<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
FORM 10-Q
(Mark One)
XX Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934. For the quarterly period ended September 30, 1995, or
__ Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934. For the transition period from __________ to
__________.
Commission File Number: 0-4791
PAUL MUELLER COMPANY
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(Exact name of registrant as specified in its charter)
Missouri
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(State or other jurisdiction of incorporation or organization)
44-0520907
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(I.R.S. Employer Identification No.)
1600 West Phelps Street, P.O. Box 828, Springfield, Missouri 65801-0828
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (417) 831-3000
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(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the Registrant (1) has filed all reports re-
quired to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes XX No __
Indicate the number of shares outstanding of the issuer's Common Stock as
of November 1, 1995: 1,168,021
<PAGE> 2
PART I - FINANCIAL INFORMATION
The condensed financial statements included herein have been prepared by
the Company without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in the financial statements, prepared in
accordance with generally accepted accounting principles, have been con-
densed or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures are adequate to make the information
presented not misleading. It is suggested that these condensed financial
statements be read in connection with the financial statements and the
notes thereto included in the Company's latest annual report on Form 10-K.
This report reflects all adjustments of a normal recurring nature which
are, in the opinion of management, necessary for a fair statement of the
results for the interim period.
2
<PAGE> 3
PAUL MUELLER COMPANY AND SUBSIDIARY
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands)
<TABLE>
<CAPTION>
Sept. 30 Dec. 31
1995 1994
-------- --------
<S> <C> <C>
ASSETS
Current Assets:
Cash and short-term investments, at cost $ 2,165 $ 1,874
Available-for-sale investments, at market 9,513 12,211
Accounts and notes receivable, less reserve
of $511 at September 30, 1995, and $679
at December 31, 1994, for doubtful accounts 14,260 14,840
Inventories (Note 2) -
Raw materials and components $ 8,627 $ 6,035
Work-in-process 3,781 1,875
Finished goods 3,701 1,469
-------- --------
$ 16,109 $ 9,379
Prepayments 796 593
-------- --------
Total Current Assets $ 42,843 $ 38,897
Other Assets 3,585 3,837
Property, Plant & Equipment, at cost $ 44,582 $ 44,786
Less - Accumulated depreciation 33,327 33,270
-------- --------
$ 11,255 $ 11,516
-------- --------
$ 57,683 $ 54,250
======== ========
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities:
Accounts payable $ 3,502 $ 2,286
Accrued expenses 6,163 6,339
Advance billings 5,647 3,248
-------- --------
Total Current Liabilities $ 15,312 $ 11,873
Other Long-Term Liabilities (Note 4) 4,265 4,431
Shareholders' Investment:
Common Stock, par value $1 per share -- Authorized
20,000,000 shares -- Issues 1,342,325 shares $ 1,342 $ 1,342
Preferred Stock, par value $1 per share --
Authorized 1,000,000 shares -- No shares issued - -
Paid-in surplus 4,307 4,307
Retained earnings 35,011 34,851
-------- --------
$ 40,660 $ 40,500
Less - Treasury stock, 174,304 shares at
September 30, 1995, and December 31, 1994,
at cost 2,554 2,554
-------- --------
$ 38,106 $ 37,946
-------- --------
$ 57,683 $ 54,250
======== ========
</TABLE>
The accompanying notes are an integral part of these balance sheets.
3
<PAGE> 4
PAUL MUELLER COMPANY AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Dollars in Thousands Except Per Share Amounts)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
------------------ ------------------
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net Sales $ 21,186 $ 20,610 $ 59,166 $ 56,687
Cost of Sales 16,882 15,503 45,041 42,968
-------- -------- -------- --------
Gross Profit $ 4,304 $ 5,107 $ 14,125 $ 13,719
Selling, General & Admin. Expenses 3,978 3,917 12,156 11,809
-------- -------- -------- --------
Operating Income $ 326 $ 1,190 $ 1,969 $ 1,910
Other Income (Expense):
Interest income $ 135 $ 115 $ 430 $ 329
Interest expense (Note 4) (31) (26) (96) (68)
Other, net 140 98 410 307
-------- -------- -------- --------
$ 244 $ 187 $ 744 $ 568
-------- -------- -------- --------
Income from Operations before
Provision for Income Taxes $ 570 $ 1,377 $ 2,713 $ 2,478
Provision for Income Taxes 151 443 801 724
-------- -------- -------- --------
Net Income $ 419 $ 934 $ 1,912 $ 1,754
======== ======== ======== ========
Earnings per Common Share (Note 3) $ 0.36 $ 0.80 $ 1.64 $ 1.50
====== ====== ====== ======
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE> 5
PAUL MUELLER COMPANY AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30
--------------------
1995 1994
-------- --------
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 1,912 $ 1,754
Adjustments to reconcile net income to net cash
provided by operating activities:
Bad debt expense 37 94
Depreciation and amortization 1,852 2,000
(Gain) on sales of fixed assets (5) (26)
Changes in assets and liabilities -
Decrease (increase) in interest receivables 139 (35)
Decrease (increase) in accounts
and notes receivable 542 (3,206)
(Increase) in inventory (6,730) (3,160)
(Increase) in prepayments (203) (323)
Decrease (increase) in other assets 149 (529)
Increase in accounts payable 1,216 928
(Decrease) increase in accrued expenses (176) 917
Increase in advance billings 2,399 859
(Decrease) increase in other liabilities (166) 129
-------- --------
Net Cash Provided (Required) by Operations $ 966 $ (598)
Cash Flows Provided (Requirements) from
Investing Activities:
Proceeds from maturities of investments $ 18,135 $ 12,565
Purchases of investments (15,575) (11,343)
Proceeds from sale of equipment 8 55
Additions to property, plant and equipment (1,491) (1,250)
-------- --------
Net Cash Provided from Investing Activities $ 1,077 $ 27
Cash Flows (Requirements) from Financing Activities:
Dividends paid $ (1,752) $ (1,752)
-------- --------
Net Cash (Required) by Financing Activities $ (1,752) $ (1,752)
-------- --------
Net Increase (Decrease) in Cash $ 291 $ (2,323)
Cash at Beginning of Period 1,874 3,154
-------- --------
Cash at End of Period $ 2,165 $ 831
======== ========
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ 90 $ 70
Income taxes 1,260 986
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE> 6
PAUL MUELLER COMPANY AND SUBSIDIARY
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 1995 AND 1994
(Unaudited)
1. The condensed financial statements include the accounts of Paul Mueller
Company (Company) and its wholly owned subsidiary, Mueller International
Sales Corporation. A summary of the significant accounting policies is
included in Note 1 to the consolidated financial statements included in
the Company's annual report on Form 10-K for the year ended December 31,
1994.
2. Inventory is recorded at the lower of cost, last-in, first-out (LIFO),
or market.
Because the inventory determination under the LIFO method can only be
made at the end of each fiscal year based on the inventory levels and
costs at that time, interim LIFO determinations, including those at
September 30, 1995, must necessarily be based on management's estimate
of expected year-end inventory levels and costs. Since estimates of
future inventory levels and prices are subject to many factors beyond
the control of management, interim financial results are subject to
final year-end LIFO inventory amounts. Accordingly, inventory compo-
nents reported for the period ending September 30, 1995, are estimates
based on management's knowledge of the Company's production cycle, the
costs associated with this cycle and the sales and purchasing volume of
the Company.
3. The net income per share of Common Stock has been computed on the basis
of weighted average shares outstanding: 1,168,021 for periods ended
September 30, 1995, and September 30, 1994.
4. In 1987, the Company purchased an additional manufacturing facility in
Osceola, Iowa, by assuming a $3,000,000 Floating Rate Weekly Demand
Industrial Development Bond issue due December 1, 1996. The assets re-
quired included land, a building, equipment and inventory. The weighted
average interest rate on a year-to-date basis as of September 30, 1995,
and September 30, 1994, was 4.0% and 2.8%, respectively.
6
<PAGE> 7
PAUL MUELLER COMPANY AND SUBSIDIARY
MANAGEMENT'S ANALYSIS OF OPERATING RESULTS
AND FINANCIAL CONDITION
OPERATING RESULTS
The following is Management's discussion and analysis of the significant
factors that have affected the Companies' earnings during the periods in-
cluded in the accompanying Consolidated Condensed Statements of Income.
Net sales for the third quarter ended September 30, 1995, were $21,186,000
versus $20,610,000 for the third quarter of 1994. Processing Equipment
shipments were about $2,600,000 higher, while Dairy Farm Equipment ship-
ments were about $2,000,000 lower. The higher Processing Equipment sales
were primarily related to favorable market conditions which contributed
to strong order entry, especially for Food Processing Equipment, and to
higher sales of Vapor Compression Stills. The decline in sales of Dairy
Farm Equipment was about equally divided between the domestic and export
markets. The lower sales in the domestic market were primarily the result
of weak milk prices paid to farmers, a decrease in milk production and
higher feed prices due to the poor weather conditions, and a slowdown in
the expansion of dairy production in the southwestern and western states.
Export sales of Dairy Farm Equipment have been hampered by the unsettled
economic conditions in Mexico and Argentina.
The gross profit rate for the third quarter of 1995 was 20.3% versus 24.8%
for the same period of a year ago. The decline in the gross profit rate
was due to increased manufacturing burden due to higher expenditures and
a lower manufacturing burden absorption rate resulting from a decrease in
production in the Springfield plant due to the strike previously reported.
The gross profit rate was also adversely affected by poor labor efficiency
due to the relocation of work and the reassignment of personnel due to the
strike. In addition, overall gross margins were down due to the lower
proportion of Dairy Farm Equipment sales which have high gross margins,
and this also affected the gross profit rate.
Selling, general and administrative expenses were comparable for the third
quarter of 1995 compared to the third quarter of 1994.
Although the level of investable funds was lower during the third quarter
of 1995, the average interest rate was higher, which led to an increase in
interest income. Other income was higher due to improved results for the
trucking operation and higher royalty income during the third quarter of
1995 versus the third quarter of 1994.
The provisions for income taxes for the third quarter of 1995 and 1994
were less than the tax provision calculated at the statutory rate (34%)
due to the lower effective tax rate for the Foreign Sales Corporation
(FSC) and tax-exempt interest.
Net sales for the nine months ended September 30, 1995, were $59,166,000
versus $56,687,000 for the same period of 1994. Sales for Processing
Equipment were higher by about $5,400,000, while sales of Dairy Farm
Equipment declined by $2,900,000. The improvement in Processing Equipment
shipments is directly related to higher order entry, primarily for Food
Processing Equipment, and higher sales of Commercial Refrigeration pro-
ducts. The variance in shipments for Dairy Farm Equipment was primarily
on the domestic side and was due to the reasons mentioned above.
The gross profit rate for the nine months ended September 30, 1995,
was 23.9% versus 24.2% for the comparable period of a year ago. The
reasons for the variance in the gross profit rate between the first
nine months in 1995 compared to the first nine months of 1994 are the
same as those sited above for the third quarter of 1995 compared to
the third quarter of 1994. The provision for LIFO was also greater for
7
<PAGE> 8
the first nine months of 1995 compared to the comparable period of 1994
due primarily to higher stainless steel prices, and this contributed to
a lower gross profit rate.
Selling, general and administrative expenses increased by $347,000 for the
first nine months of 1995 versus the first nine months of 1994. Increased
expenditures for personnel, sales literature and travel were the reasons
for the higher level of expenses.
Interest income for the nine months ended September 30, 1995, was approxi-
mately $100,000 higher than the comparable period of 1994. Although the
average level of investable funds was lower in 1995 as compared to 1994,
the average interest rate was higher, which contributed to a higher level
of interest income. The variance in interest expense between 1994 and
1995 is also due to the higher average interest rates. The increase in
other income between 1995 and 1994 is attributable to improved results
from the trucking operation and higher royalties.
The effective tax rates for the nine months ended September 30, 1995 and
1994, vary from the statutory rate (34%) primarily as a result of tax
exempt interest and the lower effective tax rate for the FSC.
As previously reported, the labor contract with the Sheet Metal Workers
Union (which covers a portion of the employees at the Springfield,
Missouri plant) expired on June 11, 1994. Negotiations with union re-
presentatives continued until an impasse was reached, and the Company
implemented specific provisions of its final offer effective September
19, 1994. In November 1994, the Regional Director of the National Labor
Relations Board also concluded that a lawful impasse had been reached in
negotiations prior to the Company's implementation of its offer.
However, on December 22, 1994, the Regional Director of the National Labor
Relations Board issued an unfair labor practice complaint against the Com-
pany for refusing to supply information to union representatives about
the personal health insurance claims of individual employees and their
dependents. The Regional Director also reconsidered his previous conclu-
sion and is now claiming that the parties had not reached a valid impasse
at the time the Company implemented its offer in September.
A hearing on the unfair labor practice issues has been scheduled for
December 11, 1995, and will be conducted by an administrative law judge
of the National Labor Relations Board. A final determination on the
charges may take up to two years, but management believes, based on an
evaluation by counsel, that it will be successful in refuting the alle-
gations of unfair labor practices.
Paul Mueller Company employs approximately 900 people, of which approxi-
mately 375 at the Springfield, Missouri, facility are represented by the
Sheet Metal Workers Union. The International Union called a strike be-
ginning on July 25, 1995, and approximately 18 employees went out. During
the month of August, an average of about 35 employees were on strike,
and during the month of September, the average number striking was 60 em-
ployees. Subsequent to the end of the quarter, more employees have joined
the strike, and there are currently approximately 180 employees who have
chosen to participate. No action has been taken by the Union to prevent
those employees who continue to work from working.
The Company has continued production with the remaining work force and
supervisory, technical, administrative and service personnel. With the
reduction in the work force, the level of production has declined and
efficiency has been hampered due to the relocation of work and the re-
assignment of personnel to the plant to continue operations.
Several negotiating sessions with the Union were held during September and
October of 1995. The Company extended a revised final offer to the Union
during the October 11, 1995, meeting. The offer remains open for the
Union's acceptance. No further negotiations are scheduled.
8
<PAGE> 9
The Company has facilities located in Springfield, Missouri, and Osceola,
Iowa. There are approximately 800 employees assigned to the Springfield
facility. There are an additional 100 employees at the Iowa facility, none
of which are represented by a labor union.
Looking forward, there are a number of factors that could affect results
of operations for the balance of 1995. The above-mentioned strike con-
tinues to have an adverse effect on the level of production and may affect
the ability to secure future orders due to extended lead times. With
respect to stainless steel, although steel suppliers are still assessing
surcharges, steel prices are expected to be relatively stable for the
balance of the year. As to the outlook for sales of domestic Dairy Farm
Equipment, the market is expected to be soft for the balance of the year.
The primary reasons for the outlook is lower milk production and higher
feed prices, which are not conducive to strong demand for milk storage
equipment. Economic problems in Mexico and Argentina and the ripple
effect to other Latin American countries will continue to have a dampen-
ing effect on export sales of Dairy Farm Equipment.
Sales backlog at September 30, 1995, was $27,200,000 compared to
$21,500,000 at September 30, 1994. The September 30, 1995, backlog
primarily represents orders that will be completed and shipped over
the next twelve months.
FINANCIAL CONDITION
The consolidated financial condition and the liquidity of the Company at
September 30, 1995, have not changed significantly since December 31,
1994. There are no significant commitments for capital expenditures at
September 30, 1995.
9
<PAGE> 10
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
a. Exhibits
Sequentially
Exhibit Numbered
Number Exhibit Page
------ ------------------------------------------ --------
(10) (a) Paul Mueller Company Tax Savings
Plan and Trust, effective January 1,
1996, was adopted by the Board of
Directors on August 2, 1995........... 11
(b) Paul Mueller Company Dependent Care
Assistant Plan, effective January 1,
1996, was adopted by the Board of
Directors on August 2, 1995........... 22
(c) The First Amendment to the Paul
Mueller Company Employee Benefit
Plan was adopted by the Trustees on
October 12, 1995...................... 25
(d) Amendment Number Five to the Paul
Mueller Company Salaried and Clerical
Employees Retirement Plan was adopted
by the Board of Directors on October 31,
1995.................................. 26
(27) Financial Data Schedule................... 30
b. Reports on Form 8-K -- There were no reports on Form 8-K
filed for the three months ended September 30, 1995.
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.
PAUL MUELLER COMPANY
DATE: November 1, 1995 /S/ DONALD E. GOLIK
---------------- ------------------------------------------
Donald E. Golik, Senior Vice President and
Chief Financial Officer
10
PAUL MUELLER COMPANY TAX SAVINGS PLAN AND TRUST
ARTICLE I
ESTABLISHMENT OF THE PLAN AND TRUST
1.1. The Plan. Paul Mueller Company hereby establishes a tax savings plan
(the "Plan") and Trust for the benefit of its employees. The Plan is
intended to provide certain benefits to participating employees in a
tax-effective manner.
1.2. Legal Status. Under the Plan, Participants will have a choice be-
tween cash compensation and certain nontaxable benefits. Therefore,
the Plan constitutes a "cafeteria plan" under Section 125 of the
Internal Revenue Code of 1986 (the "Code"), as amended, and has been
reduced to writing in order to comply with Code Section 125 and the
regulations promulgated thereunder. The Plan will be "nondiscrimina-
tory" as such term is used in Code Section 125, and the Employer will
take such action as may be necessary to maintain the Plan as nondis-
criminatory under said Code Section.
ARTICLE II
DEFINITIONS AND CONSTRUCTION
2.1. Definitions. Where the following words and phrases appear in the
Plan they shall have the meaning set forth below, unless a different
meaning is plainly required by the context.
a. Account: The account or accounts maintained under the Plan by
the Trustee for each Participant and to which allocations of
Employer contributions are made as required by the Plan, and
from which benefit payments, as permitted by the Plan, shall be
paid.
b. Coverage Period: The Plan Year; provided that with respect to
any eligible Employee who becomes a Participant after the begin-
ning of a Plan Year, the first Coverage Period with respect to
such a Participant shall mean the period commencing on the date
coverage or participation begins hereunder and ending with the
last day of the Plan Year in which such coverage or participa-
tion begins.
c. Dependent: Any person who comes within the definition of depen-
dent provided in Code Section 152.
d. Dependent Care Expense: Reimbursement for the payment of
services which, if or when paid for by a Participant, are con-
sidered employment related expenses under Code Section 21(b)(2),
relating to expenses for household and dependent care services
necessary for gainful employment.
e. Effective Date: January 1, 1996
f. Employer: Paul Mueller Company, together with any affiliate em-
ployer that adopts the Plan in writing.
g. Employee: Any person who is a full-time common-law employee of
the Employer and who is receiving remuneration for personal ser-
vices rendered to the Employer. A full-time employee is defined
as an employee who is scheduled to work 40 or more hours per
week on a regular basis.
h. Enrollment Period: The period beginning two to six weeks pre-
ceding, and ending one day before the beginning of the Plan Year
for which enrollment is made.
i. Health Care Plan: Any plan providing health, dental, or vision
care or similar benefits sponsored and maintained by the Em-
ployer for the benefit of its Employees, to the extent that such
coverage is excludable from income under Code Section 106.
j. Key Employee: An Employee who in the current Plan Year or any
of the preceding four Plan Years was a 5% owner of the Employer,
a 1% owner of the Employer earning more than $150,000 per year,
one of the 10 largest owners of the Employer earning more than
the Code Section 415 defined contribution limits, or an officer
of the Employer earning more that 50% of the Code Section 415
defined benefit limits.
k. Participant: Any Employee who has elected to participate and is
participating in the Plan.
l. Plan Year: Each twelve-month period ending December 31. The
initial Plan Year shall be the period commencing January 1, 1996
and ending December 31, 1996.
m. Plan Administrator: The person or persons appointed by the Em-
ployer pursuant to Section 10.1 to administer this Plan. If no
Plan Administrator is appointed, then the Employer shall be the
Plan Administrator.
n. Qualifying Medical Expense: An expense incurred by a Partici-
pant or the Spouse or Dependent of a Participant for medical
care as defined in Code Section 213(d)(1)(A) and (B).
o. Salary Redirection: The amount by which a Participant autho-
rizes the Employer to reduce his salary or compensation in order
to provide for Salary Redirection Contributions to provide bene-
fits under this Plan. Compensation shall be redirected pursuant
to an election made by such Participant during an Enrollment
Period.
p. Salary Redirection Contributions: Contributions to this Plan
for the purpose of providing benefits hereunder made by the
Employer on an Employee's behalf pursuant to a Salary Redirec-
tion election to receive such benefits in lieu of taxable
compensation.
q. Spouse: Any person who comes within the definition of Spouse
provided in Code Section 152.
r. Trust: The legal entity resulting from this agreement between
the Employer and the Trustee pursuant to which Employer contri-
butions are received, held and disbursed.
s. Trustee: UMB Bank, n.a. and any successor thereto by merger or
consolidation, and shall also include a successor Trustee.
2.2. Construction. As used in this Plan, the masculine gender includes
the feminine, and the singular may include the plural, unless the
context clearly indicates to the contrary.
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.1. Eligibility for Participation. An Employee who is an Employee of the
Employer as of the Effective Date is eligible to become a Participant
in this Plan. Any person who becomes an Employee after the Effective
Date shall be eligible to participate commencing the first day of the
first Plan Year after completing one year of employment.
3.2. Commencement of Participation. An Employee who is eligible to parti-
cipate as of the Effective Date or the first day of any Plan Year
thereafter shall be entitled to participate in this Plan during the
Plan Year commencing on such date. An Employee who first becomes
eligible to participate in the Plan after the beginning of a Plan
Year shall be entitled to participate in the Plan commencing the
first day of the first Plan Year after completing one year of em-
ployment. If an Employee does not elect to participate when first
eligible, he may not elect to participate until the next Plan Year.
3.3. Termination of Participation. A Participant shall continue to parti-
cipate in this Plan until the earlier of the following events occurs:
a. the Participant terminates employment with the Employer;
b. the effective date of Plan termination; or
c. the first day of a Plan Year for which the Participant fails to
make an effective Salary Redirection election.
3.4. Election of Participation. An election form will be provided by the
Plan Administrator to eligible Employees on or before the beginning
of the Enrollment Period, upon becoming eligible to participate if
eligibility occurs after the beginning of a Plan Year, or when the
Employee notifies the Plan Administrator of a change in family status
as defined in Section 6.3. The election provides the eligible Em-
ployee the opportunity to elect to either participate in the Plan
through Salary Redirection contributions on a pretax basis, or not to
participate in the Plan and receive direct compensation on a taxable
basis.
ARTICLE IV
ELECTION PROCEDURES
4.1. Enrollment. An eligible Employee may enroll in the Plan or change
an existing election, if so entitled, by submitting to the Plan
Administrator the election form described in Section 3.4 of the Plan.
The election form must include the Participant's Salary Redirection
designation and his election of benefits, and must meet such other
standards for completeness and accuracy as the Plan Administrator may
establish. A Participant's election form must be submitted to the
Plan Administrator during the Enrollment Period. A Participant's
election shall be effective until the end of the Coverage Period to
which it applies, submission of a valid change of election to the
Plan Administrator, or termination of participation, whichever is the
first to occur.
4.2. Elections for Subsequent Plan Years. If an Employee fails to submit
an election form for the first Coverage Period for which he is eligi-
ble to participate, he shall have the opportunity to enroll for any
succeeding Coverage Period by submitting an election form during the
Enrollment Period for that Coverage Period.
ARTICLE V
CONTRIBUTIONS
5.1. Salary Redirection Contributions. The source of funding under this
Plan shall be Salary Redirection Contributions, as designated by Par-
ticipants in their election forms, submitted in accordance with the
provisions of Section 4.1. of the Plan. Salary Redirection Contri-
butions shall be made by approximately equal payroll redirections
during a Plan Year and shall be transmitted to the Trustee as soon
as practical following the payroll redirection.
Notwithstanding the foregoing, if a participant's Qualified Medical
Expense account does not contain sufficient funds for the payment of
a claim for reimbursement of Qualified Medical Expenses, the Employer
shall, upon receipt of notice of the insufficiency from the Trustee,
contribute to the Trust the amount necessary to fund the payment of
the claim. The amount to be contributed by the Employer with respect
to a Participant shall not exceed the Participant's Salary Redirec-
tion elected for reimbursement of Qualified Medical Expenses for the
Plan Year.
5.2. Maximum Salary Redirection Contributions. The maximum Salary Redi-
rection Contribution that may be elected by a participant for each
benefit available under this Plan shall be as follows:
a. for reimbursement of Qualified Medical Expenses, $5,000 per Plan
Year;
b. for reimbursement of Dependent Care Expenses, $5,000 per Plan
Year;
c. cash, not to exceed the combined maximum Salary Redirection
amounts for the benefits listed in a. through b., above. A
Salary Redirection designated for one of the benefits listed at
Section 6.1. of the Plan cannot be used to pay for another bene-
fit available under the Plan.
5.3. Forfeiture of Unused Amounts. Any balance remaining in a Partici-
pant's Qualified Medical Expense account or Dependent Care Expense
account as of the end of the Plan Year shall be forfeited. However,
all such balances shall be held for a period of not more than 90 days
following the end of the Plan Year and be applied to the reimburse-
ment of expenses of the Participant incurred during the Plan Year of
deposit, to the extent that proper claims for reimbursement are sub-
mitted to the Plan Administrator within 60 days for Qualified Medical
Expenses and Dependent Care Expenses following the end of the Plan
Year.
ARTICLE VI
BENEFITS
6.1. Availability of Benefits. An Employee may elect to redirect his
compensation for the applicable Coverage Period and pay premiums for
coverage under a Health Care Plan or Plans or Other Health Coverage,
Qualified Medical Expenses, Dependent Care Expenses, premiums for
Employer-sponsored group-term life insurance, or receive cash.
6.2. Limitation on Benefits for Certain Participants. No more than 25%
of the total benefits paid under the Plan may be received by Key
Employees. The Employer may in its absolute discretion limit the
amount of benefits received by such Participants so that this limi-
tation on benefits will not be exceeded.
6.3. Irrevocability of Benefit Selection and Salary Redirection Designa-
tion. A Participant's selection of benefits under this Plan and the
applicable Salary Redirection for a Coverage Period shall be irrevo-
cable with respect to such Coverage Period, except that a Participant
shall be entitled to change the election and Salary Redirection
designation during a Coverage Period if the Plan Administrator deter-
mines that the Participant has experienced a change in family status,
and that such change in election and Salary Redirection designation
is necessary or appropriate as a result of the change in family
status. For purposes of this section, the term "change in family
status" shall include the following:
a. marriage or divorce of a Participant
b. death of a Participant's spouse or Dependent
c. birth or adoption of a child of a Participant
d. commencement or termination of employment by a Participant's
spouse
e. change in full-time or part-time employment status by a Parti-
cipant or spouse
f. unpaid leave of absence by a Participant or spouse
g. a significant change in health coverage of a Participant or
spouse attributable to the spouse's employment.
In addition, the Plan Administrator may determine by written policy
that other circumstances or situations constitute a change in family
status. Such determination shall be made on a nondiscriminatory
basis in accordance with uniform principles consistently applied.
ARTICLE VII
GENERAL PROVISIONS REGARDING BENEFITS
7.1. Benefit Accounts. The Trustee shall establish for each Participant a
separate account for each form of benefit elected by the Participant.
The Accounts shall be increased by the amount of Salary Redirection
Contributions that the Participant has elected to apply toward the
Participant's Accounts, and reduced by the amount of any benefits
paid to or on behalf of the Participant.
7.2. Special Limitation on Payment of Dependent Care Expenses. Subject to
the limitation of Salary Redirection as provided elsewhere in this
Plan, the maximum amount of Dependent Care Expense reimbursement for
the Plan Year shall not exceed the lesser of the following:
a. the Participant's gross annual salary or compensation, reduced
by the amount of any other Salary Redirection designation for
other benefits under this Plan;
b. $5,000, or $2,500 if the Participant is married and files a
separate income tax return; or
c. the Spouse's base annual salary. In the case of a Spouse who is
a student or is mentally or physically unable to care for him-
self, such Spouse will be deemed to have monthly earned income
of $200 if one Dependent is cared for, and $400 if two or more
Dependents are cared for.
7.3. Period of Coverage Expenses Only. No expenditure of any nature shall
qualify for payment or reimbursement under this Plan unless the ex-
pense is incurred by the Participant or his spouse or Dependent
during a Period of Coverage for which an appropriate benefit and
Salary Redirection election is in effect. In the case of Qualified
Medical Expenses, an expense will be considered as having been
incurred at the time the medical care related to the expense is pro-
vided, and not at the time the expense is charged, billed or paid.
Similarly, in the case of Dependent Care Expenses, an expense will be
considered as having been incurred at the time the Dependent care re-
lated to the expense is provided.
7.4. Account Recapitulation. On or before each January 31, the Trustee
shall provide to each person who was a Participant at any time during
the previous calendar year an accounting statement reflecting contri-
butions to and distributions from each Account established for the
Participant with respect to such calendar year, and such other infor-
mation as may be required by regulations promulgated by the Secretary
of the Treasury or his delegate.
ARTICLE VIII
CLAIMS PROCEDURES
8.1. Submission of Claims. A Participant who has made a Salary Redirec-
tion designation for Qualified Medical Expenses and/or Dependent Care
Expenses may apply for reimbursement of such expenses incurred during
the Coverage Period by submitting an application in writing to the
Trustee on or before the sixtieth day following the end of the Cover-
age Period, in such form as the Plan Administrator may describe,
stating that such expense has not been reimbursed or is not reimburs-
able from any other source. The application shall be accompanied by
a written statement from an independent third party stating that the
expense has been incurred and the amount of such expense. The aggre-
gate amount of claims submitted by a Participant for reimbursement of
expenses incurred in a Coverage Period shall not exceed the Partici-
pant's Salary Redirection designation for that Coverage Period. Any
claim for individual benefits under a Health Care Plan shall be ad-
ministered in accordance with the provisions of the applicable plan.
8.2. Payment of Claims. Upon the submission of a properly executed claim
for reimbursement by a Participant, if sufficient funds exist in the
Trust, the Trustee shall reimburse the Participant within five busi-
ness days of receipt of the claim. The total amount of Salary
Redirection amount designated by a Participant for a Coverage Period
for reimbursement of Qualified Medical Expenses shall be made avail-
able for payment of claims during the entire Coverage Period. How-
ever, no reimbursement of Dependent Care Expenses shall be made to a
Participant unless the amount of Salary Redirection contributions to
the credit of the Participant is sufficient to pay the claim.
8.3. Claim Denials and Appeals. If a claim for benefits under the Plan is
denied, the Plan Administrator shall provide notice to the Employee
(or, if applicable, the Employee's Executor or Administrator) in
writing within sixty days after the claim is filed. The notice shall
be written in a manner calculated to be understood by the claimant
and shall set forth (i) the specific reasons for the denial, (ii)
specific references to the Plan provisions on which the denial is
based, (iii) a description of any additional material or information
necessary for the claimant to perfect the claim and an explanation as
to why such information is necessary, and (iv) an explanation of the
Plan's claim procedure.
Within sixty days after receipt of the above material, the claimant
shall have a reasonable opportunity to appeal the claim denial to the
Plan Administrator for a full and fair review. The claimant or his
duly authorized representative may (i) request a review upon written
notice to the Plan Administrator, (ii) review pertinent documents,
and (iii) submit issues and comments in writing.
A decision by the Plan Administrator will be made not later than
sixty days after receipt of a request for review, unless special
circumstances require an extension of time for processing, in which
event a decision should be rendered as soon as possible, but in no
event later than 120 days after such receipt. The decision of the
Plan Administrator shall be written and shall include specific
reasons for the decision, written in a manner calculated to be under-
stood by the claimant, with specific references to the pertinent Plan
provisions on which the decision is based.
8.4. Termination of Employment. Participation in the Plan shall terminate
upon the voluntary or involuntary termination of employment by the
Participant. In such case the terminated Participant must submit any
claims for reimbursement of expenses incurred prior to his termina-
tion. No claims may be filed or reimbursement made for expenses
incurred subsequent to a Participant's termination of employment.
8.5. Continuation Coverage. Notwithstanding any other provision in the
Plan, a Participant or his Spouse or Dependent may elect to continue
the coverage elected under the Plan for Qualifying Medical Expenses,
even though the Participant's election to receive benefits expired or
was terminated, under the following circumstances:
a. death of the Participant;
b. termination (other than for gross misconduct) or reduction of
hours of the Participant;
c. divorce or legal separation of the Participant;
d. the Participant becoming entitled to benefits under Medicare; or
e. a Dependent child ceasing to be a Dependent child under the
terms of the Plan.
The election period for continuation coverage begins when coverage
would otherwise terminate under the Plan and ends 60 days after the
later of the date when coverage would otherwise terminate, or the
date notice of the right to continue coverage is provided by the Plan
Administrator. The Plan may charge a premium to the Participant,
Spouse, or Dependent, as the case may be, for any period of continua-
tion coverage equal to not more than 102% of its cost of providing
coverage for the period to similarly situated Participants, Spouses,
or Dependents. Any premium charged by the Plan under this Section
shall be credited to the Participant's Account pursuant to Section
7.1. Continuation coverage will extend for a period of not more than
36 months (18 months if the Participant terminates or is terminated
from employment or reduces or has his hours reduced so as no longer
to be a Participant) but may extend for a shorter period of time if
(1) the Employer ceases to provide any group health plan to any Em-
ployee, (2) the premiums described above are not paid within 30 days
of their due dates, or (3) a party electing continuation coverage
becomes covered under another group health plan or entitled to Medi-
care benefits. The Plan, the Employer, the Plan Administrator, and
any party electing continuation coverage shall comply with the re-
quirements of Code Section 4980B (42 U.S.C. Sec. 300bb in the case of
an Employer who is a state or any political subdivision, agency, or
instrumentality thereof), all of which requirements are incorporated
herein by reference.
ARTICLE IX
DUTIES AND POWERS OF TRUSTEE
9.1. Contributions to the Trust. Contributions to the Trust shall be made
only by the Employer; provided, however, that if a Participant or his
Spouse or Dependent elects to continue coverage under the Plan as
provided in Section 8.5., contributions for continuation coverage
shall be made by the Participant, Spouse, or Dependent, as the case
may be. Each contribution to the Trustee shall be accompanied by a
listing prepared by the Employer identifying each Participant for
whose Account the contribution is being made, the social security
number of the Participant, and other information as the Trustee may
reasonably require of the Employer.
9.2. Trustee's Records. The Trustee shall keep and maintain accurate re-
cords of the contributions made by the Employer and shall receive,
hold, and administer all such contributions in accordance with the
provisions of this agreement, as amended from time to time. The
Trustee shall be responsible only for such funds and assets as shall
actually be received by it hereunder, and shall, to the extent
practicable, invest all such funds not required to meet immediate
obligations of the Trust in highly liquid short-term fixed income
securities, including accounts in the commercial division of the
Trustee.
9.3. Trustee's Report. The Trustee shall render an annual report to the
Employer within 120 days following the end of each Plan Year. Such
report shall contain a complete accounting showing the total funds of
the Trust as of the last day of the Plan Year and all receipts and
disbursements since the last report. Upon written request of the
Employer or the Plan Administrator, the Trustee shall prepare such
other reports, publications, statements, and tax return information
as the Trustee shall agree to undertake.
9.4. Trustee's Powers. The Trustee shall have the following powers in
addition to those vested elsewhere in this Plan or by law:
a. To acquire and hold any securities or other property of the
Trust without disclosing its fiduciary capacity, or in the name
of any other person, with or without a power of attorney for
transfer thereto attached;
b. To make, execute and deliver any and all instruments necessary
or proper for the effective exercise of any of the Trustee's
powers as stated herein or otherwise necessary to accomplish the
purposes of this Trust;
c. To make payments of benefits on behalf of Participants and their
beneficiaries, either directly or indirectly, on the instruction
of the Plan Administrator;
d. To maintain the Trust assets in cash and unproductive of income,
with no requirement to pay interest on cash balances;
e. To determine what is principal and what is income;
f. To invest available funds in short-term fixed income securities,
including, but without limitation, any money market mutual fund,
any commingled money market fund managed by the Trustee, or any
account maintained by the Trustee in the commercial division of
the Trustee.
9.5. Other Rights of the Trustee. In addition to the foregoing, the Trus-
tee shall have the following rights and privileges:
a. The Trustee shall be entitled to advice of counsel (who may be
counsel for the Employer) in any case in which the Trustee shall
deem such advice necessary. With the exception of those powers
and duties specifically allocated to the Trustee by the express
terms of this Trust, it shall not be the responsibility of the
Trustee to interpret the terms of this agreement, and the Trus-
tee shall be entitled to receive guidance and written direction
from the Plan Administrator on any point requiring construction
or interpretation of this agreement.
b. The Trustee shall be entitled to payment or reimbursement from
the employer for all reasonable costs, charges and expenses
incurred in connection with its administration of the Trust,
including fees for legal services rendered to the Trustee. Such
reasonable compensation to the Trustee as may be agreed upon
from time to time between the Employer and the Trustee shall be
paid by the Employer. All such costs, charges, expenses and
fees, unless paid by the Employer, shall be a lien against the
Trust and may be paid by the Trustee from the funds of the
Trust.
c. The Trustee shall be protected in acting on any notice, direc-
tion, certificate or other paper or document reasonably believed
to be genuine and to have been executed by a Participant or the
Employer.
d. Any successor Trustee shall have all of the title, interest,
rights, privileges and duties as the Trustee named herein.
ARTICLE X
ADMINISTRATION
10.1. Plan Administrator. The Employer, through its board of directors or
comparable governing body, shall appoint a Plan Administrator, who
shall hold office at the discretion of the Employer. All usual and
reasonable expenses of the Administrator may be paid in whole or in
part by the Employer. The Plan Administrator or any other designated
representative of the Employer who is an Employee of the Employer
shall not receive any compensation with respect to services hereunder
except as such person may be entitled to benefits under this Plan.
The Plan Administrator shall make all rules, regulations and determi-
nations required respecting administration of the Plan, including
determinations as to the right of any person to a benefit under this
Plan. The Plan Administrator shall exercise such authority and re-
sponsibility as it deems appropriate in order to comply with the
terms of the Plan relating to the records of Participants and amounts
payable under the Plan.
10.2. Administrator's Rules. The Plan Administrator may adopt such rules
as the Plan Administrator deems necessary, desirable or appropriate.
All rules and decisions of the Plan Administrator shall be uniformly
and consistently applied to all participants in similar circum-
stances. The Plan Administrator shall have no power to add to,
subtract from or modify any of the terms of the Plan, or to authorize
or permit the payment of or reimbursement for any obligation or ex-
pense of a Participant incurred during a period when the individual
was not a Participant.
10.3. Other Rights of the Plan Administrator. The Plan Administrator shall
have such powers as may be necessary to discharge its duties here-
under, including, but not by way of limitation, the following:
a. to construe and interpret the Plan, decide all questions of eli-
gibility and determine the amount, manner and time of payment
of any benefits hereunder;
b. to prescribe procedures to be followed by Participants in filing
applications for benefits;
c. to prepare and distribute information explaining the Plan;
d. to appoint individuals to assist in the administration of the
Plan and any agents it deems desirable, including legal and
actuarial counsel.
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.1. Rights to Trust Assets. No participant shall have any right to, or
interest in, any assets of the Trust upon termination or otherwise,
except as provided from time to time under this Plan, and then only
to the extent of the benefits payable under the Plan to such Partici-
pant. All payments of benefits provided for in this Plan shall be
made solely out of the assets of the Trust.
11.2. Nonalienation of Benefits. Except as otherwise provided by paragraph
9.5.b. above, benefits payable under this Plan shall not be subject
in any manner to anticipation, alienation, sale, transfer, assign-
ment, pledge, encumbrance, charge, garnishment, execution, or levy of
any kind, either voluntary or involuntary.
ARTICLE XII
AMENDMENTS AND TERMINATION
12.1. Amendment of Plan. The Employer reserves the right to make amend-
ments to the Plan at any time and from time to time. Any amendment
to the Plan may be made with retroactive effect if determined to be
necessary or desirable to comply with any law or regulation. No
amendment, however, may expand or diminish the powers or duties of
the Trustee unless the Trustee consents in writing thereto.
12.2. Termination of Plan. The Employer may terminate the Plan at any
time. Upon the termination of the Plan the Accounts of all Partici-
pants affected thereby shall continue to be held by the Trustee for
distribution in accordance with the purposes and relevant provisions
of the Plan. If not so distributed within ninety days following the
close of the Plan Year during which the Plan is terminated, balances
shall thereupon be forfeited and revert to the Employer.
ARTICLE XIII
RESIGNATION AND REMOVAL OF TRUSTEE
13.1. Resignation of Trustee. The Trust or any successor Trustee may re-
sign from the trusteeship hereof at any time by giving a least sixty
(60) days written notice of such resignation to the Employer, and any
Trustee may be removed by the Employer upon at least sixty (60) days
written notice of such removal to the Trustee. The Employer shall,
by an appropriate instrument in writing, appoint a Successor Trustee
in the event of vacancy in the trusteeship resulting from the resig-
nation or removal of the Trustee, and before entering upon its
duties, such successor Trustee shall execute an instrument evidencing
its acceptance of the Trust and its agreement to be bound by all
terms and provisions thereof. The successor Trustee shall have all
rights, powers, privileges, liabilities, duties and immunities of the
former Trustee.
13.2. Final Accounting. Upon the acceptance of appointment by such succes-
sor Trustee, the former Trustee shall make a final accounting of its
administration of the Plan Trust for the period of time elapsed since
the preceding accounting, and shall deliver and transfer the Plan
Trust to such successor Trustee. Upon approval by the Employer of,
or upon its failure to object to, such final accounting, the former
Trustee shall thereupon be finally released and discharged, all as
herein provided with respect to annual accountings.
The Employer represents that it has had the opportunity to consult
with counsel of its choice with respect to establishment of this
Plan. The Employer further represents that it has made an indepen-
dent determination as to the appropriateness of establishment of the
Plan and the suitability of the benefit categories selected herein.
IN WITNESS WHEREOF, this instrument has been executed this 2nd day of
August, 1995.
PAUL MUELLER COMPANY
-----------------------------------
EMPLOYER
BY: /S/ DANIEL C. MANNA
-------------------------------
APPROVED:
UMB BANK, N.A., TRUSTEE
BY: /S/ WILLIAM A. HANN
-------------------------------
SR. VICE PRESIDENT
PAUL MUELLER COMPANY DEPENDENT CARE ASSISTANCE PLAN
ARTICLE I
ESTABLISHMENT OF PLAN
1.1. The Plan. Paul Mueller Company, for the benefit of its Employees,
hereby establishes a dependent care assistance plan (the "Plan") in
association with the Tax Savings Plan established concurrently here-
with, and intended to conform to the requirements of paragraphs (2)
through (6) of subsection (d) of Section 129 of the Internal Revenue
Code of 1986 (the "Code"), as amended.
1.2. Purpose. The purpose of this Plan is to make possible the inclusion
of Dependent Care Assistance in the group of benefits which may be
selected by Participants of the Tax Savings Plan, and to satisfy the
requirement of a separate written plan with respect to a dependent
care assistance program as set forth in Section 129(d)(1) of the Code.
ARTICLE II
DEFINITIONS AND CONSTRUCTION
2.1. Dependent Care Assistance. Reimbursement for the payment of services
which, if or when paid for by a Participant, are considered employment
related expenses under Internal Revenue Code Section 21(b)(2), relat-
ing to expenses for household and dependent care services necessary
for gainful employment.
2.2. Other Definitions. Words and phrases not herein defined shall have
the meaning ascribed to them in the Tax Savings Plan.
ARTICLE III
ELIGIBILITY
3.1. Eligibility to Participate. Any Participant in the Tax Savings Plan
is eligible to participate in this Plan, subject to the terms, condi-
tions, and provisions set forth herein. The establishment of this
Plan in the form of a separate document shall not be interpreted or
construed as expanding or enlarging the rights or privileges of any
Participant for payment or reimbursement above the amount set forth in
the related Tax Savings Plan.
3.2. Termination of Participation. Each Participant shall continue to
participate in this Plan until the Participant terminates participa-
tion as provided for in the Tax Savings Plan or the effective date of
Plan termination, whichever is the first to occur.
ARTICLE IV
BENEFITS
4.1. Benefits Provided. The benefit provided by this Plan is the reim-
bursement, on a pretax Salary Redirection basis, of Dependent Care
Expenses incurred by the Participant.
4.2. Election of Benefits and Designation of Salary Redirection. Within
the enrollment period as specified in the Tax Savings Plan, each
Participant shall be given the opportunity to designate, on forms pro-
vided by the Employer for such purpose, his intent to participate in
this Plan and the Salary Redirection that will be applicable during
the applicable Coverage Period. The amount of Salary Redirection
elected under this Plan shall not exceed the limitation provided in
the Tax Savings Plan.
4.3. Irrevocability of Benefit Selection and Salary Redirection Designa-
tion. A Participant's election of benefits under this Plan and the
applicable Salary Redirection for a Coverage Period shall be irrevo-
cable with respect to such Coverage Period, except that a Participant
shall be entitled to change his election and Salary Redirection desig-
nation during a coverage Period if the Plan Administrator determines
that such Participant has experienced a change in family status as
defined in the Tax Savings Plan, and that such change in election and
Salary Redirection designation is necessary or appropriate as a result
of the change in family status.
4.4. Funding of Benefits. Benefits under this Plan shall be funded solely
through Salary Redirections as authorized by each Participant in con-
junction with his election to participate. Such Salary Redirection
shall be made for each payroll period during the Coverage Period and
shall be transmitted to the Trustee as soon as practical following
such payroll.
ARTICLE V
PAYMENT OF CLAIMS
5.1. Claims for Reimbursement. A Participant in this Plan may apply for
reimbursement of Dependent Care Expenses incurred during the Coverage
Period by submitting an application in writing to the Trustee on or
before the 60th day following the end of the Coverage Period, in such
form as the Plan Administrator may describe. The application shall
be accompanied by a written statement from an independent third party
care provider stating that the Dependent Care Expense has been in-
curred and the amount of such expense. The aggregate amount of claims
submitted by a Participant for reimbursement of Dependent Care Ex-
penses incurred in a Coverage Period shall not exceed the Partici-
pant's Salary Redirection designation for that Coverage Period.
5.2. Payment of Claims. Upon the submission of a properly executed claim
for reimbursement by a Participant, the Trustee shall reimburse the
Participant within 30 days of receipt of the claim. No reimbursement
shall be made to a Participant unless the amount of Salary Redirection
to the credit of the Participant is sufficient to pay the claim.
5.3. Limitations on Payment. Subject to the limitation of Salary Redirec-
tion as provided in the Tax Savings Plan, the maximum amount of Depen-
dent Care Expense reimbursement for the Coverage Period shall not
exceed the lesser of the following:
a. the Participant's gross annual salary or compensation, reduced by
the amount of other Salary Redirection designation under other
Component Plans adopted by the Employer;
b. $5,000 or $2,500 if the Participant is married and files a
separate income tax return; or
c. the Spouse's base annual salary. In the case of a Spouse who is
a student or is mentally or physically unable to care for him-
self, such Spouse will be deemed to have monthly earned income
of $200 if one Dependent is cared for, and $400 if two or more
Dependents are cared for.
ARTICLE VI
MISCELLANEOUS
6.1. Notice of Plan. Reasonable notification of the availability and terms
of this Plan and the related Tax Savings Plan shall be provided by the
Plan Administrator to all Employees.
6.2. Statement of Expenses. The Employer shall furnish to each Participant
with respect to whom any payment or reimbursement is made for Depen-
dent Care Assistance, on or before each January 31, a written state-
ment showing the amounts paid by the participant to the Tax Savings
Plan for such Dependent Care Assistance during the previous calendar
year.
6.3. Amendment of Plan. The Employer reserves to itself the right to amend
this Plan in any manner which it deems to be necessary or desirable,
and shall amend the Plan in any respect necessary to conform the same
to the provisions of the Code or relevant regulations promulgated
thereunder, and further reserves the right to terminate the Plan by
appropriate action.
IN WITNESS WHEREOF, this instrument has been executed this 2nd day of
August, 1995.
PAUL MUELLER COMPANY
---------------------------------
EMPLOYER
BY: /S/ DANIEL C. MANNA
-----------------------------
APPROVED:
UMB BANK, N.A., TRUSTEE
BY: /S/ WILLIAM A. HANN
-----------------------------
SR. VICE PRESIDENT
FIRST AMENDMENT
TO THE
PAUL MUELLER COMPANY EMPLOYEE BENEFIT PLAN
AMENDED AND RESTATED AS OF MARCH 22, 1995
Whereas Article VI of the Paul Mueller Company Employee Benefit Plan
provides that the Plan may be amended by resolution of the Trustees in
accordance with the provisions of the Declaration of Trust, be it resolved
that the Paul Mueller Company Employee Benefit Plan is amended effective
August 1, 1995, as follows:
The Section entitled "Medical Care Coverage," Article III, is amended
as follows:
1. The Subsection entitled "Medical Care Definitions" is amended by
by the addition of the following item 18):
18) "Home Health Agency" means only an organization that
is approved by Medicare as a home health agency and
has signed a Medicare home health agency participation
agreement.
2. The Subsection entitled "Medical Covered Charges," item L), is
deleted and replaced by the following:
L) Home Health Care charges made by a Hospital or by a Home
Health Agency for medical care rendered after or in lieu
of confinement in a hospital or convalescent nursing
home, subject to the following:
1) A Physician must certify no less frequently than
every three (3) months that (a) medical care des-
cribed in (3) below is necessary in connection with
treatment of the patient's Illness or Injury, (b)
the patient is totally disabled, and (c) in the
absence of Home Health Care, the patient would be
confined in a Hospital or a Convalescent Nursing
Home.
2) The medical care must not be custodial in nature.
3) The medical care must consist of care by a registered
professional nurse (R.N.), a licensed practical nurse
(L.P.N.), a home health aide, or an occupational or
physical therapist, provided the nurse, aide or thera-
pist does not have the same legal residence as, and
is not a Close Relative of, the Covered Individual,
and further provided that services of a licensed res-
piratory therapist are limited to three (3) training
sessions to train the patient's caretaker following
discharge from a hospital.
IN WITNESS WHEREOF, the Trustees of the PAUL MUELLER COMPANY EMPLOYEE
BENEFIT PLAN cause this Third Instrument of Amendment to be duly executed
this 12th day of October, 1995.
By: /S/ DONALD E. GOLIK By: /S/ GERALD S. MILLER
---------------------------- ----------------------------
Donald E. Golik - Trustee Gerald S. Miller - Trustee
By: /S/ MICHAEL W. YOUNG By: /S/ GAIL HENRICHS
---------------------------- ----------------------------
Michael W. Young - Trustee Gail Henrichs - Trustee
AMENDMENT NUMBER FIVE
TO THE
PAUL MUELLER COMPANY
SALARIED AND CLERICAL EMPLOYEES
RETIREMENT PLAN
WHEREAS, Paul Mueller Company (the "Company") adopted the Paul Mueller
Company Salaried and Clerical Employees Retirement Plan (the "Plan") effec-
tive July 3, 1957; and
WHEREAS, the Company amended and restated the Plan effective January 1,
1989; and
WHEREAS, the Company retained the right to amend the Plan pursuant to
Section XIV hereof;
NOW, THEREFORE, BE IT RESOLVED, that the Plan is hereby amended as
follows:
1. Section 1.01 is amended to read as follows:
1.01 Company - Paul Mueller Company, a Missouri corporation, and
any successor thereto. In the event the Company is a member
of a Related Group, the term "Company" shall also mean mem-
bers of the Related Group to the extent provided below. The
term "Related Group" means a controlled group of corpora-
tions, or trades or businesses under common control, as
defined in Sections 414(b) and (c), respectively, of the
Internal Revenue Code.
The term "Company" shall include all members of the Related
Group for purposes of: determining Compensation under Sec-
tion 1.16; determining service, and breaks in service, for
purposes of vesting and eligibility for participation; ap-
plication of the Plan's top-heavy rules under Article XVI;
application of the rules regarding the maximum limitations
on benefits, under Section 5.04; determining eligibility for
commencement of benefits upon termination of employment; and
for any other purpose for which members of the Related Group
must be considered as the "Company" under the provisions of
the Internal Revenue Code or this Plan.
The term "Company" shall include only those members of the
Related Group which maintain this Plan, for purposes of:
eligibility to participate in this Plan; determining service
for benefit accruals; and suspension of benefits upon reem-
ployment.
For purposes of funding benefits under this Plan, the term
"Company" shall mean each member, respectively, of the Re-
lated Group which maintains this Plan, but only with respect
to each such member's employees who participate in this
Plan.
For purposes of determining authority to execute amendments,
terminate the Plan, transfer and merge assets, and perform
similar or settlor functions, the term "Company" shall mean
Paul Mueller Company.
2. Section 1.20 is amended by modifying subsection (B) thereof (but
not the last paragraph of Section 1.20) as follows:
(B) Interest Discount Factor - Either (1) or (2) below,
whichever yields the larger benefit:
(1) The interest discount factor used by the PBGC to
value immediate annuities as of the Assumption
Determination Date, applied to the Member's
Accrued Pension as of October 1, 1995; the balance
of the Member's Accrued Pension shall not be taken
into account;
(2) Seven percent (7%), applied to the Member's entire
Accrued Pension.
3. Section 5.04 is amended by deleting the existing Section in its
entirety, substituting the following new Section in its place:
5.04 Maximum Pension Provision: In no event shall the monthly
pension payable under the Plan exceed the limitations appli-
cable to the Plan under Section 415 of the Internal Revenue
Code and the regulations promulgated thereunder. If the
monthly pension payable under any provision of the Plan
would exceed such limitations, then notwithstanding any
other provision of the Plan, such monthly pension shall be
reduced to the extent necessary to ensure that such limi-
tations are not exceeded. If a Member's monthly pension
payable under this Plan, in combination with the annual
additions credited to him under any defined contribution
plan maintained by the Company would exceed such limita-
tions, then the monthly pension payable under this Plan
shall be reduced to the extent necessary to ensure that such
limitations are not exceeded. For purposes of this Section,
"Company" means Paul Mueller Company and all employers re-
quired, pursuant to Section 415 of the Internal Revenue
Code, to be aggregated therewith under the rules of Sections
414(b) or (c) of the Code.
4. Section 7.04 is amended to read as follows:
7.04 Cash Option: Where the lump sum Actuarial Equivalent of a
Member's vested Accrued Pension is not greater than $10,000,
he may elect with the consent of his spouse to receive an
immediate lump sum cash settlement in lieu of the monthly
payments of his vested Accrued Pension which he would other-
wise be entitled to receive. The Member may elect this
cash settlement to be paid at any time after termination of
employment but not later than his Normal or Deferred Retire-
ment Date. This Cash Option may also be elected by a Member
who has not terminated employment but whose Accrued Pension
must be distributed pursuant to the required distribution
provisions of Section 6.01.
The Cash Option will be invoked by the Committee without the
Member's consent if the lump sum Actuarial Equivalent of the
Member's vested Accrued Pension is less than $3,500 at the
time of his termination of employment or upon his required
beginning date as described in Section 6.01.
For purposes of this Section 7.04, the Actuarial Equivalent
of a Member's vested Accrued Pension shall be determined in
accordance with the following actuarial assumptions:
(A) Mortality Table - The mortality table published by the
Internal Revenue Service pursuant to Section 417(e)(3)
of the Internal Revenue Code, determined as of the date
the lump sum cash settlement is paid.
(B) Interest Discount Factor - The annual interest rate on
thirty (30) year Treasury securities, published by the
Internal Revenue Service, for the month of December
that next precedes the Plan Year in which the lump sum
cash settlement is paid.
5. Section 9.01 is amended by modifying the last paragraph thereof as
follows:
All Company contributions are conditioned upon their deductibility
under Section 404 of the Code. To the extent the deduction of any
contribution is disallowed, the contribution shall be returned to
the Company within one year of the disallowance of the deduction
pursuant to ERISA Section 403(c)(2)(C).
6. Section 9.01 is further amended by adding the following to the end
thereof:
Any Company contribution (to include any portion thereof) made due
to a mistake of fact shall be returned to the Company within one
year after payment of the contribution.
7. A new Section 9.04 is added as follows:
9.04 Liquidity Shortfall Limitations. If the Plan has a liquid-
ity shortfall within the meaning of Section 412(m) of the
Internal Revenue Code, the Plan shall not pay benefits in
excess of the amounts payable as a Basic Monthly Pension,
plus any applicable Social Security supplements, to a Member
or Beneficiary the payment of whose benefits commences
during the period of the liquidity shortfall. Additional
restrictions shall apply to a period of a liquidity short-
fall to the extent required by section 401(a)(32) of the
Internal Revenue Code and Section 206(d) of ERISA.
The changes made by numbered paragraphs 1, 2, 3 and 4 above shall be
effective November 1, 1995. The changes made by numbered paragraphs 5 and
6 above shall be effective with respect to contributions made on or after
January 1, 1995. The changes made by numbered paragraph 7 above shall be
effective for Plan Years beginning on or after January 1, 1995.
IN WITNESS WHEREOF, PAUL MUELLER COMPANY has caused this instrument to
be duly executed this 31st day of October, 1995.
PAUL MUELLER COMPANY
By: /S/ DANIEL C. MANNA
----------------------------
DANIEL C. MANNA, PRESIDENT
Attest:
/S/ DONALD E. GOLIK
- -----------------------------
Secretary - DONALD E. GOLIK
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 2,165
<SECURITIES> 9,513
<RECEIVABLES> 14,771
<ALLOWANCES> 511
<INVENTORY> 16,109
<CURRENT-ASSETS> 42,843
<PP&E> 44,582
<DEPRECIATION> 33,327
<TOTAL-ASSETS> 57,683
<CURRENT-LIABILITIES> 15,312
<BONDS> 3,154
<COMMON> 1,342
0
0
<OTHER-SE> 39,318
<TOTAL-LIABILITY-AND-EQUITY> 57,683
<SALES> 59,166
<TOTAL-REVENUES> 59,166
<CGS> 45,041
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<OTHER-EXPENSES> 0
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<INCOME-PRETAX> 2,713
<INCOME-TAX> 801
<INCOME-CONTINUING> 1,912
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<NET-INCOME> 1,912
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