PAGE 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For The Fiscal Year Ended December 31, 1995
Commission File No. 1-996
(A) Full title of the plan and the address
of the plan, if different from that of
the issuer named below:
GENERAL SIGNAL CORPORATION
SAVINGS AND STOCK OWNERSHIP PLAN
One High Ridge Park
Stamford, Connecticut 06904
(B) Name of issuer of the securities held
pursuant to the plan and the address
of its principal executive office:
GENERAL SIGNAL CORPORATION
One High Ridge Park
Stamford, Connecticut 06904
<PAGE>
PAGE 2
ITEM 1. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements: Pages
Report of Independent Auditors 4
Statements of Financial Condition as of
December 31, 1995 and December 31, 1994 5-6
Statements of Income and Changes in
Participants' Equity for the years
ended December 31, 1995 and December
31, 1994 7-8
Notes to Financial Statements 9-19
All schedules are omitted as the required
information is presented in the Financial
Statements.
(b) Exhibits:
4.1 General Signal Corporation Savings and Stock
Ownership Plan as amended and restated January
1,1996 (filed herewith).
23.1 Consent of Ernst & Young LLP (filed herewith).
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Corporate Pension Board has duly caused this annual report to be signed by
the undersigned thereunto duly authorized.
GENERAL SIGNAL CORPORATION
SAVINGS AND STOCK OWNERSHIP PLAN
BY /s/ Edgar J. Smith, Jr.
Member of the Corporate
Pension Board
DATE: May 3, 1996
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PAGE 4
REPORT OF INDEPENDENT AUDITORS
The Corporate Pension Board
General Signal Corporation
We have audited the accompanying statements of financial condition of
the General Signal Corporation Savings and Stock Ownership Plan as of
December 31, 1995 and 1994, and the related statements of income and changes
in participants' equity for the years then ended. These financial statements
are the responsibility of the Plan's management. Our responsibility is to
express an opinion on these 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 financial statements referred to above present
fairly, in all material respects, the financial position of the General
Signal Corporation Savings and Stock Ownership Plan at December 31, 1995 and
1994, and the results of its operations and changes in participants' equity
for the years then ended in conformity with generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The Fund Information in the
Statement of Financial Condition and Statement of Income and Changes in
Participants' Equity is presented for purposes of additional analysis rather
than to present the financial condition and income and changes in
participants' equity of each fund. The Fund Information has been subjected
to the auditing procedures applied in our audits of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/ Ernst & Young LLP
Stamford, Connecticut
March 28, 1996
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<TABLE>
GENERAL SIGNAL CORPORATION SAVINGS AND STOCK OWNERSHIP PLAN
Statement of Financial Condition With Fund Information
December 31, 1995
<CAPTION>
Assets Fidelity Fixed Income General Signal S&P
Puritan Fund Common Stock 500 Equity
Fund Fund Index Fund Total
<S> <C> <C> <C> <C> <C>
Investments, at market:
General Signal Corporation Common Stock,
2,426,368 shares (cost $69,613,867) $78,553,664 $78,553,664
Bankers Trust S&P 500 Equity Index Fund,
19,939 shares (cost $15,603,559) $26,946,057 $26,946,057
Fidelity Puritan Fund
2,063,601 shares(cost $31,748,455) $35,101,848 $35,101,848
Guaranteed interest contracts $75,879,578 $75,879,578
Dividends and interest receivable 358,774 2 358,776
Cash and Short Term Investments 11,391,890 11 11,391,901
Contributions receivable:
Employee 180,315 504,711 838,731 138,517 1,662,274
Employer 827,119 827,119
Participant Loans 443,389 1,087,170 1,050,148 357,590 2,938,297
Other assets 14,233 36,954 29,089 10,224 90,500
TOTAL ASSETS $35,739,785 $89,259,077 $81,298,762 $27,452,390 $233,750,014
Liabilities and Participants' Equity
Liabilities:
Advances from General Signal $70,000 $490,000 $677,463 $80,000 $1,317,463
Due to/(from) other funds 608,521 2,259,077 (2,158,305) (709,293)
Other liabilities 12,500 7,346 19,846
Participants' equity 35,061,264 86,497,500 82,779,604 28,074,337 232,412,705
TOTAL LIABILITIES &
PARTICIPANTS' EQUITY: $35,739,785 $89,259,077 $81,298,762 $27,452,390 $233,750,014
</TABLE>
See accompanying notes to financial statements.
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^L
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<TABLE>
GENERAL SIGNAL CORPORATION SAVINGS AND STOCK OWNERSHIP PLAN
Statement of Financial Condition With Fund Information
December 31, 1994
<CAPTION>
Assets Fidelity Fixed Income General Signal S&P
Puritan Fund Common Stock 500 Equity
Fund Fund Index Fund Total
<S> <C> <C> <C> <C> <C>
Investments, at market:
General Signal Corporation Common Stock,
2,353,271 shares (cost $63,767,490) $75,010,513 $ 75,010,513
Bankers Trust S&P 500 Equity Index Fund,
19,010 shares (cost $13,245,472) $19,057,474 19,057,474
Fidelity Puritan Fund
1,950,954 shares
(cost $29,697,433) $28,893,632 28,893,632
Guaranteed interest contracts (note 2) $85,722,383 85,722,383
Dividends and interest receivable 446,185 4 446,189
Cash and Short Term Investments 4,679,271 87 4,679,358
Contributions receivable:
Employee 258,927 516,001 484,911 148,096 1,407,935
Employer 0 0 659,765 0 659,765
Participant Loans 402,645 1,244,540 1,042,332 262,428 2,951,945
Other assets 21,919 35,336 136,722 12,742 206,719
TOTAL ASSETS $29,577,123 $92,643,716 $77,334,330 $19,480,744 $219,035,913
Liabilities and Participants' Equity
Liabilities:
Advances from General Signal $ 70,000 $ 490,000 $ 600,000 $ 80,000 $ 1,240,000
Due to/(from) other funds (116,936) (109,836) 5,981 220,791 0
Other liabilities 15,720 9,041 24,761
Participants' equity 29,624,059 92,247,832 76,728,349 19,170,912 217,771,152
TOTAL LIABILITIES &
PARTICIPANTS' EQUITY: $29,577,123 $92,643,716 $77,334,330 $19,480,744 $219,035,913
</TABLE>
See accompanying notes to financial statements.
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<TABLE>
GENERAL SIGNAL CORPORATION SAVINGS AND STOCK OWNERSHIP PLAN
Statement of Income and Changes in Participants' Equity With Fund Information
For the fiscal year ended December 31, 1995
<CAPTION>
Fidelity Fixed Income General Signal S&P
Puritan Fund Common Stock 500 Equity
Fund Fund Fund Total
<S> <C> <C> <C> <C> <C>
Investment Income:
Interest 11 5,327,274 4,242 38 5,331,565
Dividend 975,538 2,314,126 39 3,289,703
Realized gain/(loss) on
investments 1,154,228 3,471,643 1,618,539 6,244,410
Increase/(decrease) in unrealized
appreciation 4,157,194 (2,303,225) 5,530,496 7,384,465
6,286,971 5,327,274 3,486,786 7,149,112 22,250,143
Contributions
Participating employees 3,784,557 6,653,520 6,914,094 2,617,929 19,970,100
Employer net of forfeitures 8,928,494 8,928,494
3,784,557 6,653,520 15,842,588 2,617,929 28,898,594
Interfund transfers (370,902) (1,721,086) (973,445) 3,065,433
Withdrawals by participating employees
(5,252,154) (18,335,754) (13,262,347) (4,673,286) (41,523,541)
Loans to participants 18,078 75,312 (221,073) 47,008 (80,675)
Loan repayments 277,569 795,395 516,836 174,388 1,764,188
Assets transferred from prior trustee 693,086 1,537,697 661,910 542,341 3,435,034
Expenses (82,690) (19,500) (102,190)
Net changes in participants' equity 5,437,205 (5,750,332) 6,051,255 8,903,425 14,641,553
Participants' equity,
December 31, 1994 29,624,059 92,247,832 76,728,349 19,170,912
Participants' equity,
December 31, 1995 $35,061,264 $86,497,500 $82,779,604 $28,074,337 $232,412,705
</TABLE>
See accompanying notes to financial statements.
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PAGE 8
<TABLE>
GENERAL SIGNAL CORPORATION SAVINGS AND STOCK OWNERSHIP PLAN
Statement of Income and Changes in Participants' Equity With Fund Information
For the fiscal year ended December 31, 1994
<CAPTION>
Fidelity Fixed Income General Signal S&P
Puritan Fund Common Stock 500 Equity
Fund Fund Fund Total
<S> <C> <C> <C> <C> <C>
Investment Income:
Interest $ 894 $5,986,522 $ 20,204 $ 1,674 $ 6,009,294
Dividends 965,668 0 2,001,658 726 2,968,052
Realized gain/(loss) on investments
(note 4) 1,597,759 0 1,901,098 1,325,642 4,824,499
Increase/(decrease) in unrealized
appreciation (note 5) (1,960,366) 0 (7,841,479) (1,064,209) (10,866,054)
$ 603,955 $5,986,522 ($3,918,519) $ 263,833 $ 2,935,791
Contributions (notes 2 and 3):
Participating employees $ 3,231,089 $6,960,562 $ 6,166,398 $ 2,174,340 $ 18,532,389
Employer-net of forfeitures
of $222,223 0 0 8,595,584 0 8,595,584
$ 3,231,089 $6,960,562 $14,761,982 $ 2,174,340 $ 27,127,973
Interfund transfers 3,082,277 (2,204,418) 667,793 (1,545,652) 0
Withdrawals by participating employees
(note 2) (5,281,196) (16,700,377) (9,106,128) (2,745,174) (33,832,875)
Loans to participants (note 2) (171,231) (687,732) (285,671) (167,600) (1,312,234)
Loan repayments 253,933 516,232 446,546 159,654 1,376,365
Assets transferred from prior trustee 0
Assets transferred to successor trustee 0
Expenses 0 (72,818) 0 (28,915) (101,733)
Net changes in participants' equity $ 1,718,827 ($6,202,029) $ 2,566,003 ($1,889,514) ($3,806,713)
Participants' equity, December 31, 1993 $27,905,232 98,449,861 $74,162,346 21,060,426 221,577,865
Participants' equity, December 31, 1994 $29,624,059 $92,247,832 $76,728,349 $19,170,912 $217,771,152
</TABLE>
See accompanying notes to financial statements.
-8-
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PAGE 9
GENERAL SIGNAL CORPORATION
SAVINGS AND STOCK OWNERSHIP PLAN
Notes to Financial Statements
1. Summary of Significant Accounting Policies
Investments
The market values of equity securities owned by the General Signal
Corporation Savings and Stock Ownership Plan (the "Plan") are based upon the
closing market quotation on December 31 of the respective plan year. Gains
and losses from the distribution and disposition of equity securities are
determined based upon the average cost of the applicable securities.
The investments of the fixed income fund are currently invested in
investment contracts issued by various insurance companies and banks, as well
as in U. S. Government mortgage-backed securities. These
investments are valued at historical costs. (see note 2)
Basis of Accounting
The financial statements have been prepared on the accrual basis of
accounting.
Withdrawals and Loans
Withdrawals and loans are payable as of the Valuation Date (March 31,
June 30, September 30 or December 31) for all withdrawal and loan requests
received at least 15 days prior to the Valuation Date (see note 2).
Use of Estimates
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
2. Plan Description
The purpose of the Plan is to encourage employees to make and continue
careers with the Employer by providing eligible employees with a vehicle to
save part of their income on a regular and long term tax-deferred basis, to
strengthen their interest in General Signal Corporation ("Corporation") and
its profitability by the investment of Employer contributions in Corporation
Common Stock, and to provide a supplemental source of retirement income. As
used in the Plan, the term "Employer" means the Corporation and any other
organization which is designated by appropriate action of the Corporation's
Corporate Pension Board (the "Board") as a participating employer under the
Plan, and which adopts the Plan by appropriate action of its board of
directors or other governing body, as applicable.
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PAGE 10
The Plan is an individual account plan under which a participant's
benefits are based on amounts contributed to the Plan by the participant and
by the Employer on his behalf, as adjusted by income, expenses, gains and
losses which may be allocated to such participant's accounts under the Plan.
The Plan is intended to comply with the provisions of Section 404(c) of
the Employee Retirement Income Security Act of 1974, as amended and that as a
result the fiduciaries of the Plan may be relieved of liability for any
losses which result from the investment instructions given by a participant.
Tax Deferred and Taxed Contributions - Each employee who elects to
participate in the Plan (a "Member") may elect to have his Employer make
contributions to the Plan on his behalf from such Member's total earnings
paid by an Employer ("Compensation") by a periodic payroll reduction in an
amount equal to at least 3% but not more than 17% of his Compensation (in
whole percentages), as determined by the Member ("Tax Deferred
Contributions").
A Member may also elect to make contributions to the Plan on an
after-tax basis ("Taxed Contributions") from his Compensation by periodic
payroll deduction in an amount not to exceed 10% of his Compensation (in
whole percentages), subject to a minimum of 3% of Compensation for a Member
who has not elected any Tax Deferred Contributions. The aggregate percentage
of Tax Deferred Contributions and Taxed Contributions may not exceed 17% of
the Member's Compensation for any period. Tax Deferred Contributions and
Taxed Contributions will hereinafter be collectively referred to as "Member
Elected Contributions".
A Member's Tax Deferred Contributions may not exceed $7,000 (subject to
cost-of-living adjustment- $9,240 for 1995 and $9,500 for 1996) for any
calendar year. To the extent an election of Tax Deferred Contributions would
exceed this limitation for any Member, it shall automatically be treated as
an election of Taxed Contributions (subject to the 10% limitation on Taxed
Contributions).
A Member may discontinue or change his rate of Member Elected
Contributions as of any quarterly Enrollment Date on at least 15 days prior
written notice to his Employer. A Member may not have discontinued
contributions made up, but may resume having contributions made on his
behalf as of any quarterly Enrollment Date by filing the appropriate
enrollment application.
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PAGE 11
Matching Contributions - On behalf of each Member in its employ who has
completed one year of Continuous Employment and is having Tax Deferred
Contributions made to this Plan or has contributed Tax Deferred Contributions
on a year to date basis equal to 3% of his Compensation for the entire Plan
Year, each Employer will make matching contributions ("Matching
Contributions")to the Plan for each month, out of current or accumulated
earnings and profits, equal to either 4% of each such Member's Compensation
if such Member elected to invest at least 3% of such Member's Compensation
for such period in the Company Stock Fund or 3% of each such Member's
Compensation if such Member did not elect to invest at least 3% of such
Member's Compensation for such period in the Company Stock Fund, less any
amount of forfeitures then to be applied to reduce such Matching
Contributions.
The portion of the Plan consisting of Matching Contributions (and any
income, expenses, gains and losses allocable thereto) is intended to
constitute a stock bonus plan under Section 401(a) of the Code which
qualifies as an Employee Stock Ownership Plan ("ESOP") under Section
4975(e)(7) of the Internal Revenue Code (the "Code"). Accordingly, Matching
Contributions shall be invested in Corporation Common Stock but may be held
in investments of a short-term nature pending investment in Corporation
Common Stock. Certain additional provisions set forth in the Plan will apply
if the Plan incurs an "Acquisition Loan" to acquire shares of Corporation
Common Stock.
Member Elected Contributions and Matching Contributions are paid monthly
to The Chase Manhattan Bank, N.A. (the "Trustee"). The Member Elected
Contributions will be invested in one or more Investment Funds which are made
available from time to time by the Board for such purpose as selected by the
Member in 25% increments; provided, however, that if the Member elects to
invest 3% of such Member's Compensation in the Company Stock Fund, the
applicable 25% increments shall apply to any additional Member Elected
Contributions. The current Investment Funds available are as follows:
(A) Fidelity Puritan Fund - The Fidelity Puritan Fund is primarily an
income fund with a secondary emphasis on growth. The fund's investment
emphasis is on producing income while preserving the capital of its
investors. However, since the portfolio is comprised of common and preferred
stocks, as well as bonds, the fund may also obtain growth of capital. The
Fidelity Puritan Fund is a mutual fund managed by Fidelity Management &
Research Company.
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PAGE 12
(B) Fixed Income Fund - The purpose of the Fixed Income Fund is to
provide a way to achieve steady income with Member Elected Contributions. As
of August 1, 1994, this fund is managed by T. Rowe Price Stable Asset
Management, Inc. Due to the size of assets managed and experience in
managing similar funds, T. Rowe Price Stable Asset Management, Inc. is able
to obtain competitive rates on a daily basis, thoroughly research and monitor
the credit quality of the issuers and provide adequate liquidity and
diversification of the portfolio. The fund is currently invested in
investment contracts issued by various insurance companies and banks, as well
as in U.S. Government mortgage-backed securities. These investments are
typically unsecured contractual obligations under which the issuer agrees to
repay principal and accrued interest over a specified period of time. The
terms, interest rates and the duration of the investment contracts will vary
from time to time depending on the terms negotiated and on pre- vailing
interest rates. The interest rate earned by Members is a composite
reflecting the weighted average of all investments in the Fixed Income Fund,
and it changes daily. While the contracts provide for the return of
principal and an effective rate of interest for a specified period of time,
the Corporation has no control over the investment policies or fund
management of the institutions and can assume no responsibility for any
losses a Member may experience by investing in the Fixed Income Fund.
Therefore, the creditworthiness of each issuer should be considered in the
evaluation of this fund.
The Plan has investments in guaranteed interest contracts with the
following companies at December 31, 1995 and December 31, 1994:
December 31, December 31,
1995 1994
CNA Insurance Company $ 0 $ 263
Canada Life 6,319,279 0
John Hancock Ins. Co. 5,570,332 5,236,682
Metropolitan Life 5,335,324 10,556,159
Mutual Benefit Life 22,781,406 22,300,088
New York Life 3,143,465 0
Principal Mutual Life
Insurance Company 7,238,862 5,359,287
Provident National 4,146,284 3,894,687
Prudential Insurance Co.
of America 5,693,103 10,556,847
State Mutual Companies 5,306,127 10,065,510
Union Bank of Switzerland 10,345,396 17,752,860
Total Contracts $75,879,578 $85,722,383
The guaranteed investment contracts ("GICS") held by General Signal
Corporation except for the Mutual Benefit Contract are fully
benefit-responsive and as such have been recorded at their contract value on
the face of the financial statements in accordance with Statement of Position
("SOP") 94-4. Since the Mutual Benefit Life contract was entered into before
December 31, 1993, it is accounted for at contract value in accordance with
SOP 94-4. The average yield for these GICS for the years ended December 31,
1995 and 1994 was 6.6% and 6.7%, respectively. The crediting interest rates
for the GICS ranged from 5.1% to 8.85% and 3.5% to 9.5% at December 31, 1995
and 1994, respectively. Based upon the GIC interest rates available at
December 31, 1995, the fair value of the investment contracts is
approximately $76,612,800 at that date. The Plan's intention is to hold the
GIC's until maturity and to make withdrawals from them only to pay benefits
in the normal course of operations of the Plan. The difference between the
fair value and contract value is not allocable to individual participants.
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PAGE 13
(C) Company Stock Fund - The Company Stock Fund is available for
employees who choose to invest in shares of General Signal Corporation Common
Stock. The purpose of this fund is to provide employees the opportunity to
invest directly in the Corporation and share in its future. Member Elected
Contributions and dividends will be invested in whole and fractional shares
of Corporation Common Stock. Shares will be purchased on the open market or
directly from the Corporation out of its treasury shares at the fair market
value of the stock under the direction of the Trustee.
(D) S&P 500 Equity Index Fund - The assets of the S&P 500 Equity Index
Fund are invested in a Standard & Poor's 500 Equity Index Fund managed by
Bankers Trust Company. The objective of the fund is to provide investment
results which approximate the overall performance of the common stocks
included in the Standard and Poor's Composite Index of 500 stocks.
The Trustee or the investment manager, as the case may be, may in its
discretion temporarily invest any part of any Fund in selected short-term
investments either through direct investment or through the medium of a
commingled fund or funds. Amounts held in the Trust from time to time
pending investment in the applicable investment fund, or pending payment of a
withdrawal or distribution may be held by the Trustee uninvested or may be
invested in short-term instruments at the direction of the Corporation.
Upon 15 days advance written notice, a participating employee may on the
applicable January 1, April 1, July 1, or October 1, change the allocation of
his future contributions, and may elect to transfer his Member Elected
Contributions from one investment fund to another. Employer contributions
are invested in General Signal Common Stock; provided, however that a Member
may transfer part or all of the balance of his Matching Contribution Account
which represents the amount of the company matching contributions previously
made to either the Best Power Technology, Inc. Retirement Investment Plan and
Trust or the Retirement Savings Plan for Employees of Data Switch Corporation
to another investment fund. Once an employee attains age 55 and has
completed five years of continuous employment, he may transfer Matching
Contributions to the three other investment funds.
The number of participants in each investment fund at December 31, 1995
was as follows:
Fidelity Puritan Fund - 3,218
Fixed Income Fund - 4,942
Company Stock Fund- 7,837
S&P 500 Equity Index Fund - 2,844
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PAGE 14
Withdrawals are provided for in the following order:
Under certain circumstances (as described below), a Member may make
withdrawals from his Accounts while he is still an employee. Each Member is
entitled to two withdrawal requests during any calendar year. All withdrawals
must be made as of the Valuation Date which follows by at least 15 days the
date on which the Board receives notice of the withdrawal request. Payment
to a Member will occur approximately 6 weeks after the Valuation Date. No
investment experience will be applied to the withdrawal after the Valuation
Date.
Withdrawals made prior to termination of employment with the Employer
will be charged (i) first, to the Member's Taxed Contribution Account; (ii)
second, the Member's Matured Stock Account (vested portion of Matching
Contributions), provided that withdrawal of amounts attributable to
Matching Contributions made less than 24 months prior to the effective date
of the withdrawal may not be made by one who has not been a Member for at
least 60 months prior to that effective date; (iii) third, to the Member's
Tax Deferred Contribution Account if the withdrawal is after such Member has
attained 50 and 1/2 without proof of hardship; and (iv) fourth, to the
Member's Tax Deferred Contribution Account but only if the withdrawal is on
account of hardship and is approved by the Board. However, only the amount
of the Tax Deferred Contributions (but no earnings thereon) may be included
in a hardship withdrawal on or after January 1, 1989. The withdrawal may be
authorized only to the extent necessary to satisfy the hardship.
In addition, pursuant to rules and regulations established by the Board,
a Member may obtain a loan from the Plan which shall be charged against such
Member's Accounts. The amount of such a loan may not in the aggregate exceed
the balance in the Member's Accounts exclusive of amounts attributable to
Matching Contributions made on his behalf (whether vested or unvested).
The Board shall prescribe the interest rate charged on loans, the maximum
loan term, the minimum and maximum amounts of loans, the security for loans
(which shall include the value of a Member's Accounts), the method and timing
of repayment and other requirements as it shall deem appropriate, subject to
Internal Revenue Code and Department of Labor regulations. Loans shall be
available to all Members on a non-discriminatory basis.
Upon a Member's termination of service by reason of retirement, after
completion of at least five years of continuous employment, disability or
death, the balance of his Accounts will be distributed to him (or in the
case of his death, to his beneficiary) as soon as practicable following the
Valuation Date coincident with or next following such termination of service.
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Page 15
The payment of benefits shall commence not later than April 1 of the
calendar year next following the calendar year in which the Member attains
age 70-1/2.
Other Termination of Employment - If a Member terminates employment with
the Employer for any reason other than death, disability or retirement, and
prior to completion of five years of continuous employment, he must elect
either:
(A) to make one last in-service withdrawal of all or part of his Taxed
Contribution Account and his Matured Stock Account and to leave the balance
of his Accounts in the Plan until his rights to all Matching Contributions
have become nonforfeitable;
(B) to receive the value of all of his Accounts (other than his Matching
Contribution Account), and to forfeit his unvested Matching Contribution
Account subject to the Member's right to restore such forfeited amount in
accordance with the Plan; or
(C) to defer receipt of all amounts until his rights to all Matching
Contributions credited to his Matching Contribution Account on the date of
his termination of employment become nonforfeitable.
A Member electing to defer receipt of his Accounts at termination under
(A) or (C) above may nevertheless elect at some subsequent date, before all
Matching Contributions have become nonforfeitable, to receive the value of
all his Accounts together with all Matching Contributions which at that date
have become nonforfeitable in accordance with (B) above.
If the amount credited to a Member's Accounts exceeds $3,500, the
distribution will not commence prior to the Member's attainment of age 62
unless the Member consents to the distribution.
If a Member's employment with the Employer terminates and he is not
reemployed before incurring five consecutive one-year breaks in service, the
balance of his Matching Contributions Account will be forfeited as of
December 31 of the calendar year in which occurs the fifth such consecutive
one-year break in service. Amounts forfeited on account of termination of
employment prior to vesting will be applied, as soon as practicable, to
reduce the Employer's Matching Contributions to the Plan.
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3. Vesting Rights of Members
The portion of a Member's account which consists of his contribu- tions
and the net investment income allocated thereto is 100% vested at all times.
The portion of a Member's account which consists of Matching Contributions
and the net investment income allocated thereto becomes vested after an
employee completes 5 years of continuous employment, attains age 55 and
terminates employment, becomes disabled or dies or after the end of the third
full calendar year following the calendar year for which such contributions
were made. Members will be fully vested in the event the Plan is terminated.
4. Realized Gain on Sales of Investments
YEAR ENDED DECEMBER 31
1995 1994
Fidelity Puritan Fund
Proceeds received on sales $5,837,245 $7,077,267
Cost of shares sold 4,683,017 5,479,508
Realized gain 1,154,228 $1,597,759
General Signal Common Stock
Proceeds received on sales $16,937,395 $8,531,760
Cost of shares sold 13,465,752 6,630,662
Realized gain $3,471,643 $1,901,098
S&P 500 Equity Index Fund
Proceeds received on sales $4,250,167 $5,500,770
Cost of shares sold 2,631,628 4,175,128
Realized gain $1,618,539 $1,325,642
Total realized gain $6,244,410 $4,824,499
-16-
<PAGE>
PAGE 17
5. Unrealized Appreciation (Depreciation) of Investments
YEAR ENDED DECEMBER 31
1995 1994
Fidelity Puritan Fund
Unrealized appreciation
(depreciation)
at: Beginning of fiscal year ($803,801) $1,156,565
End of fiscal year $3,353,393 (803,801)
Increase/(decrease) $4,157,194 ($1,960,366)
General Signal Common Stock
Unrealized appreciation
(depreciation)
at: Beginning of fiscal year $11,243,022 $19,084,501
End of fiscal year 8,939,797 11,243,022
Increase/(decrease) ($2,303,225) ($7,841,479)
S&P 500 Equity Index Fund
Unrealized appreciation
(depreciation)
at: Beginning of fiscal year $5,812,002 $6,876,211
End of fiscal year 11,342,498 5,812,002
Increase/(decrease) $5,530,496 ($1,064,209)
Total unrealized appreciation/
(depreciation) $7,384,465 ($10,866,054)
-17-
<PAGE>
PAGE 18
6. Federal Income Taxes
The Plan has secured a favorable determination as a qualified plan under
Section 401(a) of the Code and that the Trust created under the Plan is
exempt from Federal income tax under Section 501(a) of the Code. The
participating employees are not subject to Federal Income Tax on investment
income or on the Tax Deferred Contributions and Matching Contributions
until such funds are distributed from the Plan.
7. Administrative Costs
All costs of administering the Plan are borne by the Corporation on
behalf of the Plan; provided, however, that on and after April 1, 1991, that
all investment expenses related to each applicable investment fund will be
paid pro rata from the accounts of each Member's share of such investment
fund.
8. Investment in Mutual Benefit Life Insurance Company
Guaranteed Investment Contract
In 1991, the Plan entered into a Guaranteed Investment Contract ("GIC")
with Mutual Benefit Life Insurance Company (Mutual Benefit). The GIC was
scheduled to begin payouts of interest on March 1, 1992 and was to mature in
three installments (September 1993, March 1994 and September 1994).
On July 16, 1991, Mutual Benefit was placed in rehabilitory
conservatorship by a New Jersey state court, which resulted in a freeze on
withdrawals. This resulted from Mutual Benefit's request to the New Jersey
State Insurance Commissioner to place the company in a "rehabilitation"
status following unusually large and unexpected demands for cash withdrawals.
Mutual Benefit requested this action to protect its assets from the continued
drain of these withdrawals. Mutual Benefit has continued to make regular
payments to policy-holders and to pay death benefits. However, group annuity
payments, which included the Plan's GIC, were temporarily suspended.
-18-
<PAGE>
Page 19
On January 28, 1994, the Superior Court of New Jersey issued an order
approving the final Plan of Rehabilitation for Mutual Benefit. Each contract
has been restructured and transferred to MBL Life Assurance Corporation. The
rehabilitation plan allowed contractholders to elect to receive their
contract value less a 45% penalty in 1994 or their contract value plus
interest (at a rate which will depend on the performance of underlying
assets) over a five year period beginning in the year 2000. In addition,
Mutual Benefit may defer distribution of the contract value for an additional
seven years if necessary to satisfy obligations to all contractholders.
Since the rehabilitation plan provides for the payment of 100% of the
principal amount of the contract and the plan sponsor has selected the option
to continue to hold the contract to maturity ("opt-in"), the contract is
recorded at 100% of its contract value in the financial statements.
-19-
PAGE 1
EXHIBIT 23.1
Consent of Independent Auditors
The Corporate Pension Board
General Signal Corporation:
We consent to the incorporation by reference in the Registration
Statement (Form S-8 No. 33-46613) pertaining to the General Signal
Corporation Savings and Stock Ownership Plan and related Prospectus of our
report dated March 28, 1996 with respect to the financial statements of the
General Signal Corporation Savings and Stock Ownership Plan included in this
Annual Report (Form 11-K) for the year ended December 31, 1995.
/s/ Ernst & Young LLP
Stamford, Connecticut
April 30, 1996
<PAGE>
GENERAL SIGNAL CORPORATION
SAVINGS AND STOCK OWNERSHIP PLAN
As Amended and Restated January 1, 1996
TABLE OF CONTENTS
ARTICLE PAGE
I PURPOSE I-1
II DEFINITIONS II-1
III ELIGIBILITY AND MEMBERSHIP III-1
IV MEMBER ELECTED CONTRIBUTIONS IV-1
V EMPLOYER CONTRIBUTIONS V-1
VI MEMBERS' ACCOUNTS VI-1
VII INVESTMENT ELECTIONS VII-1
VIII VESTING VIII-1
IX IN SERVICE WITHDRAWALS IX-1
X DISTRIBUTIONS AT TERMINATION OF EMPLOYMENT X-1
XI DISTRIBUTION OF EXCESS DEFERRALS XI-1
XII DISTRIBUTION OF EXCESS CONTRIBUTIONS XII-1
XIII DISTRIBUTION OF EXCESS AGGREGATE XIII-1
CONTRIBUTIONS
XIV APPLICATION OF FORFEITURES XIV-1
XV TRUST XV-1
XVI ADMINISTRATION XVI-1
XVII APPROVAL BY THE INTERNAL REVENUE SERVICE XVII-1
XVIII GENERAL PROVISIONS XVIII-1
XIX AMENDMENT, TERMINATION AND MERGER XIX-1
XX TRANSFERS OF ACCOUNTS FROM OTHER PLANS XX-1
XXI TOP-HEAVY PROVISIONS XXI-1
<PAGE>
ARTICLE I
PURPOSE
1.1 The purpose of the General Signal Corporation Savings and Stock
Ownership Plan is to encourage employees to make and continue careers with
General Signal Corporation and its participating subsidiaries by providing
eligible employees with an efficient and convenient way to save part of their
income on a regular and long term tax- preferred basis, to strengthen their
interest in the Company and its profitability by the investment of all
Employer contributions and all Member Elected Contributions which the Member
so directs in the Common Stock of General Signal Corporation, and to provide
a supplemental source of retirement income.
1.2 The Plan was established effective January 1, 1976, and was amended
from time to time thereafter. The provisions of this restated Plan apply to
all contributions made under the Plan with respect to all payrolls paid on or
after this restatement. The provisions of the Plan as in effect from time to
time prior to this restatement will continue to apply to all contributions
made with respect to prior years, unless otherwise specifically provided.
1.3 The Plan as amended and restated and its related Trust are intended
to qualify as a plan and trust which meet the requirements of Sections
401(a), 401(k) and 501(a) of the Internal Revenue Code of 1986, as from time
to time amended.
<PAGE>
ARTICLE II
DEFINITIONS
2.1 When used in the Plan, the following terms, when capitalized, have
the meanings set forth below:
(a) "Accounts" means the separate accounts maintained by the Board on
behalf of each Member, pursuant to Section 6.1, to reflect the Member's
interest in the Trust Fund.
(b) "Act" means the Employee Retirement Income Security Act of 1974, as
from time to time amended.
(c) "Beneficiary" means the person or persons designated by the Member
or otherwise determined in accordance with Section 18.8.
(d) "Board" means the Corporate Pension Board appointed to administer
the Plan in accordance with Article XVI.
(e) "Board of Directors" means the Board of Directors of the Company.
(f) "Code" means the Internal Revenue Code of 1986, as from time to time
amended. References to specific sections of the Code are deemed to be
references to any comparable section or sections of any future legislation
that amends, supplements or supersedes such sections.
(g) "Company" means General Signal Corporation, a New York Corporation.
(h) "Compensation" means the amount which an Employee receives as salary
from the Employer including management incentive compensation, sales
incentives and commissions, overtime pay, vacation pay, holiday pay, night
shift bonus, as reported for federal income tax purposes, and before any
reduction for Tax Deferred Contributions, but excluding any payments under
the Company's stock option plans or Long Term Incentive Compensation Plan,
moving and living allowances, retainers, severance payments, any special
payments made for services performed outside his regular duties and other
special payments. Effective January 1, 1994, Compensation for any calendar
year shall be limited to $150,000 (or such larger amount as may be determined
by the Internal Revenue Service).
(i) "Continuous Employment" means the following:
(1) Continuous Employment is the number of full years, completed months
and days of service with the Controlled Group from the Employee's original
date of hire to his severance from service date, including periods of layoff,
leave of absence or other temporary breaks in service not in excess of 12
complete months. For this purpose, an Employee's "original date of hire" is
the date on which he first performs an hour of service for which he is
entitled to payment for the performance of duties for an Employer or a member
of the Controlled Group; an Employee's "severance from service date" is the
earlier of the date on which the Employee quits, retires, is discharged, or
dies, or the first anniversary of the first date of absence for any other
reason (but only if the Employee returns to active employment within the
authorized period of time). In determining whether an Employee has incurred
a severance from service date, an absence from work for any period not in
excess of 12-consecutive months which begins on or after January 1, 1985 (i)
by reason of the pregnancy of the Employee, (ii) by reason of the birth of a
child of the Employee, (iii) by reason of the placement of a child with the
Employee in connection with the adopting of such child by such Employee, or
(iv) for purposes of caring for such child for a period beginning immediately
following such birth or placement, shall be treated as Continuous Employment
for this purpose.
(2) Continuous Employment will be preserved during the first 12 complete
months following the last day of active employment, but not thereafter, and
only if the Employee returns to active employment within the authorized
period of time.
(j) "Controlled Group" means the controlled group of corporations, as
defined in Section 1563(a) of the Code, determined without regard to Section
1563(a)(4) and 1563(e)(3)(c), of which the Company or an Employer is a
member.
(k) "Disability" means a Member's physical or mental incapacity which
continues for a period of 6 con- secutive months and would entitle him to
benefits under his Employer's disability plan, or for which disability
benefits under the Social Security Act are payable.
(l) "Effective Date" means January 1, 1976.
(m) "Employee" means each person who is employed by an Employer but does
not include:
(i) a person who is neither a citizen nor a resident of the United
States and who receives no earned income from any Employer which constitutes
income from sources within the United States,
(ii) any employee of an organization who becomes employed by an Employer
as a result of the acquisition of that organization by the Employer, unless
and until the Board otherwise determines (for purposes of this Plan, the date
of the acquisition will be considered the employee's date of hire unless the
Board determines otherwise),
(iii) any person included in a unit of employees who are covered by a
collective bargaining agreement which does not expressly provide for
participation in this Plan, or
(iv) a leased employee (as defined in Section 414(n) of the Code;
provided, however, that if a leased employee becomes an Employee, prior
service as a leased employee shall be recognized for eligibility and vesting
purposes.
(n) "Employer" means the Company or any of its subsidiaries or
affiliates which may elect to participate in the Plan with the consent of the
Board.
(o) "Enrollment Date" means January 1, 1976, or the first day of any
calendar quarter thereafter.
(p) "Highly Compensated Employee" means an individual described in
Section 414(q) of the Code.
(q) "Investment Funds" means:
(1) The "Company Stock Fund" which is a fund for the investment by the
Trustee of Matching Contributions and designated Member Elected Contributions
in Stock, and (2) Such other funds which may be established from time to time
by the Board pursuant to Section 7.2 and the Trust Agreement for the
investment of Member Elected Contributions.
(r) "Matching Contributions" means the contributions made by the
Employers pursuant to Section 5.1. The portion of the Plan consisting of
Matching Contributions (as adjusted for earnings and losses attributable
thereto) constitutes an employee stock ownership plan as defined in Section
4975(e)(7) of the Code and a stock bonus plan as described in Section 401(a)
of the Code. Such portion of this Plan is hereinafter referred to as the
"ESOP". The assets of the ESOP shall be invested primarily in qualifying
employer securities as defined by Section 4975(e)(8) of the Code.
(s) "Member" means an Employee who has satisfied the requirements for
membership in the Plan specified in Article III. An individual will continue
to be considered a Member until all Accounts maintained on his behalf have
been either distributed or forfeited.
(t) "Member Elected Contributions" means the Tax Deferred Contributions
and Taxed Contributions which a Member elects to have made under Article IV.
(u) "Plan" means this General Signal Corporation Savings and Stock
Ownership Plan as it may be amended from time to time.
(v) "Plan Year" means (i) the calendar year beginning on the Effective
Date and each calendar year thereafter prior to January 1, 1989, (ii) the
period January 1, 1989 through November 30, 1989 (iii) commencing December 1,
1989 the 12-month period commencing on each December 1 and ending on the
succeeding November 30 until November 30, 1991, (iv) the period December 1,
1991 through December 31, 1991 and (v) commencing January 1, 1992, the
calendar year, and each calendar year thereafter.
(w) "Retirement" means the Member's termination of service for any
reason with the Controlled Group on or after age fifty-five (55).
(x) "Stock" means the Common Stock, par value of $1.00 per share, of the
Company.
(y) "Tax Deferred Contributions" means contributions made under Section
4.1 of this Plan at a Member's election pursuant to Section 401(k) of the
Code and which, as to a Member, are considered tax deferred under Section
401(k) of the Code, but in an amount not to exceed $7,000 (as adjusted under
Section 402(g) of the Code) or such greater amount which may be permitted to
be contributed to the Plan on a tax deferred basis under a qualified cash or
deferred arrangement under Section 401(k) of the Code.
(z) "Taxed Contributions" means Member contributions made under this
Plan which do not qualify for deferral under Section 401(k) of the Code.
(aa) "Trust Agreement" means the instrument or instruments executed
between the Company or the Board and the Trustee or Trustees named therein
which provides for the receiving, holding, investing, and disposing of the
Trust Fund.
(bb) "Trust Fund" means the assets of the Plan held by the Trustee or
Trustees.
(cc) "Trustee" means the trustee or trustees at any time acting under
the Trust Agreement or Trust Agreements.
(dd) "Valuation Date" means the last business day of any calendar
quarter on which the New York Stock Exchange is open for trading.
2.2 Gender. Except when otherwise indicated by the context, any
masculine terminology also includes the feminine.
<PAGE>
ARTICLE III
ELIGIBILITY AND MEMBERSHIP
3.1 Eligibility. As of any Enrollment Date the individuals who are
eligible to participate in this Plan and become Members are all those who:
(a) are Employees and
(b) are receiving Compensation.
3.2 Membership. An eligible Employee can become a Member on any
Enrollment Date only if:
(a) he has elected to have either Tax Deferred Contributions or Taxed
Contributions made to the Plan as specified in Article IV,
(b) he has signed the enrollment form prescribed by the Board and filed
it with his Employer at least fifteen (15) days prior to his applicable
Enrollment Date, and
(c) he is still an Employee and receiving Compensation on his Enrollment
Date.
<PAGE>
ARTICLE IV
MEMBER ELECTED CONTRIBUTIONS
4.1 Tax Deferred Contributions. A Member, unless he ceases to be an
Employee, may elect to defer each pay period an amount equal to at least 3%
but not more than 17% (only a whole percentage can be elected) of the
Compensation which otherwise would have been paid to him during that period
and have that amount contributed under the Plan on his behalf by his Employer
as a Tax Deferred Contribution; provided, however, that, even though the
amount is not equal to a full percentage of Compensation, a Member may elect
to make aggregate Tax Deferred Contributions of $7,000 (as adjusted under the
provisions of Section 402(g)(5) of the Code), or such greater amount which
may be permitted to be contributed to the Plan on a tax deferred basis under
a qualified cash or deferred arrangement under Section 401(k) of the Code, in
any taxable year; and further provided that such Tax Deferred Contributions
shall not exceed the amount permitted to be contributed under the provisions
of Section 415(c) of the Code or under the actual deferral percentage test
under Section 401(k) (3)(A)(ii) of the Code and the regulations thereunder.
4.2 Taxed Contributions. A Member may elect to make Taxed Contributions
for each pay period by payroll deductions in an amount equal to any whole
number percentage of his Compensation not to exceed 10% of his Compensation
subject to a minimum of 3% for a Member who has not elected any Tax Deferred
Contributions. In addition, a Member's election of Tax Deferred
Contributions shall automatically be treated as an election of Taxed Con-
tributions (subject to the 10% limitation on Taxed Contributions) to the
extent additional Tax Deferred Contribu- tions may not be made by reason of
the limitation set forth in Section 2.1(y).
4.3 Aggregate Limitation on Tax Deferred Contributions and Taxed
Contributions. Notwithstanding the foregoing provisions of Section 4.1 and
4.2, the aggregate percentage of Tax Deferred Contributions and Taxed
Contributions may not exceed 17%. 4.4 Change in Contribution Rate. A Member
may discontinue or change his rate of Member Elected Contributions only as of
an Enrollment Date by filing the appropriate notice with his Employer at
least 15 days prior to the applicable Enrollment Date. A Member may not have
discontinued contributions made up, but may resume having contributions made
as of any Enrollment Date by filing the enrollment election specified in
Section 3.2.
4.5 Change in Employment Status.
(a) A Member who ceases to be an Employee, but who remains in the
employment of the Controlled Group, will have his Member Elected
Contributions automatically discontinued as of the date of change of
employment status. Such Member's Elected Contributions may be resumed on any
Enrollment Date after he again becomes an Employee by filing the enrollment
election specified in Section 3.2, but discontinued contributions cannot be
made up.
(b) No Member Elected Contributions will be made to the Plan for any
period in which the Member is not receiving Compensation.
4.6 Payment of Member Elected Contributions to Trustee. As soon as
practicable after the last day of each month, the Employers will pay to the
Trustee the amount of each Member's Elected Contributions for each payroll
paid in the month.
4.7 Modification of Member Elected Contributions to Satisfy Code
Requirements.
(a) In order to satisfy the deferral percentage limitations imposed by
Section 401(k)(3) of the Code, the Board may, at any time, in its sole
discretion and without the prior consent of affected Members prospectively
limit the percentage of Tax Deferred Contributions elected by either all
Members or all Members who are Highly Compensated Employees. Such limitation
will be imposed to the extent deemed necessary by the Board.
If any Member's Tax Deferred Contribution rate is limited pursuant to
this Section or the limitation set forth in Section 2.1(y), the rate at which
the Member has elected to make Taxed Contributions may be considered
increased to the extent that his Tax Deferred Contribution rate has been
decreased. A Member's Taxed Contributions for the Plan Year may not exceed
10% of the Member's Compensation for the Plan Year unless the Member is
precluded by Section 6.3 from having any Tax Deferred Contributions made to
the Plan, in which case the Member's Taxed Contributions will be limited to
13% of his Compensation for the Plan Year (any refund to the Member to comply
with this limitation will be made as soon as practicable after the end of the
Plan Year). In no event, however, shall a Member's Taxed Contributions
exceed 10% of the Member's aggregate Compensation for all of the Plan Years
of his participation in the Plan.
(b) For purposes of determining whether the Plan satisfies the deferral
percentage limitation imposed by Section 401(k)(3) of the Code,
(1) the actual deferral percentage specified in Section 401(k)(3)(B) of
the Code for each Member will be the ratio of the Tax Deferred Contribution
allocated to the Member's Accounts for the Plan Year to the Member's
compensation which meets the requirements of Section 414(s) of the Code and
the regulations thereunder for the Plan Year, and
(2) If an individual has not satisfied the eligibility requirements set
forth in Section 3.1 of this Plan during any part of the Plan Year,
Compensation received by such person during that period will not be included
in determining the person's "actual deferral percentage" within the meaning
of Section 401(k)(3)(B) of the Code.
(c) All Member Elected Contributions are subject to the limitations
imposed in Section 6.3.
<PAGE>
ARTICLE V
EMPLOYER CONTRIBUTIONS
5.1 Matching Contributions. On behalf of each Member in its employ who
has completed one year of Continuous Employment and is having Tax Deferred
Contributions made to this Plan pursuant to Section 4.1 or has contributed
Tax Deferred Contributions on a year to date basis equal to 3% of his
Compensation for the entire Plan Year (or who would have had Tax Deferred
Contributions made on his behalf but for the limitations imposed in Sections
2.1(y), 4.1 or 6.3 of the Plan and who is making Taxed Contributions at the
rate of at least 3% of his Com- pensation), as of any Enrollment Date, each
Employer will make Matching Contributions to the Plan for each month, out of
current or accumulated earnings and profits, equal to either 4% of each such
Member's Compensation if such Member elected to invest at least 3% of such
Member's Compensation for such period in the Company Stock Fund or 3% of each
such Member's Compensation if such Member did not elect to invest at least 3%
of such Member's Compensation for such period in the Company Stock Fund, less
any amount of forfeitures then to be applied to reduce the Matching
Contributions pursuant to Section 14.1; provided, however, that no Matching
Contributions shall be made with respect to Compensation for any period
during which a Member's right to make Member Elected Contributions is
suspended by reason of a withdrawal of matched Taxed Contributions (see
Section 9.3).
5.2 Profit Requirement. In the event that any Employer is prevented
from making its share of such Contributions it would be required to make as
provided above because it has neither current nor accumulated earnings and
profits, or because its current or accumulated earnings and profits are
insufficient to make the required contribution, then the required
Contribution or that portion of it in excess of the Employer's current or
accumulated earnings and profits, if any, which the Employer is so prevented
from making will be made for the Employer by the other Employers who have
current or accumulated earnings and profits. If more than one of the other
Employers has current or accumulated earnings and profits, then each such
Employer will be charged and pay that portion of the prevented Contribution
which bears the same ratio to the total prevented Contributions as that
Employer's current or accumulated earnings and profits (adjusted for its own
Contribution deductible for the concurrent period without regard to its share
of the said prevented Contribution) bears to the total current or accumulated
earnings and profits of all Employers having such earnings and profits
(adjusted to their Contributions deductible without regard to their share of
the prevented Contribution); and, in making this determination, current
accumulated earnings and profits for such period shall be computed as of the
close of the concurrent period without diminution by reason of any dividends
during the concurrent period, and current accumulated earnings and profits
shall be computed as of the beginning of the concurrent period.
Notwithstanding the above provisions of this paragraph, with respect to any
period for which a consolidated federal income tax return is to be filed for
all Employers, any required Contribution which an Employer may be prevented
from making may be made for such Employer by any one or more of the other
Employers on the above basis or any other basis that the Company may
determine. The provisions of this paragraph will apply only to those
Employers under the Plan which are Members of the "affiliated group"
including the Company as the term "affiliated group" is defined in Section
1504(a) of the Code.
5.3 Payment to the Trustee. As soon as practicable after the end of
each month, each Employer will pay or transfer to the Trustee the amount of
its Matching Contributions for such month.
5.4 Plan Expenses. (a) The expenses applicable to each Investment Fund,
including (i) investment management fees and (ii) all proper charges and
disbursements incurred with respect to each Investment Fund (including
brokerage fees, transfer taxes, consulting fees, and any other expenses
related to each applicable Investment Fund) shall be paid out of the Trust
Fund and allocated to and deducted from the Accounts of Members based on the
Members' pro rata share of each applicable Investment Fund unless such
expenses are paid directly by each Employer.
(b) Except for expenses applicable to each Investment Fund (see Section
5.4(a)), all costs and expenses incurred in administering the Plan, including
the fees and expenses of the Trustees and of counsel and other administrative
expenses, shall be paid by each Employer.
(c) Taxes, if any, on assets held by the Trustee or on any income
derived therefrom, and which are payable by the Trustee, shall be paid out of
the Trust Fund, and allocated to and deducted from the Accounts of Members
based on the Members' pro rata share of all Investment Funds of the Trust
Fund.
5.5 Limitations under Section 401(m) of the Code. In no event shall the
Matching Contributions and Taxed Con- tributions exceed the limitations set
forth in Section 401(m) of the Code and the regulations thereunder.
<PAGE>
ARTICLE VI
MEMBERS' ACCOUNTS
6.1 Types of Accounts. In addition to the Accounts maintained by the
Board with respect to Plan Years beginning before January 1, 1984, the Board
will establish and maintain on behalf of each Member:
(a) A Tax Deferred Contribution Account, to be credited with the
Member's Tax Deferred Contributions;
(b) A Taxed Contribution Account, to be credited with:
(1) the Member's Taxed Contributions,
(2) on January 1, 1984, the balances of the Member's
- Supplemental Contribution Account; and
- Matured Basic Contribution Account, if any, which were maintained
under the Plan prior to 1984 (to the extent not withdrawn effective December
31, 1983), and
(3) on January 1, of 1985, 1986 and 1987, that balance of the Member's
Basic Contribution Account which will mature on the December 31 of the
preceding year in accordance with the terms of the Plan as in effect prior to
this restatement;
(c) A Matching Contribution Account, to be credited with the Matching
Employer Contributions allocated to the Member; and
(d) A Matured Stock Account, to be credited with Matching Contributions
when they become nonforfeitable in accordance with Article VIII of this Plan
or Article IX of the Plan as in effect prior to this restatement (to the
extent not withdrawn effective December 31, 1983).
All amounts will be credited to a Member's Accounts as of a Valuation
Date and in the appropriate Investment Fund, in accordance with the Member's
investment election made pursuant to Article VII.
6.2 Valuation of Accounts. As of each Valuation Date, the Trustee will
determine the net worth of the assets of each Investment Fund and report such
value to the Board. In determining such net worth, the Trustee will evaluate
the assets of each Investment Fund at their fair market value as of the
Valuation Date and will deduct any liabilities or other amounts properly
chargeable against each Investment Fund. The net worth of each Investment
Fund will be allocated among the various Accounts of each Member in each Fund
in the following manner:
(a) The opening balance in each Account in each Fund will be determined
by reducing the value of the Account as of the prior Valuation Date by any
withdrawals or distributions made as of such prior Valuation Date;
(b) The dollar amount of Member Elected Contributions and Matching
Contributions due each Account since the prior Valuation Date will be
determined (the "current quarter contributions"); and
(c) The fair market value of each Fund on the Valuation Date as of which
the determination is being made will be apportioned to each Member's Accounts
in each Fund based on rate of return factors developed separately for the
opening balances in all of the Accounts in the Fund and the current quarter
contributions credited to all such Accounts.
6.3 Limitations Imposed Under Section 415 of the Code. (a) The
provisions of this Section 6.3 supersede all other provisions of this Plan.
(b) The total Account Addition of any Member for any calendar year may
not exceed the lesser of:
(1) $30,000 (or, if greater, one-fourth of the defined benefit dollar
limitation set forth in Section 415(b)(1) of the Code as in effect for the
applicable calendar year), or
(2) 25% of the Member's total compensation for such calendar year. For
this purpose, a Member's compensation is equal to his Compensation less his
Tax Deferred Contributions.
(c) The term "Account Addition" means the sum of the following amounts
allocated to a Member's Accounts for any calendar year:
(1) The Matching Contributions,
(2) the Member's Tax Deferred Contributions,
(3) the Member's Taxed Contributions,
(4) contributions allocated to any individual medical account (as
defined in Section 415(1)(2) of the Code) which is part of a defined benefit
plan maintained by the Employer, and
(5) if the Member is a Key Employee (within the meaning of Section
21.2(c) hereof), amounts attributable to medical benefits allocated to an
account established for such Member in accordance with Section 419A(d) of the
Code.
(d) The Board will apply the limitation set forth in this Section 6.3 by
taking into account the Account Additions under any other qualified defined
contribution plan maintained by the Controlled Group. If any Member also
participates in any defined benefit plan maintained by the Controlled Group,
the sum of a Member's defined benefit plan fraction for such year as defined
in Section 415(e)(2) of the Code and such Member's defined contribution plan
fraction for such year as defined in Section 415(e)(3) of the Code will not
exceed 1.0. In the event the sum of such fractions would exceed l.0, the
Member's retirement benefit under such defined benefit plan shall
automatically be reduced by the amount required in order that the sum of such
fractions shall not exceed l.0.
(e) If amounts which would otherwise be allocated to a Member's Accounts
must be reduced to satisfy para- graph (b) or (d), the reduction will be made
in the following order, but only to the extent necessary:
(1) The amount of his Taxed Contributions will be refunded as soon as
practicable; then
(2) His Tax Deferred Contributions and related Matching Contributions
will be reduced and held in the Trust Fund, and will be applied to reduce the
Matching Contribution of his Employer.
<PAGE>
ARTICLE VII
INVESTMENT ELECTIONS
7.1. Company Stock Fund. (a) Subject to Section 7.1(d), Matching
Contributions must be invested in Stock, but they may be invested in short
term obligations of the United States government and other investments of a
short-term nature, including commercial paper, pending investment in Stock.
(b) Subject to Section 7.1(c), cash dividends and cash proceeds of any
other distributions received on the Stock will be reinvested in the same
manner. The shares of Stock from time to time required for the purposes of
this Plan will be acquired by the Trustee by purchase in the open market, or,
if directed by the Company, by contribution in kind or by purchase privately
from the Company or any other person at a price per share equal to the
closing price per share at which the shares of Common Stock of the Company
were sold on the New York Stock Exchange on the last business day preceding
the day of the purchase; it being understood that shares purchased from the
Company may be either treasury shares or authorized but unissued shares, if
the Company shall make such shares available for the purpose, and that the
Trustee in its discretion may refrain from making purchases in the open
market whenever in the light of current market conditions it deems such
refraining to be in the best interests of the Members and beneficiaries in
the Plan.
(c) Notwithstanding the provisions of Section 7.1(b), the Board may, in
its discretion, elect to have all cash dividends received on the Stock by the
ESOP be distributed in cash to Members or their Beneficiaries, as the case
may be. Such distribution shall be in an amount attributable to the shares
of Stock held for each such Member or Beneficiary in such Member's or
Beneficiary's Accounts, whether or not the Member is vested in such shares at
the time of such payment. Distribution shall be made not later than 90 days
after the close of the Plan Year in which the dividends are paid. All such
dividends are nonforfeitable to the Member or Beneficiary when distributed,
even when they are paid with respect to shares of Stock in which the Member
or Beneficiary has not attained a nonforfeitable interest as of the date of
such distribution.
(d) A Member may transfer part or all of the balance of his Matching
Contribution Account which represents the amount of the company matching
contributions previously made to either the Best Power Technology, Inc.
Retirement Investment Plan and Trust or the Retirement Savings Plan for
Employees of Data Switch Corporation to another Investment Fund as of the
last day of any calendar quarter on 15 days' notice of such transfer to the
Corporate Pension Board.
(e) A Member who shall have attained age 55 and shall have had at least
five years of Continuous Employ- ment may transfer part or all of the balance
of his Matching Contribution Account in his Company Stock Fund to another
Investment Fund as of the last day of any calendar quarter on 15 days' notice
of such transfer to the Corporate Pension Board.
7.2 Funds for Member Elected Contributions. (a) All Members' Elected
Contributions will be invested in the Investment Funds selected by the Member
in 25% increments, at the time he files the election specified in Section
3.2, from the Funds which are made available from time to time by the Board
for that purpose; provided, however, that if the Member elects to invest 3%
of such Member's Compensation in the Company Stock Fund pursuant to Section
5.1, the applicable 25% increments shall apply to any additional Member
Elected Contributions. All Members' Elected Contributions will be credited
to their Accounts in the respective Investment Funds. In addition to the
Company Stock Fund, the Board shall establish at least three alternative
Investment Funds. All dividends, interest, gains and losses of each
Investment Fund will be reinvested in that Investment Fund and credited to
the Member's Accounts as of the applicable Valuation Date. The Board will
from time to time inform the Members of the Investment Funds provided under
the Trust and specify all rules governing the investment by Members in such
Funds.
(b) The making of an election of an Investment Fund is the sole
responsibility of each Member. Neither the Trustee, the Board, any Employer
nor any of their officers, directors, or supervisors are authorized or
permitted to advise a Member as to the election of any Investment Fund or
Funds or the manner in which his Accounts ought to be invested.
(c) A Member may change his investment election for future Member
Elected Contributions as of the first day of any calendar quarter on 15 days'
notice of such change to the Corporate Pension Board, which notice shall
specify the new investment election.
(d) A Member may transfer part or all of the balance in his Accounts in
any Investment Fund to one or more other Investment Funds as of the last day
of any calendar quarter on 15 days' notice of such transfer to the Corporate
Pension Board.
7.3 Distributions.
(a) Withdrawals and distributions from the Trust Fund will be charged to
the Member's Accounts in each Fund. The Board may establish rules and
regulations and accounting conventions to determine the particular Account
and Fund to be charged in the case of a withdrawal or distribution of less
than the entire balances in all of a Member's Accounts in all Funds.
(b) The distributable amount in a Member's Account in each Fund will be
determined on the basis of the value of such Account on the Valuation Date
coincident with or next preceding the date on which the distribution is
effected.
(c) All withdrawals and distributions will be made in cash; provided,
however, that, with respect to a distribution under Article X, a Member may
elect to have his distribution paid in the form of Stocks (with fractional
shares to be paid in cash) to the extent of his vested interest in the
Company Stock Fund.
<PAGE>
ARTICLE VIII
VESTING
8.1 Vesting in Matching Contributions. A Member's rights to the
Matching Contributions credited to his Matching Contribution Account will
become nonforfeitable on the first to occur of:
(a) December 31 of the third full calendar year after the calendar year
for which the Matching Contributions were made,
(b) the Member's completion of five years of Continuous Employment,
(c) the Member's Retirement,
(d) the Member's death,
(e) the Member's termination of service with the Controlled Group by
reason of Disability, or
(f) Termination of the Plan, partial termination of the Plan which
directly affects the Member, or complete discontinuance of Matching
Contributions.
For vesting purposes, Continuous Employment shall include any period of
service as an employee with any employer which becomes or is consolidated
with or merged into, or whose stocks or properties are acquired by an
Employer.
As a Member's rights to Matching Contributions become nonforfeitable
each December 31 or otherwise, these Contributions and any related earnings
and losses will be transferred to his Matured Stock Account.
8.2 Termination of Employment and Transfer Prior to Vesting.
(a) If a Member's employment with the Controlled Group terminates and he
is not reemployed before incurring five consecutive 1-year breaks in service
(as defined in Section 10.3), the balance of his Matching Contributions
Account will be forfeited as of December 31 of the calendar year in which
occurs the fifth such consecutive 1-year break in service and will be applied
as provided in Section 14.1, unless the Member elects pursuant to Section
10.2(c) not to receive a distribution from the Plan until after his rights
become nonforfeitable.
(b) A Member transferred to a non-participating subsidiary or affiliate
of the Company or who otherwise ceases to be an Employee without termination
of his employment by an Employer or the Controlled Group will continue to be
deemed a Member of the Plan for purposes of vesting of his Matching Con-
tribution Account for as long as he remains an employee of the Controlled
Group.
8.3 Vesting in Member Elected Contributions. Each Member is at all
times 100% vested in the value of his Member Elected Contribution Accounts.
<PAGE>
ARTICLE IX
IN SERVICE WITHDRAWALS
9.1 Elections to Withdraw Funds and Payment. All withdrawal requests
for Members who are actively employed must be made on the form prescribed by
the Board, specifying the amount to be withdrawn. Each Member will be
entitled to two withdrawal requests per calendar year. All withdrawals will
be made as of the Valuation Date which follows by at least 15 days the date
on which the Board receives notice of the withdrawal, but the Board may, in
its sole discretion, impose from time to time such other restrictions or
conditions on withdrawals as it deems necessary to preserve the integrity of
the Trust Fund. Payment to a Member will be made in a lump sum in cash as
soon after the Valuation Date as practicable; provided, however, that a
Member may elect to have his distribution paid in the form of Stock (with
fractional shares to be paid in cash) to the extent of his interest in the
Company Stock Fund.
9.2 Order of Withdrawals. All withdrawals by Members prior to
termination of employment with the Controlled Group will be charged to a
Member's Accounts in the order and under the conditions, if any, which
follow:
(a) First, to the Member's Taxed Contribution Account,
(b) Second, to the Member's Matured Stock Account; provided, however,
that a Member who has not been a Member for at least 60 months prior to the
effective date of a withdrawal may not withdraw amounts attributable to
Matching Contributions made less than 24 months prior to the effective date
of the with- drawal,
(c) Third, to the Member s Tax Deferred Contribution Account if the
withdrawal is after such Member has attained 59 1/2 without proof of
hardship, and
(d) Fourth, to the Member's Tax Deferred Contribution Account if the
withdrawal is on account of hardship and is approved by the Board; provided,
however, that on and after January 1, 1989, only the amount of the Tax
Deferred Contributions (but no earnings thereon) may be included in a
hardship withdrawal. The Board may authorize a hardship withdrawal only if
(i) the Member certifies that he requires financial assistance to meet an
immediate and heavy financial need and other resources are not reasonably
available to meet the need incurred or to be incurred in the near future with
respect to his health or welfare or that of his immediate family (such as for
the purchase of a principal residence for the Member, medical expenses not
covered by insurance, payment of tuition for post-secondary education for the
Member, his spouse or children or payment of amounts necessary to prevent the
eviction of the employee from his principal residence or foreclosure on the
mortgage of the employee's principal residence), and (ii) the Member
certifies to the precise amount required to satisfy the hardship. A Member
shall furnish evidence of hardship satisfactory to the Board which will be
determined on a nondiscriminatory basis uniformly applicable to all Members
similarly situated. A withdrawal may be authorized only to the extent
necessary to satisfy the hardship. The Board's decision shall be final and
binding on the Member.
9.3 Withdrawal of Matched Taxed Contributions. If a Member withdraws
any Taxed Contributions that are matched by the Employer and such Taxed
Contributions have not been held by the Plan for at least two years, his
right to make Member Elected Contributions shall be suspended for a period of
three months.
9.4 Additional Rules. The Board may prescribe from time to time such
additional rules with respect to withdrawals (including restricting a
Member's right to make Member Elected Contributions) as it deems appropriate
to further the purposes of the Plan, but no such rules will cause the
forfeiture of vested Accounts.
9.5 Loans. Pursuant to rules and regulations established by the Board,
loans may be made pursuant to the Plan which shall be charged against a
Member's Accounts. Such loans may not exceed the balance in such Accounts,
excluding, for this purpose, those amounts attributable to Matching
Contributions, whether vested or unvested. In connection with such loans,
the rules and regulations shall (a) provide for the securing of such loans
by, among other things, the value of the Member's Accounts, (b) provide a
reasonable rate of interest, (c) set forth the maximum loan term, (d)
establish any minimum and maximum amounts, (e) provide a fixed repayment
schedule (including payroll deductions), and (f) establish such other
requirements as the Board shall deem appropriate. Loans shall be available
to all Members on a non-discriminatory basis.
<PAGE>
ARTICLE X
DISTRIBUTIONS AT TERMINATION OF EMPLOYMENT
10.1 Distributions on Account of Retirement, after Completion of Five
Years of Continuous Employment, Disability or Death. Upon a Member's
termination of service by reason of Retirement, after completion of five
years of Continuous Employment, Disability or upon a Member's death, there
will be distributed to him (or in the case of his death, to his Beneficiary),
in accordance with Section 10.4, the balance of his Accounts determined as of
the Valuation Date coincident with or next following such termination of
service or death in accordance with Section 10.7. Such distribution shall
commence as soon as practicable following such Valuation Date.
Notwithstanding the foregoing provisions of this Section 10.1 or of Section
10.2, the payment of benefits shall commence not later than April 1 of the
calendar year next following the calendar year in which the Member attains
age 70-1/2.
10.2 Other Distributions. When a Member terminates employment with the
Controlled Group for reasons other than Retirement, after completion of five
years of Continuous Employment, death or Disability, he must elect subject to
Section 10.7 either,
(a) to make one last in-service withdrawal of all or part of his Taxed
Contribution Account and his Matured Stock Account (provided he had made no
more than one previous withdrawal during the year) and leave the balance of
his Accounts in the Plan until his rights to all Matching Contributions have
become nonforfeitable in accordance with Section 8.1; or
(b) to receive the balance of all of his Accounts but not the balance of
his Matching Contribution Account, determined as of the Valuation Date which
coincides with or immediately follows the date of his termination of
employment, and forfeit his Matching Contribution Account pursuant to Section
8.2 (subject to the restoration provisions of Section 10.3); or
(c) to defer receipt of all amounts until his rights to all Matching
Contributions which were credited to his Matching Contribution Account on the
date of his termination of employment become nonforfeitable in accordance
with Section 8.1. If deferral is elected the amount distributable to the
Member will be the balance of all of his Accounts, determined as of the
Valuation Date which coincides with or immediately follows the date on which
all of his Matching Contributions become nonforfeitable.
A Member electing to defer receipt of his Accounts at termination under
(a) or (c) above may nevertheless elect at some subsequent date, before all
Matching Contributions have become nonforfeitable, to receive the balance of
all his Accounts together with all Matching Contributions which at that date
have become nonforfeitable. Such distribution will result in a forfeiture of
the balance of his Matching Contribution Account pursuant to Section 8.2
(subject to the restoration provisions of Section 10.3).
10.3 Restoration of Forfeitures. A Member may restore account balances
which are forfeited under Sections 8.2(a) and 10.2(b) of the Plan by repaying
the amount withdrawn by or distributed to him which caused the forfeiture.
Repayment may be made at any time prior to the earlier of (i) December 31 of
the fifth calendar year after the calendar year in which the withdrawal or
distribution was made or (ii) the date on which the Member incurs his fifth
consecutive 1-year break in service commencing after the withdrawal or
distribution. For purposes of the preceding sentence, a 1 - year break in
service means a 12-consecutive month period beginning on the severance from
service date and ending on each anniversary thereof, provided that during
such 12-consecutive month period the Employee does not perform an hour of
service which he is paid or entitled to payment for the performance of duties
for an Employer.
The amount of a Member's repaid withdrawal will be credited to the
Member's Account as of the Enrollment Date which follows receipt by the
Trustee of such repayment. The restoration of forfeited amounts will be
effected as of such Enrollment Date by credit to the Member's Matching
Contribution Account of Stock having a fair market value at the Enrollment
Date equal to the fair market value at the date of forfeiture of the Stock
forfeited by reason of the withdrawal. Repaid withdrawals will be invested
in accordance with a new investment election filed by the Member with the
Board. A Member's restored Matching Contribution Account will be
nonforfeitable on December 31 of the calendar year determined as follows: to
the calendar year in which the Member's Contribution Account would have
matured (had the forfeiture not occurred) will be added the number of
calendar years during any part of which the withdrawn contributions were not
repaid.
The repayment of withdrawn contributions and the restoration of
forfeited amounts will not be considered in the Account Addition as defined
in Section 6.3.
10.4 Methods of Payment.
(a) Distributions from the Plan will be paid as follows:
(i) Death. Any distribution of Accounts in the event of death of a
Member will be made by a single payment to his Beneficiary consisting of cash
and Stock credited to his Accounts unless the Member has elected an alternate
method of payment pursuant to subsection 10.4(a)(v), in which event the
Member's remaining interest in his Accounts will be distributed in accordance
with the method of payment being used as of the date of the Member's death.
<PAGE>
(ii) Disability Any distribution of Accounts in the event of Disability of a
Member while in the service of the Controlled Group will be made by a single
payment to the Member consisting of cash and Stock credited to his Accounts.
(iii) Termination after Completion of Five Years of Continuous
Employment. Any distribution of Accounts on account of termination of
service after completion of five years of Continuous Employment will be made
by a single payment to the Member consisting of cash and Stock credited to
his Accounts.
(iv) Termination of Service Prior to Age 55. Any distribution of
Accounts on account of termination of service prior to age 55 pursuant to
Section 10.2 will be made by a single payment to the Member consisting of
cash and Stock credited to his Accounts.
(v) Retirement. Any distribution of the Member's Deferred and Taxed
Contribution Accounts on account of Retirement as defined in Section 2.1(w)
will be made, subject to subsection 10.4(b), in one of the following ways
selected by the Member, provided, however, that if such Accounts total less
than $10,000 the distribution will be made only in one lump sum:
(1) in one lump sum;
(2) in installments over a period not exceeding ten years; or
(3) in the form of a non-commutable and non- assignable annuity but only
if a group annuity contract constitutes a part of the Trust Fund. Any such
annuity shall be in such form that more than 50% of its actuarial value at
its commencement date is attributable to payments to be made to the Member
himself, unless the annuity is payable for a period not extending beyond the
life expectancy of the Member and his spouse. Notwithstanding the foregoing,
the annuity option pursuant to this Section 10.4(a)(v)(3) shall not be
available in the case of a Member who has any loan outstanding pursuant to
Section 9.5.
No form of distribution permitted under this Section 10.4(a) shall
provide for payments over a period exceeding (i) the life of the Member, (ii)
the life expectancy of the Member, (iii) the joint lives of the Member and
his designated Beneficiary, or (iv) the joint life and last survivor
expectancy of the Member and his designated Beneficiary (redetermined
annually if the Member's spouse is his designated Beneficiary).
(b) If the Member elects to receive an annuity pursuant to Section
10.4(a)(v)(3), then any distribution (except distribution in Stock) made to a
Member who is married on the distribution date will be made in the form of a
Qualified Joint and Survivor Annuity unless the Member elects otherwise in
the manner described below. A Qualified Joint and Survivor Annuity is an
annuity which (i) has an actuarial value equivalent to the amount of the
Member's distribution (less the value of the Stock distributed) and (ii)
provides for a distribution during the Member's life commencing on the date
of his Retirement, with the provision that after his death (whether before or
after commencement of benefit payments to him) distribution at a rate equal
to 50% of the rate of the distribution during his life (or which would have
been made during his life had payments commenced on the first day of the
month next succeeding that in which his death occurs) shall be paid during
the life of, and to, his spouse provided his spouse survives him.
A Member may elect by written notice to the Board, at any time during
the election period (and after having received from the Board a written
notice of the availability of such election and the availability upon request
of a written explanation of the effect of receiving a distribution in the
form of a Qualified Joint and Survivor Annuity pursuant to this Section 10.4)
to receive a distribution in the form of an annuity other than the Qualified
Joint and Survivor Annuity, but only if his spouse consents to such election
in a writing that acknowledges the effect of such election and that is
witnessed by a notary public or Plan representative. The election period
will begin 90 days prior to the commencement of payment of a benefit which
could be paid in the form of an annuity to the Member hereunder and will end
on the date of commencement of payment of such benefits. If the Member
requests during the election period a written explanation of the terms and
conditions of the Qualified Joint and Survivor Annuity and the financial
effect upon the Member's benefits (in terms of dollars per annuity payment)
of making an election not to take the same, payment of benefits in any other
form will be delayed until the 90th day after such written explanation is
given, and the Member's request for such an explanation shall constitute an
election that commencement of payment of benefits shall be so delayed. The
Board will notify each Member who elects to receive an annuity not later than
7 days after commencement of the election period of his right to request the
written explanation referred to above. The written explanation will in all
cases be provided to the Member within 7 days after receipt of his request
therefor. The election in writing will be revocable until the election
period has expired and shall clearly indicate the Member's election to
receive his benefit hereunder in a form other than that of a Qualified Joint
and Survivor Annuity.
10.5 Withholding of Taxes. Income taxes will be withheld from
distributions and withdrawals as required under applicable laws.
10.6 Restrictions on Cashouts. Unless a Member consents to the
distribution of his Accounts in accordance with the provisions of Section
10.1 or 10.2, as applicable, if the amount credited to such Member's Accounts
exceeds $3,500, the distribution shall not commence prior to the Member's
attainment of age 62.
10.7 ELECTIONS FOR DISTRIBUTIONS AND PAYMENT. All distribution requests
by Members must be made on the form prescribed by the Board. All
distributions will be made as of the Valuation Date which follows by at least
15 days the date on which the Board receives notice of the distribution.
Payment to a Member will be made in a lump sum in cash as soon after the
Valuation Date as practicable; provided, however, that a Member may elect to
have his distribution paid in the form of Stock (with fractional shares to be
paid in cash) to the extent of his interest in the Company Stock Fund.
<PAGE>
ARTICLE XI
DISTRIBUTION OF EXCESS DEFERRALS
11.1 In General. Notwithstanding any other provision of the Plan,
Excess Deferral Amounts and income allocable thereto shall be distributed no
later than April 15, 1988, and each April 15 thereafter to Members who claim
such Allocable Excess Deferral Amounts for the preceding calendar year.
11.2 Definitions. For purposes of this Article XI, "Excess Deferral
Amount" shall mean the amount of Tax Deferred Contributions for a calendar
year that the Member allocates to this Plan pursuant to the claim procedure
set forth in Section 11.3.
11.3 Claims. The Member's claim shall be in writing, shall be submitted
to the Corporate Pension Board no later than March 1; shall specify the
Member's Excess Deferral Amount for the preceding calendar year; and shall be
accompanied by the Member's written statement that if such amounts are not
distributed, such Excess Deferral Amount, when added to amounts deferred
under other plans or arrangements described in Sections 401(k), 408(k) or
403(b) of the Code, exceeds the limit imposed on the Member by Section 402(g)
of the Code for the year in which the deferral occurred.
11.4 Maximum Distribution Amount. The Excess Deferral Amount
distributed to a Member with respect to a calendar year shall be adjusted for
income and, if there is a loss allocable to the Excess Deferral, shall in no
event be less than the lesser of the Member's account under the Plan or the
Member's Tax Deferred Contributions for the calendar year.
<PAGE>
ARTICLE XII
DISTRIBUTION OF EXCESS CONTRIBUTIONS
12.1 In General. Notwithstanding any other provision of the Plan,
Excess Contributions and income allocable thereto shall be distributed no
later than the last day of each Plan Year beginning after December 31, 1987,
to Members on whose behalf such Excess Contributions were made for the
preceding Plan Year.
12.2 Excess Contributions. For purposes of this Article XII, "Excess
Contributions" shall mean the amount described in Section 401(k)(8)(B) of the
Code.
12.3 Determination of Income. The income allocable to Excess
Contributions shall be determined by multiplying income allocable to the
Member's Tax Deferred Contributions for the Plan Year by a fraction, the
numerator of which is the Excess Contribution on behalf of the Member for the
preceding Plan Year and the denominator of which is the Member's account
balance attributable to Tax Deferred Contributions on the last day of the
preceding Plan Year.
12.4 Maximum Distribution Amount. The Excess Contributions which would
otherwise be distributed to the Member shall be adjusted for income; shall be
reduced, in accordance with regulations, by the amount of Tax Deferred
Contributions distributed to the Member; shall, if there is a loss allocable
to the Excess Contributions, in no event be less than the lesser of the
Member's account under the Plan or the Member's Tax Deferred Contributions
for the Plan Year.
<PAGE>
ARTICLE XIII
DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS
13.1 In General. Excess Aggregate Contributions and income allocable
thereto shall be forfeited, if otherwise forfeitable under the terms of this
Plan, or if not forfeitable, distributed no later than the last day of each
Plan Year beginning after December 31, 1987, to Members to whose accounts
Taxed Contributions or Matching Contributions were allocated for the
preceding Plan Year.
13.2 Excess Aggregate Contributions. For purposes of this Article XIII,
"Excess Aggregate Contributions" shall mean the amount described in Section
401(m)(6)(B) of the Code.
13.3 Determination of Income. The income allocable to Excess Aggregate
Contributions shall be determined by multiplying the income allocable to the
Member's Taxed Contributions and Matching Contributions for the Plan Year by
a fraction, the numerator of which is the Excess Aggregate Contributions on
behalf of the Member for the preceding Plan Year and the denominator of which
is the sum of the Member's account balances attributable to Taxed
Contributions and Matching Contributions on the last day of the preceding
Plan Year.
13.4 Maximum Distribution Amount. The Excess Aggregate Contributions to
be distributed to a Member shall be adjusted for income, and, if there is a
loss allocable to the Excess Aggregate Contribution, shall in no event be
less than the lesser of the Member's account under the Plan or the Member's
Taxed Contributions and Matching Contributions for the Plan Year.
13.5 Accounting for Excess Aggregate Contributions. Excess Aggregate
Contributions shall be distributed from the Member's Taxed Contribution
account, and forfeited if otherwise forfeitable under the terms of the Plan
(or, if not forfeitable, distributed) from the Member's Matching Contribution
account in proportion to the Member's Taxed Contributions and Matching
Contributions for the Plan Year.
13.6 Allocation of Forfeitures. (a) Amounts forfeited by Highly
Compensated Employees under this Article XIII shall be:
(i) Treated as Account Additions under Section 6.3 and either;
(ii) Applied to reduce employer contributions if forfeitures of Matching
Contributions under the Plan are applied to reduce employer contributions; or
(iii) Allocated, after all other forfeitures under the Plan, and subject
to Section 13.6(b), to the same Members and in the same manner as such other
forfeitures of Matching Contributions, are allocated to other Members under
the Plan.
(b) Notwithstanding the foregoing, no forfeitures arising under this
Article XIII shall be allocated to the account of any Highly Compensated
Employee.
<PAGE>
ARTICLE XIV
APPLICATION OF FORFEITURES
14.1 Any amount which is forfeited by a Member pursuant to Sections
8.2(a), 9.2 and 10.2(b) will be applied, as soon as practicable, to reduce
Matching Contributions.
<PAGE>
ARTICLE XV
TRUST
15.1 Trustee. The Board will appoint the Trustee or Trustees under the
Plan. The Board may, without reference to or action by any Employee, Member
or Beneficiary or any other Employer, enter into a Trust Agreement or
Agreements with the Trustee or Trustees and from time to time enter into
further agreements with the Trustee or Trustees amending the Trust Agreement
or Agreements. The Board may at any time remove the Trustee or Trustees and
appoint a successor Trustee or Trustees.
15.2 Acquisition Loans. The Board may from time to time direct the
Trustee to incur an Acquisition Loan (as hereinafter defined). An
"Acquisition Loan" shall mean a loan to the Trust by a "party in interest" as
defined in Section 3(14) of ERISA or a "disqualified person" as defined in
Section 4975(e)(7) of the Code, or any other loan which is treated as
involving an extension of credit to the Trust by such a "party in interest"
or "disqualified person". Each Acquisition Loan must satisfy the
requirements set forth in Treasury Regulation Section 54.4975- 7(b).
Except as provided herein or as otherwise required by applicable law, no
security acquired with the proceeds of any Acquisition Loan by the ESOP may
be subject to a put, call, or other option, or buy-sell or similar
arrangement while held by and when distributed from the ESOP, whether or not
the ESOP is then an employee stock ownership plan within the meaning of
Section 4975(e)(7) of the Code. Any qualifying employer security, within the
meaning of Code Section 4975(e)(8), which may be acquired with the proceeds
of any Acquisition Loan by the ESOP, will be subject to a put option if it is
not publicly traded or if it is subject to a trading limitation when
distributed. The put option will be exercisable only by a Member, the
Member's Beneficiary, or by a person to whom the security passes by reason of
a Member's death. Under the put option the security may be put to the
Member's Employer or to the Company. The put option shall remain in effect
for 15 months following the date the security is distributed. If a security
ceases to be publicly traded without restriction within 15 months after
distribution, the Company will notify each security holder in writing within
10 days that the security will be subject to the put option exercisable for
the remainder of the 15-month period and will explain the option terms in
such notice. The period of the option shall be extended a day for each day
the notice is given after the 10-day period expires.
The put option shall be exercised by written notice to the Employer.
The period during which a put option is exercisable does not include any time
when a distributee is unable to exercise it because the party bound by the
put option is prohibited from honoring it by applicable federal or state law.
The price at which the option is exercisable is the value of the security, as
determined under Section 54.4975-11(d)(5) of the Treasury Department
Regulations. Securities put under this Section 15.2 to the Employer or to
the Company shall be paid for in cash upon receipt by the Employer or the
Company of a properly endorsed stock certificate representing ownership in
the securities. No restrictions as to payment shall apply, except by
applicable state law. The rights and protections set forth in this Section
15.2 shall be non-terminable.
The provisions of Treasury Department Regulation Section 54.4975-11(c)
shall apply with respect to any assets obtained by the ESOP with the proceeds
of any loan made to the ESOP.
15.3 Special Provisions If Exempt Loan Is Incurred. Anything in the
Plan or the ESOP to the contrary notwithstanding, if an Acquisition Loan is
incurred, the following special provisions shall apply:
(a) At the direction of the Board, any dividends on allocated or
unallocated shares of Common Stock of the Company acquired by the ESOP with
the proceeds of an Acquisition Loan shall be applied to pay principal and
interest on the loan (except to the extent the amount of such dividends
exceeds the remaining principal balance and interest on the loan).
(b) The Company shall contribute to the Trust an amount which, when
added to the dividends described in (a) above, is sufficient to make all
required payments of principal and interest on the loan. Such contributions
shall be made at such time or times as shall enable the Trustee to make
required payments of principal and interest on the loan on a timely basis.
(c) If dividends on shares of Common Stock of the Company allocated to
the account of a Member are applied to the payment of principal or interest
on an Acquisition Loan, shares of Common Stock of the Company with a value
equal to the amount of such dividends shall be allocated to the Matching
Contribution Account of such Member. All other shares of Common Stock of the
Company released from encumbrance under an Acquisition Loan shall be treated
as Matching Contributions pursuant to Section 5.1 in an amount equal to the
value of such shares as of the date the allocation is made, and the
Employer's obligation to make Matching Contributions pursuant to Section 5.1
shall be reduced by a corresponding amount.
<PAGE>
ARTICLE XVI
ADMINISTRATION
16.1 Corporate Pension Board.
(a) The Plan will be administered by a Corporate Pension Board
consisting of at least three members who will be appointed from time to time
by the Board of Directors to serve at its pleasure. Members of the Board may
participate in the benefits under the Plan provided they are otherwise
eligible to do so. No member of the Board who is a full-time Employee of an
Employer will receive any compensation for his service as such member. Except
as otherwise provided by law, no bond or other security will be required of
any member of the Board in such capacity in any jurisdiction.
(b) The members of the Board may appoint from their number such
committees with such powers as they may determine, may authorize one or more
of their number or any agent to execute or deliver any instrument or make any
payment in their behalf, may employ such counsel, accountants, actuaries, and
such clerical services as they may require in carrying out the provisions of
the Plan, and may appoint one or more designees (who need not be members of
the Board) to serve at the pleasure of the Board and to exercise such of the
powers of the Board as the Board may specify.
(c) The Board will hold meetings upon such notice, at such time, and at
such place as it may determine.
(d) The Board will establish its own rules of procedure.
(e) The Board will appoint the Administrator under the Act, and failing
such appointment will be the Administrator under the Act, and the
Administrator and the members of the Board will be named fiduciaries for the
Plan under the Act. The members may allocate fiduciary responsibilities
(other than trustee responsibilities) among themselves, and may designate
persons other than themselves to carry out fiduciary responsibilities (other
than trustee responsibilities) under the Plan.
16.2 Board Determinations Final. Subject to the limitations of the
Plan, the Board from time to time will establish rules for the administration
of the Plan and the transaction of its business. The Board has the authority
to interpret all the terms of the Plan and to exercise discretion where
necessary or appropriate in the interpretation and administration of the
Plan. The determination of the Board as to any disputed questions will be
conclusive. All actions taken and all decisions and interpretations of the
Board made in administering the Plan will be uniform and non- discriminatory
in respect to all persons similarly situated.
16.3 Claims Procedure. If any claim for benefits under the Plan is
denied, the Board will give notice in writing, by registered or certified
mail, of such denial to the affected Member or Beneficiary, setting forth the
specific reasons for such denial and advising him that he may request further
review by the Board of the decision denying such claim by filing with the
Board, within 30 days after the date of mailing of such notice, a request for
such review. If the Member or Beneficiary files such request for review, such
review will be made by the Board within 60 days of receipt of such request,
and the Member or Beneficiary will be given written notice of the result of
such review.
<PAGE>
ARTICLE XVII
APPROVAL BY THE INTERNAL REVENUE SERVICE
17.1 The Company intends to secure a determination that the Plan is a
qualified Plan under Section 401(a) and 401(k) of the Code, contributions to
which are deductible by the Employers for Federal income tax purposes.
All Matching Contributions and Tax Deferred Contributions made by the
Employers are hereby expressly conditioned upon their deductibility under
Section 404 of the Code and regulations issued thereunder, as amended from
time to time, and if the deduction for any such Contributions is disallowed
in whole or in part, then such Contributions (to the extent the deduction is
disallowed) will be returned to the Employers upon direction of the Board
within one year after such disallowance.
17.2 Any modification or amendment of the Plan or the Trust Agreement
may be made retroactively by the Company or the Board, if necessary or
appropriate to cause the Plan to qualify or maintain its qualification as a
Plan and Trust meeting the requirements of applicable sections of the
Internal Revenue Code and/or other Federal and State laws, as now in effect
or hereafter amended or enacted or a determination to that effect. Any such
modification or amendment, however, will not adversely affect any right or
obligation of any Member theretofore accrued.
<PAGE>
ARTICLE XVIII
GENERAL PROVISIONS
18.1 Member Statements. As soon as practicable following the end of
each calendar year the Board will furnish to each Member a statement setting
forth the balance credited to each of his Accounts in each Investment Fund as
of the end of such calendar year.
18.2 Communications to the Board. All elections, notices, designations
and other communications to the Board will be on the forms from time to time
prescribed by the Board, mailed or delivered to the Board in care of the
Member's Employer, and deemed to have been duly given upon receipt.
18.3 No Employment Rights. The establishment of this Plan will not be
construed as conferring any legal rights upon any Employee or any other
person for a continuation of employment, nor will it interfere with the
rights of any Employer to discharge any Employee and/or to treat him without
regard to the effect which such treatment might have upon him as a Member.
18.4 Members Assume Investment Risk. All benefits payable under the
Plan will be paid or provided for solely from the Trust Fund and neither the
Company nor any other Employer assumes any liability therefor. Each Member
assumes all risk connected with any decrease in the market value of any
assets held by the Trustee under the Plan. Neither the Trustee, the Board
nor any Employer in any way guarantees the Trust Fund against loss or
depreciation, or the payment of any amount which may be or become due to any
person from the Trust Fund.
18.5 Facility of Payment Provision. If any person to whom a payment is
due hereunder is a minor or is determined by the Board to be incompetent by
reason of physical or mental disability, the Board may cause the payments
becoming due to such person to be made to another for the benefit of the
minor or incompetent, without responsibility of any Employer, the Board, or
the Trustee to see to the application of such payment. Payments made pursuant
to such power will operate as a complete discharge of all Employers, the
Board, the Trustee and the Trust Fund.
18.6 Nonassignability of Benefits. No right or interest of any Member
in the Plan is alienable, assignable or transferable, or, to the extent
permitted by law, subject to any lien, in whole or in part, either directly
or by operation of law, or otherwise, including, but not by way of
limitation, execution, levy, garnishment, attachment, pledge, bankruptcy, or
in any other manner, and no right or interest of any Member in the Plan will
be liable for, or be subject to, any obligation or liability of such Member.
This Section 18.6 shall apply to the creation, assignment or recognition of a
right to any benefit payable with respect to a Member pursuant to a domestic
relations order, but shall not apply if the order is determined to be a
qualified domestic relations order within the meaning of Section 414(p) of
the Internal Revenue Code of 1986, as amended ("Code"). Notwithstanding any
other provision of the Plan, benefits payable under the Plan shall be paid
under the terms of any such qualified domestic relations order.
18.7 Prevention of Escheat. In the event any distribution mailed to a
Member or the Beneficiary at the last known address remains unclaimed by the
Member or his Beneficiary as the case may be, for a period of 24 months and
payment cannot be made alternatively to the estate of either and no surviving
spouse, child, parent, brother or sister, or grandchild of the Member or
Beneficiary are known to the Employer or the Trustee, or if known, cannot
with reasonable diligence be located, the amount payable may be canceled on
the records of the Plan and used to reduce Matching Contributions, except
that if the Member or Beneficiary later notifies the Board of his whereabouts
and requests the amount due him under the Plan, the amount will be paid in
accordance with Article X.
18.8 Designation of Beneficiary.
(a) Any Member may at any time and from time to time designate the
Beneficiary to whom the amounts in his Accounts will be delivered in the
event of the Member's death. Any such designation will take precedence over
any testamentary or other disposition. Such designation or any change or
cancellation of such designation under this Plan will become effective only
upon the receipt thereof as provided in Section 18.2, and will then relate
back to the date of its execution; provided, however, that neither the
Trustee, the Board, nor the Employer will be liable by reason of any payment
made before receipt of such designation, change, or cancellation to the
Member's estate or to any Beneficiary previously designated.
(b) Notwithstanding any other provision of the Plan to the contrary, a
married Member who designates a Beneficiary other than his spouse must obtain
the written consent of such spouse, which consent acknowledges the effect of
such designation and is witnessed by a notary public or Plan representative.
(c) If no Beneficiary designation is effective pursuant to this Section
18.8, or if the Board or the Trustee are in doubt as to the right of any
claimant, or if the designated Beneficiary predeceases the Member, the amount
in question may, in the discretion of the Board, be paid directly to the
estate of the Member, in which event the Trustee, the Employer, and the Board
will have no further responsibility or liability with respect thereto.
(d) Upon receipt by the Board of evidence satisfactory to it of the
death of a Member and of the existence and identity of the Beneficiary
designated by the Member, the Trustee shall pay to such Beneficiary an amount
equal to the balance of the Member's Accounts in accordance with the
provisions of Article X.
18.9 Voting Rights. Before each annual or special meeting of
stockholders of the Company, the Company will cause the Trustee to send to
each Member a copy of the proxy solicitation material therefor, together with
a form requesting confidential instructions to the Trustee on how to vote the
shares of Stock allocated to the Member's Accounts. Upon receipt of such
instructions in conformance with the proxy solicitation material, the Trustee
will vote the shares of Stock as instructed. Instructions received from
individual Members by the Trustee will be held in strictest confidence and
will not be divulged or released to any person, including officers or
employees of any Employer. The Trustee will vote the shares of Stock for
which no instructions have been received in the same proportion as the shares
for which instructions have been received.
18.10 Tender or Exchange Offer. Notwithstanding any other provision of
this Plan or of the Trust Agreement, the Board shall be the sole named
fiduciary with respect to the control and management of assets held in the
Company Stock Fund and the Trustee shall have no authority or responsibility
with respect to such control or management. If a tender or exchange offer is
made for Stock, the Board shall determine whether, under the circumstances
the terms of the offer are such that the provisions of the Plan and Trust
Agreement requiring retention of Stock in the Company Stock Fund (other than
to effect distributions or inter-account transfers under the Plan) can no
longer be validly applied without violation of Section 404(a) of the Act. In
making such determination the Board shall take into account the purpose of
the Plan to invest Employer contributions and designated Member Elected
Contributions in Stock. If the Board determines that such provisions can no
longer be validly applied, such Board may, in its sole discretion, direct a
disposition of Stock pursuant to such offer.
18.11 Fractional Interests in Stock. Notwithstanding any other
provision of this Plan, no distribution of a fractional interest in Stock
held by the Trustee will be made to any Member or his Beneficiary. All
fractional interests in Stock otherwise distributable from Members' Accounts
will be the amount in such fund on the Valuation Date coincident with or next
succeeding the date the distribution is to be made and a sum equal thereto
will be distributed in cash. Any distribution in cash based on an interest in
a fractional share will be considered for all purposes hereof as a
distribution of the fractional interest in the share.
18.12 Limitation of Liability. To the extent permitted by the Act,
neither the Trustee, the Board or any member or members of the Board, nor any
Employer or any Director, Officer or employee of any Employer, will have any
personal liability of any nature for any act done or omitted to be done in
good faith, under or in connection with the Plan, the Trust Agreement and/or
the Trust Fund, including but not limited to delay in the making of any
contribution, investment or distribution, or failure to secure funds needed
for Trust purposes, or failure to provide sufficient Stock for the purposes
of the Trust. To the extent permitted by the Act, each member of the Board,
and every Director, Officer and employee of an Employer will be indemnified
and saved harmless by the Employers against any claims, and the expenses of
defending against such claims, resulting from any action or conduct relating
to the administration of the Plan and the Trust Fund. Each of the Employers
will pay such proportion of any such claim and/or expenses as the Company
directs. Any payment or distribution to a Member, or in case of his death to
his Beneficiary, at the last known post office address of the distributee on
file with the Board, will constitute a complete acquittance and discharge to
each member of the Board, every Director, Officer, and employee of each
Employer having an interest in the Trust Fund.
18.13 Service of Process. The Board is designated as the agent of each
Employer and of the Plan for service of process to commence any legal
proceeding against an Employer or against the Plan, pertaining to this Plan
or the determination of any rights hereunder.
18.14 Governing Law. The validity of the Plan or any of its provisions
will be determined under, and it shall be construed and administered
according to, the laws of the State of New York, except as may be required by
any provision of the Act.
18.15 Direct Rollover of Eligible Rollover Distributions.. This Section
applies to distributions made on or after January 1, 1993. Notwithstanding
any provision of the Plan to the contrary that would otherwise limit a
distributee's election under this Section, a distributee may elect, at the
time and in the manner prescribed by the Corporate Pension Board, to have any
portion of an eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct rollover. For
purposes of this Section, the following definitions apply.
(a) Eligible rollover distribution: An eligible rollover distribution is
any distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not include:
any distribution that is one of a series of substantially equal periodic
payments (not less frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's designated
beneficiary, or for a specified period of ten years or more; any distribution
to the extent such distribution is required under Section 401(a)(9) of the
Code; and the portion of any distribution that is not includible in gross
income (determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
(b) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in Section 408(a) of the Code, an
individual retirement annuity described in Section 408(b) of the Code, an
annuity plan described in Section 403(a) of the Code, or a qualified trust
described in Section 401(a) of the Code, that accepts the distributee's
eligible rollover distribution. However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible retirement plan is an
individual retirement account or individual retirement annuity.
(c) Distributee: A distributee includes 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) Direct rollover: A direct rollover is payment by the Plan to the
eligible retirement plan specified by the distributee.
18.16 Verti-Line Product Line of Aurora Pump. Active Employees of the
Verti-Line product line of Aurora Pump on March 17, 1986 shall be 100% vested
in the Matching Contributions as of March 17, 1986 and shall receive such
benefits at such time as they become entitled to them under the normal terms
of such Plan.
18.17 Tapco International, Inc. Active Employees of Tapco
International, Inc. on March 31, 1986 shall be 100% vested in the Matching
Contributions as of March 31, 1986 and shall receive such benefits at such
time as they become entitled to them under the normal terms of such Plan.
18.18 Warren Communications, Littleton, Massachusetts. Active Employees
of Warren Communications, Littleton, Massachusetts on August 15, 1986 shall
be 100% vested in the Matching Contributions as of August 15, 1986 and shall
receive such benefits at such times as they become entitled to them under the
normal terms of such Plans.
18.19 GS Electric Motors, Inc. Active Employees of GS Electric Motors,
Inc. involuntarily terminated as a result of the closing of the Racine
facility on August 15, 1986 shall be 100% vested in the Matching
Contributions as of August 15, 1986 and shall receive such benefits at such
time as they become entitled to them under the normal terms of such Plan.
18.20 Kieley & Mueller. Active Employees of Kieley & Mueller
involuntarily terminated as a result of the closing of the Kieley & Mueller
plant shall be 100% vested in the Matching Contributions as of the date each
such employee ceases to be employed and shall receive such benefits at such
time as they become entitled to them under the normal terms of such Plan.
18.21 Cardion Electronics, Inc. Active Employees of Cardion
Electronics, Inc. on September 12, 1986 shall be 100% vested in the Matching
Contributions as of September 12, 1986 and shall receive such benefits at
such time as they become entitled to them under the normal terms of such Plan
or to elect a trust to trust transfer of their account balances to the
"qualified" defined contribution plan of ISC Defense and Space Group.
18.22 Drytek, Inc. For employees of Drytek, Inc., as of January 1,
1987, former service with Drytek, Inc. shall be recognized as Continuous
Employment for meeting the one-year service requirement for Matching
Contributions.
18.23 Nelson Electric, Homer, Louisiana. Active Employees of Nelson
Electric, Homer, Louisiana involuntarily terminated as a result of either the
sale of the Marine Hardware Division on June 23, 1986 or the closing of the
facility on April 10, 1987 shall be 100% vested in the Matching Contributions
as of June 23, 1986 or April 10, 1987, respectively, and shall receive such
benefits at such time as they become entitled to them under the normal terms
of such Plan.
18.24 Cincinnati Time, Inc. Active Employees of Cincinnati Time, Inc.
on May 2, 1987 shall be 100% vested in the Matching Contributions as of May
2, 1987 and shall receive such benefits at such time as they become entitled
to them under the normal terms of such Plan.
18.25 Nester Instruments Company. Active Employees of Nester
Instruments Company involuntarily terminated as a result of the closing of
the Nester Instruments Company on May 29, 1987 shall be 100% vested in the
Matching Contributions as of the date each such employee ceases to be
employed and shall receive such benefits at such time as they become entitled
to them under the normal terms of such Plan.
18.26 Hydreco. Active Employees of Hydreco on September 11, 1987 shall
be 100% vested in the Matching Contri- butions as of September 11, 1987 and
shall receive such benefits at such time as they become entitled to them
under the normal terms of such Plan.
18.27 Quali-Cast Corporation. Active Employees of Quali-Cast
Corporation on September 19, 1987 shall be 100% vested in the Matching
Contributions as of September 19, 1987 and shall receive such benefits at
such times as they become entitled to them under the normal terms of such
Plan.
18.28 Anchor Electric. Active Employees of Anchor Electric on November
6, 1987 shall be 100% vested in the Matching Contributions as of November 6,
1987 and shall receive such benefits at such times as they become entitled to
them under the normal terms of such Plan.
18.29 BIF. Active Employees of BIF involuntarily terminated after
December 1, 1987 as a result of the closing of the BIF facility at West
Warwick, R.I. shall be 100% vested in the Matching Contributions as of the
date each such employee ceases to be employed and shall receive such benefits
at such time as they become entitled to them under the normal terms of such
Plan.
18.30 Marsh Instrument Company. Active Employees of Marsh Instrument
Company on March 17, 1988 shall be 100% vested in the Matching Contributions
as of March 17, 1988 and shall receive such benefits at such times as they
become entitled to them under the normal terms of such Plan.
18.31 Nelson Electric, Marine Division. Active Employees of Nelson
Electric, Marine Division on March 29, 1988 shall be 100% vested in the
Matching Contributions as of March 29, 1988 and shall receive such benefits
at such times as they become entitled to them under the normal terms of such
Plan.
18.32 Ultraglas. Active Employees of Ultraglas on January 22, 1988
shall be 100% vested in the Matching Contributions as of January 22, 1988 and
shall receive such benefits at such times as they become entitled to them
under the normal terms of such Plan.
18.33 Ultratech Photomask. Active Employees of Ultratech Photomask on
April 1, 1988 shall be 100% vested in the Matching Contributions as of April
1, 1988 and shall receive such benefits at such times as they become entitled
to them under the normal terms of such Plan.
18.34 Ceilcote Company, Inc. Active Employees of Ceilcote Company, Inc.
on April 29, 1988 shall be 100% vested in the Matching Contributions as of
April 29, 1988 and shall receive such benefits at such times as they become
entitled to them under the normal terms of such Plan or to elect a trust to
trust transfer of their account balances to the Master Builders Savings
Investment Plan.
18.35 Karkar Electronics. Active Employees of Karkar Electronics
involuntarily terminated after June 10, 1988 as a result of the consolidation
of Karkar Electronics into Tau-tron and Telecommunications Technology or
terminated after October 1, 1988 shall be 100% vested in the Matching
Contributions as of the date each such employee ceases to be employed and
shall receive such benefits at such times as they become entitled to them
under the normal terms of such Plan.
18.36 Accutel. Active Employees of Accutel involuntarily terminated
after September 13, 1988 as a result of the announcement of the closing of
Accutel shall be 100% vested in the Matching Contributions as of the date
each such employee ceases to be employed and shall receive such benefits at
such times as they become entitled to them under the normal terms of such
Plan.
18.37 Northeast Electronics Division. Active Employees of the Concord,
New Hampshire plant of Northeast Electronics Division terminated on and after
October 28, 1988 as a result of the closing of the Concord, New Hampshire
plant of Northeast Electronics Division shall be 100% vested in the Matching
Contributions as of the date each such employee ceases to be employed and
shall receive such benefits at such times as they become entitled to them
under the normal terms of such Plan.
18.38 Camarillo Plan (Formerly BIF Accutel). Active Employees of the
Camarillo plant involuntarily terminated after November 18, 1988 as a result
of the closing of the Camarillo plant shall be 100% vested in the Matching
Contributions as of the date each such employee ceases to be employed and
shall receive such benefits at such times as they become entitled to them
under the normal terms of such Plan.
18.39 Merrick Corporation. Active Employees of the Merrick Corporation
involuntarily terminated after December 9, 1988 as a result of the closing of
the Merrick office shall be 100% vested in the Matching Contributions as of
the date each such employee ceases to be employed and shall receive such
benefits at such times as they become entitled to them under the normal terms
of such Plan.
18.40 Henschel. Active Employees of Henschel on May 12, 1989 shall be
100% vested in the Matching Contributions as of May 12, 1989 and shall
receive such benefits at such times as they become entitled to them under the
normal terms of such Plan.
18.41 Rucker & Kolls. Active Employees of Rucker & Kolls on October 26,
1989 shall be 100% vested in the Matching Contributions as of October 26,
1989 and shall receive such benefits at such times as they become entitled to
them under the normal terms of such Plan.
18.42 Axel Electronics, Inc. Active Employees of Axel Electronics, Inc.
on December 28, 1989 shall be 100% vested in the Matching Contributions as of
December 28, 1989 and shall receive such benefits at such times as they
become entitled to them under the normal terms of such Plan.
18.43 Leeds & Northrup. Active Employees of Leeds & Northrup
involuntarily terminated after February 28, 1990 as a result of the closing
of the Irondale, Alabama facility shall be 100% vested in the Matching
Contributions as of the date each such employee ceases to be employed and
shall receive such benefits as such times as they become entitled to them
under the normal terms of such Plan.
18.44 Aerotron. Active Employees of Aerotron on March 14, 1990 shall be
100% vested in the Matching Contributions as of March 14, 1990 and shall
receive such benefits at such times as they become entitled to them under the
normal terms of such Plan.
18.45 Ultratech Stepper. Active Employees of Ultratech Stepper whose
employment was terminated between May 1, 1990 and July 9, 1990 in connection
with the proposed consolidation of the GCA and Ultratech organizations into
the GCA/Ultratech unit or involuntarily terminated on and after July 9, 1990
in connection with the proposed sale of Ultratech Stepper to New Enterprize
Associates, shall be 100% vested in the Matching Contributions as of the date
each such employee ceases to be employed and shall receive such benefits at
such times as they become entitled to them under the normal terms of such
Plan.
18.46 Hevi-Duty, Puerto Rico. Active Employees of Hevi-Duty, Puerto
Rico on May 17, 1990 shall be 100% vested in the Matching Contributions as of
May 17, 1990 and shall receive such benefits at such times as they become
entitled to them under the normal terms of such Plan.
18.47 Leeds & Northrup. Active Employees of Leeds & Northrup
involuntarily terminated after May 31, 1990 as a result of the closing of the
Salt Lake City plant shall be 100% vested in the Matching Contributions as of
the date each such employee ceases to be employed and shall receive such
benefits at such times as they become entitled to them under the normal terms
of such Plan.
18.48 GCA/Tropel. Active Employees of GCA/Tropel terminated on and
after May 31, 1990 in connection with the transfer of its government business
operation to Optimal Technology Incorporated of Rochester, New York shall be
100% vested in the Matching Contributions as of the date each such employee
ceases to be employed and shall receive such benefits at such times as they
become entitled to them under the normal terms of such Plan.
18.49 Kayex. Active Employees of Kayex involuntarily terminated after
October 19, 1990 as a result of the closing the Spitfire facility shall be
100% vested in the Matching Contributions as of the date each such employee
ceases to be employed and shall receive such benefits at such times as they
become entitled to them under the normal terms of such Plan.
18.50 Semiconductor Systems. Active Employees of Semiconductor Systems
on December 3, 1990 shall be 100% vested in the Matching Contributions as of
December 3, 1990 and shall receive such benefits at such times as they become
entitled to them under the normal terms of such Plan.
18.51 General Railway Signal Company. Active Employees of General
Railway Signal Company on March 11, 1991 shall be 100% vested in the Matching
Contributions and shall receive such benefits at such times as they become
entitled to them under the normal terms of such Plan.
18.52 New York Air Brake Company. Active Employees of New York Air
Brake Company involuntarily terminated on and after December 10, 1990 in
connection with the sale of New York Air Brake Company and active employees
of New York Air Brake Company on the date of sale, January 2, 1991, shall be
100% vested in the Matching Contributions as of either the date each such
employee ceases to be employed or the date of sale, as applicable, and shall
receive such benefits at such times as they become entitled to them under the
normal terms of such Plan.
18.53 GS Thinfilm. Active Employees of GS Thinfilm involuntarily
terminated on and after October 26, 1990 in connection with the sale of GS
Thinfilm and active employees of GS Thinfilm on the date of sale shall be
100% vested in the Matching Contributions as of either the date each such
employee ceases to be employed or the date of sale, as applicable, and shall
receive such benefits at such times as they become entitled to them under the
normal terms of such Plan.
18.54 Merrick Industries, Inc.. Active Employees of Merrick Industries,
Inc. on September 27, 1991 shall be 100% vested in the Matching Contributions
as of September 27, 1991 and shall receive such benefits at such times as
they become entitled to them under the normal terms of such Plan.
18.55 Alarm and Control Product Line of Telecommunications Technology.
Active Employees of the Alarm and Control Product Line of Telecommunications
Technology on January 8, 1992 shall be 100% vested in the Matching
Contributions as of January 8, 1992 and shall receive such benefits at such
times as they become entitled to them under the normal terms of such Plan.
18.56 Telecommunications Technology. Employees of Telecommunications
Technology who are actively at work on January 27, 1992 and who are
involuntarily terminated on and after January 27, 1992 in connection with
either the sale of Telecommunications Technology or the closing of the
Telecommunications Technology facility shall be 100% vested in the Matching
Contributions as of the date each such employee ceases to be employed and
shall receive such benefits at such times as they become entitled to them
under the normal terms of such Plan.
18.57 Center for Precision Machining of GCA. Active Employees of the
Center for Precision Machining of GCA involuntarily terminated on and after
March 31, 1992 in connection with the sale of the Center for Precision
Machining of GCA and active employees of the Center for Precision Machining
of GCA on the date of sale shall be 100% vested in the Matching Contributions
as of either the date each such employee ceases to be employed or the date of
sale, as applicable, and shall receive such benefits at such times as they
become entitled to them under the normal terms of such Plan.
18.58 Proportioneer Division of Lightnin. Active employees of the
Proportioneer Division of Lightnin involuntarily terminated on and after
April 13, 1992 in connection with the sale of the Proportioneer Division of
Lightnin and active employees of the Proportioneer Division of Lightnin on
the date of sale shall be 100% vested in the Matching Contributions as of
either the date each such employee ceases to be employed or the date of sale,
as applicable, and shall receive such benefits at such times as they become
entitled to them under the normal terms of such Plan.
18.59 Switching Products Division of Hevi-Duty/Nelson. Active employees
of the Switching Products Division of Hevi-Duty/Nelson involuntarily
terminated on and after April 13, 1992 in connection with the sale of the
Switching Products Division of Hevi-Duty/Nelson and active employees of the
Switching Products Division of Hevi-Duty/Nelson on the date of sale shall be
100% vested in the Matching Contributions as of either the date each such
employee ceases to be employed or the date of sale, as applicable, and shall
receive such benefits at such times as they become entitled to them under the
normal terms of such Plan.
18.60 Dynapower/Stratopower. Active employees of Dynapower/ Stratopower
involuntarily terminated on and after April 21, 1992 in connection with the
relocation of Dynapower/ Stratopower to Charleston, South Carolina shall be
100% vested in the Matching Contributions as of the date each such employee
ceases to be employed, and shall receive such benefits at such times as they
become entitled to them under the normal terms of such Plan.
18.61 Ultratech Stepper Division. Active Employees of the Ultratech
Stepper Division on March 5, 1993 shall be 100% vested in the Matching
Contributions as of March 5, 1993 and shall receive such benefits at such
times as they become entitled to them under the normal terms of such Plan.
18.62 GCA Division and Tropel Division of General Signal Technology
Corporation. Active Employees of the GCA Division and the Tropel Division
involuntarily terminated on and after March 26, 1993 as a result of the
suspension of the Andover, Massachusetts production operations shall be 100%
vested in the Matching Contributions as of the date each such employee ceases
to be employed and shall receive such benefits at such times as they become
entitled to them under the normal terms of such Plan.
18.63 Electroglas Division. Active Employees of the Electroglas
Division on June 30, 1993 shall be 100% vested in the Matching Contributions
as of June 30, 1993 and shall receive such benefits at such times as they
become entitled to them under the normal terms of such Plan.
18.64 Drytek, Incorporated. Active Employees of Drytek, Incorporated on
June 30, 1993 shall be 100% vested in the Matching Contributions as of June
30, 1993 and shall receive such benefits at such times as they become
entitled to them under the normal terms of such Plan.
18.65 DeZurik, La Grange, Georgia. Active Employees of DeZurik
involuntarily terminated as a result of the closing of the DeZurik, La
Grange, Georgia facility shall be 100% vested in the Matching Contributions
as of the date each such employee ceases to be employed and shall receive
such benefits at such times as they become entitled to them under the normal
terms of such Plan.
18.66 Dielectric Communications. Active employees of Dielectric
Communications involuntarily terminated after December 1, 1993 as a result of
the closing of the Dielectric Communications facility at Voorhees, New Jersey
shall be 100% vested in the Matching Contributions as of the date each such
employee ceases to be employed and shall receive such benefits at such times
as they become entitled to them under the normal terms of such Plan.
18.67 Lindberg / Revco. Active employees of the Blue M facility of
Lindberg/Revco at Blue Island, Illinois involuntarily terminated as a result
of the closing of the facility shall be 100% vested in the Matching
Contributions as of the date each employee ceases to be employed and shall
receive such benefits at such times as they become entitled to them under the
normal terms of such Plan.
18.68 Sola / Hevi-Duty. Active employees of the Sola/Hevi-Duty
Lakeland, Florida plant involuntarily terminated in connection with closing
of the plant on or after August 20, 1993, shall be 100% vested in the
Matching Contributions as of the date of termination and shall receive such
benefits at such times as they become entitled to them under the normal terms
of such Plan.
18.69 GCA Tropel. Active employees of GCA Tropel involuntarily
terminated in connection with the sale of GCA Tropel on April 22, 1994 shall
be 100% vested in the Matching Contributions as of the date of sale and shall
receive such benefits at such times as they become entitled to them under the
normal terms of such Plan.
18.70 UNIVAL Product Line of DeZurik. Active employees of UNIVAL
Product Line of DeZurik involuntarily terminated as a result of the transfer
of the Tampa, Florida plant to the McMinnville, Tennessee plant after June
30, 1994 shall be 100% vested in the Matching Contributions as of the date
each such employee ceases to be employed and shall receive such benefits at
such times as they become entitled to them under the normal terms of such
Plan.
18.71 Assembly Technologies. Active employees of Assembly Technologies
on July 13, 1994 shall be 100% vested in the Matching Contributions as of
July 13, 1994 and shall receive such benefits at such times as they become
entitled to them under the normal terms of such Plan.
18.72 Leeds & Northrup Company. Active employees of Max Systems, a
product line of Leeds & Northrup Company, involuntarily terminated in
connection with the sale of Max Systems shall be 100% vested in the Matching
Contributions and shall receive such benefits at such times as they become
entitled to them under the normal terms of such Plan.
18.73 Telenex Corporation. Active exempt and non-exempt employees of
Telenex Corporation involuntarily terminated in connection with the closing
of the Springfield, Virginia plant shall be 100% vested in the Matching
Contributions and shall receive such benefits at such times as they become
entitled to them under the normal terms of such Plan.
18.74 Leeds & Northrup Company. Active employees of Leeds & Northrup
Company involuntarily terminated in connection with the sale of Leeds &
Northrup Company shall be 100% vested in the Matching Contributions and shall
receive such benefits at such times as they become entitled to them under the
normal terms of such Plan.
18.75 Telenex Corporation. Active employees of Telenex Corporation
involuntarily terminated in connection with the closing of the AR Test
Systems facility located at 7401 Boston Boulevard, Springfield, VA shall be
100% vested in the Matching Contributions and shall receive such benefits at
such times as they become entitled to them under the normal terms of such
Plan.
18.76 Revco/Lindberg. Active employees of Revco/Lindberg involuntarily
terminated in connection with the relocation of the Laboratory Furnaces Line
from Watertown, WI to Asheville, NC shall be 100% vested in the Matching
Contributions and shall receive such benefits at such times as they become
entitled to them under the normal terms of such Plan.
18.77 Elk Grove Facility of Sola Electric. Active employees of Sola
Electric involuntarily terminated after September 21, 1995 as a result of the
closing of the Elk Grove facility shall be 100% vested in the Matching
Contributions as of the date each such employee ceases to be employed and
shall receive such benefits at such times as they become entitled to them
under the normal terms of such Plan.
18.78 Dynapower/Stratopower. Active employees of Dynapower/Stratopower
involuntarily terminate on and after October 23, 1995 in connection with the
sale of Dynapower/Stratopower shall be 100% vested in the Matching
Contributions as the date each such employee ceases to be employed and shall
receive such benefits at such times as they become entitled to them under the
normal terms of such Plan.
18.79 Kinney Vacuum Company. Active employees of the Kinney Vacuum
Company on February 11, 1996 shall be 100% vested in the Matching
Contributions as of February 11, 1996 and shall receive such benefits at such
times as they become entitled to them under the normal terms of such Plan.
<PAGE>
ARTICLE XIX
AMENDMENT, TERMINATION AND MERGER
19.1 The Company, by action of the Board of Directors, at any time or
from time to time may amend or modify the Plan to any extent that it may deem
advisable. The Board may adopt amendments to the Plan which it deems
necessary or appropriate to comply with applicable laws or government
regulations or which do not materially increase the annual cost of the Plan
to the Employers. No such amendment shall:
(1) increase the duties and responsibilities of the Trustee without its
consent;
(2) have the effect of revesting in any Employer the whole or any part
of the principal or income of the Trust fund or of diverting any part of such
principal or income to purposes other than for the exclusive benefit of the
Members and their Beneficiaries; or
(3) cause any reduction to any Member's Accounts.
19.2 The Company, by action of the Board of Directors, at any time may
discontinue all Contributions under the Plan or terminate the Plan in its
entirety. Each Employer may, by action of its Board of Directors, take
similar action as to Members who are its employees. Upon complete
discontinuance of contributions under the Plan or termi- nation of the Plan
as to any Members hereunder, the Accounts of such Members will become fully
vested, and will not thereafter be subject to forfeiture.
19.3 No merger or consolidation with, or transfer of assets or
liabilities to, any other plan shall occur unless each Member of the Plan
would (if the Plan then terminated) receive a benefit immediately after the
merger, consolidation or transfer which is equal to or greater than the
benefit he would have been entitled to receive immediately before the merger,
consolidation, or transfer (if the Plan had then terminated).
<PAGE>
ARTICLE XX
TRANSFERS OF ACCOUNTS FROM OTHER PLANS
20.1 Purpose of this Article. The purpose of this Article is to specify
the provisions governing Account balances that represent assets transferred
to this Plan (the "Transferred Assets") from other defined contribution plans
that are qualified under Section 401(a) of the Code and whose assets were
exempt from tax under Section 501(a) of the Code (an "Other Plan"). For
purposes of this Article, a distribution to an individual from an Other Plan
which is transferred to this Plan by such individual in a transfer intended
to qualify for tax-free rollover treatment pursuant to Section 402(a)(5) or
408(d)(3) of the Code shall be considered a transfer of assets from such
Other Plan.
20.2 Approval of Transfers. The Board, in its discretion, may approve
from time to time the transfer of assets from an Other Plan, provided that
the transfer satisfies the requirements of Section 19.3 of this Plan and does
not adversely affect the tax qualified status of this Plan. If the Other
Plan is not maintained by a member of the Controlled Group, the Board must
receive an affidavit from the trustee and plan administrator of the Other
Plan to the effect that such Other Plan is qualified, its assets are exempt
from federal income tax and the transfer will not adversely affect such
status or, in the alternative, that the assets to be transferred constitute a
"qualified total distribution" as defined in Section 402(a)(5)(E) of the
Code; provided, however, that if the transfer to this Plan is intended to
qualify as a tax-free rollover from an individual retirement account or
annuity under Section 408(d)(3) of the Code, the Board may instead require
the individual requesting the transfer to supply such affidavits or other
evidence as the Board may deem appropriate to establish that the transfer
will satisfy the requirements for such a tax-free rollover. The Board, in its
discretion, may require approval of the transaction by the Internal Revenue
Service prior to accepting any such transfer.
20.3 Membership in the Plan. No assets may be transferred to this Plan
from an Other Plan unless each individual who has an interest in the
Transferred Assets is or was an employee of the Controlled Group. Each
individual who has an interest in the Transferred Assets shall become a
Member of this Plan with the following rights:
(a) If the individual satisfies the requirements for membership
specified in Article III, he will have all the rights of a Member;
(b) If the individual has not satisfied the requirements for membership
specified in Article III, he will have the right of a Member only as to the
Accounts maintained on his behalf to account for the Transferred Assets
(i.e., rights pertaining to investment, withdrawal and distribution of such
Accounts).
20.4 Allocation of Transferred Assets. Each Member's interest in the
Transferred Assets and any earnings thereon will be separately accounted for
and allocated to the Member's Accounts as follows:
(a) To the Member's Tax Deferred Contribution Account - All Transferred
Assets representing (1) contributions that were made to an Other Plan
maintained by a member of the Controlled Group and that were not includible
in the Member's gross income under the Code in the year for which they were
contributed or thereafter and (2) earnings on such contributions will be
allocated to the Member's Tax Deferred Contribution Account; and
(b) To the Member's Taxed Contribution Account - The balance of the
Member's interest in the Trans- ferred Assets and all Transferred Assets from
an Other Plan not maintained by a member of the Controlled Group will be
allocated to his Taxed Contribution Account.
Transferred Assets allocated to an Account will be governed by all of
the rules applicable to that Account. The allocation of Transferred Assets
to the Member's Accounts will not be considered a Tax Deferred contribution
for purposes of Section 4.6(b)(1) (regarding compliance with the deferral
percentage limitations imposed by Section 401(k)(3)) nor an Account Addition
for purposes of Section 6.3 (regarding the limitations imposed by Section 415
of the Code). Unless otherwise determined by the Board, a distribution from
a Member's Accounts will be deemed to be made first from Transferred Assets
allocated to the Account.
20.5 Special Rule for Distributions at Termination of Employment Under
Section 10.2. If a Member's Tax Deferred Contribution Account contains any
Transferred Assets and he is entitled to a distribution from the Plan
pursuant to Section 10.2, then, instead of the distribution elections
specified in Section 10.2, a terminating Member may elect to receive the
portion of his Accounts representing the Transferred Assets, determined as of
the Valuation Date which coincides with or immediately follows the date of
his termination of employment, and the payment of the balance of his Accounts
at a later date in accordance with Section 10.2(c).
20.6 Provisions of Other Plan Superseded. The provisions of this Plan
will supersede the provisions of any Other Plan with respect to the
Transferred Assets. In particular, all beneficiary designations and other
elections made under the Other Plan will be canceled effective as of the date
such Other Plan assets are transferred to this Plan and made a part of the
Trust Fund. Upon the Member's death, the amount in his Accounts representing
Transferred Assets will be paid to the Beneficiary designated under this Plan
in accordance with Sections 10.1, 10.4(a)(i) and 18.8.
<PAGE>
ARTICLE XXI
TOP-HEAVY PROVISIONS
21.1 Top-Heavy Determination. Notwithstanding any other provision of
this Plan to the contrary, this Article XXI shall apply for any Plan Year if
the Plan is a "Top-Heavy Plan" as defined herein. The Plan shall be a "Top-
Heavy Plan" if, as of the Determination Date, the present value of the
cumulative accrued benefits of Key Employees exceeds sixty percent (60%) of
the present value of the cumulative accrued benefits under the Plan of all
Employees (but excluding the value of the accrued benefits of the Non-Key
Employees who were formerly Key Employees). In determining whether this Plan
is a Top-Heavy Plan, the Company and all members of the Controlled Group
shall be treated as a single employer. In addition, all plans that are part
of the Aggregation Group shall be treated as a single plan.
For purposes of the foregoing, the present value of an Employee's
accrued benefit shall be equal to the sum of the amounts determined under the
following paragraphs:
(a) The sum of (i) the present value of an Employee's accrued benefits
in each defined benefit plan which is included in the Aggregation Group
determined as of the most recent Valuation Date within the twelve (12) month
period ending on the Determination Date and as if the Employee had terminated
service as of such Valuation Date and (ii) the aggregate distributions made
with respect to such Employee during the five-year period ending on the
Determination Date from all defined benefit plans included in the Aggregation
Group and not reflected in the present value of his accrued benefits as of
the most recent Valuation Date; and
(b) The sum of (i) the aggregate balance of his accounts in all defined
contribution plans which are part of the Aggregation Group as of the most
recent Valuation Date within the twelve (12) month period ending on the
Determination Date, (ii) any contributions allocated to such accounts after
the Valuation Date and on or before the Determination Date and (iii) the
aggregate distributions made with respect to such Employee during the
five-year period ending on the Determination Date from all defined
contribution plans which are part of the Aggregation Group and not reflected
in the value of his accounts as of the most recent Valuation Date.
Solely for the purpose of determining if the Plan, or any other plan
included in a required aggregation group of which this Plan is a part, is top
- - heavy (within the meaning of Section 416(g) of the Code) the accrued
benefit of an Employee other than a key employee (within the meaning of
Section 416(i)(1) of the Code) shall be determined under (a) the method, if
any, that uniformly applies for accrual purposes under all plans maintained
by the Controlled Group, or (b) if there is no such method, as if such
benefit accrued not more rapidly than the slowest accrual rate permitted
under the fractional accrual rate of Section 411(b)(1)(C) of the Code.
Plan-to-plan transfers and rollovers shall be taken into account to the
extent provided in the applicable Treasury Regulations. In addition, for
purposes of paragraphs (a)(ii) and (b)(iii) above, distributions under a
terminated plan which, if such plan had not terminated, would have been
required to be included in an Aggregation Group, shall also be taken into
account.
21.2 Top-Heavy Definitions. The following terms shall have the
following meanings:
(a) "Aggregation Group" means
(i) Each stock bonus, pension, or profit sharing plan of the Company in
which a Key Employee participates and which is intended to qualify under
Section 401(a) of the Code; and
(ii) Each other such stock bonus, pension or profit sharing plan of the
Company which enables any plan in which a Key Employee participates to meet
the requirements of Section 401(a)(4) or 410 of the Code; and
(iii) Each other such stock bonus, pension or profit sharing plan of the
Company which the Company designates as part of the Aggregation Group
provided that the resulting group meets the requirements of Section 401(a)
and 410 of the Code.
(b) "Determination Date" means the last day of the preceding Plan Year,
except that for the first plan year of any plan, the Determination Date shall
be the last day of such plan year.
(c) "Key Employee" means any Employee, former Employee, or the
beneficiary under the Plan of a former Employee who, in the Plan Year
containing the Determination Date, or any of the four pre- ceding Plan Years,
is:
(i) An officer of the Company having an annual compensation greater than
150% of the maxi- mum dollar limitation under Section 415(c)(1)(A) of the
Code. Not more than fifty (50) Employees or, if lesser, the greater of three
(3) Employees or ten percent (10%) of the Employees shall be considered as
officers for purposes of this paragraph.
(ii) One of the ten (10) Employees owning (or considered as owning
within the meaning of Section 318 of the Code) the largest interest in the
Company and having an annual compensation greater than the maximum dollar
limitation under Section 415(c)(1)(A) of the Code.
(iii) A five-percent (5%) owner of the Company.
(iv) A one-percent (1%) owner of the Company having an annual
compensation of more than $150,000.
An Employee's ownership interest in the Company shall be determined in
accordance with Section 416(i) of the Code.
(d) "Non-Key Employees" means any Employee, former Employee, or the
beneficiary under the Plan of a former Employee who is not a Key Employee.
(e) "Compensation" means compensation as defined in Section 415 of the
Code.
21.3 Minimum Top-Heavy Contribution. If this Article XXI applies to the
Plan for any Plan Year, the Company contribution to the Plan (including Tax
Deferred Contributions) and all other defined contribution plans included in
the Aggregation Group for such Plan Year on behalf of each Non-Key Employee
who is a Member of this Plan, whether or not such Non-Key Employee elects to
make Tax Deferred Contributions to the Plan for such Plan Year, shall not in
the aggregate be less than the lesser of (i) three percent (3%) of such
Non-Key Employee's compensation, or (ii) the percentage of compensation
contributed, or required to be contributed, by the Company in the aggregate
to the Plan and all other defined contribution plans in the Aggregation Group
for such Plan Year on behalf of the Key Employee for whom such percentage is
the highest (disregarding for this purpose compensation of such Key Employee
for such Plan Year in excess of $200,000, as adjusted for cost-of- living
increases to the extent permitted pursuant to Section 416(d)(2) of the Code),
multiplied by such Non-Key Employee's compensation. If the amount contributed
in the aggregate on behalf of any Non-Key Employee under the Plan and all
other defined contribution plans in the Aggregation Group would otherwise be
less than the minimum contribution required by this Section 21.3, an
additional contribution shall be made to such plan or plans as the Company
shall designate so that the minimum contribution requirement set forth in
this Section 21.3 is satisfied. This Section 21.3 shall not apply to any
Non-Key Employee who is a participant in any defined benefit plan included in
the Aggregation Group under which such Non-Key Employee receives the minimum
benefit required by Section 416 of the Code and applicable Treasury
Regulations.
21.4 Top-Heavy Vesting Requirements.
(a) If this Article XXI applies to the Plan for any Plan Year, then
notwithstanding the provisions of Section 8.1, a Member's nonforfeitable
interest in his Accounts attributable to Company contributions shall not be
less than the appropriate percentage set forth below:
Full Years
of Continuous Nonforfeitable
Employment Percentage
Less than 2 0%
2 20
3 40
4 60
5 80
6 or more 100
(b) A Member's nonforfeitable interest in his Accounts shall not be less
than the greater of (i) his non- forfeitable interest determined pursuant to
Section 8.1 or (ii) his nonforfeitable interest determined pursuant to this
Section 21.4 as of the last day of the last Plan Year in which this Article
XXI applies to the Plan.
(c) If this Article XXI ceases to apply to the Plan, each Member having
five or more full years of Continuous Employment (determined as of the first
day of the Plan Year in which the Article XXI ceases to apply to the Plan)
shall have his nonforfeitable interest determined in accordance with the
schedule contained in this Section 21.4 if such schedule results in a higher
nonforfeitable interest than that determined under Section 8.1.
21.5 Top-Heavy Section 415 Limitation. If this Article XXI applies to
the Plan for any Plan Year, then the defined benefit plan fraction and
defined contribution plan fraction applied under Section 6.3(d) shall be
applied by substituting "1.0" for "1.25" in each place such number appears in
Section 415(e) of the Code, unless the following requirements are met:
(1) The defined benefit plan or plans of the Company in which each
Non-Key Employee participates provides a benefit on his behalf not less than
the minimum benefit required under Section 416(b) of the Code and Treasury
Regulations thereunder.
(2) This Article XXI would not apply if "ninety percent (90%)" were
substituted for "sixty percent (60%)" in each place such term appears in
Section 21.1.
This Section 21.5 shall not apply to any Member as long as there are (i)
no Company contributions, forfeitures or voluntary contributions allocated to
such Member under any defined contribution plan of the Company and (ii) no
accruals for such Member under any defined benefit plan of the Company.
21.6 Top-Heavy Compensation Limit. If this Article XXI applies to the
Plan for any Plan Year, the annual compensation of each Employee taken into
account under the Plan shall not exceed $200,000, as adjusted for
cost-of-living increases to the extent permitted pursuant to Section
416(d)(2) of the Code.
