UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1997 Commission file number 1-996
OR
( ) TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
GENERAL SIGNAL CORPORATION
(Exact name of registrant as specified in its charter)
New York 16-0445660
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
High Ridge Park,
Box 10010, Stamford, Connecticut 06904-2010
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code (203) 329-4100
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
X
(Yes) (No)
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common Stock, par value $1.00 50,332,461
(Class) (Outstanding at July 25, 1997)
GENERAL SIGNAL CORPORATION AND CONSOLIDATED SUBSIDIARIES
INDEX
Page No.
PART I - FINANCIAL INFORMATION:
Statement of Earnings -
Three Months Ended June 30, 1997 and 1996 3
Statement of Earnings -
Six Months Ended June 30, 1997 and 1996 4
Balance Sheet -
As of June 30, 1997 and December 31, 1996 5
Condensed Statement of Cash Flow -
Six Months Ended June 30, 1997 and 1996 6
Notes to Financial Statements 7
Management's Discussion and Analysis of
Financial Condition and Results of Operations 11
PART II - OTHER INFORMATION 17
PART I: FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
GENERAL SIGNAL CORPORATION AND CONSOLIDATED SUBSIDIARIES
Statement of Earnings
(In millions, except per-share data)
(Unaudited)
Three Months Ended June 30,
1997 1996
Net sales $539.6 $515.0
--------- ---------
Cost of sales 375.9 357.3
Selling, general and administrative
expenses 101.7 99.4
--------- ---------
477.6 456.7
--------- ---------
Operating earnings 62.0 58.3
Interest expense, net 4.6 5.6
---------- ---------
Earnings before income taxes 57.4 52.7
Income taxes 23.0 21.1
Net earnings $ 34.4 $ 31.6
----------- -----------
Net earnings per share $ 0.68 $ 0.64
----------- -----------
Dividends declared per share $ 0.255 $ 0.24
----------- -----------
Average shares outstanding 50.3 49.7
----------- -----------
See accompanying notes to financial statements.
GENERAL SIGNAL CORPORATION AND CONSOLIDATED SUBSIDIARIES
Statement of Earnings
(In millions, except per-share data)
(Unaudited)
Six Months Ended June 30,
1997 1996
Net sales $1,045.2 $996.7
----------- -----------
Cost of sales 733.2 708.7
Selling, general and administrative
expenses 206.1 201.4
Gain on disposition - - (20.8)
----------- ----------
939.3 889.3
----------- ----------
Operating earnings 105.9 107.4
Interest expense, net 8.0 12.4
----------- ----------
Earnings before income taxes 97.9 95.0
Income taxes 39.2 38.0
----------- ----------
Net earnings $58.7 $57.0
----------- ---------
Net earnings per share $1.15 $1.15
----------- --------
Dividends declared per share $0.51 $0.48
----------- ----------
Average shares outstanding 51.2 49.6
----------- ----------
See accompanying notes to financial statements.
GENERAL SIGNAL CORPORATION AND CONSOLIDATED SUBSIDIARIES
Balance Sheet
(In millions)
Unaudited) (Audited)
June 30, December 31,
Assets 1997 1996
Current assets:
Cash and cash equivalents $ 24.3 $ 17.7
Accounts receivable, net 362.4 353.0
Inventories, net 242.6 240.6
Prepaid expenses and other
current assets 22.4 24.7
Deferred income taxes 51.6 55.9
----------- --------
Total current assets 703.3 691.9
Property, plant and equipment, net of
accumulated 305.8 310.0
depreciation and amortization
Intangibles, net of accumulated amortization 366.5 381.3
Other assets 174.3 167.8
----------- ---------
Total assets $1,549.9 $1,551.0
----------- ---------
Liabilities and Shareholders' Equity
Current liabilities:
Short-term borrowings and current
maturities of long-term debt $ 9.1 $ 5.6
Accounts payable 180.9 187.3
Accrued expenses 193.3 214.6
Income taxes 28.0 31.7
----------- ---------
Total current liabilities 411.3 439.2
----------- ---------
Long-term debt, less current maturities 243.2 201.3
Accrued post-retirement and post-employment
obligations 128.1 133.2
Deferred income taxes 28.1 17.3
Other liabilities 16.8 16.2
----------- --------
Total long-term liabilities 416.2 368.0
----------- --------
Shareholders' equity:
Common stock 78.4 78.2
Additional paid-in capital 360.8 337.1
Retained earnings 700.2 667.4
Cumulative translation adjustments (5.5) (1.4)
Common stock in treasury (411.5) (337.5)
----------- --------
Total shareholders' equity 722.4 743.8
----------- --------
Total liabilities and shareholders' equity $1,549.9 $1,551.0
----------- ----------
See accompanying notes to financial statements
GENERAL SIGNAL CORPORATION AND CONSOLIDATED SUBSIDIARIES
Condensed Statement of Cash Flow
(In millions)
(Unaudited)
Six Months Ended June 30,
1997 1996
CASH FLOW FROM OPERATING ACTIVITIES:
Net earnings $ 58.7 $ 57.0
Adjustments to reconcile net earnings
to net cash from operating activities:
Gain on disposition - - (20.8)
Asset write down and other charges - - 19.7
Deferred income taxes 14.8 15.7
Depreciation and amortization 35.6 34.9
Pension credits (6.5) (4.8)
Other, net (1.1) 5.9
Changes in assets and liabilities, net of
effects from acquisitions and divestitures (43.9) (19.2)
----------- --------
Net cash from operating activities 57.6 88.4
----------- --------
CASH FLOW FROM INVESTING ACTIVITIES:
Divestitures 7.3 71.6
Capital expenditures (26.3) (28.6)
Other, net 1.5 0.6
----------- --------
Net cash from investing activities (17.5) 43.6
----------- --------
CASH FLOW FROM FINANCING ACTIVITIES:
Net change in short and long-term
borrowings 84.7 (102.2)
Dividends paid (26.5) (23.9)
Issuance of common stock 8.3 8.0
Purchase of common stock (100.0) (0.9)
----------- --------
Net cash from financing activities (33.5) (119.0)
----------- -------
Net change in cash and cash
equivalents 6.6 13.0
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 17.7 1.0
----------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 24.3 $ 14.0
----------- --------
See accompanying notes to financial statements.
GENERAL SIGNAL CORPORATION AND CONSOLIDATED SUBSIDIARIES
Notes to Financial Statements
(Unaudited)
1. In the opinion of management, the accompanying unaudited financial
statements reflect all adjustments (consisting of normal,
recurring items) necessary for the fair presentation
of results for these interim periods. These results are
based upon generally accepted accounting principles
consistently applied with those used in the preparation of
the company's 1996 Annual Report on Form 10-K. The results
of operations for the six-month period ended June 30, 1997
are not necessarily indicative of the results of operations
that may be expected for the full year.
The financial information as of June 30, 1997 should be read
in conjunction with the financial statements contained in
the company's 1996 Annual Report on Form 10-K.
2. Certain reclassifications have been made to the 1996
financial statements to conform with the 1997 presentation.
3. Inventories June 30, December 31,
1997 1996
(In millions)
Finished goods $ 82.1 $ 80.8
Work in process 65.3 63.2
Raw material and purchased parts 116.1 117.1
-------- --------
Total FIFO cost 263.5 261.1
Excess of FIFO cost over LIFO
inventory value (20.9) (20.5)
-------- ---------
Net carrying value $ 242.6 $ 240.6
--------- ----------
4. Property, Plant and Equipment June 30, December 31,
1997 1996
(In millions)
Property, plant and equipment, $ 767.1 $ 747.3
at cost
Accumulated depreciation and
amortization (461.3) (437.3)
--------- ----------
Property, plant and equipment,
net $ 305.8 $ 310.0
--------- ----------
5. Capital Stock June 30, December 31,
1997 1996
(In millions)
Common stock:
Shares authorized 150.0 150.0
Shares issued 64.9 64.6
Held in treasury (14.6) (13.2)
6. Business Segment Information Three Months Ended June 30,
1997 1996
Net sales: (In millions)
Process Controls $193.7 $188.8
Electrical Controls 257.0 234.7
Industrial Technology 88.9 91.5
--------- ----------
$539.6 $515.0
--------- ----------
Operating earnings:
Process Controls $ 28.3 $ 27.6
Electrical Controls 26.9 23.9
Industrial Technology 15.4 15.7
--------- ----------
Total operating earnings before
unallocated expenses and interest 70.6 67.2
Net interest expense (4.6) (5.6)
Unallocated expenses (8.6) (8.9)
--------- ----------
Earnings before income taxes $ 57.4 $ 52.7
--------- ----------
Six Months Ended June 30,
1997 1996
(In millions)
Net sales:
Process Controls $368.4 $361.9
Electrical Controls 493.0 457.3
Industrial Technology 183.8 177.5
--------- ----------
$1,045.2 $996.7
--------- ----------
Operating earnings:
Process Controls $45.4 $ 66.1 (a)
Electrical Controls 45.6 34.4 (b)
Industrial Technology 33.7 22.9 (c)
--------- ----------
Total operating earnings before
unallocated expenses and interest 124.7 123.4
Net interest expense (8.0) (12.4)
Unallocated expenses (18.8) (16.0)
--------- ----------
Earnings before income taxes $ 97.9 $ 95.0
--------- ----------
(a) Includes $20.8 of gain on disposition of Kinney Vacuum, and
a charge of $4.0 for product warranty costs.
(b) Includes an $11.1 charge related to plant closure costs,
asset valuations and environmental costs.
(c) Includes $4.6 charge for asset valuations.
7. Supplemental Information - Statement of Cash Flow
Six Months Ended
June 30,
1997 1996
Cash paid for: (In millions)
Interest $ 8.4 $14.3
--------- ----------
Income taxes $ 22.7 $18.2
--------- ---------
The company had the following non-cash
financing activity:
Conversion of convertible debt
into common stock $ 39.3 $ - -
8. Repurchase of Shares
In December 1996, the Board of Directors approved a stock
buy-back program of up to $100.0 million to offset the
shares issued in relation to the call for the redemption of
the 5.75 percent convertible subordinated notes. These
shares were purchased systematically in open market
transactions. On April 17, 1997, the program was completed
with the total of 2.5 million shares repurchased for $100.0
million (see note 12).
9. Medium Term Notes
On April 7, 1997, the company sold $25.0 million 7.114
percent medium-term senior notes that are due on April 8,
2002. On April 18, 1997, the company sold an additional
$25.0 million 7.00 percent medium-term senior notes that are
due on October 18, 2000. The proceeds were used to pay down
floating rate commercial paper.
10. Accounting Pronouncements
In February 1997, the Financial Accounting Standards Board
("FASB") issued Statement of Financial Accounting Standards
("SFAS") No. 128, "Earnings per Share," which changes the
methodology of calculating earnings per share. SFAS No. 128
requires the disclosure of diluted earnings per share
regardless of its difference from basic earnings per share.
The company plans to adopt SFAS No. 128 in December 1997.
Early adoption is not permitted. Had the company adopted
SFAS No. 128 as of June 30, 1997, the related per share
disclosure for both basic and diluted earnings per share
would have been:
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
Basic $0.68 $0.64 $1.15 $1.15
Diluted 0.68 0.62 1.14 1.13
In June 1997, the FASB issued SFAS No. 130, "Reporting
Comprehensive Income" and SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information". While
the company is studying the application of the disclosure
provisions, it does not expect either of these statements
to materially affect its financial position or results of
operations.
11. Joint Venture
On June 30, 1997, the company and Emerson Electric Company,
entered into an agreement in principle to form a joint
venture combining Emerson's Appleton Electric division and
the company's Electrical Group. Upon formation of the joint
venture, Emerson would hold a majority interest in the entity
and the company would account for its investment under the
equity method of accounting. The company's Electrical Group
accounts for approximately 15 percent of the company's
consolidated net sales.
12. Sale of Pump Division
On July 21, 1997 the company announced that it had entered
into an agreement to sell substantially all of the assets of
the General Signal Pump Group to Pentair, Inc. for
approximately $200 million. Consummation of the sale is
subject to the satisfaction of customary conditions
including the expiration of the applicable waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended. Subject to closing adjustments, the
company expects to record a gain on the transaction. The
General Signal Pump Group accounts for approximately 10
percent of the company's consolidated sales.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in millions, except per-share data)
Results of Operations - Second Quarter 1997 Compared With Second
Quarter 1996
1997 1996
Reported Reported Change
Net sales $539.6 $515.0 4.8%
Gross profit 163.7 157.7 3.8%
Margin percent 30.3% 30.6%
Selling, general and
administrative 101.7 99.4 2.3%
expenses
Percent of sales 18.8% 19.3%
Operating earnings 62.0 58.3 6.3%
Interest expense, net 4.6 5.6 (17.9%)
Net earnings 34.4 31.6 8.9%
Net earnings per share $0.68 $0.64 6.3%
Net sales: Sales increased 4.8 percent over 1996 levels due
primarily to higher volume in the Electrical Controls sector.
International sales represented approximately 22 percent of total
net sales in 1997 and 1996. Export sales were relatively flat
with the second quarter of 1996. Foreign sales increased
approximately 9 percent versus the same period last year
primarily as a result of improvements of the company's Canadian
and United Kingdom affiliates.
Process Control sector sales were $193.7 in the second quarter of
1997 as compared to $188.8 in the same period in 1996. The
increase was primarily the result of higher demand for industrial
oven and laboratory freezer products. This increase was
partially offset by lower sales volume of crystal growing
furnaces as a result of a cyclical downturn in the semiconductor
equipment market.
Sales in the Electrical Controls sector increased 9.5 percent to
$257.0 from $234.7 in the same period of last year. Sales
increases were reported by all six operating units within the
sector. The largest improvements were in the construction
material, industrial electrical, treadmill motor and medium power
transformer products.
Industrial Technology sector sales decreased to $88.9 versus
$91.5 in the same period in 1996. New networking product sales
of the CD9000TM ESCON Director were offset by a decrease in sales
associated with the discontinuance of a low margin original equipment
manufacturer ("OEM") contract. In addition, worker strikes at North
American automobile manufacturers stemmed the increased demand from
North American automobile producers experienced in the first quarter
of the year.
Gross profit: Gross profit as a percentage of sales decreased to
30.3 percent from 30.6 percent in the second quarter of 1996.
The decrease was due to higher sales of lower margin products and
increased new product development costs partially offset by
productivity improvements and material cost savings.
Selling, general and administrative expenses: Selling, general
and administrative expenses as a percentage of sales decreased to
18.8 percent compared to 19.3 percent in the second quarter of
1996. Second quarter 1997 selling, general and administrative
expenses were positively impacted by a $1.9 insurance settlement
in the Process Controls sector and the reversal of $0.8 of excess
plant closure costs in the Electrical Controls sector. Included
in selling, general and administrative expenses were pension
credits of $2.9 in 1997 and $2.1 in 1996.
Operating earnings: Operating earnings for the Process Controls
sector increased 2.5 percent to $28.3 versus $27.6 in the same
period in 1996. The increase was primarily driven by the
higher volume in the oven and freezer business partially offset
by lower volume in the crystal growing furnace business.
Electrical Controls sector operating earnings increased 12.6
percent to $26.9, versus $23.9 in the same period in 1996. The
increase was driven by higher sales at all six business units and
productivity improvements in the electrical product and medium
power transformers businesses.
Industrial Technology sector operating earnings were relatively
flat at $15.4 versus $15.7 in the same period in 1996. Higher
margins on new telecommunication products offset lower sales
volume.
Unallocated expenses declined 3.4 percent to $8.6 in the second
quarter of 1997 from $8.9 in the same period in 1996. 1996
unallocated expenses were positively impacted by the collection
of a $1.3 previously written off receivable.
Interest expense: Net interest expense decreased 17.9 percent
to $4.6 versus $5.6 in the same period of 1996 due to the
conversion of subordinated notes in late 1996 and early 1997 as
well as lower average debt levels. Cash generated from
operations and divestitures was used to pay down debt incurred in
connection with acquisitions made in 1995.
Net earnings: Net earnings were $34.4 or $0.68 per share in
1997 compared to $31.6 or $0.64 per share in 1996. The company's
effective tax rate was 40.0 percent in both 1997 and 1996.
Results of Operations - Six Months 1997 Compared With Six Months
1996
1997 1996
Reported Reported Change
Net sales $1,045.2 $996.7 4.9%
Gross profit 312.0 288.0 8.3%
Selling, general and
administrative 206.1 201.4 2.3%
expenses
Operating earnings 105.9 107.4 (1.4%)
Interest expense, net 8.0 12.4 (35.5%)
Net earnings 58.7 57.0 (3.0%)
Net earnings per share $ 1.15 $ 1.15 - -
To facilitate a more meaningful comparison of the results of
operations for the first half of 1997 with the same period in
1996, the following items reported in the first half 1996 net
earnings should be excluded.
Gain on disposition: In January 1996, the company disposed of
Kinney Vacuum Company, a unit previously included in the Process
Controls sector, for $29.0 and recorded a pre-tax gain of $20.8.
Included in the gain was a LIFO liquidation of approximately
$1.1 and transaction costs of approximately $0.5.
Product warranty: In March 1996, the company extended warranty
service to certain products sold by the Process Controls sector
which were not covered by warranty. The company recorded $4.0 to
cover the cost of such repairs. Through June 30, 1997, payments
made against this reserve were $3.5. It is anticipated that the
remaining amount will be expended in 1997.
Capitalized software: The company reviews on an ongoing basis
the carrying amount of company assets. As part of this review,
in the first quarter of 1996, the future market potential of
capitalized software in the Industrial Technology sector was
determined to be impaired. Accordingly the company wrote off
$4.6 of such software.
Factory closure and other: As part of the company's ongoing
review of operations, the company decided in March 1996 to close
a factory in the Electrical Controls sector and provided $4.7
primarily for lease termination costs, asset write-downs and
severance. In connection with this review, the company identified
property, plant and equipment that will not be utilized in future
operations, and, therefore, recorded a $4.4 charge to write-off
the assets.
Environmental: During the first quarter of 1996, the company
changed its estimate of environmental costs to be incurred at one
of its facilities in the Electrical Controls sector. The change
in estimate of $2.0 was a result of additional information
received about the method and extent of remediation required.
The following table summarizes the results of operations for the
first half of 1997 and 1996 excluding the items discussed above.
1997 1996
Reported Adjusted Change
Net sales $1,045.2 $996.7 4.9%
Gross profit 312.0 301.0 3.7%
Margin percent 29.9% 30.2%
Selling, general and
administrative 206.1 194.7 5.9%
expenses
Percent of sales 19.7% 19.5%
Operating earnings 105.9 106.3 (0.4%)
Interest expense, net 8.0 12.4 (35.5%)
Net earnings 58.7 56.3 4.3%
Net earnings per share $1.15 $1.14 0.9%
Net sales: Sales in the first half of 1997 increased 4.9 percent
over first half 1996 due primarily to increase in the Electrical
Controls sector and higher first quarter sales in the
telecommunication market. International sales in 1997 increased
7 percent over the same period of 1996 and represented
approximately 23 percent of total net sales versus 22 percent in
the same period of 1996. Export sales increased 3 percent over
the first half of 1996.
Foreign sales increased approximately 10 percent versus the same
period last year primarily as a result of improvements of the
company's Canadian and United Kingdom affiliates.
Process Control sector sales were $368.4 in the first half of
1997 as compared to $361.9 in the same period in 1996. The small
increase was primarily the result of higher industrial oven and
laboratory product sales. The increases were partially offset by
lower sales volume of crystal growing furnaces as a result of a
cyclical downturn in the semiconductor equipment market in late
1996 and continuing into 1997.
Sales in the Electrical Controls sector increased 7.8 percent to
$493.0 from $457.3, as compared to the same period last year.
Sales increases were reported by all six units within the sector.
The largest improvements were in the construction material,
industrial electrical, treadmill motor and medium power
transformer products.
Industrial Technology sector sales increased 3.5 percent to
$183.8 versus $177.5 in the same period in 1996. New networking
product sales of the CD9000TM ESCON Director product as well as
new application sales of an existing networking monitoring
product were the primary reasons for the increase. Increased
demand from North American automotive production also contributed
to the growth but was negatively impacted by North American
automobile worker strikes in the second quarter of 1997.
Gross profit: Gross profit as a percentage of sales decreased
from 30.2 percent to 29.9 percent. The margin decrease was
largely due to higher sales of lower margin products,
higher labor, new product development and new information systems
costs partially offset by productivity and material cost savings.
Selling, general and administrative expenses: Selling, general
and administrative expenses as a percentage of sales increased in
the first half from 19.5 percent in 1996 to 19.7 percent in 1997.
This increase resulted from higher marketing, sales commissions
and information systems costs in the first quarter of 1997. 1997
selling, general and administrative expenses were positively
impacted by a $1.9 insurance settlement in the Process Controls
sector and the reversal of $0.8 of excess plant closure costs in
the Electrical Controls sector. Included in selling, general and
administrative expenses were pension credits of $6.5 in 1997 and
$4.8 in 1996.
Operating earnings: Process controls operating earnings
decreased 7.9 percent to $45.4, versus $49.3 in the same period
in 1996. The decline is primarily due to a shift in mix to lower
margin products in the pump and coal feeder systems businesses
and lower volume in the crystal growing furnace business. 1996
operating earnings of the Process Controls sector included $0.7
of environmental insurance recoveries.
Electrical controls operating earnings were flat at $45.6, versus
$45.5 in the same period in 1996. Included in 1997 operating
earnings is approximately $0.6 of pre-tax gain on the sale of a
product line for approximately $2.4. 1996 operating earnings of
the Electrical Controls sector included $1.3 of environmental
insurance recoveries.
Industrial Technology sector operating earnings increased 22.5
percent to $33.7 versus $27.5 in the same period in 1996. The
increase was due mainly to higher first quarter sales volume, a
shift toward the higher margin CD9000TM ESCON Director product
and productivity improvements in automotive product lines.
Unallocated expenses increased to $18.8 in the first half of 1997
from $16.0 in the same period in 1996. 1996 unallocated expenses
were positively impacted by the collection of a $1.3 previously
written off receivable. The increase is primarily the result of
higher expenses due to divested businesses and higher benefit
cost accruals.
Interest expense: Net interest expense decreased 35.5 percent
to $8.0 versus $12.4 in the same period of 1996 due to the
conversion of subordinated notes in late 1996 and early 1997 as
well as lower average debt levels. Cash generated from
operations and divestitures in 1996 was used to pay down debt
incurred in connection with acquisitions made in 1995.
Net earnings: Net earnings were $58.7 or $1.15 per share in
1997 compared to $56.3 or $1.14 per share in 1996. The company's
effective tax rate was 40.0 percent in both 1997 and 1996.
Financial Condition - June 30, 1997 Compared to December 31, 1996
The following summarizes the cash flow activity for the first six
months of 1997 compared to the first six months of 1996.
1997 1996
Cash flow from operating activities $57.6 $88.4
Divestitures 7.3 71.6
Capital expenditures (26.3) (28.6)
Other investing activities 1.5 0.6
Cash flow from investing activities (17.5) 43.6
Debt borrowings/(repayments) 84.7 (102.2)
Dividends paid (26.5) (23.9)
Purchase of common stock (100.0) (0.9)
Issuance of common stock 8.3 8.0
Cash flow from financing activities (33.5) (119.0)
Included in operating cash flow for 1997 and 1996 were
expenditures of $3.4 and $13.5, respectively, related to
previously divested operations and $3.7 and $3.3, respectively,
for severance pay.
Operating cash flow for the first half of 1997 decreased in
comparison to first half of 1996 primarily due to higher accounts
receivable balances resulting from the higher sales volume and
lower accrued expenses due to the utilization of disposition and
restructuring accruals as well as payment of other non-operating
accruals.
In December 1996, the Board of Directors approved a stock buy-
back program of up to $100.0 to offset the dilutive impact of
shares issued in connection with the convertible subordinated
notes redemption. On April 17, 1997, the company concluded
the buy-back program which resulted in the repurchase of
approximately 2.5 million shares. On June 19, 1997, the Board of
Directors approved a stock buy-back program of up to $150.0 subject
to the consummation of the GS Pump business divestiture (see note 12).
On June 30, 1997, the company entered into an agreement in
principle to form a joint venture with Emerson's Appleton
Electric division (see note 11). The company's contribution to the
joint venture is not expected to significantly affect the company's
liquidity.
Total debt-to-total capitalization was 25.9 percent at June 30,
1997, up from 21.8 percent at year-end, due to higher long-term
debt at the end of the second quarter. The debt level increased
in the second quarter of 1997 in order to repurchase common
shares to offset the impact of the converted debt. The company
is well positioned to finance future working capital requirements
and capital expenditures through current earnings and available
credit facilities.
On April 7, 1997, the company sold $25.0 million 7.114 percent
medium-term senior notes that are due on April 8, 2002. On April
18, 1997, the company sold an additional $25.0 million 7.00
percent medium-term senior notes that are due on October 18,
2000. The proceeds were used to pay down floating rate
commercial paper.
Other Matters
Since the company is a producer of capital goods and equipment,
its results can vary with the relative strength of the economy.
Demand for products in the Process Controls sector follows the
demand for capital goods orders. The Electrical Controls sector
depends upon several markets, principally the nonresidential
construction and computer equipment industries. The Industrial
Technology sector depends on several markets, primarily
automotive, mass transportation, and telecommunications
equipment. Mass transportation depends upon continued federal
and local government spending, andtelecommunications is
dependent upon continued research and development and the
continued success of new products. While no one marketplace
or industry has a significant impact on the company's operations
or results, the inherent pace of technological changes presents
certain risks that the company monitors carefully. Success within
all of the company's businesses is dependent upon the timely
introduction and acceptance of new products.
Forward-looking Statements
The company may from time to time make projections concerning
future operations and earnings. The company's forward-looking
statements are based on the company's current expectations, which
are subject to a number of risks and uncertainties that could
materially affect or reduce such operations and earnings. In
addition to the general factors identified in "Other Matters"
above, the primary factors that could specifically affect the
company's expectations include the failure of: (1) order rates
increasing as expected, (2) productivity improvements meeting or
exceeding budget, and (3) new products under development being
produced and accepted as anticipated.
PART II: OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
10.1 364 Day Credit Agreement - Amendment No. 2 among
General Signal Corporation and Various Commercial
Banking Institutions, dated May 29, 1997.
10.2 Four Year Credit Agreement - Amendment No. 3 among
General Signal Corporation and Various Commercial
Banking Institutions, dated May 29, 1997.
10.3 General Signal Corporation Savings and Stock
Ownership Plan as amended and restated
July 1, 1997.
27.0 Financial Data Schedule
(b) Reports on Form 8-K:
The Registrant did not file any reports on Form 8-K during
the quarter covered by this report.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
GENERAL SIGNAL CORPORATION
/s/ Raymond L. Arthur
Raymond L. Arthur
Vice President and Controller
Chief Accounting Officer
DATE: July 25, 1997
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
GENERAL SIGNAL CORPORATION
Raymond L. Arthur
Vice President and Controller
Chief Accounting Officer
DATE: July 25, 1997
364 Day Credit Agreement
AMENDMENT NO. 2
THIS AMENDMENT NO. 2, (this "Amendment"), dated as of
May 29, 1997, among GENERAL SIGNAL CORPORATION (the
"Company") and the undersigned commercial banking
institutions (herein collectively "Banks").
WITNESSETH:
WHEREAS, the Company and the Banks are parties to a
certain 364 Day Credit Agreement, dated as of June 1, 1995
as amended as of May 31, 1996 (the "364 Day Credit
Agreement"); and
WHEREAS, the parties desire to amend further certain
terms of the 364 Day Credit Agreement;
NOW, THEREFORE, in consideration of the agreements
herein contained, the parties hereto hereby agree as
follows:
1. Except as otherwise defined herein, the
capitalized terms used herein shall have the meanings
respectively ascribed to them in the 364 Day Credit
Agreement.
2. Each Bank's Commitment shall be the amount set
forth opposite its signature hereto, as such amount may be
reduced or increased from time to time pursuant to Sections
1.1.6, 1.1.7 and 1.1.8 or Section 13.5 of the 364 Day Credit
Agreement.
3. The "Revolver Expiration Date" is hereby amended
to mean the earlier of May 28, 1998 or the date of
termination in whole of the Commitments. All references to
the "364 Day Credit Agreement" shall be deemed to refer to
the 364 Day Credit Agreement as hereby amended.
4. The table in Section 3.1.8, Applicable Margin, is
hereby deleted and replaced with the following:
Public Debt Rating Eurodollar
Margin CD Margin
Level 1:
AA-/Aa3 or higher .185% .310%
Level 2:
A-/A3 or higher, but
less than Level 1 .200% .325%
Level 3:
BBB-/Baa3 or higher,
but less than Level 2 .350% .475%
Level 4:
Less than BBB-/Baa3 .500% .625%
5. The table in Section 3.2, Facility Fee, is hereby
deleted and replaced with the following:
Public Debt Rating Facility Fee Percentage
Level 1:
AA-/Aa3 or higher .040 %
Level 2:
A-/A3 or higher, but
less than Level 1 .060 %
Level 3:
BBB-/Baa3 or higher,
but less than Level 2 .100%
Level 4:
Less than BBB-/Baa3 .150 %
6. Except as set forth in this Amendment, all terms and
conditions of the 364 Day Agreement shall remain unchanged.
IN WITNESS WHEREOF, the Company and each Bank have
caused this Amendment to be executed, as of the day and year
first above written, by one of its officers thereunto duly
authorized.
GENERAL SIGNAL CORPORATION
By: Terry J. Mortimer
____________________________
Vice President and Treasurer
One High Ridge Park
Stamford, CT 06904
Attention: Treasurer
Telecopier No.: (203) 329-4365
Four Year
Credit Agreement
AMENDMENT NO. 3
THIS AMENDMENT NO.3 (this "Amendment"), dated as of May
29, 1997, among GENERAL SIGNAL CORPORATION (the "Company")
and the undersigned commercial banking institutions (herein
collectively "Banks").
WITNESSETH:
WHEREAS, the Company and the Banks are parties to a
certain Four Year Credit Agreement, dated as of January 12,
1994 as amended as of January 12, 1995 and May 31, 1996,
(the "Four Year Credit Agreement"); and
WHEREAS, the parties desire to further amend certain
terms of the Four Year Credit Agreement.
NOW, THEREFORE, in consideration of the agreements
contained herein, the parties hereto hereby agree as
follows:
1. Except as otherwise defined herein, the
capitalized terms used herein shall have the meanings
respectively ascribed to them in the Four Year Credit
Agreement.
2. Each Bank's Commitment shall be the amount set
forth opposite its signature hereto, as such amount may be
reduced or increased from time to time pursuant to Sections
1.1.6, 1.1.7 and 1.1.8 or Section 13.5 of the Four Year
Credit Agreement.
3. The term "Revolver Expiration Date" is hereby
amended to mean the earlier of May 28, 2002 or the date of
termination in whole of the Commitments.
4. The term "Agreement" is hereby amended to mean
this "Five Year Credit Agreement" and all references to the
"Five Year Credit Agreement" shall be deemed to refer to the
Four Year Credit Agreement as hereby amended.
5. The table in Section 3.1.8, Applicable Margin, is
hereby deleted and replaced with the following:
Public Debt Rating Eurodollar
Margin CD Margin
Level 1:
AA-/Aa3 or higher .165% .290%
Level 2:
A-/A3 or higher, but
less than Level 1 .180% .305%
Level 3:
BBB-/Baa3 or higher,
but less than Level 2 .300% .425%
Level 4:
Less than BBB-/Baa3 .400% .525%
6. The table in Section 3.2, Facility Fee, is hereby
deleted and replaced with the following:
Public Debt Rating Facility Fee Percentage
Level 1:
AA-/Aa3 or higher .060 %
Level 2:
A-/A3 or higher, but
less than Level 1 .080 %
Level 3:
BBB-/Baa3 or higher,
but less than Level 2 .150%
Level 4:
Less than BBB-/Baa3 .250 %
7. Except as set forth in this Amendment, all terms
and conditions of the Four Year Credit Agreement shall
remain unchanged.
IN WITNESS WHEREOF, the Company and each Bank have
caused this Amendment to be executed, as of the day and year
first above written, by one of its officers thereunto duly
authorized.
GENERAL SIGNAL CORPORATION
By: Terry J. Mortimer
__________________________
Vice President and Treasurer
One High Ridge Park
Stamford, CT 06904
Attention: Treasurer
Telecopier No.: (203) 329-4365
GENERAL SIGNAL CORPORATION
SAVINGS AND STOCK OWNERSHIP PLAN
As Amended and Restated July 1, 1997
070397
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
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 pro-
viding eligible employees with an efficient and con-
venient 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
providing an opportunity to invest 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 pro-
visions 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.
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 Corporate Benefits Committee 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 desig-
nated by the Member or otherwise determined in
accordance with Section 18.8.
(d) "Corporate Benefits Committee" means the Corporate
Benefits Committee 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 reduc-
tion for Tax Deferred Contributions or for any
salary deferred amounts not included in gross
income pursuant to Section 125 of the Code, 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 the Member's 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 the Employee's
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, an Employee's "original
date of hire" is the date on which the person
first performs an hour of service for which
the person 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.
(3) If an Employee is absent from the service of
the Controlled Group because of service in the
uniformed services of the United States and
the person returns to service with the
Controlled Group having applied to return
while the person's reemployment rights were
protected by law, the absence shall be
included in the person's Continuous
Employment.
(j) "Controlled Group" means any company which is a
member of a controlled group of corporations (as
defined in Section 414(b) of the Code) which also
includes as a member the Employer; any trade or
business under common control (as defined in
Section 414(c) of the Code) with the Employer; any
organization (whether or not incorporated) which is
a member of an affiliated service group (as defined
in Section 414(m) of the Code) which includes the
Employer; and any other entity required to be
aggregated with the Employer pursuant to
regulations under Section 414 (o) of the Code.
Notwithstanding the foregoing, for purposes of
Section 6.3, the definitions in Sections 414(b) and
(c) of the Code shall be modified by substituting
the phrase "more than 50 percent" for the phrase
"as least 80 percent" each place it appears in
Section 1563(a)(1) of the Code.
(k) "Disability" means a Member's physical or mental
incapacity which continues for a period of 6 con-
secutive months and would entitle the Member to
benefits under the Member's 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 Human Resources
Officer otherwise determines (for purposes of
this Plan, the date of the acquisition will be
considered the employee's date of hire unless
the Human Resources Officer 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 par-
ticipate in the Plan with the consent of the Human
Resources Officer.
(o) "Enrollment Date" means January 1, 1976, or the
first day of any calendar quarter
thereafter.
(p) "Five percent owner" means with respect to a
corporation, any person who owns (or is considered
as owing within the meaning of section 318 of the
code) more than 5% of the outstanding stock of the
corporation, or stock possessing more than 5% of
the total voting power of the corporation.
(q) "Highly Compensated Employee" means for a Plan Year
commencing on or after January 1, 1997, any
employee of the Controlled Group (whether or not
eligible for membership in the Plan) who
(1) was a Five Percent Owner for such Plan Year or
the prior Plan Year, or
(2) for the preceding Plan Year received
compensation (as defined in Section 414(q)(4)
of the Code) in excess of $80,000, and, if the
Employer so elects, was among the highest 20
percent of employees for the preceding Plan
Year when ranked by such compensation paid for
that year excluding, for purposes of
determining the number of such employees, such
employees as the Corporate Benefits Committee
may determine on a consistent basis pursuant
to Section 414(q) of the Code. The $80,000
dollar amount in the preceding sentence shall
be adjusted from time to time for cost of
living in accordance with Section 414(q) of
the Code.
Notwithstanding the foregoing, employees who are
nonresident aliens and who receive no earned income from
the Controlled Group which constitutes income from
sources within the United States shall be disregarded
for all purposes of this Section.
The provisions of this Section shall be further subject
to such additional requirements as shall be described in
Section 414(q) of the Code and its applicable
regulations, which shall override any aspects of this
Section inconsistent therewith.
(r) "Human Resources Officer" means the chief human
resources officer of the Company.
(s) "Investment Committee" means the Investment
Committee provided for in Article XVI of this Plan.
(t) "Investment Funds" means:
(1) The "Company Stock Fund" which is a fund for
the investment in Stock, and
(2) Such other funds which may be established
from time to time by the Investment
Committee.
(u) "Matching Contributions" means the contributions
made by the Employers pursuant to Section 5.1. The
portion of the Plan consisting of Matching
Contributions made prior to July 1, 1997 (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. Other amounts
invested in Stock may also be included in the ESOP
portion of the Plan.
(v) "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 the Member's behalf have been either distributed
or forfeited.
(w) "Member Elected Contributions" means the Tax
Deferred Contributions and Taxed Contributions
which a Member elects to have made under Article
IV.
(x) "Plan" means this General Signal Corporation
Savings and Stock Ownership Plan as it may be
amended from time to time.
(y) "Plan Year" means (i) the calendar year beginning
on the Effective Date and each calendar year there-
after 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.
(z) "Retirement" means the Member's termination of
service for any reason with the Controlled Group on
or after age fifty-five (55).
(aa) "Stock" means the Common Stock, par value of $1.00
per share, of the Company.
(bb) "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.
(cc) "Taxed Contributions" means Member contributions
made under this Plan which do
not qualify for deferral under Section 401(k) of
the Code.
(dd) "Trust Agreement" means the instrument or
instruments executed between the Company and the
Trustee or Trustees named therein which provides
for the receiving, holding, investing, and
disposing of the Trust Fund.
(ee) "Trust Fund" means the assets of the Plan held by
the Trustee or Trustees.
(ff) "Trustee" means the trustee or trustees at any time
acting under the Trust Agreement or Trust
Agreements.
(gg) "Valuation Date" means the last business day of any
calendar quarter on which the New York Stock
Exchange is open for trading.
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) the person has elected to have either Tax Deferred
Contributions or Taxed Contributions made to the
Plan as specified in Article IV,
(b) the person has signed the enrollment form
prescribed by the Corporate Benefits Committee and
filed it with the person's Employer on the first
day of employment or subsequently at least fifteen
(15) days prior to the Employee's applicable
Enrollment Date, and
(c) the person is still an Employee and receiving
Compensation on the Enrollment Date.
ARTICLE IV
MEMBER ELECTED CONTRIBUTIONS
4.1 Tax Deferred Contributions. A Member, unless the person
ceases to be an Employee, may elect to defer each pay
period an amount equal to at least 1% but not more than
17% (only a whole percentage can be elected) of the Com-
pensation which otherwise would have been paid to the
Member during that period and have that amount
contributed under the Plan on the Member's behalf by the
Member's 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 the
Member's Compensation not to exceed 10% of the Member's
Compensation subject to a minimum of 1% 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 Contributions (subject to the 10%
limitation on Taxed Contributions) to the extent
additional Tax Deferred Contributions may not be made by
reason of the limitation set forth in Section 2.1(bb).
4.3 Aggregate Limitation on Tax Deferred Contributions and
Taxed Contributions. Notwithstanding the foregoing
provisions of Section 4.1 and 4.2, the aggregate per-
centage of Tax Deferred Contributions and Taxed Contri-
butions may not exceed 17%.
4.4 Change in Contribution Rate. A Member may discontinue
or change the Member's rate of Member Elected
Contributions only as of an Enrollment Date by filing
the appropriate notice with the Member's 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 or her Member Elected Contributions
automatically discontinued as of the date of change
of employment status. Such Member's Elected Contri-
butions may be resumed on any Enrollment Date after
the Member 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, but in no event later than 15 days
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 or the actual contribution percentage
limitation imposed by Section 401(m)(3) of the
Code, the Corporate Benefits Committee may, at any
time, in its sole discretion and without the prior
consent of affected Members respectively limit the
percentage of Tax Deferred Contributions and/or
Taxed 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 Corporate Benefits
Committee.
If any Member's Tax Deferred Contribution rate is
limited pursuant to this Section or the limitation
set forth in Section 2.1(bb), the rate at which the
Member has elected to make Taxed Contributions may
be considered increased to the extent that the
Member's Tax Deferred Contribution rate has been
decreased. A Member's Taxed Contributions for the
Plan Year may not exceed 10% of the Member's Com-
pensation 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 the Member's 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 the Member's
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.
4.8 Contributions During Period Of Military Leave.
(a) Without regard to any limitations on contributions
set forth in this Article IV, a Member who is
credited with Continuous Employment under the
provisions of Section 2.1(i)(3) because of a period
of service in the uniformed services of the United
States, may elect to contribute to the Plan the Tax
Deferred Contributions and Taxed Contributions that
could have been contributed to the Plan in
accordance with the provisions of the Plan had the
person remained continuously employed by the
Employer throughout such period of absence ("make-
up contributions"). The amount of make-up
contributions shall be determined on the basis of
the Member's Compensation in effect immediately
prior to the period of absence, and the terms of
the Plan at such time. Any Tax Deferred
Contributions and Taxed Contributions so determined
shall be limited as provided in the preceding
Sections of this Article IV and Sections 5.5 and
6.3 with respect to the Plan Year or Years to which
such contributions relate rather than the Plan Year
in which payment is made. Any payment to the Plan
described in this paragraph shall be made during
the period, beginning with the date of reemployment
or October 13, 1996, if later, whose duration is
the lesser of three times the period of absence or
five years. Earnings (or losses) on make-up
contributions shall be credited commencing with the
date the make-up contribution is made in accordance
with the provisions of Article VI.
(b) With respect to a Member who makes the election
described in paragraph (a) above, the Employer
shall make Matching Contributions on the make-up
contributions in the amount described in the
provisions of Sections 5.1, as in effect for the
Plan Year to which such make-up contributions
relate. Employer Matching Contributions shall be
made during the period described in paragraph (a)
above. Earnings (or losses) on Matching
Contributions shall be credited commencing with the
date the contributions are made in accordance with
the provisions of Article VI. Any limitations on
Matching Contributions described in Sections 5.1,
5.5 or 6.3 shall be applied with respect to the
Plan Year or Years to which such contributions
relate rather than the Plan Year or Years in which
payment is made.
(c) All contributions under this Section 4.8 are
considered "annual additions," as defined in
Section 415(c)(2) of the Code, and shall be limited
in accordance with the provisions of Section 6.3
with respect to the Plan Year or Years to which
such contributions relate rather than the Plan Year
in which payment is made.
ARTICLE V
EMPLOYER CONTRIBUTIONS
5.1 Matching Contributions. On behalf of each Member in its
employ who 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
1% to 5% of the Member's Compensation for the entire
Plan Year (or who would have had Tax Deferred
Contributions made on the Member's behalf but for the
limitations imposed in Sections 2.1 (bb) 4.1 or 6.3 of
the Plan), 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 100% of the first 3% of each such Member's
Compensation and 50% of each of the next 2% (in whole
percentages) of each such Member's Compensation;
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). The
Matching Contributions are made expressly conditional on
the Plan satisfying the provisions of Sections 4.1 and
5.5. If any portion of the Tax Deferred Contributions
or Taxed Contributions to which the Matching
Contributions relate is returned to the Member under
Article XI or XII, the corresponding Matching
Contribution shall be forfeited and if any amount of the
Matching Contribution is deemed an excess aggregate
contribution under Article XIII, such amount shall be
forfeited or distributed in accordance with the
provisions of that Section.
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,
including the multiple use of the alternative limitation
under Section 401(m) (9) of the Code.
ARTICLE VI
MEMBERS' ACCOUNTS
6.1 Types of Accounts. In addition to the Accounts main-
tained by the Corporate Benefits Committee with respect
to Plan Years beginning on and after July 1, 1997, the
Corporate Benefits Committee 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) Taxed Contribution Accounts, to be credited with:
(1) the Member's Taxed Contributions made prior to
January 1, 1987, and
(2) the Member's Taxed Contributions made after
December 31, 1986;
(c) A Rollover Account, to be credited with Transferred
Assets pursuant to Article XX;
(d) Matching Contribution Accounts, to be credited
with:
(1) the Matching Employer Contributions allocated
to the Member prior to July 1, 1997,
(2) the Matching Employer Contributions allocated
to the Member after June 30, 1997, and
(3) the Matching Employer Contributions allocated
to the Member form a prior employer;
(e) A Matured Stock Account, to be credited with
Matching Contributions when they become non-
forfeitable in accordance with Article VIII of this
Plan or Article IX of the Plan as in effect prior
to this restatement if the Member terminated
employment prior to July 1, 1997.
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
Investment Committee. 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, is adjusted pursuant to Section
415(d) of the Code, or 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 the Member's
Compensation, except for calendar years
commencing prior to January 1, 1998, the
Member's Tax Deferred Contributions and any
salary deferral amounts which were included in
gross income under Section 125 of the Code
shall not be included in Compensation.
(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.
For purposes of this paragraph (c), any Taxed Deferred
Contributions distributed under Article XII, and any
Matching Contributions or Taxed Contributions
distributed or forfeited under the provisions of Article
XI, XII or XIII shall be included in the annual addition
for the year allocated.
(d) The Corporate Benefits Committee 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. With respect to calendar
years commencing prior to January 1, 2000, 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), the reduction will be made in the
following order, but only to the extent necessary:
(1) The Member's unmatched Taxed Contributions
shall be reduced to the extent necessary. The
amount of the reduction shall be returned to
the Member, together with any earnings on the
contributions to be returned.
(2) The Member's unmatched Tax Deferred
Contributions shall be reduced to the extent
necessary. The amount of the reduction shall
be returned to the Member together with any
earnings on the contributions to be returned.
(3) The Member's matched Taxed Contributions and
corresponding Matching Contributions shall be
reduced to the extent necessary. The amount
of the reduction attributable to the Member's
matched Taxed Contributions shall be returned
to the Member, together with any earnings on
those contributions to be returned, and the
amount attributable to the Matching
Contributions shall be forfeited and used to
reduce subsequent contributions payable by the
Employer.
(4) The Member's matched Tax Deferred
Contributions and corresponding Matching
Contributions shall be reduced to the extent
necessary. The amount of the reduction
attributable to the Member's matched Tax
deferred Contributions shall be returned to
the Member together with any earnings on those
contributions to be returned, and the amount
attributable to the Matching Contributions
shall be forfeited and used to reduce
subsequent contributions payable by the
Employer.
ARTICLE VII
INVESTMENT ELECTIONS
7.1. Company Stock Fund.
(a) Subject to Section 7.1(d), Matching Contributions
made prior to July 1, 1997 shall 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. All
Matching Contributions credited on or after July 1,
1997 shall be invested in the Investment Funds in
the same proportions as selected by the Member for
Member Elected Contributions.
(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 Investment Committee 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. Distri-
bution 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
the Member's 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 Benefits Committee.
(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 the
Member's Matching Contribution Account
(attributable to Matching Contributions made prior
to July 1, 1997) in the Member's 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 Benefits Committee.
7.2 Funds for Member Elected Contributions.
(a) All Members' Elected Contributions will be invested
in the Investment Funds selected by the Member in
10% increments, at the time the Member files the
election specified in Section 3.2, from the
Investment Funds which are made available from time
to time by the Investment Committee for that
purpose. All Members' Elected Contributions will
be credited to their Accounts in the respective
Investment Funds. All dividends, interest, gains
and losses of each Investment Fund will be rein-
vested in that Investment Fund and credited to the
Member's Accounts as of the applicable Valuation
Date. The Corporate Benefits Committee 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 Investment Committee, the Corporate
Benefits Committee, 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 the Member's Accounts ought to be invested.
(c) A Member may change the Member's 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
Benefits Committee, which notice shall specify the
new investment election.
(d) A Member may transfer part or all of the balance in
the Member's 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 Benefits Committee.
7.3 Distributions.
(a) Withdrawals and distributions from the Trust Fund
will be charged to the Member's Accounts in each
Fund. The Corporate Benefits Committee 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 coin-
cident 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 IX or X, a Member may
elect to have the Member's distribution paid in the
form of Stock (with fractional shares to be paid in
cash) to the extent of the Member's interest in the
Company Stock Fund.
ARTICLE VIII
VESTING
8.1 Vesting. Each Member is at all times 100% vested the
value of (a) the participant's Member Elected
Contribution Accounts and (b) after July 1, 1997 the
Member's Matching Contribution Account. A Member who
terminated employment prior to July 1, 1997 and who
elected not to receive a distribution from the Plan
until after the Member"s rights become nonforfeitable
will vest in the Member's Matching Contribution Account
effective as of July 1, 1997.
8.2 Termination of Employment and Transfer Prior to Vesting.
If a Member's employment
with the Controlled Group terminated prior to July 1,
1997 and the Member is not reemployed before incurring
five consecutive 1-year breaks in service (as defined in
Section 10.3), the balance of the Member's 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 elected
not to
receive a distribution from the Plan until after the
Member's rights become nonforfeitable.
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 Corporate Benefits
Committee, specifying the amount to be withdrawn. Each
Member will be entitled to four 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 Corporate Benefits Committee receives
notice of the withdrawal, but the Corporate Benefits
Committee 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 the Member's distribution paid
in the form of Stock (with fractional shares to be paid
in cash) to the extent of the Member's interest in the
Company Stock Fund. All in-service withdrawals will be
paid pro rata from the Investment Funds of the Member.
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; pro-
vided, 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 withdrawal,
(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 Corporate Benefits
Committee; 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
Corporate Benefits Committee may authorize a
hardship withdrawal only if (i) the Member
certifies that the Member 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 the
Member's health or welfare or that of the Member's
immediate family (such as for the purchase of a
principal residence for the Member, medical
expenses not covered by insurance, payment of
tuition, and related educational fees and room and
board expenses for post-secondary education for the
Member, the Member's spouse or children or payment
of amounts necessary to prevent the eviction of the
employee from the Member's 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 hard-
ship. A Member shall furnish evidence of hardship
satisfactory to the Corporate Benefits Committee
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
Corporate Benefits Committee'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, the Member's
right to make Member Elected Contributions shall be
suspended for a period of three months.
9.4 Additional Rules. The Corporate Benefits Committee 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 Corporate Benefits Committee, loans may be made
pursuant to the Plan which shall be charged against a
Member's Accounts. Such loans may not in the aggregate
exceed the balance in such Accounts. 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 Corporate Benefits Committee
shall deem appropriate. Loans shall be available to all
Members on a non-discriminatory basis with a maximum of
two loans outstanding at any time.
ARTICLE X
DISTRIBUTIONS AT TERMINATION OF EMPLOYMENT
10.1 Distributions on Account of Retirement, Disability or
Death. Upon a Member's termination of service by reason
of Retirement, Disability or upon a Member's death,
there will be distributed to the Member (or in the case
of the Member's death, to the Member's Beneficiary), in
accordance with Section 10.4, the balance of the
Member's 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.
10.2 Other Distributions. When a Member terminates employ-
ment with the Controlled Group on or after July 1, 1997
for reasons other than Retirement, death or Disability,
the Member will receive a distribution of the value of
all the Member's Accounts in a lump sum consisting of
cash and/or whole shares of Corporation Common Stock
credited to such Accounts as selected by the Member. If
the amount credited to a Member's Accounts exceeds
$3,500, the distribution will not be made prior to the
Member's attainment of age 62 unless the Member consents
to the distribution of the Member's Accounts.
10.3 Restoration of Forfeitures. If a Member forfeited the
Member's unvested Matching Contribution Accounts by
reason of a distribution prior to July 1, 1997, such a
Member may restore account balances which are forfeited
by repaying the amount distributed to the Member 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
distribution was made or (ii) the date on which the
Member incurs the Member's fifth consecutive 1-year
break in service commencing after the 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 for which the Member is paid or
entitled to payment for the performance of duties for an
Employer or a member of the Controlled Group.
The amount of a Member's repaid distribution 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 distribution. Repaid amounts
will be invested in accordance with a new investment
election filed by the Member with the Corporate Benefits
Committee. A Member's restored Matching Contribution
Account will be nonforfeitable immediately.
The repayment of 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 the Member's Beneficiary consisting
of cash and Stock credited to the Member's
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 the Member's
Accounts will be distributed in accordance
with the method of payment being used as of
the date of the Member's death.
(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 the Member's Accounts.
(iv) Termination of Service Prior to Age 55.
Any distribution of Accounts on account of
termination of service prior to age 55 pur-
suant to Section 10.2 will be made by a single
payment to the Member consisting of cash and
Stock credited to the Member's Accounts.
(v) Retirement.
Any distribution of the Member's Tax Deferred
and Taxed Contribution Accounts on account of
Retirement as defined in Section 2.1(z) 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 ex-
ceeding 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 the himself, unless the
annuity is payable for a period not
extending beyond the life expectancy of
the Member and the Member's 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 the Member's designated
Beneficiary, or (iv) the joint life and last
survivor expectancy of the Member and the Member's
designated Beneficiary (redetermined annually if
the Member's spouse is the Member's 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
the Member's Retirement, with the provision that
after the Member's death (whether before or after
commencement of benefit payments to the Member)
distribution at a rate equal to 50% of the rate of
the distribution during the Member's life (or which
would have been made during the Member's life had
payments commenced on the first day of the month
next succeeding that in which the Member's death
occurs) shall be paid during the life of, and to,
the Member's spouse provided the Member's spouse
survives the Member.
A Member may elect by written notice to the
Corporate Benefits Committee, at any time during
the election period (and after having received from
the Corporate Benefits Committee a written notice
of the availability of such election and the avail-
ability 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 the
Member's 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 Corporate
Benefits Committee will notify each Member who
elects to receive an annuity not later than 7 days
after commencement of the election period of the
Member's 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 the Member's 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 the
Member's 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 the Member's Accounts in accordance
with the provisions of Section 10.1 or 10.2, as
applicable, if the nonforfeitable 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 Corporate Benefits Committee.
All distributions will be made as of the Valuation Date
which follows by at least 15 days the date on which the
Corporate Benefits Committee 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 the Member's distribution paid in the form of
Stock (with fractional shares to be paid in cash) to the
extent of the Member's interest in the Company Stock
Fund.
10.8 Waiver Of Notice Period. Except as provided in the
following sentences, if the value of the vested portion
of a Member's Accounts exceeds $3,500, an election by
the Member to receive a distribution shall not be valid
unless the written election is made (a) after the Member
has received the notice required under Section 1.411(a)-
11(c) of the Income Tax Regulations and (b) within a
reasonable time before the effective date of the
commencement of the distribution as prescribed by said
regulations. If a distribution is one to which Sections
401(a)(11) and 417 of the Code do not apply, such
distribution may commence less than 30 days after the
notice required under Section 1.411(a)-11(c) of the
Income Tax Regulations is given, provided that:
(i) the Corporate Benefits Committee clearly informs
the Member that the Member has a right to a period
of at least 30 days after receiving the notice to
consider the decision of whether or not to elect a
distribution (and, if applicable, a particular
distribution option), and
(ii) the Member, after receiving the notice under
Sections 411 and 417, affirmatively elects a
distribution.
If the distribution is one to which Sections 401(a)(11)
and 417 of the Code do apply, a Member may, after
receiving the notice required under Sections 411 and 417
of the Code, affirmatively elect to have the Member's
benefit commence sooner than 30 days following the
Member's receipt of the required notice, provided all of
the following requirements are met:
(i) the Corporate Benefits Committee clearly informs
the Member that the Member has a period of at least
30 days after receiving the notice to decide when
to have the Member's benefit begin and, if
applicable, to choose a particular optional form of
payment;
(ii) the Member affirmatively elects a date for benefits
to begin and, if applicable, an optional form of
payment, after receiving the notice;
(iii) the Member is permitted to revoke the Member's
election until the later of the Member's benefit
commencement date or seven days following the day
the Member received the notice;
(iv) the Member's benefit commencement date is after the
date the notice is provided; and
(v) payment does not commence less than seven days
following the day after the notice is received by
the Member.
10.9 Age 70" Required Distribution. Notwithstanding any
provisions of the Plan to the contrary, if a Member is a
Five Percent Owner, distribution of the Member's
Accounts shall begin no later than the April 1 following
the calendar year in which the Member attains age 70'.
No minimum distribution payments will be made to a
Member while in service under the provisions of Section
401(a)(9) of the Code on or after January 1, 1997 if the
Member is not a Five Percent Owner and attains age 70'
in 1996 or later. Such Member may, however, elect to
receive in-service withdrawals in accordance with the
provisions of Article IX while the Member remains in
service.
In the event a Member, other than Member who is a Five
Percent Owner, was receiving minimum distribution
payments while in service in accordance with the
provisions of Section 401(a)(9) of the Code on December
31, 1996, the Member may elect to suspend payments due
on and after April 1, 1997 while the Member remains in
service in accordance with such uniform rules as the
Corporate Benefits Committee shall adopt.
10.10 Distribution Limitation. Notwithstanding any other
provision of this Article X, all distributions from this
Plan shall conform to the regulations issued under
Section 401(a)(9) of the Code, including the incidental
death benefit provisions of Section 401(a)(9)(G) of the
Code. Further, such regulations shall override any Plan
provision that is inconsistent with Section 401(a)(9) of
the Code.
ARTICLE 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 Benefits Committee 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. To the extent the Excess Deferral Amount
was matched by Matching Contributions, the Matching
Contributions, adjusted for gains or losses, shall be
forfeited.
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. In the event the
Excess Contributions were matched by Matching
Contributions, those Matching Contributions, adjusted in
gain or losses, shall be forfeited.
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 con-
tributions; 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 Contribu-
tions, 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.
ARTICLE XIV
APPLICATION OF FORFEITURES
14.1 Any amount which is forfeited by a Member pursuant to
Sections 8.2, 11.4, 12.4, 13.5 and 18.7 will be applied,
as soon as practicable, to reduce Matching Contribu-
tions.
ARTICLE XV
TRUST
15.1 Trustee. The Investment Committee will appoint the
Trustee or Trustees under the Plan. The Company 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 Investment Committee may at any time
remove the Trustee or Trustees and appoint a successor
Trustee or Trustees.
15.2 Acquisition Loans. The Investment Committee 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 restric-
tion 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 Investment Committee, 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 Contri-
butions pursuant to Section 5.1 shall be reduced by
a corresponding amount.
ARTICLE XVI
ADMINISTRATION
16.1 Authority and Responsibility of the Board of Directors.
The Board of Directors shall have the exclusive
responsibility for:
(a) the appointment of a Finance Committee of the
Board, and its Chairman, which committee shall
be responsible for such duties as shall be delegated to it in
writing by the Board of Directors;
(b) the appointment of a Personnel and Compensation
Committee of the Board, and its Chairman, which
Committee shall be responsible for such duties as shall be
delegated to it in writing by the Board of
Directors.
In addition to the above, the Board of Directors shall
have such powers, duties and responsibilities granted or
imposed upon it elsewhere in the Plan.
16.2 Appointment of Corporate Benefits Committee.
(a) The Plan Administrator shall be a Corporate
Benefits Committee consisting of at least three
(3) members who shall be appointed from time to time by the
Personnel and Compensation Committee of the Board
of Directors to serve at its pleasure. Members of
the Corporate Benefits Committee may participate in the Plan
provided they are otherwise eligible to do so.
(b) The members of the Corporate Benefits Committee may
appoint from their number such committees with such
powers as they shall 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 Committee) to serve at the
pleasure of the Committee and to exercise such of
the powers of the Committee as the Committee may
specify.
(c) The Corporate Benefits Committee shall hold
meetings upon such notice, at such time, and at
such place as they may determine.
(d) The Corporate Benefits Committee shall establish
its own rules of procedure.
16.3 Powers and Duties of the Corporate Benefits Committee.
Subject to the limitations of the Plan, the Corporate
Benefits Committee shall be generally responsible for
the administration, interpretation and compliance
requirements under applicable laws pertaining to the
Plan. To this end it shall, by way of illustration and
not limitation:
(a) be the named fiduciary for administration of the
Plan;
(b) meet periodically with respect to the
responsibilities delegated to the Corporate
Benefits Committee by the Board of Directors;
(c) be responsible for and adopt a program for the
administration of the Plan;
(d) establish and maintained all Plan documents;
(e) be responsible for reporting and disclosure as
required by the Act;
(f) delegate to the Human Resources Department (i) the
responsibility for assuring compliance with the
reporting and disclosure requirements of the Act other than
those involving financial reporting or disclosure,
and (ii) such other duties as it shall determine
from time to time;
(g) engage the Plan's administrative service providers
and such other counselors and advisors as it shall
deem necessary or advisable;
(h) adopt a claims procedure for the Plan;
(i) delegate its authority to perform any act
hereunder, including those matters involving
the exercise of discretion, to such members, subcommittees or
agents as it shall require or deem advisable in
discharging its responsibilities;
(j) determine its own rules of procedure;
(k) interpret all the terms of the Plan in its sole
discretion, and the determination of the
Corporate Benefits Committee as to the interpretation of
the Plan or any disputed question shall be
conclusive and final to the extent permitted by applicable
law;
(l) to decide all questions concerning the Plan and the
eligibility of any Employee to participate in
the Plan;
(m) to compute the amount of benefits which shall be
payable to any Member, retired Member,
contingent annuitant, or beneficiary in accordance with the
provision of the Plan, and to determine the
person or persons to whom such benefits shall be
paid; and
(n) to authorize the payment of benefits.
In addition to the above, the Corporate Benefits
Committee shall have such powers, duties and
responsibilities granted or imposed upon it elsewhere in
the Plan.
16.4 Appointment of Investment Committee.
(a) The Investment Committee shall be an investment
committee consisting of at least three (3) members
who shall be appointed from time to time by the
Finance Committee of the Board. Members of the
Investment Committee may participate in the Plan
provided they are otherwise eligible to do so.
(b) The members of the Investment Committee may appoint
from their number such committees with such powers
as they shall 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 Committee) to serve at the pleasure
of the Investment Committee and to exercise such of
the powers of the Investment Committee as the
Committee may specify.
(c) The Investment Committee shall hold meetings upon
such notice, at such time, and at such place as
they may determine.
(d) The Investment Committee shall establish its own
rules of procedure.
16.5 Powers and Duties of Investment Committee. The
Investment Committee shall generally be responsible for
all assets of the Plan. To this end it shall, by way of
illustration and not limitation:
(a) be the named fiduciary for all assets of the Plan;
(b) meet periodically with respect to the
responsibilities delegated to the Investment
Committee by the Board of Directors;
(c) be responsible for monitoring the investment
performance of Plan assets and ensuring
compliance with applicable laws;
(d) appoint or remove any Trustee, investment manager,
or financial services provider, review all
written reports of the trustees or investment managers
and, where required, file objections to such
reports;
(e) meet directly, or through its authorized
representatives, with the investment
managers on a regular basis and review their investment
performance;
(f) engage the Plan's auditors, financial consultants
and such other
counselors and advisors as it shall deem necessary
or advisable;
(g) communicate to each Trustee or investment manager
all requirements and objectives of the
Plan which may be pertinent to the investment of Plan
assets, establish investment standards and
policies and communicate the same to the
Trustee, investment managers or other funding agencies under
the Plan;
(h) delegate to the Treasury Department (i) the
responsibility for assuring compliance with the
financial reporting and disclosure requirements of
ERISA, and (ii) such other duties as it shall
determine from time to time;
(i) approve any fees expenses paid from the Trust Fund;
and
(j) delegate its authority to perform any act
hereunder, including those matters involving
the exercise of discretion, to such members, subcommittees or
agents as it shall require or deem
advisable in discharging its
responsibilities.
In addition to the above, the Investment Committee shall
have such powers, duties and responsibilities
granted or imposed upon it elsewhere in the Plan.
16.6 Name Fiduciaries. For purposes of the Act, the
Corporate Benefits Committee and its members and the
Investment Committee and its members are designated as
named fiduciaries with respect to the fiduciary
matters for which they are responsible hereunder.
The Corporate Benefits Committee, the Investment
Committee and the Company may designate persons,
including persons other than "named fiduciaries" as
defined in Act "402(a)(2), to carry out its rights,
powers, duties and responsibilities. Any member of the
Corporate Benefits Committee or the Investment
Committee, any subcommittee or agent to whom the
Corporate Benefits Committee or the Investment Committee
delegates any authority, and any other person or group
of persons, may serve in more than one fiduciary
capacity with respect to the Plan. An insurance company
underwriting the Plan, or any administrative services
provider administering the Plan, shall be the named
fiduciary thereof with respect to the fiduciary
matters for which it is responsible, as provided in the
relevant contract, including the processing and
reviewing of claims.
16.7 Uniform Administration. Whenever, in the administration
of the Plan, any action by the Corporate Benefits
Committee, the Investment Committee or an Employer is
required, such action shall be uniform in nature as
applied to all persons similarly situated.
16.8 Indemnification of Fiduciaries. To the maximum extent
permitted by law, no member of the Corporate Benefits
Committee or Investment Committee shall be personally
liable by reason of any contract or other instrument
executed by such member or on such member's behalf in
his or her capacity as a member of said Committees nor
for any mistake of judgment made in good faith, and the
Company shall indemnify and hold harmless, directly from
its own assets (including the proceeds of any insurance
policy the premiums of which are paid from the Company's
own assets), each member of the Corporate Benefits
Committee, Investment Committee and each other officer,
employee or director of the Company to whom any duty or
power relating to the administration or interpretation
of the Plan, or to the management and control of the
assets of the Plan, may be delegated or allocated,
against any cost or expense (including counsel fees) or
liability (including any sum paid in settlement of a
claim with the approval of the Company) arising out of
any act or omission to act in connection with the Plan
unless arising out of such person's own fraud or willful
misconduct. Each of the Employer will pay such
proportion of any claim and/or expense as the Company
directs. This indemnification is not intended to
relieve any member of the Corporate Benefits Committee
or the Investment Committee from any liability he or she
may have under the Act for breach of a fiduciary duty or
otherwise under part 4 of Title I of the Act.
16.9 Compensation and Bonding. The members of the Corporate
Benefits Committee and the Investment Committee shall
not receive any special compensation for service in
their capacities as members of the Corporate Benefits
Committee and the Investment Committee but shall be
reimbursed for any reasonable expenses incurred in
connection therewith. No bond or other security (except
as otherwise required by federal law) need be required
of the Corporate Benefits Committee or the Investment
Committee or any member thereof in any jurisdiction.
16.10 Reliance on Advisors. The Corporate Benefits Committee,
the Investment Committee and the Company shall be
entitled to rely upon the advise, opinions, reports,
statements and certificates of counsel, consultants,
accountants and other experts retained by them.
16.11 Claims and Appeal Procedure. If any claim for benefits
under the Plan is wholly or partially denied, the
Corporate Benefits Committee shall give written notice
by registered or certified mail of such denial to the
claimant within 90 days after receipt of the written
claim by the Corporate Benefits Committee. Notice must
be written in a manner calculated to be understood by
the claimant, setting forth the specific reasons for
such denial, specific reference to pertinent Plan
provisions on which the denial is based, a description
of any additional material or information necessary for
the claimant to perfect the claim and an explanation of
why such material or information is necessary, and an
explanation of the Plan's claim review procedure. The
Corporate Benefits Committee shall also advise the
claimant that the claimant or the claimant's duly
authorized representative may request a review by the
Corporate Benefits Committee of the decision to deny the
claim by filing with the Corporate Benefits Committee,
within 65 days after such notice has been received by
the claimant, a written request for such review. The
claimant may review pertinent documents and submit
issues and comments in writing within the same 65 day
period. If such request is so filed, such review shall
be made by the Committee within 60 days after receipt of
such request, unless special circumstances (including,
but not limited to, a need to hold a hearing) require an
extension of time for processing, in which case a
decision shall be rendered not later than 120 days after
receipt of the request for review. The claimant shall
be given written notice within such 60 day period of the
decision resulting from such review, which shall include
specific reasons for the decision, written in a manner
calculated to be understood by the claimant, and
specific references to the pertinent Plan provisions on
which the decision was based.
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 Contri-
butions 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 Corporate Benefits Committee within one
year after such disallowance.
17.2 Any modification or amendment of the Plan or the Trust
Agreement may be made retroactively 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.
ARTICLE XVIII
GENERAL PROVISIONS
18.1 Member Statements. As soon as practicable following
the end of each calendar quarter the Corporate Benefits
Committee will furnish to each Member a statement
setting forth the balance credited to each of the
Member's Accounts in each Investment Fund as of the end
of such calendar year.
18.2 Communications to the Corporate Benefits Committee.
All elections, notices, designations and other
communications to the Corporate Benefits Committee will
be on the forms from time to time prescribed by the
Corporate Benefits Committee, mailed or delivered to
the Corporate Benefits Committee 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 or her without regard to the effect
which such treatment might have upon him or her 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 Corporate Benefits
Committee, the Investment Committee 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 Corporate Benefits Committee to be incompetent by
reason of physical or mental disability, the Corporate
Benefits Committee 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 Corporate Benefits Committee, 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, includ-
ing, 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 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 the Member's
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 Corporate
Benefits Committee of the Member's whereabouts and
requests the amount due the Member 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 the Member's 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 Corporate
Benefits Committee, 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 the Member's 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 repre-
sentative.
(c) If no Beneficiary designation is effective pursuant
to this Section 18.8, or if the Corporate Benefits
Committee 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 Corporate
Benefits Committee, be paid directly to the estate
of the Member, in which event the Trustee, the
Employer, and
the Corporate Benefits Committee will have no
further responsibility or liability with respect
thereto.
(d) Upon receipt by the 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
Investment Committee 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 Investment Committee 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
Investment Committee shall take into account the
purpose of the Plan to invest Employer contributions
and designated Member Elected Contributions in Stock.
If the Investment Committee determines that such
provisions can no longer be validly applied, such
Committee 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 the Member's 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 Payment or Distribution to a Member. Any payment or
distribution to a Member, or in case of the Member's
death to the Member's Beneficiary, at the last known
post office address of the distributee on file with the
Corporate Benefits Committee, will constitute a
complete acquittance and discharge to each member of
the Corporate Benefits Committee, every Director,
Officer, and employee of each Employer having an
interest in the Trust Fund.
18.13 Service of Process. The Corporate Benefits Committee
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 Member's 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 Benefits
Committee, 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 Contributions
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 Enterprise
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.
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
Human Resources Officer 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 termination 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 termi-
nated) receive a
benefit immediately after the merger, consolidation or
transfer which is equal to or greater than the benefit
the Member would have been entitled to receive
immediately before the merger, consolidation, or
transfer (if the Plan had then terminated).
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 Corporate Benefits
Committee, 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 Corporate Benefits Committee 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 an "eligible
rollover distribution" as defined in Section
402(c)(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
Corporate Benefits Committee may instead require the
individual requesting the transfer to supply such
affidavits or other evidence as the Corporate Benefits
Committee may deem appropriate to establish that the
transfer will satisfy the requirements for such a tax-
free rollover. The Corporate Benefits Committee, 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, the
individual will have all the rights of a Member;
(b) If the individual has not satisfied the require-
ments for membership specified in Article III,
the individual will have the right of a Member
only as to the Accounts maintained on the
individual's 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 the
Member's 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 Corporate Benefits
Committee, 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 the Member 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 the Member's Accounts representing the
Transferred Assets, determined as of the Valuation Date
which coincides with or immediately follows the date of
the Member's termination of employment, and the payment
of the balance of the Member's Accounts at a later date
in accordance with Section 10.2.
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, except as
may otherwise be required by Section 411 (2) (6) of the
Code 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
the Member's 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.
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 deter-
mined as of the most recent Valuation Date within
the twelve (12) month period ending on the Deter-
mination Date and as if the Employee had termi-
nated 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 the
Member's accrued benefits as of the most recent
Valuation Date; and
(b) The sum of (i) the aggregate balance of the
Member's 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 the Member's 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 per-
cent (10%) of the Employees shall be con-
sidered 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 (excluding Tax Deferred Con-
tributions and any Matching Contributions required to
meet the provisions of Section 5.5.) 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 (including any Tax Deferred
Contributions), 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 the dollar
limit in effect under Section 401(a) (17) of the Code
for such year), 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 the Member's 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 the
Member's Accounts shall not be less than the
greater of (i) the Member's nonforfeitable
interest determined pursuant to Section 8.1 or
(ii) the Member's 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 the
Member's 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 commencing prior
to January 1, 2000, 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 the Member's 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.
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<CIK> 0000040834
<NAME> GENERAL SIGNAL CORPORATION
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0
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