605 0.7690 0.7776 0.7863
70 0.7358 0.7443 0.7529 0.7618 0.7707
71 0.7190 0.7276 0.7364 0.7454 0.7546
72 0.7019 0.7106 0.7196 0.7287 0.7380
73 0.6844 0.6932 0.7023 0.7116 0.7210
74 0.6666 0.6754 0.6845 0.6939 0.7035
75 0.6483 0.6572 0.6663 0.6758 0.6855
76 0.6296 0.6385 0.6477 0.6572 0.6670
77 0.6106 0.6194 0.6286 0.6382 0.6480
78 0.5914 0.6003 0.6095 0.6190 0.6288
79 0.5723 0.5811 0.5903 0.5997 0.6096
80 0.5533 0.5621 0.5711 0.5805 0.5903
81 0.5345 0.5432 0.5521 0.5615 0.5712
82 0.5159 0.5244 0.5333 0.5425 0.5522
83 0.4975 0.5059 0.5146 0.5238 0.5333
84 0.4793 0.4875 0.4961 0.5051 0.5145
85 0.4613 0.4694 0.4778 0.4867 0.4959
86 0.4435 0.4514 0.4597 0.4684 0.4775
87 0.4260 0.4337 0.4418 0.4503 0.4592
88 0.4086 0.4161 0.4240 0.4323 0.4410
89 0.3914 0.3987 0.4064 0.4145 0.4230
90 0.3745 0.3815 0.3890 0.3969 0.4051
91 0.3577 0.3646 0.3719 0.3795 0.3875
92 0.3412 0.3479 0.3549 0.3623 0.3700
93 0.3249 0.3313 0.3380 0.3452 0.3527
94 0.3086 0.3147 0.3212 0.3281 0.3353
95 0.2926 0.2985 0.3047 0.3113 0.3183
96 0.2770 0.2826 0.2886 0.2949 0.3016
97 0.2618 0.2672 0.2730 0.2790 0.2854
98 0.2470 0.2521 0.2576 0.2633 0.2694
99 0.2323 0.2372 0.2424 0.2478 0.2537
</TABLE>
67
<PAGE>
FMC CORPORATION - SKULL POINT MINE UNION
Normal Form: Payable Immediately Life Annuity
Optional Form: Joint Life Payable Immediately
Reduction on Participant's Death -- 50% Continued to Beneficiary
Factors to Convert from the Normal Form to the Optional Form
Payment at Beginning of Month
Mortality: Retiree - 71GAT Beneficiary - 71GAT Interest: 3.00% (Except at
frozen ages)
<TABLE>
<CAPTION>
Unisex Unisex
Participant Age Beneficiary Age
Years Years
60 61 62 63 64
<S> <C> <C> <C> <C> <C>
20 0.9978 0.9980 0.9982 0.9983 0.9984
21 0.9977 0.9978 0.9980 0.9982 0.9983
22 0.9975 0.9977 0.9979 0.9980 0.9982
23 0.9973 0.9975 0.9977 0.9979 0.9981
24 0.9970 0.9973 0.9975 0.9977 0.9979
25 0.9968 0.9970 0.9973 0.9975 0.9977
26 0.9965 0.9968 0.9970 0.9973 0.9975
27 0.9961 0.9964 0.9967 0.9970 0.9973
28 0.9957 0.9961 0.9964 0.9967 0.9970
29 0.9953 0.9957 0.9961 0.9964 0.9967
30 0.9949 0.9953 0.9957 0.9961 0.9964
31 0.9943 0.9948 0.9953 0.9957 0.9961
32 0.9938 0.9943 0.9948 0.9952 0.9957
33 0.9931 0.9937 0.9942 0.9947 0.9952
34 0.9924 0.9930 0.9936 0.9942 0.9947
35 0.9916 0.9923 0.9929 0.9935 0.9941
36 0.9906 0.9914 0.9922 0.9928 0.9935
37 0.9896 0.9905 0.9913 0.9920 0.9927
38 0.9885 0.9894 0.9903 0.9912 0.9919
39 0.9872 0.9883 0.9893 0.9902 0.9910
40 0.9858 0.9870 0.9881 0.9891 0.9900
41 0.9843 0.9855 0.9867 0.9878 0.9889
42 0.9825 0.9839 0.9852 0.9864 0.9876
43 0.9806 0.9821 0.9836 0.9849 0.9862
44 0.9785 0.9802 0.9817 0.9832 0.9846
45 0.9762 0.9780 0.9797 0.9814 0.9829
46 0.9736 0.9756 0.9775 0.9793 0.9810
47 0.9708 0.9730 0.9751 0.9771 0.9790
48 0.9678 0.9702 0.9725 0.9746 0.9767
49 0.9645 0.9671 0.9696 0.9720 0.9742
50 0.9609 0.9637 0.9664 0.9690 0.9714
51 0.9570 0.9600 0.9630 0.9658 0.9684
52 0.9527 0.9560 0.9592 0.9622 0.9651
53 0.9480 0.9516 0.9551 0.9584 0.9615
54 0.9429 0.9468 0.9505 0.9541 0.9575
55 0.9260 0.9290 0.9330 0.9494 0.9531
56 0.9190 0.9220 0.9260 0.9443 0.9483
57 0.9120 0.9160 0.9190 0.9387 0.9430
58 0.9040 0.9080 0.9120 0.9325 0.9372
59 0.8950 0.9000 0.9050 0.9258 0.9308
60 0.8860 0.8910 0.8960 0.9185 0.9239
61 0.8770 0.8810 0.8860 0.9105 0.9163
62 0.8670 0.8720 0.8770 0.9020 0.9081
63 0.8724 0.8792 0.8860 0.8927 0.8993
64 0.8613 0.8685 0.8757 0.8828 0.8897
65 0.8495 0.8571 0.8646 0.8721 0.8794
66 0.8370 0.8449 0.8528 0.8607 0.8684
67 0.8238 0.8320 0.8403 0.8485 0.8567
68 0.8098 0.8184 0.8270 0.8356 0.8441
69 0.7951 0.8040 0.8129 0.8219 0.8308
70 0.7798 0.7889 0.7982 0.8075 0.8168
71 0.7639 0.7733 0.7828 0.7924 0.8021
72 0.7476 0.7572 0.7670 0.7769 0.7869
73 0.7307 0.7406 0.7506 0.7608 0.7711
74 0.7134 0.7234 0.7337 0.7441 0.7546
75 0.6955 0.7057 0.7161 0.7267 0.7375
76 0.6770 0.6873 0.6979 0.7087 0.7197
77 0.6581 0.6685 0.6792 0.6901 0.7013
78 0.6390 0.6494 0.6602 0.6712 0.6825
79 0.6197 0.6302 0.6410 0.6521 0.6635
80 0.6005 0.6109 0.6218 0.6329 0.6444
81 0.5813 0.5917 0.6025 0.6137 0.6252
82 0.5622 0.5726 0.5834 0.5945 0.6060
83 0.5432 0.5535 0.5642 0.5753 0.5868
84 0.5243 0.5345 0.5451 0.5561 0.5676
85 0.5056 0.5156 0.5261 0.5370 0.5484
86 0.4869 0.4969 0.5072 0.5180 0.5292
87 0.4685 0.4782 0.4884 0.4990 0.5101
88 0.4501 0.4597 0.4697 0.4801 0.4910
89 0.4319 0.4412 0.4510 0.4613 0.4720
90 0.4138 0.4229 0.4325 0.4425 0.4530
91 0.3960 0.4048 0.4141 0.4239 0.4342
92 0.3782 0.3869 0.3959 0.4054 0.4154
93 0.3606 0.3690 0.3777 0.3870 0.3967
94 0.3430 0.3510 0.3595 0.3685 0.3779
95 0.3256 0.3334 0.3416 0.3502 0.3593
96 0.3087 0.3161 0.3240 0.3323 0.3411
97 0.2922 0.2993 0.3069 0.3148 0.3233
98 0.2759 0.2827 0.2900 0.2976 0.3057
99 0.2598 0.2663 0.2732 0.2805 0.2882
</TABLE>
68
<PAGE>
FMC CORPORATION - SKULL POINT MINE UNION
Normal Form: Payable Immediately Life Annuity
Optional Form: Joint Life Payable Immediately
Reduction on Participant's Death -- 50% Continued to Beneficiary
Factors to Convert from the Normal Form to the Optional Form
Payment at Beginning of Month
Mortality: Retiree - 71GAT Beneficiary - 71GAT Interest: 3.00% (Except at
frozen ages)
<TABLE>
<CAPTION>
Unisex Unisex
Participant Age Beneficiary Age
Years Years
65 66 67 68 69
<S> <C> <C> <C> <C> <C>
20 0.9986 0.9987 0.9988 0.9989 0.9990
21 0.9985 0.9986 0.9987 0.9988 0.9989
22 0.9984 0.9985 0.9986 0.9987 0.9989
23 0.9982 0.9984 0.9985 0.9987 0.9988
24 0.9981 0.9982 0.9984 0.9985 0.9987
25 0.9979 0.9981 0.9983 0.9984 0.9986
26 0.9977 0.9979 0.9981 0.9983 0.9985
27 0.9975 0.9977 0.9980 0.9981 0.9983
28 0.9973 0.9975 0.9978 0.9980 0.9982
29 0.9970 0.9973 0.9976 0.9978 0.9980
30 0.9967 0.9970 0.9973 0.9976 0.9978
31 0.9964 0.9967 0.9970 0.9973 0.9976
32 0.9960 0.9964 0.9967 0.9971 0.9973
33 0.9956 0.9960 0.9964 0.9967 0.9971
34 0.9952 0.9956 0.9960 0.9964 0.9968
35 0.9946 0.9951 0.9956 0.9960 0.9964
36 0.9941 0.9946 0.9951 0.9956 0.9960
37 0.9934 0.9940 0.9946 0.9951 0.9955
38 0.9927 0.9933 0.9939 0.9945 0.9950
39 0.9918 0.9926 0.9932 0.9939 0.9945
40 0.9909 0.9917 0.9925 0.9932 0.9938
41 0.9898 0.9907 0.9916 0.9924 0.9931
42 0.9887 0.9897 0.9906 0.9915 0.9923
43 0.9874 0.9885 0.9895 0.9905 0.9914
44 0.9859 0.9872 0.9883 0.9894 0.9904
45 0.9844 0.9857 0.9870 0.9881 0.9892
46 0.9826 0.9841 0.9855 0.9868 0.9880
47 0.9807 0.9823 0.9839 0.9853 0.9866
48 0.9786 0.9804 0.9821 0.9837 0.9851
49 0.9763 0.9783 0.9801 0.9819 0.9835
50 0.9737 0.9759 0.9780 0.9799 0.9817
51 0.9710 0.9733 0.9756 0.9777 0.9797
52 0.9679 0.9705 0.9729 0.9753 0.9774
53 0.9645 0.9674 0.9700 0.9726 0.9750
54 0.9608 0.9639 0.9668 0.9696 0.9722
55 0.9567 0.9601 0.9633 0.9663 0.9692
56 0.9522 0.9558 0.9594 0.9627 0.9658
57 0.9472 0.9512 0.9550 0.9586 0.9621
58 0.9417 0.9460 0.9502 0.9541 0.9579
59 0.9357 0.9404 0.9449 0.9492 0.9533
60 0.9291 0.9342 0.9390 0.9437 0.9481
61 0.9219 0.9274 0.9326 0.9377 0.9425
62 0.9141 0.9200 0.9256 0.9311 0.9363
63 0.9057 0.9119 0.9180 0.9239 0.9295
64 0.8966 0.9032 0.9097 0.9160 0.9221
65 0.8867 0.8938 0.9007 0.9075 0.9140
66 0.8761 0.8836 0.8910 0.8982 0.9052
67 0.8647 0.8727 0.8805 0.8882 0.8957
68 0.8526 0.8610 0.8693 0.8774 0.8854
69 0.8397 0.8485 0.8573 0.8659 0.8743
70 0.8260 0.8353 0.8445 0.8536 0.8625
71 0.8118 0.8214 0.8310 0.8406 0.8500
72 0.7969 0.8069 0.8170 0.8269 0.8368
73 0.7814 0.7918 0.8022 0.8127 0.8230
74 0.7653 0.7760 0.7868 0.7976 0.8084
75 0.7484 0.7595 0.7706 0.7818 0.7930
76 0.7309 0.7422 0.7536 0.7652 0.7768
77 0.7127 0.7243 0.7360 0.7479 0.7598
78 0.6941 0.7059 0.7179 0.7300 0.7423
79 0.6752 0.6872 0.6994 0.7118 0.7244
80 0.6562 0.6683 0.6807 0.6933 0.7061
81 0.6371 0.6493 0.6618 0.6745 0.6876
82 0.6179 0.6302 0.6427 0.6557 0.6688
83 0.5987 0.6110 0.6236 0.6366 0.6499
84 0.5794 0.5917 0.6043 0.6174 0.6308
85 0.5602 0.5724 0.5850 0.5981 0.6115
86 0.5409 0.5530 0.5656 0.5786 0.5921
87 0.5217 0.5337 0.5462 0.5591 0.5725
88 0.5024 0.5143 0.5267 0.5395 0.5529
89 0.4832 0.4949 0.5071 0.5198 0.5331
90 0.4640 0.4755 0.4876 0.5001 0.5132
91 0.4450 0.4562 0.4680 0.4804 0.4933
92 0.4260 0.4370 0.4485 0.4606 0.4733
93 0.4069 0.4177 0.4290 0.4408 0.4532
94 0.3878 0.3983 0.4092 0.4208 0.4329
95 0.3689 0.3790 0.3897 0.4009 0.4127
96 0.3504 0.3601 0.3704 0.3813 0.3927
97 0.3322 0.3416 0.3516 0.3621 0.3731
98 0.3143 0.3233 0.3329 0.3430 0.3537
99 0.2964 0.3051 0.3142 0.3239 0.3342
</TABLE>
69
<PAGE>
FMC CORPORATION - SKULL POINT MINE UNION
Normal Form: Payable Immediately Life Annuity
Optional Form: Joint Life Payable Immediately
Reduction on Participant's Death -- 50% Continued to Beneficiary
Factors to Convert from the Normal Form to the Optional Form
Payment at Beginning of Month
Mortality: Retiree - 71GAT Beneficiary - 71GAT Interest: 3.00% (Except at
frozen ages)
<TABLE>
<CAPTION>
Unisex Unisex
Participant Age Beneficiary Age
Years Years
70 71 72 73 74
<S> <C> <C> <C> <C> <C>
20 0.9991 0.9992 0.9992 0.9993 0.9994
21 0.9990 0.9991 0.9992 0.9993 0.9993
22 0.9990 0.9991 0.9991 0.9992 0.9993
23 0.9989 0.9990 0.9991 0.9992 0.9992
24 0.9988 0.9989 0.9990 0.9991 0.9992
25 0.9987 0.9988 0.9989 0.9990 0.9991
26 0.9986 0.9987 0.9989 0.9990 0.9991
27 0.9985 0.9986 0.9988 0.9989 0.9990
28 0.9983 0.9985 0.9986 0.9988 0.9989
29 0.9982 0.9984 0.9985 0.9987 0.9988
30 0.9980 0.9982 0.9984 0.9985 0.9987
31 0.9978 0.9980 0.9982 0.9984 0.9986
32 0.9976 0.9978 0.9981 0.9983 0.9984
33 0.9974 0.9976 0.9979 0.9981 0.9983
34 0.9971 0.9974 0.9976 0.9979 0.9981
35 0.9968 0.9971 0.9974 0.9976 0.9979
36 0.9964 0.9968 0.9971 0.9974 0.9977
37 0.9960 0.9964 0.9968 0.9971 0.9974
38 0.9955 0.9960 0.9964 0.9967 0.9971
39 0.9950 0.9955 0.9960 0.9964 0.9967
40 0.9944 0.9950 0.9955 0.9959 0.9964
41 0.9938 0.9944 0.9949 0.9954 0.9959
42 0.9930 0.9937 0.9943 0.9949 0.9954
43 0.9922 0.9929 0.9936 0.9943 0.9948
44 0.9913 0.9921 0.9929 0.9936 0.9942
45 0.9902 0.9912 0.9920 0.9928 0.9935
46 0.9891 0.9902 0.9911 0.9920 0.9928
47 0.9879 0.9890 0.9901 0.9910 0.9919
48 0.9865 0.9878 0.9889 0.9900 0.9910
49 0.9850 0.9864 0.9877 0.9889 0.9900
50 0.9833 0.9849 0.9863 0.9876 0.9888
51 0.9815 0.9832 0.9848 0.9862 0.9876
52 0.9795 0.9813 0.9831 0.9847 0.9862
53 0.9772 0.9793 0.9812 0.9830 0.9846
54 0.9747 0.9770 0.9791 0.9811 0.9829
55 0.9719 0.9744 0.9767 0.9789 0.9809
56 0.9688 0.9715 0.9741 0.9765 0.9787
57 0.9653 0.9683 0.9712 0.9738 0.9763
58 0.9614 0.9648 0.9679 0.9708 0.9735
59 0.9571 0.9608 0.9642 0.9674 0.9704
60 0.9524 0.9564 0.9601 0.9636 0.9669
61 0.9471 0.9515 0.9556 0.9594 0.9630
62 0.9413 0.9461 0.9505 0.9548 0.9587
63 0.9350 0.9401 0.9450 0.9496 0.9539
64 0.9280 0.9336 0.9389 0.9439 0.9486
65 0.9203 0.9264 0.9321 0.9376 0.9427
66 0.9120 0.9185 0.9247 0.9307 0.9363
67 0.9030 0.9100 0.9167 0.9231 0.9292
68 0.8932 0.9007 0.9079 0.9148 0.9214
69 0.8826 0.8906 0.8984 0.9058 0.9129
70 0.8713 0.8798 0.8881 0.8960 0.9037
71 0.8593 0.8683 0.8771 0.8856 0.8938
72 0.8466 0.8562 0.8655 0.8745 0.8832
73 0.8333 0.8433 0.8532 0.8627 0.8720
74 0.8191 0.8297 0.8401 0.8502 0.8600
75 0.8042 0.8152 0.8261 0.8367 0.8471
76 0.7884 0.7999 0.8112 0.8224 0.8333
77 0.7718 0.7838 0.7956 0.8072 0.8187
78 0.7547 0.7670 0.7792 0.7913 0.8033
79 0.7371 0.7498 0.7624 0.7749 0.7874
80 0.7191 0.7321 0.7451 0.7580 0.7709
81 0.7008 0.7141 0.7274 0.7407 0.7540
82 0.6823 0.6958 0.7094 0.7231 0.7367
83 0.6635 0.6772 0.6911 0.7050 0.7190
84 0.6445 0.6584 0.6724 0.6866 0.7009
85 0.6253 0.6393 0.6535 0.6679 0.6824
86 0.6059 0.6200 0.6343 0.6488 0.6635
87 0.5864 0.6005 0.6149 0.6295 0.6443
88 0.5666 0.5807 0.5952 0.6098 0.6248
89 0.5467 0.5608 0.5752 0.5899 0.6049
90 0.5267 0.5407 0.5550 0.5697 0.5847
91 0.5067 0.5205 0.5347 0.5492 0.5642
92 0.4865 0.5001 0.5142 0.5286 0.5435
93 0.4662 0.4796 0.4934 0.5077 0.5224
94 0.4455 0.4587 0.4723 0.4863 0.5008
95 0.4250 0.4379 0.4512 0.4649 0.4792
96 0.4047 0.4172 0.4302 0.4437 0.4577
97 0.3848 0.3969 0.4095 0.4226 0.4363
98 0.3649 0.3766 0.3889 0.4016 0.4149
99 0.3450 0.3563 0.3681 0.3805 0.3933
</TABLE>
70
<PAGE>
FMC CORPORATION - SKULL POINT MINE UNION
Normal Form: Payable Immediately Life Annuity
Optional Form: Joint Life Payable Immediately
Reduction on Participant's Death -- 50% Continued to Beneficiary
Factors to Convert from the Normal Form to the Optional Form
Payment at Beginning of Month
Mortality: Retiree - 71GAT Beneficiary - 71GAT Interest: 3.00% (Except at
frozen ages)
<TABLE>
<CAPTION>
Unisex Unisex
Participant Age Beneficiary Age
Years Years
75 76 77 78 79
<S> <C> <C> <C> <C> <C>
20 0.9994 0.9995 0.9995 0.9996 0.9996
21 0.9994 0.9995 0.9995 0.9996 0.9996
22 0.9994 0.9994 0.9995 0.9995 0.9996
23 0.9993 0.9994 0.9994 0.9995 0.9996
24 0.9993 0.9993 0.9994 0.9995 0.9995
25 0.9992 0.9993 0.9994 0.9994 0.9995
26 0.9992 0.9992 0.9993 0.9994 0.9994
27 0.9991 0.9992 0.9993 0.9993 0.9994
28 0.9990 0.9991 0.9992 0.9993 0.9994
29 0.9989 0.9990 0.9991 0.9992 0.9993
30 0.9988 0.9989 0.9991 0.9992 0.9992
31 0.9987 0.9989 0.9990 0.9991 0.9992
32 0.9986 0.9987 0.9989 0.9990 0.9991
33 0.9985 0.9986 0.9988 0.9989 0.9990
34 0.9983 0.9985 0.9986 0.9988 0.9989
35 0.9981 0.9983 0.9985 0.9987 0.9988
36 0.9979 0.9981 0.9983 0.9985 0.9987
37 0.9977 0.9979 0.9981 0.9983 0.9985
38 0.9974 0.9977 0.9979 0.9981 0.9983
39 0.9971 0.9974 0.9977 0.9979 0.9982
40 0.9967 0.9971 0.9974 0.9977 0.9979
41 0.9963 0.9967 0.9971 0.9974 0.9977
42 0.9959 0.9963 0.9967 0.9971 0.9974
43 0.9954 0.9959 0.9963 0.9967 0.9970
44 0.9948 0.9953 0.9958 0.9963 0.9967
45 0.9942 0.9948 0.9953 0.9958 0.9963
46 0.9935 0.9942 0.9948 0.9953 0.9958
47 0.9927 0.9935 0.9941 0.9947 0.9953
48 0.9919 0.9927 0.9934 0.9941 0.9947
49 0.9910 0.9919 0.9927 0.9934 0.9941
50 0.9899 0.9909 0.9919 0.9927 0.9934
51 0.9888 0.9899 0.9909 0.9919 0.9927
52 0.9875 0.9888 0.9899 0.9909 0.9919
53 0.9861 0.9875 0.9887 0.9899 0.9909
54 0.9845 0.9860 0.9874 0.9887 0.9899
55 0.9827 0.9844 0.9860 0.9874 0.9887
56 0.9808 0.9826 0.9844 0.9859 0.9874
57 0.9785 0.9806 0.9825 0.9843 0.9859
58 0.9760 0.9783 0.9804 0.9824 0.9842
59 0.9731 0.9757 0.9780 0.9802 0.9822
60 0.9699 0.9728 0.9754 0.9778 0.9800
61 0.9664 0.9695 0.9724 0.9751 0.9775
62 0.9624 0.9658 0.9691 0.9720 0.9747
63 0.9580 0.9618 0.9653 0.9686 0.9716
64 0.9531 0.9572 0.9611 0.9647 0.9681
65 0.9476 0.9522 0.9565 0.9605 0.9641
66 0.9416 0.9466 0.9513 0.9557 0.9597
67 0.9349 0.9404 0.9456 0.9504 0.9549
68 0.9277 0.9336 0.9392 0.9445 0.9494
69 0.9197 0.9261 0.9322 0.9380 0.9434
70 0.9110 0.9180 0.9246 0.9309 0.9368
71 0.9016 0.9092 0.9164 0.9232 0.9296
72 0.8917 0.8998 0.9075 0.9149 0.9218
73 0.8810 0.8897 0.8980 0.9059 0.9134
74 0.8695 0.8788 0.8877 0.8962 0.9043
75 0.8572 0.8670 0.8765 0.8856 0.8943
76 0.8440 0.8544 0.8645 0.8742 0.8835
77 0.8299 0.8409 0.8516 0.8619 0.8718
78 0.8151 0.8266 0.8379 0.8488 0.8593
79 0.7996 0.8117 0.8235 0.8351 0.8462
80 0.7836 0.7962 0.8086 0.8207 0.8324
81 0.7672 0.7803 0.7932 0.8058 0.8181
82 0.7503 0.7638 0.7772 0.7904 0.8032
83 0.7330 0.7469 0.7608 0.7744 0.7878
84 0.7152 0.7295 0.7438 0.7579 0.7717
85 0.6970 0.7116 0.7263 0.7408 0.7552
86 0.6784 0.6933 0.7083 0.7233 0.7380
87 0.6594 0.6746 0.6899 0.7051 0.7203
88 0.6400 0.6554 0.6709 0.6865 0.7020
89 0.6202 0.6357 0.6515 0.6673 0.6831
90 0.6000 0.6157 0.6315 0.6475 0.6636
91 0.5796 0.5952 0.6112 0.6274 0.6436
92 0.5588 0.5745 0.5905 0.6067 0.6231
93 0.5376 0.5532 0.5692 0.5854 0.6019
94 0.5159 0.5313 0.5473 0.5635 0.5799
95 0.4940 0.5093 0.5251 0.5412 0.5576
96 0.4722 0.4873 0.5028 0.5188 0.5351
97 0.4505 0.4653 0.4806 0.4964 0.5125
98 0.4287 0.4432 0.4582 0.4737 0.4895
99 0.4068 0.4209 0.4355 0.4506 0.4662
</TABLE>
71
<PAGE>
FMC CORPORATION - SKULL POINT MINE UNION
Normal Form: Payable Immediately Life Annuity
Optional Form: Joint Life Payable Immediately
Reduction on Participant's Death -- 50% Continued to Beneficiary
Factors to Convert from the Normal Form to the Optional Form
Payment at Beginning of Month
Mortality: Retiree - 71GAT Beneficiary - 71GAT Interest: 3.00% (Except at
frozen ages)
<TABLE>
<CAPTION>
Unisex Unisex
Participant Age Beneficiary Age
Years Years
<S> <C> <C> <C> <C> <C>
80 81 82 83 84
20 0.9997 0.9997 0.9997 0.9998 0.9998
21 0.9996 0.9997 0.9997 0.9997 0.9998
22 0.9996 0.9997 0.9997 0.9997 0.9998
23 0.9996 0.9996 0.9997 0.9997 0.9997
24 0.9996 0.9996 0.9997 0.9997 0.9997
25 0.9995 0.9996 0.9996 0.9997 0.9997
26 0.9995 0.9996 0.9996 0.9996 0.9997
27 0.9995 0.9995 0.9996 0.9996 0.9997
28 0.9994 0.9995 0.9995 0.9996 0.9996
29 0.9994 0.9994 0.9995 0.9996 0.9996
30 0.9993 0.9994 0.9995 0.9995 0.9996
31 0.9993 0.9993 0.9994 0.9995 0.9995
32 0.9992 0.9993 0.9994 0.9994 0.9995
33 0.9991 0.9992 0.9993 0.9994 0.9994
34 0.9990 0.9991 0.9992 0.9993 0.9994
35 0.9989 0.9990 0.9992 0.9992 0.9993
36 0.9988 0.9989 0.9991 0.9992 0.9993
37 0.9987 0.9988 0.9990 0.9991 0.9992
38 0.9985 0.9987 0.9988 0.9990 0.9991
39 0.9984 0.9985 0.9987 0.9989 0.9990
40 0.9982 0.9984 0.9985 0.9987 0.9989
41 0.9979 0.9982 0.9984 0.9985 0.9987
42 0.9977 0.9979 0.9982 0.9984 0.9986
43 0.9974 0.9977 0.9979 0.9981 0.9984
44 0.9970 0.9974 0.9976 0.9979 0.9981
45 0.9967 0.9970 0.9973 0.9976 0.9979
46 0.9962 0.9967 0.9970 0.9973 0.9976
47 0.9958 0.9962 0.9967 0.9970 0.9974
48 0.9953 0.9958 0.9963 0.9967 0.9970
49 0.9947 0.9953 0.9958 0.9963 0.9967
50 0.9941 0.9948 0.9953 0.9958 0.9963
51 0.9935 0.9942 0.9948 0.9954 0.9959
52 0.9927 0.9935 0.9942 0.9948 0.9954
53 0.9919 0.9927 0.9935 0.9942 0.9949
54 0.9909 0.9919 0.9928 0.9935 0.9943
55 0.9899 0.9909 0.9919 0.9928 0.9936
56 0.9887 0.9899 0.9910 0.9919 0.9928
57 0.9873 0.9887 0.9899 0.9910 0.9919
58 0.9858 0.9873 0.9886 0.9898 0.9909
59 0.9840 0.9857 0.9872 0.9885 0.9898
60 0.9820 0.9839 0.9855 0.9871 0.9885
61 0.9798 0.9818 0.9837 0.9854 0.9870
62 0.9772 0.9795 0.9816 0.9836 0.9853
63 0.9744 0.9769 0.9793 0.9814 0.9834
64 0.9712 0.9740 0.9766 0.9790 0.9812
65 0.9676 0.9707 0.9736 0.9763 0.9788
66 0.9635 0.9670 0.9702 0.9732 0.9760
67 0.9590 0.9629 0.9665 0.9698 0.9728
68 0.9540 0.9583 0.9622 0.9659 0.9693
69 0.9484 0.9531 0.9575 0.9616 0.9653
70 0.9423 0.9475 0.9523 0.9567 0.9609
71 0.9356 0.9412 0.9465 0.9515 0.9561
72 0.9284 0.9345 0.9403 0.9457 0.9508
73 0.9205 0.9272 0.9335 0.9394 0.9450
74 0.9120 0.9192 0.9261 0.9325 0.9386
75 0.9026 0.9104 0.9179 0.9249 0.9315
76 0.8924 0.9008 0.9088 0.9164 0.9236
77 0.8813 0.8904 0.8990 0.9072 0.9150
78 0.8695 0.8791 0.8884 0.8972 0.9056
79 0.8569 0.8672 0.8771 0.8866 0.8956
80 0.8438 0.8547 0.8652 0.8753 0.8850
81 0.8301 0.8416 0.8527 0.8634 0.8737
82 0.8158 0.8279 0.8396 0.8510 0.8619
83 0.8008 0.8135 0.8259 0.8378 0.8494
84 0.7853 0.7986 0.8115 0.8241 0.8363
85 0.7692 0.7830 0.7965 0.8097 0.8225
86 0.7526 0.7669 0.7809 0.7946 0.8080
87 0.7353 0.7500 0.7645 0.7788 0.7928
88 0.7173 0.7325 0.7475 0.7623 0.7768
89 0.6988 0.7143 0.7298 0.7450 0.7600
90 0.6796 0.6955 0.7113 0.7270 0.7425
91 0.6599 0.6761 0.6922 0.7083 0.7242
92 0.6395 0.6559 0.6724 0.6888 0.7051
93 0.6185 0.6351 0.6517 0.6684 0.6851
94 0.5965 0.6133 0.6301 0.6470 0.6640
95 0.5742 0.5910 0.6079 0.6250 0.6422
96 0.5516 0.5684 0.5853 0.6025 0.6198
97 0.5289 0.5455 0.5625 0.5796 0.5971
98 0.5057 0.5223 0.5391 0.5562 0.5736
99 0.4821 0.4984 0.5150 0.5320 0.5494
</TABLE>
72
<PAGE>
FMC CORPORATION - SKULL POINT MINE UNION
Normal Form: Payable Immediately Life Annuity
Optional Form: Joint Life Payable Immediately
Reduction on Participant's Death -- 50% Continued to Beneficiary
Factors to Convert from the Normal Form to the Optional Form
Payment at Beginning of Month
Mortality: Retiree - 71GAT Beneficiary - 71GAT Interest: 3.00% (Except at
frozen ages)
<TABLE>
<CAPTION>
Unisex Unisex
Participant Age Beneficiary Age
Years Years
85 86 87 88 89
<S> <C> <C> <C> <C> <C>
20 0.9998 0.9998 0.9998 0.9999 0.9999
21 0.9998 0.9998 0.9998 0.9999 0.9999
22 0.9998 0.9998 0.9998 0.9998 0.9999
23 0.9998 0.9998 0.9998 0.9998 0.9999
24 0.9998 0.9998 0.9998 0.9998 0.9998
25 0.9997 0.9998 0.9998 0.9998 0.9998
26 0.9997 0.9997 0.9998 0.9998 0.9998
27 0.9997 0.9997 0.9998 0.9998 0.9998
28 0.9997 0.9997 0.9997 0.9998 0.9998
29 0.9996 0.9997 0.9997 0.9998 0.9998
30 0.9996 0.9997 0.9997 0.9997 0.9998
31 0.9996 0.9996 0.9997 0.9997 0.9997
32 0.9996 0.9996 0.9996 0.9997 0.9997
33 0.9995 0.9996 0.9996 0.9997 0.9997
34 0.9995 0.9995 0.9996 0.9996 0.9997
35 0.9994 0.9995 0.9995 0.9996 0.9996
36 0.9994 0.9994 0.9995 0.9996 0.9996
37 0.9993 0.9994 0.9994 0.9995 0.9996
38 0.9992 0.9993 0.9994 0.9995 0.9995
39 0.9991 0.9992 0.9993 0.9994 0.9995
40 0.9990 0.9991 0.9992 0.9993 0.9994
41 0.9989 0.9990 0.9991 0.9992 0.9993
42 0.9987 0.9989 0.9990 0.9991 0.9992
43 0.9986 0.9987 0.9989 0.9990 0.9991
44 0.9984 0.9986 0.9987 0.9989 0.9990
45 0.9981 0.9984 0.9986 0.9987 0.9989
46 0.9979 0.9982 0.9984 0.9986 0.9987
47 0.9977 0.9979 0.9982 0.9984 0.9986
48 0.9974 0.9977 0.9979 0.9982 0.9984
49 0.9971 0.9974 0.9977 0.9980 0.9982
50 0.9967 0.9971 0.9974 0.9977 0.9980
51 0.9963 0.9967 0.9971 0.9975 0.9978
52 0.9959 0.9964 0.9968 0.9972 0.9975
53 0.9954 0.9960 0.9964 0.9968 0.9972
54 0.9949 0.9955 0.9960 0.9965 0.9969
55 0.9943 0.9950 0.9955 0.9961 0.9965
56 0.9936 0.9943 0.9950 0.9956 0.9961
57 0.9928 0.9937 0.9944 0.9951 0.9956
58 0.9920 0.9929 0.9937 0.9944 0.9951
59 0.9909 0.9919 0.9929 0.9937 0.9945
60 0.9898 0.9909 0.9919 0.9929 0.9937
61 0.9884 0.9897 0.9909 0.9919 0.9929
62 0.9869 0.9884 0.9897 0.9909 0.9920
63 0.9852 0.9868 0.9883 0.9896 0.9909
64 0.9832 0.9851 0.9867 0.9882 0.9896
65 0.9810 0.9831 0.9849 0.9866 0.9882
66 0.9785 0.9808 0.9829 0.9848 0.9866
67 0.9756 0.9782 0.9806 0.9827 0.9847
68 0.9724 0.9753 0.9779 0.9804 0.9826
69 0.9688 0.9720 0.9750 0.9777 0.9802
70 0.9648 0.9683 0.9716 0.9747 0.9774
71 0.9603 0.9643 0.9679 0.9713 0.9744
72 0.9555 0.9598 0.9639 0.9676 0.9711
73 0.9501 0.9550 0.9594 0.9636 0.9674
74 0.9442 0.9495 0.9545 0.9591 0.9633
75 0.9377 0.9435 0.9489 0.9540 0.9587
76 0.9304 0.9367 0.9427 0.9483 0.9535
77 0.9223 0.9293 0.9358 0.9419 0.9477
78 0.9136 0.9211 0.9283 0.9350 0.9413
79 0.9042 0.9124 0.9201 0.9274 0.9343
80 0.8942 0.9030 0.9114 0.9193 0.9268
81 0.8836 0.8931 0.9021 0.9106 0.9187
82 0.8724 0.8825 0.8922 0.9014 0.9101
83 0.8606 0.8713 0.8816 0.8915 0.9009
84 0.8481 0.8595 0.8704 0.8810 0.8911
85 0.8349 0.8469 0.8586 0.8698 0.8806
86 0.8210 0.8337 0.8460 0.8579 0.8694
87 0.8064 0.8197 0.8327 0.8453 0.8574
88 0.7910 0.8050 0.8186 0.8318 0.8447
89 0.7748 0.7894 0.8036 0.8175 0.8310
90 0.7578 0.7729 0.7878 0.8023 0.8166
91 0.7400 0.7557 0.7711 0.7863 0.8012
92 0.7214 0.7375 0.7535 0.7693 0.7848
93 0.7018 0.7184 0.7348 0.7512 0.7674
94 0.6810 0.6980 0.7149 0.7318 0.7486
95 0.6595 0.6768 0.6941 0.7115 0.7288
96 0.6373 0.6549 0.6726 0.6903 0.7081
97 0.6147 0.6324 0.6504 0.6685 0.6867
98 0.5913 0.6092 0.6273 0.6457 0.6642
99 0.5670 0.5850 0.6032 0.6217 0.6405
</TABLE>
73
<PAGE>
FMC CORPORATION - SKULL POINT MINE UNION
Normal Form: Payable Immediately Life Annuity
Optional Form: Joint Life Payable Immediately
Reduction on Participant's Death -- 50% Continued to Beneficiary
Factors to Convert from the Normal Form to the Optional Form
Payment at Beginning of Month
Mortality: Retiree - 71GAT Beneficiary - 71GAT Interest: 3.00% (Except at
frozen ages)
<TABLE>
Unisex Unisex
Participant Age Beneficiary Age
Years Years
90 91 92 93 94
<S> <C> <C> <C> <C> <C>
20 0.9999 0.9999 0.9999 0.9999 0.9999
21 0.9999 0.9999 0.9999 0.9999 0.9999
22 0.9999 0.9999 0.9999 0.9999 0.9999
23 0.9999 0.9999 0.9999 0.9999 0.9999
24 0.9999 0.9999 0.9999 0.9999 0.9999
25 0.9999 0.9999 0.9999 0.9999 0.9999
26 0.9998 0.9999 0.9999 0.9999 0.9999
27 0.9998 0.9999 0.9999 0.9999 0.9999
28 0.9998 0.9998 0.9999 0.9999 0.9999
29 0.9998 0.9998 0.9999 0.9999 0.9999
30 0.9998 0.9998 0.9998 0.9999 0.9999
31 0.9998 0.9998 0.9998 0.9999 0.9999
32 0.9998 0.9998 0.9998 0.9998 0.9999
33 0.9997 0.9998 0.9998 0.9998 0.9998
34 0.9997 0.9997 0.9998 0.9998 0.9998
35 0.9997 0.9997 0.9998 0.9998 0.9998
36 0.9997 0.9997 0.9997 0.9998 0.9998
37 0.9996 0.9997 0.9997 0.9997 0.9998
38 0.9996 0.9996 0.9997 0.9997 0.9998
39 0.9995 0.9996 0.9996 0.9997 0.9997
40 0.9995 0.9995 0.9996 0.9997 0.9997
41 0.9994 0.9995 0.9996 0.9996 0.9997
42 0.9993 0.9994 0.9995 0.9996 0.9996
43 0.9992 0.9993 0.9994 0.9995 0.9996
44 0.9991 0.9993 0.9994 0.9994 0.9995
45 0.9990 0.9992 0.9993 0.9994 0.9994
46 0.9989 0.9990 0.9992 0.9993 0.9994
47 0.9988 0.9989 0.9991 0.9992 0.9993
48 0.9986 0.9988 0.9989 0.9991 0.9992
49 0.9984 0.9986 0.9988 0.9990 0.9991
50 0.9982 0.9985 0.9987 0.9988 0.9990
51 0.9980 0.9983 0.9985 0.9987 0.9989
52 0.9978 0.9981 0.9983 0.9985 0.9987
53 0.9976 0.9979 0.9981 0.9984 0.9986
54 0.9973 0.9976 0.9979 0.9982 0.9984
55 0.9970 0.9973 0.9977 0.9980 0.9983
56 0.9966 0.9970 0.9974 0.9977 0.9980
57 0.9962 0.9967 0.9971 0.9975 0.9978
58 0.9957 0.9962 0.9967 0.9971 0.9975
59 0.9951 0.9957 0.9963 0.9968 0.9972
60 0.9945 0.9952 0.9958 0.9963 0.9968
61 0.9938 0.9945 0.9952 0.9958 0.9964
62 0.9929 0.9938 0.9946 0.9953 0.9959
63 0.9920 0.9930 0.9938 0.9946 0.9954
64 0.9909 0.9920 0.9930 0.9939 0.9947
65 0.9896 0.9909 0.9920 0.9930 0.9939
66 0.9881 0.9896 0.9909 0.9920 0.9931
67 0.9865 0.9881 0.9896 0.9909 0.9921
68 0.9846 0.9864 0.9881 0.9896 0.9909
69 0.9824 0.9845 0.9864 0.9881 0.9896
70 0.9800 0.9823 0.9844 0.9863 0.9881
71 0.9773 0.9799 0.9822 0.9844 0.9864
72 0.9743 0.9772 0.9798 0.9823 0.9845
73 0.9710 0.9742 0.9772 0.9799 0.9824
74 0.9673 0.9709 0.9742 0.9772 0.9800
75 0.9631 0.9671 0.9708 0.9742 0.9773
76 0.9583 0.9628 0.9670 0.9708 0.9743
77 0.9530 0.9580 0.9626 0.9668 0.9707
78 0.9472 0.9526 0.9577 0.9625 0.9668
79 0.9408 0.9468 0.9524 0.9576 0.9625
80 0.9338 0.9404 0.9466 0.9524 0.9577
81 0.9264 0.9336 0.9404 0.9467 0.9526
82 0.9184 0.9263 0.9336 0.9405 0.9470
83 0.9099 0.9183 0.9263 0.9339 0.9410
84 0.9007 0.9098 0.9185 0.9267 0.9344
85 0.8909 0.9007 0.9100 0.9189 0.9273
86 0.8804 0.8909 0.9010 0.9105 0.9196
87 0.8691 0.8804 0.8912 0.9015 0.9112
88 0.8571 0.8691 0.8806 0.8916 0.9022
89 0.8442 0.8569 0.8692 0.8810 0.8923
90 0.8304 0.8439 0.8569 0.8695 0.8817
91 0.8158 0.8300 0.8438 0.8572 0.8701
92 0.8001 0.8151 0.8296 0.8438 0.8576
93 0.7833 0.7990 0.8143 0.8294 0.8440
94 0.7652 0.7815 0.7977 0.8135 0.8290
95 0.7460 0.7630 0.7799 0.7965 0.8129
96 0.7259 0.7435 0.7611 0.7785 0.7957
97 0.7049 0.7231 0.7413 0.7594 0.7774
98 0.6828 0.7016 0.7203 0.7391 0.7579
99 0.6595 0.6786 0.6979 0.7173 0.7368
</TABLE>
74
<PAGE>
FMC CORPORATION - SKULL POINT MINE UNION
Normal Form: Payable Immediately Life Annuity
Optional Form: Joint Life Payable Immediately
Reduction on Participant's Death -- 50% Continued to Beneficiary
Factors to Convert from the Normal Form to the Optional Form
Payment at Beginning of Month
Mortality: Retiree - 71GAT Beneficiary - 71GAT Interest: 3.00% (Except at
frozen ages)
<TABLE>
<CAPTION>
Unisex
Unisex Beneficiary Age
Participant Age Years
Years
95 96 97 98 99
<S> <C> <C> <C> <C> <C>
20 0.9999 1.0000 1.0000 1.0000 1.0000
21 0.9999 0.9999 1.0000 1.0000 1.0000
22 0.9999 0.9999 1.0000 1.0000 1.0000
23 0.9999 0.9999 1.0000 1.0000 1.0000
24 0.9999 0.9999 0.9999 1.0000 1.0000
25 0.9999 0.9999 0.9999 1.0000 1.0000
26 0.9999 0.9999 0.9999 0.9999 1.0000
27 0.9999 0.9999 0.9999 0.9999 1.0000
28 0.9999 0.9999 0.9999 0.9999 1.0000
29 0.9999 0.9999 0.9999 0.9999 0.9999
30 0.9999 0.9999 0.9999 0.9999 0.9999
31 0.9999 0.9999 0.9999 0.9999 0.9999
32 0.9999 0.9999 0.9999 0.9999 0.9999
33 0.9999 0.9999 0.9999 0.9999 0.9999
34 0.9999 0.9999 0.9999 0.9999 0.9999
35 0.9998 0.9999 0.9999 0.9999 0.9999
36 0.9998 0.9999 0.9999 0.9999 0.9999
37 0.9998 0.9998 0.9999 0.9999 0.9999
38 0.9998 0.9998 0.9998 0.9999 0.9999
39 0.9998 0.9998 0.9998 0.9999 0.9999
40 0.9997 0.9998 0.9998 0.9998 0.9999
41 0.9997 0.9998 0.9998 0.9998 0.9998
42 0.9997 0.9997 0.9998 0.9998 0.9998
43 0.9996 0.9997 0.9997 0.9998 0.9998
44 0.9996 0.9996 0.9997 0.9997 0.9998
45 0.9995 0.9996 0.9997 0.9997 0.9998
46 0.9995 0.9995 0.9996 0.9997 0.9997
47 0.9994 0.9995 0.9996 0.9996 0.9997
48 0.9993 0.9994 0.9995 0.9996 0.9996
49 0.9992 0.9993 0.9994 0.9995 0.9996
50 0.9991 0.9993 0.9994 0.9995 0.9995
51 0.9990 0.9992 0.9993 0.9994 0.9995
52 0.9989 0.9991 0.9992 0.9993 0.9994
53 0.9988 0.9990 0.9991 0.9992 0.9994
54 0.9986 0.9988 0.9990 0.9991 0.9993
55 0.9985 0.9987 0.9989 0.9991 0.9992
56 0.9983 0.9985 0.9988 0.9989 0.9991
57 0.9981 0.9984 0.9986 0.9988 0.9990
58 0.9979 0.9982 0.9984 0.9987 0.9989
59 0.9976 0.9979 0.9982 0.9985 0.9987
60 0.9973 0.9976 0.9980 0.9983 0.9985
61 0.9969 0.9973 0.9977 0.9980 0.9983
62 0.9965 0.9970 0.9974 0.9978 0.9981
63 0.9960 0.9965 0.9970 0.9975 0.9979
64 0.9954 0.9961 0.9966 0.9971 0.9975
65 0.9948 0.9955 0.9961 0.9967 0.9972
66 0.9940 0.9948 0.9956 0.9962 0.9968
67 0.9931 0.9941 0.9949 0.9956 0.9963
68 0.9921 0.9932 0.9941 0.9950 0.9957
69 0.9910 0.9922 0.9933 0.9942 0.9951
70 0.9896 0.9910 0.9922 0.9933 0.9943
71 0.9881 0.9897 0.9911 0.9923 0.9935
72 0.9865 0.9882 0.9898 0.9912 0.9925
73 0.9846 0.9866 0.9884 0.9900 0.9915
74 0.9825 0.9848 0.9868 0.9886 0.9903
75 0.9802 0.9827 0.9850 0.9870 0.9889
76 0.9774 0.9803 0.9829 0.9852 0.9873
77 0.9743 0.9775 0.9804 0.9830 0.9854
78 0.9708 0.9744 0.9777 0.9806 0.9833
79 0.9669 0.9710 0.9746 0.9779 0.9810
80 0.9627 0.9672 0.9712 0.9750 0.9784
81 0.9580 0.9630 0.9675 0.9717 0.9755
82 0.9530 0.9585 0.9635 0.9681 0.9724
83 0.9475 0.9536 0.9591 0.9642 0.9689
84 0.9416 0.9482 0.9543 0.9599 0.9651
85 0.9351 0.9423 0.9490 0.9552 0.9610
86 0.9281 0.9360 0.9433 0.9501 0.9564
87 0.9204 0.9290 0.9370 0.9444 0.9514
88 0.9121 0.9214 0.9301 0.9382 0.9459
89 0.9031 0.9131 0.9225 0.9314 0.9397
90 0.8932 0.9041 0.9142 0.9239 0.9330
91 0.8825 0.8942 0.9052 0.9156 0.9255
92 0.8709 0.8834 0.8953 0.9066 0.9174
93 0.8581 0.8716 0.8844 0.8966 0.9082
94 0.8440 0.8584 0.8721 0.8853 0.8979
95 0.8288 0.8441 0.8588 0.8729 0.8866
96 0.8125 0.8287 0.8444 0.8595 0.8742
97 0.7951 0.8123 0.8289 0.8450 0.8608
98 0.7764 0.7945 0.8120 0.8292 0.8461
99 0.7561 0.7751 0.7936 0.8119 0.8299
</TABLE>
75
<PAGE>
SUPPLEMENT 7
COMMERCIAL SEGMENT, SAN JOSE, CALIFORNIA
----------------------------------------
7-1 Eligible Employees
------------------
The terms of this Supplement apply only to individuals participating
in the FMC Corporation Retirement Plan for San Jose Commercial Segment Hourly
Employees ("Prior Plan") on the Freeze Date who have not yet received a full
distribution of their benefit under such Prior Plan as of the Effective Date
("Participant").
7-2 Freeze Date
-----------
Effective December 19, 1980 ("Freeze Date"), the Prior Plan was
frozen. No new participants entered the Prior Plan after the Freeze Date, and
no benefits accrued under the Prior Plan after the Freeze Date.
7-3 Actuarial Equivalent
--------------------
Actuarial Equivalent, other than for purposes of Section 12.8 of the
Plan, shall be determined based on the 1983 Group Annuity Mortality Table and
7.36% interest compounded annually.
7-4 Normal Retirement Date
----------------------
Normal Retirement Date means the end of the calendar month in which
the Participant attains age 65.
7-5 Normal Retirement Benefit
-------------------------
A Participant's monthly Normal Retirement Benefit shall be the
Participant's monthly normal retirement benefit accrued under the Prior Plan as
of the Freeze Date.
7-6 Early Retirement Date
---------------------
Early Retirement Date means the later of the Participant's 55th
birthday and the date the Participant acquires 10 Years of Vesting Service.
7-7 Early Retirement Reduction Factor
---------------------------------
If a Participant's Early Retirement Benefit commences prior to age 62,
the Participant's Early Retirement Benefit shall be reduced by 1/3 of 1% for
each month between his Annuity Starting Date and the Participant's 62nd
birthday.
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<PAGE>
7-9 Termination Benefits Reduction Factor
-------------------------------------
If a Participant's Termination Benefit commences prior to age 65, the
Participant's Termination Benefit shall be reduced by 5/12 of 1% for each month
between the Participant's Annuity Starting Date and the Participant's 65th
birthday.
77
<PAGE>
SUPPLEMENT 8
AGRICULTURE CHEMICAL DIVISION, BALTIMORE, MARYLAND
--------------------------------------------------
8-1 Eligible Employees
------------------
The terms of this Supplement apply only to Eligible Employees of the
FMC Corporation Agricultural Chemical Group who work in Baltimore, Maryland and
who are covered by the Collective Bargaining Agreement between the Company and
the United Steelworkers of America, AFL-CIO, CLC, Local No. 12517, District 8.
8-2 Actuarial Equivalent
--------------------
Actuarial Equivalent, other than for purposes of Section 12.8 of the
Plan, shall be determined based on the 1971 Group Annuity Table (weighted 95%
male, 5% female) and 6% interest compounded annually.
8-3 Commencement of Participation
-----------------------------
An Eligible Employee shall become a Participant as of the date the
Participant completes 1 Year of Credited Service.
8-4 Normal Retirement Date
----------------------
Normal Retirement Date means the first day of the month coinciding
with or next following the Participant's 65th birthday.
8-5 Normal Retirement Benefit
-------------------------
A Participant's monthly Normal Retirement Benefit shall be determined
by multiplying the fixed rate provided below in effect on the date his Years of
Credited Service terminate, multiplied by the Participant's Years of Credited
Service:
Termination Date Benefit Rate
---------------- ------------
On or after June 1, 1998 $25.50
but before June 1, 1999
On or after June 1, 1999 $26.50
8-6 Early Retirement Reduction Factor
---------------------------------
If a Participant's Early Retirement Benefit commences prior to age 62,
the Participant's Early Retirement Benefit shall be reduced by 4% for each year
between the Participant's Annuity Starting Date and the Participant's 65th
birthday.
78
<PAGE>
If a Participant's Early Retirement Benefit commences on or after age
62 but prior to age 65, the Participant's Early Retirement Benefit shall be
reduced by 2% for each year between the Participant's Annuity Starting Date and
the Participant's 65th birthday.
8-7 Disability Retirement
---------------------
A Participant who has completed 10 Years of Credited Service as of the
date Total and Permanent Disability has endured for a period of 26 weeks shall
be eligible for a Disability Retirement Benefit.
Total and Permanent Disability means a total and permanent mental or
physical disability of a Participant and confirmed by medical examination of a
physician selected by the Company or the Participant, and confirmed by medical
examination of a physician selected by the other party, whether or not such
disability arose out of or during the course of employment, of a nature
preventing such Participant from engaging in any occupation for compensation for
the balance of the Participant's life.
8-8 Disability Retirement Benefit
-----------------------------
The Participant's Disability Retirement Benefit shall be determined
pursuant to Section 3.1.2, based on the Participant's Years of Credited Service
to the date of the Participant's Disability Retirement.
The Disability Retirement payment shall commence with the first day of
the month immediately following the expiration of the 26-week period described
in Section 8-7 of this Supplement or medical certification of disability,
whichever shall be later.
Such payment shall also take into account and have deducted therefrom
any benefits paid or payable, now or in the future, to the Participant by way of
(a) Worker's Compensation payments; (b) public pension payments (except Social
Security Disability and Military pension payments); and (c) 1/2 of any accident
or health insurance benefit payment as may be provided by any program as now or
in the future made available by the Company or placed in effect by any
governmental authority for the benefit of Participants; however, any lump sum
award under (a) and (c) above shall not be deducted. Any Participant who shall
receive a Disability Retirement Benefit shall be subject to reexamination by a
physician of the Company at any time the Company may so request and if, in the
opinion of the Company, the Total and Permanent Disability of the Participant
shall no longer continue to exist, such Participant's right to a continuance of
Disability Retirement Benefit payment shall cease. Failure or refusal of a
Participant to submit to medical examination as requested by the Company shall
be cause of cancellation of the Disability Retirement Benefit. Such disabled
Participant shall, however, be entitled to Early or Normal Retirement benefit
payments upon qualification by the Participant under the requirements set forth
in Section 3.1 and Section 3.2. In no event, however, shall any Participant be
entitled to receive both a Disability Retirement Benefit and an Early or Normal
Retirement Benefit, it being intended that there should be no duplication of
retirement benefits.
8-9 Termination Benefits
--------------------
79
<PAGE>
If a Participant has attained age 55 and completed 5 Years of Vesting
Service, the Participant may elect payment of the Actuarial Equivalent of the
Participant's Termination Benefit to commence as of the first day of any month
before the Participant's Normal Retirement Date.
80
<PAGE>
SUPPLEMENT 9
INORGANIC CHEMICAL DIVISION, TONOWANDA, NEW YORK
------------------------------------------------
9-1 Eligible Employees
------------------
The terms of this Supplement apply only to Eligible Employees of the
FMC Corporation Inorganic Chemical Division who work in Tonowanda, New York and
who are covered by the Collective Bargaining Agreement between the Company and
the International Chemical Workers Union, Local No. 76.
9-2 Actuarial Equivalent
--------------------
Actuarial Equivalent, other than for purposes of Section 12.8 of the
Plan, shall be determined based on the following:
(a) for purposes of the 50% or 100% Joint and Survivor's Annuity and
Section 4.1 of the Plan, the 1971 Group Annuity Table (weighted
95% male, 5% female) and 6% interest compounded annually.
(b) for purposes of Section 9-9 of this Supplement, the 1971 Group
Annuity Table (weighted 95% male, 5% female) and 4.5% interest
compounded annually.
9-3 Commencement and Participation
------------------------------
An Eligible Employee shall become a Participant as of the date the
Participant completes 1 Year of Credited Service.
9-4 Normal Retirement Date
----------------------
Normal Retirement Date means the first day of the month coinciding
with or next following the Participant's 65th birthday.
9-5 Normal Retirement Benefit
-------------------------
A Participant's monthly Normal Retirement Benefit shall be determined
by multiplying the fixed rate provided below in effect on the date his Years of
Credited Service terminate, multiplied by the Participant's Years of Credited
Service:
Termination Date Benefit Rate
---------------- ------------
On or after July 15, 1998 but $29.00
before July 15, 1999
On or after July 15, 1999 $30.00
81
<PAGE>
Notwithstanding the foregoing, if a Participant's Annuity Starting Date
occurs on or after July 1, 1997 and after the Participant's 62nd birthday, such
Participant's Normal Retirement Benefit shall not be less than the benefit to
which he would have been entitled had his Years of Credited Service terminated
on July 15, 1999.
9-6 Early Retirement Reduction Factor
---------------------------------
If a Participant's Early Retirement Benefit commences prior to age 62,
the Participant's Early Retirement Benefit shall be reduced by 1/3 of 1% for
each month between his Annuity Starting Date and the Participant's 62nd
birthday. If a Participant's Early Retirement Benefit commences on or after age
62, no reduction shall apply.
9-7 Disability Retirement
---------------------
A Participant who has attained age 45 and completed 15 Years of Credited
Service as of the date Total and Permanent Disability has endured for a period
of 26 weeks shall be eligible for a Disability Retirement Benefit.
Total and Permanent Disability means a total and permanent mental or
physical disability of a Participant and confirmed by medical examination of a
physician selected by the Company or the Participant, and confirmed by medical
examination of a physician selected by the other party, whether or not such
disability arose out of or during the course of employment, of a nature
preventing such Participant from engaging in any occupation for compensation for
the balance of the Participant's life.
9-8 Disability Retirement Benefit
-----------------------------
The Participant's Disability Retirement Benefit shall be determined
pursuant to Section 3.1.2, based on the Participant's Years of Credited Service
to the date of his Disability Retirement.
The Disability Retirement payment shall commence with the first day of
the month immediately following the expiration of the 26-week period described
in Section 9-8 of this Supplement or medical certification of disability,
whichever shall be later.
Such payment shall also take into account and have deducted therefrom any
benefits paid or payable, now or in the future, to the Participant by way of (a)
Worker's Compensation payments; (b) public pension payments (except Social
Security Disability and Military pension payments); and (c) 1/2 of any accident
or health insurance benefit payment as may be provided by any program as now or
in the future made available by the Company or placed in effect by any
governmental authority for the benefit of Participants; however, any lump sum
award under (a) and (c) above shall not be deducted. Any Participant who shall
receive a Disability Retirement Benefit shall be subject to reexamination by a
physician of the Company at any time the Company may so request and if, in the
opinion of the Company, the Total and Permanent Disability of the Participant
shall no longer continue to exist, such Participant's right
82
<PAGE>
to a continuance of Disability Retirement Benefit payment shall cease. Failure
or refusal of a Participant to submit to medical examination as requested by the
Company shall be cause of cancellation of the Disability Retirement Benefit.
Such disabled Participant shall, however, be entitled to Early or Normal
Retirement benefit payments upon qualification by the Participant under the
requirements set forth in Section 3.1 and Section 3.2. In no event, however,
shall any Participant be entitled to receive both a Disability Retirement
Benefit and an Early or Normal Retirement Benefit, it being intended that there
should be no duplication of retirement benefits.
9-9 Optional Forms of Benefits
--------------------------
A Participant may elect, with spousal consent and in accordance with
Section 6.3, to receive Plan benefits in one of the following optional forms:
(a) a married Participant may elect an Individual Life Annuity;
(b) a Participant who is eligible for a Normal or Early Retirement
Benefit may elect a 100% joint and survivor annuity with the
Participant's Beneficiary as the survivor; or
(c) a Participant who has not attained age 62 and who is eligible for
an Early Retirement Benefit may elect a level income option so
that the Participant's benefit payments are increased until
Social Security benefits are payable, then decreased thereafter
to provide a level income from both sources.
83
<PAGE>
SUPPLEMENT 10
INDUSTRIAL CHEMICALS DIVISION, CARTERET, NEW JERSEY
---------------------------------------------------
10-1 Eligible Employees
------------------
The terms of this Supplement apply only to Eligible Employees of the
FMC Corporation Industrial Chemicals Division who were in Carteret, New Jersey,
and who are covered by the Collective Bargaining Agreement between the Company
and the International Chemical Workers Union, Local No. 144.
10-2 Actuarial Equivalent
--------------------
Actuarial Equivalent, other than for purposes of Section 12.8 of the
Plan, shall be determined based on the 1971 Group Annuity Table (weighted 95%
male, 5% female) and 6% interest compounded annually.
10-3 Commencement of Participation
-----------------------------
An Eligible Employee shall become a Participant as of the date the
Participant completes one Year of Credited Service.
10-4 Normal Retirement Date
----------------------
Normal Retirement Date means the first day of the month coinciding
with or next following the Participant's 65th birthday.
10-5 Normal Retirement Benefit
-------------------------
A Participant's monthly Normal Retirement Benefit shall be determined
by multiplying the appropriate rate by the number of Participant's Years of
Credited Service in each service segment as outlined below, then determining the
sum of such products:
For Participants who retire on or after November 1, 1998 but before
November 1, 1999:
Years of Credited Service Service Segment Multiplier
-----------------------------------------------------------
1-10 years $30.00
-----------------------------------------------------------
11-20 years $31.00
-----------------------------------------------------------
21 + years $32.00
-----------------------------------------------------------
84
<PAGE>
For Participants who retire on or after November 1, 1999 but before
November 1, 2000:
Years of Credited Service Service Segment Multiplier
---------------------------------------------------------
1-10 years $31.00
---------------------------------------------------------
11-20 years $32.00
---------------------------------------------------------
21 + years $33.00
---------------------------------------------------------
For Participants who retire on or after November 1, 2000:
Years of Credited Service Service Segment Multiplier
---------------------------------------------------------
1-10 years $32.00
---------------------------------------------------------
11-20 years $33.00
---------------------------------------------------------
21 + years $34.00
---------------------------------------------------------
10-6 Early Retirement Reduction Factor
---------------------------------
If a Participant's Early Retirement Benefit commences on or after age
55 but before age 62, the Participant's Early Retirement Benefit shall be
reduced by a percentage equal to (a) the product of 1/6 of 1% multiplied by the
number of months between age 62 and the Normal Retirement Date, plus (b) the
product of 1/3 of 1% multiplied by the number of months between the
Participant's Annuity Starting Date and the Participant's 62nd birthday.
If a Participant's Early Retirement Benefit commences on or after age
62 but before age 65 and the Participant has less than 30 Years of Credited
Service, the Participant's Early Retirement Benefit shall be reduced by 1/6 of
1% for each month between the Annuity Starting Date and the Participant's 65th
birthday.
If a Participant's Early Retirement Benefit commences on or after age
62 and the Participant has 30 or more Years of Credited Service, no reduction
shall apply.
10-7 Surviving Spouse's Benefit
--------------------------
Payment of the survivor's benefit shall commence on the first day of
the month next following the later of the first date the Participant would have
attained age 55 or the Participant's death, unless the Participant's spouse
elects to commence payment of benefits as of the first day of any subsequent
month, but not later than the Participant's Normal Retirement Date.
10-8 Disability Retirement
---------------------
85
<PAGE>
A Participant who has completed 10 Years of Credited Service as of the
date Total and Permanent Disability has endured for a period of 13 weeks shall
be eligible for a Disability Retirement Benefit.
Total and Permanent Disability means a total and permanent mental or
physical disability of a Participant and confirmed by medical examination of a
physician selected by the Company or the Participant, and confirmed by medical
examination of a physician selected by the other party, whether or not such
disability arose out of or during the course of employment, which qualifies such
Participant for Social Security benefits.
10-9 Disability Retirement Benefit
-----------------------------
The Participant's Disability Retirement Benefit shall be determined
pursuant to Section 3.1.2, based on the Participant's Years of Credited Service
to the date of the Participant's Disability Retirement.
The Disability Retirement payment shall commence with the first day of
the month immediately following the expiration of the 13-week period described
in Section 10-8 of this Supplement or medical certification of disability,
whichever shall be later.
Such payment shall also take into account and have deducted therefrom
any benefits paid or payable, now or in the future, to the Participant by way of
(a) Worker's Compensation payments; (b) public pension payments (except Social
Security Disability and Military pension payments); and (c) 1/2 of any accident
or health insurance benefit payment as may be provided by any program as now or
in the future made available by the Company or placed in effect by any
governmental authority for the benefit of Participants; however, any lump sum
award under (a) and (c) above shall not be deducted. Any Participant who shall
receive a Disability Retirement Benefit shall be subject to reexamination by a
physician of the Company at any time the Company may so request and if, in the
opinion of the Company, the Total and Permanent Disability of the Participant
shall no longer continue to exist, such Participant's right to a continuance of
Disability Retirement Benefit payment shall cease. Failure or refusal of a
Participant to submit to medical examination as requested by the Company shall
be cause of cancellation of the Disability Retirement Benefit. Such disabled
Participant shall, however, be entitled to Early or Normal Retirement benefit
payments upon qualification by the Participant under the requirements set forth
in Section 3.1 and Section 3.2. In no event, however, shall any Participant be
entitled to receive both a Disability Retirement Benefit and an Early or Normal
Retirement Benefit, it being intended that there should be no duplication of
retirement benefits.
10-10 Termination Benefits
--------------------
If a Participant has attained age 55 and completed 5 Years of Vesting
Service, the Participant may elect payment of the Actuarial Equivalent of the
Participant's Termination Benefit to commence as of the first day of any month
before the Participant's Normal Retirement Date.
86
<PAGE>
SUPPLEMENT 11
SMITH METER PLANT, ERIE, PENNSYLVANIA
-------------------------------------
11-1 Eligible Employees
------------------
The terms of this Supplement apply only to Eligible Employees of the
FMC Corporation Smith Meter Plan who work in Erie, Pennsylvania and who are
covered by the Collective Bargaining Agreement between the Company and the
International Union, United Automobile, Aerospace and Agricultural Implement
Workers of America Local No. 714.
11-2 Actuarial Equivalent
--------------------
Actuarial Equivalent, other than for purposes of Section 12.8 of the
Plan, shall be determined based on the UP-1984 Mortality Table (for nondisabled
participants) and the 1965 Railroad Board Total Disabled Annuitants Mortality
Table - Ultimate Rates (for disabled participants) and the interest rate used by
the Pension Benefit Guaranty Corporation for valuing immediate annuities for
defined benefit plans terminating on the preceding December 31. No adjustment
to such interest rate shall be made if the difference between the otherwise
current rate and the applicable PBGC rate is less than 0.5%.
11-3 Service
-------
Break-In-Service occurs when a nonvested Employee does not accrue at
least 170 Hours of Service during a calendar year. Any such break shall cause a
forfeiture of prior Years of Vesting Service if the total years of consecutive
Breaks-in-Service equals or exceeds the greater of five or the number of Years
of Vesting Service.
If the number of consecutive Breaks-in-Service do not operate to cause a
forfeiture of prior Years of Vesting Service, the prior Years of Vesting Service
shall be reinstated after the Employee is again credited with 1/10th Year of
Vesting Service. Further, if an Employee becomes eligible for a Disability
Retirement Benefit and recovers prior to his 65th birthday, he shall retain his
Years of Vesting Service upon return to active employment with the Company
within 30 days after Disability Retirement Benefits cease.
Hour of Service means:
---------------
(a) Each hour during an applicable computation period for which an
Employee is directly or indirectly paid or entitled to payment as an
Employee for services performed, including back pay, irrespective of
mitigation of damages, or such hours directly or indirectly paid for
reasons other than the performance of duties during the applicable
computation period, such as vacation, holidays, paid sick or funeral
leaves, and similar paid periods of nonworking time, or periods of
absence because of jury duty, military leaves and other Company
approved leaves of absence. The number of Hours of Service to be
credited to an Employee as a result of payment for other than duties
performed shall be computed in accordance
87
<PAGE>
with such Employee's hourly rate of pay during that computation period
for which payment is made.
(b) Such Hours of Service which are paid for other than at the time they
accrued shall be deemed accumulated for all purposes herein during the
period for which they accrued irrespective of when payment is made.
(c) The number of Hours of Service to be credited to an Employee for any
computation period shall be governed by Sections 2530.200b-2(b) and
(c) of the Labor Department Regulations relating to ERISA.
(d) Anything contained herein to the contrary notwithstanding and solely
for purposes of determining whether a Break-in-Service has occurred
for purposes of Years of Vesting Service, an Employee who is absent
from work for maternity or paternity reasons shall receive credit for
the Hours of Service which would otherwise have been credited to such
Employee but for such absence, or in any case in which Hours of
Service cannot be determined, 8 Hours of Service per day of such
absence. The total number of Hours of Service credited under this
paragraph for any single continuous period shall not exceed 501 hours.
For purposes of this paragraph, an absence from work for maternity or
paternity reasons means an absence, (i) by reason of the pregnancy of
the individual, (ii) by reason of a birth of a child of the
individual, (iii) by reason of the placement of a child with the
individual in connection with the adoption of such child by such
individual, or (iv) for purposes of caring for such child for a period
beginning immediately following such birth or placement. The Hours of
Service credited under this paragraph shall be credited in the Plan
Year in which the absence begins if such crediting is required to
prevent a Break-in-Service in such Plan Year, or (in all other cases)
in the following Plan Year.
One Year Break-In-Service means any calendar year during which an
Employee completes less than 170 Hours of Service.
Year of Credited Service means (A) the Employee's Years of Credited
Service prior to the Effective Date, and (B) the Employee's Years of Vesting
Service while the Employee is an Eligible Employee and after the Employee
becomes a Participant. Notwithstanding the foregoing, benefit payments under
this Plan for periods of service credited under any other retirement plans
sponsored by the Company or an Affiliate as certified by the Administrator shall
be reduced (but not below zero) by the amount of any benefit payments under such
other plan for the same period of time.
Year of Vesting Service means (A) the Employee's Years of Service
prior to the Effective Date, and (B) the total number of calendar years in which
the Employee is credited with 1000 or more Hours of Service, or, subject to the
provisions of this Supplement on Break-In-Service, a proportionate credit for
1/10th of a Year of Vesting Service for each 100 Hours of Service credited
during such calendar year if the Employee is credited with less than 1000 Hours
of Service during such calendar year.
88
<PAGE>
11-4 Normal Retirement Date
----------------------
Normal Retirement Date means the earlier of (a) the first date the
Participant has attained age 62 and completed 10 years of Vesting Service, or
(b) the Participant's 65th birthday.
11-5 Normal Retirement Benefit
-------------------------
A Participant's monthly Normal Retirement Benefit shall be determined
by multiplying the fixed rate provided below in effect on the date the
Participant's Years of Credited Service terminate, multiplied by the
Participant's Years of Credited Service:
Termination Date Benefit Rate
---------------- ------------
On or after January 1, 1999 $25.00
A Participant's monthly Normal Retirement Benefit shall be increased
by $20.00 per month after the Participant attains age 65, and by an additional
$20.00 per month after the Participant's spouse attains age 65.
11-6 Early Retirement Date
---------------------
Early Retirement Date means the later of the Participant's 57th
birthday and the date the Participant acquires 10 Years of Credited Service.
11-7 Early Retirement Reduction Factor
---------------------------------
If a Participant's Early Retirement Benefit commences prior to age 62,
the Participant's Early Retirement Benefit shall be reduced by a percentage
equal to 4% multiplied by the number of years (prorated for any fraction of a
year) from the Annuity Starting Date to the first day of the month following the
Participant's 62nd birthday.
11-8 Disability Retirement
---------------------
A Participant who has completed 10 Years of Credited Service and
suffers a Total and Permanent Disability while he is an Employee and before he
has attained age 62 shall be eligible for a Disability Retirement Benefit.
Total and Permanent Disability means total disability by bodily injury
or disease, physical or mental, or both, sufficient to prevent the Employee from
engaging in any regular occupation or employment for remuneration or profit,
which disability will be permanent and continuous during the remainder of the
Employee's life; provided, however, that no Employee shall be deemed to be
totally and permanently disabled for the purposes of the Plan if his incapacity
consists of chronic alcoholism or addiction to narcotics, or if such incapacity
was contracted, suffered or incurred while he was engaged in a felonious
enterprise or resulted therefrom or resulted from an intentionally self-
inflicted injury or resulted from service in the
89
<PAGE>
armed forces of any country. The existence of total and permanent disability
shall be determined by the Committee on the basis of medical evidence
satisfactory to it.
11-9 Disability Retirement Benefit
-----------------------------
The Participant's Disability Retirement Benefit shall be determined by
multiplying the fixed rate provided below in effect on the date his Total and
Permanent Disability commences, multiplied by the Participant's Years of
Credited Service as of such date:
Termination Date Benefit Rate
---------------- ------------
On or after January 1, 1999 $50.00
All disability retirement benefits shall be reduced by the amount of
(a) worker's compensation benefits; and (b) any present or future payments on
account of injury, disease or disability under the Federal Social Security Act,
as amended, or any other Federal or State law under which the Company
contributes through taxes or otherwise to benefits for injury, disease or
disability of Employees whether occupational or non-occupational; provided
however, that the provisions of this Section 11-9 shall not operate to reduce
the disability retirement benefits to less than the retirement benefits to which
the Participant would have been entitled had the Participant reached the
Participant's 62nd birthday at time of disability retirement.
11-10 Normal Form of Benefit
----------------------
The normal form of benefit shall be a 50% Joint and Survivor's Annuity
with the Participant's spouse as joint annuitant if he is married on the Annuity
Starting Date, and an Individual Life Annuity if he is not married on the
Annuity Starting Date.
11-11 Optional Forms of Benefit
-------------------------
A Participant who is eligible for an Early or Normal Retirement
Benefit may, with spousal consent and in accordance with Section 6.3, waive the
normal form of benefit and elect one of the optional forms which shall be the
Actuarial Equivalent of the normal form of benefit.
(a) an Individual Life Annuity, if the Participant is married;
(b) a 100% or 66-2/3% Joint and Survivor's Annuity; or
(c) a joint and survivor's annuity pursuant to which, upon the
Participant's death 50% of the amount paid to the Participant
(reduced by 1% for each full year exceeding 10 by which the
spouse is younger than the Participant) is paid to the
Participant's spouse until the earlier of (i) the spouse's death;
(ii) remarriage; or (iii) a total of 120 payments have been made
to the Participant and spouse. No benefit shall be paid to the
Participant's spouse if the
90
<PAGE>
Participant and spouse were married
less than 12 months at the time of the Participant's death.
11-12 Surviving Spouse's Benefit
--------------------------
If the Participant had attained Early Retirement Date, the amount of
the surviving spouse's benefit shall be 50% of the benefit the Participant would
have received if the Participant had elected an Individual Life Annuity
commencing on the day before the Participant's death.
If the Participant had not attained Early Retirement Date, the amount
of the surviving spouse's benefit shall be equal to the survivor's benefit under
the 50% Joint and Survivor's Annuity the Participant would have received if the
Participant had elected such annuity commencing at age 57 or the day before the
Participant's death, if later.
Monthly surviving spouse benefits payable under this Section 11-12
shall be reduced by 1% for each full year exceeding 10 years by which the
surviving spouse is younger than the Participant.
91
<PAGE>
SUPPLEMENT 12
FOOD PROCESSING MACHINERY DIVISION, HOOPESTON, ILLINOIS
-------------------------------------------------------
12-1 Eligible Employees
------------------
The terms of this Supplement apply only to Eligible Employees of the
FMC Corporation Food Processing Machinery Division who work in Hoopeston,
Illinois and who are covered by the Collective Bargaining Agreement between the
Company and the Allied Industrial Workers of America, AFL-CIO Local 985.
12-2 Actuarial Equivalent
--------------------
Actuarial Equivalent, other than for purposes of Section 12.8 of the
Plan, shall be determined based on the 1971 Group Annuity Table (weighted 95%
male, 5% female) and 6% interest compounded annually.
12-3 Commencement of Participation
-----------------------------
An Eligible Employee shall become a Participant as of the date the
Participant completes 1 year of Credited Service.
12-4 Normal Retirement Date
----------------------
Normal Retirement Date means the first day of the month coinciding
with or next following the Participant's 65th birthday.
12-5 Normal Retirement Benefit
-------------------------
A Participant's monthly Normal Retirement Benefit shall be determined
by multiplying the fixed rate provided below in effect on the date the
Participant's Years of Credited Service terminate, multiplied by his Years of
Credited Service:
Termination Date Benefit Rate
---------------- ------------
On or after December 1, 1998 $26.00
12-6 Early Retirement Reduction Factor
---------------------------------
If a Participant's Early Retirement Benefit commences prior to age 65,
the Participant's Early Retirement Benefit shall be reduced by 4% for each full
year between the Annuity Starting Date and the Participant's 65th birthday.
12-7 Optional Form of Benefits
-------------------------
92
<PAGE>
(a) A married Participant may elect, with spousal consent and in
accordance with Section 6.3, to receive the Participant's
benefits in one of the following forms:
(i) an Individual Life Annuity;
(ii) a 50% joint and survivor's annuity with the
Participant's Beneficiary as survivor; or
(iii) a 100% joint and survivor's annuity with the
Participant's Beneficiary as survivor.
(b) An unmarried Participant who is eligible for Normal Retirement,
Early Retirement or Disability Retirement Benefits may elect, in
accordance with Section 6.3, to receive the Participant's
benefits in one of the following forms:
(i) a 50% joint and survivor's annuity with the
Participant's Beneficiary as survivor; or
(ii) a 100% joint and survivor's annuity with the
Participant's Beneficiary as survivor.
12-8 Disability Retirement
---------------------
A Participant who has completed 15 Years of Credited Service as of the
date Total and Permanent Disability has endured for a period of 13 weeks shall
be eligible for a Disability Retirement Benefit.
Total and Permanent Disability means a total and permanent mental or
physical disability of a Participant and confirmed by medical examination of a
physician selected by the Company or the Participant, and confirmed by medical
examination of a physician selected by the other party, whether or not such
disability arose out of or during the course of employment, of a nature
preventing such Participant from engaging in any occupation for compensation for
the balance of the Participant's life.
12-9 Disability Retirement Benefit
-----------------------------
The Participant's Disability Retirement Benefit shall be determined
pursuant to Section 3.1.2, based on the Participant's Years of Credited Service
to the date of the Participant's Disability Retirement.
The Disability Retirement payment shall commence with the first day of
the month immediately following the expiration of the 13-week period described
in Section 12-8 of this Supplement or medical certification of disability,
whichever shall be later.
93
<PAGE>
Such payment shall also take into account and have deducted therefrom
any benefits paid or payable, now or in the future, to the Participant by way of
(a) Worker's Compensation payments; (b) public pension payments (except Social
Security Disability and Military pension payments); and (c) 1/2 of any accident
or health insurance benefit payment as may be provided by any program as now or
in the future made available by the Company or placed in effect by any
governmental authority for the benefit of Participants; however, any lump sum
award under (a) and (c) above shall not be deducted. Any Participant who shall
receive a Disability Retirement Benefit shall be subject to reexamination by a
physician of the Company at any time the Company may so request and if, in the
opinion of the Company, the Total and Permanent Disability of the Participant
shall no longer continue to exist, such Participant's right to a continuance of
Disability Retirement Benefit payment shall cease. Failure or refusal of a
Participant to submit to medical examination as requested by the Company shall
be cause of cancellation of the Disability Retirement Benefit. Such disabled
Participant shall, however, be entitled to Early or Normal Retirement benefit
payments upon qualification by the Participant under the requirements set forth
in Section 3.1 and Section 3.2. In no event, however, shall any Participant be
entitled to receive both a Disability Retirement Benefit and an Early or Normal
Retirement Benefit, it being intended that there should be no duplication of
retirement benefits.
94
<PAGE>
SUPPLEMENT 13
KEMMERER COKE PLANT, KEMMERER, WYOMING
--------------------------------------
13-1 Eligible Employees
------------------
The terms of this Supplement apply only to Eligible Employees of the
FMC Corporation Kemmerer Coke Plant who work in Kemmerer, Wyoming and who are
covered by the Collective Bargaining Agreement between the Company and the
International Union, United Mine Workers of America.
13-2 Actuarial Equivalent
--------------------
Actuarial Equivalent, other than for purposes of Section 12.8 of the
Plan, shall be determined based on the following:
(a) for purposes of the 50% or 100% Joint and Survivor's Annuity and
for purposes a "qualified domestic relations order" as defined in
Code Section 414(p), the 1971 Group Annuity Table (weighted 95%
male, 5% female) and 6% interest compounded annually; and
(b) for purposes of Sections 13-12 and 13-13 of this Supplement, (i)
if the Participant's employment is terminated due to permanent
layoff or nonoccupational disability, based on a reduction of 3%
for each year between the Participant's Annuity Starting Date and
the Participant's 62nd birthday; and (ii) if the Participant's
employment is terminated for reasons other than permanent layoff
or nonoccupational disability, based on Table 13 of this
Supplement.
13-3 Service
-------
Break-In-Service occurs when a nonvested Employee does not accrue at
least 501 Hours of Service during a calendar year. Any such break shall cause a
forfeiture of prior Years of Vesting Service if the total years of consecutive
Breaks-in-Service equals or exceeds the greater of five or the number of Years
of Vesting Service.
If the number of consecutive Breaks-in-Service do not operate to cause
a forfeiture of prior Years of Vesting Service, the prior Years of Vesting
Service shall be reinstated after the Employee is again credited with one Year
of Vesting Service.
Hour of Service means:
---------------
(a) Each hour during an applicable computation period for which an
Employee is directly or indirectly paid or entitled to payment as
an Employee for services performed, including back pay,
irrespective of mitigation of damages, or such hours directly or
indirectly paid for reasons
95
<PAGE>
other than the performance of duties during the applicable
computation period, such as vacation, holidays, paid sick or
funeral leaves, and similar paid periods of nonworking time, or
periods of absence because of jury duty, military leaves and
other Company approved leaves of absence. The number of Hours of
Service to be credited to an Employee as a result of payment for
other than duties performed shall be computed in accordance with
such Employee's hourly rate of pay during that computation period
for which payment is made.
(b) Such Hours of Service which are paid for other than at the time
they accrued shall be deemed accumulated for all purposes herein
during the period for which they accrued irrespective of when
payment is made.
(c) The number of Hours of Service to be credited to an Employee for
any computation period shall be governed by Sections 2530.200b-
2(b) and (c) of the Labor Department Regulations relating to
ERISA.
(d) Anything contained herein to the contrary notwithstanding and
solely for purposes of determining whether a Break-in-Service has
occurred for purposes of Years of Vesting Service, an Employee
who is absent from work for maternity or paternity reasons shall
receive credit for the Hours of Service which would otherwise
have been credited to such Employee but for such absence, or in
any case in which Hours of Service cannot be determined, 8 Hours
of Service per day of such absence. The total number of Hours of
Service credited under this paragraph for any single continuous
period shall not exceed 501 hours. For purposes of this
paragraph, an absence from work for maternity or paternity
reasons means an absence, (i) by reason of the pregnancy of the
individual, (ii) by reason of a birth of a child of the
individual, (iii) by reason of the placement of a child with the
individual in connection with the adoption of such child by such
individual, or (iv) for purposes of caring for such child for a
period beginning immediately following such birth or placement.
The Hours of Service credited under this paragraph shall be
credited in the Plan Year in which the absence begins if such
crediting is required to prevent a Break-in-Service in such Plan
Year, or (in all other cases) in the following Plan Year.
Nonsignatory Past Service has the meaning assigned thereto in the
in the Prior Plan.
Prior Plan means the FMC Corporation Pension Plan - Kemmerer Coke Plan
as in effect on December 31, 1998.
Reciprocal Service means service received by an Employee who works for
a signatory company and is covered under such company's pension plan if such
other plan recognizes service with the Company and Affiliates. An Employee's
Reciprocal Service shall be his Reciprocal Service under the Prior Plan and his
Reciprocal Service after the Effective Date.
96
<PAGE>
Signatory Past Service means the Employee's Signatory Past Service
under the Prior Plan as in effect on December 31, 1998, and any Signatory Past
Service (as determined under the terms of such plan) which qualifies on his
behalf after the Effective Date.
Year of Credited Service means (a) the Employee's Years of Credited
Service (including Signatory Past Service) prior to the Effective Date, and (b)
the total number of years in which the Employee is an Eligible Employee and
after the Employee becomes a Participant in which the Employee is credited with
1600 or more Hours of Service. Subject to the provisions of this Supplement on
Break-In-Service, an Employee shall receive credit for a partial Year of
Credited Service for each year in which he is credited with less than 1600 Hours
of Service, based on the proportion that his hours worked during such year bears
to 1600, rounded to the nearest 1/10th.
Year of Vesting Service means (a) the Employee's Years of Vesting
Service under the Prior Plan prior to the Effective Date, and (b) the total
number of years in which the Employee is credited with 1000 or more Hours of
Service or hours for any other signatory company which counts vesting under
their plan on the basis of hours worked or hours of service. In no event shall
an Employee be credited with more than one Year of Vesting Service during a
year.
13-4 Commencement of Participation
-----------------------------
An Eligible Employee shall become a Participant as of the date the
Employee completes 1 Year of Vesting Service.
13-5 Normal Retirement Date
----------------------
Normal Retirement Date means the first day of the month following the
later of the Participant's 65th birthday or the 5th anniversary of the date the
Participant commenced participation in the Plan.
13-6 Normal Retirement Benefit
-------------------------
A Participant's monthly Normal Retirement Benefit shall be determined
by multiplying the appropriate rate by the number of the Participant's Years of
Credited Service in each service segment as outlined below, then determining the
sum of such products:
For Participants who retire on or after June 1, 1998, but before June
1, 1999:
Years of Credited Service
and Reciprocal Service Benefit Rate
----------------------------------------------------
1-10 years $31.00
----------------------------------------------------
11-20 years $31.50
----------------------------------------------------
21-30 years $32.00
----------------------------------------------------
31-40 years $32.50
----------------------------------------------------
97
<PAGE>
For Participants who retire on or after June 1, 1999, but before June
1, 2000:
Years of Credited Service
and Reciprocal Service Benefit Rate
----------------------------------------------------
1-10 years $32.50
----------------------------------------------------
11-20 years $33.00
----------------------------------------------------
21-30 years $33.50
----------------------------------------------------
31-40 years $34.00
----------------------------------------------------
For Participants who retire on or after June 1, 2000, but before June
1, 2001:
Years of Credited Service
and Reciprocal Service Benefit Rate
----------------------------------------------------
1-10 years $34.00
----------------------------------------------------
11-20 years $34.50
----------------------------------------------------
21-30 years $35.00
----------------------------------------------------
31-40 years $35.50
----------------------------------------------------
For Participants who retire on or after June 1, 2001:
Years of Credited Service
and Reciprocal Service Benefit Rate
----------------------------------------------------
1-10 years $35.00
----------------------------------------------------
11-20 years $35.50
----------------------------------------------------
21-30 years $36.00
----------------------------------------------------
31-40 years $36.50
----------------------------------------------------
In addition, for each month of a Participant's Nonsignatory Past
Service $7.50 per month shall be aggregated with the foregoing amount.
13-7 Early Retirement Date
---------------------
Early Retirement Date means the later of the Participant's 55th
birthday and the date the Participant acquires (a) 10 Years of Vesting Service
or (b) 20 Years of Credited Service, Reciprocal Service and Nonsignatory Past
Service.
13-8 Early Retirement Reduction Factor
---------------------------------
98
<PAGE>
If a Participant's Early Retirement Benefit commences prior to age 62,
the Participant's Early Retirement Benefit shall be reduced by 1/4 of 1% for
each month between the Participant's Annuity Starting Date and the Participant's
62nd birthday. If a Participant's Early Retirement Benefit commences on or
after age 62, no reduction shall apply.
13-9 Minimum Normal or Early Retirement Benefit
------------------------------------------
The minimum Normal or Early Retirement Benefit, expressed as an
Individual Life Annuity, for a Participant who has attained age 55 and acquired
20 Years of Credited Service shall be $279.00 per month. Such minimum shall be
increased by $4.50 per month for each 1/4th Year of Credited Service in excess
of 20 years, up to $300.00 per month.
13-10 Disability Retirement
---------------------
A Participant who retires due to Total and Permanent Disability shall
be eligible for a Disability Retirement Benefit.
Total and Permanent Disability means disability as a result of a mine
accident if, by reason of such accident, the Participant is determined to be
eligible for Social Security Disability Insurance benefits.
13-11 Disability Retirement Benefit
-----------------------------
If a Participant has 10 or more Years of Vesting Service, the
Participant's Disability Retirement Benefit shall be the greater of (a) the
Participant's Normal Retirement Benefit under this Supplement based upon the
Participant's Years of Nonsignatory Past Service, Credited Service, and
Reciprocal Service at the time of the Participant's Disability Retirement; or
(b) the product of $150.00 multiplied by a fraction the numerator of which is
the Participant's Years of Credited Service and the denominator of which is the
Participant's Years of Credited Service and Reciprocal Service.
If a Participant has less than 10 Years of Vesting Service, the
Participant's Disability Retirement Benefit shall be $150.00 per month.
13-12 Termination of Service
----------------------
A Participant who ceases to be an Employee before the Participant's
Early Retirement Date or Disability Retirement Date for any reason other than
death shall be entitled to receive a Termination Benefit if the Participant has
5 Years of Vesting Service or 20 Years of Credited Service, Reciprocal Service
and Nonsignatory Past Service. Payment of such benefit shall commence as of the
first day of the month coincident with or next following the Participant's 62nd
birthday. If the Participant elects, payment of the Actuarial Equivalent of the
Participant's Termination Benefit shall commence as of the first day of any
month before such Normal Retirement Date and coincident with or following the
Participant's 55th birthday.
13-13 Amount of Termination Benefit
-----------------------------
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<PAGE>
A Participant's monthly Termination Benefit shall be determined as a
Normal Retirement Benefit under this Supplement, based on the Participant's
Years of Credited Service, Reciprocal Service and Nonsignatory Past Service at
the time of termination of employment, disregarding Section 13-7. If payment of
the Participant's Termination Benefit commences before age 62, the amount of the
monthly benefit shall be reduced to an Actuarial Equivalent to reflect such
earlier commencement. Notwithstanding the foregoing, if the Participant has 20
Years of Credited Service and Reciprocal Service, his Termination Benefit shall
not be reduced to less than the product of $150.00 multiplied by a fraction the
numerator of which is the Participant's Years of Credited Service and the
denominator of which is the Participant's Years of Credited Service and
Reciprocal Service.
13-14 Normal Form of Benefit
----------------------
The normal form of benefit shall be a 50% Joint and Survivor's Annuity
with the Participant's spouse as joint annuitant if the Participant is married
on the Annuity Starting Date, and an Individual Life Annuity if the Participant
is not married on the Annuity Starting Date.
100
<PAGE>
TABLE 13
ACTUARIAL EQUIVALENCE FACTORS FOR DEFERRED VESTED
--------------------------------------------------
RETIREMENT BENEFITS COMMENCING PRIOR TO AGE 62
----------------------------------------------
The following factors are to be multiplied by the full accrued benefit
payable commencing at age 62 to yield the equivalent benefit payable commencing
at the indicated age:
<TABLE>
<CAPTION>
AGE ACTUARIAL AGE ACTUARIAL
EQUIVALENCE EQUIVALENCE
YEARS MONTHS FACTOR YEARS MONTHS FACTOR
----- ------ ------ ----- ------ ------
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------
55 0 .522 56 0 .569
- ---------------------------------------------------------------
1 .526 1 .573
- ---------------------------------------------------------------
2 .529 2 .577
- ---------------------------------------------------------------
3 .533 3 .582
- ---------------------------------------------------------------
4 .537 4 .586
- ---------------------------------------------------------------
5 .541 5 .590
- ---------------------------------------------------------------
6 .545 6 .595
- ---------------------------------------------------------------
7 .549 7 .599
- ---------------------------------------------------------------
8 .553 8 .604
- ---------------------------------------------------------------
9 .557 9 .608
- ---------------------------------------------------------------
10 .561 10 .612
- ---------------------------------------------------------------
11 .565 11 .617
- ---------------------------------------------------------------
- ---------------------------------------------------------------
57 0 .621 58 0 .680
- ---------------------------------------------------------------
1 .626 1 .685
- ---------------------------------------------------------------
2 .631 2 .691
- ---------------------------------------------------------------
3 .636 3 .696
- ---------------------------------------------------------------
4 .641 4 .702
- ---------------------------------------------------------------
5 .646 5 .707
- ---------------------------------------------------------------
6 .651 6 .713
- ---------------------------------------------------------------
7 .655 7 .718
- ---------------------------------------------------------------
8 .660 8 .724
- ---------------------------------------------------------------
9 .665 9 .729
- ---------------------------------------------------------------
10 .670 10 .735
- ---------------------------------------------------------------
11 .675 11 .740
- ---------------------------------------------------------------
</TABLE>
101
<PAGE>
<TABLE>
<CAPTION>
AGE ACTUARIAL AGE ACTUARIAL
EQUIVALENCE EQUIVALENCE
YEARS MONTHS FACTOR YEARS MONTHS FACTOR
----- ------ ------ ----- ------ ------
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------
59 0 .746 60 0 .820
- ---------------------------------------------------------------
1 .752 1 .827
- ---------------------------------------------------------------
2 .758 2 .834
- ---------------------------------------------------------------
3 .765 3 .841
- ---------------------------------------------------------------
4 .771 4 .848
- ---------------------------------------------------------------
5 .777 5 .855
- ---------------------------------------------------------------
6 .783 6 .863
- ---------------------------------------------------------------
7 .789 7 .870
- ---------------------------------------------------------------
8 .796 8 .877
- ---------------------------------------------------------------
9 .802 9 .884
- ---------------------------------------------------------------
10 .808 10 .891
- ---------------------------------------------------------------
11 .814 11 .898
- ---------------------------------------------------------------
- ---------------------------------------------------------------
61 0 .905 62 0 1.000
- ---------------------------------------------------------------
1 .913
- ---------------------------------------------------------------
2 .920
- ---------------------------------------------------------------
3 .928
- ---------------------------------------------------------------
4 .936
- ---------------------------------------------------------------
5 .944
- ---------------------------------------------------------------
6 .952
- ---------------------------------------------------------------
7 .960
- ---------------------------------------------------------------
8 .968
- ---------------------------------------------------------------
9 .976
- ---------------------------------------------------------------
10 .984
- ---------------------------------------------------------------
11 .992
- ---------------------------------------------------------------
</TABLE>
102
<PAGE>
SUPPLEMENT 14
INDUSTRIAL CHEMICAL DIVISION, LAWRENCE, KANSAS
----------------------------------------------
14-1 Eligible Employees
------------------
The terms of this Supplement apply only to Eligible Employees of the
FMC Corporation Industrial Chemical Division who work in Lawrence, Kansas and
who are covered by the Collective Bargaining Agreement between the Company and
the International Chemical Workers Union, Local No. 605.
14-2 Actuarial Equivalent
--------------------
Actuarial Equivalent, other than for purposes of Section 12.8 of the
Plan, shall be determined based on the 1971 Group Annuity Table (weighted 95%
male, 5% female) and 6% interest compounded annually.
14-3 Commencement of Participation
-----------------------------
An Eligible Employee shall become a Participant as of the date the
Participant completes 1 year of Credited Service.
14-4 Normal Retirement Date
----------------------
Normal Retirement Date means the first day of the month coinciding
with or next following the Participant's 65th birthday.
14-5 Normal Retirement Benefit
-------------------------
A Participant's monthly Normal Retirement Benefit shall be determined
by multiplying the appropriate rate by the number of Participant's Years of
Credited Service in each service segment as outlined below, then determining the
sum of such products:
For Participants who retire on or after September 1, 1998, but before
September 1, 1999:
<TABLE>
<CAPTION>
Years of Credited Service Service Segment Multiplier
--------------------------------------------------------
<S> <C>
1-10 years $29.40
--------------------------------------------------------
11-20 years $30.40
--------------------------------------------------------
21 + years $31.40
--------------------------------------------------------
</TABLE>
103
<PAGE>
For Participants who retire on or after September 1, 1999, but before
September 1, 2000:
<TABLE>
<CAPTION>
Years of Credited Service Service Segment Multiplier
--------------------------------------------------------
<S> <C>
1-10 years $30.40
--------------------------------------------------------
11-20 years $31.40
--------------------------------------------------------
21 + years $32.40
--------------------------------------------------------
</TABLE>
For Participants who retire on or after September 1, 2000:
<TABLE>
<CAPTION>
Years of Credited Service Service Segment Multiplier
--------------------------------------------------------
<S> <C>
1-10 years $31.40
--------------------------------------------------------
11-20 years $32.40
--------------------------------------------------------
21 + years $33.40
--------------------------------------------------------
</TABLE>
14-6 Early Retirement Reduction Factor
---------------------------------
If a Participant's Early Retirement Benefit commences prior to age 62,
the Participant's Early Retirement Benefit shall be reduced by 1/3 of 1% for
each month between the Participant's Annuity Starting Date and the Participant's
65th birthday.
If a Participant's Early Retirement Benefit commences on or after age
62 but prior to age 65, the Participant's Early Retirement Benefit shall be
reduced by 1/12 of 1% for each month between the Participant's Annuity Starting
Date and the Participant's 65th birthday.
14-7 Disability Retirement
---------------------
A Participant who has completed 10 Years of Credited Service as of the
date Total and Permanent Disability has endured for a period of 13 weeks shall
be eligible for a Disability Retirement Benefit.
Total and Permanent Disability means a total and permanent mental or
physical disability of a Participant, so certified by a physician selected by
the Company or the Participant, and confirmed by medical examination of a
physician selected by the other party, whether or not such disability arose out
of or during the course of employment, of a nature qualifying such Participant
for Social Security benefits.
14-8 Disability Retirement Benefit
-----------------------------
The Participant's Disability Retirement Benefit shall be determined
pursuant to Section 3.1.2, based on the Participant's Years of Credited Service
to the date of the Participant's Disability Retirement.
104
<PAGE>
The Disability Retirement payment shall commence with the first day of
the month immediately following the expiration of the 13-week period described
in Section 14-7 of this Supplement or medical certification of disability,
whichever shall be later.
Such payment shall also take into account and have deducted therefrom
any benefits paid or payable, now or in the future, to the Participant by way of
(a) Worker's Compensation payments; (b) public pension payments (except Social
Security Disability and Military pension payments); and (c) one-half of any
accident or health insurance benefit payment as may be provided by any program
as now or in the future made available by the Company or placed in effect by any
governmental authority for the benefit of Participants; however, any lump sum
award under (a) and (c) above shall not be deducted. Any Participant who shall
receive a Disability Retirement Benefit shall be subject to reexamination by a
physician of the Company at any time the Company may so request and if, in the
opinion of the Company, the Total and Permanent Disability of the Participant
shall no longer continue to exist, such Participant's right to a continuance of
Disability Retirement Benefit payment shall cease. Failure or refusal of a
Participant to submit to medical examination as requested by the Company shall
be cause of cancellation of the Disability Retirement Benefit. Such disabled
Participant shall, however, be entitled to Early or Normal Retirement benefit
payments upon qualification by the Participant under the requirements set forth
in Section 3.1 and Section 3.2. In no event, however, shall any Participant be
entitled to receive both a Disability Retirement Benefit and an Early or Normal
Retirement Benefit, it being intended that there should be no duplication of
retirement benefits.
105
<PAGE>
SUPPLEMENT 15
AGRICULTURAL CHEMICAL DIVISION, MIDDLEPORT, NEW YORK
----------------------------------------------------
15-1 Eligible Employees
The terms of this Supplement apply only to Eligible Employees of the
FMC Corporation Agricultural Chemical Division who work in Middleport, New York
and are covered by the Collective Bargaining Agreement between the Company and
the International Association of Machinists and Aerospace Workers, AFL-CIO,
District 76, Local Lodge 1180.
15-2 Actuarial Equivalent
Actuarial Equivalent, other than for purposes of Section 12.8 of the
Plan, shall be determined based on the 1971 Group Annuity Table (weighted 95%
male, 5% female) and 6% interest compounded annually
15-3 Commencement of Participation
An Eligible Employee shall become a Participant as of the date the
Participant completes 1 year of Credited Service.
15-4 Normal Retirement Date
Normal Retirement Date means the first day of the month coinciding
with or next following the Participant's 65th birthday.
15-5 Normal Retirement Benefit
A Participant's monthly Normal Retirement Benefit shall be determined
by multiplying the fixed rate provided below in effect on the date the
Participant's Years of Credited Service terminate, multiplied by the
Participant's Years of Credited Service:
Termination Date Benefit Rate
---------------- ------------
On or after January 20, 1998 $23.00
but before January 20, 1999
On or after January 20, 1999 $23.00
but before January 20, 2000
On or after January 20, 2000 $28.00
but before February 1, 2001
Notwithstanding the foregoing, a Participant who has attained age 62
and 10 or more Years of Credited Service who elects to commence Normal
Retirement Benefits or Early
106
<PAGE>
Retirement Benefits in calendar years 1998 or 1999 shall receive the
Participant's benefits based on the monthly benefit rate of $28.00, subject to
applicable terms of the Plan.
15-6 Early Retirement Reduction Factor
If a Participant's Early Retirement Benefit commences prior to age 62,
the Participant's Early Retirement Benefit shall be reduced by 10% for the first
year the Participant is less than age 62, plus 4% for each additional year the
Participant is less than age 62. If a Participant's Early Retirement Benefit
commences on or after age 62, no reduction shall apply.
15-7 Disability Retirement
A Participant who has completed 10 Years of Credited Service as of the
date Total and Permanent Disability has endured for a period of 26 weeks shall
be eligible for a Disability Retirement Benefit.
Total and Permanent Disability means a total and permanent mental or
physical disability of a Participant, so certified by a physician selected by
the Company or the Participant, and confirmed by medical examination of a
physician selected by the other party, whether or not such disability arose out
of or during the course of employment, of a nature preventing such Participant
from engaging in any occupation for compensation for the balance of the
Participant's life.
15-8 Disability Retirement Benefit
The Participant's Disability Retirement Benefit shall be determined
pursuant to Section 3.1.2, based on the Participant's Years of Credited Service
to the date of the Participant's Disability Retirement.
The Disability Retirement payment shall commence with the first day of
the month immediately following the expiration of the 26-week period described
in Section 15-7 of this Supplement or medical certification of disability,
whichever shall be later.
Such payment shall also take into account and have deducted therefrom
any benefits paid or payable, now or in the future, to the Participant by way of
(a) Worker's Compensation payments; (b) public pension payments (except Social
Security Disability and Military pension payments); and (c) one-half of any
accident or health insurance benefit payment as may be provided by any program
as now or in the future made available by the Company or placed in effect by any
governmental authority for the benefit of Participants; however, any lump sum
award under (a) and (c) above shall not be deducted. Any Participant who shall
receive a Disability Retirement Benefit shall be subject to reexamination by a
physician of the Company at any time the Company may so request and if, in the
opinion of the Company, the Total and Permanent Disability of the Participant
shall no longer continue to exist, such Participant's right to a continuance of
Disability Retirement Benefit payment shall cease. Failure or refusal of a
Participant to submit to medical examination as requested by the Company shall
be cause of cancellation of the Disability Retirement Benefit. Such disabled
Participant shall, however, be
107
<PAGE>
entitled to Early or Normal Retirement benefit payments upon qualification by
the Participant under the requirements set forth in Section 3.1 and Section 3.2.
In no event, however, shall any Participant be entitled to receive both a
Disability Retirement Benefit and an Early or Normal Retirement Benefit, it
being intended that there should be no duplication of retirement benefits.
108
<PAGE>
SUPPLEMENT 16
INDUSTRIAL CHEMICAL DIVISION, NEWARK, CALIFORNIA
------------------------------------------------
16-1 Eligible Employees
The terms of this Supplement apply to Eligible Employees of the FMC
Corporation Phosphorus Chemicals Division who work in Newark, California and are
covered by the Collective Bargaining Agreement between the Company and the
International Chemical Workers Union and its Local Union No. 62.
16-2 Actuarial Equivalent
Actuarial Equivalent, other than for purposes of Section 12.8 of the
Plan, shall be determined based on the 1971 Group Annuity Table (weighted 95%
male, 5% female) and 6% interest compounded annually
16-3 Commencement of Participation
An Eligible Employee shall become a Participant as of the date the
Participant completes 1 year of Credited Service.
16-4 Normal Retirement Date
Normal Retirement Date means the first day of the month coinciding
with or next following the Participant's 65th birthday.
16-5 Normal Retirement Benefit
A Participant's monthly Normal Retirement Benefit shall be determined
by multiplying the fixed rate of $28.00 by the number of Participant's Years of
Credited Service.
16-6 Early Retirement Reduction Factor
If a Participant's Early Retirement Benefit commences prior to age 60,
the Participant's Early Retirement Benefit shall be reduced by 4% for each year
between his Annuity Starting Date and his 62nd birthday. If a Participant's
Early Retirement Benefit commences on or after age 60 but prior to age 62, the
Participant's Early Retirement Benefit shall be reduced by 3% for each year
between his Annuity Starting Date and his 62nd birthday. If a Participant's
Early Retirement Benefit commences on or after age 62, no reduction shall apply.
109
<PAGE>
16-7 Disability Retirement
---------------------
A Participant who has completed 10 Years of Credited Service as of the
date Total and Permanent Disability has endured for a period of 26 weeks shall
be eligible for a Disability Retirement Benefit.
Total and Permanent Disability means a total and permanent mental or
physical disability of a Participant, so certified by a physician selected by
the Company or the Participant, and confirmed by medical examination of a
physician selected by the other party, whether or not such disability arose out
of or during the course of employment, of a nature qualifying such Participant
for Social Security benefits.
16-8 Disability Retirement Benefit
-----------------------------
The Participant's Disability Retirement Benefit shall be determined
pursuant to Section 3.1.2, based on the Participant's Years of Credited Service
to the date of the Participant's Disability Retirement.
The Disability Retirement payment shall commence with the first day of
the month immediately following the expiration of the 26-week period described
in Section 16-7 of this Supplement or medical certification of disability,
whichever shall be later.
Such payment shall also take into account and have deducted therefrom
any benefits paid or payable, now or in the future, to the Participant by way of
(a) Worker's Compensation payments; (b) public pension payments (except Social
Security Disability and Military pension payments); and (c) one-half of any
accident or health insurance benefit payment as may be provided by any program
as now or in the future made available by the Company or placed in effect by any
governmental authority for the benefit of Participants; however, any lump sum
award under (a) and (c) above shall not be deducted. Any Participant who shall
receive a Disability Retirement Benefit shall be subject to reexamination by a
physician of the Company at any time the Company may so request and if, in the
opinion of the Company, the Total and Permanent Disability of the Participant
shall no longer continue to exist, such Participant's right to a continuance of
Disability Retirement Benefit payment shall cease. Failure or refusal of a
Participant to submit to medical examination as requested by the Company shall
be cause of cancellation of the Disability Retirement Benefit. Such disabled
Participant shall, however, be entitled to Early or Normal Retirement benefit
payments upon qualification by the Participant under the requirements set forth
in Section 3.1 and Section 3.2. In no event, however, shall any Participant be
entitled to receive both a Disability Retirement Benefit and an Early or Normal
Retirement Benefit, it being intended that there should be no duplication of
retirement benefits.
110
<PAGE>
SUPPLEMENT 17
FOOD AND PHARMACEUTICAL PRODUCTS DIVISION,
------------------------------------------
NEWARK, DELAWARE
----------------
17-1 Eligible Employees
------------------
The terms of this Supplement apply only to Eligible Employees of the
FMC Corporation Food and Pharmaceutical Products Division who work in Newark,
Delaware and are covered by the Collective Bargaining Agreement between the
Company and the United Steelworkers of America on behalf of Local Union No.
13028.
17-2 Actuarial Equivalent
--------------------
Actuarial Equivalent, other than for purposes of Section 12.8 of the
Plan, shall be determined based on the following:
(a) for purposes of the 50% or 100% Joint and Survivor's Annuity and
Section 4.1 of the Plan, the 1971 Group Annuity Table (weighted
95% male, 5% female) and 6% interest compounded annually; and
(b) for purposes of the level income option in Section 17-8(c) of
this Supplement, the 1971 Group Annuity Table (weighted 95% male,
5% female) and 4.5% interest compounded annually.
17-3 Commencement of Participation
-----------------------------
An Eligible Employee shall become a Participant as of the date the
Participant completes 1 Year of Credited Service.
17-4 Normal Retirement Date
----------------------
Normal Retirement Date means the first day of the month next following
----------------------
the Participant's 65th birthday.
17-5 Normal Retirement Benefit
-------------------------
A Participant's monthly Normal Retirement Benefit shall be determined
by multiplying the appropriate rate by the number of Participant's Years of
Credited Service in each service segment as outlined below, then determining the
sum of such products:
111
<PAGE>
For Participants who retire on or after November 1, 1998 but before
October 1, 1999:
Years of Credited Service Service Segment Multiplier
1-10 years $23.50
- ------------------------------------------------------------------------
11-20 years $24.50
- ------------------------------------------------------------------------
21 + years $25.50
- ------------------------------------------------------------------------
17-6 Early Retirement Reduction Factor
---------------------------------
If a Participant's Early Retirement Benefit commences prior to age 65,
the Participant's Early Retirement Benefit shall be reduced by 1/3 of 1% for
each month between the Participant's Annuity Starting Date and the Participant's
65th birthday.
17-7 Optional Forms of Benefit
-------------------------
A Participant may elect with spousal consent and in accordance with
Section 6.3, to receive benefits in any of the following optional forms of
benefit:
(a) an Individual Life Annuity;
(b) a 50% or 100% joint and survivor's annuity. After the
Participant's death, survivor benefits will continue to be paid
to the Participant's designated beneficiary for such
beneficiary's life. Such 50% or 100% joint and survivor's
annuity shall be the Actuarial Equivalent of an Individual Life
Annuity; or
(c) level income option. A Participant (other than a Participant
entitled only to a Termination Benefit) who is eligible for an
Early Retirement Benefit may elect prior to age 62 to have his
Plan benefits increased until he is eligible for Social Security
benefits, then decreased thereafter so that a level income from
the Plan and Social Security is received. Such level income
option shall be the Actuarial Equivalent of an Individual Life
Annuity.
112
<PAGE>
SUPPLEMENT 18
INDUSTRIAL CHEMICAL DIVISION, NITRO, WEST VIRGINIA
--------------------------------------------------
18-1 Eligible Employees
------------------
This Supplement applies only to Eligible Employees of the FMC
Corporation Process Additives Division who work in Nitro, West Virginia and are
covered by the Collective Bargaining Agreement between the Company and the
United Steelworkers of America District No. 8 on behalf of Local Union 12757.
18-2 Actuarial Equivalent
--------------------
Actuarial Equivalent, other than for purposes of Section 12.8 of the
Plan, shall be determined based on the 1971 Group Annuity Table (weighted 95%
male, 5% female) and 6% interest compounded annually.
18-3 Commencement of Participation
-----------------------------
An Eligible Employee shall become a Participant as of the date the
Participant completes 1 year of Credited Service.
18-4 Normal Retirement Date
----------------------
Normal Retirement Date means the first day of the month coinciding
with or next following the Participant's 65th birthday.
18-5 Normal Retirement Benefit
-------------------------
A Participant's monthly Normal Retirement Benefit shall be determined
by multiplying the appropriate rate by the number of Participant's Years of
Credited Service in each service segment as outlined below, then determining the
sum of such products:
For Participants who retire on or after March 2, 1998 but before March
2, 1999:
Years of Credited Service Service Segment Multiplier
1-10 years $30.50
- ------------------------------------------------------------------------
11-20 years $31.50
- ------------------------------------------------------------------------
21 + years $32.50
- ------------------------------------------------------------------------
For Participants who retire on or after March 2, 1999 but before March
2, 2000:
Years of Credited Service Service Segment Multiplier
1-10 years $31.50
- ------------------------------------------------------------------------
11-20 years $32.50
- ------------------------------------------------------------------------
113
<PAGE>
21 + years $33.50
- ------------------------------------------------------------------------
For Participants who retire on or after March 2, 2000:
Years of Credited Service Service Segment Multiplier
1-10 years $32.50
- ------------------------------------------------------------------------
11-20 years $33.50
- ------------------------------------------------------------------------
21 + years $34.50
- ------------------------------------------------------------------------
18-6 Early Retirement Reduction Factor
---------------------------------
If a Participant's Early Retirement Benefit commences prior to age 62,
the Participant's Early Retirement Benefit shall be reduced by 1/4 of 1% for
each month between his Annuity Starting Date and his 62nd birthday. If a
Participant's Early Retirement Benefit commences on or after age 62, no
reduction shall apply.
18-7 Disability Retirement
---------------------
A Participant who has completed 10 Years of Credited Service as of the
date Total and Permanent Disability has endured for a period of 13 weeks shall
be eligible for a Disability Retirement Benefit.
Total and Permanent Disability means a total and permanent mental or
physical disability of a Participant and confirmed by medical examination of a
physician selected by the Company or the Participant, and confirmed by medical
examination of a physician selected by the other party, whether or not such
disability arose out of or during the course of employment, of a nature
preventing such Participant from engaging in any occupation for compensation for
the balance of his life.
18-8 Disability Retirement Benefit
-----------------------------
The Participant's Disability Retirement Benefit shall be determined
pursuant to Section 3.1.2, based on the Participant's Years of Credited Service
to the date of the Participant's Disability Retirement.
The Disability Retirement payment shall commence with the first day of
the month immediately following the expiration of the 13-week period described
in Section 18-7 of this Supplement or medical certification of disability,
whichever shall be later.
Such payment shall also take into account and have deducted therefrom
any benefits paid or payable, now or in the future, to the Participant by way of
(a) Worker's Compensation payments; (b) public pension payments (except Social
Security Disability and Military pension payments); and (c) one-half of any
accident or health insurance benefit payment as may be provided by any program
as now or in the future made available by the Company or
114
<PAGE>
placed in effect by any governmental authority for the benefit of Participants;
however, any lump sum award under (a) and (c) above shall not be deducted. Any
Participant who shall receive a Disability Retirement Benefit shall be subject
to reexamination by a physician of the Company at any time the Company may so
request and if, in the opinion of the Company, the Total and Permanent
Disability of the Participant shall no longer continue to exist, such
Participant's right to a continuance of Disability Retirement Benefit payment
shall cease. Failure or refusal of a Participant to submit to medical
examination as requested by the Company shall be cause of cancellation of the
Disability Retirement Benefit. Such disabled Participant shall, however, be
entitled to Early or Normal Retirement benefit payments upon qualification by
the Participant under the requirements set forth in Section 3.1 and Section 3.2.
In no event, however, shall any Participant be entitled to receive both a
Disability Retirement Benefit and an Early or Normal Retirement Benefit, it
being intended that there should be no duplication of retirement benefits.
115
<PAGE>
SUPPLEMENT 19
INDUSTRIAL CHEMICAL DIVISION, POCATELLO, IDAHO
----------------------------------------------
19-1 Eligible Employees
------------------
The terms of this Supplement apply only to Eligible Employees of the
FMC Corporation Phosphorus Chemicals Division who work in Pocatello, Idaho and
are covered by the Collective Bargaining Agreement between the Company and the
International Association of Machinists (AFL-CIO) Gate City Mechanics Lodge No.
1933.
19-2 Actuarial Equivalent
--------------------
Actuarial Equivalent, other than for purposes of Section 12.8 of the
Plan, shall be determined based on the 1971 Group Annuity Table (weighted 95%
male, 5% female) and 6% interest compounded annually.
19-3 Commencement of Participation
-----------------------------
An Eligible Employee shall become a Participant as of the date the
Participant completes 1 year of Credited Service.
19-4 Normal Retirement Benefit
-------------------------
A Participant's monthly Normal Retirement Benefit shall be determined
by multiplying the appropriate rate by the number of the Participant's Years of
Credited Service in each service segment as outlined below, then determining the
sum of such products:
For Participants who retire on or after May 1, 1998 but before May 1,
1999:
Years of Credited Service Service Segment Multiplier
1-10 years $31.00
-------------------------------------------------------
11-20 years $32.00
-------------------------------------------------------
21-30 years $33.00
-------------------------------------------------------
31-45 years $34.00
-------------------------------------------------------
For Participants who retire on or after May 1, 1999 but before May 1,
2000:
Years of Credited Service Service Segment Multiplier
1-10 years $32.00
-------------------------------------------------------
11-20 years $33.00
-------------------------------------------------------
21-30 years $34.00
-------------------------------------------------------
31-45 years $35.00
-------------------------------------------------------
116
<PAGE>
For Participants who retire on or after May 1, 2000:
Years of Credited Service Service Segment Multiplier
1-10 years $33.00
- ------------------------------------------------------------------------
11-20 years $34.00
- ------------------------------------------------------------------------
21-30 years $35.00
- ------------------------------------------------------------------------
31-45 years $36.00
- ------------------------------------------------------------------------
The maximum number of Years of Credited Service taken into account
under this Supplement shall be 45 years.
19-5 Early Retirement Reduction Factor
---------------------------------
If a Participant's Early Retirement Benefit commences prior to age 60,
the Participant's Early Retirement Benefit shall be reduced by 1/3 of 1% for
each month between his Annuity Starting Date and the last day of the month in
which the Participant attains age 62.
If a Participant's Early Retirement Benefit commences on or after age
60 but prior to age 62, his Early Retirement Benefit shall be reduced by 1/6 of
1% for each month between the Participant's Annuity Starting Date and the last
day of the month in which the Participant attains age 62.
If a Participant's Early Retirement Benefit commences on or after the
first day of the month following the month in which the Participant attains age
62, no reduction shall apply.
19-6 Disability Retirement
---------------------
A Participant who has completed 15 Years of Credited Service as of the
date Total and Permanent Disability has endured for a period of 26 weeks shall
be eligible for a Disability Retirement Benefit.
Total and Permanent Disability means a total and permanent mental or
physical disability of a Participant and confirmed by medical examination of a
physician selected by the Company or the Participant, and confirmed by medical
examination of a physician selected by the other party, whether or not such
disability arose out of or during the course of employment, of a nature
preventing such Participant from engaging in any occupation for compensation for
the balance of the Participant's life.
19-7 Disability Retirement Benefit
-----------------------------
A Participant's Disability Retirement Benefit shall be determined
pursuant to Section 3.1.2, based on the Participant's Years of Credited Service
to the date of the Participant's Disability Retirement up to the maximum Years
of Credited Service specified in Section 19-3 of this Supplement.
117
<PAGE>
The Disability Retirement payment shall commence with the first day of
the month immediately following the expiration of the 26-week period described
in Section 19-6 of this Supplement or medical certification of disability,
whichever shall be later.
Such payment shall also take into account and have deducted therefrom
any benefits paid or payable, now or in the future, to the Participant by way of
(a) Worker's Compensation payments; (b) public pension payments (except Social
Security Disability and Military pension payments); and (c) 1/2 of any accident
or health insurance benefit payment as may be provided by any program as now or
in the future made available by the Company or placed in effect by any
governmental authority for the benefit of Participants; however, any lump sum
award under (a) and (c) above shall not be deducted. Any Participant who shall
receive a Disability Retirement Benefit shall be subject to reexamination by a
physician of the Company at any time the Company may so request and if, in the
opinion of the Company, the Total and Permanent Disability of the Participant
shall no longer continue to exist, such Participant's right to a continuance of
Disability Retirement Benefit payment shall cease. Failure or refusal of a
Participant to submit to medical examination as requested by the Company shall
be cause of cancellation of the Disability Retirement Benefit. Such disabled
Participant shall, however, be entitled to Early or Normal Retirement benefit
payments upon qualification by the Participant under the requirements set forth
in Section 3.1 and Section 3.2. In no event, however, shall any Participant be
entitled to receive both a Disability Retirement Benefit and an Early or Normal
Retirement Benefit, it being intended that there should be no duplication of
retirement benefits.
118
<PAGE>
SUPPLEMENT 20
INDUSTRIAL CHEMICAL GROUP, SPRING HILL PLANT,
--------------------------------------------
SOUTH CHARLESTON, WEST VIRGINIA
-------------------------------
20-1 Eligible Employees
------------------
The terms of this Supplement apply to Eligible Employees of the FMC
Corporation Industrial Chemical Group, Spring Hill Plant who work in South
Charleston, West Virginia and are covered by the Collective Bargaining Agreement
between the Company and the United Steelworkers of America, Local Union 12625.
20-2 Actuarial Equivalent
--------------------
Actuarial Equivalent, other than for purposes of Section 12.8 of the
Plan, shall be determined based on the 1971 Group Annuity Table (weighted 95%
male, 5% female) and 6% interest compounded annually.
20-3 Commencement of Participation
-----------------------------
An Eligible Employee shall become a Participant as of the date the
Participant completes 1 year of Credited Service.
20-4 Normal Retirement Date
----------------------
Normal Retirement Date means the first day of the month coinciding
with or next following the Participant's 65th birthday.
20-5 Normal Retirement Benefit
-------------------------
A Participant's monthly Normal Retirement Benefit shall be determined
by multiplying the appropriate rate by the number of Participant's Years of
Credited Service in each service segment as outlined below, then determining the
sum of such products:
For Participants who retire on or after May 18, 1998 but before May 17, 1999:
Years of Credited Service Service Segment Multiplier
1-10 years $31.50
- ------------------------------------------------------------------------
11-20 years $32.50
- ------------------------------------------------------------------------
21 + years $33.50
- ------------------------------------------------------------------------
119
<PAGE>
For Participants who retire on or after May 17, 1999:
Years of Credited Service Service Segment Multiplier
1-10 years $32.50
- ------------------------------------------------------------------------
11-20 years $33.50
- ------------------------------------------------------------------------
21 + years $34.50
- ------------------------------------------------------------------------
20-6 Early Retirement Reduction Factor
---------------------------------
Participants With 30 Years of Credited Service: If the Participant's
Early Retirement Benefit commences before the Participant attains age 60, the
Participant's Early Retirement Benefit shall be reduced by 3% for each full year
that the Participant is less than age 62. If the Participant's Early Retirement
Benefit commences on or after the Participant attaining age 60 but before age
62, the Participant's Early Retirement Benefit shall be reduced by 2% for each
full year that the Participant is less than age 62. If the Participant's Early
Retirement Benefit commences on or after the Participant attains age 62, no
reduction shall apply.
Participants With Less Than 30 Years of Credited Service: If the
Participant's Early Retirement Benefit commences before the Participant attains
age 62, the Participant's Early Retirement Benefit shall be reduced by 3% for
each full year that the Participant is less than age 62. If the Participant's
Early Retirement Benefit commences on or after the Participant attains age 62,
no reduction shall apply.
20-7 Disability Retirement
---------------------
A Participant who has attained age 40 and who has completed 10 Years
of Credited Service as of the date Total and Permanent Disability has endured
for a period of 13 weeks shall be eligible for a Disability Retirement Benefit.
Total and Permanent Disability means a total and permanent mental or
physical disability of a Participant and confirmed by medical examination of a
physician selected by the Company or the Participant, and confirmed by medical
examination of a physician selected by the other party, whether or not such
disability arose out of or during the course of employment, of a nature
preventing such Participant from engaging in any occupation for compensation for
the balance of the Participant's life.
20-8 Disability Retirement Benefit
-----------------------------
The Participant's Disability Retirement Benefit shall be determined
pursuant to Section 3.1.2, based on the Participant's Years of Credited Service
to the date of the Participant's Disability Retirement.
The Disability Retirement payment shall commence with the first day of
the month immediately following the expiration of the 26-week period described
in Section 20-7 of this Supplement or medical certification of disability,
whichever shall be later.
120
<PAGE>
Such payment shall also take into account and have deducted therefrom
any benefits paid or payable, now or in the future, to the Participant by way of
(a) Worker's Compensation payments; (b) public pension payments (except Social
Security Disability and Military pension payments); and (c) one-half of any
accident or health insurance benefit payment as may be provided by any program
as now or in the future made available by the Company or placed in effect by any
governmental authority for the benefit of Participants; however, any lump sum
award under (a) and (c) above shall not be deducted. Any Participant who shall
receive a Disability Retirement Benefit shall be subject to reexamination by a
physician of the Company at any time the Company may so request and if, in the
opinion of the Company, the Total and Permanent Disability of the Participant
shall no longer continue to exist, such Participant's right to a continuance of
Disability Retirement Benefit payment shall cease. Failure or refusal of a
Participant to submit to medical examination as requested by the Company shall
be cause of cancellation of the Disability Retirement Benefit. Such disabled
Participant shall, however, be entitled to Early or Normal Retirement benefit
payments upon qualification by the Participant under the requirements set forth
in Section 3.1 and Section 3.2. In no event, however, shall any Participant be
entitled to receive both a Disability Retirement Benefit and an Early or Normal
Retirement Benefit, it being intended that there should be no duplication of
retirement benefits.
20-9 Normal Form of Benefit
----------------------
If a Participant receives his benefits in the form of a 100% Joint and
Survivor's Annuity and his spouse predeceases him, his benefit shall "pop-up" to
the Individual Life Annuity form as of the first day of the month following his
spouse's death.
20-10 Surviving Spouse's Benefit
--------------------------
Payment of the survivor's benefit shall commence on the first day of
the month next following the later of the first date the Participant would have
attained age 55 or his death, unless the Participant's spouse elects to commence
payment of benefits as of the first day of any subsequent month, but not later
than the Participant's Normal Retirement Date.
121
<PAGE>
FIRST AMENDMENT OF
FMC CORPORATION EMPLOYEES' RETIREMENT PROGRAM
PART I SALARIED AND NONUNION HOURLY EMPLOYEES' RETIREMENT PLAN
--------------------------------------------------------------
(As Amended and Restated Effective January 1, 1999)
WHEREAS, FMC Corporation (the "Company") maintains the FMC Corporation
Employees' Retirement Program Part I Salaried and Nonunion Hourly Employees'
Retirement Plan (the "Plan"); and
WHEREAS, amendment of the Plan is now considered desirable;
NOW, THEREFORE, by virtue and in exercise of the powers reserved to the
Company under Section 11.1 Plan Amendment or Termination of the Plan, and
pursuant to authority delegated to the undersigned officer of the Company by
resolution of its Board of Directors, the Plan is hereby amended, effective
January 1, 1999, in the following respects:
1. Subsection (iv) of Section 3.4.2 Suspension of Benefits After Normal
Retirement Date is hereby amended by deleting the language "(such reduction will
occur only if such benefits are not repaid in full to the Trust within 2 years
after his date of reemployment.)"
2. Section 4.1 Termination of Service is hereby amended by adding the
following sentence to the end thereof:
"The Committee or its delegatee may, in its discretion, fully vest a
Participant in the Participant's accrued benefit in the event the
Participant's employment with the Company is affected by a transaction
undertaken by the Company."
3. Section 6.2 Available Forms of Benefit is hereby amended by adding the
following Section to the end thereof:
"6.2.5 Lump Sum Distribution Option: Participants in the Plan who
were:
(a) salaried Participants employed at Green Bay, Wisconsin;
<PAGE>
(b) salaried Participants who were employed by the segment of the
Company acquired from Crosby Valve Inc.; and
(c) salaried Participants who were employed by the BioProducts
Division of the Company
at the time of a divestiture of assets by the Company affecting the
employment of such Participants by the Company were given a one-time
option to elect (i) an immediate lump sum payment which is the
actuarial equivalent of an Individual Life Annuity (determined in
accordance with the 1983 Group Annuity Mortality Table weighted 50%
male and 50% female and the applicable interest rate prescribed under
Section 417(e)(3) of the Code for the November preceding the Plan Year
that contains the Annuity Starting Date); (ii) an immediate annuity
distribution in any form as described in Section 6.2.1 through 6.2.4
above; or (iii) to defer an annuity distribution in any form as
described in Section 6.2.1 through 6.2.4 above."
IN WITNESS WHEREOF, the Company has caused this amendment to be executed by
a duly authorized representative this 9th day of November, 1999.
FMC CORPORATION
By: /s/ J. Paul McGrath
------------------------------------
Member, Employee Welfare Benefits Plan
Committee
<PAGE>
FIRST AMENDMENT OF
FMC CORPORATION EMPLOYEES' RETIREMENT PROGRAM
PART II UNION HOURLY EMPLOYEES' RETIREMENT PLAN
-----------------------------------------------
(As Amended and Restated Effective January 1, 1999)
WHEREAS, FMC Corporation (the "Company") maintains the FMC Corporation
Employees' Retirement Program Part II Union Hourly Employees' Retirement Plan
(the "Plan"); and
WHEREAS, amendment of the Plan is now considered desirable;
NOW, THEREFORE, by virtue and in exercise of the powers reserved to the
Company under Section 11.1 Plan Amendment or Termination of the Plan, and
pursuant to authority delegated to the undersigned officer of the Company by
resolution of its Board of Directors, the Plan is hereby amended for
clarification purposes, effective January 1, 1999, in the following respects:
1. Subsection (iv) of Section 3.4.2 Suspension of Benefits After Normal
Retirement Date is hereby amended by deleting the language "(such reduction will
occur only if such benefits are not repaid in full to the Trust within 2 years
after his date of reemployment.)"
2. Section 4.1 Termination of Service is hereby amended by adding the
following sentence to the end thereof:
"The Committee or its delegatee may, in its discretion, fully vest a
Participant in the Participant's accrued benefit in the event the
Participant's employment with the Company is affected by a transaction
undertaken by the Company."
3. Supplement 3 PACKAGING MACHINERY DIVISION, GREEN BAY, WISCONSIN is
hereby amended by adding the following Section to the end thereof:
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"3-9 Participants who were Salaried Employees
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Participants who prior to the Freeze Date became salaried employees
and as a result became covered under the FMC Corporation Salaried
Employees' Retirement Plan ("Salaried Plan"), or its predecessor plan,
were given certain distribution rights as described in Section 6.2.5
of the Salaried Plan that applied to benefits payable under the Plan
and the Salaried Plan."
IN WITNESS WHEREOF, the Company has caused this amendment to be executed by
a duly authorized representative this 9th day of November, 1999.
FMC CORPORATION
By: /s/ J. Paul McGrath
---------------------------------
Member, Employee Welfare Benefits Plan
Committee
<PAGE>
FMC Corporation
Savings and Investment
Plan
Winston & Strawn
Chicago
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TABLE OF CONTENTS
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TABLE OF CONTENTS................................ i
ARTICLE I........................................ 1
Definitions...................................... 1
Account......................................... 1
Account Balance................................. 1
Administrator................................... 1
Affiliate....................................... 1
After-Tax Contribution.......................... 2
After-Tax Contribution Account.................. 2
After-Tax Contribution Election................. 2
Annuity Contract................................ 2
Annuity Starting Date........................... 2
Basic Contributions............................. 2
Beneficiary..................................... 2
Board........................................... 2
Break in Service................................ 2
Code............................................ 2
Committee....................................... 2
Company......................................... 3
Company Contributions........................... 3
Company Contribution Account.................... 3
Compensation.................................... 3
Contingent Account.............................. 4
Direct Rollover................................. 4
Disability...................................... 4
Distributee..................................... 4
Effective Date.................................. 4
Eligible Employee............................... 4
Eligible Retirement Plan........................ 5
Eligible Rollover Distribution.................. 5
Employee........................................ 5
Employment Commencement Date.................... 6
ERISA........................................... 6
Forfeiture...................................... 6
Funding Agent................................... 6
Harsco Stock Account............................ 6
Highly Compensated Employee..................... 6
Hour of Service................................. 7
Investment Fund................................. 7
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Leased Employee............................................................ 7
Nonhighly Compensated Employee............................................. 7
Participant................................................................ 7
Participating Employer..................................................... 7
Period of Separation....................................................... 7
Plan....................................................................... 8
Plan Year.................................................................. 8
Pre-Tax Contribution....................................................... 8
Pre-Tax Contribution Account............................................... 8
Pre-Tax Contribution Election.............................................. 8
Required Beginning Date.................................................... 8
Rollover Contribution...................................................... 8
Rollover Contribution Account.............................................. 8
Stock...................................................................... 8
Stock Fund................................................................. 8
Supplemental Contributions................................................. 9
Surviving Spouse........................................................... 9
Trust...................................................................... 9
Trust Fund................................................................. 9
Trustee.................................................................... 9
Valuation Date............................................................. 9
Year of Service............................................................ 9
ARTICLE II................................................................. 10
Participation............................................................... 10
2.1 Admission as A Participant............................................. 10
2.2 Provision of Information............................................... 10
2.3 Termination of Participation........................................... 11
2.4 Special Rules Relating to Veterans' Reemployment Rights................ 11
ARTICLE III................................................................. 13
Contributions and Account Allocations....................................... 13
3.1 Pre-Tax Contributions.................................................. 13
3.2 After-Tax Contributions................................................ 13
3.3 Rules Applicable to Both Pre-Tax and After-Tax Contributions........... 13
3.4 Company Contributions.................................................. 14
3.5 Rollover Contributions................................................. 15
3.6 Establishment of Accounts.............................................. 15
3.7 Limitation on Annual Additions to Accounts............................. 15
3.8 Reduction of Annual Additions.......................................... 16
3.9 Combined Plan Fraction................................................. 16
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3.10 Limitations on Pre-Tax Contributions, After-Tax Contributions and
Company Contributions - Definitions.......................................... 16
3.11 Maximum Amount of Pre-Tax Contributions...................................... 19
3.12 Correction of Excess Pre-Tax Contributions................................... 19
3.13 Actual Deferral Percentage Test.............................................. 20
3.14 Actual Contribution Percentage Test.......................................... 21
3.15 Multiple Use of Alternative Limitation....................................... 23
ARTICLE IV.............................................................................. 24
Vesting................................................................................. 24
4.1 Vesting in After-Tax, Pre-Tax and Rollover Contributions Accounts............ 24
4.2 Vesting in Company Contribution and Contingent Accounts...................... 24
4.3 Forfeitures.................................................................. 25
4.4 Special Vesting Rules for Participants Transferred to Snap-On Incorporated... 25
4.5 Special Vesting Rules for Participants Transferred to Great Lakes Chemical... 26
4.6 Special Vesting Rules for Participants Transferred to Cambrex................ 27
ARTICLE V............................................................................... 28
Timing of Distributions to Participants................................................. 28
5.1 Separation from Service...................................................... 28
5.2 Start of Benefit Payments.................................................... 28
5.3 Additional Distribution Events............................................... 29
5.4 Transfers from the Plan for Changes in a Participant's Employment Status..... 30
ARTICLE VI.............................................................................. 31
Forms of Benefit, In-Service Withdrawals and Loans...................................... 31
6.1 Cashout of Small Amounts..................................................... 31
6.2 Medium of Distribution....................................................... 31
6.3 Forms of Benefit............................................................. 31
6.4 Change in Form, Timing or Medium of Benefit Payment.......................... 32
6.5 Direct Rollover of Eligible Rollover Distributions........................... 32
6.6 In-service and Hardship Withdrawals.......................................... 32
6.7 Loans........................................................................ 35
ARTICLE VII............................................................................. 38
Death Benefits.......................................................................... 38
7.1 Payment of Account Balance................................................... 38
7.2 Failure to Name a Beneficiary................................................ 38
7.3 Waiver of Spousal Beneficiary Rights......................................... 38
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ARTICLE VIII...............................................................................40
Special Forms of Benefit and Special Death Benefit Provisions Applicable to
Certain Transferred Participants...........................................................40
8.1 Applicability..................................................................40
8.2 Forms of Benefit for Certain Transferred Participants..........................40
8.3 Change in Form, Timing or Medium of Benefit Payment for Certain
Transferred Participants.......................................................42
8.4 Waiver of Normal Form of Benefit for Certain Transferred Participants..........42
8.5 Payment of Account Balances of Certain Transferred Participants Who
Die Before Payment Begins......................................................43
8.6 Failure to Name a Beneficiary for Certain Transferred Participants.............44
8.7 Waiver of Preretirement Survivor Annuity for Certain Transferred Participants..45
ARTICLE IX.................................................................................47
Fiduciaries................................................................................47
9.1 Named Fiduciaries..............................................................47
9.2 Employment of Advisers.........................................................47
9.3 Multiple Fiduciary Capacities..................................................47
9.4 Payment of Expenses............................................................47
9.5 Indemnification................................................................48
ARTICLE X..................................................................................49
Plan Administration........................................................................49
10.1 Powers, Duties and Responsibilities of the Administrator and the Committee... 49
10.2 Investment Powers, Duties and Responsibilities of the Administrator
and the Committee..............................................................49
10.3 Investment of Accounts.........................................................50
10.4 Valuation of Accounts..........................................................50
10.5 The Insurance Company..........................................................51
10.6 Compensation...................................................................51
10.7 Delegation of Responsibility...................................................51
10.8 Committee Members..............................................................51
ARTICLE XI.................................................................................53
Appointment of Trustee.....................................................................53
ARTICLE XII................................................................................54
Plan Amendment or Termination..............................................................54
12.1 Plan Amendment or Termination..................................................54
12.2 Limitations on Plan Amendment..................................................54
12.3 Right to Terminate Plan or Discontinue Contributions...........................54
12.4 Bankruptcy.....................................................................54
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ARTICLE XIII..................................................................55
Miscellaneous Provisions......................................................55
13.1 Subsequent Changes....................................................55
13.2 Merger or Transfer of Assets..........................................55
13.3 Benefits Not Assignable...............................................55
13.4 Exclusive Benefit of Participants.....................................56
13.5 Benefits Payable to Minors, Incompetents and Others...................56
13.6 Plan Not A Contract of Employment.....................................57
13.7 Source of Benefits....................................................57
13.8 Proof of Age and Marriage.............................................57
13.9 Controlling Law.......................................................57
13.10 Income Tax Withholding................................................57
13.11 Claims Procedure......................................................57
13.12 Participation in the Plan by An Affiliate.............................59
13.13 Action by Participating Employers.....................................59
13.14 Dividends.............................................................59
ARTICLE XIV...................................................................60
Top Heavy Provisions..........................................................60
14.1 Top Heavy Definitions.................................................60
14.2 Determination of Top Heavy Status.....................................63
14.3 Minimum Allocation for Top Heavy Plan.................................63
14.4 Adjustment of Combined Plan Fraction..................................64
APPENDIX A....................................................................66
Bargaining Units Covered......................................................66
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BACKGROUND
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The Employees' Thrift and Stock Purchase Plan was established by the
Company effective April 1, 1961, as the FMC Employees' 1960 Thrift and Stock
Purchase Plan. The Plan was subsequently amended from time to time. The Plan was
last amended and restated effective April 1, 1991. This document is an amendment
and restatement of the Plan effective, except as and to the extent otherwise
provided in this document, as of January 1, 1999, and changes the name of the
Plan to the FMC Corporation Savings and Investment Plan effective January 1,
2000.
The Company or its delegate may amend the Plan to meet applicable
rules and regulations of the Internal Revenue Service and the United States
Department of Labor, or for other reasons the Company or its delegate deems
necessary or desirable.
The Plan is intended to be qualified under Code Section 401(a), and
its associated trust is intended to be tax exempt under Code Section 501(a). The
Plan is intended also to meet the requirements of ERISA, and will be
interpreted, wherever possible, to comply with the terms of the Code and ERISA.
<PAGE>
ARTICLE I
Definitions
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For purposes of this Plan and any amendments to it, the following
terms have the meanings ascribed to them below.
Account means the Pre-Tax Contribution Account, After-Tax Contribution
Account, Company Contribution Account, Contingent Account, Employee Contribution
Account and Rollover Contribution Account, if any, established on behalf of a
Participant.
Account Balance means the value of the Account maintained on behalf of
a Participant, determined as of any Valuation Date.
Administrator means the Company. The Plan is administered by the
Company through the Committee. The Administrator and the Committee have the
responsibilities specified in Article X.
Affiliate means any corporation, partnership, or other entity that
---------
is:
(a) a member of a controlled group of corporations of which the
Company is a member (as described in Code Section 414(b));
(b) a member of any trade or business under common control with the
Company (as described in Code Section 414(c));
(c) a member of an affiliated service group that includes the Company
(as described in Code Section 414(m));
(d) an entity required to be aggregated with the Company pursuant to
regulations promulgated under Code Section 414(o); or
(e) a leasing organization that provides Leased Employees to the
Company or an Affiliate (as determined under paragraphs (a)
through (d) above), unless: (i) the Leased Employees make up no
more than 20% of the nonhighly compensated workforce of the
Company and Affiliates (as determined under paragraphs (a)
through (d) above); and (ii) the Leased Employees are covered by
a plan described in Code Section 414(n)(5).
"Leasing organization" has the meaning ascribed to it in the definition of
"Leased Employee" below.
For purposes of Section 3.7, the 80% thresholds of Code Sections 414(b) and (c)
are deemed to be "more than 50%," rather than "at least 80%."
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After-Tax Contribution means the amount a Participant contributes in
accordance with Section 3.2. A Participant's After-Tax Contribution may be made
up of Basic Contributions, Supplemental Contributions or both.
After-Tax Contribution Account means the Account established for a
Participant pursuant to Section 3.6.2.
After-Tax Contribution Election means a Participant's election to make
After-Tax Contributions in accordance with Section 3.3.1.
Annuity Contract means an individual or group annuity contract issued by an
insurance company and providing periodic benefits, whether fixed, variable or
both, to a Participant or Beneficiary. An Annuity Contract must provide that a
Participant or Beneficiary cannot transfer, sell, assign, discount, or pledge
(as collateral for a loan or for any other purpose) all or any part of the
contract benefits or value to any person other than the issuer. The terms of an
Annuity Contract must comply with the requirements of this Plan.
Annuity Starting Date means the first day of the first period for which an
amount is paid in an annuity or other form of benefit. In the case of a lump sum
distribution, the Annuity Starting Date is the date payment is actually made.
Basic Contributions means a Participant's Pre-Tax Contributions and After-
Tax Contributions not in excess of five percent of his or her annualized
Compensation.
Beneficiary means any person designated or deemed designated by a
Participant to receive any payment of Plan benefits due after the Participant's
death. A married Participant may name a primary Beneficiary other than his or
her Surviving Spouse only if the Surviving Spouse consents to the election in
the time frame and manner required by Section 7.3.
Board means the board of directors of the Company.
Break in Service means a Period of Separation that lasts for at least 12
consecutive months.
Code means the Internal Revenue Code of 1986, as amended from time to time.
Reference to a specific provision of the Code includes that provision, any
successor to it and any valid regulation promulgated under the provision or
successor provision.
Committee means the FMC Corporation Employee Welfare Benefits Plan
Committee as described in Section 10.8, its authorized delegatee and any
successor to the FMC Corporation Employee Welfare Benefits Plan Committee.
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Company means FMC Corporation and any successor to it.
Company Contributions means the contributions made by the Employer under
Section 3.4 after March 31, 1982, other than contributions elected by
Participants.
Company Contribution Account means an account maintained as to each
Participant, to which the Participant's share of Company Contributions made for
periods after March 31, 1982 and all earnings and losses attributable to it, are
allocated.
Compensation means the total compensation paid by the Company or a
Participating Employer to an Employee for each Plan Year that is currently
includible in gross income for federal income tax purposes:
(a) including: overtime, administrative and discretionary bonuses
(including completion bonuses, gainsharing bonuses and performance
related bonuses); sales incentive bonuses; field premiums; back pay
and sick pay; plus the Employee's Pre-Tax Contributions and amounts
contributed to a plan described in Code Section 125 or 132; and the
9/12 of the incentive compensation (including management incentive
bonuses paid in both cash and restricted stock and local incentive
bonuses) paid during the Plan Year for services rendered in the
preceding Plan Year, and the 3/12 of the incentive compensation (of
the same types) paid during the preceding Plan Year for services
rendered in the Plan Year preceding the preceding Plan Year (unless,
for periods beginning on or after February 1, 2000, the Participant
elects all such incentive compensation paid for prior Plan Years to be
included in Compensation for the prior Plan Years, or unless the
Participant elects that no such incentive compensation will be
included in his or her Compensation);
(b) but excluding: hiring bonuses; referral bonuses; stay bonuses;
retention bonuses; awards (including safety awards, "Gutbuster" awards
and other similar awards); amounts received as deferred compensation;
disability payments from insurance or the Long-Term Disability Plan
for Employees of FMC Corporation; workers' compensation benefits;
state disability benefits; flexible credits (i.e., wellness awards and
payments for opting out of benefit coverage); expatriate premiums;
grievance or settlement pay; pay in lieu of notice; severance pay;
accrued (but not earned) vacation; other special payments such as
reimbursements, relocation or moving expense allowances; stock options
or other stock-based compensation (except as provided above);
effective January 1, 2000, any gross-up paid by a Participating
Employer on any amount paid that is Compensation (as defined herein);
other distributions that receive special tax benefits; any amounts
paid by a Participating Employer to cover an Employee's FICA tax
obligation as to amounts deferred or accrued under
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<PAGE>
any nonqualified retirement plan of a Participating Employer; and any
gross-up paid by a Participating Employer on any amount paid that is
not Compensation (as defined herein).
Notwithstanding anything herein to the contrary, no amounts paid to a
Participant more than 30 days after his or her termination of employment with
the Company or a Participating Employer will be considered Compensation.
The annual amount of Compensation taken into account for a Participant must
not exceed $160,000 (as adjusted by Internal Revenue Service for cost-of-living
increases in accordance with Code Section 401(a)(17)(B)). Compensation taken
into account for the 9-month Plan Year from April 1, 1997 through December 31,
1997 was limited to $120,000 for any Participant. Effective April 1, 1997, the
Compensation limit will be applied to each Participant without taking into
account the Compensation of any of his or her family members.
A Participant's Compensation will be conclusively determined according to
the Company's records.
Contingent Account means an account maintained as to each Participant, to
which the Participant's share of Company Contributions made for periods before
April 1, 1982, and all earnings and losses attributable to it, are allocated.
Direct Rollover means a payment by the Plan to the Eligible Retirement Plan
specified by a Distributee.
Disability means a medically determinable physical or mental impairment
that makes the Participant unable to engage in any substantial gainful activity,
can be expected to result in death or be of long and indefinite duration, or has
lasted or can be expected to last for a continuous period of at least 12 months.
A Participant will be considered to have a Disability at any time only if he or
she is then eligible to receive Social Security disability benefits.
Distributee means 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 under Code Section 414(p), are Distributees
as to their Plan interests.
Effective Date means January 1, 1999.
Eligible Employee means an Employee of a Participating Employer, other
than:
(a) a Leased Employee;
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(b) a member of a bargaining unit covered by a collective bargaining
agreement that does not specifically provide for participation in the
Plan by members of the bargaining unit, or that is not listed in
Appendix A;
(c) an Employee who is a nonresident alien of the United States; or
(d) an individual working for a Participating Employer under a contract
that designates him or her as an independent contractor.
An employee who works for a non-U.S. Affiliate, and who would be an
Eligible Employee if the non-U.S. Affiliate were a Participating Employer, will
be an Eligible Employee during the period in which the employee has U.S. taxable
income, and the Company will be deemed to be the Employee's employer for Plan
purposes.
An individual's status as an Eligible Employee or not will be conclusively
determined by the Administrator, subject to the claims review procedure
described in Section 13.11.
The bargaining units whose members are covered by the Plan, and the
effective dates of that coverage, are listed in Appendix A.
Eligible Retirement Plan means 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 plan
described in Code Section 401(a) that accepts the Distributee's Eligible
Rollover Distribution. In the case of an Eligible Rollover Distribution paid to
a Surviving Spouse, an Eligible Retirement Plan is either an individual
retirement account or individual retirement annuity, and does not include an
annuity plan or a Code Section 401(a) plan.
Eligible Rollover Distribution means any distribution of all or any portion
of the balance to the credit of the Distributee, other than (a) a distribution
that is one of a series of substantially equal periodic payments made (no less
frequently than annually) for the life (or life expectancy) of the Distributee
and the Distributee's Beneficiary, or for a specified period of ten years or
more; (b) the portion of a distribution that is required to be made under Code
Section 401(a)(9); (c) the portion of a distribution that is not includible in
gross income (determined without regard to the exclusion for net unrealized
appreciation for employer securities); or (iv) effective January 1, 1999, a
"hardship distribution" within the meaning of Code Section 402(c)(4).
Employee means (a) a common law employee of the Company or an Affiliate who
is paid as an employee from the payroll of the Company or an Affiliate and
treated as an employee, or (b) a Leased Employee.
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Employment Commencement Date means the date on which the Employee first
performs an Hour of Service.
ERISA means the Employee Retirement Income Security Act of 1974, as amended
from time to time. Reference to a specific provision of ERISA includes the
provision, any successor provision and any valid regulation promulgated under
the provision or successor provision.
Forfeiture means the portion (if any) of a Participant's Company
Contribution Account that is forfeited under Section 4.3.
Funding Agent means any legal reserve life insurance company or Trustee
selected by the Administrator or the Committee to receive Plan contributions and
pay Plan benefits.
Harsco Stock Account means an account maintained as to each eligible
Participant to hold Harsco stock and all earnings and losses attributable
thereto; effective October 6, 1997 no further investments in this account were
permitted.
Highly Compensated Employee means, effective April 1, 1997, an Employee
who:
(a) at any time during the Plan Year or the preceding Plan Year owns (or
is considered under Code Section 318 to own) more than five percent of
the Company or an Affiliate; or
(b) had more than $80,000, as adjusted, in Compensation from the Company
and the Affiliates during the preceding Plan Year.
A former Employee of the Company or an Affiliate is a Highly Compensated
Employee for a given Plan Year if he or she separated from service (or was
deemed to have separated) before the Plan Year, performs no service for a
Participating Employer during the Plan Year, and was a Highly Compensated
Employee for the Plan Year during which he or she separated from service (or was
deemed to have separated) or for any Plan Year ending on or after his or her
55th birthday.
The Secretary of the Treasury or its delegate will adjust the $80,000 limit
from time to time, to reflect increases in the cost of living. Employees who are
nonresident aliens and receive no earned income (within the meaning of Code
Section 911(d)(2)) from the Company and its Affiliates that constitutes income
from sources within the United States (within the meaning of Code Section
861(a)(3)) are not treated as Employees for purposes of this definition.
In determining who was a Highly Compensated Employee for the short Plan
Year from April 1, 1997 through December 31, 1997, the Plan Year Compensation
limit was adjusted
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to $60,000. In determining who was a Highly Compensated Employee for the 1998
Plan Year, the "preceding Plan Year" was deemed to be the 1997 calendar year.
Hour of Service means each hour for which an Employee is directly or
indirectly paid or entitled to payment by the Company or an Affiliate for the
performance of duties.
Investment Fund means an investment fund, if any, established or
selected by the Administrator pursuant to Section 10.3.
Leased Employee means, effective January 1, 1997, an individual who
performs services for the Company or an Affiliate on a substantially full-time
basis, for a period of at least one year, under the primary direction or control
of the Company or Affiliate, and under an agreement between the Company or
Affiliate and a leasing organization. The leasing organization can be a third
party or the Leased Employee himself or herself.
Nonhighly Compensated Employee means an Employee who is not a Highly
Compensated Employee.
Participant means an Eligible Employee who has begun but not ended his
or her participation in the Plan pursuant to the provisions of Article II.
Participating Employer means the Company and each other Affiliate that
adopts the Plan with the consent of the Board, as provided in Section 13.12.
Period of Separation means a continuous period of time when the
Employee is not employed by the Company or an Affiliate. A Period of Separation
begins on the date an Employee retires, dies, separates from service due to
Disability, quits or is discharged, or, if earlier, on the 12-month anniversary
of the date the Employee was otherwise first absent from service.
Notwithstanding the foregoing, a Period of Separation does not begin if the
Employee is:
(a) on a leave of absence authorized by the Company or an Affiliate
in accordance with standard personnel policies applied in a
nondiscriminatory manner to all similarly situated Employees, and
returns to active employment with the Company or Affiliates as
soon as the leave expires;
(b) on a military leave while the Employee's reemployment rights are
protected by law, and returns to active employment with the
Company or Affiliate within 90 days after his or her discharge or
release (or such longer period as may be prescribed by law); or
(c) on a layoff, and returns to work with the Company or an Affiliate
within the period of time and in the manner necessary to maintain
seniority
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according to the rules of the Company or Affiliate in effect at
the time of the return.
Plan means, effective January 1, 2000, the FMC Corporation Savings and
Investment Plan. For periods beginning before January 1, 2000, the Plan was
known as the FMC Employees' Thrift and Stock Purchase Plan. The Plan is a single
employer plan.
Plan Year means the 12-month period beginning on each January 1 and
ending on the next December 31. For periods beginning before January 1, 1998,
Plan Year meant each 12-month period beginning on April 1 and ending on the next
March 31. The period from April 1, 1997 through December 31, 1997 was a short
Plan Year.
Pre-Tax Contribution means the amount that otherwise would have been
paid as Compensation that is, before taxes, converted to a Participating
Employer contribution in accordance with Section 3.1. A Participant's Pre-Tax
Contribution may be made up of Basic Contributions, Supplemental Contributions,
or both.
Pre-Tax Contribution Account means the Account established for a
Participant pursuant to Section 3.6.1.
Pre-Tax Contribution Election means the Participant's election to make
Pre-Tax Contributions in accordance with Section 3.3.1.
Required Beginning Date is defined in Section 5.2.3.
Rollover Contribution means an amount received from a deferred
compensation plan that is qualified under Code Section 401 or 403(a), and which
is rolled over to the Plan pursuant to Code Section 402(c). A Rollover
Contribution can be either a Direct Rollover or an amount distributed to a
Participant and then rolled over. In addition, if an Employee had deposited an
Eligible Rollover Distribution into an individual retirement account as defined
in Code Section 408, he or she may transfer the amount of the distribution plus
earnings from the individual retirement account to the Plan, if the rollover
amount is deposited with the Trustee within 60 days after receipt from the
individual retirement account, and the rollover meets the other requirements of
Code Section 408(d)(3)(A)(ii).
Rollover Contribution Account means the Account established for a
Participant pursuant to Section 3.6.3.
Stock means the common stock of the Company.
Stock Fund means an Investment Fund established and maintained by the
Trustee as part of the Trust Fund to invest in Stock. All Plan contributions
placed in or directed to the Stock Fund and all dividends, other earnings and
appreciation on those contributions must
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be invested only in Stock, except as and to the extent it is deemed necessary or
advisable to maintain cash and cash equivalents to meet the Stock Fund's
liquidity needs.
Supplemental Contributions means a Participant's Pre-Tax Contributions
and After-Tax Contributions in excess of five percent of his or her annualized
Compensation.
Surviving Spouse means the person legally married to a Participant on
the date of his or her death or on his or her Annuity Starting Date, whichever
is earlier.
Trust means the trust established under the Plan, to which Plan
contributions are made and in which Plan assets are held.
Trust Fund means the assets of the Trust held by or in the name of the
Trustee.
Trustee means the institution appointed as Trustee pursuant to Article
XI of the Plan, and any successor Trustee.
Valuation Date means each business day of the Plan Year. For periods
beginning before July 7, 1997, the Valuation Date was the last business day of
each calendar month.
Year of Service means the total number of calendar months during which
the Employee is employed by the Company or an Affiliate, divided by 12,
including any Period of Separation that does not constitute a Break in Service.
A partial month of employment counts as a whole month. An Employee's Years of
Service do not include any Breaks in Service.
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ARTICLE II
Participation
-------------
2.1 Admission as A Participant
--------------------------
2.1.1 An Employee becomes a Participant as of the date he or she
satisfies all of the following requirements:
(a) the Employee is an Eligible Employee;
(b) the Employee either (i) is a permanent, full-time Employee, (ii)
is a permanent, part-time employee eligible for benefits, or
(iii) has completed at least 1,000 Hours of Service in a 12-month
period beginning on his or her Employment Commencement Date or an
anniversary of his or her Employment Commencement Date;
(c) the Employee has filed with the Administrator a form on which he
or she makes a Pre-Tax Contribution Election or After-Tax
Contribution Election; and
(d) the Employee's election has become effective according to uniform
and nondiscriminatory rules established by the Administrator.
In place of the form, the Administrator may substitute a telephonic or
electronic means of enrollment.
2.1.2 A Participant or Eligible Employee who is rehired as an
Eligible Employee after a Period of Separation becomes an active Participant by
filing with the Administrator a form on which he or she makes his or her Pre-Tax
Contribution Election or After-Tax Contribution Election. When the form becomes
effective, the Participant or Eligible Employee will again become an active
Participant. In place of the form, the Administrator may substitute a
telephonic or electronic means of reenrollment.
2.2 Provision of Information
------------------------
Each Participant must execute the forms or follow the telephonic or
electronic procedures required by the Administrator and make available to the
Administrator any information it reasonably requests. As a condition of
participating in the Plan, an Employee agrees, on his or her own behalf and on
behalf of all persons who may have or claim any right by reason of the
Employee's participation in the Plan, to be bound by all provisions of the Plan
and by any agreement entered into pursuant to it.
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2.3 Termination of Participation
----------------------------
A Participant ceases to be a Participant when he or she dies or, if
earlier, when his or her entire Account Balance has been paid to him or her.
2.4 Special Rules Relating to Veterans' Reemployment Rights
-------------------------------------------------------
Effective December 12, 1994, the following special provisions will
apply to an Eligible Employee or Participant who is reemployed in accordance
with the reemployment provisions of the Uniformed Services Employment and
Reemployment Rights Act ("USERRA") following a period of qualifying military
service (as determined under USERRA).
2.4.1 Each period of qualifying military service served by an
Eligible Employee or Participant will, upon his or her reemployment as an
Eligible Employee, be deemed to constitute service with the Participating
Employer for all Plan purposes.
2.4.2 The Participant will be permitted to make up Pre-Tax and/or
After-Tax Contributions missed during the period of qualifying military service,
so long as he or she does so during the period of time beginning on the date of
the Participant's reemployment with the Participating Employer following his or
her period of qualifying military service and extending over the lesser of (a)
three times the length of the Participant's period of qualifying military
service, and (b) five years.
2.4.3 The Participating Employer will not credit earnings to a
Participant's Account with respect to any Pre-Tax or After-Tax Contribution
before the contribution is actually made.
2.4.4 A reemployed Participant will be entitled to accrued benefits
attributable to Pre-Tax or After-Tax Contributions only if they are actually
made.
2.4.5 For all Plan purposes, including the Participating Employer's
liability for making contributions on behalf of a reemployed Participant as
described above, the Participant will be treated as having received Compensation
from the Participating Employer based on the rate of Compensation the
Participant would have received during the period of qualifying military
service, or if that rate is not reasonably certain, on the basis of the
Participant's average rate of Compensation during the 12-month period
immediately preceding the period of qualifying military service.
2.4.6 If a Participant makes a Pre-Tax or After-Tax Contribution in
accordance with the foregoing provisions of this Section 2.4:
(a) those contributions will not be subject to any otherwise
applicable limitation under Code Section 402(g), 404(a) or 415,
and will not be taken into account in applying those limitations
to other contributions under the Plan or any other plan, for the
year in which the contributions are made;
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the contributions will be subject to the above-referenced
limitations only for the year to which the contributions relate
and only in accordance with regulations prescribed by the
Internal Revenue Service; and
(b) the Plan will not be treated as failing to meet the requirements
of Code Section 401(a)(4), 401(a)(26), 401(k)(3), 410(b) or 416
by reason of the contributions.
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ARTICLE III
Contributions and Account Allocations
-------------------------------------
3.1 Pre-Tax Contributions
---------------------
The Company will transmit to the Funding Agent the Pre-Tax
Contributions for the Participants. To determine the amount it must transmit for
each Participant, the Company will multiply the percentage elected by the
Participant in his or her Pre-Tax Contribution Election by the Participant's
Compensation.
3.2 After-Tax Contributions
-----------------------
The Company will transmit to the Funding Agent the After-Tax
Contributions for the Participants. To determine the amount it must transmit for
each Participant, the Company will multiply the percentage elected by the
Participant in his or her After-Tax Contribution Election by the Participant's
Compensation.
3.3 Rules Applicable to Both Pre-Tax and After-Tax Contributions
------------------------------------------------------------
3.3.1 In making his or her Pre-Tax Contribution Election and After-
Tax Contribution Election, a Participant must choose to defer or contribute
between 2% and 20% (15% before October 1, 1999) of his or her Compensation, in
1% increments. For periods beginning on or after October 1, 1999, the
Participant's Pre-Tax Contribution Election and After-Tax Contribution Election
cannot together total more than 20% of his or her Compensation. For periods
beginning before October 1, 1999, the Participant's Pre-Tax Contribution
Election and After-Tax Contribution Election cannot together total more than 15%
of his or her Compensation. The Administrator may reduce the amount of any Pre-
Tax Contribution Election, or make such other modifications it deems necessary,
so that the Plan complies with the provisions of Code Section 401(k). Pre-Tax
and After-Tax Contributions will be made on a payroll deduction basis and in
accordance with uniform and nondiscriminatory rules and procedures established
by the Administrator. A Participant's Salary Deferral Election will apply only
to Compensation paid to the Participant while he or she is an Eligible Employee.
3.3.2 A Participant may change his or her Pre-Tax or After-Tax
Contribution Election percentage or discontinue making Pre-Tax Contributions or
After-Tax Contributions, as frequently as permitted by the Administrator, by
completing the form or following any other election change procedure prescribed
by the Administrator. An election change will become effective according to the
uniform and nondiscriminatory rules established by the Administrator.
3.3.3 Pre-Tax and After-Tax Contributions will be delivered to the
Funding Agent as of the earliest date they are known and can reasonably be
segregated from the general assets of the Participating Employer. In no event
will that date be later than the 15th business day of the month following the
month they would have been paid to the Participant if he or she had not chosen
to defer their payment or contribute them to the Plan.
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<PAGE>
3.3.4 Notwithstanding any other provision of the Plan, the amount
contributed by the Participating Employers as Pre-Tax Contributions and by
Participants as After-Tax Contributions must not exceed, in the aggregate, 15%
of the total Compensation for the Plan Year for those Participants employed by
the Participating Employers eligible for an allocation for that Plan Year. In
addition, the amount contributed by the Participating Employers to this Plan or
any other qualified plan maintained by the Participating Employers pursuant to a
Participant's Pre-Tax Contribution Election must not exceed the Code Section
402(g) limit applicable for that calendar year.
3.4 Company Contributions
---------------------
3.4.1 For each contribution period, as defined in Section 3.4.2, the
Company will make a Company Contribution equal to:
(a) the applicable percentage of all Basic Contributions made for
that contribution period and initially invested in the Stock
Fund; plus
(b) the applicable percentage of all Basic Contributions made for
that contribution period and initially invested in any Investment
Funds other than the Stock Fund; less
(c) any Forfeitures credited against the Company Contribution for
that contribution period.
No Company Contribution will be made with respect to Supplemental Contributions.
The applicable percentage for a Plan Year will be determined by the Company
before the start of the Plan Year. It is currently anticipated that the
applicable percentage will be different for Basic Contributions initially
invested in the Stock Fund than for Basic Contributions initially invested in
other Investment Funds. The Company will communicate the applicable percentages
for each Plan Year as soon as possible after they are determined.
3.4.2 The Company Contribution for each contribution period will be
paid to the Funding Agent as soon as practicable. The Company Contribution will
be allocated to each Participant who made Basic Contributions during that
contribution period, by multiplying the Participant's own Basic Contributions
for the contribution period by the applicable percentages determined for the
Participant, as described above. All Company Contributions will be invested in
the Stock Fund. For periods beginning on or after July 7, 1997, each calendar
week will be a contribution period. For periods beginning before July 7, 1997,
each calendar month was a contribution period. Subject to the special provisions
of Section 3.13 through 3.15, all Company Contributions for a Plan Year will be
allocated to Participants' Company Contribution Accounts no later than the due
date (including all extensions) of the Company's federal tax return for the
fiscal year of the Company ending with or within the Plan Year.
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3.5 Rollover Contributions
----------------------
Effective January 1, 1986, with the approval of the Administrator, a
Participant or Eligible Employee may make a Rollover Contribution to the Plan. A
Participant's Rollover Contribution will be allocated to his or her Rollover
Contribution Account no later than the first day of the month following the
month in which the contribution is made. A Rollover Contribution must be made in
cash. If an Employee makes a contribution that was intended to be a Rollover
Contribution and the Funding Agent later discovers it was not a Rollover
Contribution, the Funding Agent will distribute the balance of the Participant's
Rollover Contribution Account to him or her as soon as practicable.
3.6 Establishment of Accounts
-------------------------
3.6.1 Each Participant to whom Pre-Tax Contributions are allocated
will have a Pre-Tax Contribution Account. The Pre-Tax Contribution Account will
be credited with the Pre-Tax Contributions allocable to the Participant and the
income on those contributions, and will be debited with expenses, losses,
withdrawals and distributions chargeable to those contributions.
3.6.2 Each Participant who makes After-Tax Contributions will have an
After-Tax Contribution Account. The After-Tax Contribution Account will be
credited with the After-Tax Contributions the Participant makes and the income
on those contributions, and will be debited with expenses, losses, withdrawals
and distributions chargeable to those contributions.
3.6.3 Each Participant who makes a Rollover Contribution to the Plan
pursuant to Section 3.5 will have a Rollover Contribution Account. The Rollover
Contribution Account will be credited with all Rollover Contributions made by
the Participant and the income on those contributions, and will be debited with
expenses, losses, withdrawals and distributions chargeable to those
contributions.
3.7 Limitation on Annual Additions to Accounts
------------------------------------------
Notwithstanding any provision of the Plan to the contrary, the total
annual additions allocated for any Plan Year to the Account of a Participant and
to his or her accounts under any other defined contribution plan maintained by
the Company or an Affiliate must not exceed $30,000 or 25% of the Participant's
Compensation. For purposes of this Section 3.7, "annual additions" include all
Pre-Tax Contributions, After-Tax Contributions, Company Contributions and
Forfeitures allocated to the Participant's Accounts for the Plan Year, except
for Excess Pre-Tax Contributions (as described in Section 3.10.5) distributed to
the Participant by April 15 following the year for which they were contributed
to the Plan. "Annual additions" also include any employer and employee
contributions and forfeitures allocated for the Plan Year under other defined
contribution plans of the Company and the Affiliates. For Plan Years beginning
before January 1, 1998, for purposes of this Section 3.7, a Participant's
Compensation was adjusted by subtracting from it any Pre-Tax Contributions made
for the Participant for the Plan Year, any Code Section 401(k) contributions
made for the Participant to another plan for the
15
<PAGE>
Plan Year, and any contributions made on the Participant's behalf under a Code
Section 125 cafeteria plan. For the Short Plan Year running from April 1, 1997
through December 31, 1997, the $30,000 limit of this Section 3.7 was adjusted to
$22,500.
3.8 Reduction of Annual Additions
-----------------------------
If the annual additions allocated to a Participant's Accounts for the
Plan Year exceed the limitation described in Section 3.7, annual additions, with
their earnings, will be returned to the Participant in the minimum amount
necessary to meet the limitation on annual additions. Supplemental Contributions
(both After-Tax Contributions and Pre-Tax Contributions, in that order) will be
returned first, and if there are not enough to satisfy the limitation on annual
additions, Basic Contributions (both After-Tax Contributions and Pre-Tax
Contributions, in that order) will be returned. If, after all of the
Participant's Supplemental and Basic Contributions have been returned, the
annual additions allocated to the Participant's Account for the Plan Year still
exceed the limitation described in Section 3.7, the excess amounts attributable
to Company Contributions will be held in a suspense account containing the
excess amounts attributable to Company Contributions for all Participants, and
will be used to reduce the Company Contributions for the following Plan Year
(and later Plan Years, if necessary), before any Company Contributions that
would be annual additions for the next Plan Year (or later Plan Years, if
necessary) are made to the Plan.
3.9 Combined Plan Fraction
----------------------
For Plan Years beginning before January 1, 2000, if a Participant was
(or had been) a participant in any defined benefit plan (whether or not
terminated) maintained by the Company or an Affiliate, the sum of the
Participant's defined benefit plan fraction and defined contribution plan
fraction could not exceed 1. If the sum exceeded 1, the Participant's defined
contribution plan fraction was reduced until the sum equaled 1. The defined
benefit plan fraction and defined contribution plan fraction were defined in
Code Section 415(e).
3.10 Limitations on Pre-Tax Contributions, After-Tax Contributions and Company
-------------------------------------------------------------------------
Contributions - Definitions
- ---------------------------
For purposes of Sections 3.10 through 3.15, the terms defined below
have the meanings ascribed to them in this Section 3.10.
3.10.1 Actual Contribution Percentage means the sum of the After-Tax
Contributions and Company Contributions allocated to the Eligible Participant
for the Plan Year, plus any of the Eligible Participant's Pre-Tax Contributions
treated as Company Contributions for the Plan Year, divided by the Eligible
Participant's Plan Year Compensation, and stated as a percentage. All after-tax
employee contributions and employer matching contributions made on behalf of a
Highly Compensated Employee under all plans of the Company and its Affiliates
will be aggregated to determine the Highly Compensated Employee's Actual
Contribution Percentage. A Company Contribution that is treated as a Pre-Tax
Contribution under Section
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<PAGE>
3.13.7 is subject to Section 3.13 and is not taken into account in calculating
an Eligible Participant's Actual Contribution Percentage. A Company Contribution
that is forfeited to correct Excess Aggregate Contributions, or because the
contribution to which it relates is treated as an Excess Contribution, Excess
Pre-Tax Contribution or Excess Aggregate Contribution is not taken into account
in calculating the Eligible Participant's Actual Contribution Percentage. The
Actual Contribution Percentage of an Eligible Participant who does not make a
Pre-Tax Contribution Election or an After-Tax Contribution Election is 0.0%.
Effective April 1, 1997, the Actual Contribution Percentage of an Eligible
Participant will be determined without taking into account any amounts allocated
to the accounts of his or her family members.
3.10.2 Actual Deferral Percentage means the amount of Pre-Tax
Contributions allocated to the Eligible Participant for the Plan Year, divided
by his or her Plan Year Compensation, stated as a percentage. In calculating
the Actual Deferral Percentage, Pre-Tax Contributions include Excess Pre-Tax
Contributions for Highly Compensated Employees (whether they were made under
plans of unrelated employers or plans of the same or related employers) but do
not include Excess Pre-Tax Contributions for Nonhighly Compensated Employees.
The Actual Deferral Percentage of an Eligible Participant who does not make a
Pre-Tax Contribution Election is 0.0%. Effective April 1, 1997, the Actual
Deferral Percentage of an Eligible Participant will be determined without taking
into account any amounts allocated to the accounts of his or her family members.
3.10.3 Aggregate Limit means the greater of:
(a) the sum of:
(i) 1.25 times the Average Actual Deferral Percentage or the
Average Actual Contribution Percentage of the group,
whichever is larger; and
(ii) two percentage points plus the Average Actual Deferral
Percentage or the Average Actual Contribution Percentage of
the group, whichever is less, but in no event more than
twice the lesser of the group's Average Actual Deferral
Percentage and its Average Actual Contribution Percentage;
and
(b) the sum of:
(i) 1.25 times the Average Actual Deferral Percentage or
the Average Actual Contribution Percentage of the
group, whichever is less; and
(ii) two percentage points plus the Average Actual Deferral
Percentage or the Average Actual Contribution
Percentage of the group, whichever is larger, but in no
event more than twice the larger of the group's Average
Actual Deferral
-17-
<PAGE>
Percentage and its Average Actual Contribution
Percentage.
For purposes of this Section 3.10.3, the "group" is the group of Eligible
Participants who are Nonhighly Compensated Employees for the preceding Plan
Year.
3.10.4 Average Actual Contribution Percentage means the average of
the Actual Contribution Percentages of the Eligible Participants in a group.
3.10.5 Average Actual Deferral Percentage means the average of the
Actual Deferral Percentages of the Eligible Participants in a group.
3.10.6 Eligible Participant means any Employee who is eligible to
make a Pre-Tax Contribution Election or an After-Tax Contribution Election any
time during the Plan Year.
3.10.7 Excess Aggregate Contributions means, for any Plan Year, the
excess of the Company and After-Tax Contributions (and any Pre-Tax Contributions
or pre-tax salary deferrals under other plans taken into account in determining
the Actual Contribution Percentages) actually made on behalf of Highly
Compensated Employees for the Plan Year, over the maximum amount of Company and
After-Tax Contributions permitted under Section 3.14 for the Plan Year.
Effective April 1, 1997, the amount of the Excess Aggregate Contribution for any
given Eligible Participant is determined by making bookkeeping reductions (as
opposed to actual reductions) in contributions. The reductions will be made by
reducing the Company and After-Tax contributions for the Highly Compensated
Employee with the highest combined dollar amount of Company and After-Tax
Contributions by the lesser of: (a) the amount necessary for the dollar amount
of that Highly Compensated Employee's combined Company and After-Tax
Contributions to equal the combined dollar amount of the Company and After-Tax
Contributions of the Highly Compensated Employee with the next highest combined
dollar amount of Company and After-Tax Contributions; and (b) the amount
necessary for the Plan to satisfy the Actual Contribution Percentage Test. The
Administrator will repeat this bookkeeping procedure until the Plan satisfies
the Actual Contribution Percentage Test of Section 3.14. For each Highly
Compensated Employee's reductions, the Administrator will begin by making
reductions in his or her Company Contributions, and will reduce the Highly
Compensated Employee's After-Tax Contributions only if his or her Company
contributions for the Plan Year have been reduced to zero and it is still
necessary to reduce his or her Plan Year contributions. The amount of any
Highly Compensated Employee's Excess Aggregate Contributions is calculated after
determining the Excess Contribution to be recharacterized as After-Tax
Contributions for the Plan Year.
3.10.8 Excess Contributions means for any Plan Year, the excess of
the Pre-Tax Contributions (and any Company contributions taken into account in
determining the Actual Deferral Percentages) that are made on behalf of Highly
Compensated Employees for the Plan Year, over the maximum amount of Pre-Tax
Contributions permitted under Section 3.13 for the Plan Year. Effective April
1, 1997, the amount of the Excess Contribution for any given Eligible
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<PAGE>
Participant is determined by making bookkeeping reductions (as opposed to actual
reductions) in contributions. The reduction will be made by reducing the Pre-
Tax Contributions for the Highly Compensated Employee with the highest dollar
amount of Pre-Tax Contributions by the lesser of: (a) the amount necessary for
the dollar amount of that Highly Compensated Employee's Pre-Tax Contributions to
equal the dollar amount of the Pre-Tax Contributions for the Highly Compensated
Employee with the next highest dollar amount of Pre-Tax Contributions, and (b)
the amount necessary for the Plan to satisfy the Actual Deferral Percentage
Test. The Administrator will repeat this bookkeeping procedure until the Plan
satisfies the Actual Deferral Percentage Test set forth in Section 3.13.
3.10.9 Excess Pre-Tax Contribution means the amount of Pre-Tax
Contributions for a calendar year that are includible in a Participant's gross
income under section 402(g) of the Code because the Participant's elective
deferrals exceed the dollar limitation under section 402(g) of the Code as
determined under Sections 3.11 and 3.12.
3.11 Maximum Amount of Pre-Tax Contributions
---------------------------------------
The total amount of Pre-Tax Contributions, 401(k) contributions under
another qualified plan, and deferrals under a Code Section 403(b) annuity, a
simplified employee pension and/or a simple retirement account allocated to a
Participant in any calendar year cannot exceed the dollar limitation in effect
under Code Section 402(g) for that year.
3.12 Correction of Excess Pre-Tax Contributions
------------------------------------------
3.12.1 Excess Pre-Tax Contributions, as adjusted per Section 3.12.2,
will be distributed to each Participant on whose behalf they were made no later
than the first April 15 following the close of the taxable year of the
Participant for which they were allocated. In no event may the amount
distributed under this Section 3.12 exceed the Participant's total Pre-Tax
Contributions (as adjusted under Section 3.12.2 for income and losses allocable
to them) for the taxable year for which he or she had Excess Pre-Tax
Contributions.
3.12.2 The Excess Pre-Tax Contributions to be distributed to a
Participant will be adjusted for income or losses through the close of the Plan
Year for which they were made. Income and losses allocable to a Participant's
Excess Pre-Tax Contributions will be determined in a nondiscriminatory manner
(within the meaning of Code Section 401(a)(4)) consistent with the valuation of
Participant Accounts under Section 10.4.
3.12.3 If a Participant has Excess Pre-Tax Contributions, but only
when taking into account his or her pre-tax contributions under another plan, in
order to receive a distribution of Excess Pre-Tax Contributions, he or she must
make a written claim to the Administrator no later than the March 15 following
the taxable year of the Participant for which the contributions were made. The
claim must specify the amount of the Participant's Excess Pre-Tax Contributions
for the preceding taxable year and be accompanied by the Participant's written
statement that if those amounts are not distributed, the Participant's Pre-Tax
Contributions, when
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added to amounts deferred under other plans or arrangements described in Code
Sections 401(k), 402(h)(1)(B) (a simplified employee pension), 403(b) (an
annuity plan) or 408(p)(2)(A)(i) (a simple retirement plan) will exceed the
limit imposed on the Participant by Code Section 402(g) for the year in which
the deferral occurred.
3.12.4 Excess Pre-Tax Contributions distributed prior to the first
April 15 following the close of the Participant's taxable year will not be
treated as Annual Additions under Section 3.7 for the preceding Limitation Year.
3.12.5 Any Pre-Tax Contributions that are properly distributed under
Section 3.8 as excess Annual Additions are disregarded in determining if there
are any Excess Pre-Tax Contributions.
3.13 Actual Deferral Percentage Test
-------------------------------
3.13.1 The Average Actual Deferral Percentage for Eligible
Participants who are Highly Compensated Employees for the Plan Year may not
exceed the greater of:
(a) the Average Actual Deferral Percentage for Eligible Participants
who are Nonhighly Compensated Employees for the Plan Year
multiplied by 1.25; and
(b) the lesser of:
(i) the Average Actual Deferral Percentage for Eligible
Participants who are Nonhighly Compensated Employees for the
Plan Year multiplied by two and
(ii) the Average Actual Deferral Percentage for Eligible
Participants who are Nonhighly Compensated Employees for the
Plan Year plus two percentage points.
3.13.2 The provisions of Code Section 401(k)(3) are incorporated by
reference.
3.13.3 If this Plan satisfies the requirements of Code Sections
401(a)(4), 401(k), and 410(b) only if aggregated with one or more other plans,
or if one or more other plans satisfy the requirements of those Code sections
only if aggregated with this Plan, then this Section 3.13 is applied by
determining the Actual Deferral Percentages of Eligible Participants as if all
the plans were a single plan.
3.13.4 The Administrator also may treat one or more plans as a single
plan with the Plan whether or not the aggregated plans must be aggregated to
satisfy Code Sections 401(a)(4) and 410(b). However, those plans must then be
treated as one plan under Code Sections 401(a)(4), 401(k), and 410(b). Plans
may be aggregated under this Section 3.13.4 only if they have the same plan
year.
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3.13.5 Pre-Tax Contributions may be considered made for a Plan Year
if made no later than the end of the 12-month period beginning on the day after
the close of the Plan Year.
3.13.6 The determination and treatment of the Pre-Tax Contributions
and Actual Deferral Percentage of any Participant must satisfy all requirements
prescribed by the Secretary of the Treasury, including, without limitation,
record retention requirements.
3.13.7 The Administrator will limit the election and allocation of
Pre-Tax Contributions in order to avoid the creation of Excess Contributions.
If and to the extent necessary or desirable, the Administrator will
recharacterize Excess Contributions as After-Tax Contributions, or will
distribute Excess Contributions. Recharacterized Excess Contributions will be
treated as required in Treasury Regulations Section 1.401(k)-1(f)(3). The
Administrator will recharacterize Excess Contributions within two and one-half
months after the close of the Plan Year in which they arose. A distribution of
Excess Contributions will normally be made within the same time frame. At all
events, a corrective distribution of Excess Contributions must be made within 12
months after the end of the Plan Year in which they arose, and will include
income allocable the Excess Contributions for the Plan Year in which they arose.
The method used to determine the income allocable to Excess Contributions that
are distributed will not violate Code Section 401(a)(4), and will be applied
consistently for all Participants and all corrective distributions for any Plan
Year. Any distribution to a Participant of less than the entire amount of his
or her Excess Contributions will be treated as a pro rata distribution of Excess
Contributions and income. The Administrator may combine the correction methods
described in this Section 3.13.7. The amount of Excess Contributions to be
recharacterized or distributed to a Participant under this Section 3.13.7 will
be reduced by any Excess Pre-Tax Contributions previously distributed to the
Participant for his or her taxable year ending with or within the Plan Year.
Similarly, the amount of Excess Pre-Tax Contributions to be distributed for a
Participant's taxable year will be reduced by the amount of any Excess
Contributions previously distributed or recharacterized as to that Participant
for the Plan Year beginning with or within the Participant's taxable year.
3.14 Actual Contribution Percentage Test
-----------------------------------
3.14.1 The Average Actual Contribution Percentage for Eligible
Participants who are Highly Compensated Employees for the Plan Year may not
exceed the greater of:
(a) the Average Actual Contribution Percentage for Eligible
Participants who are Nonhighly Compensated Employees for the Plan
Year multiplied by 1.25; and
(b) the lesser of:
(i) the Average Actual Contribution Percentage for Eligible
Participants who are Nonhighly Compensated Employees for the
Plan Year multiplied by two; and
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(ii) the Average Actual Contribution Percentage for Eligible
Participants who are Nonhighly Compensated Employees for the
Plan Year plus two percentage points.
3.14.2 The provisions of Code Section 401(m)(2) are incorporated by
reference.
3.14.3 If this Plan satisfies the requirements of Code Section
401(a)(4), 401(k) and 410(b) only if aggregated with one or more other plans, or
if one or more other plans satisfy the requirements of those Code sections only
if aggregated with this Plan, then this Section 3.14 is applied by determining
the Actual Contribution Percentage of Eligible Participants as if all the plans
were a single plan.
3.14.4 The Administrator also may treat one or more plans as a single
plan with the Plan, whether or not the aggregated plans must be aggregated to
satisfy Code Sections 401(a)(4) and 410(b). However, those plans must then be
treated as one plan under Code Sections 401(a)(4), 401(m) and 410(b). Plans may
be aggregated under this Section 3.14.4 only if they have the same plan year.
3.14.5 An After-Tax Contribution is considered made for a Plan Year
if it is deducted from the Participant's Compensation during the Plan Year and
transmitted to the Trustee within a reasonable period after that. A Company
Contribution is considered made for a Plan Year if it is allocated to a
Participant's Account as of a date within the Plan Year, is actually paid to the
Trust no later than 12 months after the Plan Year, and is made on account of the
Participant's Basic Contributions for the Plan Year. A Pre-Tax Contribution may
be considered made under this Section 3.14 for a Plan Year if it is
recharacterized for purposes of Section 3.13, and if it is includible in the
gross income of the Participant as of a date during that Plan Year. A
recharacterized Pre-Tax Contribution is includible in a Participant's gross
income as of the date it would have been paid to the Participant, had the
Participant not elected to defer it into the Plan.
3.14.6 The determination and treatment of After-Tax and Company
Contributions and the Actual Contribution Percentage of any Participant must
satisfy all requirements prescribed by the Secretary of Treasury, including,
without limitation, record retention requirements.
3.14.7 The Administrator will limit the making of After-Tax
Contributions in order to avoid the creation of Excess Aggregate Contributions.
If and to the extent necessary or desirable, the Administrator will forfeit any
Excess Aggregate Contributions that were Company Contributions and that were not
vested, will distribute to the Participant who made them any Excess Aggregate
Contributions that were After-Tax Contributions, and will distribute to the
Participant to whom they were allocated any Excess Aggregate Contributions that
were Company Contributions and were vested. A distribution of Excess Aggregate
Contribution will normally be made within two and one-half months after the
close of the Plan Year in which they arose. At all events a corrective
distribution of Excess Aggregate Contributions must be made no later than 12
months after the close of the Plan Year in which they arose, and will include
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income allocable to the Excess Aggregate Contributions for the Plan Year in
which they arose. The method used to determine the income allocable to any
Excess Aggregate Contributions that are distributed will not violate Code
Section 401(a)(4), and will be applied consistently for all Participants and all
corrective distributions for any Plan Year. Any distribution to a Participant
of less than the entire amount of his or her Excess Aggregate Contributions will
be treated as a pro rata distribution of Excess Aggregate Contributions and
income. The Administrator may combine the correction methods described in this
Section 3.14.7.
3.15 Multiple Use of Alternative Limitation
--------------------------------------
3.15.1 Multiple use of the alternative limitation occurs if all of
the following conditions are satisfied.
(a) The sum of the Average Actual Contribution Percentage for
Eligible Participants who are Highly Compensated Employees and
the Average Actual Deferral Percentage for Eligible Participants
who are Highly Compensated Employees is greater than the
Aggregate Limit for the preceding Plan Year.
(b) The Average Actual Deferral Percentage for Eligible Participants
who are Highly Compensated Employees exceeds the amount described
in Section 3.13.1(a).
(c) The Average Actual Contribution Percentage for Eligible
Participants who are Highly Compensated Employees exceeds the
amount descried in Section 3.14.1(a)
3.15.2 The Average Actual Deferral and Contribution Percentages for
Eligible Participants who are Highly Compensated Employees will be determined
for purposes of this Section 3.15 after corrective measures have been taken
under Sections 3.13.7 and 3.14.7.
3.15.3 The Administrator will limit the making of After-Tax
Contributions or, if that is not sufficient, the election and allocation of Pre-
Tax Contributions, in order to avoid multiple use of the alternative limitation.
If and to the extent necessary or desirable, the Administrator will eliminate
multiple use of the alternative limitation by reducing the Average Actual
Contribution Percentage of the Eligible Participants who are Highly Compensated
Employees in the manner described in Section 3.10.7 above. The amount of the
required reduction will be Excess Aggregate Contributions, and will be forfeited
or distributed to Highly Compensated Employees as described in Section 3.14.7
above.
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ARTICLE IV
Vesting
-------
4.1 Vesting in After-Tax, Pre-Tax and Rollover Contributions Accounts
-----------------------------------------------------------------
A Participant is always 100% vested in the balance of his or her
After-Tax Contribution Account, Pre-Tax Contribution Account and Rollover
Contribution Account.
4.2 Vesting in Company Contribution and Contingent Accounts
-------------------------------------------------------
4.2.1 A Participant becomes vested in the balance of his or her
Company Contribution Account and Contingent Account according to the following
Schedule:
Years of Service Percent Vested
---------------- --------------
Fewer than 2 0%
2 but fewer than 3 20%
3 but fewer than 4 40%
4 but fewer than 5 60%
5 or more 100%
4.2.2 Notwithstanding the foregoing, a Participant will become 100%
vested in the balance of his or her Company Contribution Account and Contingent
Account if:
(a) he or she reaches age 55 while employed by the Company or one of
its Affiliates;
(b) he or she separates from service due to Disability;
(c) he or she dies while employed by the Company or one of its
Affiliates;
(d) he or she ceases to be an Employee because of the permanent
shutdown of a single site of employment or of one or more
facilities or operating unites within a single site of
employment; or
(e) he or she is employed by the Company or one of its Affiliates
involved in a transaction and the Committee, in its discretion,
fully vests the Participant in connection with the transaction.
4.2.3. If a Participant is hired by the Company or one of its
Affiliates as a result of an acquisition, the Committee (or its delegatee) may,
in its discretion, give the Participant and all other Participants hired under
the same circumstances as a result of the same acquisition credit for service
with a prior employer for purposes of vesting.
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<PAGE>
4.3 Forfeitures
-----------
4.3.1 A Participant forfeits the non-vested portion of his or her
Company Contribution and Contingent Accounts on the date a Period of Separation
begins. The non-vested portion so forfeited is a "Forfeiture." If the Period
of Separation is shorter than one year, the Forfeiture is restored, and the
Period of Separation counts towards the Participant's Year of Service. If the
Period of Separation is longer than one year but shorter than five years, the
Forfeiture will be restored, and service before and after the Period of
Separation will count in determining the Participant's Year of Service for
purposes of Section 4.2. If the Period of Separation is five years or longer,
the Forfeiture will not be restored. If a Participant begins a Period of
Separation by way of a maternity or paternity leave, this Section 4.3.1 will be
read by substituting the number "six" for the number of "five" wherever the
latter number appears. A "maternity or paternity leave" is an absence from work
because of the Participant's pregnancy, the birth of a child or placement of a
child for adoption with the Participant, or the need to care for the
Participant's child immediately following its birth to or placement with the
Participant.
4.3.2 Amounts that become Forfeitures during a month will be used to
restore Forfeitures to rehired Participants as provided in Section 4.3.1. Any
remaining Forfeitures during a month will be used to pay the administrative
expenses of the Plan in the following order: Trustee's fees, communications to
Participants, nondiscrimination testing, qualified domestic relations order
administration, enrollment fees, required minimum distribution fees, auditors'
fees, consulting and legal fees and other similar administrative expenses. Any
remaining Forfeitures during a month will be debited against the appropriate
Company Contribution and Contingent Accounts, and credited toward the Company's
obligation to make Company Contributions in succeeding months. Any remaining
Forfeitures during a month will be used to pay fees associated with Participant
communications to Participants involved in an acquisition or divestiture and
Participant Account adjustments, as determined by the Committee or its
delegatee. While awaiting allocation, Until such time as the Company applies
Forfeitures to the purposes described above, they will be invested in a default
fund selected by the Company. For periods beginning before July 7, 1997, while
awaiting allocation as Company Contributions, Forfeitures were invested in the
Stock Fund.
4.4 Special Vesting Rules for Participants Transferred to Snap-On Incorporated
--------------------------------------------------------------------------
In 1996, the Company sold and assigned the assets and liabilities of
its Automotive Service Equipment Division to Snap-On Incorporated. Effective as
of the Closing Date of that transaction (as defined in the asset purchase
agreement), each Participant who was transferred to Snap-On Incorporated as part
of the transaction and was a Transferred Employee, as defined in the asset
purchase agreement (a "Snap-On Transferred Employee"), was made fully vested in
his or her Plan Account. Further, any Plan loan to a Snap-On Transferred
Employee that was outstanding as of the Closing Date remains outstanding,
notwithstanding the Snap-On Transferred Employee's termination of employment
with the Company and all Affiliates, as if the Transferred Employee were still
employed by the Company, until the earliest of:
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(a) the date the Snap-On Transferred Employee fully repays the loan;
(b) the date the Snap-On Transferred Employee defaults on the loan;
(c) the date the Snap-On Transferred Employee fails to repay the loan
in full after separating from service with Snap-On Incorporated
and its affiliates under Code Sections 414(b), (c), (m) and (o)
and being given the opportunity to repay the loan; and
(d) a date that is no later than 90 days after the date Snap-On
Incorporated ceases to facilitate loan repayments for Snap-On
Transferred Employees by payroll deduction.
4.5 Special Vesting Rules for Participants Transferred to Great Lakes Chemical
--------------------------------------------------------------------------
Pursuant to that certain U.S. Asset Purchase and Framework Agreement
(the "Agreement") dated May 4, 1999 by and between the Company and Great Lakes
Chemical Corporation ("Great Lakes"), the Company sold and assigned certain
assets and liabilities to Great Lakes. As part of that transaction, certain
individuals were offered employment by Great Lakes and became Transferred
Employees, as defined in the Agreement. Each such individual is a "Great Lakes
Transferred Employee" for purposes of this Section 4.5. Effective immediately
before the Closing Date, as defined in the Agreement (the "Closing Date"), each
Participant who was a Great Lakes Transferred Employee was made fully vested in
all of his or her Account. Moreover, any Plan loan that was outstanding on the
Closing Date to a Great Lakes Transferred Employee remains outstanding under
this Plan, notwithstanding the Great Lakes Transferred Employee's termination of
employment with the Company and all Affiliates, as if the Great Lakes
Transferred Employee were still employed by the Company, until the earliest of:
(a) the date the Great Lakes Transferred Employee fully repays the
loan;
(b) the date the Great Lakes Transferred Employee defaults on the
loan;
(c) the date the Great Lakes Transferred Employee fails to repay the
loan in full after separating from service with Great Lakes and
its affiliates under Code Sections 414(b), (c), (m) and (o) and
being given the opportunity to repay the loan;
(d) the date that is no later than 90 days after the date Great Lakes
ceases to facilitate loan repayments for Great Lakes Transferred
Employees by payroll deduction; and
(e) the date the loan is transferred with the rest of the Great Lakes
Transferred Employee's Accounts to a defined contribution plan of
Great Lakes or a Great Lakes affiliate under Code Section 414(b),
(c), (m) or (o).
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4.6 Special Vesting Rules for Participants Transferred to Cambrex
-------------------------------------------------------------
Pursuant to that asset purchase agreement (the "Agreement") dated June
3, 1999 by and between the Company and Cambrex Corporation ("Cambrex"), the
Company sold and assigned certain assets and liabilities of its BioProducts
Division to Cambrex. As part of that transaction, certain individuals were
offered employment by Cambrex and became Transferred Employees, as defined in
the Agreement. Each such individual is a "Cambrex Transferred Employee" for
purposes of this Section 4.6. Effective immediately before the Closing Date, as
defined in the Agreement (the "Closing Date"), each Participant who was a
Cambrex Transferred Employee was made fully vested in all of his or her Account.
Moreover, any Plan loan that was outstanding on the Closing Date to a Cambrex
Transferred Employee remains outstanding under this Plan, notwithstanding the
Cambrex Transferred Employee's termination of employment with the Company and
all Affiliates, as if the Cambrex Transferred Employee were still employed by
the Company, until the earliest of:
(a) the date the Cambrex Transferred Employee fully repays the loan;
(b) the date the Cambrex Transferred Employee defaults on the loan;
(c) the date the Cambrex Transferred Employee fails to repay the loan
in full after separating from service with Cambrex and its
affiliates under Code Sections 414(b), (c), (m) and (o) and being
given the opportunity to repay the loan;
(d) the date that is no later than 90 days after the date Cambrex
ceases to facilitate loan repayments for Cambrex Transferred
Employees by payroll deduction; and
(e) the date the loan is transferred with the rest of the Cambrex
Transferred Employee's Accounts to a defined contribution plan of
Cambrex or a Cambrex affiliate under Code Section 414(b), (c),
(m) or (o).
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ARTICLE V
Timing of Distributions to Participants
---------------------------------------
5.1 Separation from Service
-----------------------
Upon his or her separation from service with the Company and all
Affiliates for any reason, a Participant will be entitled to receive the vested
portion of his or her Account Balance, determined in accordance with the
provisions of Article IV and the valuation rules established for each Investment
Fund. The date as of which the Participant's Account Balance is determined will
be the Valuation Date preceding the date of distribution.
5.2 Start of Benefit Payments
-------------------------
5.2.1 Except as provided in Sections 5.2.2 and 5.2.3, unless a
Participant otherwise elects, payment of benefits will begin no later than the
60th day after the close of the Plan Year in which the latest of the following
events occurs:
(a) the Participant's 65th birthday;
(b) the 10th anniversary of the year in which the Participant
commenced participation; and
(c) the Participant's separation from service.
If the amount of benefits payable to or in respect of a Participant cannot be
determined by the benefit commencement date described in the preceding sentence,
or if the Administrator cannot locate the Participant (or, if the Participant
has died, his or her Beneficiary) after making a reasonable effort to do so,
benefit payments will begin no later than 60 days after the amount of the
Participant's benefits can first be determined or the Participant (or his or her
Beneficiary) is located, in the amount necessary to bring the payments up to
date, as if they had begun on the benefit commencement date described in the
preceding sentence.
5.2.2 The Participant's Account Balance will be distributed as soon
as practicable after the Participant elects a distribution following the
Participant's separation from service. Notwithstanding the foregoing, if (at the
time of his or her separation from service) the Participant's total Account
Balance exceeds $5,000 (or, for Plan Years beginning before 1998, $3,500) the
Participant may elect to defer distribution of his or her Account Balance until
a date no later than his or her Required Beginning Date, and the Participant's
Account Balance may be distributed before the Participant's Required Beginning
Date only if the notice and consent rules of this Section 5.2.2 are met. At
least 30, but no more than 90, days before the Annuity Starting Date, the
Administrator will furnish the Participant with a notice containing information
regarding his or her right to defer distribution of his or her Account Balance.
The Administrator will give the Participant an election period of at least 30
days to decide whether to take distribution. Notwithstanding the foregoing, the
election period may end immediately after the
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<PAGE>
Participant makes an affirmative election to take distribution of his or her
Account Balance. Notices and elections under this Section 5.2.2 may be made
electronically or telephonically.
5.2.3 Notwithstanding any other provision of this Plan, a Participant
must begin to receive his or her benefit no later than his or her Required
Beginning Date. The amount to be distributed each year will be the minimum
amount required to satisfy Code Section 401(a)(9) and the regulations
promulgated thereunder, determined with no recalculation of life expectancy. The
Required Beginning Date of a Participant who reaches age 70-1/2 on or after
January 1, 2000 is April 1 of the calendar year following the calendar year in
which the Participant reaches age 70-1/2 or, if later, retires. The Required
Beginning Date of a Participant who reaches age 70-1/2 before January 1, 2000 is
April 1 of the calendar year following the calendar year in which the
Participant reaches age 70-1/2. Notwithstanding any other provision of this
Section 5.2.3, if a Participant is a 5% owner (as defined in Section 416) for
the Plan Year ending in the calendar year in which he or she reaches age 70-1/2,
his or her Required Beginning Date is April 1 of the following calendar year,
and he or she cannot defer distribution until after he or she retires.
5.2.4 Notwithstanding any other provision of this Plan, all Plan
distributions will comply with Code Section 401(a)(9), including Department of
Treasury Regulation Section 1.401(a)(9)-2. In addition, the benefit payments
distributed to any Participant will satisfy the incidental death benefit
provisions under Code Section 401(a)(9)(G) and the regulations promulgated under
it.
5.2.5 If the Participant dies after beginning distribution of his or
her Account Balance, the remainder of the Account Balance will be payable in
accordance with Section 7.1. Notwithstanding the foregoing, the Participant's
Account Balance must continue to be distributed at least as rapidly as under the
method of distribution in effect before the Participant died.
5.2.6 If the Participant dies before beginning distribution of his or
her Account Balance, the Participant's Account Balance will be distributed as
provided under Section 7.1, but distribution must be completed within five years
after the Participant dies. Notwithstanding the foregoing, the Participant's
Beneficiary may receive the Account Balance over his or her life or over a
period not extending beyond his or her life expectancy, so long as distribution
begins within one year after the participant dies, or, if the Beneficiary is the
Participant's Surviving Spouse, by the date the Participant would have reached
age 70-1/2. Furthermore, if the Participant's Surviving Spouse is the
Beneficiary and dies before distribution begins, the next Beneficiary to take
may receive benefits over his or her life or a period not exceeding his or her
life expectancy, so long as distribution begins by the date the Surviving Spouse
would have reached age 70-1/2.
5.3 Additional Distribution Events
------------------------------
A Participant is eligible to receive a lump sum distribution of his or
her Account Balance under any of the sets of circumstances described below.
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<PAGE>
(a) The Plan is terminated and another defined contributions plan is
not established in its place. Neither an employee stock ownership plan (as
described in Code Section 4975(e) or 409) nor a simplified employee pension plan
(as defined in Code Section 408(k)) counts as another defined contribution plan
for this purpose.
(b) A Participating Employer that is a corporation disposes of
substantially all of the assets used in a trade or business to an unrelated
corporation, and the Participating Employer continues to maintain this Plan
after the disposition. In such a case, only Employees who continue employment
with the corporation acquiring the assets may receive a lump sum distribution.
(c) A Participating Employer that is a corporation disposes of its
interest in a subsidiary to an unrelated entity, and the Participating Employer
continues to maintain this Plan. In such a case, only Employees who continue
employment with the subsidiary may receive a lump sum distribution.
For purposes of this Section 5.3, a lump sum distribution has the
meaning given by Code Section 402(d)(4), without regard to Subsections (i),
(ii), (iii) and (iv) of Subsections (A), (B), or (F) thereof.
5.4 Transfers from the Plan for Changes in a Participant's Employment Status
------------------------------------------------------------------------
If, as a result of a change in employment status, a Participant ceases
to be a Participant in this Plan but becomes a participant in the FMC
Corporation Savings and Investment Plan for Bargaining Unit Employees pursuant
to the terms of that plan, his or her Account will be transferred to that plan
as soon as reasonably feasible after the date he or she becomes a participant in
that plan.
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<PAGE>
ARTICLE VI
Forms of Benefit, In-Service Withdrawals and Loans
--------------------------------------------------
6.1 Cashout of Small Amounts
------------------------
Notwithstanding any other Plan provision, if a Participant's Account
Balance is not larger than $5,000 (or, for Plan Years beginning before 1998,
$3,500) the Account Balance will be paid in one lump sum as soon as practicable
after the Participant's separation from service, without his or her consent or
the consent of his or her spouse.
6.2 Medium of Distribution
----------------------
A Participant's Account Balance will be distributed by check to the
Participant or Beneficiary entitled to it (or to his or her designated agent).
Alternatively, as to any amount invested in the Stock Fund at the time of
distribution, the Participant or, where applicable, his or her Beneficiary, may
request a certificate representing the whole shares of Stock held for him or
her, and a check representing any fractional share. The Administrator will
establish uniform and nondiscriminatory rules governing the timing, content and
manner of elections under this Section 6.2.
6.3 Forms of Benefit
----------------
6.3.1 A Participant or Beneficiary may elect to have his or her
Account Balance distributed in any of the forms described below.
(a) Lump Sum: This form of benefit pays the entire Account Balance
in one payment.
(b) Installments for a Fixed Period: The Participant or Beneficiary
may elect to receive annual, quarterly or monthly installments
over a fixed period of 20 years or less, or, for periods
beginning before June 1, 1997, 10 years or less.
(c) Installments over Life Expectancy: The Participant or
Beneficiary may elect to receive annual, quarterly or monthly
installments over his or her life expectancy or over the joint
life expectancy of the Participant and his or her Beneficiary.
6.3.2 If the Participant chooses to receive installments, the size of
each installment will be calculated by dividing the Account Balance determined
as of the date described in Section 5.1 by the total number of installments
remaining to be paid.
6.3.3 The Administrator will establish uniform and nondiscriminatory
rules governing the timing, content and manner of elections under this Section
6.3.
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<PAGE>
6.3.4 No installment election under this Plan will permit payments to
be made over a period longer than the Participant's life expectancy or the joint
life expectancy of the Participant and his or her Beneficiary. A Participant
may not elect any stream of installments providing payments to a Beneficiary who
is other than his or her spouse, unless the amount distributed each year equals
or exceeds the quotient obtained by dividing the Participant's Account Balance
by the divisor determined under Department of Treasury Regulation Section
1.401(a)(9)-2. Further, the amount of the periodic payment made to a
Beneficiary cannot under any circumstances be larger than the amount of the
periodic payment made to the Participant.
6.4 Change in Form, Timing or Medium of Benefit Payment
Any former Employee who has chosen to defer payment of his or her
Account Balance may request a change in the form, timing or medium in which his
or her Account Balance will be paid, so long as the revised election conforms to
Section 6.3. Once benefit payments have begun, no Participant may change the
form, timing or medium of payment of his or her Account Balance.
6.5 Direct Rollover of Eligible Rollover Distributions
6.5.1 Notwithstanding any provision of the Plan, effective for
distributions on or after January 1, 1993, a Distributee may elect, at the time
and in the manner prescribed below, to have any portion of an Eligible Rollover
Distribution paid in a Direct Rollover to an Eligible Retirement Plan specified
by the Distributee.
6.5.2 At least 30, but no more than 90, days before the Annuity
Starting Date, the Administrator will furnish the Participant with a notice
containing information regarding his or her right to take distribution directly
or to elect a Direct Rollover, and some of the federal tax consequences of the
alternative types of distribution. The notice must meet the requirements of
Code Section 402(f). The Administrator will give the Participant an election
period of at least 30 days to decide whether to elect a Direct Rollover.
Notwithstanding the foregoing, the election period may end immediately after the
Participant makes an affirmative election as to whether to receive the
distribution directly or in the form of a Direct Rollover, so long as the
Participant is properly informed of his or her right to a full 30-day election
period, and waives the remainder of the election period.
6.6 In-service and Hardship Withdrawals
6.6.1 An active Participant who has reached age 59-1/2 may elect to
withdraw all or any part of his or her Account. For periods beginning before
January 1, 2000, a Participant was permitted to make only one in-service
withdrawal during his or her lifetime. The Administrator will establish uniform
and nondiscriminatory procedures for requesting, granting and processing in-
service withdrawals under this Section 6.6.1, which may include telephonic or
electronic procedures, as and to the extent permitted by applicable law or
regulation.
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<PAGE>
6.6.2 An active Participant who has not reached age 59 1/2 may make a
withdrawal of the following portions of the Participant's Account Balance in the
order listed below:
(a) all or part of the After-Tax Contributions he or she made after
March 31, 1986 and before January 1, 1987;
(b) all earnings or appreciation attributable to After-Tax
Contributions he or she made after March 31, 1986 and before
January 1, 1987;
(c) all or part of the After-Tax Contributions he or she made after
December 31, 1986;
(d) all or part of his or her After-Tax Contributions made before
April 1, 1982, or, if less, the amount in the Participant's
After-Tax Contribution Account allocable to those contributions;
(e) any amount remaining in the Participant's After-Tax Contribution
Account that is allocable to After-Tax Contributions made before
April 1982;
(f) all the vested value of his or her Contingent Account;
(g) all earnings or appreciation attributable to the After-Tax
Contributions he or she made after December 31, 1986;
(h) all of the current value of vested Company Contributions made as
to After-Tax Contributions he or she made after December 31,
1986.
For periods beginning on or after January 1, 2000, the above order should be
revised to move Subsection (f) after Subsection (g). For periods beginning
before January 1, 2000, a Participant who made a withdrawal under Subsection
(d), (e), (f), (g) or (h) was suspended from making Pre-Tax Contributions from
the effective date of the withdrawal until the first day of the payroll period
coincident with or next following the first day of the seventh calendar month
after the withdrawal is effective. The Administrator will establish uniform and
nondiscriminatory procedures for requesting, granting and processing in-service
withdrawals under this Section 6.6.2, which may include electronic or telephonic
procedures, as and to the extent permitted by applicable law or regulation.
6.6.3 An active Participant may make a hardship withdrawal from his
or her Pre-Tax Contribution Account if he or she demonstrates to the
Administrator that the withdrawal is necessary to satisfy the Participant's
immediate and heavy financial need. A hardship withdrawal cannot exceed the
total Pre-Tax Contributions made to the Plan on behalf of the Participant by the
date of the withdrawal, reduced by the amounts of any previous hardship or other
in-service withdrawals. In addition, the minimum hardship withdrawal permitted
is $500,
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or, if less, the total amount of Pre-Tax Contributions, made for the
Participant, minus any previous hardship or in-service withdrawals.
(a) A distribution is on account of an immediate and heavy financial
need if it is for:
(1) medical expenses as described in Code Section 213(d)
incurred by the Participant, his spouse or dependents;
(2) costs directly related to the purchase of a principal
residence for the Participant (excluding mortgage payments);
(3) tuition payments, or related education expenses, for the
next 12 months of post-secondary education for the
Participant or the Participant's spouse or dependents;
(4) payments necessary to prevent the Participant's eviction
from his or her principal residence, or foreclosure on the
mortgage on the Participant's residence;
(5) expenses incurred for the funeral of a member of the
Participant's immediate family;
(6) legal expenses incurred by the Participant in obtaining a
divorce;
(7) expenses incurred by the Participant in remedying an
uninsured property loss;
(8) expenses incurred by the Participant in adopting or
attempting to adopt a child;
(9) emergency expenses of the Participant in personal
bankruptcy; or
(10) other expenses deemed by the Administrator to constitute
hardships justifying a hardship withdrawal, and formally
adopted under rules of the Administrator as eligible for
hardship withdrawal.
(b) A withdrawal will be permitted only if the Participant certifies
in writing to the Administrator that the "immediate and heavy
financial need" cannot be met from other resources reasonably
available to the Participant and the Participant further
represents to the Administrator, in such manner and form as the
Administrator may require, that the Participant's immediate and
heavy financial need cannot be relieved:
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(1) through reimbursement or compensation by insurance or
otherwise;
(2) by reasonable liquidation of the Participant's assets, to
the extent liquidation would not itself cause an immediate
and heavy financial need;
(3) by the Participant's ceasing to have Pre-Tax Contributions
made for him or her under the Plan; or
(4) by other distributions from plans maintained by a
Participating Employer or any other employer, or by
borrowing from commercial sources on reasonable commercial
terms.
If the Participating Employer or the Administrator knows that the
representation required by the preceding sentence would not be
true, the hardship withdrawal request will not be granted.
(c) A hardship withdrawal under this Section 6.6.3 cannot exceed the
amount required to relieve the financial need, including any
amounts necessary to pay any federal, state, or local income
taxes or penalties reasonably anticipated to result from the
distribution.
6.6.4 The Administrator will establish uniform and nondiscriminatory
procedures for requesting, granting and processing hardship withdrawals.
6.7 Loans
6.7.1 An active Participant may submit an application to the
Administrator to borrow from his or her Account (on such uniform and
nondiscriminatory terms and conditions as the Administrator shall prescribe) an
amount, when added to the amount of any then outstanding loan, does not exceed
the lesser of:
(a) $50,000, reduced by the excess (if any) of the Participant's
highest outstanding Plan loan balance during the one-year period
ending on the day before the loan is made over the Participant's
outstanding Plan loan balance on the day the loan is made; and
(b) 50% of the Participant's Account as of the Valuation Date
coincident with or immediately preceding the date the
Administrator receives the application.
In calculating the Participant's loan limit, all loans from qualified plans of
the Company and all Affiliates will be aggregated.
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<PAGE>
6.7.2 Each loan granted under the Plan will meet the following
requirements:
(a) it must be evidenced by a negotiable promissory note;
(b) the rate of interest payable on the unpaid balance of the loan
will be reasonable;
(c) the amount of the loan must be at least $1,000;
(d) the loan, by its terms, must require repayment within five years;
(e) the loan will be secured by the Participant's interest in the
Account Balance of his or her Account, but not to exceed 50% of
such Account; and
(f) the loan must be repaid through payroll deduction, or, if the
loan has been outstanding for at least three months, the
Participant may make one payment by check or money order of the
full amount of principal and interest then outstanding.
6.7.3 If a Participant is granted a loan, a "Loan Account" will be
established for the Participant. All Loan Accounts will be held by the Funding
Agent, as part of the Trust Fund. The loan amount will be transferred from a
Participant's other Accounts according to uniform and nondiscriminatory ordering
rules adopted by the Administrator, and will be disbursed from the Loan Account.
The promissory note executed by the Participant will be deposited in his or her
Loan Account.
6.7.4 Principal and interest payments of a loan will be credited
initially to the Loan Account of the Participant, and will be transferred as
soon as reasonably practicable thereafter to the other Accounts of the
Participant. Any loss caused by nonpayment or other default on a loan
obligations will be borne solely by the Loan Account of the Participant.
Although a default will constitute a taxable event to the Participant,
necessitating certain reporting obligations on the Administrator's part,
notwithstanding any other provision of the Plan, the note evidencing a loan in
default will not be executed upon until the Participant experiences a
distributable event. A Participant's loan repayments will, at his or her
request, be suspended during the time he or she is absent as a result of
qualifying military service (as determined under USERRA), as permitted under
Code Section 414(u)(4).
6.7.5 A Participant may not have more than two loans outstanding at
any given time. For periods beginning before January 1, 2000, a Participant
could not receive more than one Plan loan in any 12-month period, and could not
have more than two loans outstanding at any given time.
6.7.6 Upon termination of employment, a Participant who has an
outstanding loan under the Plan must repay his or her loan in a lump sum or the
loan will be in default.
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Notwithstanding the above, the Committee (or its delegatee) may, in its sole
discretion, allow terminated Participants to continue to repay loans under such
uniform and nondiscriminatory rules as the Committee (or its delegate)
determines, where the Participant has been terminated due to a transaction or a
permanent reduction in force.
6.7.7 All fees and expenses incurred in connection with a loan
obligation of a Participant will be borne solely by the Participant's Account.
6.7.8 The Administrator will establish uniform and nondiscriminatory
procedures for requesting, granting and processing Plan loans.
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ARTICLE VII
Death Benefits
--------------
7.1 Payment of Account Balance
7.1.1 Subject to the provisions of Section 5.2, if a Participant dies
before payment of his or her Account Balance has begun, his or her Account
Balance will be paid to the Participant's Beneficiary in the form of benefit
chosen by the Beneficiary under Sections 6.2 and 6.3. The Beneficiary of a
Participant who is married on the date of his or her death will be the
Participant's Surviving Spouse, unless the Participant has designated another
Beneficiary and the Surviving Spouse consented to the designation, both as
provided in Section 7.3.
7.2 Failure to Name a Beneficiary
If a Participant fails to name a Beneficiary and dies before payment
of his or her Account Balance begins, or if no designated Beneficiary survives
the Participant, the Administrator will pay any amounts due after the
Participant's death to the Participant's surviving spouse or, if there is no
surviving spouse, to the Participant's surviving children, in equal shares. If
the Participant leaves behind no surviving spouse or children, the Administrator
will pay any amounts then due to the Participant's estate.
7.3 Waiver of Spousal Beneficiary Rights
7.3.1 A Participant may designate someone other than his or her
Surviving Spouse as his or her primary Beneficiary only if the designation or
election meets the requirements of this Section 7.3 outlined below.
7.3.2 The Administrator will provide each Participant with a written
explanation of:
(a) the right of the Participant to name someone other than his or
her Surviving Spouse as a Beneficiary;
(b) the right of the Participant's spouse to be named as the primary
Beneficiary for all of the Participant's Account Balance and the
effect of waiving that right; and
(c) the Participant's right to revoke a previous designation of
someone other than the Surviving Spouse as a Beneficiary, and the
effect of such a revocation.
7.3.3 A designation of someone other than the Surviving Spouse as a
primary Beneficiary will be effective only if it is made in writing and
consented to by the Participant's spouse, with the spouse's consent witnessed by
a notary public or the Administrator, Any
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subsequent change of Beneficiary to an individual who is not the Participant's
Surviving Spouse must also be in writing and consented to by the Participant's
spouse, with the spouse's consent witnessed by a notary public or the
Administrator. Spousal consent is not necessary if the Participant establishes
to the satisfaction of a Plan representative that the Participant does not have
a spouse, or that the Participant's spouse cannot be located. Spousal consent
is also unnecessary if the Participant produces a court order to the effect that
the Participant is legally separated from his or her spouse or has been
abandoned by the spouse, within the meaning of the law of the Participant's
state of residence, unless a qualified domestic relations order requires
otherwise. If the Participant's spouse is legally incompetent to give consent,
the spouse's legal guardian may give the spouse's consent, even if the legal
guardian is the Participant. A spouse's consent will be valid only as to that
spouse, and an election deemed effective without the spouse's consent will be
valid only as to the spouse designated as to that election. A Participant may
revoke a prior waiver of the 50% preretirement life annuity or a prior
designation of someone other than the Surviving Spouse as a primary Beneficiary
without the consent of his or her spouse, and may revoke such a waiver or
designation an unlimited number of times.
7.3.4 A Participant's former spouse will be treated as the spouse or
Surviving Spouse only to the extent provided under a qualified domestic
relations order as described in Code Section 414(p).
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ARTICLE VIII
Special Forms of Benefit and Special Death Benefit Provisions Applicable to
---------------------------------------------------------------------------
Certain Transferred Participants
--------------------------------
8.1 Applicability
The provisions of this Article VIII apply, instead of Sections 6.3,
6.4, 7.1, 7.2 and 7.3, to the entire Account Balance of each Participant who
was: (a) a participant in the FMC Corporation 401(k) Plan for Employees Covered
by a Collective Bargaining Agreement immediately before his or her collective
bargaining unit became covered under this Plan, and whose account balance in
that plan was transferred to this Plan; or (b) transferred to the Company as
part of its acquisition from Stein, Inc. or Frigoscandia Equipment Holding AB.
Sections 6.1, 6.2, 6.5, 6.6 and 6.7 continue to apply to the Account Balances of
Participants described in the preceding sentence, but this Article VIII does not
apply to any other Participant.
8.2 Forms of Benefit for Certain Transferred Participants
8.2.1 The normal form of benefit for a Participant to whom this
Article VIII applies is the 50% Joint and Survivor-Ten Year Certain Annuity with
the Participant's spouse as the Beneficiary, if the Participant is married on
the Annuity Starting Date. If the Participant is not married on the Annuity
Starting Date, the normal form of benefit is the Life and Ten Year Certain
Annuity. If the Participant fails to make an election under Section 8.4, his or
her Account Balance will be paid in the normal form of benefit. A Participant
covered by this Article VIII who is married on the Annuity Starting Date may
elect a benefit other than the normal form of benefit only if his or her spouse
consents to the election within the time frame and in the manner required by
Section 8.4.
8.2.2 Subject to Sections 8.2.1 and 8.4, and except as otherwise
provided herein, a Participant covered by this Article VIII may elect to have
his or her benefit under this Plan paid in the form of a lump sum distribution
or a fixed dollar annuity purchased on his or her behalf. A Plan annuity is a
fixed dollar annuity if it provides a stream of monthly payments that do not
vary in amount.
8.2.3 If a Participant to whom this Article VIII applies elects to
have a fixed dollar annuity purchased on his or her behalf, he or she may select
any of forms of annuity described in this Section 8.2.3.
(a) Life and Ten Year Certain Annuity: This form of annuity pays the
Participant a fixed amount each month beginning with the month in
which the Annuity Starting Date occurs and ending when the
Participant dies. If the Participant dies before 120 monthly
payments have been made, payments will continue to the
Participant's Beneficiary until 120 monthly payments have been
made to the Participant and Beneficiary under the annuity.
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(b) Joint and Survivor-Ten Year Certain Annuity: This form of annuity
pays the Participant a fixed amount each month beginning with the
month in which the Annuity Starting Date occurs and ending when
the Participant dies. If the Participant's Beneficiary survives
the Participant, payments will continue to the Participant's
primary Beneficiary until the Beneficiary dies. If the
Participant and Beneficiary both die before 120 monthly payments
have been made to the Participant and Beneficiary under the
annuity, payments will continue to the Participant's contingent
Beneficiary until 120 monthly payments in all have been made
under the annuity. The monthly payment payable to the primary or
contingent Beneficiary before 120 payments have been made under
the annuity equals the monthly payment made during the
Participant's lifetime. The monthly payment payable to the
primary Beneficiary after 120 payments have been made under the
annuity equals 100% or 50% of the monthly payment made during the
Participant's lifetime, as specified in the Participant's
election. Both the primary and contingent Beneficiaries must be
named at the time this annuity is elected.
(c) Period Certain Annuity: This form of annuity pays the
Participant a fixed amount each month beginning with the month in
which the Annuity Starting Date occurs and ending when the
specified number of monthly payments have been made to the
Participant and, if he or she dies before receiving the specified
number of payments, to the Participant's Beneficiary. The
Participant may specify 60, 120 or 180 monthly payments. The
Participant specifies the number of monthly payments and names
his or her Beneficiary at the time he or she elects the annuity.
(d) Other: This form of payment includes any other alternative form
of distribution, including installment distributions, provided
for by the Funding Agent. Notwithstanding the foregoing, a
Participant may not elect any form of distribution providing only
for the payment of interest or income earned on his or her
Accounts.
8.2.4 An annuity under this Plan must provide that payments will be
made over a period no longer than the life of the Participant, the lives of the
Participant and his or her Beneficiary, the Participant's life expectancy or the
life expectancy of the Participant and his or her Beneficiary. A Participant to
whom this Article VIII applies may not elect any form of annuity providing
monthly payments to a Beneficiary who is other than his or her spouse, unless
the amount distributed each year equals or exceeds the quotient obtained by
dividing the Participant's Account Balances by the divisor determined under
Department of Treasury Regulation Section 1.401(a)(9)-2. Further, the amount of
the monthly payment made to a Beneficiary cannot under any circumstances be
larger than the amount of the monthly payment made to the Participant.
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8.3 Change in Form, Timing or Medium of Benefit Payment for Certain Transferred
Participants
Any former Employee who is a Participant to whom this Article VIII
applies and who has chosen to defer payment of his or her Account Balance may
request a change in the form, timing or medium in which his or her Account
Balances will be paid, so long as the revised election conforms to Sections 8.2
through 8.4.
8.4 Waiver of Normal Form of Benefit for Certain Transferred Participants
8.4.1 The Account Balance of a Participant to whom this Article VIII
applies will be distributed in the normal form of benefit, regardless of what
form of benefit the Participant chooses, unless the Participant makes an
effective waiver under this Section 8.4 and, if the Participant is married on
the Annuity Starting Date, unless the Participant's spouse consents to the
Participant's choice of another form of benefit in the manner described in this
Section 8.4. No sooner than 30, and no more than 90, days before the Annuity
Starting Date, the Administrator will provide the Participant with a written
explanation of:
(a) the terms and conditions of the normal form of benefit;
(b) the Participant's right to waive the normal form of benefit and
the effect of waiving the normal form of benefit;
(c) the right of the Participant's spouse to consent or withhold his
or her consent to the Participant's choice of another form of
benefit; and
(d) the Participant's right to revoke a waiver of the normal form of
benefit, and the effect of revoking the waiver.
A Participant may revoke his or waiver of the normal form of benefit at any time
before the payment begins, without his or her spouse's consent. For purposes of
the previous sentence, if the Participant's Account Balance is to be paid in the
form of an annuity, payment will be deemed to begin when the annuity has been
purchased.
8.4.2 A Participant's waiver of the normal form of benefit will be
effective only if:
(a) the Participant's spouse consents in writing to the waiver;
(b) the waiver includes an election of a form of benefit that cannot
be changed without the spouse's consent, or the spouse's consent
specifically permits the Participant to make other elections of
forms of benefit;
(c) the spouse's consent acknowledges the effect of the waiver; and
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(d) the spouse's consent is witnessed by a notary public or the
Administrator.
Spousal consent to the Participant's waiver of the normal form of benefit is not
necessary if the Participant establishes to the satisfaction of a Plan
representative that the Participant does not have a spouse, or that the
Participant's spouse cannot be located. Spousal consent is also unnecessary if
the Participant produces a court order to the effect that the Participant is
legally separated from his or her spouse or has been abandoned by the spouse,
within the meaning of the law of the Participant's state of residence, unless a
qualified domestic relations order requires otherwise. If the Participant's
spouse is legally incompetent to give consent, the spouse's legal guardian may
give the spouse's consent, even if the legal guardian is the Participant. A
spouse's consent will be valid only as to that spouse, and an election deemed
effective without the spouse's consent will be valid only as to the spouse
designated as to that election.
8.4.3 Notwithstanding the foregoing, the first payment of the
Participant's Account Balance may be made as early as seven days after the
Participant makes an affirmative election to receive his or her Account Balance
in a particular form of payment, even if that means the Participant has fewer
than 30 days to decide on a form of payment, if the Annuity Starting Date is
after the date of the Participant's affirmative election and, if the Participant
is married on the Annuity Starting Date, the Participant's spouse consents to
the form of payment in the manner required by Section 8.4.2.
8.4.4 If the Administrator believes that any spouse might, under the
law of any jurisdiction, have any interest in any benefit that might become
payable to a Participant, the Administrator may, as a condition precedent to the
Participant's making any distribution or withdrawal election, require a written
release or releases, or other documents that it believes are necessary,
desirable, or appropriate to prevent or avoid any conflict or multiplicity of
claims regarding payment of any Plan benefits.
8.5 Payment of Account Balances of Certain Transferred Participants Who Die
Before Payment Begins
8.5.1 If a Participant to whom this Article VIII applies dies before
payment of his or her Account Balance has begun, his or her Account Balance will
be paid to the Participant's Beneficiary in one lump sum within 90 days after
the Administrator receives notice of the Participant's death. The Beneficiary
of a Participant to whom this Article VIII applies, and who is married on the
date of his or her death, will be the Participant's Surviving Spouse, unless the
Participant has designated another Beneficiary and the Surviving Spouse
consented to the designation, both as provided in Section 8.7.
8.5.2 If a Participant to whom this Article VIII applies dies before
payment of his or her Account Balance has begun, 50% of the Participant's
Account Balance will be paid to his or her Surviving Spouse in the form of a
life annuity, and the remainder will be paid to any Beneficiary chosen by the
Participant (including the Participant's Surviving Spouse).
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<PAGE>
(a) The Participant may choose a form of benefit other than the life
annuity for the 50% of his or her Account Balance that will be
paid to the Surviving Spouse, so long as the Participant's
election meets the requirements of Section 8.7 and his or her
Spouse consents in the time and manner required by Section 8.7.
The Participant may also designate a Beneficiary other than his
or her Surviving Spouse as the primary Beneficiary to receive
some or all of his or her Account Balance, so long as the
Surviving Spouse consents to the designation in the time and
manner required by Section 8.7.
(b) Unless the Participant has chosen a form of benefit for his or
her Beneficiary or Surviving Spouse, the Beneficiary or Surviving
Spouse may choose to have any amounts payable to him or her paid
in any of the forms of benefit described under Section 8.2 other
than the Joint and Survivor-Ten Year Certain Annuity. Payments
to a Surviving Spouse must begin no later than the April 1
following the year in which the Participant would have reached
age 70-1/2, and payments to a Beneficiary who is not the
Surviving Spouse must begin no later than one year after the
Participant's death. Amounts payable to a Beneficiary or
Surviving Spouse must be made within five years after the
Participant's death, or over a period not exceeding the life or
life expectancy of the Surviving Spouse. A Participant's
Surviving Spouse who chooses to waive his or her right to receive
50% of the Participant's Account Balances in the form of a life
annuity must waive the right in the time and manner described in
Section 8.7.
(c) Notwithstanding Subsection (b) above, if at the time the
Participant dies his or her Account Balance does not exceed
$5,000 (or, for Plan Years beginning before January 1, 1998,
$3,500) the Account will be distributed in the form of a single
sum payment. In addition, if more than one Beneficiary is
concurrently entitled to receive annuity payments, or if the
monthly annuity payment to any Beneficiary would be less than $50
(or another amount established from time to time by the
Administrator), the Administrator may choose to pay the value of
the annuity in a single sum, so long as the single sum would not
exceed the dollar limit of the previous sentence.
8.6 Failure to Name a Beneficiary for Certain Transferred Participants
If a Participant to whom this Article VIII applies fails to name a
Beneficiary and dies before payment of his or her Account Balance begins, or if
no designated Beneficiary survives the Participant, the Administrator will pay
any amounts due after the Participant's death to the Participant's Surviving
Spouse or, if there is no Surviving Spouse, to the Participant's
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surviving children in equal shares. If the Participant leaves behind no
Surviving Spouse or surviving children, the Administrator will pay any amounts
then due to the Participant's estate.
8.7 Waiver of Preretirement Survivor Annuity for Certain Transferred
Participants
8.7.1 A Participant to whom this Article VIII applies may designate
someone other than his or her Surviving Spouse as a primary Beneficiary to
receive any portion of his or her Account Balance payable after his or her
death, or the Participant or his or her Surviving Spouse may choose a form of
benefit other than the life annuity for the 50% of the Account Balances that
will automatically be paid to the Surviving Spouse as a life annuity only if the
designation or election meets the requirements of this Section 8.7 outlined
below.
8.7.2 The Administrator will provide each Participant with a written
explanation of:
(a) the 50% preretirement life annuity payable to the Participant's
Surviving Spouse;
(b) the Participant's right to waive that annuity and the effect of
such a waiver;
(c) the right of the Participant's spouse to the 50% preretirement
life annuity and the effect of waiving that right; and
(d) the Participant's right to revoke a previous waiver and the
effect of such a revocation;
(e) the right of the Participant to name someone other than his or
her Surviving Spouse as a Beneficiary;
(f) the right of the Participant's spouse to be named as the primary
Beneficiary for all of the Participant's Account Balance and the
effect of waiving that right; and
(g) the Participant's right to revoke a previous designation of
someone other than the Surviving Spouse as a Beneficiary, and the
effect of such a revocation.
The Administrator will provide the above explanation to the Participant during
the period that begins on the first day of the Plan Year in which the
Participant reaches age 32 and ends on the last day of the Plan Year in which
the Participant reaches age 34. If a Participant first becomes a Participant
after the start of that period, the Administrator will provide the explanation
no later than the end of the second Plan Year after the Participant first
becomes a Participant.
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8.7.3 A designation of someone other than the Surviving Spouse as a
primary Beneficiary, or the election of a form of benefit other than the 50%
preretirement life annuity will be effective only if it is made in writing and
consented to by the Participant's spouse, with the spouse's consent witnessed by
a notary public or the Administrator. Moreover, the election must be made during
the period that begins on the first day of the Plan Year in which the
Participant reaches age 35 (or, if earlier, the date the Participant separates
from service) and ends on the date of the Participant's death. Any subsequent
change of Beneficiary to an individual who is not the Participant's Surviving
Spouse must also be in writing and consented to by the Participant's spouse,
with the spouse's consent witnessed by a notary public or the Administrator.
Spousal consent is not necessary if the Participant establishes to the
satisfaction of a Plan representative that the Participant does not have a
spouse, or that the Participant's spouse cannot be located. Spousal consent is
also unnecessary if the Participant produces a court order to the effect that
the Participant is legally separated from his or her spouse or has been
abandoned by the spouse, within the meaning of the law of the Participant's
state of residence, unless a qualified domestic relations order requires
otherwise. If the Participant's spouse is legally incompetent to give consent,
the spouse's legal guardian may give the spouse's consent, even if the legal
guardian is the Participant. A spouse's consent will be valid only as to that
spouse, and an election deemed effective without the spouse's consent will be
valid only as to the spouse designated as to that election. A Participant may
revoke a prior waiver of the 50% preretirement life annuity or a prior
designation of someone other than the Surviving Spouse as a primary Beneficiary
without the consent of his or her spouse, and may revoke such a waiver or
designation an unlimited number of times.
8.7.4 A Participant's former spouse will be treated as the spouse or
Surviving Spouse only to the extent provided under a qualified domestic
relations order as described in Code Section 414(p).
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ARTICLE IX
Fiduciaries
-----------
9.1 Named Fiduciaries
-----------------
9.1.1 The Company is the Plan sponsor and a "named fiduciary," as
that term is defined in ERISA Section 402(a)(2), with respect to control over
and management of the Plan's assets only to the extent that it (a) appoints the
members of the Committee which administers the Plan at the Administrator's
direction; (b) delegates its authorities and duties as "plan administrator" (as
defined under ERISA) to the Committee; and (c) continually monitors the
performance of the Committee.
9.1.2 The Company as Administrator, and the Committee, which
administers the Plan at the Administrator's direction, are "named Fiduciaries"
of the Plan, as that term is defined in ERISA Section 402(a)(2), with authority
to control and manage the operation and administration of the Plan. The
Administrator is also the "administrator" and "plan administrator" of the Plan,
as those terms are defined in ERISA Section 3(16)(A) and Code Section 414(g),
respectively.
9.1.3 The Trustee is a "named fiduciary" of the Plan, as that term is
defined in ERISA Section 402(a)(2), with authority to manage and control all
Trust assets, except to the extent that authority is allocated under the Plan
and Trust to the Administrator or is delegated to an Investment Manager, an
insurance company, or the Plan Participants at the direction of the
Administrator or the Committee.
9.1.3 The Company, Committee, Administrator and Trustee are the only
named fiduciaries of the Plan.
9.2 Employment of Advisers
----------------------
A named fiduciary, and any fiduciary appointed by a named fiduciary,
may employ one or more persons to render advice regarding any of the named
fiduciary's or fiduciary's responsibilities under the Plan.
9.3 Multiple Fiduciary Capacities
-----------------------------
Any named fiduciary and any other fiduciary may serve in more than one
fiduciary capacity with respect to the Plan.
9.4 Payment of Expenses
-------------------
All Plan expenses, including expenses of the Administrator, the
Committee, the Trustee, any Investment Manager and any insurance company, will
be paid by the Trust Fund, unless a Participating Employer elects to pay some or
all of those expenses. All or a portion of
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the recordkeeping costs or charges imposed or incurred (if any) in maintaining
the Plan will be charged on a per capita basis to the Account of each
Participant. In addition, all charges imposed or incurred (if any) for an
Investment Fund or a transfer between Investment Funds will be charged to the
Account of the Participant directing that investment. In addition, all charges
imposed or incurred for a Participant loan will be charged to the Account of the
Participant requesting the loan.
9.5 Indemnification
---------------
To the extent not prohibited by state or federal law, each
Participating Employer agrees to, and will indemnify and save harmless the
Administrator, any past, present, additional or replacement member of the
Committee, and any other Employee, officer or director of that Participating
Employer, from all claims for liability, loss, damage (including payment of
expenses to defend against any such claim) fees, fines, taxes, interest,
penalties and expenses which result from any exercise or failure to exercise any
responsibilities with respect to the Plan, other than willful misconduct or
willful failure to act.
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ARTICLE X
Plan Administration
-------------------
10.1 Powers, Duties and Responsibilities of the Administrator and the Committee
--------------------------------------------------------------------------
10.1.1 The Administrator and the Committee have full discretion and
power to construe the Plan and to determine all questions of fact or
interpretation that may arise under it. An interpretation of the Plan or
determination of questions of fact regarding the Plan by the Administrator or
Committee will be conclusively binding on all persons interested in the Plan.
10.1.2 The Administrator and the Committee have the power to
promulgate such rules and procedures, to maintain or cause to be maintained such
records and to issue such forms as they deem necessary or proper to administer
the Plan.
10.1.3 Subject to the terms of the Plan, the Administrator and/or the
Committee will determine the time and manner in which all elections authorized
by the Plan must be made or revoked.
10.1.4 The Administrator and the Committee have all the rights,
powers, duties and obligations granted or imposed upon them elsewhere in the
Plan.
10.1.5 The Administrator and the Committee have the power to do all
other acts in the judgment of the Administrator or Committee necessary or
desirable for the proper and advantageous administration of the Plan.
10.1.6 The Administrator and the Committee will exercise all of their
responsibilities in a uniform and nondiscriminatory manner.
10.2 Investment Powers, Duties and Responsibilities of the Administrator and
- -----------------------------------------------------------------------------
the Committee
-------------
10.2.1 The Administrator and the Committee have the power to make and
deal with any investment of the Trust in any manner it deems advisable and which
is consistent with the Plan. Notwithstanding the foregoing, the power to make
and deal with Trust investments does not extend to any assets subject to the
direction and control of Plan Participants as described in Section 10.3.2.
10.2.2 The Administrator and/or the Committee will establish and
carry out a funding policy and method consistent with the objectives of the Plan
and the requirements of ERISA.
10.2.3 The Administrator and the Committee have the power to direct
that assets of the Trust be held in a master trust consisting of assets of plans
maintained by a Participating Employer which are qualified under Code Section
401(a).
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10.2.4 The Administrator and the Committee have the power to select
Annuity Contracts.
10.3 Investment of Accounts
----------------------
10.3.1 The Administrator or, as delegated by the Administrator, the
Committee, may establish such different Investment Funds as it from time to time
determines to be necessary or advisable for the investment of Participants'
Accounts, including Investment Funds pursuant to which Accounts can be invested
in "qualifying employer securities," as defined in Part 4 of Title I of ERISA.
Each Investment Fund will have the investment objective or objectives
established by the Administrator or Committee. Except to the extent investment
responsibility is expressly reserved in another person, the Administrator or the
Committee, in its sole discretion, will determine what percentage of the Plan
assets is to be invested in qualifying employer securities. The percentage
designated by the Administrator can exceed ten percent of the Plan's assets, up
to a maximum of all of the Plan's assets.
10.3.2 Except as provided in Section 10.3.3, the Administrator or, as
delegated by the Administrator, the Committee, may in its sole discretion permit
Participants to determine the portion of their Accounts that will be invested in
each Investment Fund. The frequency with which a Participant may change his or
her investment election concerning future Pre-Tax Contributions or his or her
existing Account will be governed by uniform and nondiscriminatory rules
established by the Administrator or the Committee. To the extent permitted under
ERISA, effective June 1, 1997, the Plan is intended to comply with and be
governed by Section 404(c) of ERISA.
10.3.3 Notwithstanding Section 10.3.2, Company Contributions must be
invested in the Stock Fund, and may not be invested in any other Investment
Fund. Also notwithstanding Section 10.3.2, a Participant may transfer amounts
out of the Stock Fund only if he or she is at least 55 years old, and no more
frequently than once per year. Effective October 1, 1999, a Participant may
transfer Basic Contributions out of the Stock Fund only if he or she is at least
50 years old, and no more frequently than once per year. Also effective October
1, 1999, a Participant may transfer Supplemental Contributions and Rollover
Contributions out of the Stock Fund as frequently as he or she may transfer
those contributions out of any other Investment Fund. Prior to June 1, 1997, a
Participant was not permitted to transfer amounts out of any Investment Funds
until the Participant reached age 55. Prior to June 1, 1993, Rollover
Contributions were required to be invested in the Fixed Income Fund.
10.4 Valuation of Accounts
---------------------
A Participant's Accounts will be revalued at fair market value on each
Valuation Date. On each Valuation Date, the earnings and losses of the Trust
will be allocated to each Participant's Account in the ratio that his or her
total Account Balance bears to all Account Balances. Notwithstanding the
foregoing, if the Administrator or Committee establishes Investment Funds
pursuant to Section 10.3, the earnings and losses of the particular Investment
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Funds will be allocated in the ratio that the portion of each Participant's
Account Balance invested in a particular Investment Fund bears to the total
amount invested in that fund. If and to the extent the rules of any Investment
Fund require a different method of valuation, those rules will be followed.
10.5 The Insurance Company
---------------------
The Administrator or the Committee may appoint one or more insurance
companies as Funding Agents, and may purchase insurance contracts, Annuity
Contracts or policies from one or more insurance companies with Plan assets.
Neither the Administrator nor the Committee, nor any other Plan fiduciary will
be liable for any act or omission of an insurance company with respect to any
duties delegated to any insurance company.
10.6 Compensation
------------
Each person providing services to the Plan will be paid such
reasonable compensation as is from time to time agreed upon between the Company
and that service provider, and will have his, her or its expenses reimbursed.
Notwithstanding the foregoing, no person who is an Employee will be paid any
compensation for his or her services to the Plan.
10.7 Delegation of Responsibility
----------------------------
The Administrator and the Committee may designate by written
instrument one or more actuaries, accountants or consultants as fiduciaries to
carry out, where appropriate, their administrative responsibilities, including
their fiduciary duties. The Committee may from time to time allocate or delegate
to any subcommittee, member of the Committee and others, not necessarily
employees of the Company, any of its duties relative to compliance with ERISA,
administration of the Plan and other related matters, including those involving
the exercise of discretion. The Company's duties and responsibilities under the
Plan will be carried out by its directors, officers and employees, acting on
behalf of and in the name of the Company in their capacities as directors,
officers and employees, and not as individual fiduciaries. No director, officer
or employee of the Company will be a fiduciary with respect to the Plan unless
he or she is specifically so designated and expressly accepts such designation.
10.8 Committee Members
-----------------
The Committee will consist of at least three people, who need not be
directors, and will be appointed by the Chief Executive Officer of the Company.
Any Committee member may resign and the Chief Executive Officer may remove any
Committee member, with or without cause, at any time. A majority of the members
of the Committee will constitute a quorum for the transaction of business, and
the act of a majority of the Committee members at a meeting at which a quorum is
present will be an act of the Committee. The Committee can act by written
consent signed by all of its members. Any member of the Committee who is an
Employee cannot receive compensation for his or her services for the Committee.
No
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Committee member will be entitled to act on or decide any matter relating solely
to his or her status as a Participant.
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ARTICLE XI
Appointment of Trustee
----------------------
The Committee or its authorized delegatee will appoint the Trustee and
either may remove it. The Trustee accepts its appointment by executing the trust
agreement. A Trustee will be subject to direction by the Committee or its
authorized delegatee or, to the extent specified by the Company, by an
Investment Manager or other Funding Agent, and will have the degree of
discretion to manage and control Plan assets specified in the trust agreement.
Neither the Administrator nor the Committee, nor any other Plan fiduciary will
be liable for any act or omission to act of a Trustee, as to duties delegated to
the Trustee. Any Trustee appointed under this Article XI will be an institution.
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ARTICLE XII
Plan Amendment or Termination
-----------------------------
12.1 Plan Amendment or Termination
-----------------------------
The Company may amend, modify or terminate this Plan at any time by
resolution of its Board or by resolution of or other action recorded in the
minutes of the Administrator or the Committee. Execution and delivery by the
Chairman of the Board, the President, any Vice President of the Company or the
Committee of an amendment to the Plan is conclusive evidence of the amendment,
modification or termination.
12.2 Limitations on Plan Amendment
-----------------------------
No Plan amendment can:
(a) authorize any part of the Trust Fund to be used for, or diverted
to, purposes other than the exclusive benefit of Participants or
their Beneficiaries;
(b) decrease the accrued benefits of any Participant or his or her
Beneficiary under the Plan; or
(c) except to the extent permitted by law, eliminate or reduce an
early retirement benefit or retirement-type subsidy (as defined
in Code Section 411) or an optional form of benefit with respect
to service prior to the date the amendment is adopted or
effective, whichever is later.
12.3 Right to Terminate Plan or Discontinue Contributions
----------------------------------------------------
The Participating Employers intend and expect to continue this Plan in
effect and to make the contributions provided for in this Plan. However, the
Company reserves the right to terminate the Plan at any time in the manner set
forth in Section 12.1. In addition, each Participating Employer reserves the
right to completely discontinue contributions to the Plan for its Employees at
any time. Upon termination of the Plan, each affected Participant's Account
Balance will be vested and nonforfeitable and the Trust will continue until the
Trust Fund has been distributed.
12.4 Bankruptcy
----------
If the Company is ever judicially declared bankrupt or insolvent, and
no provisions to continue the Plan are made in the bankruptcy or insolvency
proceeding, the Plan will to the extent permissible under federal bankruptcy
law, be completely terminated.
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ARTICLE XIII
Miscellaneous Provisions
------------------------
13.1 Subsequent Changes
------------------
All benefits to which any Participant, Surviving Spouse or Beneficiary
may be entitled under this Plan will be determined under the Plan as in effect
when the Participant ceases to be an Eligible Employee, and will not be affected
by any subsequent change in the provisions of the Plan, unless either the
Participant again becomes an Eligible Employee or the subsequent change
expressly applies to the Participant.
13.2 Merger or Transfer of Assets
----------------------------
13.2.1 Neither the merger or consolidation of a Participating
Employer with any other person, nor the transfer of the assets of a
Participating Employer to any other person, nor the merger of the Plan with any
other plan will constitute a termination of the Plan.
13.2.2 The Plan may not merge or consolidate with, or transfer any
assets or liabilities to, any other plan, unless each Participant 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 or
she would have been entitled to receive immediately before the merger,
consolidation or transfer (if the Plan had then terminated).
13.3 Benefits Not Assignable
-----------------------
13.3.1 A Participant's Account Balance may not be assigned or
alienated either voluntarily or involuntarily.
13.3.2 Notwithstanding the foregoing, a Participant may pledge his or
her Pre-Tax Account as security for a loan under Section 6.7. In addition, the
Administrator or Committee will comply with the terms of any qualified domestic
relations order, as defined in Code Section 414(p). Notwithstanding any other
provision of the Plan, the Funding Agent has all powers that would otherwise be
assigned to the Administrator, regarding the interpretation of and compliance
with qualified domestic relations orders, including the power make and enforce
rules regarding segregations of or holds on a Participant's Account to comply
with a qualified domestic relations order, or when a domestic relations order is
reasonably expected, or is under examination of its status.
13.3.3 In addition, effective August 5, 1997, the prohibition of
Section 13.3.1 will not apply to any offset of a Participant's Account Balance
against an amount the Participant is ordered or required to pay to the Plan
under a judgment, order, decree or settlement agreement that meets the
requirements of this Section 13.3.3. The requirement to pay must arise under a
judgment of conviction for a crime involving the Plan, under a civil judgment
(including a
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consent order or decree) entered by a court in an action brought in connection
with a violation (or alleged violation) of part 4 of subtitle B of title I of
ERISA, or pursuant to a settlement agreement between the Secretary of Labor and
the Participant in connection with a violation (or alleged violation) of that
part 4. In addition, the judgment, order, decree or settlement agreement must
expressly provide for the offset of all or part of the amount that must be paid
to the Plan against the Participant's Account Balance.
13.4 Exclusive Benefit of Participants
---------------------------------
Notwithstanding any other provision of the Plan, no part of the Trust
Fund must ever be used for, or diverted to, any purpose other than the exclusive
providing benefits to Participants and their Beneficiaries and defraying the
reasonable expenses of the Plan, except that, upon the direction of the
Administrator:
(a) any contribution made by a Participating Employer by a mistake of
fact will be returned within one year after payment of the
contribution;
(b) any contribution made by a Participating Employer that was
conditioned upon its deductibility shall be returned to the
extent disallowed as a deduction under Code Section 404 within
one year after the deduction is disallowed; and
(c) any contribution that was initially conditioned on the Plan's
satisfying the requirements of Code Section 401(a) will be
returned to the Participating Employer who made it, if the Plan
is initially determined not to satisfy the requirements of Code
Section 401(a).
Any amount a Participating Employer seeks to recover under paragraph
(a) or (b) will be reduced by the amount of any losses attributable to it, but
will not be increased by the amount of any earnings attributable to it.
13.5 Benefits Payable to Minors, Incompetents and Others
---------------------------------------------------
If any benefit is payable to a minor, an incompetent, or a person
otherwise under a legal disability, or to a person the Administrator reasonably
believes to be physically or mentally incapable of handling and disposing of his
or her property, whether because of his or her advanced age, illness, or other
physical or mental impairment, the Administrator has the power to apply all or
any part of the benefit directly to the care, comfort, maintenance, support,
education, or use of the person, or to pay all or any part of the benefit to the
person's parent, guardian, committee, conservator, or other legal
representative, wherever appointed, to the individual with whom the person is
living or to any other individual or entity having the care and control of the
person. The Plan, the Administrator and any other Plan fiduciary will have
fully discharged their responsibilities to the Participant, Surviving Spouse or
Beneficiary entitled to a payment by making payment under the preceding
sentence.
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13.6 Plan Not A Contract of Employment
---------------------------------
The Plan is not a contract of Employment, and the terms of Employment
of any Employee will not be affected in any way by the Plan or any related
instruments, except as specifically provided in the Plan or related instruments.
13.7 Source of Benefits
------------------
Plan benefits will be paid or provided for solely from the Trust or
applicable insurance or Annuity Contracts, and the Participating Employers
assume no liability for Plan benefits.
13.8 Proof of Age and Marriage
-------------------------
Participants and Beneficiaries must furnish proof of age and marital
status satisfactory to the Administrator or Committee when and if the
Administrator or Committee reasonably requests it. The Administrator or
Committee may delay the payment of any benefits under the Plan until all
pertinent information regarding age and marital status has been presented to it,
and then, if appropriate, make payment retroactively.
13.9 Controlling Law
---------------
The Plan is intended to qualify under Code Section 401(a) and to
comply with ERISA, and its terms will be interpreted accordingly. If any Plan
provision is subject to more than one construction, the ambiguity will be
resolved in favor of the interpretation or construction consistent with that
intent. Similarly, if there is a conflict between any Plan provisions, or
between any Plan provision and any Plan administrative form submitted to the
Administrator, the Plan provisions necessary to retain qualified status under
Code Section 401(a) will govern. Otherwise, to the extent not preempted by ERISA
or as expressly provided herein, the laws of the State of Illinois (other than
its conflict of laws provisions) will control the interpretation and performance
of the Plan.
13.10 Income Tax Withholding
----------------------
The Administrator or Committee may direct that any amounts necessary
to comply with applicable employment tax law be withheld from any payment due
under this Plan.
13.11 Claims Procedure
----------------
13.11.1 Any application for benefits under the Plan and all inquiries
concerning the Plan shall be submitted to the Company at such address as may be
announced to Participants from time to time. Applications for benefits shall be
in writing on the form prescribed by the Company and shall be signed by the
Participant or, in the case of a benefit payable after the death of the
Participant, by the Participant's Surviving Spouse or Beneficiary, as the case
may be.
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13.11.2 The Company shall give written notice of its decision on any
application to the applicant within 90 days. If special circumstances require a
longer period of time the Company shall so notify the applicant within 90 days,
and give written notice of its decision to the applicant within 180 days after
receiving the application. In the event any application for benefits is denied
in whole or in part, the Company shall notify the applicant in writing of the
right to a review of the denial. Such written notice shall set forth, in a
manner calculated to be understood by the applicant, specific reasons for the
denial, specific references to the Plan provisions on which the denial is based,
a description of any information or material necessary to perfect the
application, an explanation of why such material is necessary and an explanation
of the Plan's review procedure.
13.11.3 The Company shall appoint a "Review Panel," which shall
consist of three or more individuals who may (but need not) be employees of the
Company. The Review Panel shall be the named fiduciary which has the authority
to act with respect to any appeal from a denial of benefits under the Plan.
13.11.4 Any person (or his authorized representative) whose
application for benefits is denied in whole or in part may appeal the denial by
submitting to the Review Panel a request for a review of the application within
60 days after receiving written notice of the denial. The Company shall give the
applicant or such representative an opportunity to review, by written request,
pertinent materials (other than legally privileged documents) in preparing such
request for review. The request for review shall be in writing and addressed as
follows: "Review Panel of the Employee Welfare Benefits Plan Committee, 200 East
Randolph Drive, Chicago, Illinois 60601." The request for review shall set forth
all of the grounds on which it is based, all facts in support of the request and
any other matters which the applicant deems pertinent. The Review Panel may
require the applicant to submit such additional facts, documents or other
material as it may deem necessary or appropriate in making its review.
13.11.5 The Review Panel shall act upon each request for review
within 60 days after receipt thereof. If special circumstances require a longer
period of time the Review Panel shall so notify the applicant within 60 days,
and give written notice of its decision to the applicant within 120 days after
receiving the request for review. The Review Panel shall give notice of its
decision to the Company and to the applicant in writing. In the event the Review
Panel confirms the denial of the application for benefits in whole or in part,
such notice shall set forth in a manner calculated to be understood by the
applicant, the specific reasons for such denial and specific references to the
Plan provisions on which the decision is based.
13.11.6 The Review Panel shall establish such rules and procedures,
consistent with ERISA and the Plan, as it may deem necessary or appropriate in
carrying out its responsibilities under this Section 13.11.
13.11.7 No legal or equitable action for benefits under the Plan
shall be brought unless and until the claimant (a) has submitted a written
application for benefits in accordance with Section 13.10.1, (b) has been
notified by the Company that the application is
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denied, (c) has filed a written request for a review of the application in
accordance with Section 13.10.4 and (d) has been notified in writing that the
Review Panel has affirmed the denial of the application; provided that legal
action may be brought after the Review Panel has failed to take any action on
the claim within the time prescribed in Section 13.11.5. A claimant may not
bring an action for benefits in accordance with this Section 13.11.7 later than
90 days after the Review Panel denies the claimant's application for benefits.
13.12 Participation in the Plan by An Affiliate
-----------------------------------------
13.12.1 With the consent of the Board, any Affiliate, by appropriate
action of its board of directors, a general partner or the sole proprietor, as
the case may be, may adopt the Plan. Each Affiliate will determine the classes
of its Employees that will be Eligible Employees and the amount of its
contribution to the Plan on behalf of its Eligible Employees.
13.12.2 With the consent of the Board, a Participating Employer, by
appropriate action, may terminate its participation in the Plan.
13.12.3 With the consent of the Board, a Participating Employer, by
appropriate action, may withdraw from the Plan and the Trust. A Participating
Employer's withdrawal will be deemed to be an adoption by that Participating
Employer of a plan and trust identical to the Plan and the Trust, except that
all references to the Company will be deemed to refer to that Participating
Employer. At such time and in such manner as the Administrator directs, the
assets of the Trust allocable to Employees of the Participating Employer will be
transferred to the trust deemed adopted by the Participating Employer.
13.12.4 A Participating Employer will have no power with respect to
the Plan except as specifically provided herein.
13.13 Action by Participating Employers
---------------------------------
Any action required to be taken by the Company pursuant to any Plan
provisions will be evidenced in the manner set forth in Section 12.1. Any action
required to be taken by a Participating Employer will be evidenced by a
resolution of the Participating Employer's board of directors (or an authorized
committee of that board). Participating Employer action may also be evidenced by
a written instrument executed by any person or persons authorized to take the
action by the Participating Employer's board of directors, any authorized
committee of that board, or the stockholders. A copy of any written instrument
evidencing the action by the Company or Participating Employer must be delivered
to the secretary or assistant secretary of the Company or Participating
Employer.
13.14 Dividends
---------
Any dividends credited to a group Annuity Contract between the
Participating Employer and the Funding Agent will be used to provide additional
benefits under the Plan.
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ARTICLE XIV
Top Heavy Provisions
--------------------
14.1 Top Heavy Definitions
---------------------
For purposes of this Article XIV and any amendments to it, the terms
listed in this Section 14.1 have the meanings ascribed to them below.
14.1.1 Aggregate Employer Contributions means the sum of all Company
Contributions and Forfeitures allocated under this Plan for a Participant, and
all employer contributions and forfeitures allocated for the Participant to all
Related Defined Contributions in the Aggregation group.
14.1.2 Aggregation Group means the group of plans in a Mandatory
Aggregation Group, if any, that includes the Plan, unless including additional
Related Plans in the group would prevent the Plan for being a Top Heavy Plan, in
which case Aggregation Group means the group of plans in a Permissive
Aggregation Group, if any, that includes the Plan.
14.1.3 Determination Date means, for a Plan Year, the last day of the
preceding Plan Year. If the Plan is part of an Aggregation Group, the
Determination Date for each other plan will be, for any Plan Year, the
Determination Date for that other plan that falls in the same calendar year as
the Determination Date for the Plan.
14.1.4 Key Employee means an employee described in Code Section
416(i)(1) and the regulations promulgated thereunder. Generally, a Key Employee
is an Employee or former Employee who, at any time during the Plan Year
containing the Determination Date or any of the four preceding Plan Years, is:
(a) an officer of the Company or an Affiliate with annual
Compensation greater than 50% of the amount in effect under Code
Section 415(b)(1)(A);
(b) one of the ten Employees of the Company and all Affiliates owning
(or considered to own within the meaning of Code Section 318) the
largest interests in any of the Company and the Affiliates, but
only if the Employee has annual Compensation greater than the
limitation in effect under Code Section 415(c)(1)(A);
(c) a five percent owner of the Company or an Affiliate; or
(d) a one percent owner of the Company or an Affiliate with annual
Compensation from the Company and all Affiliates of more than
$150,000.
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For purposes of determining who is a Key Employee, the Plan's definition of
Compensation will be applied by taking into account amounts paid by Affiliates
who are not Participating Employers, as well as amounts paid by Participating
Employers, and without applying the exclusions for amounts paid by a
Participating Employer to cover an Employee's nonqualified deferred compensation
FICA tax obligations and for gross-up payments on such FICA tax payments.
14.1.5 Mandatory Aggregation Group means each plan (considering the
Plan and Related Plans) that, during the Plan Year that contains the
Determination Date or any of the four preceding Plan Years:
(a) had a participant who was a Key Employee; or
(b) was required to be considered with a plan in which a Key Employee
participated in order to enable the plan in which the Key
Employee participated to meet the requirements of Code Section
401(a)(4) or 410(b).
14.1.6 Non-key Employee means an Employee or former Employee who is
not a Key Employee.
14.1.7 Permissive Aggregation Group means the group of plans
consisting of the plans in a Mandatory Aggregation Group with the Plan, plus any
other Related Plan or Plans that, when considered as a part of the Aggregation
Group, does not cause the Aggregation Group to fail to satisfy the requirements
of Code Section 401(a)(4) or 410(b).
14.1.8 Present Value of Accrued Benefits means, for any Plan Year, an
amount equal to the sum of (a), (b) and (c) for each person who, in the Plan
Year containing the Determination Date, was a Key Employee or a Non-key
Employee.
(a) The value of a person's full Account Balance under the Plan, plus
his or her total account balances under each Related Defined
Contribution Plan in the Aggregation Group, determined as of the
valuation date coincident with or immediately preceding the
Determination Date, adjust for contributions due as of the
Determination Date, as follows:
(i) in the case of a plan not subject to the minimum funding
requirements of Code Section 412, by including the amount of
any contributions actually made after the valuation but on
or before the Determination Date and, in the first plan year
of a plan, by including contributions made after the
Determination Date that are allocated as of a date in the
first plan year; and
(ii) in the case of a plan that is subject to the minimum funding
requirements of Code Section 412, by including the amount of
any contributions that would be allocated as of a date no
later than the
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Determination Date, plus adjustments to those amounts
required under applicable rulings, even though those amounts
are not yet required to be contributed or allocated (e.g.,
because they have been waived) and by including the amount
of any contributions actually made (or due to be made) after
the valuation date but before the expiration of the extended
payment period in Code Section 412(c)(10).
(b) The sum of the actuarial present value of a person's accrued
benefits under each Related Defined Benefit Plan in the
Aggregation Group, determined for any person who is employed by a
Participating Employer on a Determination Date, expressed as a
benefit commencing at normal retirement date (or, if later, the
person's attained age). The present value of an accrued benefit
under a Related Defined Benefit Plan is determined as of the most
recent valuation date that is within the 12-month period ending
on the Determination Date.
(c) The aggregate value of amounts distributed during the plan year
that includes the Determination Date or any of the four preceding
plan years, including amounts distributed under a terminated plan
which, if it had not been terminated, would have been in the
Aggregation Group.
14.1.9 Related Plan means any other defined contribution plan (a
"Related Defined Contribution Plan") or defined benefit plan (a "Related Defined
Benefit Plan") (both as defined in Code Section 415(k), maintained by the
Company or an Affiliate.
14.1.10 A Super Top Heavy Aggregation Group exists in any Plan Year
for which, as of the Determination Date, the sum of the Present Value of Accrued
Benefits for Key Employees under all plans in the Aggregation Group exceeds 90%
of the sum of the Present Value of Accrued Benefits for all employees under all
plans in the Aggregation Group. In determining the sum of the Present Value of
Accrued Benefits for all employees, the Present Value of Accrued Benefits for
any Non-key Employee who was a Key Employee for any Plan Year preceding the Plan
Year that contains the Determination Date will be excluded.
14.1.11 Super Top Heavy Plan means the Plan when it is described in
the second sentence of Section 14.2.
14.1.12 A Top Heavy Aggregation Group exists in any Plan Year for
which, as of the Determination Date, the sum of the Present Value of Accrued
Benefits for Key Employees under all plans in the Aggregation Group exceeds 60%
of the sum of the Present Value of Accrued Benefits for all employees under all
plans in the Aggregation Group. In determining the sum of the Present Value of
Accrued Benefits for all employees, the Present Value of Accrued Benefits for
any Non-key Employee who was a Key Employee for any Plan Year preceding the Plan
Year that contains the Determination Date will be excluded.
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14.1.13 Top Heavy Plan means the Plan when it is described in the
first sentence of Section 14.2.
14.2 Determination of Top Heavy Status
---------------------------------
This Plan is a Top Heavy Plan in any Plan Year in which it is a member
of a Top Heavy Aggregation Group, including a Top Heavy Aggregation Group that
includes only the Plan. The Plan is a Super Top Heavy Plan in any Plan Year in
which it is a member of a Super Top Heavy Aggregation Group, including a Super
Top Heavy Aggregation Group that includes only the Plan.
14.3 Minimum Allocation for Top Heavy Plan
-------------------------------------
14.3.1 For any Plan Year that the Plan is a Top Heavy Plan, the sum
of the Company Contributions and Forfeitures allocated to the Accounts of each
Participant who is a Non-key Employee will be at least three percent of the
Participant's Compensation. However, if the sum of the Company contributions and
Forfeitures allocated to the Accounts of each Participant who is a Key Employee
for the Plan Year is less than three percent of his or her Compensation and this
Plan is not required to be included in an Aggregation Group to enable a defined
benefit plan to meet the requirements of Code Section 401(a)(4) or 410(b), the
sum of the Company Contributions and Forfeitures allocated to the Accounts of
each Participant who is a Non-key Employee for the Plan Year will be equal to
the largest percentage of Compensation allocated to the Accounts of any
Participant who is a Key Employee. Notwithstanding the foregoing, no minimum
allocation will be required for any Non-key Employee who participates in another
defined contribution plan subject to Code Section 412 and included with this
Plan in a Mandatory Aggregation Group.
14.3.2 For any Plan Year when the Plan is a Top Heavy Plan but not a
Super Top Heavy Plan and a Key Employee is a participant in both this Plan and a
defined benefit plan included in a Mandatory Aggregation Group that is top
heavy, the extra minimum allocation will be provided only in this Plan, and by
substituting four percent for three percent, where the latter percentage appears
in Section 14.3.1.
14.3.3 For any Plan Year that the Plan is a Top Heavy Plan, the
minimum allocations set forth in this Section 14.3 will be allocated to the
Accounts of all Non-key Employees who are Participants and who are employed by
the Company on the last day of the Plan Year, regardless of their service during
the Plan Year, and whether or not they have made contributions of their own to
the Plan.
14.3.4 In lieu of the above, if a Non-key Employee participates in
this Plan and a Related Defined Benefit Plan included with this Plan in a
Mandatory Aggregation Group that is a Top Heavy Aggregation Group, a minimum
allocation of five percent of Compensation will be provided under this Plan.
However, for any Plan Year when the Plan is a Top Heavy Plan but not a Super Top
Heavy Plan and a Key Employee is a participant in both this Plan and a Related
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Defined Benefit Plan included with this Plan in a Mandatory Aggregation Group,
seven and one-half percent will be substituted for five percent where the latter
percentage appears in this Section 14.3.4, and the extra minimum allocation will
be provided only in this Plan.
14.4 Adjustment of Combined Plan Fraction
------------------------------------
For any Plan Year beginning before January 1, 2000 in which this Plan
was a Super Top Heavy Plan, the combined plan fraction of Section 3.9 was
determined by using the figure 1.00, rather than the figure 1.25 in the
denominator of each Participant's defined benefit plan fraction and defined
contribution plan fraction. Also in any such Plan Year, Code Section
415(e)(7)(B)(i) was applied by substituting the figure $41,500 for the figure
$51,875.
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To record the amendment and restatement of the Plan to read as set
forth herein, the Company has caused its authorized member of the Committee to
execute the same this ___ day of December, 1999, but to be effective as of
January 1, 1999, except as otherwise expressly provided herein.
FMC CORPORATION
By J. Paul McGrath
-------------------------------------
Member, Employee Welfare Benefits
Plan Committee
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APPENDIX A
Bargaining Units Covered
------------------------
Until otherwise negotiated, the bargaining units whose members are covered by
the Plan, and the effective dates of their coverage, are listed below.
Name of Bargaining Unit Effective Date of Coverage
- ----------------------- --------------------------
Agricultural Machinery Division,
Hoopeston, Illinois, United Paperworkers
International Union, AFL-CIO, CLC,
Local 7985 January 1, 1997
Peroxygen Chemicals Division, Buffalo, New York,
International Chemical Workers Union, Local 706C July 1, 1997
Phosphorus Chemicals Division, Pocatello, Idaho,
International Association of Machinists and
Aerospace Workers, AFL-CIO, Gate City
Mechanics, Local 1933 July 1, 1998
Kemmerer Coke Plant, Kemmerer, Wyoming,
District No. 22, United Mine Workers of America,
in behalf of Local Union No. 1316, UMWA August 1, 1998
Agricultural Chemicals Division, Lawrence,
Kansas, International Chemical Workers
Union, Local 605 September 15, 1998
Phosphorus Chemicals Division, Carteret,
New Jersey, International Chemical Workers
Union, Local 144 October 15, 1998
Agricultural Chemicals Division, Middleport,
New York, International Association of Machinists,
Local 1180 January 1, 1999
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Amendment
---------
to the
------
FMC 1995 Stock Option Plan
--------------------------
(As Amended 4/18/97)
WHEREAS, FMC Corporation (the "Company") maintains the FMC 1995 Stock
Option Plan (the "Plan"); and
WHEREAS, the Company previously has amended the Plan and the Company now
considers it desirable to further amend the Plan.
NOW, THEREFORE, in exercise of the authority delegated to the undersigned
officer by Resolution of the Company's Board of Directors and by virtue of the
power reserved to the Company under Section 11(a) of the Plan, the Plan, as
previously amended, be and is hereby further amended, by substituting the
following for Section 10(a) of the Plan, effective as of September 1, 1999:
"(a) Assignment and Transfer. Except as provided below, Options shall
not be transferable other than by will or the laws of descent and
distribution, shall not be subject to execution, attachment or similar
process, and may be exercised or otherwise realized, during the grantee's
lifetime, only by the grantee or his or her guardian or legal
representative.
(i) Beginning September 1, 1999, an Option agreement for a grant
of Nonqualified Stock Options, may permit or may be amended to permit
the Participant who received the Option, at any time prior to the
Participant's death, to assign all or any portion of the Option
granted to him or her to: (A) the Participant's spouse or lineal
descendants; (B) the trustee of a trust for the primary benefit of the
Participant, the Participant's spouse or lineal descendants, or any
combination thereof; (C) a partnership of which the Participant, the
Participant's spouse and/or lineal descendants are the only partners;
(D) custodianships under the Uniform Transfers to Minors Act or any
other similar statute; or (E) upon the termination of a trust by the
custodian or trustee thereof, or the dissolution or other termination
of the family partnership or the termination of a custodianship under
the Uniform Transfers to Minors Act or other similar statute, to the
person or persons who, in accordance with the terms of such trust,
partnership or custodianship are entitled to receive Options held in
trust, partnership or custody. In such event, the spouse, lineal
descendant,
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trustee, partnership or custodianship will be entitled to all of the
Participant's rights with respect to the assigned portion of such
Option, and such portion of the Option will continue to be subject to
all of the terms, conditions and restrictions applicable to the
Option, as set forth herein and in the related option agreement. Any
such assignment will be permitted only if: (x) the Participant does
not receive any consideration therefor; and (y) the assignment is
expressly permitted by the applicable Option agreement and any
amendment thereto as approved by the Committee. The Committee's
approval of an Option agreement with assignment rights or amendment of
an Option agreement to allow for assignment rights for any one
Participant shall not require the Committee to include such assignment
rights in an Option agreement or any amendment thereto with any other
Participant. Any such assignment shall be evidenced by an appropriate
written document executed by the Participant, and the Participant
shall deliver a copy thereof to the Committee on or prior to the
effective date of the assignment.
(iii) An assignee or transferee of an Option must sign an
agreement with FMC to be bound by the terms of the applicable Option
agreement."
IN WITNESS WHEREOF, the Company has caused this Amendment of the Plan to be
executed this 16th day of September, 1999.
FMC Corporation
By: /s/ Michael Murray
------------------------------------
Its: Vice President, Human Resources
--------------------------------
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TRUST AGREEMENT
Between
FMC CORPORATION
And
Bankers Trust Company
FMC Corporation Defined Benefit
Retirement Trust
<PAGE>
TRUST Agreement made as of the 31st day of August, 1999, by and between FMC
Corporation, a Delaware corporation, ("FMC") and BANKERS TRUST COMPANY, a New
York banking corporation ("Trustee").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, FMC maintains a master retirement trust known as the FMC
Corporation Master Retirement Trust with the Trustee ("Master Trust"); and
WHEREAS, the Master Trust serves as the funding medium for several
qualified defined benefit retirement plans sponsored by FMC and its subsidiaries
and affiliates ("Prior Plans"); and
WHEREAS, effective December 31, 1998, all of the Prior Plans have been
merged into the defined benefit plan formerly known as the FMC Corporation
Salaried Employees' Retirement Plan, but which name has been changed to the FMC
Corporation Employees' Retirement Program ("Plan") by appropriate action taken
by the FMC Corporation Employee Welfare Benefits Plan Committee ("Committee");
and
WHEREAS, as a result of such merger of the Prior Plans into the Plan there
is no longer a need to maintain a master retirement trust; and
WHEREAS, FMC and the Trustee desire to restate the Master Trust to reflect
the merger of the Prior Plans into the Plan and to make such other changes as
are incorporated herein; and
WHEREAS, the Trustee is willing to continue to act as trustee of such
restated trust upon all of the terms and conditions hereinafter set forth.
NOW, THEREFORE, FMC and the Trustee declare and agree that the Trustee will
receive, hold and administer all sums of money and such other property
acceptable to the Trustee as shall from time to time be
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contributed, paid or delivered to it hereunder, IN TRUST, upon all of the
following terms and conditions:
ARTICLE I
Title-Purpose-Policy-Effect
---------------------------
1.1. Name. The qualified defined benefit retirement trust established
hereunder shall be known as the FMC Corporation Defined Benefit Retirement Trust
and is sometimes hereinafter referred to as the "Trust".
1.2. Definitions. Where used in this Trust Agreement, unless the context
otherwise requires or unless otherwise expressly provided, the terms as defined
in the recitals and as defined below shall have the meanings as set forth
therein:
(a) "Account Party" shall mean the Person designated by FMC to
represent FMC for this purpose, the Named Fiduciary and any Person to whom
the Trustee shall be instructed by the Named Fiduciary to deliver its
annual or other periodic account under Section 7.2, except, that with
respect to any filings, notices, reports or accountings required to be
given under the General Trust, "Account Party" shall be limited to that
officer designated herein to represent FMC.
(b) "Accounting Period" shall mean either the twelve (12) consecutive
month period coincident with the calendar year or the shorter period in any
year in which the Trustee accepts appointment as Trustee hereunder or
ceases to act as Trustee for any reason.
(c) "Agreement" shall mean all of the provisions of this instrument
and of all other written instruments amendatory hereof.
(d) "Asset Manager" shall mean the Trustee (other than for purposes of
Article V), Named Fiduciary or Investment Manager,
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individually or collectively as the context shall require, with respect to
those assets held in any Investment Fund established hereunder over which
it exercises, or to the extent it is authorized to exercise, discretionary
investment authority or control.
(e) "Bank Business Day" shall mean a day on which the Trustee is open
for business.
(f) "Bankers" shall mean Bankers Trust Company.
(g) "Board of Directors" shall mean the Board of Directors of
FMC.
(h) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and Regulations issued thereunder.
(I) "Committee" shall mean the FMC Corporation Employee Welfare
Benefits Plan Committee or other Person responsible for benefit
administration under the Plan, including any representative (designated in
writing as such) or designee thereof authorized to act on behalf of such
Committee.
(j) "Directed Fund" shall mean any Investment Fund, or part thereof,
subject to the discretionary management and control of the Named Fiduciary
or any Investment Manager.
(k) "Discretionary Fund" shall mean any Investment Fund, or part
thereof, subject to the discretionary management and control of the
Trustee.
(l) "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time and Regulations issued thereunder.
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(m) "General Trust" shall mean the BT Pyramid Trust created by Bankers
Trust Company under Declaration of Trust effective June 30, 1991, as
heretofore or hereafter amended.
(n) "Insurance Contract" shall mean any contract or policy of any kind
issued by an insurance company, whether or not providing for the allocation
of amounts received by the insurance company thereunder solely to the
general account or solely to one or more separate accounts (including
separate accounts maintained for the collective investment of qualified
retirement plans), or a combination thereof, and whether or not any such
allocation may be made in the discretion of the insurance company.
(o) "Investment Fund" shall mean each pool of assets in the Trust in
which the Plan has an interest during an Accounting Period. The term shall
also include for purposes hereof any sub-fund or account into which an
Investment Fund shall be divided from time to time at the direction of the
Named Fiduciary.
(p) "Investment Manager" shall mean a bank, insurance company or
investment adviser satisfying the requirements of Section 3(38) of ERISA.
(q) "Investment Vehicle" shall mean any common, collective or
commingled trust (other than the General Trust or an Investment Fund),
investment company, corporation functioning as an investment intermediary,
Insurance Contract, partnership, joint venture or other entity or
arrangement to which, or pursuant to which, assets of an Investment Fund
within the Trust may be transferred or in which the Trust has an interest,
beneficial or otherwise (whether or not the underlying assets thereof are
deemed to constitute "plan assets" for any purpose under ERISA).
(r) "Named Fiduciary" shall mean the Person or its designee with
respect to the Plan, who, within the meaning of Section 402(a)(2),
402(c)(3) or 403(a)(1) of ERISA, has the authority to
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perform the separate functions allocated to that "Named Fiduciary" under
this Agreement. Unless otherwise specifically provided to the contrary, the
Named Fiduciary shall mean the Committee appointed pursuant to the Plan.
(s) "Plan" shall mean the FMC Corporation Employees' Retirement
Program which is one plan that consists of two parts - - Part I Salaried
and Nonunion Hourly Employees' Retirement Plan and Part II Union Hourly
Employees Retirement Plan.
(t) "Person" shall mean a natural person, trust, estate, corporation
of any kind or purpose, mutual company, joint-stock company, unincorporated
organization, association, partnership, joint venture, employee
organization, committee, board, participant, beneficiary, trustee, partner,
or venturer acting in an individual, fiduciary or representative capacity,
as the context may require.
(u) "Retirement Fund" shall mean all cash and other property
contributed, paid or delivered to the Trustee hereunder, all investments
made therewith and proceeds thereof and all earnings and profits thereon,
less payments, transfers or other distributions which, at the time of
reference, shall have been made by the Trustee, as authorized herein. The
Retirement Fund shall include all evidences of ownership, interest or
participation in an Investment Vehicle, but shall not, solely by reason of
the Retirement Fund's investment therein, be deemed to include any assets
of such Investment Vehicle.
(v) "Section" shall mean any Section of this Agreement.
(w) "Trustee" shall mean Bankers Trust Company, as Trustee of the
Retirement Trust.
(x) "Valuation Date" shall mean the last day of the Accounting Period,
calendar quarter or any more frequent date for reporting and/or investment
purposes agreed to by the Trustee.
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The plural of any term shall have a meaning corresponding to the singular
thereof as so defined and any neuter pronoun used herein shall include the
masculine or feminine, as the context may require.
1.3. Purpose. The Trust is established to fund the benefits payable to
participants and their beneficiaries under the Plan and to permit the collective
investment of the Plan's assets as hereinabove provided. The Trust is intended
to constitute a qualified trust as defined under Section 401(a) of the Code and
is entitled to tax exemption under Section 501(a) of the Code.
1.4. Exclusive Benefit. Except as may otherwise be permitted by law and
the terms of the Plan, at no time prior to the satisfaction of all liabilities
with respect to participants and their beneficiaries under the Plan shall any
part of the Plan in the Retirement Fund be used for, or diverted to, any
purposes other than for the exclusive benefit of such participants and their
beneficiaries, and for defraying the reasonable expenses of administering such
Plan. Notwithstanding the above, contributions (or portions thereof) may be
returned to the Company (or Participating Employers, as defined in the Plan)
upon written request of the Company (or Participating Employer) within one year
if a contribution:
(a) is conditioned upon deductibility under Section 404 of the Code,
to the extent the deduction is disallowed; or
(b) any portion thereof is made by the Company (or Participating
Employers) by a mistake of fact.
1.5. Effect. All Persons at any time interested in the Plan shall be
bound by the provisions of this Agreement and, in the event of any conflict
between this Agreement and the provisions of the Plan or any instrument or
agreement forming part of such Plan other than this Agreement, the provisions of
this Agreement shall control.
1.6. Domestic Trust. The Trust shall at all times be maintained as a
domestic trust in the United States.
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1.7. Contributions. FMC and its subsidiaries and affiliates shall, from
time to time, make contributions to the Retirement Fund as provided in the Plan.
The Trustee shall be accountable for all contributions so received. The Named
Fiduciary shall be solely responsible for enforcing payment of all contributions
to the Plan, for the timing and amount thereof, for the adequacy of the
Retirement Fund and the funding standards adopted for the Plan to meet or
discharge any pension or other liabilities of such Plan, and the Trustee shall
have no responsibility therefor.
ARTICLE II
Valuation
---------
2.1. Valuations. The Trustee shall determine the value of the assets of
the Retirement Fund and each Investment Fund as of each Valuation Date. In
addition, for the convenience of FMC and without imposing any obligation on the
Trustee, the Named Fiduciary may request the Trustee to include in its periodic
reports under this Section 2.1 or its annual account under Section 7.2, assets
that do not constitute part of the Retirement Fund. Except in the case of an
Investment Fund in which amortized cost is the valuation method designated,
assets will be valued at their market values at the close of business on the
Valuation Date, or, in the absence of readily ascertainable market values, at
such values as the Trustee shall determine in accordance with methods
consistently followed and uniformly applied. Anything in this Agreement to the
contrary notwithstanding, with respect to assets constituting part of a Directed
Fund or assets included at the request of the Named Fiduciary as hereinabove
provided, the Trustee may rely for all purposes of this Agreement on the latest
valuation and transaction information submitted to it by the Person responsible
for the investment of such assets even if such information predates the
Valuation Date. The Named Fiduciary will cause such Person to provide the
Trustee with all information needed by the Trustee to discharge its obligations
to value such assets and to account under this Agreement.
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2.2. Participant Records. Except as the parties may otherwise agree in
writing, the Trustee shall not be required to maintain any separate records or
accounts with respect to any participant of the Plan, and any records or
accounts required to be maintained pursuant to the terms of the Plan or to
comply with ERISA or the Code shall be the responsibility of FMC or the
Committee.
ARTICLE III
Administration of the Plan
--------------------------
3.1. Payment of Benefits. On the direction of the Committee or its
authorized agent, the Trustee shall pay moneys out of the Plan directly to or
for the benefit of participants in such Plan and their beneficiaries, or to an
insurance company to provide for the payment of such benefits by the purchase of
an Insurance Contract, or to a paying or disbursing agent (which may be the
Committee). On the direction of the Committee or its authorized agent, the
Trustee shall pay moneys out of the Plan for the reasonable expenses of
administering the Plan. Any assets disbursed or paid over by the Trustee
pursuant to this Section 3.1 shall no longer be part of the Retirement Fund.
FMC has opened a commercial banking account in the name of the Trust in a
federally insured banking institution for the exclusive purpose of making
benefit payments in accordance with the Plan. FMC has authorized one or more of
its officers, or their designees, to sign, manually or by facsimile signature,
all checks, drafts and orders, including orders of direction in informal or
letter form, against any funds in such checking account. FMC shall keep
accurate and detailed records covering all receipts and disbursements made from
the account and shall prepare an appropriate account and reconciliation with
respect thereto. FMC shall pay, prepare, file and furnish all local, state and
federal tax deposits, returns, and reports required by any government agency or
authority with respect to distributions from qualified plans. The Trustee shall
make deposits from the Retirement Fund to the checking account as directed from
time to time by the Committee or its authorized agent in writing. The Trustee
shall have no
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duty to question the propriety of any direction by the Committee or its
authorized agent.
3.2. Reliance on Committee. Any directions pursuant to Section 3.1 may,
but need not, specify the application to be made of moneys so ordered. Each
direction to the Trustee under Section 3.1 shall constitute a certification by
the Committee that such direction is in accordance with applicable law, the
terms of the Plan and the terms of this Agreement, and the Trustee shall have no
duty to make any independent inquiry or investigation as to any of the foregoing
before acting upon such direction, or to see to the application of any moneys
paid.
3.3. Trustee Not Responsible for Plan Administration. The Trustee shall
not be responsible under this Agreement, or otherwise, in any way respecting the
determination, computation, payment or application of any benefit, for the form,
terms, payment provisions or issuer of any Insurance Contract that it is
directed to purchase to provide for the payment of benefits under the Plan, for
performing any functions under any such Insurance Contract that it may be
directed to purchase and/or hold as contract holder thereunder (other than the
execution of any documents incidental thereto and transfer or receipt of funds
thereunder on the directions of the Committee), or for any other matter
affecting the administration of the Plan, by FMC or the Committee or any other
Person to whom such responsibility is allocated or delegated pursuant to the
terms of the Plan.
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ARTICLE IV
Investment of Trust Assets
--------------------------
4.1. Asset Managers. Discretionary authority for the management and
control of assets of the Plan from time to time held in the Retirement Fund may
be retained, allocated or delegated, as the case may be, for one or more
purposes, to and among the Asset Managers by the Named Fiduciary, in its
absolute discretion. The terms and conditions of appointment, authority and
retention of any Asset Manager shall be the sole responsibility of the Named
Fiduciary. The Named Fiduciary shall promptly notify the Trustee in writing of
the appointment or removal of an Asset Manager. Any notice of appointment
pursuant to this Section 4.1 shall constitute a representation and warranty that
the Asset Manager has been appointed in accordance with the provisions of the
Plan and that any Asset Manager (other than the Trustee or the Named Fiduciary)
is an Investment Manager.
4.2. Investment Discretion. The assets of the Trust shall be invested
and reinvested, without distinction between principal and income, at such time
or times in such investments and pursuant to such investment strategies or
courses of action and in such shares and proportions, as the Asset Managers, in
their sole discretion, shall deem advisable.
4.3. Limitations on Investment Discretion. The Named Fiduciary may
limit, restrict or impose guidelines affecting the exercise of the discretion
hereinabove conferred on any Asset Manager. Any limitations, restrictions or
guidelines applicable to the Trustee, as Asset Manager, shall be communicated in
writing to the Trustee. The Trustee shall have no responsibility with respect
to the formulation of any funding policy or any investment or diversification
policies embodied therein. The Named Fiduciary shall be responsible for
communicating, and monitoring adherence to, any limitations or guidelines
imposed on any other Asset Manager.
4.4. Responsibility for Diversification. The Named Fiduciary shall be
responsible for determining the diversification policy of the Retirement Fund,
for monitoring adherence by the Asset Managers to such policy, and
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for advising the Asset Managers with respect to limitations on employer or other
securities or property contained in the Plan or imposed on such Plan by
applicable law or by the Named Fiduciary.
ARTICLE V
Responsibility for Directed Funds
---------------------------------
5.1. Responsibility for Selection of Agents. All transactions of any kind
or nature in or from a Directed Fund shall be made upon such terms and
conditions and from or through such brokers, dealers and principals and other
agents as the Asset Manager shall direct. No such transactions shall be executed
through the facilities of the Trustee except where the Trustee shall make
available its facilities solely for the purpose of temporary investment of cash
reserves of a Directed Fund. However, nothing in the preceding sentence shall
confer any authority upon the Trustee to invest the cash balances of any
Directed Fund unless and until it receives directions from the Asset Manager.
5.2. Trustee Not Responsible for Investments in Directed Funds. The
Trustee shall be under no duty or obligation to review or to question any
direction of any Asset Manager, or to review securities or any other property
held in any Directed Fund with respect to prudence or proper diversification or
compliance with any limitation on the Asset Manager's authority under this
Agreement or the terms of the Plan, any agreement entered into between FMC or
the Named Fiduciary and the Asset Manager or imposed by applicable law, or to
make any suggestions or recommendation to FMC, the Named Fiduciary or the Asset
Manager with respect to the retention or investment of any assets of any
Directed Fund, and shall have no authority to take any action or to refrain from
taking any action with respect to any asset of a Directed Fund unless and until
it is directed to do so by the Asset Manager.
5.3. Investment Vehicles. Any Investment Vehicle, or interest therein,
acquired by or transferred to the Trustee upon the directions of the Asset
Manager shall be allocated to a designated Directed Fund, and the
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Trustee's duties and responsibilities under this Agreement shall not be
increased or otherwise affected thereby. The Trustee shall be responsible solely
for the safekeeping of the physical evidence, if any, of the Trust's ownership
of or interest or participation in such Investment Vehicle.
5.4. Reliance on Asset Manager. The Trustee shall be required under this
Agreement to execute documents, to settle transactions, to take action on behalf
of or in the name of the Trust and to make and receive payments on the direction
of the Asset Manager. Any direction of the Asset Manager shall constitute a
certification to the Trustee (a) that the transaction will not constitute a
prohibited transaction under ERISA or the Code, (b) that the investment is
authorized under the terms of this Agreement and any other agreement or law
affecting the Asset Manager's authority to deal with the Directed Fund, (c) that
any contract, agency, joinder, adoption, participation or partnership agreement,
deed, assignment or other document of any kind which the Trustee is requested or
required to execute to effectuate the transaction has been reviewed by the Asset
Manager and, to the extent it deems advisable and prudent, its counsel, (d) that
such instrument or document is in proper form for execution by the Trustee, (e)
that, where appropriate, insurance protecting the Trust against loss or
liability has been or will be maintained in the name of or for the benefit of
the Trustee, and (f) that all other acts to perfect and protect the Trust's
rights have been taken, and the Trustee shall have no duty to make any
independent inquiry or investigation as to any of the foregoing before acting
upon such direction. In addition, the Trustee shall not be liable for the
default of any Person with respect to any Investment Vehicle or any investment
in a Directed Fund or for the form, genuineness, validity, sufficiency or effect
of any document executed by, delivered to or held by it for any Directed Fund on
account of such investment, or if, for any reason (other than the negligence or
willful misconduct of the Trustee) any rights of the Trust therein shall lapse
or shall become unenforceable or worthless.
5.5. Merger of Funds. The Trustee shall not have any discretionary
responsibility or authority to manage or control any asset held in a Directed
Fund upon the resignation or removal of an Asset Manager unless and until it has
been notified in writing by the Named Fiduciary that the Asset
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Manager's authority has terminated and that such Directed Fund's assets are to
be integrated with the Discretionary Fund. Such notice shall not be deemed
effective until two Bank Business Days after it has been received by the
Trustee. The Trustee shall not be liable for any losses to the Retirement Fund
resulting from the disposition of any investment made by the Asset Manager or
for the retention of any illiquid or unmarketable investment or any investment
which is not widely publicly traded or for the holding of any other investment
acquired by the Asset Manager if the Trustee is unable to dispose of such
investment because of any restrictions imposed by the Securities Act of 1933 or
other Federal or state law, or if an orderly liquidation of such investment is
impractical under prevailing conditions, or for failure to comply with any
investment limitations imposed pursuant to Section 4.3, or for any other
violation of the terms of this Agreement, the Plan or applicable law as a result
of the addition of Directed Fund assets to the Discretionary Fund.
5.6. Notification of Named Fiduciary in Event of Breach. If the Trustee
has knowledge of a breach committed by an Asset Manager, it shall notify the
Named Fiduciary thereof, and the Named Fiduciary shall thereafter assume full
responsibility to all Persons interested in the Plan to remedy such breach.
5.7. Definition of Knowledge. The parties hereto acknowledge that while
the Trustee will perform certain duties (such as custodial, reporting,
recording, valuation and bookkeeping functions) with respect to Directed Funds,
such duties will not involve the exercise of any discretionary authority to
manage or control the assets of the Directed Funds and will be the
responsibility of officers or other employees of the Trustee who are unfamiliar
with and have no responsibility for investment management. Therefore, in the
event that knowledge of the Trustee shall be a prerequisite to imposing a duty
upon or to determining liability of the Trustee under this Agreement or any
statute regulating the conduct of the Trustee with respect to such Directed
Funds or relieving FMC of its undertakings under Section 13.2, the Trustee will
not be deemed to have knowledge of, or to have participated in, any act or
omission of an Asset Manager involving the investment of assets allocated to the
Directed Funds as a result of the
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receipt and processing of information in the course of performing such duties.
5.8. Duty to Enforce Claims. The Trustee shall have no duty to commence
or maintain any action, suit or legal proceeding on behalf of the Trust on
account of or growing out of any investment made in or for a Directed Fund
unless the Trustee has been directed to do so by the Asset Manager or the Named
Fiduciary and unless the Trustee is either in possession of funds sufficient for
such purpose or has been indemnified to its satisfaction for counsel fees, costs
and other expenses and liabilities to which it, in its sole judgment, may be
subjected by beginning or maintaining such action, suit or legal proceeding.
5.9. Restrictions on Transfer. Nothing herein shall be deemed to empower
any Asset Manager to direct the Trustee to transfer any asset of a Directed Fund
to itself except for purposes enumerated in paragraph (j), (l) or (m) of Section
6.1.
ARTICLE VI
Powers of Asset Managers
------------------------
6.1. General Powers. Without in any way limiting the powers and
discretions conferred upon any Asset Manager by the other provisions of this
Agreement or by law, each Asset Manager shall be vested with the following
powers and discretions with respect to the assets of the Trust subject to its
management and control, and, upon the directions of the Asset Manager of a
Directed Fund, the Trustee shall make, execute, acknowledge and deliver any and
all documents of transfer and conveyance and any and all other instruments that
may be necessary or appropriate to enable such Asset Manager to carry out such
powers and discretions:
(a) to purchase, sell, exchange, convey, transfer or otherwise
acquire or dispose of any property by private contract or at public auction,
and no person dealing with the Asset Manager shall be bound to see to the
application of the purchase money or to inquire into the
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validity, expediency or propriety of any such purchase, sale or other
acquisition or disposition;
(b) to acquire and hold qualifying employer securities and qualifying
employer real property, as such investments are defined in Section 407(d)
of ERISA;
(c) to enter into contracts or to make commitments either alone or in
company with others to sell or acquire property;
(d) to purchase or sell, write or issue, puts, calls or other
options, covered or uncovered, to enter into financial futures contracts,
forward placement contracts and standby contracts, and in connection
therewith, to deposit, hold (or direct Bankers, as Trustee or in its
individual capacity, to deposit or hold) or pledge assets of the Retirement
Fund;
(e) to purchase part interests in real property or in mortgages on
real property, wherever such real property may be situated;
(f) to lease to others for any term without regard to the duration of
the Trust any real property or part interest in real property;
(g) to delegate to a manager or the holder or holders of a majority
interest in any real property or mortgage on real property or in any oil,
mineral or gas properties, the management and operation of any part
interest in such property or properties (including the authority to sell
such part interests or otherwise carry out the decisions of such manager or
the holder or holders of such majority interest);
(h) other than with respect to FMC stock, to vote upon any stocks,
bonds or other securities (but subject to the suspension of any voting
rights as a result of any broker loan or similar agreement); to give
general or special proxies or powers of attorney with or without power of
substitution; to exercise any conversion privileges, subscription rights or
other options and to make any payments incidental thereto; to
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consent to or otherwise participate in corporate reorganizations or other
changes affecting corporate securities and to delegate discretionary powers
and to pay any assessments or charges in connection therewith; and
generally to exercise any of the powers of an owner with respect to stocks,
bonds, securities or other property;
(i) with respect to FMC stock, to vote upon any such stock; to give
general or special proxies or powers of attorney with or without the power
of substitution, to exercise any conversion privileges, subscription rights
or other options and to make any payments incidental thereto; to consent or
otherwise participate in corporate reorganizations or other changes
affecting corporate securities and to delegate discretionary powers and to
pay any assessments or charges in connection therewith; and generally to
exercise any of the powers of an owner with respect to such FMC stock each
in a manner that is consistent with the written direction of the Committee,
or to the extent the Trustee has not received the written direction of the
Committee as to how the Trustee is to act (or not act) with respect to such
FMC stock, to the extent required by law in the Trustee's uncontrolled
discretion;
(j) to organize corporations under the laws of any state for the
purpose of acquiring or holding title to property (or, in the case of a
Directed Fund, to direct the Trustee to organize such corporations or to
appoint an ancillary trustee acceptable to the Trustee for such purpose);
(k) to invest in a fund consisting of securities issued by
corporations and selected and retained solely because of their inclusion
in, and in accordance with, one or more commonly used indices of such
securities, with the objective of providing investment results for the fund
which approximate the overall performance of such designated index;
(l) to enter into any partnership, as a general or limited partner,
or joint venture;
Page 17
<PAGE>
(m) to purchase units or certificates issued by an investment company
or pooled trust or comparable entity;
(n) to transfer money or other property to an insurance company
issuing an Insurance Contract;
(o) to engage in notional principal contracts, including, without
limitation, any SWAP or exchange agreement with respect to interest rates,
commodities or securities, or any financial contract or derivative products
relating thereto; and from time to time, to deliver payments to and receive
payments from the counterparties to such contracts;
(p) to transfer assets of a Discretionary or Directed Fund to a
common, collective or commingled trust fund exempt from tax under the Code
maintained by an Asset Manager or an affiliate of an Asset Manager or by
another trustee who is designated by the Named Fiduciary, to be held and
invested subject to all of the terms and conditions thereof, and such trust
shall be deemed adopted as part of the Trust and the Plan to the extent
that assets of the Trust are invested therein; provided, however, that any
transfer from a Directed Fund to the General Trust may be made only with
the prior approval of the Trustee and shall be invested only in one or more
short term investment funds or other special purpose funds established from
time to time thereunder; and
(q) to be reimbursed for the reasonable expenses incurred in
exercising any of the foregoing powers or to pay the reasonable expenses
incurred by any agent, manager or trustee appointed pursuant hereto.
6.2. Additional Powers of Trustee. In addition, the Trustee is
hereby authorized:
(a) to register any securities held in the Retirement Fund in its own
name or in the name of a nominee and to hold any securities in
Page 18
<PAGE>
bearer form, and to combine certificates representing such securities with
certificates of the same issue held by the Trustee in other fiduciary or
representative capacities or as agent for customers, or to deposit or to
arrange for the deposit of such securities in any qualified central
depository even though, when so deposited, such securities may be merged
and held in bulk in the name of the nominee of such depository with other
securities deposited therein by other depositors, or to deposit or arrange
for the deposit of any securities issued by the United States Government,
or any agency or instrumentality thereof, with a Federal Reserve Bank, but
the books and records of the Trustee shall at all times show that all such
investments are part of the Retirement Fund;
(b) to deposit any funds of the Trust in accounts or savings
certificates, which bear a reasonable rate of interest issued or maintained
by Bankers, in its separate corporate capacity, or in any other institution
affiliated with Bankers and to deposit funds in foreign currency, if any,
in accordance with the Cash Management Addendum attached hereto;
(c) to employ suitable agents, depositories and counsel, domestic or
foreign, and to the extent authorized under Section 8.1, to charge their
reasonable expenses and compensation against the Retirement Fund, and to
confer upon any such depository the powers conferred upon the Trustee by
paragraph (a) of this Section 6.2 as well as the power to appoint subagents
and depositories, wherever situated, in connection with the retention of
securities or other property;
(d) to borrow money from any source as may be necessary or advisable
to effectuate the purposes of the Trust on such terms and conditions as the
Trustee, in its absolute discretion, may deem advisable;
(e) to deposit any funds of the Trust in accounts or savings
certificates, which bear a reasonable rate of interest, issued or
maintained by Bankers Trust Company, in its separate corporate capacity, or
in any other institution affiliated with Bankers Trust Company and to
deposit funds
Page 19
<PAGE>
in foreign currency, if any in accordance with the Cash Management Addendum
attached hereto;
(f) to compromise, compound, submit to arbitration or settle any debt
or obligation owing to or from or otherwise adjust all claims in favor of
or against the Retirement Fund other than claims solely affecting the right
of any Person to benefits under a Participating Plan; to reduce or increase
the rate of interest or extend, or otherwise modify, foreclose upon
default, or enforce any such debt or obligation; to sue or defend suits or
legal proceedings to protect any interest in the Trust and to represent the
Trust in all suits or legal proceedings in any court or before any other
administrative agency, body or tribunal;
(g) to make any distribution or transfer of assets as of a Valuation
Date authorized under Article IX or X or to effectuate participants' rights
under a Participating Plan in cash or in kind, or partly in cash or kind,
and, in furtherance thereof, to value such assets, which valuation shall be
conclusive and binding on all Persons;
(h) upon the direction of the Named Fiduciary, to maintain and
operate one or more market inventory funds as a vehicle to exchange
securities among Discretionary and Directed Funds without alienating the
property from the Trust;
(i) pursuant to the terms of a separate agreement, to loan securities
held in the Retirement Fund to brokers or dealers or other borrowers, to
secure the same in any manner permitted by law and the provisions of this
Agreement, and during the term of any such loan, to permit the loaned
securities to be transferred into the name of and voted by the borrowers or
others, and, in connection with the exercise of the powers hereinabove
granted, to hold any property deposited as collateral by the borrower
pursuant to any master loan agreement in bulk, either as provided in
paragraph (a) of this Section 6.2 or otherwise, together with the
unallocated interests of other lenders, and to retain any such property
upon the default of the borrower, whether or not investment in such
property is
Page 20
<PAGE>
authorized under this Agreement, and to receive compensation therefor out
of any amounts paid by or charged to the account of the borrower;
(j) to hold uninvested cash awaiting investment and such additional
cash balances as it shall deem reasonable or necessary, without incurring
any liability for the payment of interest thereon; and
(k) generally, consistent with the provisions of this Agreement to
perform all acts (whether or not expressly authorized herein) which it may
deem necessary and prudent for the protection of the assets of the Trust.
6.3. Prior Consent. The discretionary powers conferred under
paragraphs (e), (f), and (g) of Section 6.1 and paragraph (d) of Section 6.2
shall be exercised only with the prior written consent of the Named Fiduciary.
In addition, any powers conferred on the Trustee or any other Asset Manager
thereunder may be suspended at any time by the Named Fiduciary upon notice to
the Asset Manager or Trustee, as the case may be. Any oral notice hereunder
shall be promptly confirmed in writing to the Trustee, but the Trustee shall
have no responsibility hereunder unless and until it has received notice in
accordance with Section 12.6.
ARTICLE VII
Records and Accounts of Trustee
-------------------------------
7.1. Records. The Trustee shall keep accurate and detailed accounts of
all investments, receipts, disbursements and other transactions in the
Retirement Fund and all accounts, books and records relating thereto shall be
open to inspection and audit at all reasonable times during normal business
hours by any Person designated by the Named Fiduciary.
7.2. Annual Account. Within ninety (90) days following the close of each
Accounting Period, the Trustee shall file with the Account Party, in accordance
with Section 13.6, a written account setting forth the receipts and
disbursements of the Retirement Fund and the investments and other transactions
effected by it upon its own authority or pursuant to the
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<PAGE>
directions of any Person as herein provided during the Accounting Period. FMC
shall promptly review such statement and report any errors in writing to the
Trustee.
7.3. Judicial Accountings. Nothing herein shall in any way limit the
Trustee's right to bring any action or proceeding in a court of competent
jurisdiction to settle its account or for such other relief as it may deem
appropriate.
7.4. Necessary Parties. Except to the extent that Sections 502 and 504 of
ERISA may provide otherwise, in order to protect the Retirement Fund from the
expense of litigation, no Person other than FMC shall be a necessary party in
any proceeding under Section 7.4 or may require the Trustee to account or may
institute any other action or proceeding against the Trustee or the Trust.
ARTICLE VIII
Compensation, Taxes and Expenses
--------------------------------
8.1. Compensation and Expenses. (a) Any reasonable expenses and all other
proper charges and disbursements of the Trustee incurred by the Trustee in
connection with its administration of the Retirement Trust including, but not
limited to, fees for legal services rendered to the Trustee (whether or not
rendered in connection with a judicial or administrative proceeding); and (b)
such compensation to the Trustee as shall be agreed upon from time to time
between the Trustee and an officer of FMC shall be paid from the Retirement
Fund, unless paid by FMC. Anything in this sentence to the contrary
notwithstanding, FMC shall reimburse the Trustee for any such expenses if for
any reason such fees and expenses are not paid out of the Retirement Fund. In no
event shall the Trustee be entitled to charge the Retirement Fund or to
reimbursement from FMC, for the cost of retaining an agent to perform any
service for which the Trustee is compensated under the fee agreement, or for any
expenses which are which are not permitted under ERISA. The Trustee's
entitlement to reimbursement hereunder shall not be affected by the resignation
or removal of the Trustee or by the termination of the Trust. FMC agrees to
indemnify
Page 22
<PAGE>
the Trustee from and against any and all agreed upon fees and reasonable
expenses that the Trustee is entitled to be reimbursed under this Agreement,
notwithstanding that such fees and expenses may be incurred after termination of
this Agreement. The Named Fiduciary may direct the Trustee to pay from the
Retirement Fund any other administration expenses of the Plan. Each direction to
the Trustee under this Section and Section 8.3 shall constitute a certification
by the Named Fiduciary that such direction is in accordance with applicable law,
the terms of the Plan and the terms of this Agreement, and the Trustee shall
have no duty to make any independent inquiry or investigation as to any of the
foregoing before acting upon such direction, or to see to the application of any
money paid.
8.2. Taxes. All taxes of any and all kinds what so ever that may be levied
or assessed under existing or future laws, domestic or foreign, upon the
Retirement Fund or the income thereof shall be paid from the Retirement Fund.
The Trustee shall notify the Named Fiduciary of any taxes that may be assessed.
In the event that the Named Fiduciary shall determine that the taxes are not
lawfully assessed, it may elect to direct the Trustee to contest such assessment
at the expense of the Trust, or may itself contest such assessment.
8.3. Allocation. Any tax or expense paid from the Retirement Fund
hereunder which is determined by the Named Fiduciary to be specifically
allocable to one or more Investment Funds shall be charged against such
Investment Fund. Any expense which is allocable to all of the Investment Funds
shall be charged against the Retirement Fund as a whole, in such proportions as
the Named Fiduciary shall direct the Trustee.
ARTICLE IX
Resignation or Removal of Trustee
---------------------------------
9.1. Resignation or Removal. The Trustee may be removed by FMC at any time
upon thirty (30) days' notice in writing to the Trustee. The Trustee may resign
at any time upon sixty (60) days' notice in writing to FMC.
Page 23
<PAGE>
9.2. Designation of a Successor. Upon the removal or resignation of the
Trustee, FMC shall either appoint a successor trustee who shall have the same
powers and duties as those conferred upon the Trustee hereunder, and upon
acceptance of such appointment by the successor trustee, the Trustee shall
assign, transfer and pay over the Retirement Fund to such successor trustee, or
FMC shall direct the Trustee to assign, transfer and pay over the Retirement
Fund to one or more insurance companies pursuant to Insurance Contracts issued
to the Plan. If, for any reason, FMC cannot or does not act promptly to appoint
a successor trustee or designate an insurance company in the event of the
resignation or removal of the Trustee, the Trustee may apply to a court of
competent jurisdiction for the appointment of a successor trustee. Any expenses
incurred by the Trustee in connection therewith shall be charged to and paid
from the Retirement Fund as an expense of administration.
ARTICLE X
Amendment or Termination
------------------------
10.1. Amendment. Subject to Section 1.4, FMC reserves the right at any
time and from time to time to amend, in whole or in part, any or all of the
provisions of this Agreement by notice thereof in writing delivered to the
Trustee; provided, however, no amendment that affects the rights, duties or
responsibilities of the Trustee may be made without its prior written consent.
10.2. Termination. Subject to Section 1.4, FMC reserves the right to
terminate this Agreement by notice in writing thereof delivered to the Trustee.
In the event of termination, the Trustee shall dispose of the Retirement Fund,
after the payment of or other provision for all of its expenses (including any
compensation to which the Trustee may be entitled), all in accordance with the
written directions of the Committee. The Committee will direct the Trustee to
dispose of the Retirement Fund by allocating the same on an actuarial basis
among the participants, joint annuitants and beneficiaries of the Plan in the
manner prescribed by Section
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<PAGE>
4044 of ERISA. Any residual assets of the Trust Fund remaining after such
allocation shall be distributed to FMC if (a) all liabilities of the Plan to
participants, joint annuitants and beneficiaries have been satisfied; and (b)
such a distribution does not contravene any provision of law. The foregoing
notwithstanding, if any remaining assets of the Plan are attributable to
employee contributions, such assets shall be equitably distributed to the
participants who made such contributions (or to their beneficiaries) in
accordance with their rate of contribution.
10.3. Trustee's Authority to Survive Termination. Until the final
distribution of the Retirement Fund, the Trustee shall continue to have and may
exercise all of the powers and discretions conferred upon it by this Agreement.
10.4. Disqualification. FMC shall promptly notify the Trustee if the Plan
has been or is likely to be disqualified under Section 401 of the Code.
10.5. Approval of Appropriate Agencies. The Trustee may, in its absolute
discretion, condition delivery, transfer or distribution of any assets withdrawn
from the Retirement Fund upon the Trustee's receiving assurances satisfactory to
it that any notice that may be required to be given under ERISA or the Code to
any Person, the Department of Labor, the Internal Revenue Service or the Pension
Benefit Guaranty Corporation has been given, that any filings required to be
made under ERISA or the Code have been made, where required, that no notice of
noncompliance has been issued by the Pension Benefit Guaranty Corporation
pursuant to Section 4041 of ERISA and the time to issue such notice of
noncompliance has expired, that a termination has not affected the qualification
of the Plan, and that any plan to which such assets are to be transferred is a
qualified plan under Section 401(a) of the Code. The Trustee shall not be
responsible under the Plan to give or apply for any such notice or make any such
filings or maintain any records required under ERISA or the Code, all of which,
for purposes of this Agreement, shall be the responsibility of FMC.
Page 25
<PAGE>
ARTICLE XI
Authorities
-----------
11.1. Company. Whenever the provisions of this Agreement specifically
require or permit any action to be taken by "FMC", such action must be
authorized by the Board of Directors or by any person authorized by the Board of
Directors to take such action. Any resolution adopted by the Board of Directors
or other evidence of such authorization shall be certified to the Trustee by the
Secretary or an Assistant Secretary of FMC, and the Trustee may rely upon any
authorization so certified until revoked or modified by a further action of the
Board of Directors similarly certified to the Trustee. Each subsidiary or
affiliate of the Company appoints the Company as its agent to exercise on its
behalf all of the powers and authority conferred upon the Company by this Trust,
including without limitation, the power to amend or terminate the Trust.
11.2. Named Fiduciary and Committee. FMC shall furnish the Trustee from
time to time with a list of the names and signatures of all Persons (other than
FMC) authorized hereunder: (a) to receive accountings under Section 1.2(a); (b)
to act as a Named Fiduciary; (c) as members of the Committee; or (d) in any
manner authorized to issue orders, notices, requests, instructions and
objections to the Trustee pursuant to the provisions of this Agreement. Any such
list and the form of the instructions shall be certified to the Trustee by the
Secretary or an Assistant Secretary of FMC and may be relied upon for accuracy
and completeness by the Trustee. Each such Person shall thereupon furnish the
Trustee with a list of the names and signatures of those individuals, if any,
who are authorized, jointly or severally or otherwise, to act for such Person
hereunder, and the Trustee shall be fully protected in acting upon any notices
or directions received from any of them.
11.3. Investment Manager. The Named Fiduciary shall cause each Investment
Manager to furnish the Trustee from time to time with the names and signatures
of those persons authorized to direct the Trustee on its behalf hereunder.
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<PAGE>
11.4. Form of Communications. Any agreement or understanding between FMC
and any Person (including an Investment Manager) or any other provision of this
Agreement to the contrary notwithstanding, all notices, directions and other
communications to the Trustee shall be in writing or in such other form,
including transmission by electronic means through the facilities of third
parties or otherwise, specifically agreed to in writing by the Trustee. The
Trustee shall be fully protected in acting in accordance therewith, but shall
not thereby assume responsibility for the failure or breakdown of any such means
of communication not due to its own negligence or willful misconduct.
11.5. Continuation of Authority. The Trustee shall have the right to
assume, in the absence of written notice to the contrary, that no event
constituting a change in the composition or authority of the Named Fiduciary or
membership of the Committee or terminating the authority of any Person,
including any Investment Manager, has occurred.
11.6. No Obligation to Act on Unsatisfactory Notice. The Trustee shall
incur no liability under this Agreement for any failure to act pursuant to any
notice, direction or any other communication from any Asset Manager, FMC, the
Named Fiduciary, the Committee, or any other Person or the designee of any of
them unless and until it shall have received instructions in form specified in
this Article XI herein.
ARTICLE XII
General Provisions
------------------
12.1. Governing Law. To the extent that state law shall not have been
preempted by the provisions of ERISA or any other law of the United States
heretofore or hereafter enacted, this Agreement shall be administered, construed
and enforced according to the laws of the State of New York.
12.2. Entire Agreement. The Trustee's duties and responsibilities to the
Plan or any Person interested therein shall be limited to those
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<PAGE>
specifically set forth in this Agreement. No amendment to the Plan or agreement
or instrument affecting the Plan or any other document shall affect the
Trustee's duties or responsibilities hereunder without its prior written
consent.
12.3. Mistake. No mistake made in good faith and in the exercise of due
care in connection with the administration of the Retirement Fund shall be
deemed to be a breach of the Trustee's duties if, promptly after discovery of
the mistake, the Trustee takes whatever action may be practicable in the
circumstances to remedy the mistake.
12.4. Reliance on Experts. The Trustee may consult with experts (who may
be experts employed by FMC) including legal counsel, appraisers, pricing
services, accountants or actuaries, selected by it with due care with respect to
the meaning and construction of this Agreement or any provision hereof, or
concerning its powers and duties hereunder.
12.5. Successor to the Trustee. Any successor, by merger or otherwise, to
substantially all of the trust business of Bankers shall automatically and
without further action become the Trustee hereunder, subject to all the terms
and conditions and entitled to all the benefits and immunities hereof.
12.6. Notices. All notices, reports, annual accounts and other
communications from the Trustee to FMC, the Named Fiduciary, Committee,
Investment Manager, or any other Person shall be deemed to have been duly given
if mailed, postage prepaid, or delivered in hand to such Person at its address
appearing on the records of the Trustee, which address shall be filed with the
Trustee at the time of the establishment of the Trust and shall be kept current
thereafter by the Named Fiduciary. All directions, notices, statements,
objections and other communications to the Trustee shall be deemed to have been
given when received by the Trustee at its offices in the form provided in
Article XI.
12.7. Plan Documents. The Named Fiduciary shall provide the Trustee with
complete, current copies of the Plan and the most recent tax
Page 28
<PAGE>
qualification letter relative thereto. The Trustee shall be entitled to rely
upon the Named Fiduciary's attention to this obligation and shall be under no
duty to inquire of any Person as to the existence of any documents not provided
hereunder.
12.8. No Waiver; Reservation of Rights. The rights, remedies, privileges
and immunities expressed herein are cumulative and are not exclusive, and the
Trustee shall be entitled to claim all other rights, remedies, privileges and
immunities to which it may be entitled under applicable law.
12.9. Descriptive Headings. The captions in this Agreement are solely for
convenience of reference and shall not define or limit the provisions hereof.
12.10. Spendthrift Provision. Except as may be required by law, no
interest or claim of interest of any kind of any participant in the Plan under
the provisions of this Trust is assignable, nor may any such interest or claim
be subject to garnishment, attachment, execution or levy of any kind, and no
attempt to transfer, assign, pledge or otherwise encumber or dispose of such
interest by act of the Person involved or by operation of law will be
recognized.
ARTICLE XIII
Undertaking by FMC
------------------
13.1. Undertaking. In consideration of Bankers' agreeing to enter into
this Agreement, FMC hereby agrees to hold harmless Bankers, individually and as
Trustee, and Bankers' directors, officers, and employees, from and against all
amounts, including without limitation taxes, expenses (including reasonable
counsel fees), liabilities, claims, damages, actions, suits or other charges,
incurred by or assessed against Bankers, individually or as Trustee, or its
directors, officers or employees (a) as a direct or indirect result of any act
or omission of any predecessor trustee or fiduciary appointed under the Plan;
(b) as a direct or indirect result of anything done
Page 29
<PAGE>
by or on behalf of Bankers in reliance upon the duly authorized directions of
any Investment Manager, the Committee, FMC, or the Named Fiduciary, or anything
omitted to be done in the absence of such directions, or (c) as a direct result
of the failure of FMC, the Committee, or the Named Fiduciary, directly or
indirectly or through its appointed agents, to adequately, carefully and
diligently discharge its fiduciary responsibilities with respect to the Plan.
13.2. Limitation on Undertaking. Anything hereinabove to the contrary
notwithstanding, FMC shall have no responsibility to Bankers under Section 13.1
if Bankers knowingly participated in or knowingly concealed any act or omission
of any Person described therein knowing that such act or omission constituted a
breach of such Person's fiduciary responsibilities, or if Bankers fails to
perform any of the duties specifically undertaken by it under the provisions of
this Agreement in the manner herein provided.
13.3. Survival of Undertakings. FMC further agrees that the undertakings
made in this Article XIII shall be binding on its successors or assigns and
shall survive termination, amendment or restatement of this Agreement, or the
resignation or removal of the Trustee, and that this Article shall be construed
as a contract between FMC and the Trustee according to the laws of the State of
New York in effect from time to time.
ARTICLE XIV
Undertaking by Trustee
----------------------
FMC has allocated fiduciary responsibilities to various fiduciaries under
the Plan and Trust. In carrying out its fiduciary responsibilities under the
Trust, the Trustee, any Investment Manager and any other fiduciary hereunder
shall act solely in the interest of the participants and beneficiaries with the
care, skill, prudence and diligence under the circumstances then prevailing that
a prudent man acting in a like capacity and familiar with such matters would use
in the conduct of an enterprise of a like character with like aims. In
determining whether the requirements of prudence and diversification stated in
Sections 404(a)(1)(B) and (C), respectively of ERISA
Page 30
<PAGE>
have been met, all the investments of the Retirement Fund shall be considered in
their entirety, provided, however that nothing in this paragraph shall impose
any duty or liability upon Bankers for any action taken or omitted by it under
the direction of an Asset Manager other than Bankers.
Page 31
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized and attested to
as of the day and year first above written.
FMC CORPORATION
By FMC Corporation Employee
Welfare Benefits Plan Committee
Attest /s/ Lori A. Lenard By: /s/ J. Paul McGrath
--------------------- ----------------------
Title Counsel Title: Member
------
STATE OF ILLINOIS )
) ss. :
COUNTY OF COOK )
On the 31st day of August, 1999, before me personally came J. Paul McGrath
to me known, who being by me duly sworn, did depose and say: that he resides in
Chicago, Illinois; that he is a member of the Employee Welfare Benefits
Committee of FMC Corporation, the corporation described in and which executed
the above instrument; and that he signed his name thereto by like order.
/s/ Karen E. Biege
---------------------------------
Notary Public
(Corporate Seal) BANKERS TRUST COMPANY
Attest /s/ James T. Strag By: /s/ Frank Eipper
--------------------- -----------------------
Title Assistant Vice President Title: Vice President
STATE OF NEW YORK )
) ss. :
COUNTY OF NEW YORK )
On the 22nd day of September, 1999, before me personally came Frank Eipper
to me known, who being by me duly sworn, did depose and say: that he/she resides
in Stamford, CT; that he/she is a Vice President of BANKERS TRUST COMPANY, the
corporation described in and which executed the above instrument; that he/she
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by order of the Board of Directors
of said corporation, and that he/she signed his/her name thereto by like order.
/s/ Allison O. Taylor
---------------------------------
Notary Public
Page 32
<PAGE>
EXHIBIT 12
----------
FMC CORPORATION
---------------
STATEMENT RE COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
---------------------------------------------------------------
(In millions, except ratios)
<TABLE>
<CAPTION>
Years ended December 31,
-----------------------------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Earnings:
Income (loss) from continuing
operations before income
taxes, extraordinary items and
cumulative effect of a change in
accounting principle $ 274.3 $ 249.5 $ (59.7) $ 235.8 $ 152.7
Minority interests 5.1 6.2 8.9 9.6 5.1
Undistributed (earnings) losses
of affiliates 1.3 (3.4) (2.0) (6.7) 1.9
Interest expense and amortization
of debt discount, fees and
expenses 117.1 120.3 118.3 103.0 84.0
Amortization of capitalized interest 3.4 3.5 7.0 7.5 7.7
Interest included in rental expense 15.0 14.8 14.2 12.7 17.7
-----------------------------------------------------------------
Total earnings $ 416.2 $ 390.9 $ 86.7 $ 361.9 $ 269.1
=================================================================
Fixed charges:
Interest expense and amortization
of debt discount, fees and
expenses $ 117.1 $ 120.3 $ 118.3 $ 103.0 $ 84.0
Interest capitalized as part of
fixed assets 2.3 4.4 6.6 15.5 10.2
Interest included in rental expense 15.0 14.8 14.2 12.7 17.7
-----------------------------------------------------------------
Total fixed charges $ 134.4 $ 139.5 $ 139.1 $ 131.2 $ 111.9
=================================================================
Ratio of earnings to fixed charges 3.1 2.8 0.6 2.6 2.4
=================================================================
(A) (B) (C)
</TABLE>
(A) The ratio of earnings to fixed charges for the year ended December 31,1999,
before the gain on the sale businesses, asset impairments, and restructuring
and other charges was 2.9x.
(B) Earnings did not cover fixed charges by $52.4 million for the year ended
December 31, 1997. The ratio of earnings to fixed charges for the year ended
December 31, 1997 before asset impairments and restructuring and
other charges was 2.5x.
(C) The ratio of earnings to fixed charges for the year ended December 31, 1995
before a gain on the sale of FMC Wyoming stock, asset impairments,
restructuring and other charges, and a write-off of acquired in-process
research and development costs was 2.9x.
<PAGE>
ANNUAL REPORT FOR THE YEAR 1999
In 1999, we exceeded our goal of growing
income per share ten percent per year
and made progress toward our target
of fifteen percent return on investment
by the year 2001
[CHART APPEARS HERE]
<PAGE>
FMC Profile
As one of the world's leading producers of chemicals and machinery for industry
and agriculture, FMC participates on a worldwide basis in five broad markets:
Energy Systems, Food and Transportation Systems, Agricultural Products,
Specialty Chemicals, and Industrial Chemicals. FMC operates 97 manufacturing
facilities and mines in 26 countries.
About the Cover
Return on investment is calculated as after-tax income from continuing
operations (before asset impairments and restructuring and other charges and
gains on sales of businesses) plus after-tax interest expense on debt as a
percentage of total average debt and equity.
Income per share is based on after-tax income from continuing operations
excluding gains on sales of businesses ($1.47 per share) in 1999, and asset
impairments and restructuring and other charges in 1999 and 1997 of $(0.83) and
$(4.77) per share, respectively. All per share amounts are on a diluted basis
and represent supplemental financial information which should not be considered
in isolation nor as an alternative for earnings per share determined in
accordance with generally accepted accounting principles.
<PAGE>
FINANCIAL SUMMARY
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
(In millions, except per share, common stock, return on investment, employee and stockholder data) 1999 1998
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Sales
In the United States $ 1,780.2 $ 1,909.1
Outside the United States, including exports 2,330.4 2,469.3
- -----------------------------------------------------------------------------------------------------------------------------------
Total sales $ 4,110.6 $ 4,378.4
- -----------------------------------------------------------------------------------------------------------------------------------
Income (after tax)
- -----------------------------------------------------------------------------------------------------------------------------------
Income from continuing operations before
cumulative effect of change in accounting principle $ 216.0 $ 185.3
- -----------------------------------------------------------------------------------------------------------------------------------
Income from continuing operations before gains on sales
of businesses, asset impairments, restructuring and other charges
and cumulative effect of change in accounting principle/(1)/ $ 195.1 $ 185.3
- -----------------------------------------------------------------------------------------------------------------------------------
Earnings per share from continuing operations before
cumulative effect of change in accounting principle:
Basic $ 6.86 $ 5.45
Diluted $ 6.67 $ 5.30
- -----------------------------------------------------------------------------------------------------------------------------------
Income per share from continuing operations before gains on sales of
businesses, asset impairments, restructuring and other charges
and cumulative effect of change in accounting principle:/(1)/
Basic $ 6.19 $ 5.45
Diluted $ 6.03 $ 5.30
- -----------------------------------------------------------------------------------------------------------------------------------
Financial and other data
- -----------------------------------------------------------------------------------------------------------------------------------
Common stock price range $ 74 5/16 - 39 5/8 $ 82 3/16 - 48 1/4
- -----------------------------------------------------------------------------------------------------------------------------------
Return on investment based on income from continuing operations (adjusted)/(1)/(2)/ 12.5% 12.1%
- -----------------------------------------------------------------------------------------------------------------------------------
Capital expenditures excluding acquisitions $ 236.3 $ 265.9
- -----------------------------------------------------------------------------------------------------------------------------------
Research and development expense $ 152.4 $ 157.7
- -----------------------------------------------------------------------------------------------------------------------------------
At December 31 Operating working capital/(3)/ $ 255.2 $ 304.2
Number of employees 15,609 16,216
Number of stockholders of record 9,549 10,036
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Supplemental financial information. Income from continuing operations
before gains on sales of businesses, asset impairments, restructuring and
other charges and cumulative effect of change in accounting principle; and
income per share or return on investment from continuing operations before
gains on sales of businesses, asset impairments, restructuring and other
charges and cumulative effect of change in accounting principle should not
be considered in isolation nor as an alternative for income from continuing
operations, net income, earnings per share or return on investment
determined in accordance with generally accepted accounting principles, nor
as the sole measure of the company's profitability.
(2) Return on investment is calculated as income from continuing operations
before gains on sales of businesses, asset impairments, restructuring and
other charges and cumulative effect of change in accounting principle plus
after-tax interest expense on debt as a percentage of total average debt
(includes short-term and total long-term debt) and equity, as follows, in
millions: ($195.1 + $71.4)/$2,124.1 in 1999 and ($185.3 + $75.0)/$2,156.2
in 1998.
(3) Operating working capital includes trade receivables (net), inventories,
other current assets, accounts payable, accrued payroll, other current
liabilities, and the current portion of accrued pension and postretirement
benefits. The calculation excludes the impact of the company's $144.0
million sale of receivables in 1999. See page 28 for more information about
operating working capital in the Liquidity and Capital Resources section of
Management's Discussion and Analysis.
1
<PAGE>
2
MESSAGE TO SHAREHOLDERS
[PICTURE OF ROBERT N. BURT APPEARS HERE]
Earnings for FMC's continuing operations hit a record high since our 1986
recapitalization. The momentum of the fourth quarter indicates that the improved
markets worldwide will drive earnings in 2000 and beyond.
Our numbers document our success in 1999 and illustrate our progress
against the targets we outlined in 1998.
We achieved--and exceeded--our goal of growing earnings per share 10
percent per year and made progress toward our target of 15 percent return on
investment by 2001. After-tax income per share from continuing operations,
excluding one-time items, was $6.03--an increase of 14 percent from $5.30 in
1998 and 46 percent from $4.13 in 1997. Sales for the full year were $4.1
billion compared with $4.4 billion in 1998. FMC's return on investment increased
to 12.5 percent from 12.1 percent in 1998.
We made aggressive, strategic acquisitions in 1999. We bought the Norway-
based Pronova alginate business and combined it with our complementary
pharmaceutical and food ingredients business to create FMC BioPolymer. To expand
our soda ash business, we bought our Wyoming neighbor, Tg Soda Ash, from Elf
Atochem. In addition, we made six smaller investments that were attractive
extensions of our machinery and chemicals businesses. Our total investment in
acquisitions and joint ventures was nearly $300 million, excluding an incentive
payment that could be as much as $100 million to Elf Atochem for the soda ash
business in four years. This month we also acquired Northfield Freezing Systems
Group, which manufactures freezing systems for industrial food processing.
We found solutions for our problem areas. We announced a phosphorus joint
venture with Solutia Inc that will create significant synergies and help that
business improve returns and compete more effectively in the marketplace. We
expect the joint venture to be cleared by the FTC in the first quarter of 2000.
We strengthened the competitive position of our lithium business by continuing
to improve operations overall and by negotiating a contract with SQM (Sociedad
Quimica y Minera de Chile S.A.) to supply us with lithium carbonate. Returns
from our hydrogen peroxide division were above the cost of capital through a
combination of reduced costs and improved market dynamics. Finally, we sold our
bioproducts and lower-margin process additives businesses.
FMC Corporation
<PAGE>
3
Overall, our businesses performed well in 1999. We continued to cut costs
and improve efficiencies throughout our operations while heightening attention
to both quality and safety. Earnings for Industrial Chemicals rose significantly
as hydrogen peroxide prices and volumes increased. Soda ash also increased on
higher volumes, reflecting the Tg Soda Ash acquisition and increased
productivity overall. Agricultural Products reported lower sales and earnings,
which were affected primarily by unusually low pest pressure in North America.
However, sales of insecticides to Asia were strong, and sales to Latin America
were strengthening, signaling continued improvement in 2000. Sales for Specialty
Chemicals declined due to the divestitures of the process additives and
bioproducts businesses, partially offset by good results from FMC BioPolymer.
Countering industry trends, our energy systems business reported a strong
year and achieved record profits. Most oil service companies saw 1999 profits
drop 50 percent or more from 1998 levels. Our results reflect a lower cost
structure and our dominance in the sophisticated technology used in deep-water
oil and gas projects.
While FMC FoodTech reported increased profits based on improved margins and
lower costs, our airport products business saw profit declines from record
levels in 1998.
We continue to build our leadership team. We welcome two new members to our
board of directors. Asbjorn Larsen brings us 25 years of experience with Norway-
based Saga Petroleum ASA, where he served for two decades as president and chief
executive officer. Enrique J. Sosa joined FMC's board after serving as president
of BP Amoco Chemicals, executive vice president of Amoco, and senior vice
president of Dow Chemical Company's chemical sector. Their knowledge and
experience in the oil field and chemical industries will help guide the future
direction of our businesses.
In mid-1999 we made a smooth transition to Joe Netherland's leadership as
president of FMC and also as a member of our board of directors. Long a
respected member of our senior leadership team, Joe brings enthusiasm,
experience and no-nonsense pragmatism to his new position. I'm pleased to be
working more closely with him. Joe succeeds Larry Brady, who contributed
significantly to FMC during his career. We wish Larry a successful future.
Three other senior executives retired. Mike Callahan, whose wisdom and
experience strengthened our financial reputation in the marketplace, retired in
December. Replacing Mike as senior vice president and chief financial officer is
Bill Schumann--who has served FMC as treasurer, executive director of corporate
development and general manager of the Agricultural Products Group. We're
fortunate to have someone of Bill's caliber, experience and skills as part of
our management team.
HISTORICAL EARNINGS GROWTH
CONTINUING OPERATIONS
excludes one-time gains and losses
[GRAPH APPEARS HERE]
nineteen ninety nine annual report
<PAGE>
4
Hal Russell retired as head of our Washington, D.C. office. Hal's knowledge
and political savvy helped build diverse coalitions and address public policy
issues important to FMC. We have a strong successor in Jerry Prout, newly
appointed vice president of government affairs. Jerry has a wealth of public
affairs experience, broad knowledge of FMC and industry issues, and a solid
record of success in Washington, D.C.
Bill Wheeler, vice president of shared services, retired after a 31-year
career that has literally taken him around the globe for FMC. He has been a
stalwart in our chemical businesses and pioneered a role, as head of our
Asia/Pacific region, in developing business in that region.
We promoted Peter Kinnear to FMC vice president. Peter continues as general
manager of Petroleum Equipment and Systems, where his business and industry
experience was a driving force behind our ability to develop our subsea
business. His broad knowledge of the oil field will help guide our future growth
efforts.
Congratulations to our new officers and thanks to our retirees for jobs
well done.
HISTORICAL CHART OF ROI
excludes one-time gains and losses
[CHART APPEARS HERE]
The excellent year we just completed bodes well for our future prospects.
We're committed to sustain the back-to-back profit momentum of 1998 and 1999.
Specifically, we're committed to growing earnings at least 10 percent per year
and achieving a return on investment of 15 percent by 2001.
Agricultural Products is poised to rebound from unusually low pest
pressures in 1999 in all four of our major North American markets. We expect a
continued recovery in Industrial Chemicals, reflecting higher volumes, synergies
and cost savings. Food and Transportation Systems should see improved results,
reflecting improved market conditions and product mix. Our Specialty Chemicals
business is well positioned for growth, particularly given the potential of FMC
BioPolymer. And with higher crude prices, oil companies are restoring
exploration and production spending, which should continue to drive growth in
our Energy Systems business.
We will generate strong cash flow, allowing us to pursue profitable growth
opportunities. We also expect that our operating earnings will continue to grow.
A major objective is to translate our success into a higher stock price.
Equally important is continuing to make FMC better--defined as employees
being energized by their jobs, customers being well served with quality products
and sophisticated technology, and our plant communities viewing FMC as a
responsible corporate citizen.
/s/ Robert N. Burt
Robert N. Burt
Chairman of the Board and
Chief Executive Officer
February 11, 2000
FMC Corporation
<PAGE>
The story of FMC chronicles the spirit of inquisitiveness and insight,
innovation and invention--from our early days in targeted food machinery lines
to our presence today as a global competitor offering an array of products and
services in machinery and chemicals. This is a story about a company that
changed the lives of millions of people--and in the process, earned market
shares and leadership positions and profits. This is a story about people
looking for new opportunities and new chances to grow--people who have courage,
who take risks and who are smart enough, strategic enough and bold enough to
keep this company moving forward, rising to the challenges of tomorrow.
And this is a story about how FMC will continue to spark growth and provide
solutions that will continue to change people's lives around the world.
<PAGE>
6
Providing Tomorrow's Technology for Today's Oil Field
In the energy equipment arena, our focus on invention demanded dedicated
research and development in subsea technology in the 1980s and added
acquisitions of technology leaders in the 1990s. Today, the range of our
capabilities and the fast-track nature of our technological developments make
FMC the undisputed market leader in providing integrated energy systems.
The oil and gas industries continue to consolidate, which we believe will lead
to further outsourcing by the major oil companies and a more limited number of
vendors who can provide a package of related products and services--particularly
for deep-water projects. To broaden our capabilities, in 1999 we formed with the
Mitsui group a joint-venture company, MODEC International LLC, to provide
tension leg platform and floating production system technologies to the offshore
Gulf of Mexico, West Africa and Brazil markets.
As technologies become more sophisticated, deep-water basins are more
available to oil companies. Of the recent large discoveries, 74 percent have
been offshore, with increasing activity in the Gulf of Mexico, West Africa and
offshore Brazil. FMC is a key player in this market, with a significant portion
of our energy systems sales in offshore projects. Heightened use of advanced
technologies is continuing to help lower costs--which bodes well for still more
deep-water projects.
We continue to develop our technology to maintain our leadership in subsea
markets, spending more on research and development than at any time in our
history. Our Kongsberg, Norway, team continues to introduce products for the
subsea market, including the new SmartField control system that allows an
exchange of huge amounts of data from the well on the sea floor.
Early in 1999 we helped set--once again--a new world-record for a subsea
installation. Petrobras, Brazil's state-owned oil company, used FMC systems for
a well in 6,080 feet of water in the Roncador field, offshore Brazil. To
maintain our lead, we currently are developing subsea completion systems for
10,000 feet of water. We also have programs underway to put subsea processing
and other production-related activities on the ocean floor.
To expand our gas metering business and to complement our industry-leading
liquids measurement business, we also acquired the flow measurement systems of
Perry Engineering Company. With this acquisition, FMC offers a full range of
advanced gas metering products, including ultrasonic, orifice and coriolis
technologies. Also, we acquired Mid-America Engineers to complement our blending
systems for the petroleum and chemical industries.
FMC Corporation
<PAGE>
EXPERT CONTROL
FMC Kongsberg Subsea is providing French oil company Elf Aquitaine with an
advanced, guidelineless, remote-controlled subsea production system to operate
at 4,400 feet below sea level off the coast of Angola. FMC engineered the entire
system--including subsea trees, HOST 2500 manifolds and expert control systems--
specifically for this deep-water project. Installation begins in the spring of
2000.
[PICTURE APPEARS HERE]
<PAGE>
[PICTURE APPEARS HERE]
LET'S GET COOKING
FMC FoodTech engineers have developed the largest oven in any USDA application--
the GYRoCOMPACT oven that can cook more than 10,000 pounds per hour.
Computerized controls maintain precise humidity levels and other operating
parameters, allowing the cooked product to retain flavor and high yield.
<PAGE>
9
Offering Solutions to Feed the World Safely
Throughout the century, FMC has brought the spirit of invention and
breakthrough developments to the food processing industry.
Today, FMC FoodTech has rounded out its product portfolio and
transformed itself into a global food industry supplier and technology leader.
We provide the equipment and expertise wherever food is processed, portioned,
squeezed, cooked, sterilized, fried, packaged and frozen.
Customers and consumers alike are demanding convenience--and more
important--increased food safety. We have a history of adding products and
services to become a solutions provider to our customers, with food safety at
the forefront of new opportunities. Frigoscandia Equipment, for instance, was
the pioneer of fluidization technology that quick-freezes foods to allow for
gentle handling and food safety. One of our new cooking technologies, Stein
VaporJet--geared toward convenience food makers and fast food
restaurants--depends on high humidity to cook poultry and other meats faster.
Faster processing produces higher product yields and safer-to-eat foods. Our
proprietary software and robotics technology come into play with our DSI
waterjet portioning systems, a hygienically sound method of cutting poultry,
seafood and other foods during processing.
Our broad technology base means that we can offer customers a range of options
and fully integrated systems. For the future, we'll be examining new
technologies and new equipment to improve food processing and ensure safe foods.
Extending Technology for a Travelling World
Our transportation business has built clear market leadership in its major
product lines by making acquisitions, creating alliances with key customers,
continuing our ambitious internal development program and emphasizing global
expansion.
Flying is easier today thanks to a host of FMC products that are standard
equipment for modern airports and airlines. From helping passengers board
aircraft to loading cargo to deicing planes, FMC airport products and systems
are in the forefront of technology that ensures comfort and safety for
passengers and convenience with cargo at airports around the world.
We have more exciting projects on the horizon. We are competing to build a new
generation of cargo loaders for the U.S. Air Force. We acquired the rights to
manufacture towbarless tractors, which increase flexibility and speed in moving
aircraft away from the gates. We also are testing passenger boarding bridges for
new commuter jets. These projects and more should help improve growth potential
and earnings in the future.
nineteen ninety nine annual report
<PAGE>
10
Providing Innovative Products for a Growing World
To help feed the world's people,
FMC's Agricultural Products business has delivered on diligent internal
research and development efforts for the past 50 years.
Our history of product development has resulted in a strong portfolio of
insecticides and recent notable successes in discovering new herbicides--with
another promising herbicide in the product pipeline. We've been successful in
building our specialty--or non-crop--business, including termiticides and lawn
and garden products, and we see this business increasing significantly over the
next two to three years. Across the board, we continue to develop opportunities
for our products in market segments and crop uses throughout the world.
FMC has the ability to respond to evolving and changing environments with
flexibility, agility and efficiency. We have been an effective global marketer,
and we continue to build on our history of progressive strategic partnerships.
Our efforts focus on lower application rates, more environmentally compatible
products, alternatives to insect-resistant products and products that can be
adapted to developing countries.
With today's focus on biotechnology, we are one of the first agricultural
products companies to dedicate a majority of our discovery efforts to identify
compounds with a specific biological function on agricultural pests. This
approach is a step-change--a revolutionary approach to discovering new crop
protection chemicals. We're learning more about the genetics of major economic
pests--allowing us to more effectively uncover important biological sites to
target our chemistry. As with the pharmaceutical industry, we expect to discover
new breakthrough classes of products from these research and development
strategies.
As part of this process, in late 1999 we announced a partnership with Devgen,
a Brussels-based drug and drug-target discovery company, to discover pesticides.
With Devgen's genomics and screening technology, we are able to rapidly identify
pesticide target sites. We can then develop tests to screen hundreds of
thousands of compounds in a short period of time--dramatically increasing the
probability of successfully bringing products to the marketplace. And by
targeting a biological function from the pest we want to control, we'll target
our applications and ensure that we develop products that are safer for the
environment and for humans.
FMC Corporation
<PAGE>
11
[PICTURE APPEARS HERE]
TARGETING BIOTECHNOLOGY
FMC is taking a new, state-of-the-art biotech approach to our agricultural
products discovery efforts. We're focusing on the genetic make-up of insects to
identify target sites and develop pesticides to act on those sites. To advance
this work, in 1999 we entered into a partnership with Brussels-based Devgen, a
new company that works to identify optimal targets for drug delivery. Devgen's
expertise will allow us to test a greater number and higher quality of
biochemical target sites for pesticide discovery.
nineteen ninety nine annual report
<PAGE>
[PICTURES APPEAR HERE]
EURO-MADE (inset)
FMC Foret, our European chemicals business, also boasts advanced processing
technology for a range of chemical products. Here, sodium perborate and sodium
tripolyphosphate are ready for shipment from Huelva, Spain, to a customer in the
Middle East.
LEADING THE INDUSTRY
FMC is a major supplier of soda ash to Cardinal Glass, a Wisconsin-based flat
glass manufacturing company. Our advanced mining and processing technologies
give us cost advantages that result in competitive pricing for our customers.
FMC Corporation
<PAGE>
13
Pioneering Technology in Chemicals
In the chemical products business, our spirit of invention lies in harnessing
natural resources and processing those resources safely and cost-effectively.
In alkali chemicals, we built our reputation as a technology leader by
pioneering innovations in mining and processing ore into natural soda ash,
leveraging our investments and minimizing costs. Today, our technological
strength gives us a competitive edge in the marketplace.
In the late 1970s, we introduced the technique of longwall mining to the soda
ash industry. In the mid-1990s, we led the industry with another mining
innovation: solution mining. This proprietary technology recycles previously
unusable trona ore and produces soda ash in an even more cost-effective and
environmentally friendly manner, securing our position as the lowest-cost
producer in the business. We continue to refine the process to enhance the
quality of our product. Our 1999 acquisition of Tg Soda Ash will increase
volumes and create mining and processing opportunities as we combine our
adjacent operations--and skilled, innovative employees--in Wyoming.
FMC claims the lowest-delivered cost for hydrogen peroxide because of
efficient process technology and a broader network of plants. For example, our
ability to purify hydrogen peroxide makes us a leader in supplying the
electronics industry. Advanced technology and low costs also give FMC Foret, our
European chemicals business, a strong competitive advantage.
Within phosphorus chemicals, we are forming a 50-50 joint venture between FMC
and Solutia Inc. The new company--Astaris LLC--will combine the strengths of
both companies to streamline production, develop new technical capabilities--and
continue to reduce costs.
FMC also is building a purified phosphoric acid unit in Idaho in partnership
with Nu West Industries. This world-class facility will be designed to produce
80,000 tons of purified phosphoric acid annually, using technology from the FMC
Foret phosphate operations in Huelva, Spain. FMC's technology and phosphate ore
position, together with Nu West's phosphoric acid manufacturing capabilities,
will result in a reliable raw material supply that will have the lowest cost in
the industry. This new investment will become part of Astaris when the joint
venture begins operation.
For the future, we're exploring new market opportunities in important areas
such as food safety. Our peracetic acid, which already is used as a biocide to
kill bacteria in medical applications and in paper manufacturing, has
applications as a disinfectant in food processing. FMC chemical and machinery
operations are sharing expertise on these food-safety initiatives.
nineteen ninety nine annual report
<PAGE>
14
Developing Products and Partnerships for Your Health
Since the early 1960s, FMC has built a reputation as the world's technology
leader in food texture, structure and stabilization, and in providing solutions
to the pharmaceutical industry's tablet binding needs. Today, FMC BioPolymer
continues to grow, combining the strengths and potential of our original
pharmaceutical and food ingredients businesses with Pronova BioPolymer, a
Norway-based alginate business we acquired in mid-1999.
Alginates, like a number of FMC BioPolymer products, are derived from seaweed.
We share similar markets, customers, product technologies and manufacturing
processes. We'll leverage these similarities, and also expect to add new
technologies and product lines through ongoing acquisitions and alliances.
We developed new products and expanded applications in 1999. In the food
sector, our heat-stable Avicel and carrageenan products are replacing gelatin in
fruit preparations such as bakery fillings and fruit-at-the-bottom yogurt. We've
recently developed a low-moisture Avicel for use in snack bars, power bars and
diet preparations. Still in development is an Avicel/carrageenan mix that will
perform in many low-pH foods, including yogurt and fruit beverages--appealing to
the continuing interest in healthy eating.
On the pharmaceutical side, our technological advances are helping our
customers speed the tablet production process, add more controlled-release
dosages to smaller-sized capsules, and market chewable vitamins and medications
for children and elderly consumers who might have difficulty swallowing
traditional tablets.
Late in 1999, FMC launched LustreClear, an entirely new technology that blends
carrageenan with Avicel for the first time to create a new coating for an
easier-to-swallow--and more cost-effective--tablet, again geared toward the
pediatric and geriatric markets.
As people continue to try to reduce their fat intake, our food ingredients
business will continue to pursue applications in fat reduction. We expect to
explore opportunities to work with a partner to produce better-tasting, low-fat
preparations. And we'll look at the quality and safety of foods--examining how
to preserve the potency of nutrients in processed foods, and how edible coatings
might protect foods from contamination.
Our pharmaceutical experts expect to see increased interest in our new EnTec
drug delivery technologies. Our four new technologies work to enhance
solubility, control release of active ingredients, mask the taste of
unpleasant-tasting drugs, and create soft, chewy formulations for those tablets
taken without water. Our lithium business has been instrumental in developing
custom products and active ingredients for drugs to treat depression and control
AIDS. An increasing number of new compounds currently in the pipelines of
pharmaceutical companies worldwide are produced using organolithium chemistry.
FMC Corporation
<PAGE>
15
[PICTURE APPEARS HERE]
ACTIVE INGREDIENT
FMC's newly acquired business, Norway-based Pronova
BioPolymer, produces the sodium alginate that is used as the active ingredient
in Reckitt & Coleman's popular anti-reflux medicine, Gaviscon, manufactured in
Hull, England. Gaviscon is available in both liquid and tablet forms, and was
the most frequently supplied branded medicine in the United Kingdom in 1999.
nineteen ninety nine annual report
<PAGE>
BUSINESS SEGMENT DATA
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
(In millions) Year ended December 31
1999 1998 1997 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Sales
Energy Systems $1,129.4 $1,320.9 $1,144.3 $ 949.0 $ 769.1
Food and Transportation Systems 826.3 868.2 889.5 738.8 585.4
Agricultural Products 632.4 647.8 637.6 650.2 589.6
Specialty Chemicals 564.5 598.2 604.8 602.0 587.7
Industrial Chemicals 978.4 974.4 1,012.0 1,041.3 976.8
Eliminations (20.4) (31.1) (29.2) (30.6) (26.0)
- -----------------------------------------------------------------------------------------------------------------------------------
Total $4,110.6 $4,378.4 $4,259.0 $3,950.7 $3,482.6
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from continuing operations
before income taxes and cumulative
effect of changes in accounting principles
Energy Systems $ 97.1 $ 95.2 $ 76.5 $ 33.9 $ 16.1
Food and Transportation Systems 64.2 72.8 63.9 42.0 33.3
Agricultural Products 64.3 76.3 35.1 93.7 96.4
Specialty Chemicals 73.5 77.9 77.2 65.5 67.3
Industrial Chemicals 144.4 117.5 135.7 181.8 153.1
- -----------------------------------------------------------------------------------------------------------------------------------
Segment operating profit/(1)/ 443.5 439.7 388.4 416.9 366.2
Corporate (76.6) (85.1) (86.2) (91.3) (99.0)
Other income and expense, net 2.4 3.2 11.8 3.2 12.2
- -----------------------------------------------------------------------------------------------------------------------------------
Operating profit before gains on sales of businesses,
asset impairments, restructuring and other
charges, gain on sale of FMC Wyoming stock
and net interest expense 369.3 357.8 314.0 328.8 279.4
Gains on sales of businesses/(2)/ 55.5 -- -- -- --
Asset impairments/(3)/ (29.1) -- (224.0) -- (26.4)
Restructuring and other charges/(4)/ (14.7) -- (40.9) -- (123.6)
Gain on sale of FMC Wyoming stock/(5)/ -- -- -- -- 99.7
Net interest expense (106.7) (108.3) (108.8) (93.0) (76.4)
- -----------------------------------------------------------------------------------------------------------------------------------
Total $ 274.3 $ 249.5 $(59.7) $ 235.8 $ 152.7
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Business segment results are presented net of minority interests, reflecting
only FMC's share of earnings. The corporate line primarily includes staff
expenses, and other income and expense consists of all other corporate items,
including LIFO inventory adjustments and pension income or expense.
(1) Results for all segments are net of minority interests in 1999, 1998, 1997,
1996 and 1995 of $5.1 million, $6.2 million, $8.9 million, $9.6 million and
$5.1 million, respectively, the majority of which pertain to Industrial
Chemicals.
(2) Gains on sales of businesses in 1999 (Note 2 to the consolidated financial
statements) relate to the process additives ($35.4 million) and bioproducts
($20.1 million) operations, both of which are attributable to Specialty
Chemicals.
(3) Asset impairments in 1999 (Note 4 to the consolidated financial statements)
are related to Specialty Chemicals ($20.7 million) and Industrial Chemicals
($8.4 million). Asset impairments in 1997 are related to Energy Systems
($18.0 million), Food and Transportation Systems ($9.0 million),
Agricultural Products ($9.0 million), Specialty Chemicals ($62.0 million)
and Industrial Chemicals ($126.0 million). Asset impairments in 1995 are
related to Specialty Chemicals ($23.4 million) and Industrial Chemicals
($3.0 million).
(4) Restructuring and other charges in 1999 (Note 4 to the consolidated
financial statements) are related to Energy Systems ($1.5 million), Food
and Transportation Systems ($7.1 million), Agricultural Products ($2.2
million), Specialty Chemicals ($1.3 million), Industrial Chemicals ($0.6
million) and Corporate ($2.0 million). Restructuring and other charges in
1997 are related to Energy Systems ($17.9 million), Food and Transportation
Systems ($10.0 million) and Agricultural Products ($13.0 million).
Restructuring and other charges in 1995 are related to Energy Systems
($15.5 million), Specialty Chemicals ($21.6 million), Industrial Chemicals
($74.5 million) and Corporate ($12.0 million).
(5) The gain on sale of FMC Wyoming stock (comprising the sale of 20 percent of
FMC's soda ash business to minority partners) is attributable to Industrial
Chemicals.
16
<PAGE>
BUSINESS SEGMENT DATA continued
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
(In millions) December 31
1999 1998 1997 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operating Capital Employed/(1)/
Energy Systems $ 439.3 $ 471.4 $ 550.6 $ 649.5 $ 572.2
Food and Transportation Systems 370.4 384.4 429.3 495.4 279.0
Agricultural Products 552.0 567.3 503.9 546.8 380.8
Specialty Chemicals 652.9 638.8 642.8 630.4 473.4
Industrial Chemicals 818.0 740.8 731.7 920.1 840.4
- ---------------------------------------------------------------------------------------------------------------------------
Total operating capital employed 2,832.6 2,802.7 2,858.3 3,242.2 2,545.8
Segment liabilities included in total operating
capital employed 1,070.7 1,125.0 1,087.0 917.2 808.8
Corporate and other assets 92.5 238.7 167.8 194.5 214.1
- ---------------------------------------------------------------------------------------------------------------------------
Assets of continuing operations 3,995.8 4,166.4 4,113.1 4,353.9 3,568.7
Net assets of discontinued operations/(3)/ -- -- -- 113.5 183.1
- ---------------------------------------------------------------------------------------------------------------------------
Total assets $3,995.8 $4,166.4 $4,113.1 $4,467.4 $3,751.8
- ---------------------------------------------------------------------------------------------------------------------------
Segment Assets/(2)/
Energy Systems $ 749.4 $ 848.1 $ 829.0 $ 874.2 $ 792.9
Food and Transportation Systems 571.7 618.7 654.2 709.4 394.7
Agricultural Products 735.1 702.3 697.0 646.7 478.1
Specialty Chemicals 732.6 722.8 723.6 714.7 566.9
Industrial Chemicals 1,114.5 1,035.8 1,041.5 1,214.4 1,122.0
- ---------------------------------------------------------------------------------------------------------------------------
Total segment assets 3,903.3 3,927.7 3,945.3 4,159.4 3,354.6
Corporate and other assets 92.5 238.7 167.8 194.5 214.1
- ---------------------------------------------------------------------------------------------------------------------------
Assets of continuing operations 3,995.8 4,166.4 4,113.1 4,353.9 3,568.7
Net assets of discontinued operations/(3)/ -- -- -- 113.5 183.1
- ---------------------------------------------------------------------------------------------------------------------------
Total assets $3,995.8 $4,166.4 $4,113.1 $4,467.4 $3,751.8
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Company management views operating capital employed, which consists of
assets, net of liabilities, reported by the company's operations (and
excludes corporate items such as cash equivalents, debt, pension
liabilities, income taxes and LIFO reserves), as its primary measure of
segment capital.
(2) Segment assets are assets recorded and reported by the segments, and are
equal to segment operating capital employed plus segment liabilities (Note
1 to the consolidated financial statements).
(3) Net assets of discontinued operations comprise the net assets of FMC's
Defense Systems and Precious Metals operations (Note 3 to the consolidated
financial statements).
17
<PAGE>
18
PRODUCTS & MARKETS
<TABLE>
<CAPTION>
[PICTURE APPEARS HERE]
- -------------------------------------------------------------------------------------------
Energy Systems Markets Served
- -------------------------------------------------------------------------------------------
<S> <C>
FMC Energy Systems supplies Oil and gas exploration, production,
oil and gas exploration and refining and transportation. Power
production equipment for land generation and mining.
and offshore applications;
engineering, procurement and
construction of subsea oil fields;
fluid control and metering products
and systems; loading systems; marine
terminals and floating production
systems; and conveying and
processing systems.
[PICTURE APPEARS HERE]
- -------------------------------------------------------------------------------------------
Food & Transportation Systems Markets Served
- -------------------------------------------------------------------------------------------
FMC FoodTech is a global provider of Meat, seafood and poultry processors.
integrated systems and equipment for Fruit and vegetable processors.
every phase of food harvesting, Convenience food processors, including
preparation, processing and preservation. potato and snack food, soups,
Leader in citrus, poultry, tomato and sauces and ready meals.
vegetable processing systems.
Airport Products and Systems is a Global airlines, airports and material
global supplier of Jetway passenger handling and services companies within
boarding bridges, aircraft loaders, the aviation industry. Industrial manufacturing,
deicers, push-back tractors, 400hz mining, warehouses, newsprint, publishing,
inverters, pre-conditioned air and chemicals and utilities.
automated material handling systems.
[PICTURE APPEARS HERE]
- -------------------------------------------------------------------------------------------
Agricultural Products Markets Served
- -------------------------------------------------------------------------------------------
Agricultural Products provides crop Food and fiber growers and pest control
protection and pest control products markets.
for worldwide markets. More than 50
percent of sales derived outside the
United States.
- -------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
19
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Competitive Advantage Market Opportunities Outlook
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FMC Energy Systems combines Continuing opportunities to Strong subsea position and
the industry's broadest range build market position and cost reduction initiatives
of products, services and long-term customer alliances should help generate solid
engineering expertise to by leveraging subsea technologies performance.
deliver integrated systems for and systems and integrating recent
subsea/floating production, acquisitions. Added capabilities
measurement and deep-water in flow measurement systems expand
applications. The business is opportunities in the gas metering
well positioned in the four market.
major regions of offshore
exploration.
- --------------------------------------------------------------------------------------------------------------------
Competitive Advantage Market Opportunities Outlook
- --------------------------------------------------------------------------------------------------------------------
One of the top 10 suppliers of Consumer demand for convenience-- Continued profitable growth.
food processing systems in the such as packaged ready meals--and Acquisitions of complementary
world, with strong technology industry supply chain consolidation technologies strengthen overall
and global support capability. drive higher-value opportunities market position and improve
Market-leading positions in for FMC FoodTech. Increased involvement competitive advantage.
thermal processing, sterilizing, with global customers interested in
cooking, frying and freezing food safety and service.
systems. Partnerships with
major food processors.
Airport Products and Systems Strong growth in towbarless The Commander Loader, the world's
provides a broad range of tractors and pre-conditioned air top-selling family of aircraft
aviation products with units for the aviation industry. cargo loaders, and Jetway, the global
worldwide brand recognition Positioned for future growth in market leader of aviation passenger
and market leadership positions. the military loader market, boarding bridges, will continue to
Strong and active product aviation services and automated strengthen leading positions. Continued
development approach. Global laser-guided vehicle systems. focus on cost improvement.
marketing, management and
services network.
- --------------------------------------------------------------------------------------------------------------------
Competitive Advantage Market Opportunities Outlook
- --------------------------------------------------------------------------------------------------------------------
Solid business presence Long-term agreement to supply New herbicide sales and
around the world. Direct sulfentrazone herbicide to DuPont continuing cost improvements
distribution in key markets. for sales in U.S. soybean market are key to strong performance.
Leading global position in took effect in 1999. Success of R&D collaboration with Devgen
pyrethroid chemistry. new herbicide carfentrazone-ethyl, in Belgium to expand discovery
Attractive portfolio of registered for use in major opportunities.
chemistries that complements European cereal markets and other
other products and provides countries worldwide, as well as in
opportunities for new and U.S. corn markets. Growing
established formulation label termiticide, turf and horticultural
expansion and volume growth. market segments worldwide. Product
Strong insecticide and formulation, sales and distribution
growing herbicide product joint venture with Rallis in India.
portfolio. Product R&D effort,
generating high profitability.
Solid product stewardship
programs.
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
20
PRODUCTS & MARKETS
<TABLE>
<CAPTION>
[PICTURE APPEARS HERE]
- ------------------------------------------------------------------------------------------
Specialty Chemicals Markets Served
- ------------------------------------------------------------------------------------------
<S> <C>
FMC BioPolymer is the world's leading Global food, pharmaceutical and specialty
producer of alginate, carrageenan and industries.
microcrystalline cellulose.
Lithium is one of the world's leading Pharmaceutical, agricultural chemical
producers of lithium-based products. synthesis, synthetic rubber and plastics,
Recognized as the technology leader batteries, air conditioning and refrigeration,
in specialty organolithium chemicals construction, pool and spa, lubricating greases,
and related technologies. and ceramics and glass.
[PICTURE APPEARS HERE]
- ------------------------------------------------------------------------------------------
Industrial Chemicals Markets Served
- ------------------------------------------------------------------------------------------
Alkali Chemicals is the world's Glass-making, chemicals, detergents, food
largest producer of natural soda ash products, animal feed additives, mining,
and the market leader in North America. air/water treatment and pulp and paper.
Downstream products include sodium
bicarbonate, sodium cyanide, sodium
sesquicarbonate, caustic soda.
FMC is a worldwide producer of Hydrogen Electronics, cosmetics, food, water
Peroxide with manufacturing sites in the treatment, textiles, pulp and paper.
U.S., Canada, Mexico, Spain, the
Netherlands and Thailand. Region leader
in North America.
Also the world's leading supplier Polymers, electronics, pool and spa,
of persulfate products and a major hair care, industrial water treatment,
producer of peracetic acid and other paper, pharmaceuticals and Industrial &
oxidants. Institutional sanitizers.
Phosphorus Chemicals is a major Detergents, cleaning compounds, water
worldwide supplier and leading North treatment, food products and other
American producer of phosphorus and its industrial applications.
derivatives, phosphates and phosphoric
acid.
Foret is a major European chemical Detergents, pulp and paper, textiles,
producer. Products include hydrogen chemicals, tanning, pharmaceuticals,
peroxide, perborates, phosphates, ceramics, food and agriculture.
silicates, zeolites, and sulfur
derivatives.
- ------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
21
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Competitive Advantage Market Opportunities Outlook
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Worldwide brand recognition New opportunities for Good performances should
and strong market positions. alginate technology in food, continue across food,
Superior product quality, pharmaceutical and specialty pharmaceutical and specialty
research, applications applications. Commercializing new businesses.
technology, formulation food ingredient products for dairy,
support, global customer convenience foods and meat
service and manufacturing applications. Developed and
capabilities. introduced LustreClear--a new
technology in pharmaceutical
coating systems.
Leading market position in Growing demand for advanced Improved cost position in
diverse specialty products. organolithium reagents in upstream products. Attractive
Global manufacturing and pharmaceutical and agricultural growth in key downstream
distribution capabilities. chemical synthesis. specialty markets.
Strong R&D and manufacturing Commercializing proprietary
organizations. polymer initiators for
synthetic rubber, plastics and
coatings markets. Introduced
new products for lithium ion
batteries used in laptop
computers, personal digital
assistants (PDAs), cell phones
and handheld devices.
Introducing new product line for
the construction industry.
- --------------------------------------------------------------------------------------------------------------------
Competitive Advantage Market Opportunities Outlook
- --------------------------------------------------------------------------------------------------------------------
Mining and production Revitalized sales growth Continuing focus on
technology leader, including as overseas economies recover. improving production
proprietary, low-cost solution Continued growth tied to efficiencies, cost position
mining technology. Multiple improvement in overseas GDP and realizing synergies
production facilities result per capita. New products in from Tg Soda Ash
in increased flexibility and cleaning compounds, feed acquisition. Capitalizing on
reliability. Enhanced additives, and acid waste volume growth due to
competitive position as a neutralization. recovering overseas
result of the 1999 acquisition economies.
of Tg Soda Ash.
Process technology and plant Broad-based demand growth. Increased market pricing
locations key to low-cost and growth with market.
supply network. Defendable Commitment to continued
specialty market positions. capital efficiency and cost
Sole producer in Mexico. improvement.
Maintains lowest cost/capital
expansion options as market
demand warrants.
Capacity share leader, Sales volume tied Continued focus on cost
cost competitive plant to market growth and new improvement; growth via
locations and process applications. new products and applications.
technology.
Lowest-cost U.S. producer of Growing diversity of product Focus on pricing and
sodium tripolyphosphate--our uses. Introduced new food production efficiencies.
largest downstream product-- phosphates for the beverage Expect Astaris joint
used in automatic dishwasher and meat segments. venture to compete more
detergents. effectively in global markets.
Strong market positions. Continuing focus on current Continued good performance
Excellent cost positions. market positions. Export based on costs and competitive
Strong manufacturing and growth. advantages of the product
distributions capabilities. portfolio.
Growing export business.
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
FMC Corporation 21
<PAGE>
22
MANAGEMENT'S DISCUSSION AND ANALYSIS
Disclosure of Foward-Looking Statements
Statement under the Safe Harbor Provisions of the Private Securities Litigation
Reform Act of 1995: The company and its representatives may from time to time
make written or oral statements that are "forward-looking" and provide other
than historical information, including statements contained in the Annual
Report, in the company's other filings with the Securities and Exchange
Commission or in reports to its stockholders.
Whenever possible, FMC Corporation ("FMC" or the "company") has identified
these forward-looking statements by such words or phrases as "will likely
result", "is confident that", "expected", "should", "could", "will continue to",
"believes", "anticipates", "predicts", "forecasts", "estimates", "projects" or
similar expressions identifying "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements are based on management's current views and assumptions regarding
future events, future business conditions and the outlook for the company based
on currently available information. These forward-looking statements are subject
to certain risks and uncertainties that could cause actual results to differ
materially from those expressed in, or implied by, these statements. The company
wishes to caution readers not to place undue reliance on any such forward-
looking statements, which speak only as of the date made.
In connection with the Safe Harbor Provisions of the Private Securities
Litigation Reform Act of 1995, the company is hereby identifying important
factors that could affect the company's financial performance and could cause
the company's actual results for future periods to differ materially from any
opinions or statements expressed with respect to future periods in any current
statements.
Among the factors that could have an impact on the company's ability to
achieve its operating results and growth plan goals are:
.Significant price competition, particularly among competitors in the company's
chemical businesses;
.The impact of unforeseen economic and political changes in the international
markets where the company competes, including currency exchange rates, war,
civil unrest, inflation rates, recessions, trade restrictions, foreign
ownership restrictions and economic embargoes imposed by the United States or
any of the foreign countries in which FMC does business, and other external
factors over which the company has no control;
.The impact of significant changes in interest rates or taxation rates;
.Increases in ingredient or raw material prices compared with historical levels,
or shortages of ingredients or raw materials;
.Inherent risks in the marketplace associated with new product introductions and
technologies, particularly in agricultural and specialty chemicals;
.Changes in capital spending by customers in the petroleum exploration and
airline industries;
.Risks associated with developing new manufacturing processes, particularly with
respect to complex chemical products;
.The ability of the company to integrate possible future acquisitions or joint
ventures into its existing operations;
.The impact of freight transportation delays beyond the control of the company;
.The effect of previously undetected compliance issues related to the arrival of
the year 2000;
.Risks associated with joint venture, partnership or limited endeavors in which
the company may be responsible at least in part for the acts or omissions of
its partners;
.Conditions affecting domestic and international capital markets;
.Risks derived from unforeseen developments in industries served by the company,
such as extreme weather patterns or low insect infestations in the agricultural
sector, political or economic changes in the energy industries, and other
external factors over which the company has no control;
.Risks associated with litigation, including the possibility that current
reserves and estimated loss contingencies relating to the company's ongoing
litigation may prove inadequate;
.Environmental liabilities that may arise in the future that exceed current
reserves and estimated loss contingencies; and
.Increased competition in the hiring and retention of employees.
The company cautions that the foregoing list of important factors may not
be all-inclusive, and it specifically declines to undertake any obligation to
publicly revise any forward-looking statements that have been made to reflect
events or circumstances after the date of such statements or to reflect the
occurrence of anticipated or unanticipated events.
With respect to forward-looking statements set forth in the notes to
consolidated financial statements, including those relating to environmental
obligations, contingent liabilities and legal proceedings, as well as the
Company's 1999 Annual Report on Form 10-K, some of the factors that could affect
the ultimate disposition of those contingencies are changes in applicable laws,
the development of facts in individual cases, settlement opportunities and the
actions of plaintiffs, judges and juries.
[PICTURE APPEARS HERE]
SERVICE DELUXE
To focus on customer needs, mobilize installations, and test and service
equipment, FMC's Energy Systems business operates the world's largest offshore
base in Bergen, Norway.
[PICTURE APPEARS HERE]
FAST FOOD
Stein's VaporJet depends on high humidity to cook poultry and other meats
faster--producing higher yields and safer-to-eat foods.
<PAGE>
23
GENERAL
1999 compared with 1998
Sales of $4.1 billion for 1999 were down from $4.4 billion in 1998. Sales
outside the United States, including exports, represented 57 percent of the
company's total sales, consistent with 1998. U.S. sales and non-U.S. sales
decreased by 7 percent and 6 percent, respectively.
After-tax income from continuing operations before asset impairments,
restructuring and other charges, and gains on sales of businesses (in 1999) and
the cumulative effect of a change in accounting principle (in 1998) was $195.1
million, or $6.03 per share on a diluted basis, in 1999 compared with $185.3
million, or $5.30 per share, in 1998.
Average shares outstanding used in the years' diluted earnings per share
calculations decreased to 32.4 million in 1999 from 34.9 million in 1998 due to
the company's share repurchase program.
Income from continuing operations, including one-time items, was $216.0
million, or $6.67 per share on a diluted basis, in 1999 compared with $185.3
million, or $5.30 per share, in 1998.
Net loss from discontinued operations (Note 3 to the consolidated financial
statements) was $3.4 million in 1999 compared with $42.7 million in 1998, or
$0.10 and $1.22 per share on a diluted basis in 1999 and 1998, respectively. In
1999, gains on the sale of real estate used by the company's discontinued
defense systems operations were offset by charges recorded primarily for
environmental remediation and changes in actuarial estimates of general
liability and workers' compensation liabilities. In 1998, the company recorded a
$70.0 million pre-tax charge to increase environmental reserves related to
discontinued operations (Notes 3 and 14 to the consolidated financial
statements).
Net income for 1999 was $212.6 million, or $6.57 per share on a diluted
basis, compared with $106.5 million, or $3.05 per share on a diluted basis for
1998. The company adopted AICPA Statement of Position ("SOP") No. 98-5,
"Reporting on the Costs of Start-Up Activities," effective January 1, 1998. In
conjunction with the adoption, the company charged $46.5 million ($36.1 million
after tax, or $1.03 per share on a diluted basis) of previously capitalized
start-up costs to expense. This charge was recorded in 1998 as the cumulative
effect of a change in accounting principle.
1998 compared with 1997
In 1998, sales were $4.4 billion, up from $4.3 billion in 1997. Sales in the
United States increased 5 percent during the year, while sales outside the
United States increased 1 percent from 1997.
After-tax income from continuing operations before asset impairments,
restructuring and other charges (in 1997) and the cumulative effect of changes
in accounting principles (in 1998 and 1997) was $185.3 million, or $5.30 per
share on a diluted basis, in 1998 compared with $156.4 million, or $4.13 per
share, in 1997.
Net loss from discontinued operations (Note 3 to the consolidated financial
statements) was $42.7 million in 1998, or $1.22 per share on a diluted basis. In
1998, the company recorded a $70.0 million pre-tax charge to increase
environmental reserves associated with discontinued operations (Notes 3 and 14
to the consolidated financial statements). Net income from discontinued
operations in 1997, primarily related to the sale of the company's defense
operations, was $191.4 million, or $5.20 per share.
Net income for 1998 was $106.5 million, or $3.05 per share on a diluted
basis, compared to $162.4 million, or $4.41 per share, in 1997. In 1998, the
company adopted SOP No. 98-5 (discussed above and in Note 1 to the consolidated
financial statements). In conjunction with this adoption, a charge of $46.5
million ($36.1 million after tax, or $1.03 per share on a diluted basis) was
recorded in 1998 as the cumulative effect of a change in accounting principle.
In 1997, the company wrote off business process reengineering costs of $7.6
million ($4.5 million after tax, or $0.12 per share) in conjunction with the
requirements of a consensus of the Financial Accounting Standards Board's
Emerging Issues Task Force.
BUSINESS SEGMENTS
Results on a segment basis for the five years ended December 31, 1999 are
presented on page 16. As described in Note 1 to the consolidated financial
statements, effective for the year ended December 31, 1998, the company adopted
Statement of Financial Accounting Standards ("SFAS") No. 131, "Disclosures about
Segments of an Enterprise and Related Information." Under the provisions of the
standard, the company began reporting results based on five segments. Segment
data for the periods prior to 1998 have been restated and are presented on a
comparable basis.
Segment operating profits exclude certain income and expense items as
described in Note 1 to the consolidated financial statements.
[PICTURE APPEARS HERE]
WEEDS, BE GONE
FMC created carfentrazone-ethyl, the fastest-acting herbicide for controlling
Europe's prolific galium weed. In 1999, we expanded registrations directed at
European wheat and barley fields to include other crops, including potatoes.
[PICTURE APPEARS HERE]
MEDICAL MILESTONES
Our lithium business has developed specialty organolithium products used in the
manufacture of new prescription drugs--including those used in treating
depression and controlling AIDS.
<PAGE>
24
ENERGY SYSTEMS
1999 compared with 1998
Energy Systems 1999 sales of $1,129.4 million decreased from 1998 sales of
$1,320.9 million, while operating profits increased to $97.1 million (before
restructuring and other charges), from $95.2 million in 1998. Backlog at
December 31, 1999 and 1998 was $593.4 million and $877.9 million, respectively.
Lower sales reflected reduced customer exploration and production spending
for 1999 due to price and market uncertainty. Uncertainty surrounding both oil
prices and oil company mergers resulted in delays in subsea projects, reflected
in reduced backlog in 1999 compared with 1998, and a depressed market for land-
based wellheads. Partly offsetting these declines were higher deliveries arising
from the Elf Girassol Angola and Terra Nova Canada projects, and higher sales to
several of the company's energy systems alliance partners, such as Shell and
Exxon.
Operating profits increased as a result of improved margins,
standardization and cost reductions when compared with 1998.
Shipments of marine loading arms in the fourth quarter of 1999 resulted in
increased sales and profits when compared with the same period in 1998.
1998 compared with 1997
Energy Systems 1998 sales of $1,320.9 million were up 15 percent from prior-year
sales of $1,144.3 million, and operating profits of $95.2 million were up 24
percent from $76.5 million (before asset impairments and restructuring and other
charges) in 1997.
Demand in the subsea business remained strong with higher sales to Shell,
Statoil and Elf Aquitaine, among others. The results also reflect the August
1998 acquisition of CBV, the leading wellhead manufacturer in Brazil. Energy
Systems earnings also were favorably affected by cost-saving efforts implemented
during the year, including the elimination of approximately 250 positions.
During 1998, the company continued to solidify its premier position in
subsea systems, receiving a $230 million order for the Terra Nova project on the
Grand Banks of Newfoundland and a $200 million order for the Elf Girassol
project, offshore Angola. Also during 1998, the company sold Crosby Valve to a
subsidiary of Tyco International Ltd., realizing an immaterial gain on the
disposition.
Outlook for 2000
Industry surveys indicate higher exploration and production budgets for oil
companies. However, the timing of project orders remains uncertain as customers
continue to respond cautiously to the effects of recent oil price increases and
oil company mergers. Until the market improves, competitive pressures are
expected to remain intense. Management is confident that the company can retain
its leadership position in the energy markets that it serves.
FOOD & TRANSPORTATION SYSTEMS
1999 compared with 1998
Food and Transportation Systems sales declined to $826.3 million from $868.2
million in 1998. Operating profits were $64.2 million (before restructuring and
other charges), down from $72.8 million in 1998. Backlog of $247.2 million at
December 31, 1999 was relatively flat compared with $256.0 million at December
31, 1998. Lower sales and operating profits for the segment primarily reflect a
decrease in airport products and systems, down from record levels in 1998.
The decline in airport products and systems sales from 1998 was a result of
lower domestic sales of loaders purchased for equipment replacement programs by
airlines and reduced purchases of ground support equipment by cargo companies.
These reductions were partially offset by increased demand from European
airports and airlines. Reduced profitability in 1999 was the result of lower
sales volumes, particularly for loaders, and lower margins for Jetway projects.
FMC FoodTech's sales were slightly lower as a result of lower freezer sales
and the 1998 divestiture of a minor product line. Higher margins arising from
higher after-market sales, lower costs and a more favorable product mix for FMC
FoodTech in 1999 contributed to its increased profitability.
1998 compared with 1997
Food and Transportation Systems 1998 sales of $868.2 million decreased from
$889.5 million in 1997, and 1998 operating profits of $72.8 million increased
from $63.9 million (before asset impairments and restructuring and other
charges) in the prior year.
FMC FoodTech's 1998 sales were down from the prior year as a result of the
weak business climate in Asia and the divestiture of a minor product line, but
were partially offset by increased food processing sales. Operating profits were
up compared with 1997, reflecting stronger after-market performance and the
benefits of cost reduction activities. Sales and operating profits were up in
airport products and systems, as increased sales of Jetway Systems and ground
support equipment more than offset lower deicer sales that resulted from a mild
winter in 1997.
[PICTURE APPEARS HERE]
GOING DEEP
In 1998 we acquired our licensee CBV, Brazil's leading wellhead producer, to add
deep-water capabilities and strengthen our presence offshore Brazil. This
wellhead is headed for Petrobras, Brazil's state-owned oil company and a key CBV
customer.
[PICTURE APPEARS HERE]
WHERE'S THE BEEF?
FMC's Frigoscandia Equipment engineers designed the Steam Pasteurization System.
This USDA-approved equipment uses thermally controlled steam chambers to kill
surface bacteria--including E coli, salmonella and listeria--on beef ready for
processing.
<PAGE>
25
Outlook for 2000
Stable business conditions are expected to prevail for FMC FoodTech's operations
as food processors are expected to continue to seek opportunities to invest in
improved technologies that lower their costs. The acquisition of Northfield
Freezing Systems Group from York International in early 2000 builds on FMC's
existing position by increasing the company's range of high-quality specialized
freezing solutions for industrial food processing. FMC expects its worldwide
market position for freezing equipment to increase in both scale and level of
service.
Management expects strong performance from Jetway Systems, reflecting the
high volume of orders for domestic projects to be executed in 2000. Overall
growth of transportation systems depends in part on the growth rate of the
airline industry, which can be affected by labor issues and fluctuations in fuel
prices.
AGRICULTURAL PRODUCTS
1999 compared with 1998
Sales of Agricultural Products were $632.4 million, down from $647.8 million in
1998. Operating profits were $64.3 million (before restructuring and other
charges) compared with $76.3 million in 1998. Lower sales and earnings in 1999
resulted from unusually low pest infestation levels in U.S. cotton and corn
markets and from difficult economic conditions in Latin America. Partially
offsetting these factors were the continued benefits from cost-reduction
initiatives and increased profitability from sulfentrazone.
1998 compared with 1997
Sales for Agricultural Products of $647.8 million in 1998 were up from $637.6
million in 1997, and operating profits increased to $76.3 million from $35.1
million (before asset impairments and restructuring and other charges) in the
prior year. Sales were up due to improved performance in herbicide markets. The
significant increase in operating profits was largely a result of cost
reductions implemented during 1998. In 1997, operating profits were negatively
affected by difficulties encountered in the start-up process at the company's
Baltimore, Maryland, sulfentrazone plant.
Outlook for 2000
The company anticipates a strong rebound in Agricultural Products in 2000 as
pest infestations are anticipated to return to normal levels in North America.
Increased herbicide sales and economic recovery in Brazilian and Asian markets
are expected to provide opportunity for growth in this segment.
SPECIALTY CHEMICALS
1999 compared with 1998
Specialty Chemicals sales of $564.5 million in 1999 decreased from $598.2
million in 1998, and operating profits of $73.5 million (before gains on sales
of businesses and charges for asset impairments and restructuring and other
charges) in 1999 decreased $4.4 million from $77.9 million in 1998.
Increased sales and operating profits of FMC BioPolymer in 1999 (which
includes the Pronova Biopolymer alginate business acquired from Norsk Hydro in
the second quarter, as well as FMC's former pharmaceutical and food ingredients
businesses) were more than offset by reductions caused by the sale of the
process additives and bioproducts businesses in the third quarter.
Higher sales of food ingredients to Asia and Europe in 1999 increased
revenues and profits for FMC BioPolymer. The increase in profitability was
partially offset by higher manufacturing costs in 1999 in the pharmaceutical
portion of the business.
Although lithium sales declined slightly in 1999 when compared with 1998,
the company enhanced its strategic position by executing a long-term sourcing
agreement with Sociedad Quimica y Minera de Chile S.A. ("SQM"), a South American
manufacturer of lithium carbonate. Costs related to idling production in FMC's
lithium carbonate facility in Argentina partially offset the benefits of the SQM
sourcing agreement in 1999 earnings.
1998 compared with 1997
Specialty Chemicals 1998 sales were $598.2 million, down slightly from 1997
sales of $604.8 million. Operating profits of $77.9 million were up from $77.2
million (before asset impairments) in 1997.
Food ingredient sales were up from the prior year, driven by sales of new
products. Operating profits increased on higher sales and the continued
reduction of manufacturing and administrative costs.
Lithium sales and operating profits were down from the prior year as a
result of lower lithium carbonate and lithium hydroxide prices and higher
operating costs associated with the start-up of the Argentine production
facilities.
U.K.-based sales of water additives and flame retardant products were up
slightly from the prior year. Operating profits in 1998 increased over 1997 as
cost reductions more than offset negative foreign currency effects.
Outlook for 2000
Strategic acquisitions and divesting non-core businesses have positioned this
segment for growth. A full year's sales from Pronova Biopolymer, acquired in
mid-1999, and continued realization of synergies are expected to drive growth
for FMC BioPolymer over the next year. In addition, growing demand for the
company's specialty lithium applications is expected to continue throughout
2000. The value of certain productive assets for lithium will continue to be
assessed in light of both the recent strategic moves to outsource lithium
carbonate and other potential changes in the industry structure required to
increase profitability in this market.
[PICTURE APPEARS HERE]
SNOW BLOWER
The AirFirst deicer uses forced air to blow snow and ice off the surface of an
aircraft. This approach reduces the use of the traditional deicing fluid, as
well as operational time and impact on the environment.
<PAGE>
26
MANAGEMENT'S DISCUSSION AND ANALYSIS
INDUSTRIAL CHEMICALS
1999 compared with 1998
Industrial Chemicals sales of $978.4 million in 1999 were up from $974.4 million
in 1998. Operating profits of $144.4 million (net of minority interests and
before asset impairments and restructuring and other charges) increased
significantly from $117.5 million in 1998. Industrial Chemicals earnings
favorability was driven largely by the impact of the company's acquisition of Tg
Soda Ash and continued significant cost reductions (including the favorable
impact of a change in the estimated useful lives of assets), partially offset by
expenses for Y2K-related compliance and higher pension costs.
Phosphorus results in 1999 included decreases in sales and profitability
when compared with 1998, reflecting lower volumes and increased distribution
costs partially offset by higher average prices.
Higher sales volumes and profits for soda ash reflect the positive impact
of the company's acquisition of Tg Soda Ash in 1999, although the improvements
were partially offset by reduced domestic and export prices.
Sales from Spain-based FMC Foret were lower in 1999 compared with 1998 as a
result of competitive pressures on selling prices and the translation impact of
the weakened Spanish peseta against the U.S. dollar. Operating profits were
higher in 1999, reflecting lower raw material prices and improved efficiencies,
which more than offset the unfavorable effects of currency translation.
Hydrogen peroxide sales and operating earnings increased on higher prices
and volumes, reflecting improvements in the pulp industry. Lower costs also
contributed to increased profitability.
1998 compared with 1997
Industrial Chemicals sales in 1998 were $974.4 million compared with $1,012.0
million in 1997, and operating profits (net of minority interests) were $117.5
compared to $135.7 million (before asset impairments) in the prior year.
Sales and operating profits of alkali products in 1998 decreased from the
previous year, reflecting lower domestic and export prices, decreased export
volumes of soda ash to Asia and lower sodium cyanide sales due to reduced gold
mining activity. Cost reductions implemented in the third and fourth quarters of
1998 at the company's Green River, Wyoming facility partially offset the impact
of unfavorable market conditions.
Hydrogen peroxide sales and operating profits in 1998 were down from 1997,
as lower prices more than offset increased volumes and reduced costs. The
company shut down an older production line at its Bayport, Texas facility in
August 1998, and a competitor also shut down a portion of its production
facilities. The combined effect of these actions reduced excess U.S. production
capacity by approximately 45 percent. FMC expects to meet current demand levels
from its remaining production facilities.
Phosphorus sales decreased in 1998 from the prior year due to reduced
volumes. Operating profits were essentially even with 1997, as lower sales were
offset by reduced depreciation resulting from an asset impairment charge
recorded in 1997.
Sales from Spain-based FMC Foret increased in 1998 as higher sales volumes
more than offset the effects of selling price pressures in the last half of 1998
and the negative translation impact of the Spanish peseta against the U.S.
dollar. Operating profits were lower in 1998 as the impact of higher sales
volumes was offset by reduced margins in the fourth quarter and by the effect of
foreign currency translation.
Outlook for 2000
Soda ash results are expected to continue to improve in 2000, reflecting a full
year of contributions from Tg Soda Ash and the result of cost-saving
initiatives. Average soda ash pricing is expected to be down slightly in 2000,
reflecting decreased prices in Asia intended to protect Asian volume, while
pricing of hydrogen peroxide in 2000 is expected to exceed 1999 levels. A
phosphorus joint venture with Solutia Inc, to be named Astaris LLC, was
announced in 1999 and is subject to a governmental approval process that is
expected to be completed in the first quarter of 2000. Upon formation of the
joint venture, FMC expects to benefit from significant synergies through plant
rationalizations and other restructuring activities.
[PHOTO APPEARS HERE]
FIRED UP
Fire ants, among the most destructive insects to invade the United States,
destroy grain and vegetable crops and bite people with stings that burn like
fire. FMC's pioneering work in synthetic pyrethroids led to the discovery of
bifenthrin, which acts to eradicate these pests' nests in huge mounds of earth.
Massey Services, a pest control expert, uses FMC's Talstar insecticide to fight
the ants at a residence in Florida.
<PAGE>
27
OTHER INFORMATION
Corporate Expenses, Net Interest Expense and Pension-Related Costs
Corporate expenses of $76.6 million (before restructuring and other charges) in
1999 decreased $8.5 million from the prior year reflecting ongoing cost
reduction efforts. Compared with 1997, the company's 1998 corporate expenses
declined slightly. The company expects 2000 results to benefit from further
cost-control measures.
Net interest expense for 1999 and 1998 was $106.7 million and $108.3
million, respectively, reflecting lower average rates in 1999. Net interest
expense in 1998 was substantially flat compared with 1997.
Pension and other postemployment benefit expenses increased $19.4 million
in 1999 primarily due to a lower discount rate used to value the company's
liabilities and due to increased costs related to certain non-qualified plans.
For 2000, an increase in the discount rate is expected to result in a reduction
in expenses related to pension and other postemployment benefits; however, this
change is not expected to affect the company's cash flow.
Under generally accepted accounting principles, the company is required to
periodically evaluate the useful lives of its plants and equipment. In the first
quarter of 1999, the company extended the depreciable lives of certain equipment
used in its chemical and machinery operations to 15 years from an average of 11
to 12 years. This change better reflects the current service lives of its
assets. The effect of this change increased pre-tax profits by $24.2 million in
1999. Asset lives used for tax purposes were not affected by this change.
Taxes
Although FMC's domestic earnings (losses) are generally subject to tax expense
(benefit) at the statutory rate of 35 percent, many factors alter the company's
consolidated tax rate. These factors include non-deductible or non-benefitable
transactions related to goodwill or other items, differing foreign tax rates,
state tax increments, depletion, foreign sales corporation benefits, and other
permanent differences. The company's effective tax rate of 21.2 percent in 1999
also includes the beneficial impact of the non-taxable portion of a gain on the
sale of FMC's process additives business (Note 2 to the consolidated financial
statements).
The effective tax rate in 1999, excluding special income and expense items,
was 25.7 percent, consistent with the effective tax rate in 1998 of 25.7 percent
before the cumulative effect of a change in accounting principle. The effective
tax benefit rate in 1997, before the cumulative effect of a change in accounting
principle, was 59.0 percent, which includes the impact of asset impairments and
restructuring and other charges (Note 4 to the consolidated financial
statements), a portion of which were not benefited for tax purposes. The 1997
effective tax rate was 23.8 percent excluding these charges.
Accounting Changes
SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities", is
effective (as amended) for financial statements for fiscal years beginning after
June 15, 2000, but may be adopted in earlier periods. SFAS No. 133 will require
the company to recognize all derivatives on the balance sheet at fair value.
Derivatives that are not hedges must be adjusted to fair value through income.
If the derivative is a hedge, depending on the nature of the hedge, changes in
the fair value of the derivative will either be offset against the change in
fair value of the hedged item through earnings or recognized in other
comprehensive income until the hedged item is recognized in earnings. The
ineffective portion of a derivative's change in fair value will be recognized in
earnings immediately. The company is evaluating the new standard's provisions
and has not yet determined what the effect of SFAS No. 133 will be on the
earnings and financial position of the company. The company intends to adopt the
standard on January 1, 2001.
Discontinued Operations
The company recorded losses from discontinued operations of $3.4 million and
$42.7 million (net of tax) in 1999 and 1998, respectively, and a gain of $191.4
million (net of tax) in 1997.
The loss from discontinued operations in 1999 included gains of $53.7
million ($32.8 million after tax) from the sale of property in California that
was formerly used by the company's divested defense business. FMC also recorded
charges of $59.4 million ($36.2 million after tax) for environmental remediation
and changes in actuarial estimates of general liability and workers'
compensation liabilities associated with discontinued businesses.
Results of discontinued operations for 1998 consisted of a $70.0 million
($42.7 million after tax) charge for environmental costs (net of anticipated
recoveries of $19.8 million), the majority of which related to clean-up work at
the discontinued fiber manufacturing site in Front Royal, Virginia (Notes 3 and
14 to the consolidated financial statements).
In 1997, results of discontinued operations included gains from the sale of
the defense business of $318.4 million ($179.7 million after tax), income from
operations of the discontinued defense segment of $64.2 ($38.7 million after
tax) and a $45.0 million ($27.0 million after tax) charge for environmental
costs related to various discontinued operations (Note 3 to the consolidated
financial statements).
[PICTURE APPEARS HERE]
SOUND ANALYSIS
FMC's resourceful developmental work has resulted in a new analytical approach
to measuring the chemical components of persulfate products. Incorporating a new
analytical method into the process supports product and process safety and
delivers more efficient production.
<PAGE>
28
MANAGEMENT'S DISCUSSION AND ANALYSIS
Asset Impairments and Restructuring and Other Charges
In the third quarter of 1999, FMC recorded asset impairments of $29.1 million
($17.8 million after tax), and restructuring and other one-time charges of $14.7
million ($9.0 million after tax). Asset impairments of $20.7 million were
required to write off the remaining net book values of two U.S. lithium
facilities, which management determined would not be feasible to use as
currently configured. Additionally, an impairment charge of $8.4 million was
required to write off the remaining net book value of a small caustic soda
facility in Green River, Wyoming. Restructuring and other one-time charges of
$14.7 million resulted primarily from strategic decisions to divest or
restructure a number of businesses and support departments, including certain
food machinery, agricultural products, and energy systems operations and certain
corporate and shared services support departments.
FMC recorded pretax charges of $264.9 million ($180.9 million after tax) in
1997. Of this amount, $224.0 million ($154.0 million after tax) related to asset
impairments, primarily in the phosphorus chemicals and process additives
businesses, and $40.9 million ($26.9 million after tax) primarily covered
smaller restructuring activities in several other businesses.
See Note 4 to the consolidated financial statements for further discussion
of the asset impairments and restructuring charges.
Environmental Obligations
FMC, like other industrial manufacturers, is involved with a variety of
environmental matters in the ordinary course of conducting its business and is
subject to federal, state and local environmental laws. FMC feels strongly that
the company has a responsibility to protect the environment, public health and
employee safety.
This includes cooperating with other parties to resolve issues created by
past and present handling of wastes. When issues arise, including notices from
the Environmental Protection Agency or other government agencies identifying FMC
as a Potentially Responsible Party, FMC's environmental remediation management
assesses and manages the issues. When necessary, the company uses
multifunctional teams composed of environmental, legal, financial and
communications management to ensure that the company's actions are consistent
with its responsibilities to the environment and public health, as well as to
its employees and shareholders.
In the fourth quarter of 1999, the company provided additional
environmental reserves related to discontinued operations totaling $25.9 million
($15.8 million after tax). This provision and provisions made in 1998 and 1997
are more fully described in Note 3 to the consolidated financial statements.
Additional information regarding the company's environmental accounting
policies and potential environmental liability is included in Notes 1 and 14,
respectively, to the company's consolidated financial statements. Information
regarding environmental obligations associated with the company's discontinued
operations is included in Note 3 to the consolidated financial statements.
Estimates of 2000 environmental spending are included below in Liquidity and
Capital Resources.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents at December 31, 1999 and December 31, 1998 were $64.0
million and $61.7 million, respectively. The company had total borrowings of
$1.3 billion and $1.5 billion as of December 31, 1999 and 1998, respectively.
Operating working capital, which excludes cash and cash equivalents, short-term
and the current portion of long-term debt, income tax balances and the impact of
the company's 1999 sale of accounts receivable, decreased $49.0 million to
$255.2 million at December 31, 1999, from $304.2 million at December 31, 1998,
as follows:
<TABLE>
<CAPTION>
(In millions)
December 31 Effect of Change
1999 1998 in Component
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Components of operating working capital:
Trade receivables (net)/(1)/ $ 779.4 $ 840.6 $ (61.2)
Inventories 457.7 517.7 (60.0)
Other current assets 172.6 136.4 36.2
Accounts payable, trade and other (665.5) (685.8) 20.3
Accrued payroll (106.9) (109.3) 2.4
Other current liabilities (371.6) (383.3) 11.7
Current portion of accrued pensions and other
postretirement benefits (10.5) (12.1) 1.6
- ---------------------------------------------------------------------------------------------------------------------------
$ 255.2 $ 304.2 $ (49.0)
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For purposes of this calculation, the balance has been adjusted by $144.0
million at December 31, 1999 to exclude the impact of the company's sale of
receivables.
[PICTURE APPEARS HERE]
HOW SWEET IT IS
Sulfentrazone, one of two new herbicides FMC has brought to market in the last
few years, is a big force for FMC in Latin America, where it is used on
sugarcane and soybean crops. Our product, known as Boral and Capaz in Latin
America, is performing well on this sugarcane field near Guadalajara, Mexico.
<PAGE>
29
Cash provided from operating activities of $558.2 million for the year
ended December 31, 1999 increased from $430.0 million in 1998 primarily as a
result of the sale of accounts receivable in the fourth quarter of 1999 and a
reduction in inventories and other accounts receivable during the year. The
company also received $49.1 million related to settlement of insurance coverage
issues regarding environmental claims.
Sales of receivables, which the company initiated in the fourth quarter of
1999, reduced accounts receivable by $144.0 million at December 31, 1999. Net
discounts recognized on receivables sales during 1999 totaling $1.9 million are
included in selling, general and administrative expenses in the consolidated
statement of income for the year ended December 31, 1999. Proceeds received by
the company from the sales of receivables were used to repay short-term debt.
Sales of receivables were without recourse and were executed through a wholly
owned subsidiary. The agreement for the sale of accounts receivable provides for
continuation of the program on a revolving basis for a three-year period.
Cash required by investing activities of $255.2 million in 1999 decreased
from the 1998 requirement of $351.5 million. During the year ended December 31,
1999, the company received $199.3 million from sales of its process additives
and bioproducts businesses, which partly offset funding required for the
company's acquisitions of Pronova Biopolymer AS and Tg Soda Ash, Inc. (Note 2 to
the consolidated financial statements).
In addition to the acquisitions and divestitures described above (Note 2 to
the consolidated financial statements), the company completed a number of
smaller transactions in 1999 and continues to evaluate potential acquisitions,
divestitures and joint ventures on an ongoing basis.
Capital spending (excluding acquisitions) of $236.3 million for the year
ended December 31,1999 is lower when compared with 1998, reflecting the
completion of significant capital projects. This reduction was partially offset
by increased spending related to environmental compliance at current operating
sites.
During 1999, the company entered into an agreement for the sale and
leaseback of $29.1 million of certain equipment. The net proceeds received in
connection with this transaction were $52.1 million. A non-amortizing deferred
credit of $23.4 million was recorded in conjunction with the transaction and is
included in other long-term liabilities at December 31, 1999 (Note 8 to the
consolidated financial statements).
Cash required by financing activities in 1999 of $340.2 million
significantly increased from $7.5 million in 1998, largely because of
significant net long-term debt repayments during 1999. For the year ended
December 31, 1999, the company increased its commercial paper borrowings by
$40.9 million (net of discount); increased borrowings under uncommitted U.S.
credit facilities by $39.7 million; and received proceeds from issuing $35.0
million of medium-term notes under the universal shelf registration described
below. These funds were used primarily to retire higher-cost senior debt and to
purchase FMC common stock under the company's open-market stock repurchase
program.
The company has $800.0 million in committed credit facilities, consisting
of a $350.0 million, 364-day non-amortizing revolving credit agreement due in
July 2000 and a $450.0 million, five-year non-amortizing revolving credit
agreement due in December 2001. As of December 31, 1999, the company had no
borrowings under the revolving credit agreements and had commercial paper
borrowings (supported by committed credit facilities) of $190.8 million and
borrowings under uncommitted U.S. credit facilities of $89.8 million.
On August 3, 1998, a new universal shelf registration statement became
effective, under which $500.0 million of debt and/or equity securities may be
offered. This registration statement incorporated $160.0 million of unused
capacity from the company's 1995 shelf registration statement. During 1997, the
company issued $70.0 million of medium-term notes at rates ranging from 7.2
percent to 7.32 percent. The net proceeds of $69.7 million were used to retire
short-term borrowings. During 1998, the company issued $290.0 million of
medium-term notes at rates ranging from 6.6 percent to 7.125 percent. The net
proceeds of $288.6 million were used to retire other borrowings and repurchase
FMC common stock. During 1999, the company issued $35.0 million of medium-term
notes at rates ranging from 6.38 percent to 6.53 percent. The net proceeds of
$34.9 million were used to retire other borrowings and repurchase FMC common
stock. Unused capacity of $345.0 million remains available under the 1998 shelf
registration at December 31, 1999.
In 1999, the company borrowed $50.0 million at 6.45 percent interest
maturing in 2032 from the proceeds of Power County, Idaho's Solid Waste
Industrial Development Revenue Bonds. Undrawn proceeds of $21.1 million at
December 31, 1999 will be used to fund phosphorus capital projects related to
solid waste disposal (Note 14 to the consolidated financial statements).
[PICTURE APPEARS HERE]
ADVANCED METERING
We're enhancing our capabilities to the gas-producing industry with our 1999
acquisition of the flow measurement systems of Perry Equipment Company, a
producer of gas orifice metering equipment.
[PICTURE APPEARS HERE]
THE MAIN INGREDIENT
We are expanding applications for our seaweed-derived products carrageenan and
Avicel micro-crystalline cellulose, used as food and pharmaceutical ingredients.
Recently, we developed Avicel as a gelatin replacement and as a low-moisture
ingredient for use in snack products.
<PAGE>
30
MANAGEMENT'S DISCUSSION AND ANALYSIS
During 1999, the company completed the common stock open-market repurchase
program originally authorized by the Board of Directors on August 28, 1997.
Purchases for 1999 totaled 2.5 million shares at a cost of $137.5 million. A
total of 7.7 million shares were repurchased during fiscal years 1997 through
1999 at a cost of approximately $503 million.
On August 27, 1999, the Board of Directors authorized an additional $50
million of open market repurchases of FMC common stock, which the company had
not commenced at December 31, 1999. Depending on market conditions, the company
may purchase additional shares of its common stock on the open market from time
to time; however, the company has not determined when or if it will make
significant repurchases under this authorization.
The company expects to meet operating needs, fund capital expenditures and
potential acquisitions, and meet debt service requirements for 2000 through cash
generated from operations and available credit facilities. FMC expects its cash
requirements for 2000 to include approximately $230 million for planned capital
expenditures, including approximately $85 million for capital projects related
to environmental control facilities. Projected 2000 spending also includes
approximately $60 million for environmental compliance at current operating
sites, which is an operating expense of the company, plus approximately $60
million of remediation spending and $8 million for environmental study costs at
current operating, previously operated and other sites, which has been accrued
in prior periods.
The company's foreign currency translation adjustment in accumulated other
comprehensive loss increased from $134.1 million at December 31, 1998 to $196.0
million at December 31, 1999, primarily as a result of the negative translation
impact of the Spanish peseta against the U.S. dollar.
The company's ratios of earnings to fixed charges were 3.1x and 2.8x for
the years ended December 31, 1999 and 1998, respectively. The increase in the
ratio from 1998 is primarily the result of higher 1999 earnings, as gains on the
sales of businesses and lower selling, general and administrative expenses more
than offset the effect of lower sales, asset impairments and restructuring and
other charges on 1999 earnings.
DIVIDENDS
No dividends were paid in 1999, 1998 and 1997, and no dividends are expected to
be paid in 2000.
DERIVATIVE FINANCIAL INSTRUMENTS AND MARKET RISKS
FMC's primary financial market risks include fluctuations in interest rates and
currency exchange rates. The company manages these risks by using derivative
financial instruments in accordance with established policies and procedures.
FMC does not use derivative financial instruments for trading purposes. At
December 31, 1999, the company's derivative holdings consisted primarily of
foreign currency forward contracts.
When FMC sells or purchases products or services outside the United States,
transactions are frequently denominated in currencies other than U.S. dollars.
Exposure to variability in currency exchange rates is mitigated, when possible,
through the use of natural hedges, whereby purchases and sales in the same
foreign currency and with similar maturity dates offset one another.
Additionally, FMC initiates hedging activities by entering into foreign exchange
forward contracts with third parties when unable to use natural hedges. The
maturity dates of the currency exchange agreements that provide hedge coverage
are consistent with those of the underlying purchase or sales commitments.
To monitor its currency exchange rate risks, the company uses a sensitivity
analysis, which measures the impact on earnings of a 10 percent devaluation of
the foreign currencies to which it has exposure. Based on its sensitivity
analysis at December 31, 1999, such a fluctuation in currency exchange rates in
the near term would not materially affect FMC's consolidated operating results,
financial position or cash flows. FMC's management believes that its hedging
activities have been effective in reducing its risks related to currency
exchange rate fluctuations.
During September 1998, the company entered into $65.0 million of forward
contracts to offset risks associated with the real-denominated portions of FMC's
Brazilian investments. During the first quarter of 1999, the Brazilian real
devalued. Losses from the decline in value of the company's real-denominated
investments during the 1999 devaluation, as well as 1999 economic losses related
to the Brazilian economic crisis, were offset by gains on these forward
contracts.
For more information on derivative financial instruments, see Notes 1 and 7
to the consolidated financial statements.
[PICTURE APPEARS HERE]
COMBINING CAPABILITIES
From longwall mining, shown here, to solution mining to the acquisition of Tg
Soda Ash, FMC has leveraged its investments and reduced costs to secure our
position as the lowest-cost producer of soda ash.
<PAGE>
31
IMPACT OF THE YEAR 2000
Systems-related failures, miscalculations or business interruptions associated
with entry into the year 2000 (the "Y2K" issue), either from within the company
or from the surrounding environment, had the potential to have a materially
adverse effect on the company.
FMC devoted substantial resources to planning and executing a strategy
aimed at identifying non-compliant systems and programs, fixing problems,
testing solutions and developing contingency plans. In addition to the company's
critical systems, the systems of key suppliers, customers and business partners
were included in the scope of the project.
At the time of entry to the year 2000, the company executed a centralized
incident reporting and follow-up system to monitor company site conditions at
its locations around the world. There were no instances of non-compliance that
had a material financial impact on the company. FMC has not yet identified any
Y2K issues relating to items having economic, health, safety or environmental
implications. The company believes all of its critical systems are Y2K
compliant, but there is no guarantee that the company has discovered all
possible failure points. Specific factors contributing to any remaining
uncertainty include the failure to identify all susceptible systems, non-ready
third parties whose systems and operations impact the company and other similar
uncertainties. While the company intends to continue to monitor its business for
Y2K compliance-related issues, management believes that the resolution of such
issues, if any, will not materially affect the financial position, results of
operations or cash flows of FMC.
In order to address Y2K issues, the company made systems modifications
and/or accelerated certain system changes in its IT, manufacturing, and facility
systems that might otherwise have been made at a later date. From inception of
the Y2K program through December 31, 1999, the company spent approximately $19
million on Y2K compliance, of which approximately $16 million was expensed and
$3 million was capitalized. Amounts expensed and capitalized for the year ended
December 31, 1999, were $12 million and $2 million, respectively. FMC does not
expect remaining costs to be significant.
CONVERSION TO THE EURO
On January 1, 1999, 11 European Union member states adopted the euro as their
common national currency. From that date until January 1, 2002 (the transition
period), either the euro or a participating country's present currency will be
accepted as legal tender. Beginning on January 1, 2002, euro-denominated bills
and coins will be issued, and by July 1, 2002, only euro currency will be used.
FMC management continues to address the strategic, financial, legal and
systems issues related to the various phases of transition. The company is
addressing customer and business needs on a timely basis and attempting to
anticipate and prevent complications related to the conversion. Throughout the
transition period, minor costs related primarily to information systems will
continue to be incurred. The company does not believe the ultimate costs of
conversion will be material to its earnings, cash flow or financial position.
[PICTURE APPEARS HERE]
GRAND SCALE
FMC's facility in Bayport, Texas--the largest hydrogen peroxide
manufacturing facility in the world--incorporates, new, low-cost technology that
delivers greater operating and expansion efficiencies.
<PAGE>
Consolidated Statements of Income
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
(In millions, except per share data) Year ended December 31
1999 1998 1997
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Sales $4,110.6 $4,378.4 $4,259.0
- -----------------------------------------------------------------------------------------------------------------------------
Costs and expenses
Cost of sales 3,008.4 3,244.0 3,136.8
Selling, general and administrative expenses 575.4 612.7 625.3
Research and development 152.4 157.7 174.0
(Gains) on sales of businesses (Note 2) (55.5) -- --
Asset impairments (Note 4) 29.1 -- 224.0
Restructuring and other charges (Note 4) 14.7 -- 40.9
- -----------------------------------------------------------------------------------------------------------------------------
Total costs and expenses 3,724.5 4,014.4 4,201.0
- -----------------------------------------------------------------------------------------------------------------------------
Income from continuing operations before minority interests,
interest income, interest expense, income taxes and cumulative
effect of changes in accounting principles 386.1 364.0 58.0
Minority interests 5.1 6.2 8.9
Interest income 10.4 12.0 9.5
Interest expense 117.1 120.3 118.3
- -----------------------------------------------------------------------------------------------------------------------------
Income (loss) from continuing operations before income taxes
and cumulative effect of changes in accounting principles 274.3 249.5 (59.7)
Provision for (benefit from) income taxes (Note 10) 58.3 64.2 (35.2)
- -----------------------------------------------------------------------------------------------------------------------------
Income (loss) from continuing operations before cumulative
effect of changes in accounting principles 216.0 185.3 (24.5)
Discontinued operations, net of income taxes (Note 3) (3.4) (42.7) 191.4
- -----------------------------------------------------------------------------------------------------------------------------
Income before cumulative effect of changes in accounting principles 212.6 142.6 166.9
Cumulative effect of changes in accounting principles, net of income taxes (Note 1) -- (36.1) (4.5)
- -----------------------------------------------------------------------------------------------------------------------------
Net income $ 212.6 $ 106.5 $ 162.4
- -----------------------------------------------------------------------------------------------------------------------------
Basic earnings (loss) per common share (Note 1)
Continuing operations $ 6.86 $ 5.45 $ (0.67)
Discontinued operations (Note 3) (0.11) (1.26) 5.20
Cumulative effect of changes in accounting principles (Note 1) -- (1.06) (0.12)
- -----------------------------------------------------------------------------------------------------------------------------
$ 6.75 $ 3.13 $ 4.41
- -----------------------------------------------------------------------------------------------------------------------------
Diluted earnings (loss) per common share (Note 1)
Continuing operations $ 6.67 $ 5.30 $ (0.67)
Discontinued operations (Note 3) (0.10) (1.22) 5.20
Cumulative effect of changes in accounting principles (Note 1) -- (1.03) (0.12)
- -----------------------------------------------------------------------------------------------------------------------------
$ 6.57 $ 3.05 $ 4.41
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
32
<PAGE>
Consolidated Balance Sheets
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
(In millions, except share and par value data) December 31
1999 1998
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Current assets
Cash and cash equivalents $ 64.0 $ 61.7
Trade receivables, net of allowances of $14.9 in 1999 and $11.9 in 1998 635.4 840.6
Inventories (Note 5) 457.7 517.7
Other current assets 172.6 136.4
Deferred income taxes (Note 10) 86.8 125.3
- ------------------------------------------------------------------------------------------------------------------------
Total current assets 1,416.5 1,681.7
Investments 206.8 186.5
Property, plant and equipment, net (Note 8) 1,691.9 1,727.5
Goodwill and intangible assets 505.7 399.1
Other assets 88.8 118.9
Deferred income taxes (Note 10) 86.1 52.7
- ------------------------------------------------------------------------------------------------------------------------
Total assets $3,995.8 $4,166.4
- ------------------------------------------------------------------------------------------------------------------------
Liabilities and stockholders' equity
Current liabilities
Short-term debt (Note 9) $ 347.5 $ 150.6
Accounts payable, trade and other 665.5 685.8
Accrued payroll 106.9 109.3
Other current liabilities 371.6 383.3
Current portion of long-term debt (Note 9) 0.8 4.7
Current portion of accrued pensions and other postretirement benefits (Note 13) 10.5 12.1
Income taxes payable (Note 10) 73.2 66.1
- ------------------------------------------------------------------------------------------------------------------------
Total current liabilities 1,576.0 1,411.9
Long-term debt, less current portion (Note 9) 945.1 1,326.4
Accrued pension and other postretirement benefits, less current portion (Note13) 237.6 228.1
Reserve for discontinued operations and other liabilities (Note 3) 319.2 305.1
Other liabilities 128.1 92.0
Minority interests in consolidated companies 46.2 73.5
Commitments and contingent liabilities (Notes 14 and 15)
- ------------------------------------------------------------------------------------------------------------------------
Stockholders' equity (Note 12)
Preferred stock, no par value, authorized 5,000,000 shares; no shares issued in 1999 or 1998 -- --
Common stock, $0.10 par value, authorized 130,000,000 shares in 1999 and 1998;
issued 38,331,817 shares in 1999 and 38,188,586 shares in 1998 3.8 3.8
Capital in excess of par value of common stock 165.8 158.4
Retained earnings 1,288.3 1,075.7
Accumulated other comprehensive loss (203.5) (134.1)
Treasury stock, common, at cost; 7,968,230 shares in 1999 and 5,485,947 shares in 1998 (510.8) (374.4)
- ------------------------------------------------------------------------------------------------------------------------
Total stockholders' equity 743.6 729.4
- ------------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $3,995.8 $4,166.4
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
33
<PAGE>
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
(In millions) Year ended December 31
1999 1998 1997
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash provided by operating activities of continuing operations:
Income (loss) from continuing operations before cumulative
effect of changes in accounting principles $ 216.0 $ 185.3 $ (24.5)
Adjustments to reconcile income (loss) from continuing operations before
cumulative effect of changes in accounting principles to cash provided
by operating activities of continuing operations:
Depreciation and amortization 180.7 206.6 238.4
Gains on sales of businesses (Note 2) (55.5) -- --
Asset impairments (Note 4) 29.1 -- 224.0
Restructuring and other charges (Note 4) 14.7 -- 40.9
Deferred income taxes 20.6 27.4 (15.8)
Minority interests 5.1 6.2 8.9
Other (0.3) (25.8) (21.2)
Changes in operating assets and liabilities:
Accounts receivable sold 142.1 -- --
Trade receivables, net 39.4 (9.6) 73.1
Inventories 57.0 8.2 (39.9)
Other current assets and other assets 11.5 77.4 (37.8)
Accounts payable, accrued payroll, other current liabilities and other liabilities (86.8) (6.5) 97.6
Income taxes payable (1.7) (22.1) 56.8
Accrued pension and other postretirement benefits, net (13.7) (17.1) (12.5)
- ----------------------------------------------------------------------------------------------------------------------------
Cash provided by operating activities of continuing operations 558.2 430.0 588.0
- ----------------------------------------------------------------------------------------------------------------------------
Cash provided (required) by discontinued operations (Note 3) 29.1 (61.6) 353.9
- ----------------------------------------------------------------------------------------------------------------------------
Cash provided (required) by investing activities:
Acquisitions and joint ventures (286.0) -- --
Capital expenditures (236.3) (277.7) (316.7)
Sale of businesses 199.3 -- --
Disposal of property, plant and equipment 62.0 72.9 57.1
(Increase) decrease in investments 5.8 (146.7) 21.2
- ----------------------------------------------------------------------------------------------------------------------------
Cash required by investing activities (255.2) (351.5) (238.4)
- ----------------------------------------------------------------------------------------------------------------------------
Cash provided (required) by financing activities:
Net proceeds from issuance of (repayment of) commercial paper 23.9 (10.1) (252.3)
Net increase (decrease) under uncommitted credit facilities 39.7 (69.9) 60.6
Net increase (decrease) in other short-term debt (83.4) (34.2) (368.3)
Increase in long-term debt 84.6 288.6 69.7
Repayment of long-term debt (270.1) (37.3) (18.9)
Distributions to minority partners (5.9) (5.3) (8.0)
Repurchases of common stock, net (Note 12) (136.4) (156.7) (209.0)
Issuances of common stock 7.4 17.4 21.6
- ----------------------------------------------------------------------------------------------------------------------------
Cash required by financing activities (340.2) (7.5) (704.6)
- ----------------------------------------------------------------------------------------------------------------------------
Effect of exchange rate changes on cash and cash equivalents 10.4 (10.4) (11.0)
- ----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents 2.3 (1.0) (12.1)
Cash and cash equivalents, beginning of year 61.7 62.7 74.8
- ----------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of year $ 64.0 $ 61.7 $ 62.7
- ----------------------------------------------------------------------------------------------------------------------------
Supplemental cash flow information: Income taxes paid (including taxes paid related to Defense Systems operations), net of
refunds, were $40.8 million, $65.4 million and $46.0 million for 1999, 1998 and 1997, respectively. Interest payments,
excluding amounts capitalized (Note 1), for 1999, 1998 and 1997 were $121.0 million, $115.6 million and $112.0 million,
respectively.
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
34
<PAGE>
Consolidated Statements of Changes in Stockholders' Equity
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
(In millions, except par value) Accumulated
Common Capital other
stock, $0.10 in excess Retained comprehensive Treasury Comprehensive
par value of par earnings income (loss) stock income (loss)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance December 31, 1996 $3.7 $120.1 $ 806.8 $ (65.5) $ (9.3) $182.0
======
Net income 162.4 $162.4
Stock options exercised (Note 11) 0.1 20.3
Purchases of treasury shares (Note 12) (209.0)
Shares reissued 0.6 0.6
Foreign currency translation adjustment (Note 6) (70.2) (70.2)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance December 31, 1997 3.8 141.0 969.2 (135.7) (217.7) $ 92.2
======
Net income 106.5 $106.5
Stock options and awards exercised (Note 11) 17.4
Purchases of treasury shares (Note 12) (150.0)
Purchases of shares for benefit plan trust (Note 12) (6.7)
Foreign currency translation adjustment (Note 6) 1.6 1.6
- ------------------------------------------------------------------------------------------------------------------------------------
Balance December 31, 1998 3.8 158.4 1,075.7 (134.1) (374.4) $108.1
======
Net income 212.6 $212.6
Stock options and awards exercised (Note 11) 7.4
Purchases of treasury shares (Note 12) (135.9)
Net purchases of shares for benefit plan trust (Note 12) (0.5)
Foreign currency translation adjustment (Note 6) (61.9) (61.9)
Minimum pension liability adjustment (Note 13) (7.5) (7.5)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance December 31, 1999 $3.8 $165.8 $1,288.3 $ (203.5) $(510.8) $143.2
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
35
<PAGE>
GEOGRAPHIC SEGMENT INFORMATION
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Sales Year ended December 31
(In millions) 1999 1998 1997
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Third party sales (by location of customer)
United States $1,780.2 $1,909.1 $1,823.7
All other countries 2,330.4 2,469.3 2,435.3
- --------------------------------------------------------------------------------------------------------------
Total sales $4,110.6 $4,378.4 $4,259.0
- --------------------------------------------------------------------------------------------------------------
Long-lived assets December 31
(In millions) 1999 1998
- --------------------------------------------------------------------------------------------------------------
United States $1,427.3 $1,431.9
All other countries 560.2 601.0
- --------------------------------------------------------------------------------------------------------------
Total long-lived assets $1,987.5 $2,032.9
- --------------------------------------------------------------------------------------------------------------
</TABLE>
OTHER BUSINESS SEGMENT INFORMATION
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Depreciation Research and
Capital expenditures and amortization development expense
Year ended December 31 Year ended December 31 Year ended December 31
(In millions) 1999 1998 1997 1999 1998 1997 1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Energy Systems $ 14.7 $ 30.4 $ 35.4 $ 30.7 $ 35.6 $ 36.4 $ 25.7 $ 24.7 $ 20.0
Food and Transportation Systems 26.1 28.9 29.7 27.8 26.6 28.4 26.1 26.0 26.7
Agricultural Products 36.6 37.4 44.5 21.0 26.6 28.5 60.9 60.2 73.9
Specialty Chemicals 40.0 60.5 84.7 33.8 34.9 39.3 21.2 28.0 35.2
Industrial Chemicals 115.5 102.3 112.6 59.5 73.5 92.6 18.5 18.6 18.2
Corporate 3.4 6.4 9.8 7.9 9.4 13.2 -- 0.2 --
- ------------------------------------------------------------------------------------------------------------------------------
Total $236.3 $265.9 $316.7 $180.7 $206.6 $238.4 $152.4 $157.7 $174.0
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Descriptions of the company's business segments are on pages 18 through 21 of
this annual report. Sales, income (loss) from continuing operations before
income taxes and cumulative effect of changes in accounting principles, assets
and operating capital employed by business segment are on pages 16 and 17.
- --------------------------------------------------------------------------------
Order backlog (unaudited) December 31
(In millions) 1999 1998 1997
- --------------------------------------------------------------------------------
Energy Systems $593.4 $877.9 $749.6
Food and Transportation Systems $247.2 $256.0 $239.2
- --------------------------------------------------------------------------------
Backlog is not reported for Agricultural Products, Specialty Chemicals or
Industrial Chemicals due to the nature of these businesses.
36
<PAGE>
OTHER SUPPLEMENTAL INFORMATION
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Quarterly financial information (unaudited)
(In millions, except per share data and common stock prices) 1999 1998
1st 2nd 3rd 4th 1st 2nd 3rd 4th
Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr.
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales $ 974.7 $ 1,070.4 $ 1,034.3 $ 1,031.2 $1,022.4 $ 1,129.4 $ 1,110.7 $1,115.9
Income (loss) from continuing operations
before minority interests, net interest
expense, income taxes and cumulative
effect of change in accounting principle $ 69.3 $ 120.7 $ 98.5 $ 97.6 $ 61.7 $ 120.3 $ 105.8 $ 76.2
Income (loss) from continuing operations
before cumulative effect of change in
accounting principle $ 30.3 $ 68.9 $ 64.0 $ 52.8 $ 26.8 $ 67.6 $ 55.4 $ 35.5
Income (loss) from discontinued
operations, net of income taxes -- 18.0 -- (21.4) -- -- -- (42.7)
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) before cumulative effect
of change in accounting principle $ 30.3 $ 86.9 $ 64.0 $ 31.4 $ 26.8 $ 67.6 $ 55.4 $ (7.2)
Cumulative effect of change in accounting
principle -- -- -- -- (36.1) -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Net income (loss) $ 30.3 $ 86.9 $ 64.0 $ 31.4 $ (9.3) $ 67.6 $ 55.4 $ (7.2)
- ----------------------------------------------------------------------------------------------------------------------------------
Basic net income (loss) per common share:
Income (loss) before cumulative effect
of change in accounting principle $ 0.94 $ 2.73 $ 2.04 $ 1.03 $ 0.77 $ 1.95 $ 1.64 $ (0.22)
Cumulative effect of change in
accounting principle -- -- -- -- (1.04) -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
$ 0.94 $ 2.73 $ 2.04 $ 1.03 $ (0.27) $ 1.95 $ 1.64 $ (0.22)
- ----------------------------------------------------------------------------------------------------------------------------------
Diluted net income (loss) per common share:
Income (loss) before cumulative effect
of change in accounting principle $ 0.92 $ 2.65 $ 1.98 $ 1.00 $ 0.75 $ 1.89 $ 1.60 $ (0.21)
Cumulative effect of change in
accounting principle -- -- -- -- (1.01) -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
$ 0.92 $ 2.65 $ 1.98 $ 1.00 $ (0.26) $ 1.89 $ 1.60 $ (0.21)
- ----------------------------------------------------------------------------------------------------------------------------------
Weighted average shares outstanding:
Basic 32.3 31.8 31.4 30.5 34.8 34.6 33.8 32.9
Diluted 33.0 32.8 32.3 31.3 35.8 35.7 34.7 33.7
- ----------------------------------------------------------------------------------------------------------------------------------
Common stock prices:
High $ 59 3/16 $ 74 5/16 $ 70 1/2 $ 57 5/16 $ 78 5/8 $ 82 3/16 $ 69 7/16 $ 60 1/2
Low $ 48 1/2 $ 49 7/8 $ 46 1/2 $ 39 5/8 $ 62 1/4 $ 66 1/2 $ 50 9/16 $ 48 1/4
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Significant transactions that affected quarterly results in 1999 and 1998 are
described in Notes 1, 2, 3 and 4 to the consolidated financial statements.
The sum of quarterly earnings per common share may differ from full-year amounts
due to changes in the number of shares outstanding during the year.
37
<PAGE>
Notes to Consolidated Financial Statements
Note 1 Principal Accounting Policies
Nature of operations. FMC Corporation ("FMC" or "the company") is a diversified
producer of chemicals, machinery and other products for industry and
agriculture. Further descriptions of FMC's products, its principal markets and
the relative significance of its operations are included in this annual report
in Products and Markets on pages 18 through 21 and in the Business Segment Data
on pages 16 and 17.
Reclassifications. Certain prior period amounts have been reclassified to
conform with the current period's presentation.
Use of estimates. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results are likely to differ from those estimates, but
management does not believe such differences will materially affect the
company's financial position, results of operations or cash flows.
Consolidation. The consolidated financial statements include the accounts of
FMC and all significant majority owned subsidiaries and ventures except those
excluded because control is restricted or temporary in nature. All material
intercompany accounts and transactions are eliminated in consolidation.
Investments. Investments in companies in which FMC's ownership interest is 50
percent or less and in which FMC exercises significant influence over operating
and financial policies, and majority owned investments in which FMC's control is
restricted or temporary in nature, are accounted for using the equity method
after eliminating the effects of any material intercompany transactions. All
other investments are carried at their fair values or at cost, as appropriate.
Cash equivalents. The company considers investments in all highly liquid debt
instruments with original maturities of three months or less to be cash
equivalents.
Accounts receivable. Sales of accounts receivable, which the company initiated
in the fourth quarter of 1999, are reflected as a reduction of accounts
receivable of $144.0 million on the company's consolidated balance sheet at
December 31, 1999. Net discounts recognized on sales of receivables during 1999
totaling $1.9 million are included in selling, general and administrative
expenses in the consolidated statement of income for the year ended December 31,
1999. Sales of accounts receivable were without recourse and were executed
through a wholly owned subsidiary. The agreement for the sale of accounts
receivable provides for continuation of the program on a revolving basis for a
three-year period.
Inventories. Inventories are stated at the lower of cost or market value. Cost
is determined on the last-in, first-out ("LIFO") basis for all domestic
inventories, except certain inventories relating to contracts-in-progress which
are stated at the actual production cost incurred to date, reduced by amounts
identified with recognized revenue. The first-in, first-out ("FIFO") method is
used to determine the cost for all other inventories.
Inventory costs include those costs directly attributable to products prior to
sale, including all manufacturing overhead but excluding costs to distribute.
Property, plant and equipment. Property, plant and equipment, including
capitalized interest, is recorded at cost. Depreciation for financial reporting
purposes is provided principally on the straight-line basis over the estimated
useful lives of the assets (land improvements--20 years, buildings--20 to 50
years, and machinery and equipment--three to 18 years). Gains and losses are
reflected in income upon sale or retirement of assets. Expenditures that extend
the useful lives of property, plant and equipment or increase productivity are
capitalized.
Under generally accepted accounting principles, the company is required to
periodically evaluate the useful lives of its plants and equipment. As a result
of a study completed in early 1999, the company extended the depreciable lives
of certain assets in the first quarter of 1999. The new lives are within the
ranges disclosed above. The change in lives increased pretax income by $24.2
million for the year ended December 31, 1999 but did not affect depreciable
lives used for tax purposes.
The company periodically evaluates the recoverability of the net book values
of property, plant and equipment, particularly in the case of a change in
business circumstances or other triggering event, based on expected future
undiscounted cash flows for the asset or group of assets. As described further
in Note 4, the company recognized significant impairments of certain long-lived
assets during the third quarter of 1999 and the fourth quarter of 1997. The
company believes that no material unrecognized impairment of long-lived assets
exists at December 31, 1999.
Capitalized interest. Interest costs of $2.3 million in 1999 ($4.4 million in
1998 and $6.6 million in 1997) associated with the construction of certain
long-lived assets have been capitalized as part of the cost of those assets and
are being amortized over the assets' estimated useful lives.
Deferred costs and other assets. Capitalized software costs totaling $48.8
million and $58.5 million at December 31, 1999 and 1998, respectively, are
components of other assets, which also include anticipated environmental
recoveries (Note 14), bond discounts and other deferred charges.
Software costs are amortized over expected lives ranging from three to seven
years. Recoverability of deferred software costs is assessed on an ongoing basis
and write downs to net realizable value are recorded as necessary.
Goodwill and intangible assets. Goodwill and identifiable intangible assets
(such as trademarks) are amortized on a straight-line basis over their estimated
useful or legal lives, not exceeding 40 years. At each balance sheet date, the
company evaluates the recoverability of goodwill and intangible assets based on
expected future undiscounted cash flows for each operation having a significant
goodwill balance. The company believes that no goodwill or intangible assets are
materially impaired at December 31, 1999.
Accounts payable. Amounts advanced by customers as deposits on orders not yet
billed and progress payments on contracts-in-progress are recorded as accounts
payable ($182.4 million at December 31, 1999 and $175.7 million at December 31,
1998).
Revenue recognition. Product sales are recognized upon transfer of title,
which is generally upon shipment. Other revenues are recognized upon completion
of contractually required performance or upon customer acceptance, depending
upon circumstances. A significant portion of production contracts use the
percentage-of-completion method. Losses are provided for contracts-in-progress
in the period in which such losses become probable.
Income taxes. Current income taxes are provided on income reported for
financial statement purposes adjusted for transactions that do not enter into
the computation of income taxes payable. Deferred tax liabilities and assets are
recognized for the expected
38
<PAGE>
Notes to Consolidated Financial Statements
future tax consequences of temporary differences between the carrying amounts
and the tax bases of assets and liabilities. Income taxes are not provided for
the equity in undistributed earnings of foreign subsidiaries or affiliates when
it is management's intention that such earnings will remain invested in those
companies. Taxes are provided in the year the decision is made to repatriate the
earnings.
Foreign currency translation. Assets and liabilities of most foreign
operations are translated at exchange rates in effect at the balance sheet date,
and their income statements are translated at the average monthly exchange rates
for the period. For operations in non-highly inflationary countries, translation
gains and losses are recorded as a component of accumulated other comprehensive
loss in stockholders' equity until the foreign entity is sold or liquidated. For
operations in highly inflationary countries and where the local currency is not
the functional currency, inventories, property, plant and equipment, and other
noncurrent assets are converted to U.S. dollars at historical exchange rates,
and all gains or losses from conversion are included in net income. Foreign
currency effects on cash and cash equivalents and debt in hyperinflationary
economies are included in interest income or expense.
Derivative financial instruments and foreign currency transactions. The
company uses derivative financial instruments selectively to offset exposure to
market risks arising from changes in foreign exchange rates and interest rates.
Derivative financial instruments currently used by the company primarily include
foreign currency forward contracts. Contracts are executed centrally to minimize
transaction costs on currency conversions and minimize losses due to adverse
changes in foreign currency markets. The company evaluates and monitors
consolidated net exposures by currency and maturity, and external derivative
financial instruments correlate with that net exposure in all material respects.
Gains and losses on hedges of existing assets and liabilities are included in
the carrying amounts of those assets or liabilities and are ultimately
recognized in income when those carrying amounts are converted. Gains and losses
related to hedges of firm commitments also are deferred and included in the
basis of the transaction when it is completed. Gains and losses on unhedged
foreign currency transactions are included in income as part of cost of sales.
Gains and losses on derivative financial instruments that protect the company
from exposure in a particular currency, but do not currently have a designated
underlying transaction, are also included in income as part of cost of sales. If
a hedged item matures, is sold, extinguished, or terminated, or is related to an
anticipated transaction that is no longer likely to take place, the derivative
financial instrument is closed out and the related gain or loss is included in
income as part of cost of sales or interest expense as appropriate in relation
to the hedged item.
Cash flows from hedging contracts are reported in the statements of cash flows
in the same categories as the cash flows from the transactions being hedged.
Treasury stock. Shares of common stock repurchased under the company's stock
repurchase plans are recorded at cost as treasury stock and result in a
reduction of stockholders' equity in the consolidated balance sheet. When the
treasury shares are reissued under FMC's stock compensation plans, the company
uses a FIFO method for determining cost. The difference between the cost of the
shares and the reissuance price is added to or deducted from capital in excess
of par value of common stock.
Earnings (loss) per common share ("EPS"). Basic EPS is computed by dividing
net income (loss) by the weighted average number of shares of common stock
outstanding during the year. Diluted EPS is computed by dividing net income
(loss) by the weighted average number of shares of common stock outstanding
during the year plus the weighted average number of additional common shares
that would have been outstanding during the year if potentially dilutive common
shares had been issued under the company's stock compensation plans. The
weighted average numbers of shares outstanding used to calculate the company's
annual EPS are as follows:
- ------------------------------------------------------------
(In thousands) 1999 1998 1997
- ------------------------------------------------------------
Basic EPS 31,516 34,007 36,805
- ------------------------------------------------------------
Diluted EPS 32,377 34,939 36,805
- ------------------------------------------------------------
The company's loss from continuing operations in 1997 results in an
antidilutive effect in the calculation of diluted EPS. Accordingly, the
potential common shares that cause the antidilutive effect have been omitted
from the calculation of 1997 diluted EPS.
At December 31, 1999, common shares outstanding plus dilutive potential common
shares totaled 31,260,524 shares.
Segment information. The company's determination of its reportable segments on
the basis of its strategic business units and the commonalities among the
products and services within each segment corresponds to the manner in which the
company's management reviews and evaluates operating performance. The company
has combined certain similar operating segments that meet applicable criteria
established under Statement of Financial Accounting Standards ("SFAS") No. 131.
Energy Systems supplies drilling, engineering, metering and subsea products
and systems and related services to the oil and gas exploration industry. Food
and Transportation Systems businesses provide automated processing and handling
equipment to consumer-based industries. Agricultural Products produces crop
protection and pest control chemicals for worldwide markets. Specialty Chemicals
develops and manufactures highly specialized chemical products used in food,
pharmaceutical and personal care products. Industrial Chemicals provides
commodity-based chemicals produced in large quantities to industrial consumers.
Business segment data are included on pages 16, 17 and 36.
Segment operating profit is defined as total revenue less operating expenses.
The following items have been excluded in computing segment operating profit:
corporate staff expense, interest income and expense associated with corporate
debt facilities and investments, income taxes, significant gains or losses on
abnormal retirements of assets, gains on sales of businesses (Note 2),
restructuring and other charges (Note 4), asset impairments (Note 4), a 1995
gain on the sale of FMC Wyoming stock, LIFO inventory adjustments and other
income and expense items.
Segment assets and liabilities are those assets and liabilities that are
recorded and reported by segment operations. Segment operating capital employed
represents segment assets less segment liabilities. Segment assets exclude
corporate and other assets, which are principally cash equivalents, LIFO
reserves, deferred income tax benefits, eliminations of intercompany
receivables, property and equipment not attributable to a specific segment and
credits relating to the sale of receivables and the deferred gain on the sale
and leaseback of equipment. Segment liabilities exclude substantially all debt,
income taxes, pension and other postretirement benefit liabilities,
environmental reserves, restructuring reserves, intercompany eliminations and
reserves for discontinued operations.
39
<PAGE>
Notes to Consolidated Financial Statements
Geographic segment sales represent sales by location of the company's
customers. Geographic segment long-lived assets include investments, net
property, plant and equipment, and other non-current assets. Geographic segment
data is included on page 36.
Environmental obligations. The company provides for environmental-related
obligations when they are probable and amounts can be reasonably estimated.
Where the available information is sufficient to estimate the amount of
liability, that estimate has been used; where the information is only sufficient
to establish a range of probable liability and no point within the range is more
likely than any other, the lower end of the range has been used.
Estimated obligations to remediate sites that involve the United States
Environmental Protection Agency ("EPA"), or similar government agencies, are
generally accrued no later than when a Record of Decision ("ROD"), or
equivalent, is issued, or upon completion of a Remedial
Investigation/Feasibility Study ("RI/FS") that is accepted by FMC and the
appropriate government agency or agencies. Estimates are reviewed quarterly by
the company's environmental remediation management, as well as by financial and
legal management and, if necessary, adjusted as additional information becomes
available. The estimates can change substantially as additional information
becomes available regarding the nature or extent of site contamination, required
remediation methods, and other actions by or against governmental agencies or
private parties.
The company's environmental liabilities for continuing and discontinued
operations are principally for costs associated with the remediation and/or
study of sites at which the company is alleged to have disposed of hazardous
substances. Such costs include, among other items, RI/FS, site remediation,
costs of operation and maintenance of the remediation plan, fees to outside law
firms and consultants for work related to the environmental effort, and future
monitoring costs. Estimated site liabilities are determined based upon existing
remediation laws and technologies, specific site consultants' engineering
studies or by extrapolating experience with environmental issues at comparable
sites.
Provisions for environmental costs are reflected in income, net of probable
and reasonably estimable recoveries from named Potentially Responsible Parties
("PRPs") or other third parties. Such provisions incorporate inflation and are
not discounted to their present values.
In calculating and evaluating the adequacy of its environmental reserves, the
company has taken into account the joint and several liability imposed by the
Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA")
and the analogous state laws on all PRPs and has considered the identity and
financial condition of each of the other PRPs at each site to the extent
possible. The company has also considered the identity and financial condition
of other third parties from whom recovery is anticipated, as well as the status
of the company's claims against such parties. In general, the company is aware
of a degree of uncertainty in disputes regarding the financial contribution by
certain named PRPs, which is common to most multi-party sites. Although the
company is unable to forecast the ultimate contributions of PRPs and other third
parties with absolute certainty, the degree of uncertainty with respect to each
party is taken into account when determining the environmental reserve by
adjusting the reserve to reflect the facts and circumstances on a site-by-site
basis. The company believes that recorded recoveries related to PRPs are
realizable in all material respects. Recoveries relating to continuing
operations are recorded as other assets at December 31, 1998, and those relating
to discontinued operations are recorded in the reserve for discontinued
operations and other liabilities at December 31, 1999 and 1998.
Accounting standards adopted. The company adopted AICPA Statement of Position
("SOP") No. 98-5, "Reporting on the Costs of Start-Up Activities", effective
January 1, 1998. SOP No. 98-5 requires that costs of start-up activities,
including organizational costs, be expensed as incurred. In conjunction with the
adoption, the company charged $46.5 million ($36.1 million after tax, or $1.03
per share on a diluted basis) to expense, which was reported as the cumulative
effect of a change in accounting principle. The expense represented the
write-off of costs related to the start-up of manufacturing at the Salar del
Hombre Muerto lithium facility in Argentina; the Baltimore, Maryland,
sulfentrazone facility; and the Bayport, Texas, hydrogen peroxide plant
expansion.
During the quarter ended March 31, 1998, the company adopted SFAS No. 130,
"Reporting Comprehensive Income". SFAS No. 130 establishes standards for the
reporting and display of comprehensive income and its components (revenues,
expenses, gains and losses) in a full set of general-purpose financial
statements. Comprehensive income includes all changes in stockholders' equity
during the period except those resulting from investments by owners and
distributions to owners.
The company adopted SFAS No. 131, "Disclosures about Segments of an Enterprise
and Related Information", for the period ended December 31, 1998. (See Segment
information above.)
In the fourth quarter of 1997, the company adopted the requirements of the
Emerging Issues Task Force consensus on Issue No. 97-13 ("EITF 97-13"),
"Accounting for Costs Incurred in Connection with a Consulting Contract or an
Internal Project That Combines Business Process Reengineering and Information
Technology Transformation". In conjunction with the adoption, the company
charged $7.6 million ($4.5 million after tax, or $0.12 per share on a diluted
basis) to expense, which was reported as the cumulative effect of a change in
accounting principle. The expense represented the write-off of business process
reengineering costs capitalized prior to October 1, 1997. Had the consensus in
EITF 97-13 been applied historically by the company, net income in 1997 would
have been $166.6 million ($4.53 per share on a diluted basis).
Accounting standard not adopted. SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities", is effective (as amended) for financial
statements for fiscal years beginning after June 15, 2000, but may be adopted in
earlier periods. The company is evaluating the new standard's provisions and has
not yet determined what the effect of SFAS No. 133 will be on the earnings and
the financial position of the company. The company intends to adopt the standard
on January 1, 2001.
Note 2 Business Combinations and Divestitures
Acquisitions. On June 30, 1999, FMC acquired the assets of Tg Soda Ash, Inc.
("TgSA") from Elf Atochem North America, Inc. for approximately $51 million in
cash and a contingent payment due at year-end 2003. The contingent payment
amount, which will be based on the financial performance of the combined soda
ash operations between 2001 and 2003, cannot currently be determined but could
be as much as $100 million. No goodwill was recorded as a result of this
transaction. TgSA's operations are included in the Industrial Chemicals segment.
40
<PAGE>
Notes to Consolidated Financial Statements
Also on June 30, 1999, the company completed the acquisition of the assets of
Pronova Biopolymer AS ("Pronova") from a wholly owned subsidiary of Norsk Hydro
for approximately $184 million in cash. The company made an additional payment
of $3.3 million in January 2000 as final settlement of the transaction. Pronova,
headquartered in Drammen, Norway, is a leading producer of alginates used in the
pharmaceutical, food and industrial markets. The company has recorded goodwill
(to be amortized over 30 years) and other intangible assets totalling
approximately $135.0 million on a preliminary basis related to the acquisition.
Pronova's operations are included in the Specialty Chemicals segment.
In August 1998, the company acquired a majority of the common stock of CBV
Industria Mecanica S.A. ("CBV"), the leading wellhead manufacturer in Brazil.
With the acquisition, FMC's previous minority equity position and a subsequent
tender offer for the remaining outstanding shares of CBV, the company owns 98
percent of CBV's voting shares. CBV's operations are included in the Energy
Systems segment.
The company completed a number of smaller acquisitions and joint ventures
during the years ended December 31, 1999, 1998 and 1997.
All acquisitions were accounted for using the purchase method of accounting
and, accordingly, the purchase prices have been allocated to the assets acquired
and liabilities assumed based on the estimated fair values of such assets and
liabilities at the date of acquisition. The excess of the purchase prices over
the fair values of the net tangible assets acquired has been recorded as
intangible assets, primarily goodwill, which are amortized over periods ranging
from 10 to 40 years.
The purchase prices for all the aforementioned acquisitions were satisfied
from cash flows from operations and short-term and long-term financing. Results
of operations of the acquired companies have been included in the company's
consolidated statements of income from the respective dates of acquisition.
Divestitures. On July 9, 1999, the company completed the sale of its
bioproducts business to Cambrex Corporation for $38.0 million in cash, resulting
in a pre-tax gain of $20.1 million ($12.2 million after tax, or $0.38 per
share). The bioproducts business was included in the Specialty Chemicals segment
and had 1998 sales of approximately $25 million.
On July 31, 1999, FMC completed the sale of its process additives business to
Great Lakes Chemical Corporation for $161.8 million in cash, resulting in a gain
of $35.4 million on both a pre-tax and after-tax basis ($1.09 per share). The
process additives business was included in the Specialty Chemicals segment and
had 1998 sales of approximately $166 million from its operations in Manchester,
England and Nitro, West Virginia.
In July 1998, the company completed the sale of Crosby Valve to a subsidiary
of Tyco International Ltd. for cash and Tyco International Ltd. ("Tyco")
preferred stock. The preferred stock is guaranteed by Tyco and can be sold to
either the issuing subsidiary or Tyco three years after issuance. Crosby Valve
was included in the Energy Systems segment.
The company sold its Defense Systems operations in 1997 (Note 3). The company
also completed a number of smaller divestitures during the years ended December
31, 1999, 1998 and 1997.
Joint ventures. On April 30, 1999, FMC and Solutia Inc announced an agreement
to form a joint venture, which will include the North American and Brazilian
phosphorus chemicals operations of both companies. The joint venture, which will
be named Astaris LLC, will be a limited liability corporation owned equally by
FMC and Solutia Inc. Formation of Astaris LLC is subject to a government
approval process, which is expected to be completed in the first quarter of
2000. FMC's portion of the joint venture's results will be included in the
company's Industrial Chemicals segment.
Beginning in July 1995, Sumitomo Corporation and Nippon Sheet Glass Company,
Ltd. ("minority owners") owned 20 percent of the common stock of FMC Wyoming
Corporation, FMC's soda ash business. Effective July 1, 1999, in conjunction
with the acquisition of TgSA, the interests of the minority owners were diluted
to 12.5 percent as a result of FMC's disproportionate investment in TgSA and
certain future capital projects. FMC retains management control of FMC Wyoming
Corporation.
Note 3 Discontinued Operations
The company's results of discontinued operations for the years ended December
31, 1999, 1998 and 1997 comprise the following:
- -----------------------------------------------------------------------
(In millions) 1999 1998 1997
- -----------------------------------------------------------------------
Provision for liabilities related
to previously discontinued
operations (net of income
tax benefits of $23.2 in
1999, $27.3 in 1998 and
$18.0 in 1997) $(36.2) $(42.7) $(27.0)
Gain on sale of Defense Systems
properties (net of income
taxes of $20.9) 32.8 -- --
Gain on sale of Defense Systems
operations (net of income
taxes of $138.7) -- -- 179.7
Income from operations of
Defense Systems segment
through August 25, 1997
(net of income taxes of $25.5) -- -- 38.7
- -----------------------------------------------------------------------
Discontinued operations,
net of income taxes $ (3.4) $(42.7) $191.4
- -----------------------------------------------------------------------
In the fourth quarter of 1999, FMC provided $59.4 million ($36.2 million after
tax) related to previously discontinued and other operations. Of the total,
$25.9 million, net of anticipated recoveries of $8.9 million, was recorded to
provide for updated estimates of environmental remediation costs, primarily at
the company's former Defense Systems sites. An additional $18.1 million related
to increased actuarial estimates of the company's long-term liabilities for
general liability and workers' compensation, net of a reduction in estimated
asbestos-related liabilities of $9.1 million. Interest charges for post
employment benefit obligations were $2.7 million, and the remaining charges
related to estimated legal defense, property maintenance and other costs,
primarily related to the discontinued Defense Systems business.
In the fourth quarter of 1998, FMC provided $70.0 million ($42.7 million after
tax) for environmental costs net of anticipated recoveries of $19.8 million. The
majority of the charge related to an agreement the company reached with the EPA
and the U.S. Department of Justice ("DOJ") regarding settlement of past costs
and future clean-up work at the discontinued fiber manufacturing site in Front
Royal, Virginia (Note 14).
41
<PAGE>
Notes to Consolidated Financial Statements
In the fourth quarter of 1997, FMC provided $45.0 million ($27.0 million after
tax) for environmental costs at a number of sites based on the company's
quarterly assessment of future remediation costs.
Reserve for discontinued operations and other liabilities. With the exception
of certain real estate for which FMC has short-term or long-term remediation
obligations, disposal of assets related to discontinued operations has been
completed in accordance with plans adopted within one year of the measurement
dates. In addition to the 1997 sale of the company's Defense Systems operations,
residual liabilities relate to operations discontinued between 1976 and 1984--
primarily the Film and Fiber, Chlor-Alkali, Power Transmission and Construction
Equipment businesses. Most residual liabilities are of a long-term nature and
will be settled over a number of years. Liabilities remaining with FMC total
$319.2 million at December 31, 1999 ($305.1 million at December 31, 1998) and
comprise $183.9 million (net of $60.2 million in anticipated third party
recoveries) for environmental remediation and study obligations, most of which
relate to former chemical plant sites; $63.9 million for product liability,
asbestos and other potential claims principally related to the discontinued
Construction Equipment and Chlor-Alkali businesses; $59.8 million for retiree
medical and life insurance benefits provided to employees of former chemical
businesses and the Construction Equipment business; and $11.6 million related to
the sale of the Defense Systems operations.
The company uses actuarial methods, to the extent practicable, to monitor the
adequacy of product liability and retiree benefit reserves on an ongoing basis.
The environmental liabilities are subject to the accounting and review practices
described in Notes 1 and 14. While the amounts required to settle the company's
liabilities for discontinued operations could ultimately differ materially from
the estimates used as a basis for recording these liabilities, management
believes that changes in estimates or required expenditures for any individual
cost component will not have a material adverse impact on the company's
liquidity or financial condition in any single year and that, in any event, such
costs will be satisfied over many years. Spending in 1999, 1998 and 1997,
respectively, included $64.2 million, $52.8 million and $47.7 million for
environmental obligations; $12.2 million, $20.1 million and $10.2 million for
product liability and other claims; $4.7 million, $6.3 million and $4.5 million
for retiree benefits; and $5.2 million related to net settlements of Defense
Systems obligations. Environmental recoveries in 1999, 1998 and 1997 were $56.9
million, $4.4 million and $3.3 million, respectively. In 1998, $15.5 million of
assets related to Defense Systems were charged against previously-established
reserves.
Sale of Defense Systems operations. On October 6, 1997, FMC, Harsco
Corporation and Harsco UDLP Corporation ("Harsco") sold United Defense, L.P.
("UDLP") and certain other assets comprising FMC's Defense Systems business to
an affiliate of The Carlyle Group ("Carlyle") for $850.0 million. FMC was the
managing general partner and 60 percent owner of UDLP, and Harsco owned the
remaining 40 percent.
The gross sale proceeds to FMC and Harsco consisted of $800.0 million cash and
a $50.0 million, 8.75 percent note receivable to FMC from Carlyle. Of the
estimated proceeds, FMC received $460.0 million in cash (subject to adjustment
based on certain closing balance sheet items) and recognized a gain on the
transaction of $318.4 million ($179.7 million after tax) during the fourth
quarter of 1997. During the third quarter of 1998, all parties to the
transaction reached an agreement on closing balance sheet adjustments, and FMC
collected the note receivable net of an immaterial cash settlement to reflect
those adjustments. The final settlement did not result in any adjustment to
FMC's previously recorded gain. FMC used cash proceeds from the sale to retire
variable rate debt and commercial paper and contribute toward its common stock
repurchase program.
During the year ended December 31, 1999, FMC sold several real estate
properties formerly used by Defense Systems operations. In the second quarter,
FMC received $33.5 million in cash, recognizing a gain of $29.5 million ($18.0
million after tax), and in the fourth quarter, FMC received $31.0 million in
cash, recognizing a gain of $24.2 million ($14.8 million after tax), related to
property sales.
Sales of the Defense Systems segment were $918.9 million for the period from
January 1, 1997 through August 25, 1997.
Note 4 Asset Impairments and Restructuring and Other Charges
In the third quarter of 1999, FMC recorded asset impairments of $29.1 million
($17.8 million after tax, or $0.55 per share on a diluted basis), and
restructuring and other one-time charges of $14.7 million ($9.0 million after
tax, or $0.28 per share).
Asset impairments of $20.7 million were required to write off the remaining
net book values of two U.S. lithium facilities. Both facilities were constructed
to run pilot and development quantities for new lithium-based products. During
the third quarter of 1999, management determined that it would not be feasible
to use the facilities as currently configured.
Additionally, an impairment charge of $8.4 million was required to write off
the remaining net book value of a small caustic soda facility in Green River,
Wyoming. Estimated future cash flows related to this facility indicated that an
impairment of the full value had occurred.
Restructuring and other one-time charges of $14.7 million resulted primarily
from strategic decisions to divest or restructure a number of businesses and
support departments, including certain food machinery, agricultural products,
and energy systems operations and certain corporate and shared service support
departments. Of the total charge, $2.9 million related to actions, including
headcount reductions, required to achieve planned synergies from recently
acquired businesses in Specialty Chemicals and Energy Systems. Restructuring
spending under all 1999 programs totaled $4.7 million in 1999 and includes
severence payments for approximately 225 individuals. The remaining
restructuring reserves related to these programs are $10.0 million at December
31, 1999, and are expected to be utilized by the fourth quarter of 2000. The
majority of cost savings related to these programs will be realized in 2000 and
beyond.
FMC recorded pretax charges of $264.9 million ($180.9 million after tax, or
$4.92 per share on a diluted basis) in the fourth quarter of 1997. Of this
amount, $224.0 million ($154.0 million after tax, or $4.19 per share) related to
asset impairments primarily in the phosphorus chemicals and process additives
businesses, and $40.9 million ($26.9 million after tax, or $0.73 per share) was
provided to cover restructuring and other activities in several businesses.
Restructuring and other reserves related to the 1997 charge totaled $3.5 million
and $12.3 million at December 31, 1999 and 1998, respectively. Restructuring
spending in 1999, 1998 and 1997 related to these reserves was $8.8 million,
$16.9 million and $6.7 million, respectively.
42
<PAGE>
Notes to Consolidated Financial Statements
In the phosphorus chemicals business, the 1997 asset impairments of $120.0
million were based on increased environmental capital cost estimates and
difficult market conditions resulting from increased international competition.
The increased capital costs included environmental projects to reduce air
emissions and meet waste handling and waste pond treatment requirements at the
company's Pocatello, Idaho, facility (Note 14).
In the United Kingdom-based process additives business, the 1997 asset
impairments of $46.0 million, including the impairment of $19.8 million of
goodwill, reflected lower expected future cash flows resulting from increased
market competition in the flame retardant and water treatment businesses, as
well as the strength of the British pound.
Additional asset impairments of $58.0 million primarily related to a partial
re-engineering of the Authority herbicide plant, certain assets at both the
lithium facility in North Carolina and the food ingredients facility in Cork,
Ireland, and unused patents in the airport products business.
The fair values of impaired assets were determined using discounted cash flow
models and assumptions based on management's estimates.
Restructuring and other charges in 1997 of $40.9 million related to the Energy
Systems businesses ($17.9 million), the Agricultural Products business ($13.0
million), and the Food and Transportation Systems businesses ($10.0 million).
Note 5 Inventories
Inventories are recorded at the lower of cost or market value. At December 31,
1999, inventories accounted for under the LIFO method totaled $139.9 million.
The current replacement costs of inventories exceeded their recorded values by
$299.5 million at December 31, 1999 and $292.9 million at December 31, 1998.
During 1999, the company reduced certain LIFO inventories that were carried at
lower than prevailing costs, resulting in a reduction of LIFO expense of $3.6
million. There were no reductions in LIFO inventories during 1998 or 1997.
Note 6 Foreign Currency
Net income for 1999, 1998 and 1997 included aggregate foreign currency
gains/(losses) of $6.0 million, $(7.7) million and $0.8 million, respectively.
Currency-related gains in 1999 resulted primarily from the rebound of the
Brazilian real subsequent to its early 1999 devaluation (Note 7). Weakening
European currencies, primarily the Spanish peseta, partially offset the 1999
effects of the stronger Canadian dollar and Japanese yen. European and certain
Southeast Asian currencies were fairly stable against the U.S. dollar in 1998
while the Canadian dollar and Mexican peso weakened. Also in 1998, the Japanese
yen reversed its previous trend and strengthened. The U.S. dollar strengthened
significantly against most currencies in 1997.
The following table presents the foreign currency adjustments to key balance
sheet categories and the offsetting adjustments to accumulated other
comprehensive income or to income at December 31:
- -------------------------------------------------------------------------
Gains (Losses)
- -------------------------------------------------------------------------
(In millions) 1999 1998 1997
- -------------------------------------------------------------------------
Cash and cash equivalents $ 10.4 $(10.4) $(11.0)
Other working capital (26.2) (1.5) (19.5)
Property, plant & equipment, net (24.5) 2.5 (38.5)
Investments 5.4 (2.4) (3.0)
Debt 0.5 1.6 1.5
Other (21.5) 4.1 1.1
- -------------------------------------------------------------------------
$(55.9) $ (6.1) $(69.4)
- -------------------------------------------------------------------------
Other comprehensive income (loss) $(61.9) $ 1.6 $(70.2)
Gain (loss) in income 6.0 (7.7) 0.8
- -------------------------------------------------------------------------
$(55.9) $ (6.1) $(69.4)
- -------------------------------------------------------------------------
Note 7 Financial Instruments
Fair value disclosures. The carrying amounts of cash and cash equivalents, trade
receivables, other current assets, accounts payable and amounts included in
investments and accruals meeting the definition of a financial instrument
approximate fair value. The carrying amounts and related estimated fair values
for the company's remaining financial instruments are as follows:
- -------------------------------------------------------------------------
December 31, 1999
- -------------------------------------------------------------------------
Carrying Estimated
(In millions) Amount Fair Value
- -------------------------------------------------------------------------
Liabilities
- -------------------------------------------------------------------------
Foreign exchange forward contracts $ 14.1 $ 12.0
Total debt $1,293.4 $1,258.3
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
December 31, 1998
- -------------------------------------------------------------------------
Carrying Estimated
(In millions) Amount Fair Value
- -------------------------------------------------------------------------
Liabilities
- -------------------------------------------------------------------------
Interest rate swap agreement $ -- $ 0.8
Foreign exchange forward contracts $ 3.9 $ 118.3
Total debt $1,481.7 $1,473.5
- -------------------------------------------------------------------------
Fair values of debt have been determined through a combination of management
estimates and information obtained from independent third parties using market
data, such as bid/ask spreads, available on the last business day of the year.
Fair values relating to derivative financial instruments reflect the estimated
amounts that the company would receive or pay to terminate the contracts at the
reporting date based on quoted market prices of comparable contracts as of
December 31.
Derivative financial instruments. At December 31, 1999, derivative financial
instruments consist primarily of foreign exchange forward contracts. The company
entered into these agreements to manage the currency risk associated with
purchases and sales denominated in currencies other than the U.S. dollar.
Substantially all of the foreign exchange forward contracts relate to
receivables, payables and intercompany transactions and are accounted for as
hedges.
43
<PAGE>
Notes to Consolidated Financial Statements
As of December 31, 1999 and 1998, the company held foreign exchange forward
contracts with notional amounts of $563.2 million and $610.8 million,
respectively, in which foreign currencies (primarily Norwegian krone, British
pound and euro in 1999 and Norwegian krone, Belgian franc, British pound and
Spanish peseta in 1998) were purchased, and approximately $574.8 million and
$886.8 million, respectively, in which foreign currencies (primarily euro,
Swedish krona, British pound and Japanese yen in 1999 and Norwegian krone,
Swedish krona, Belgian franc, Japanese yen and Brazilian real in 1998) were
sold. Notional amounts are used to measure the volume of derivative financial
instruments and do not represent potential gain or loss on these agreements.
During 1998, the company entered into forward contracts with a notional value
of $65.0 million to offset various risks associated with the potential
devaluation of the Brazilian real. The contracts matured in 1999, subsequent to
the devaluation of the real. Losses from the decline in value of the company's
real-denominated investments during the 1999 devaluation, as well as 1999
economic losses related to the Brazilian economic crisis, were offset by gains
on the forward contracts.
Standby letters of credit and financial guarantees. In the ordinary course of
business with customers, vendors and others, the company is contingently liable
for performance under letters of credit and other financial guarantees totaling
approximately $138 million at December 31, 1999. Management does not believe it
is practicable to estimate the fair value of these financial instruments and
does not expect any material losses from their resolution since performance is
not likely to be required.
Note 8 Property, Plant and Equipment
Property, plant and equipment consists of the following:
- ----------------------------------------------------------------------
December 31
(In millions) 1999 1998
- ----------------------------------------------------------------------
Land and land improvements $ 200.5 $ 181.6
Buildings 534.3 526.7
Machinery and equipment 2,879.4 2,968.7
Construction in progress 109.8 147.7
- ----------------------------------------------------------------------
Total cost 3,724.0 3,824.7
Accumulated depreciation 2,032.1 2,097.2
- ----------------------------------------------------------------------
Net property, plant and equipment $1,691.9 $1,727.5
- ----------------------------------------------------------------------
Depreciation expense was $162.7 million, $189.0 million and $218.3 million in
1999, 1998 and 1997, respectively.
In December 1999, the company entered into an agreement for the sale and
leaseback of certain equipment. The company has annual purchase options at
projected future fair market values under the agreements and may renew the lease
annually for up to five years. The leases are classified as operating leases in
accordance with SFAS No. 13, "Accounting for Leases". A non-amortizing deferred
credit of $23.4 million was recorded in conjunction with the sale transaction
and is included in other long-term liabilities at December 31, 1999. Net
property, plant and equipment was reduced by $29.1 million as a result of the
sale-leaseback, and the company received net cash proceeds of $52.1 million.
Note 9 Debt
Long-term debt. Long-term debt consists of the following:
- ----------------------------------------------------------------------
December 31
(In millions) 1999 1998
- ----------------------------------------------------------------------
Revolving credit facility (effective rate:
1999--n/a; 1998--10.0%)/(1)/ $ -- $ --
Commercial paper (effective rate:
1998--5.8%)/(2)/ -- 149.9
Uncommitted credit facilities (effective
rate: 1998--5.8%)/(2)/ -- 50.1
Pollution control and industrial revenue
bonds, 3.2% to 7.1%, due 2000 to 2032 204.7 159.3
Senior debt, 6.375%, due 2003, less
unamortized discount (1999--$0.4;
1998--$0.5), effective rate 6.4% 199.6 199.5
Senior debt, 7.75%, due 2011, less
unamortized discount (1999--$0.9; 1998--$0.9),
effective rate 7.9% 99.1 99.1
Senior debt, 8.75%, due 1999 -- 250.0
Medium-term notes, 6.38% to 7.32%, due
2002 to 2008, less unamortized discounts
(1999--$1.5, 1998--$1.4), effective
rates 6.4% to 7.4% 393.5 358.6
Exchangeable senior subordinated debentures,
6.75%, due 2005 48.4 64.1
Other 0.6 0.5
- ----------------------------------------------------------------------
Total 945.9 1,331.1
Less current portion 0.8 4.7
- ----------------------------------------------------------------------
Long-term portion $ 945.1 $1,326.4
- ----------------------------------------------------------------------
/(1)/ The effective rate for the revolving credit facility is based on average
balances outstanding during the year and includes facility fees. During
1999, there were no balances outstanding. Facility fees in 1999 were $0.9
million.
/(2)/ The effective rates for commercial paper and uncommitted facilities are
based on average balances outstanding during the year. Outstanding
balances related to short-term commercial paper and uncommitted facilities
were classified as long-term at December 31, 1998.
In December 1996, the company entered into a $450.0 million, five-year non-
amortizing revolving credit agreement due December 2001. In July 1999, the
company renewed a $350.0 million, 364-day non-amortizing revolving credit
agreement due July 2000. These agreements provide the company with $800.0
million in committed credit facilities. No amounts were outstanding under these
credit facilities as of December 31, 1999 and 1998. Among other restrictions,
the credit agreements contain covenants relating to liens, consolidated net
worth and cash flow coverage (as defined in the agreements). The company is in
compliance with all financial debt covenants.
Committed credit available under the revolving credit facilities provides
management with the ability to refinance a portion of its debt on a long-term
basis. At December 31, 1998, $149.9 million in outstanding commercial paper,
which is supported by credit facilities, $250.0 million of senior debt due in
1999 and $50.1 million of borrowings under short-term uncommitted credit
facilities were classified as long-term debt.
44
<PAGE>
Notes to Consolidated Financial Statements
On August 3, 1998, a new universal shelf registration statement became
effective, under which $500.0 million of debt and/or equity securities may be
offered. This registration statement incorporated $160.0 million of unused
capacity from the company's 1995 shelf registration statement. During 1997, the
company issued $70.0 million of medium-term notes at rates ranging from 7.2
percent to 7.32 percent. The net proceeds of $69.6 million were used to retire
short-term borrowings. During 1998, the company issued $290.0 million of
medium-term notes at rates ranging from 6.6 percent to 7.125 percent. The net
proceeds of $288.6 million were used to retire other borrowings and repurchase
FMC common stock. During 1999, the company issued $35.0 million of medium-term
notes at rates ranging from 6.38 percent to 6.53 percent. The net proceeds of
$34.9 million were used to retire other borrowings and repurchase FMC common
stock. Unused capacity of $345.0 million remains available under the 1998 shelf
registration at December 31, 1999.
In 1999, the company borrowed $50.0 million at 6.45 percent interest maturing
in 2032 from the proceeds of Power County, Idaho's Solid Waste Industrial
Development Revenue Bonds. Undrawn proceeds of $21.1 million are included in
investments in the consolidated balance sheet at December 31, 1999 and will be
used to fund phosphorus capital projects related to solid waste disposal.
During 1999, $250.0 million of senior debt matured and was repaid with cash
flows from operations and other borrowings.
The exchangeable senior subordinated debentures bearing interest at 6.75
percent and maturing in 2005 are exchangeable at any time into Meridian Gold
Inc. common stock at an exchange price of $15.125 per share, subject to
adjustment. The company may, at its option, pay an amount equal to the market
price of Meridian Gold Inc. common stock in lieu of delivery of the shares.
However, the market price at December 31, 1999 was substantially below $15.125
per share. The debentures are subordinated in right of payment to all existing
and future senior indebtedness of the company. The debentures are redeemable at
the option of FMC at prices decreasing from 103.375 percent of the face amount
on January 16, 1995, to par on January 16, 2000. The company redeemed $15.7
million of these debentures in 1999.
Aggregate maturities and sinking fund requirements over the next five years
are (in millions): 2000-$0.8, 2001-$22.8, 2002-$135.5, 2003-$226.4, 2004-$0.5,
and thereafter-$559.9.
Short-term debt. At December 31, 1999, short-term debt consisted of commercial
paper, borrowings under uncommitted credit facilities and foreign borrowings. At
December 31, 1998, components of short-term debt were domestic and foreign
borrowings.
In November 1995, the company commenced a short-term commercial paper program,
supported by committed credit facilities, providing for the issuance of up to
$500.0 million in aggregate maturity value of commercial paper at any given
time. Three-day commercial paper of $190.8 million was outstanding at December
31, 1999. At December 31, 1998, $149.9 million of outstanding commercial paper
was classified as long-term debt. Effective interest rates on commercial paper
were 5.4 percent and 5.8 percent at December 31,1999 and 1998, respectively.
Advances under uncommitted credit facilities were $89.8 million and $68.0
million at December 31, 1999 and 1998, respectively. (As described above, $50.1
million of the outstanding balance at December 31, 1998 was classified as
long-term debt.) At December 31, 1999 and 1998, effective interest rates on the
uncommitted credit facilities were 5.3 percent and 5.7 percent, respectively.
Outstanding foreign short-term borrowings totaled $66.9 million and $132.7
million at December 31, 1999 and 1998, respectively. The weighted average
interest rates on outstanding foreign short-term borrowings at December 31, 1999
and 1998 were 10.7 percent and 10.1 percent, respectively. The average interest
rates have been adjusted for currency devaluation associated with borrowing in
hyperinflationary countries.
Compensating balance agreements. FMC maintains informal credit arrangements in
many foreign countries. Foreign lines of credit, which include overdraft
facilities, typically do not require the maintenance of compensating balances,
as credit extension is not guaranteed but is subject to the availability of
funds.
Note 10 Income Taxes
Domestic and foreign components of income (loss) from continuing operations
before income taxes and the cumulative effect of changes in accounting
principles are shown below:
- ---------------------------------------------------------------------------
Year Ended December 31
(In millions) 1999 1998 1997
- ---------------------------------------------------------------------------
Domestic $ 37.3 $127.9 $(174.2)
Foreign 237.0 121.6 114.5
- ---------------------------------------------------------------------------
Total $274.3 $249.5 $ (59.7)
- ---------------------------------------------------------------------------
The provision for (benefit from) income taxes attributable to income (loss)
from continuing operations before the cumulative effect of changes in accounting
principles consists of:
- ---------------------------------------------------------------------------
Year Ended December 31
(In millions) 1999 1998 1997
- ---------------------------------------------------------------------------
Current:
Federal $ 8.9 $ 17.1 $ (33.0)
Foreign 29.0 15.6 17.3
State and local (0.2) 4.1 (3.7)
- ---------------------------------------------------------------------------
Total current 37.7 36.8 (19.4)
Deferred 20.6 27.4 (15.8)
- ---------------------------------------------------------------------------
Total $ 58.3 $ 64.2 $ (35.2)
- ---------------------------------------------------------------------------
Total income tax provisions (benefits) were allocated as follows:
- ---------------------------------------------------------------------------
Year Ended December 31
(In millions) 1999 1998 1997
- ---------------------------------------------------------------------------
Continuing operations before
the cumulative effect of
changes in accounting
principles $ 58.3 $ 64.2 $ (35.2)
Discontinued operations (2.3) (27.3) 146.2
Cumulative effect of changes
in accounting principles -- (10.4) (3.1)
Items charged directly to
stockholders' equity (1.1) (3.0) (7.1)
- ---------------------------------------------------------------------------
Income tax provision $ 54.9 $ 23.5 $ 100.8
- ---------------------------------------------------------------------------
45
<PAGE>
Notes to Consolidated Financial Statements
Significant components of the deferred income tax provision (benefit)
attributable to income (loss) from continuing operations before income taxes and
the cumulative effect of changes in accounting principles are as follows:
- --------------------------------------------------------------------------
Year Ended December 31
(In millions) 1999 1998 1997
- --------------------------------------------------------------------------
Deferred tax (exclusive of
the valuation allowance) $ 8.4 $ 21.5 $ (10.9)
Increase (decrease) in the
valuation allowance for
deferred tax assets 12.2 5.9 (4.9)
- ---------------------------------------------------------------------------
Deferred income tax provision
(benefit) $ 20.6 $ 27.4 $ (15.8)
- ---------------------------------------------------------------------------
Significant components of the company's deferred tax assets and liabilities
are as follows:
- --------------------------------------------------------------------------
Year Ended December 31
(In millions) 1999 1998
- --------------------------------------------------------------------------
Reserves for discontinued operations
and restructuring $246.9 $226.8
Accrued pension and other
postretirement benefits 85.8 86.8
Other reserves 51.4 59.3
Net operating loss carryforwards 54.8 47.3
Alternative minimum tax
credit carryforwards 25.8 19.6
Other 22.3 14.2
- --------------------------------------------------------------------------
Deferred tax assets 487.0 454.0
Valuation allowance (67.5) (55.3)
- --------------------------------------------------------------------------
Deferred tax assets, net of
valuation allowance $419.5 $398.7
- --------------------------------------------------------------------------
Property, plant and equipment $243.1 $215.6
Other 3.5 5.1
- --------------------------------------------------------------------------
Deferred tax liabilities $246.6 $220.7
- --------------------------------------------------------------------------
Net deferred tax assets $172.9 $178.0
- --------------------------------------------------------------------------
The effective income tax rate applicable to income (loss) from continuing
operations before income taxes and the cumulative effect of changes in
accounting principles is different from the statutory U.S. federal income tax
rate due to the factors listed in the following table:
- --------------------------------------------------------------------------
(Percent of income (loss) from continuing
operations before income taxes and the
cumulative effect of changes in Year Ended December 31
accounting principles) 1999 1998 1997
- --------------------------------------------------------------------------
Statutory U.S. tax rate 35% 35% (35)%
- --------------------------------------------------------------------------
Net difference:
Foreign sales corporation income
subject to different tax rates (4) (3) (13)
Percentage depletion (2) (3) (12)
State and local income taxes, less
federal income tax benefit -- 2 (11)
Foreign earnings subject to different
tax rates (10) (12) (10)
Non-taxable portion of gain on sale
of business (5) -- --
Tax on intercompany dividends and
deemed dividends for tax purposes 2 2 6
Nondeductible goodwill 1 1 16
Nondeductible expenses 1 3 5
Minority interests 1 1 5
Equity in earnings of affiliates
not taxed -- (1) (3)
Change in valuation allowance 4 2 (8)
Other (2) (1) 1
- --------------------------------------------------------------------------
Total difference (14) (9) (24)
- --------------------------------------------------------------------------
Effective tax rate 21% 26% (59)%
- --------------------------------------------------------------------------
The effective tax rate in 1999 of 21 percent includes the impact of the
non-taxable portion of the gain on the sale of FMC's process additives business.
The 1999 effective tax rate excluding this event was 26 percent.
The effective tax benefit rate of 59 percent for 1997 includes the impact of
asset impairments, restructuring and other charges (Note 4). The 1997 effective
tax rate excluding these charges was 24 percent.
FMC's federal income tax returns for years through 1994 have been examined by
the Internal Revenue Service and substantially all issues have been settled.
Management believes that adequate provision for income taxes has been made for
the open years 1995 and after and for any unsettled issues prior to 1995. U.S.
income taxes have not been provided for the equity in undistributed earnings of
foreign consolidated subsidiaries ($668.9 million and $576.8 million at December
31, 1999 and 1998, respectively) or foreign unconsolidated subsidiaries and
affiliates ($18.8 million and $17.6 million at December 31, 1999 and 1998,
respectively). Restrictions on the distribution of these earnings are not
significant. Foreign earnings taxable to the company as dividends were $140.2
million, $21.7 million and $28.1 million in 1999, 1998 and 1997, respectively.
46
<PAGE>
Notes to Consolidated Financial Statements
Note 11 Incentive Compensation Plans
The 1995 Management Incentive Plan (the "Incentive Plan") and the 1995 Stock
Option Plan (the "Option Plan"), approved by the stockholders on April 21, 1995,
provide certain incentives and awards to key employees. The plans are
administered by the Compensation and Organization Committee of the Board of
Directors (the "Committee") which, subject to the provisions of the plans,
reviews and approves financial targets, times and conditions for payment.
The Incentive Plan provides for the grant of multi-year incentive awards
payable partly in cash and partly in common stock.
The Option Plan (and its predecessor plans) provides for regular grants of
common stock options which may be incentive and/or nonqualified stock options.
The exercise price for options is not less than the fair market value of the
stock at the date of grant. Options are exercisable at the time designated by
the Committee in the option (four years for grants prior to 1995 and three years
for grants during 1995 and thereafter). Incentive and nonqualified options
expire not later than 10 years from the grant date (15 years for grants prior to
1996).
Under the plans adopted in 1995, three million shares became available for
awards and options granted in 1995 and later years. These shares are in addition
to the shares available from the predecessor plans. Cancellation (through
expiration, forfeiture or otherwise) of outstanding awards and options granted
after 1989 increases the shares available for future awards or grants. At
December 31, 1999, 1,018,138 shares were available for future use under these
plans.
The company has adopted the disclosure-only provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation". Accordingly, no compensation cost has
been recognized for the Option Plan. Had compensation cost for the Option Plan
been determined based on the fair value at the grant date for awards in 1999,
1998 and 1997 consistent with the provisions of SFAS No. 123, the company's net
income and diluted earnings per share for the three years ended December 31,
1999 would have been reduced to the pro forma amounts indicated below:
- -------------------------------------------------------------------------
Net income in millions 1999 1998 1997
- -------------------------------------------------------------------------
Net income--as reported $212.6 $106.5 $162.4
Net income--pro forma $208.1 $101.7 $157.6
Diluted earnings per share
--as reported $ 6.57 $ 3.05 $ 4.41
Diluted earnings per share
--pro forma $ 6.42 $ 2.91 $ 4.28
- -------------------------------------------------------------------------
The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option-pricing model with the following weighted-average
assumptions used for grants in 1999, 1998 and 1997, respectively: zero dividend
yield for all years; expected volatility of 22.9 percent, 19.7 percent and 17.4
percent; risk-free interest rates of 5.1 percent, 5.5 percent and 6.8 percent;
and expected lives of five years for all grants.
The weighted average fair value of each stock option granted during the years
ended December 31, 1999, 1998 and 1997, calculated using the Black-Scholes
option-pricing model, was $15.07, $21.09 and $19.84, respectively.
The following summary shows stock option activity for the three years ended
December 31, 1999:
- -------------------------------------------------------------------------
Number of Weighted-
Shares Average
(Number of shares Optioned But Exercise Price
in thousands) Not Exercised per Share
- -------------------------------------------------------------------------
December 31, 1996
(1,200 shares exercisable) 2,926 $47.44
Granted 555 $61.42
Exercised (395) $33.54
Forfeited (169) $63.73
- -------------------------------------------------------------------------
December 31, 1997
(1,012 shares exercisable) 2,917 $51.05
Granted 558 $69.92
Exercised (261) $41.87
Forfeited (60) $67.07
- -------------------------------------------------------------------------
December 31, 1998
(1,734 shares exercisable) 3,154 $54.84
Granted 350 $48.00
Exercised (107) $41.33
Forfeited (157) $62.30
- -------------------------------------------------------------------------
December 31, 1999
(2,023 shares exercisable) 3,240 $54.18
- -------------------------------------------------------------------------
The following tables summarize information about fixed-priced stock options
outstanding at December 31, 1999:
- -------------------------------------------------------------------------
Options Outstanding
- -------------------------------------------------------------------------
Weighted- Weighted-
Number Average Average
Outstanding at Remaining Exercise
Range of December 31, 1999 Contractual Life Price
Exercise Prices (in thousands) (in years) per Share
- -------------------------------------------------------------------------
$29.50-$31.13 389 5.4 $30.88
$45.00-$48.00 1,276 8.6 $46.64
$57.75-$65.50 720 8.4 $60.69
$69.00-$82.50 855 9.2 $70.53
- -------------------------------------------------------------------------
Total 3,240 7.8 $54.18
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Options Exercisable
- -------------------------------------------------------------------------
Weighted-
Number Average
Exercisable at Exercise
Range of December 31, 1999 Price
Exercise Prices (in thousands) per Share
- -------------------------------------------------------------------------
$29.50-$31.13 389 $30.88
$45.00-$46.38 971 $46.21
$59.63-$79.00 663 $66.47
- -------------------------------------------------------------------------
Total 2,023 $49.92
- -------------------------------------------------------------------------
47
<PAGE>
Notes to Consolidated Financial Statements
On January 2, 2000, an additional 473,900 shares became exercisable at
prices ranging from $61.25 to $82.50 with an expiration date of March 31, 2007.
Under a plan adopted in 1995, discretionary awards of restricted stock may
be made to selected employees. The awards vest over a period designated by the
Committee, with payment conditional upon continued employment. Compensation cost
is recognized over the vesting period based on the market value of the stock on
the date of the award.
Under the FMC Deferred Stock Plan for Non-Employee Directors, a portion of
the annual retainer for these directors was deferred and paid in the form of
shares of the company's common stock upon retirement or other termination of
their directorships. Effective January 1, 1997, the Board of Directors approved
a comprehensive compensation plan that terminated the retirement plan for
directors and increased the proportion of director compensation paid in common
stock of the company. Benefits provided for and earned under the old plan were
converted into stock units payable in shares of common stock of the company upon
retirement from the Board based on the fair market value of the common stock on
December 31, 1996. At December 31, 1999, stock units representing an aggregate
of 33,855 shares of stock were credited to the non-employee directors' accounts.
Also under the compensation plan, non-employee directors may be granted options
to purchase shares of stock at the fair market value of the stock at the date of
grant. At December 31, 1999, options had been granted for 30,600 shares at
prices ranging from $64.36 to $77.31. These grants vest one year from the grant
date and expire after ten years. The company recognizes expense for the
directors' options over the one-year vesting period of the options.
Note 12 Stockholders' Equity
The following is a summary of FMC's capital stock activity over the past three
years:
- --------------------------------------------------------------------
(Number of shares Common Treasury
in thousands) Stock Stock
- --------------------------------------------------------------------
December 31, 1996 37,481 300
Stock options 395 --
Stock repurchases -- 2,667
Stock reissued -- (15)
- --------------------------------------------------------------------
December 31, 1997 37,876 2,952
Stock options and awards 313 --
Stock for employee benefit trust -- 116
Stock repurchases -- 2,418
- --------------------------------------------------------------------
December 31, 1998 38,189 5,486
Stock options and awards 143 --
Stock for employee benefit trust, net -- 12
Stock repurchases -- 2,470
- --------------------------------------------------------------------
December 31, 1999 38,332 7,968
- --------------------------------------------------------------------
During 1999, 1998 and 1997, approximately 2.5 million, 2.4 million and 2.7
million shares, respectively, were acquired under the company's stock repurchase
plans at an aggregate cost of $135.9 million, $150.0 million and $209.0 million,
respectively. Shares of common stock repurchased and contributed to a rabbi
trust for an employee benefit program totaled 31,353 in 1999 and 116,467 in 1998
at a cost of $1.6 million and $6.7 million respectively. Of these shares, 19,570
were resold for $1.1 million in 1999 as needed to administer the plan.
In 1997, 15,000 shares of treasury stock were reissued under the restricted
stock award plan and the deferred compensation plan for non-employee directors.
At December 31, 1999, 4,718,811 shares of unissued FMC common stock were
reserved for stock options and awards.
At December 31, 1999, accumulated other comprehensive loss consisted of
cumulative foreign currency translation losses of $196.0 million and a minimum
pension liability adjustment of $7.5 million. At December 31, 1998, accumulated
other comprehensive loss consisted of cumulative foreign currency translation
losses.
Covenants of the revolving credit facility agreement (Note 9) contain
minimum net worth and other requirements.
No dividends are expected to be paid on the company's common stock in 2000.
On February 22, 1986, the Board of Directors of the company declared a
dividend distribution to each recordholder of common stock as of March 7, 1986,
of one Preferred Share Purchase Right for each share of common stock outstanding
on that date. Each right entitles the holder to purchase, under certain
circumstances related to a change in control of the company, one one-hundredth
of a share of Junior Participating Preferred Stock, Series A, without par value,
at a price of $300 per share (subject to adjustment), subject to the terms and
conditions of a Rights Agreement dated February 22, 1986 as amended through
February 9, 1996. The rights expire on March 7, 2006, unless redeemed by the
company at an earlier date. The redemption price of $.05 per right is subject to
adjustment to reflect stock splits, stock dividends or similar transactions. The
company has reserved 400,000 shares of Junior Participating Preferred Stock for
possible issuance under the agreement.
48
<PAGE>
Notes to Consolidated Financial Statements
Note 13 Pensions and Postretirement Health Care and Life Insurance Benefits
The funded status of the company's pension and postretirement health care and
life insurance benefit plans for continuing operations, and the associated
liabilities recognized in the company's consolidated financial statements as of
December 31 are as follows:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Pensions Other Benefits
(In millions) 1999 1998 1999 1998
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Accumulated benefit obligation:
Plans with unfunded accumulated benefit obligation $ 38.7 $ 28.5 $ -- $ --
- -----------------------------------------------------------------------------------------------------------------------------
Change in benefit obligation:
Benefit obligation at January 1 $1,070.0 $ 771.0 $ 119.5 $ 109.7
Service cost 33.2 26.4 2.5 2.5
Interest cost 68.9 66.7 7.7 8.4
Actuarial loss (gain) (98.0) 239.2 (9.3) 15.9
Amendments 1.0 11.8 (1.3) (8.4)
Acquisitions and divestitures -- (2.2) -- --
Curtailments and settlements -- (1.9) -- (0.3)
Plan participants' contributions 2.0 1.9 4.4 3.0
Benefits paid (47.6) (42.9) (14.6) (11.3)
- -----------------------------------------------------------------------------------------------------------------------------
Benefit obligation at December 31 1,029.5 1,070.0 108.9 119.5
- -----------------------------------------------------------------------------------------------------------------------------
Change in fair value of plan assets:
Fair value of plan assets at January 1 956.5 860.6 -- --
Actual return on plan assets (5.6) 133.8 -- --
Acquisitions and divestitures -- (2.4) -- --
Curtailments and settlements -- (3.1) -- --
Company contributions 4.1 8.6 10.2 8.3
Plan participants' contributions 2.0 1.9 4.4 3.0
Benefits paid (47.6) (42.9) (14.6) (11.3)
- -----------------------------------------------------------------------------------------------------------------------------
Fair value of plan assets at December 31 909.4 956.5 -- --
- -----------------------------------------------------------------------------------------------------------------------------
Funded status of the plan (liability) (120.1) (113.5) (108.9) (119.5)
Unrecognized actuarial loss (gain) 51.3 72.0 (1.7) 7.6
Unrecognized prior service cost (income) 23.6 22.2 (39.7) (47.6)
Unrecognized transition asset (38.6) (61.4) -- --
- -----------------------------------------------------------------------------------------------------------------------------
Accrued liability for benefit costs at December 31 $ (83.8) $ (80.7) $(150.3) $(159.5)
- -----------------------------------------------------------------------------------------------------------------------------
Prepaid benefit cost $ 4.9 $ 46.6 $ -- $ --
Accrued benefit liability (102.7) (127.3) (150.3) (159.5)
Intangible asset 6.5 -- -- --
Accumulated other comprehensive income 7.5 -- -- --
- -----------------------------------------------------------------------------------------------------------------------------
Net liability recognized in the balance sheet at December 31 $ (83.8) $ (80.7) $(150.3) $(159.5)
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
49
<PAGE>
Notes to Consolidated Financial Statements
The following table summarizes the assumptions used and the components of net
annual benefit cost (income) for the years ended December 31:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Pensions Other Benefits
(In millions) 1999 1998 1997 1999 1998 1997
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Assumptions as of December 31:
Discount rate 7.50% 6.75% 8.00% 7.50% 6.75% 8.00%
Expected return on assets 9.25% 9.20% 9.20% -- -- --
Rate of compensation increase 5.00% 5.00% 5.00% -- -- --
- -----------------------------------------------------------------------------------------------------------------------------
Components of net annual benefit cost (in millions):
Service cost $ 33.2 $ 26.4 $ 21.2 $ 2.5 $ 2.5 $ 2.4
Interest cost 68.9 66.7 55.8 7.7 8.4 8.3
Expected return on plan assets (81.3) (76.9) (59.8) -- -- --
Amortization of transition asset (22.8) (22.8) (22.8) -- -- --
Amortization of prior service cost 4.6 4.2 3.1 (9.2) (8.3) (8.3)
Recognized net actuarial (gain) loss 0.5 (5.6) (2.8) -- (0.9) 0.1
- -----------------------------------------------------------------------------------------------------------------------------
Net annual benefit cost (income) $ 3.1 $ (8.0) $ (5.3) $ 1.0 $ 1.7 $ 2.5
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
Effective December 31, 1998, the company merged all union hourly pension
plans into the FMC Salaried Employees' Retirement Plan (the "Plan"). At the same
time, the Plan name was changed to the FMC Employees' Retirement Plan.
Effective December 31, 1999, the company changed the discount rate from
6.75 percent to 7.50 percent for determining the projected benefit obligations.
The change decreased the projected benefit obligations by approximately $103
million at December 31, 1999.
Effective January 1, 1998, the company changed to the 1983 Group Annuity
Mortality Table, which is used to calculate the benefit obligations. In
addition, the discount rate was changed from 8.00 percent to 6.75 percent
effective December 31, 1998. These changes increased the projected benefit
obligation by approximately $239 million at December 31, 1998.
For measurement purposes, a six- and seven-percent annual rate increase in
the per capita cost of health care benefits was assumed for 1999 and 1998,
respectively. The rates were assumed to decrease gradually to 5.0 percent for
2001 and remain at that level thereafter.
Assumed health care cost trend rates have an effect on the amounts reported
for the health care plan. A one-percentage point change in the assumed health
care cost trend rates would have the following effects:
- ------------------------------------------------------------------------------
One Percentage One Percentage
(In millions) Point Increase Point Decrease
- ------------------------------------------------------------------------------
Effect on total of service and
interest cost components $ 0.1 $(0.1)
Effect on postretirement
benefit obligation $ 1.6 $(1.3)
- ------------------------------------------------------------------------------
The company has adopted SFAS No. 87, "Employers Accounting for Pensions",
for its pension plan for employees in the United Kingdom. The financial impact
of compliance with SFAS No. 87 for other non-U.S. pension plans is not
materially different from the locally reported pension expense. The cost of
providing pension benefits for foreign employees was $10.4 million in 1999, $5.2
million in 1998 and $6.9 million in 1997.
As a result of the sale of the process additives division (Note 3), the FMC
United Kingdom pension plan will transfer assets to the buyer's pension plan for
those participants who elect to transfer their benefits to the buyer's pension
plan. The amount of assets to be transferred and the number of participants will
be determined in 2000.
Employees' Thrift and Stock Purchase Plan. The FMC Employees' Thrift and
Stock Purchase Plan is a qualified salary-reduction plan under Section 401(k) of
the Internal Revenue Code in which all salaried and non-union hourly employees
of the company may participate by contributing a portion of their compensation.
The company matches contributions up to specified percentages of each employee's
compensation depending on the company's profits and how the employee allocates
his or her contributions. Charges against income for FMC's matching
contributions, net of forfeitures, were $15.9 million in 1999, $16.7 million in
1998 and $16.2 million in 1997.
Note 14 Environmental Obligations
FMC is subject to various federal, state and local environmental laws and
regulations that govern emissions of air pollutants; discharges of water
pollutants; and the manufacture, storage, handling and disposal of hazardous
substances, hazardous wastes and other toxic materials. Environmental
liabilities consist of obligations relating to waste handling and the
remediation and/or study of sites at which the company is alleged to have
disposed of hazardous substances. The company is also subject to liabilities
arising under CERCLA and similar state laws that impose responsibility on
persons who arranged for the disposal of hazardous substances, and on current
and previous owners and operators of a facility for the cleanup of hazardous
substances released from the facility into the environment. In addition, the
company is subject to liabilities under the Resource Conservation and Recovery
Act ("RCRA") and analogous state laws that require owners and operators of
facilities that treat, store or dispose of hazardous waste to follow certain
waste management practices and to clean up releases of hazardous waste
constituents into the environment associated with past or present practices.
The company has been named a PRP at 29 sites on the government's National
Priority List. In addition, the company also has received notice from the EPA or
other regulatory agencies that the company may be a PRP, or PRP equivalent, at
other sites, including 35 sites at which the company has determined that it is
reasonably possible that it has an environmental liability. The company, in
cooperation with appropriate government agencies, is currently participating in,
or has participated in, RI/FS or their equivalent at most of the identified
sites, with the status of each investigation varying from site to site. At
certain sites, RI/FS have just begun, providing limited information, if any,
relating to cost estimates,
50
<PAGE>
Notes To Consolidated Financial Statements
timing, or the involvement of other PRPs; whereas, at other sites, the studies
are complete, remedial action plans have been chosen, or RODs have been issued.
The company has provided reserves for potential environmental obligations
that management considers probable and for which a reasonable estimate of the
obligation could be made. Accordingly, total reserves of $266.8 million and
$294.0 million, respectively, before recoveries, were recorded at December 31,
1999 and 1998. The long-term portion of these reserves is included in reserve
for discontinued operations and other liabilities on the consolidated balance
sheets and amounted to $244.0 million and $265.7 million at December 31, 1999
and 1998, respectively. In the fourth quarters of 1999 and 1998, FMC provided
$25.9 million and $70.0 million, respectively, for environmental costs of
discontinued operations (Note 3). The company's total environmental reserves
include $255.4 million and $280.6 million for remediation activities and $11.4
million and $13.4 million for RI/FS costs at December 31, 1999 and 1998,
respectively. In addition, the company has estimated that reasonably possible
environmental loss contingencies may exceed amounts accrued by as much as $80
million at December 31, 1999.
In June 1999, the Federal District Court in Idaho approved a Consent Decree
signed by the company, the EPA (Region X) and the DOJ settling outstanding
alleged violations of RCRA at the company's Phosphorus Chemicals ("PCD") plant
in Pocatello, Idaho. The RCRA Consent Decree provides for injunctive relief
covering remediation expense for closure of existing ponds, estimated at $50
million, and in excess of $100 million of capital costs for waste treatment and
other compliance projects, including supplemental environmental projects. These
amounts will be expended over approximately four years. As described in Note 4,
an expected increase in capital costs for environmental compliance contributed
to an impairment in the value of PCD's assets during the fourth quarter of 1997.
The company provided for the estimated expenses related to the Consent Decree in
prior periods.
In addition, FMC signed a second Consent Decree with the EPA, which was
lodged in court on July 21, 1999. The Consent Decree relates to an ROD issued by
the EPA in 1998 which addresses previously closed ponds on the FMC portion of
the Eastern Michaud Flats Superfund site, including FMC's PCD Pocatello, Idaho,
facility. The remedy the EPA selected in the ROD is a combination of capping,
surface runoff controls and institutional controls for soils, with a contingency
for extraction and recycling for hydraulic control of groundwater. FMC believes
its reserves for environmental costs adequately provide for the estimated costs
of the Superfund remediation plan for the site and the expenses previously
described related to the RCRA Consent Decree.
On October 21, 1999 the Federal District Court for the Western District of
Virginia approved a Consent Decree signed by the company, the EPA (Region III)
and the DOJ regarding past response costs and future clean-up work at the
discontinued fiber manufacturing site in Front Royal, Virginia. As part of a
prior settlement, government agencies are expected to reimburse FMC for
approximately one third of the clean-up costs due to the government's role at
the site. FMC's $70 million portion of the settlement was provided for in 1998
and prior years, and no additional charge to earnings was recorded in 1999.
Although potential environmental remediation expenditures in excess of the
current reserves and estimated loss contingencies could be significant, the
impact on the company's future financial results is not subject to reasonable
estimation due to numerous uncertainties concerning the nature and scope of
contamination at many sites, identification of remediation alternatives under
constantly changing requirements, selection of new and diverse clean-up
technologies to meet compliance standards, the timing of potential expenditures,
and the allocation of costs among PRPs as well as other third parties.
The liabilities arising from potential environmental obligations that have
not been reserved for at this time may be material to any one quarter's or
year's results of operations in the future. Management, however, believes the
liability arising from potential environmental obligations is not likely to have
a material adverse effect on the company's liquidity or financial condition and
may be satisfied over the next 20 years or longer.
To ensure FMC is held responsible only for its equitable share of site
remediation costs, FMC has initiated, and will continue to initiate, legal
proceedings for contributions from other PRPs. FMC has recorded recoveries,
representing probable realization of claims against insurance companies, U.S.
government agencies and other third parties, of $60.2 million at December 31,
1999 (all of which is recorded as an offset to the reserve for discontinued
operations and other liabilities). At December 31, 1998, FMC had recorded
recoveries of $85.4 million as an offset to the reserve for discontinued
operations and other liabilities and $22.2 million related to continuing
operations as other assets.
During 1999, FMC collected cash recoveries totalling $56.9 million, the
majority of which represented a settlement with a consortium of FMC's general
liability insurance carriers. Recoveries for the years 1998 and 1997 were $4.4
million and $3.3 million, respectively. Also during 1999, the company recognized
additional receivables for recoveries of $8.9 million, primarily in conjunction
with expected contractual recoveries at discontinued Defense Systems properties
(Note 3).
Regarding current operating sites, the company spent $64.0 million, $33.0
million and $29.9 million for the years 1999, 1998 and 1997, respectively, on
capital projects relating to environmental control facilities, and expects to
spend additional capital of approximately $85 million and $86 million in 2000
and 2001, respectively. Additionally, in 1999, 1998, and 1997, FMC spent $62.2
million, $56.0 million and $60.1 million, respectively, for environmental
compliance costs, which are an operating cost of the company.
Regarding current operating, previously operated (including discontinued
operations) and other sites for the years 1999, 1998 and 1997, FMC charged $20.9
million, $17.8 million and $29.0 million, respectively, against established
reserves for remediation spending, and $43.3 million, $35.0 million and $18.7
million, respectively, against reserves for spending on RI/FS. FMC anticipates
that the expenditures for current operating, previously operated and other sites
will continue to be significant for the foreseeable future.
51
<PAGE>
Notes To Consolidated Financial Statements
Note 15 Commitments and Contingent Liabilities
On April 14, 1998, a jury returned a verdict against the company in the amount
of $125.0 million in conjunction with a federal False Claims Act action, in
which Mr. Henry Boisvert filed and ultimately took to trial allegations that the
company had filed false claims for payment in connection with its contract to
provide Bradley Fighting Vehicles to the U.S. Army between 1981 and 1996. Under
law, portions of the jury verdict were subject to doubling or trebling. On
December 24, 1998, the U.S. District Court for the Northern District of
California entered judgment for Mr. Boisvert in the amount of approximately
$87 million. This was approximately $300 million less than the maximum judgment
possible under the jury verdict. The reduction resulted from several rulings by
the District Court in favor of the company in the post-trial motions. Briefing
on cross-appeals by both parties to the U.S. Court of Appeals for the Ninth
Circuit has been completed, and it is probable that oral arguments will be heard
during 2000. Both sides are asserting arguments on appeal, and a number of the
company's arguments, if successful, would alter or eliminate the amount of the
existing judgment. Any legal proceeding is subject to inherent uncertainty, and
it is not possible to predict how the appellate court will rule. Therefore, the
company's management believes based on a review, including a review by outside
counsel, that it is not possible to estimate the amount of a probable loss, if
any, to the company that might result from some adverse aspects of the judgment
ultimately standing against the company. Accordingly, no provision for this
matter has been made in the company's consolidated financial statements.
FMC leases office space, plants and facilities, and various types of
manufacturing, data processing and transportation equipment. Leases of real
estate generally provide for payment of property taxes, insurance and repairs by
FMC. Capital leases are not significant. Rent expense under operating leases
amounted to $45.0 million, $44.4 million and $42.5 million in 1999, 1998 and
1997, respectively. Rent expense is net of credits (received for the use of
leased transportation assets) of $20.4 million, $19.5 million and $18.9 million
in 1999, 1998 and 1997, respectively.
Minimum future rentals under noncancelable leases aggregated approximately
$371.4 million as of December 31, 1999 and are estimated to be payable as
follows: $53.2 million in 2000, $48.1 million in 2001, $44.1 million in 2002,
$41.3 million in 2003, $41.2 million in 2004 and $143.5 million thereafter.
Minimum future rentals for transportation assets included above aggregated
approximately $171 million, against which the company expects to continue to
receive credits to substantially defray its rental expense.
The company also has certain other contingent liabilities resulting from
litigation, claims, performance guarantees, and other commitments incident to
the ordinary course of business. Management believes that the probable
resolution of such contingencies will not materially affect the financial
position, results of operations or cash flows of FMC.
52
<PAGE>
INDEPENDENT AUDITORS' REPORT
[KPMG LOGO APPEARS HERE]
The Board of Directors and Stockholders, FMC Corporation:
We have audited the accompanying consolidated balance sheets of FMC Corporation
and consolidated subsidiaries as of December 31, 1999 and 1998, and the related
consolidated statements of income, cash flows and changes in stockholders'
equity for each of the years in the three-year period ended December 31, 1999.
These consolidated financial statements are the responsibility of the company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the accompanying consolidated financial statements referred
to above present fairly, in all material respects, the financial position of FMC
Corporation and consolidated subsidiaries as of December 31, 1999 and 1998, and
the results of their operations and their cash flows for each of the years in
the three-year period ended December 31, 1999 in conformity with generally
accepted accounting principles.
/s/ KPMG LLP
KPMG LLP
Chicago, Illinois
January 19, 2000
MANAGEMENT'S REPORT ON FINANCIAL STATEMENTS
The consolidated financial statements and related information have been prepared
by management, which is responsible for the integrity and objectivity of that
information. Where appropriate, they reflect estimates based on judgments of
management. The statements have been prepared in conformity with accounting
principles generally accepted in the United States. Financial information
included elsewhere in this annual report is consistent with that contained in
the consolidated financial statements.
FMC maintains a system of internal control over financial reporting and over
safeguarding of assets against unauthorized acquisition, use or disposition
which is designed to provide reasonable assurance as to the reliability of
financial records and the safeguarding of such assets. The system is maintained
by the selection and training of qualified personnel, by establishing and
communicating sound accounting and business policies, and by an internal
auditing program that constantly evaluates the adequacy and effectiveness of
such internal controls, policies and procedures.
The Audit Committee of the Board of Directors, composed of directors who are not
officers or employees of the company, meets regularly with management, with the
company's internal auditors, and with its independent auditors to discuss their
evaluation of internal accounting controls and the quality of financial
reporting. Both independent auditors and the internal auditors have free access
to the Audit Committee to discuss the results of their audits.
The company's independent auditors have been engaged to render an opinion on the
consolidated financial statements. They review and make appropriate tests of the
data included in the financial statements. As independent auditors, they also
provide an objective, outside review of management's performance in reporting
operating results and financial condition.
/s/ William H. Schumann III /s/ Ronald D. Mambu
William H. Schumann III Ronald D. Mambu
Senior Vice President Vice President
and Chief Financial Officer and Controller
Chicago, Illinois
January 19, 2000
53
<PAGE>
TEN-YEAR FINANCIAL SUMMARY
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
(In millions, except share data and per share amounts) 1999 1998 1997
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Summary of earnings
Sales $4,110.6 4,378.4 4,259.0
- ----------------------------------------------------------------------------------------------------------------------------
Income (loss) from continuing operations before net
interest expense, minority interests, gain on sale of FMC
Wyoming stock, income taxes, extraordinary items and
cumulative effect of changes in accounting principles/(1)/ $ 386.1 364.0 58.0
- ----------------------------------------------------------------------------------------------------------------------------
Income from continuing operations before special income and
expense items/(4)/, net interest expense, income taxes, extraordinary
items and cumulative effect of changes in accounting principles/(5)/ $ 369.3 357.8 314.0
- ----------------------------------------------------------------------------------------------------------------------------
Income (loss) from continuing operations before income taxes, extraordinary
items and cumulative effect of changes in accounting principles/(1)/(2)/ $ 274.3 249.5 (59.7)
Provision (benefit) for income taxes 58.3 64.2 (35.2)
- ----------------------------------------------------------------------------------------------------------------------------
Income (loss) from continuing operations before extraordinary
items and cumulative effect of changes in accounting principles/(3)/ 216.0 185.3 (24.5)
Discontinued operations, net of income taxes (3.4) (42.7) 191.4
Extraordinary items, net of income taxes -- -- --
Cumulative effect of changes in accounting principles, net of income taxes -- (36.1) (4.5)
- ----------------------------------------------------------------------------------------------------------------------------
Net income (loss)/(3)/ $ 212.6 106.5 162.4
- ----------------------------------------------------------------------------------------------------------------------------
Special (income) and expense items/(1)/ $ (11.7) -- 264.9
- ----------------------------------------------------------------------------------------------------------------------------
Gain on sale of FMC Wyoming stock/(2)/ $ -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
Total dividends $ -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
Share data
Average number of shares used in earnings per share computations (thousands):
Basic 31,516 34,007 36,805
Diluted 32,377 34,939 36,805
- ----------------------------------------------------------------------------------------------------------------------------
Basic earnings (loss) per share:
Continuing operations/(3)/ $ 6.86 5.45 (0.67)
Discontinued operations (0.11) (1.26) 5.20
Extraordinary items -- -- --
Cumulative effect of changes in accounting principles -- (1.06) (0.12)
- ----------------------------------------------------------------------------------------------------------------------------
$ 6.75 3.13 4.41
- ----------------------------------------------------------------------------------------------------------------------------
Diluted earnings (loss) per share:
Continuing operations/(3)/ $ 6.67 5.30 (0.67)
Discontinued operations (0.10) (1.22) 5.20
Extraordinary items -- -- --
Cumulative effect of changes in accounting principles -- (1.03) (0.12)
- ----------------------------------------------------------------------------------------------------------------------------
$ 6.57 3.05 4.41
- ----------------------------------------------------------------------------------------------------------------------------
Other information
After-tax income per share from continuing operations before
special income and expense items/(4)/(5)/
Basic $ 6.19 5.45 4.25
Diluted $ 6.03 5.30 4.13
- ----------------------------------------------------------------------------------------------------------------------------
Financial position at December 31
Total assets $3,995.8 4,166.4 4,113.1
Long-term debt (less current portion) $ 945.1 1,326.4 1,140.2
Stockholders' equity $ 743.6 729.4 760.6
Other data
Capital expenditures $ 236.3 265.9 316.7
Depreciation expense $ 162.7 189.0 218.3
Amortization expense $ 18.0 17.6 20.1
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Includes pretax gains on sales of businesses of $55.5 million in 1999;
pretax asset impairments of $29.1 million in 1999, $224.0 million in 1997,
$26.4 million in 1995 and $8.1 million in 1993; pretax restructuring and
other charges of $14.7 million in 1999, $40.9 million in 1997, $108.1
million in 1995 and $114.4 million in 1993, and a write-off of acquired in-
process research and development of $15.5 million in 1995.
(2) Includes a nontaxable gain on the sale of 20 percent of FMC Wyoming stock
of $99.7 million in 1995.
(3) Includes gains on sales of businesses of $47.7 million after tax in 1999
($1.51 per share-basic and $1.47 per share-diluted); asset impairments and
restructuring and other charges of $(26.7) million after tax in 1999
(($0.84) per share-basic and ($0.83) per share diluted), asset impairments
and restructuring and other charges of $(180.9) million after tax in 1997
($(4.92) per share-basic and diluted); restructuring and other charges, a
write-off of acquired in-process research and development and a gain on the
sale of FMC Wyoming stock of $3.5 million, net, (after tax in 1995 ($0.10
per share-basic and $0.09 per share-diluted); and restructuring and other
charges of $(73.5) million after tax in 1993 ($(2.04) per share-basic and
diluted).
54
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
3,950.7 3,482.6 2,869.4 2,678.8 2,692.1 2,568.6 2,463.5
- -----------------------------------------------------------------------------------------------------------------
338.4 134.5 212.0 (17.3) 143.0 172.7 166.5
- -----------------------------------------------------------------------------------------------------------------
328.8 179.7 210.4 104.7 142.8 171.2 164.9
- -----------------------------------------------------------------------------------------------------------------
235.8 152.7 150.9 (79.9) 59.9 63.8 36.9
73.0 (2.0) 41.6 (62.8) 9.4 9.4 (4.3)
- -----------------------------------------------------------------------------------------------------------------
162.8 154.7 109.3 (17.1) 50.5 54.4 41.2
47.9 60.9 64.1 58.1 68.9 118.7 114.1
-- -- -- (4.7) (11.4) (9.2) --
-- -- -- -- (183.7) -- --
- -----------------------------------------------------------------------------------------------------------------
210.7 215.6 173.4 36.3 (75.7) 163.9 155.3
- -----------------------------------------------------------------------------------------------------------------
-- 150.0 -- 122.5 -- -- --
- -----------------------------------------------------------------------------------------------------------------
-- 99.7 -- -- -- -- --
- -----------------------------------------------------------------------------------------------------------------
-- -- -- -- -- -- --
- -----------------------------------------------------------------------------------------------------------------
37,024 36,615 36,369 35,976 35,595 35,024 34,739
38,058 37,721 37,195 35,976 36,796 36,267 36,075
- -----------------------------------------------------------------------------------------------------------------
4.40 4.23 3.01 (0.48) 1.42 1.55 1.19
1.29 1.66 1.76 1.62 1.94 3.39 3.28
-- -- -- (0.13) (0.32) (0.26) --
-- -- -- -- (5.16) -- --
- -----------------------------------------------------------------------------------------------------------------
5.69 5.89 4.77 1.01 (2.12) 4.68 4.47
- -----------------------------------------------------------------------------------------------------------------
4.28 4.10 2.94 (0.48) 1.37 1.50 1.14
1.26 1.62 1.72 1.62 1.87 3.27 3.16
-- -- -- (0.13) (0.31) (0.25) --
-- -- -- -- (4.99) -- --
- -----------------------------------------------------------------------------------------------------------------
5.54 5.72 4.66 1.01 (2.06) 4.52 4.30
- -----------------------------------------------------------------------------------------------------------------
4.40 4.13 3.01 1.56 1.42 1.55 1.19
4.28 4.01 2.94 1.53 1.37 1.50 1.14
- -----------------------------------------------------------------------------------------------------------------
4,467.4 3,751.8 2,857.1 2,532.1 2,565.3 2,393.6 2,484.8
1,268.4 974.4 901.2 749.8 843.4 928.6 1,158.6
855.8 653.5 416.6 216.9 219.0 309.8 149.6
485.1 427.8 271.0 204.6 179.6 168.7 263.4
205.7 182.6 173.8 172.8 179.9 166.7 159.8
17.7 13.0 6.0 4.3 2.0 1.7 0.8
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
(4) Excludes gains on sale of businesses of $55.5 million, or $47.7 after
tax in 1999 ($1.51 per share-basic and $1.47 per share-diluted); asset
impairments and restructuring and other charges of ($43.8) million, or
($26.7) million after-tax in 1999 (($0.84) per share-basic and ($0.83)
per share-diluted), asset impairments and restructuring and other
charges of ($264.9) million, or $(180.9) million after tax in 1997
($(4.92) per share-basic and $(4.77) per share-pro forma diluted);
restructuring and other charges, a write-off of acquired in-process
research and development and a gain on the sale of FMC Wyoming stock
of $50.3 million, or $3.5 million, net, after tax in 1995 ($0.10 per
share-basic and $0.09 per share-diluted); and restructuring and other
charges of $(122.5) million, or (73.5) million after tax in 1993
($(2.04) per share-basic and $(1.99) per share-pro forma diluted).
(5) Supplemental financial information. Should not be considered in
isolation nor as an alternative for income from continuing operations,
net income or earnings per share determined in accordance with
generally accepted accounting principles, nor as the sole measure of
the company's profitability.
55
<PAGE>
DIRECTORS AND OFFICERS
BOARD OF DIRECTORS
Robert N. Burt/1/
Chairman of the Board and
Chief Executive Officer
Joseph H. Netherland/4/
President
B. A. Bridgewater, Jr./1,2,5/
Retired Chairman of the Board,
President and Chief Executive Officer,
Brown Group, Inc.
Patricia A. Buffler/3,4/
Dean Emerita, Professor of Epidemiology,
School of Public Health,
University of California, Berkeley
Albert J. Costello/2,5/
Retired Chairman, President
and Chief Executive Officer,
W.R. Grace & Co.
Paul L. Davies, Jr./1,2/
President, Lakeside Corporation,
a private real estate investment company
Asbjorn Larsen/3/
Retired President and
Chief Executive Officer,
Saga Petroleum ASA
Edward J. Mooney/2,3/
Chairman of the Board and
Chief Executive Officer,
Nalco Chemical Company
William F. Reilly/1,2,3/
Founder
PRIMEDIA Inc.
Enrique J. Sosa/3/
Former President,
BP Amoco Chemicals
James R. Thompson/4,5/
Former Governor of Illinois;
Chairman, Chairman of the Executive Committee
and Partner, Law Firm of Winston & Strawn
Clayton Yeutter /4,5/
Of Counsel, Hogan & Hartson,
former U.S. Trade Representative,
and former Secretary,
U.S. Department of Agriculture
/1/ Executive Committee
/2/ Compensation and Organization Committee
/3/ Audit Committee
/4/ Public Policy Committee
/5/ Nominating and Board Procedures Committee
OFFICERS
Robert N. Burt *
Chairman of the Board and
Chief Executive Officer
Joseph H. Netherland *
President
Thomas P. Hester *
Senior Vice President,
General Counsel and
Corporate Secretary
William J. Kirby *
Senior Vice President
William H. Schumann III *
Senior Vice President and
Chief Financial Officer
Alfredo Bernad
Vice President;
President, FMC Europe/
Middle East/Africa
Patricia D. Brozowski
Vice President
Communications
Charles H. Cannon, Jr.*
Vice President;
General Manager
FMC FoodTech
Airport Products
W. Kim Foster*
Vice President;
General Manager
Agricultural Products Group
Robert I. Harries *
Vice President;
General Manager
Chemical Products Group
Stephanie K. Kushner *
Vice President and
Treasurer
Peter D. Kinnear *
Vice President;
General Manager
Petroleum Equipment
and Systems
Ronald D. Mambu *
Vice President and
Controller
James A. McClung *
Vice President
Worldwide Marketing
Eugene M. McCluskey
Vice President
Tax
Michael W. Murray
Vice President
Human Resources
Gerald R. Prout
Vice President
Government Affairs
William G. Walter *
Vice President;
General Manager
Specialty Chemicals Group
Craig M. Watson
Vice President and
Chief Information Officer
Peter E. Weber
Vice President;
President
FMC Latin America
*Executive Officer
STOCKHOLDER DATA
Annual Meeting of Stockholders
FMC's annual meeting of stockholders will be held at 2 p.m. on Thursday, April
20, 2000, at 200 E. Randolph Drive, Chicago, Illinois.
Notice of the meeting, together with proxy materials, will be mailed
approximately 40 days prior to the meeting to stockholders of record as of
February 25, 2000.
Transfer Agent and Registrar of Stock
Harris Trust and Savings Bank
P.O. Box 755, Chicago, Illinois 60690
Questions concerning FMC common stock should be sent
to the above address, or call (877) 360-5143.
Stock Exchange Listing
New York Stock Exchange
Pacific Stock Exchange
Chicago Stock Exchange
Stock Exchange Symbol
FMC
Form 10-K
A copy of the company's annual report to the Securities and Exchange Commission
on Form 10-K for 1999 is available upon written request to:
FMC Corporation
Communications Department
200 E. Randolph Drive
Chicago, Illinois 60601
However, most information required under Parts II and III of Form 10-K has been
incorporated by reference to the annual report to stockholders or the proxy
statement.
FMC was incorporated in Delaware in 1928.
56
<PAGE>
MAJOR OPERATING UNITS
Energy Systems
Energy Transportation
and Measurement
Petroleum Equipment
and Systems
Food and Transportation Systems
Airport Products and Systems
FMC FoodTech
Citrus Systems
Food Processing Systems
Food Systems and Handling
Frigoscandia Freezer
Agricultural Products
Specialty Chemicals
FMC BioPolymer
Lithium
Industrial Chemicals
Active Oxidants
Alkali Chemicals
FMC Foret, S.A.
Hydrogen Peroxide
Phosphorus Chemicals
EXECUTIVE OFFICES
FMC Corporation
200 E. Randolph Drive
Chicago, Illinois 60601
Internet: www.fmc.com
SUBSIDIARIES AND AFFILIATES IN OTHER NATIONS
ANGOLA
FMC International, AG
ARGENTINA
FMC Argentina, S.A.
Minera Del Altiplano, S.A.
AUSTRALIA
FMC (Australia), Ltd.
FMC International, AG
AUSTRIA
FMC Chemikalien
Handelsgesellschaft G.m.b.H.
BANGLADESH
FMC International AG
BARBADOS
FMC International Sales Corporation
BELGIUM
FMC Europe N.V.
BRAZIL
FMC do Brasil Industria e Commercio Ltda.
CANADA
FMC of Canada, Limited
FMC Offshore Canada Company
CHILE
FMC Corporation, Inc.
Chile Limitada
Neogel, S.A.
CHINA
FMC Asia Pacific Inc.
FMC Hong Kong Limited
Suzhou Fu Mei-Shi Crop Care
Company, Ltd.
COLOMBIA
FMC Latino America, S.A.
CZECH REPUBLIC
F&N Agro Ceska Republica, S.r.o.
DENMARK
FMC A/S
EGYPT
FMC International, AG
EQUATORIAL GUINEA
FMC Subsea Services, Inc.
FRANCE
FMC BioPolymer S.A.
FMC Europe, S.A.
FMC Food Machinery
FMC France S.A.
FMC Overseas, S.A.
Frigoscandia Equipment S.A.
GABON
FMC Gabon, S.A.R.L.
GERMANY
FMC BioPolymer G.m.b.H.
FMC G.m.b.H.
Frigoscandia Equipment G.m.b.H.
Jetway G.m.b.H.
F.A. Sening G.m.b.H.
Smith Meter G.m.b.H.
GREECE
FMC Hellas, EPE
FMC International, AG
GUATEMALA
FMC Guatemala, S.A.
HONG KONG
FMC Agricultural Products International, AG
FMC Asia Pacific, Inc.
FMC Hong Kong Ltd.
INDIA
FMC Sanmar Limited
FMC Asia Pacific, Inc.
FMC Rallis India (Pvt.) Ltd.
INDONESIA
FMC Hong Kong Limited
P.T. Bina Guna Kimia Indonesia
P.T. FMC Santana Petroleum
Equipment Indonesia
IRELAND
FMC International, AG
ITALY
FMC Italia, S.p.A.
JAPAN
Asia Lithium Corporation
FMC K.K.
Honjo-FMC Energy Systems, Inc.
L.H. Company, Ltd.
JORDAN
FMC International, AG
KENYA
FMC International, AG
KOREA
FMC Korea Limited
MALAYSIA
FMC Wellhead Equipment, Sdn. Bhd.
FMC Petroleum Equipment (Malaysia)
Sdn. Bhd.
Jetway Systems Asia, Inc.
MEXICO
FMC Agroquimica de Mexico
S. de R.L. de C.V.
Electro Quimica Mexicana, S.A. de C.V.
E.M.D., S.A. de C.V.
Fabricacion, Maquinaria y Ceras,
S.A. de C.V.
FMC Ingredientes Alimenticios
FMC Productos y Servicios S.A. de C.V.
NETHERLANDS
FMC Fluid Control (Nederland) B.V.
FMC Industrial Chemicals
(Netherlands), B.V.
NIGERIA
FMC Nigeria Ltd.
NORWAY
FMC BioPolymer A/S
Kongsberg Offshore, A/S
OMAN
FMC ETEG & Partners LLC
PAKISTAN
FMC International, S.A.
FMC United (Private) Ltd.
PANAMA
FMC Latino America S.A.
PHILIPPINES
FMC International, S.A.
Marine Colloids (Philippines) Inc.
POLAND
F&R Agro S.P.Z.O.O.
PUERTO RICO
FMC International, AG
SINGAPORE
FMC Singapore Pte. Ltd.
FMC Southeast Asia Pte., Ltd.
SLOVAKIA
F&N Agro Slovensko, S.R.O.
SOUTH AFRICA
FMC (South Africa)(Proprietary) Ltd.
SPAIN
Commercial e Industrial de Productos Quimicas, S.A.
FMC Airline Equipment Europe, S.A.
FMC Foret, S.A.
Forel, S.L.
Forenato, S.L.
Forsean, S.A.
Frigoscandia Equipment Iberica, S.A.
Peroxidos Organicos, S.A.
Sibelco Espanola, S.A.
Valentin Herraiz, S.A.
SWEDEN
Frigoscandia Equipment Holding AB
Frigoscandia Equipment AB
Frigoscandia Equipment International AB
Frigoscandia Equipment Norden AB
Frigoscandia Freezer AB
Potato Processing Machinery AB
SWITZERLAND
FMC Agricultural Products International, AG
FMC International, AG
FMC Kongsberg International AG
THAILAND
FMC (Thailand) Ltd.
Thai Peroxide Company, Ltd.
TURKEY
FMC A/S
UKRAINE
FMC International, AG
UNITED ARAB EMIRATES
FMC International, S.A. (Dubai)
UNITED KINGDOM
FMC BioPolymer Ltd.
FMC Corporation (UK), Ltd.
SOFEC, Ltd.
VENEZUELA
Tripoliven, C.A.
FMC Wellhead de Venezuela, S.A.
Italicized brand names used throughout this report are the trademarks of FMC
Corporation or its subsidiaries. (C) 2000 FMC Corporation.
57
<PAGE>
www.fmc.com
[FMC LOGO APPEARS HERE]
FMC Corporation 200 east randolph drive chicago, illinois 60601
<PAGE>
EXHIBIT 21
LIST OF SIGNIFICANT SUBSIDIARIES OF REGISTRANT
December 31, 1999
<TABLE>
<CAPTION>
Organized Under Percent of Voting
Company/(1)/ Laws of Securities Owned/(2)/
- ----------- ------- ---------------------
<S> <C> <C>
FMC Corporation Delaware Registrant
AABB Limited England 100%
Direct Measurement Corporation Colorado 100%
Electro Quimica Mexicana, S.A. de C.V. Mexico 100%
FMC A/S Denmark 100%
FMC Agroquimica de Mexico, S. de R.L. de C.V. Mexico 100%
FMC Airline Equipment Europe, S.A. Spain 100%
FMC Argentina, Sociedad Anonyma, Comercial,
Industrial Y Financiera Argentina 100%
FMC BioPolymer A/S Norway 100%
FMC Corporation (UK), Ltd. England 100%
FMC de Mexico, S.A. de C.V. Mexico 100%
FMC Defense Holding, L.L.C. Wyoming 100%
FMC do Brasil Industria e Comercio Ltda. Brazil 100%
FMC Europe N.V. Belgium 100%
FMC Europe, S.A. France 100%
FMC Food Machinery and Chemical Holding Company B.V. The Netherlands 100%
FMC Italia, S.p.A. Italy 100%
FMC Foret, S.A. Spain 100%
FMC Funding Corporation Delaware 100%
FMC Holding Norway A/S Norway 100%
FMC Industrial Chemicals (Netherlands), B.V. Holland 100%
FMC Ingredientes Alimenticios Mexico 100%
FMC International Sales Corporation Barbados 100%
FMC International, AG Switzerland 100%
FMC of Canada, Limited Ontario 100%
FMC Offshore Canada Company Canada 100%
FMC Petroleum Equipment (Malaysia) Sdn. Bhd. Malaysia 100%
FMC Productos y Servicios S.A. de C.V. Mexico 100%
FMC Southeast Asia Pte., Ltd. Singapore 100%
FMC Wellhead de Venezuela, S.A. Venezuela 100%
FMC WFC I, Inc. Wyoming 100%
FMC Wyoming Corporation Delaware 87.5%
Food Machinery Coordination Center S.C.R.L./C.V.B.A. Belgium 100%
Forel, S.L. Spain 60%
Forsean, S.A. Spain 70%
Frigoscandia Equipment AB Sweden 100%
Frigoscandia Equipment Holding AB Sweden 100%
Frigoscandia Equipment Inc. Delaware 100%
Frigoscandia Freezer AB Sweden 100%
Frigoscandia Inc. Maryland 100%
Intermountain Research and Development Corporation Wyoming 100%
Intertrade Corporation Delaware 100%
Kongsberg Offshore, A/S Norway 100%
Minera Del Altiplano, S.A. Argentina 100%
Moorco International Inc. Delaware 100%
P.T. Bina Guna Kimia Indonesia Indonesia 51%
Smith Meter G.m.b.H. Germany 100%
Smith Meter Inc. Delaware 100%
SOFEC, Inc. Texas 100%
Tg Soda Ash, Inc. Delaware 87.5%
Wyoming Caustic Soda, Inc. Delaware 100%
</TABLE>
(1) The names of various active and inactive subsidiaries have been omitted.
Such subsidiaries, considered in the aggregate as a single subsidiary, would not
constitute a significant subsidiary.
(2) Percentages shown for indirect subsidiaries reflect the percentage of voting
securities owned by the parent subsidiary.
<PAGE>
Exhibit 23
CONSENT OF KPMG LLP
The Board of Directors
FMC Corporation:
We consent to incorporation by reference in the Registration Statements on Form
S-8 (Nos. 33-10661, 33-7749, 33-41745, 33-48984, 333-18383, 333-24039, 333-62683
and 333-68905) and the Registration Statement on Form S-3 (No. 333-59543) of FMC
Corporation of our report dated January 19, 2000 relating to the consolidated
balance sheets of FMC Corporation and consolidated subsidiaries as of December
31, 1999 and 1998, and the related consolidated statements of income, cash
flows, and changes in stockholders' equity for each of the years in the three-
year period ended December 31, 1999, which report is incorporated by reference
in the December 31, 1999 annual report on Form 10-K of FMC Corporation.
/s/ KPMG LLP
Chicago, Illinois
March 27, 2000
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, FMC CORPORATION, a Delaware corporation (hereinafter referred to
as the "Company"), proposes to file with the Securities and Exchange Commission
an Annual Report on Form 10-K for the year ended December 31, 1999 under the
Securities and Exchange Act of 1934, as amended; and
WHEREAS, the undersigned holds and may hereafter from time to time hold one
or more positions in the Corporation whether as an Officer, a Director, or both,
such that the undersigned may be required or permitted in such capacity or
capacities, or on behalf of the Corporation, to sign one or more of such
documents;
NOW, THEREFORE, the undersigned hereby constitutes and appoints W.H.
Schumann III, T.P. Hester, and S.H. Shapiro or any of them, his attorney for him
or her and in his or her name, place and stead, and in each of his or her
offices and capacities in the Company as may now or hereafter exist, to sign and
file said Form 10-K and any and all amendments, schedules and exhibits thereto,
hereby giving and granting to said attorneys full power and authority to do and
perform all and every act and thing whatsoever requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he or
she might or could do if personally present at the doing thereof, hereby
ratifying and confirming all that said attorneys may or shall lawfully do, or
cause to be done, by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
the 11th day of February, 2000.
/s/ Robert N. Burt
------------------
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, FMC CORPORATION, a Delaware corporation (hereinafter referred to
as the "Company"), proposes to file with the Securities and Exchange Commission
an Annual Report on Form 10-K for the year ended December 31, 1999 under the
Securities and Exchange Act of 1934, as amended; and
WHEREAS, the undersigned holds and may hereafter from time to time hold one
or more positions in the Corporation whether as an Officer, a Director, or both,
such that the undersigned may be required or permitted in such capacity or
capacities, or on behalf of the Corporation, to sign one or more of such
documents;
NOW, THEREFORE, the undersigned hereby constitutes and appoints W.H.
Schumann III, T.P. Hester, and S.H. Shapiro or any of them, his attorney for him
or her and in his or her name, place and stead, and in each of his or her
offices and capacities in the Company as may now or hereafter exist, to sign and
file said Form 10-K and any and all amendments, schedules and exhibits thereto,
hereby giving and granting to said attorneys full power and authority to do and
perform all and every act and thing whatsoever requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he or
she might or could do if personally present at the doing thereof, hereby
ratifying and confirming all that said attorneys may or shall lawfully do, or
cause to be done, by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
the 11th day of February, 2000.
/s/ Joseph H. Netherland
-------------------------
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, FMC CORPORATION, a Delaware corporation (hereinafter referred to
as the "Company"), proposes to file with the Securities and Exchange Commission
an Annual Report on Form 10-K for the year ended December 31, 1999 under the
Securities and Exchange Act of 1934, as amended; and
WHEREAS, the undersigned holds and may hereafter from time to time hold one
or more positions in the Corporation whether as an Officer, a Director, or both,
such that the undersigned may be required or permitted in such capacity or
capacities, or on behalf of the Corporation, to sign one or more of such
documents;
NOW, THEREFORE, the undersigned hereby constitutes and appoints W.H.
Schumann III, T.P. Hester, and S.H. Shapiro or any of them, his attorney for him
or her and in his or her name, place and stead, and in each of his or her
offices and capacities in the Company as may now or hereafter exist, to sign and
file said Form 10-K and any and all amendments, schedules and exhibits thereto,
hereby giving and granting to said attorneys full power and authority to do and
perform all and every act and thing whatsoever requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he or
she might or could do if personally present at the doing thereof, hereby
ratifying and confirming all that said attorneys may or shall lawfully do, or
cause to be done, by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
the 11th day of February, 2000.
/s/ B. A. Bridgewater, Jr.
---------------------------
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, FMC CORPORATION, a Delaware corporation (hereinafter referred to
as the "Company"), proposes to file with the Securities and Exchange Commission
an Annual Report on Form 10-K for the year ended December 31, 1999 under the
Securities and Exchange Act of 1934, as amended; and
WHEREAS, the undersigned holds and may hereafter from time to time hold one
or more positions in the Corporation whether as an Officer, a Director, or both,
such that the undersigned may be required or permitted in such capacity or
capacities, or on behalf of the Corporation, to sign one or more of such
documents;
NOW, THEREFORE, the undersigned hereby constitutes and appoints W.H.
Schumann III, T.P. Hester, and S.H. Shapiro or any of them, his attorney for him
or her and in his or her name, place and stead, and in each of his or her
offices and capacities in the Company as may now or hereafter exist, to sign and
file said Form 10-K and any and all amendments, schedules and exhibits thereto,
hereby giving and granting to said attorneys full power and authority to do and
perform all and every act and thing whatsoever requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he or
she might or could do if personally present at the doing thereof, hereby
ratifying and confirming all that said attorneys may or shall lawfully do, or
cause to be done, by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
the 11th day of February, 2000.
/s/ Patricia A. Buffler
------------------------
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, FMC CORPORATION, a Delaware corporation (hereinafter referred to
as the "Company"), proposes to file with the Securities and Exchange Commission
an Annual Report on Form 10-K for the year ended December 31, 1999 under the
Securities and Exchange Act of 1934, as amended; and
WHEREAS, the undersigned holds and may hereafter from time to time hold one
or more positions in the Corporation whether as an Officer, a Director, or both,
such that the undersigned may be required or permitted in such capacity or
capacities, or on behalf of the Corporation, to sign one or more of such
documents;
NOW, THEREFORE, the undersigned hereby constitutes and appoints W.H.
Schumann III, T.P. Hester, and S.H. Shapiro or any of them, his attorney for him
or her and in his or her name, place and stead, and in each of his or her
offices and capacities in the Company as may now or hereafter exist, to sign and
file said Form 10-K and any and all amendments, schedules and exhibits thereto,
hereby giving and granting to said attorneys full power and authority to do and
perform all and every act and thing whatsoever requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he or
she might or could do if personally present at the doing thereof, hereby
ratifying and confirming all that said attorneys may or shall lawfully do, or
cause to be done, by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
the 11th day of February, 2000.
/s/ Albert J. Costello
-----------------------
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, FMC CORPORATION, a Delaware corporation (hereinafter referred to
as the "Company"), proposes to file with the Securities and Exchange Commission
an Annual Report on Form 10-K for the year ended December 31, 1999 under the
Securities and Exchange Act of 1934, as amended; and
WHEREAS, the undersigned holds and may hereafter from time to time hold one
or more positions in the Corporation whether as an Officer, a Director, or both,
such that the undersigned may be required or permitted in such capacity or
capacities, or on behalf of the Corporation, to sign one or more of such
documents;
NOW, THEREFORE, the undersigned hereby constitutes and appoints W.H.
Schumann III, T.P. Hester, and S.H. Shapiro or any of them, his attorney for him
or her and in his or her name, place and stead, and in each of his or her
offices and capacities in the Company as may now or hereafter exist, to sign and
file said Form 10-K and any and all amendments, schedules and exhibits thereto,
hereby giving and granting to said attorneys full power and authority to do and
perform all and every act and thing whatsoever requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he or
she might or could do if personally present at the doing thereof, hereby
ratifying and confirming all that said attorneys may or shall lawfully do, or
cause to be done, by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
the 11th day of February, 2000.
/s/ Paul L. Davies, Jr.
------------------------
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, FMC CORPORATION, a Delaware corporation (hereinafter referred to
as the "Company"), proposes to file with the Securities and Exchange Commission
an Annual Report on Form 10-K for the year ended December 31, 1999 under the
Securities and Exchange Act of 1934, as amended; and
WHEREAS, the undersigned holds and may hereafter from time to time hold one
or more positions in the Corporation whether as an Officer, a Director, or both,
such that the undersigned may be required or permitted in such capacity or
capacities, or on behalf of the Corporation, to sign one or more of such
documents;
NOW, THEREFORE, the undersigned hereby constitutes and appoints W.H.
Schumann III, T.P. Hester, and S.H. Shapiro or any of them, his attorney for him
or her and in his or her name, place and stead, and in each of his or her
offices and capacities in the Company as may now or hereafter exist, to sign and
file said Form 10-K and any and all amendments, schedules and exhibits thereto,
hereby giving and granting to said attorneys full power and authority to do and
perform all and every act and thing whatsoever requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he or
she might or could do if personally present at the doing thereof, hereby
ratifying and confirming all that said attorneys may or shall lawfully do, or
cause to be done, by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
the 11th day of February, 2000.
/s/ Asbjorn Larsen
-------------------
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, FMC CORPORATION, a Delaware corporation (hereinafter referred to
as the "Company"), proposes to file with the Securities and Exchange Commission
an Annual Report on Form 10-K for the year ended December 31, 1999 under the
Securities and Exchange Act of 1934, as amended; and
WHEREAS, the undersigned holds and may hereafter from time to time hold one
or more positions in the Corporation whether as an Officer, a Director, or both,
such that the undersigned may be required or permitted in such capacity or
capacities, or on behalf of the Corporation, to sign one or more of such
documents;
NOW, THEREFORE, the undersigned hereby constitutes and appoints W.H.
Schumann III, T.P. Hester, and S.H. Shapiro or any of them, his attorney for him
or her and in his or her name, place and stead, and in each of his or her
offices and capacities in the Company as may now or hereafter exist, to sign and
file said Form 10-K and any and all amendments, schedules and exhibits thereto,
hereby giving and granting to said attorneys full power and authority to do and
perform all and every act and thing whatsoever requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he or
she might or could do if personally present at the doing thereof, hereby
ratifying and confirming all that said attorneys may or shall lawfully do, or
cause to be done, by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
the 11th day of February, 2000.
/s/ Edward J. Mooney
---------------------
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, FMC CORPORATION, a Delaware corporation (hereinafter referred to
as the "Company"), proposes to file with the Securities and Exchange Commission
an Annual Report on Form 10-K for the year ended December 31, 1999 under the
Securities and Exchange Act of 1934, as amended; and
WHEREAS, the undersigned holds and may hereafter from time to time hold one
or more positions in the Corporation whether as an Officer, a Director, or both,
such that the undersigned may be required or permitted in such capacity or
capacities, or on behalf of the Corporation, to sign one or more of such
documents;
NOW, THEREFORE, the undersigned hereby constitutes and appoints W.H.
Schumann III, T.P. Hester, and S.H. Shapiro or any of them, his attorney for him
or her and in his or her name, place and stead, and in each of his or her
offices and capacities in the Company as may now or hereafter exist, to sign and
file said Form 10-K and any and all amendments, schedules and exhibits thereto,
hereby giving and granting to said attorneys full power and authority to do and
perform all and every act and thing whatsoever requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he or
she might or could do if personally present at the doing thereof, hereby
ratifying and confirming all that said attorneys may or shall lawfully do, or
cause to be done, by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
the 11th day of February, 2000.
/s/ William F. Reilly
----------------------
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, FMC CORPORATION, a Delaware corporation (hereinafter referred to
as the "Company"), proposes to file with the Securities and Exchange Commission
an Annual Report on Form 10-K for the year ended December 31, 1999 under the
Securities and Exchange Act of 1934, as amended; and
WHEREAS, the undersigned holds and may hereafter from time to time hold one
or more positions in the Corporation whether as an Officer, a Director, or both,
such that the undersigned may be required or permitted in such capacity or
capacities, or on behalf of the Corporation, to sign one or more of such
documents;
NOW, THEREFORE, the undersigned hereby constitutes and appoints W.H.
Schumann III, T.P. Hester, and S.H. Shapiro or any of them, his attorney for him
or her and in his or her name, place and stead, and in each of his or her
offices and capacities in the Company as may now or hereafter exist, to sign and
file said Form 10-K and any and all amendments, schedules and exhibits thereto,
hereby giving and granting to said attorneys full power and authority to do and
perform all and every act and thing whatsoever requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he or
she might or could do if personally present at the doing thereof, hereby
ratifying and confirming all that said attorneys may or shall lawfully do, or
cause to be done, by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
the 11th day of February, 2000.
/s/ Enrique J. Sosa
--------------------
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, FMC CORPORATION, a Delaware corporation (hereinafter referred to
as the "Company"), proposes to file with the Securities and Exchange Commission
an Annual Report on Form 10-K for the year ended December 31, 1999 under the
Securities and Exchange Act of 1934, as amended; and
WHEREAS, the undersigned holds and may hereafter from time to time hold one
or more positions in the Corporation whether as an Officer, a Director, or both,
such that the undersigned may be required or permitted in such capacity or
capacities, or on behalf of the Corporation, to sign one or more of such
documents;
NOW, THEREFORE, the undersigned hereby constitutes and appoints W.H.
Schumann III, T.P. Hester, and S.H. Shapiro or any of them, his attorney for him
or her and in his or her name, place and stead, and in each of his or her
offices and capacities in the Company as may now or hereafter exist, to sign and
file said Form 10-K and any and all amendments, schedules and exhibits thereto,
hereby giving and granting to said attorneys full power and authority to do and
perform all and every act and thing whatsoever requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he or
she might or could do if personally present at the doing thereof, hereby
ratifying and confirming all that said attorneys may or shall lawfully do, or
cause to be done, by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
the 11th day of February, 2000.
/s/ James R. Thompson
----------------------
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, FMC CORPORATION, a Delaware corporation (hereinafter referred to
as the "Company"), proposes to file with the Securities and Exchange Commission
an Annual Report on Form 10-K for the year ended December 31, 1999 under the
Securities and Exchange Act of 1934, as amended; and
WHEREAS, the undersigned holds and may hereafter from time to time hold one
or more positions in the Corporation whether as an Officer, a Director, or both,
such that the undersigned may be required or permitted in such capacity or
capacities, or on behalf of the Corporation, to sign one or more of such
documents;
NOW, THEREFORE, the undersigned hereby constitutes and appoints W.H.
Schumann III, T.P. Hester, and S.H. Shapiro or any of them, his attorney for him
or her and in his or her name, place and stead, and in each of his or her
offices and capacities in the Company as may now or hereafter exist, to sign and
file said Form 10-K and any and all amendments, schedules and exhibits thereto,
hereby giving and granting to said attorneys full power and authority to do and
perform all and every act and thing whatsoever requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he or
she might or could do if personally present at the doing thereof, hereby
ratifying and confirming all that said attorneys may or shall lawfully do, or
cause to be done, by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
the 11th day of February, 2000.
/s/ Clayton Yeutter
--------------------
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from FMC
Corporation's 1999 Annual Report on Form 10-K and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 64
<SECURITIES> 0
<RECEIVABLES> 650
<ALLOWANCES> 15
<INVENTORY> 458
<CURRENT-ASSETS> 1,417
<PP&E> 3,724
<DEPRECIATION> 2,032
<TOTAL-ASSETS> 3,996
<CURRENT-LIABILITIES> 1,576
<BONDS> 945
0
0
<COMMON> 4
<OTHER-SE> 739
<TOTAL-LIABILITY-AND-EQUITY> 3,996
<SALES> 4,111
<TOTAL-REVENUES> 4,111
<CGS> 3,008
<TOTAL-COSTS> 3,725
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 117
<INCOME-PRETAX> 274<F1>
<INCOME-TAX> 58
<INCOME-CONTINUING> 216
<DISCONTINUED> 3
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 213
<EPS-BASIC> 6.75
<EPS-DILUTED> 6.57
<FN>
<F1> Pretax income from continuing operations is net of $55.5 gain on sale of
businesses, $(43.8) one-time charges, and $(5.1) relating to minority
interests. Minority interests are primarily partners' share of partnership
profits.</FN>
</TABLE>
